Management

Information
System
Data...Data, the raw material for information is
defined as groups of non-random symbols which
represent quantities, actions, objects, etc. Data
items in information systems are formed from
characters. These may be alphabetic, numeric, or
special symbols such as *, $. Data items are
organized for processing purposes into data
structures, file structure and databases. Data
relevant to information processing, and decision
making may also be in form of text, images or
voice.
Information... information is data that has been
given meaning by way of relational connection. This
"meaning" can be useful, but does not have to be.
Knowledge... knowledge is the appropriate
collection of information, such that it's intent is to be
useful. Knowledge is a deterministic process. When
someone "memorizes" information (as less-aspiring
test-bound students often do), then they have
amassed knowledge. This knowledge has useful
meaning to them, but it does not provide for, in and
of itself, an integration such as would infer further
knowledge.
Uses of data in computing

Data (computing)

Raw data are numbers, characters, images or other

outputs from devices to convert physical quantities into
symbols, in a very broad sense. Such data are typically
further processed by a human or input into a computer,
stored and processed there, or transmitted (output) to
another human or computer.

Raw data is a relative term; data processing commonly

occurs by stages, and the "processed data" from one
stage may be considered the "raw data" of the next.
Information
Information is the summarization of data. Technically,
data are raw facts and figures that are processed into
information, such as summaries and totals. But since
information can also be the raw data for the next job or
person, the two terms cannot be precisely defined, and
both are used interchangeably.
It may be helpful to view information the way it is
structured and used, namely: data, text,
spreadsheets, pictures, voice and video.

Data are discretely defined fields. Text is a

collection of words. Spreadsheets are data in
matrix (row and column) form. Pictures are lists of
vectors or frames of bits. Voice is a continuous
stream of sound waves. Video is a sequence of
image frames.
Types of information:
The information can be classified in a number of ways for
better understanding. Some classifications are as follows:
i.   Action vs. No Action information: The information
which induces action is called action information. The
information which communicates only the status of a
situation is no-action information.
ii.  Recurring vs. non recurring information: The
information generated at regular intervals is recurring
information. The monthly sales reports, the stock
statements, the trial balance, etc are recurring information.
The financial analysis on the report on the market research
study is non recurring information.
 iii. Internal vs. external information: The information
generated through the internal sources of the organization is
termed as an internal information, while the information
generated through the government reports, the industry
surveys, etc is termed as an external information, as the
sources of the data are outside the organization.
The action information, the recurring information and the
internal information are the prime areas for computerization
and they contribute qualitatively for the MIS.
Information can also be classified in terms of its
application:
1.Planning Information: Certain standards, norms and
specifications are used in the planning of any activity.
Hence, such information is called the planning information.
The time standards, the operational standards, the design
standards are examples of the planning information.
2.Control Information: Reporting the status of an activity
through a feedback mechanism is called the control
information. When such information shows deviation from
the goal or the objective, it will induce a decision or an
action leading to control.
3.  Knowledge information: A collection of information
through library reports and the research studies to build up
knowledge base as information source for decision making
is known as knowledge information. Such a collection is not
directly connected to decision making but the need of
knowledge is perceived as a power or strength of the
organization.
The information can also be classified based on its usage.
When the information is used by everybody in the
organization, it is called the organization information. When
then information has a multiple use and application, it is
called the database information. When information is used in
the organization in operation of business, it is called
functional or operational information.
 4. Formal and informal information: Formal information
is the information which is provided to the users through
authentic channels. It carries some value for the user.
Informal information is also referred to as grapevine. It is
unorganized information and may or may not carry value for
the user.
Quality of information: The quality of information is determined by how
it motivates human action and contributes to effective decision making.

Utility of information:
There are four utilities of information that are identified:
1)Form Utility: As the form of information more closely matches the
requirement of the decision maker, its value increases.
2)Time Utility: Information has greater value to the decision maker if it is
available when needed.
3)Place Utility (Physical accessibility): Information has greater value if
it can be accessed or delivered easily. Online systems maximize both
time and place utility.
4)Possession Utility (Organizational location): The possession of
information strongly affects its value by controlling its dissemination to
others.
MIS (Management Information Systems) :-
“MIS is an integrated user machine
system for providing information to
support operations, management and
decision - making functions in an
organization.
The system utilizes :
computer hardware and software,
manual procedures,
models for analysis,
planning,
control and decision making,
and a database.”
It is also known as the Information System, the
Information and Decision System, the Computer
– based Information System.

The MIS is basically an integrated system which

transforms the data (inputs) into reports
(outputs) for facilitating decision – making
through processing using various components
of the information system viz. Hardware,
software, Database, Procedures, and Personnel.
Management Information Systems (MIS) is the
application of information technology to
support business activities.
The MIS is basically an integrated system
which transforms the data (inputs) into reports
(outputs) for facilitating decision – making
through processing using various components
of the information system viz. Hardware,
software, Database, Procedures, and
Personnel.

Management Information Systems (MIS) is the

application of information technology to
support business activities.
The system ensures that an appropriate data is
collected from the various sources, processed,
and sent further to all needy destinations. The
system is expected to fulfill the information
needs of an individual, a group of individuals, the
management functionaries : the management and
top management.
MIS helps the junior management personnel by
providing the operational data for planning,
scheduling and control, and helps further in
decision making at the operations level to
correct an out of control situation.
MIS helps the middle management in short term
planning, target setting and controlling the
business functions. It is supported by the use
of the management tools of planning and
control.
MIS helps the top management in goal setting,
strategic planning, and evolving the business
plans and their implementation.
 External Low

Top

Source of  Structured 
Information Middle Information
Management

Internal Operational High

Management
Different kinds of decisions are made at different
levels in the organization. The decision-makers at
each level of the organization can be said to be
the users of the MIS at that level. Since different
users make different decisions at each level in the
organization, their individual information needs will
be different.
Top management is concerned with the achievement of
goals, anticipation of changes in the external
environment and readiness of the organization to meet
the challenges of the environment. Therefore, the top
management will need information about changes in the
environment. It will need information about business
policy of the government, actions of rivals, general
social and economic climate, etc.
The Information Needs of top management therefore
can be said to be long term and more external than
internal. However, top management will also need
information on the existing state within the
organization. Profitability trends, state of quality
consciousness, etc. will have to be taken into account
by top management. Their information needs will thus
be for this kind of information.
Middle management is concerned with the achieving of
interim objectives. It has the task of translating
management goals into achievable objectives.
Therefore it will need information on the performance of
various functional areas, achievement of previous
objectives, etc.
Thus, the information needs of middle management can
be said to be more internal than external to the
organization and on a time-scale that is smaller than
that required by top management.
Operational management is concerned with the day-to-
day working of the organization. Thus, it will require
information that is more immediate.
Operational management is often called upon to make
snap decisions about various operations that are being
carried out within the organization. Therefore, it needs
a quicker “turn-around time” in the information that is
being supplied to it.
Thus the Information Needs vary according to the
users or the decision-makers in the organization. Each
set of users has a different set of information needs
and it would be unwise to use a common model for all
levels of users. The unique information needs of
different users must be taken into account when
enumerating the total information needs of the
organization.
The 3 level of management activities can be
differentiated on the basis the planning horizon of each
level.
Strategic planning deals with long range consideration.
The decision to be made are concerned with choice of
business direction, product mix, market strategy etc.
Management control and tactical planning has a medium
term planning horizon. It includes acquisition and
organization of resources, structuring of work personnel.
It is reflected in the capital expenditure budget, staffing
plan etc.
Operational planning and control is related to short term
decision for current operations. Pricing, production
levels, inventory levels etc. are result of operational
planning & control activities.
The activities & information processing for the 3 levels
are inter-related.
The MIS design should be such that it meets
the needs of the total organization. For design
considerations & for the operational
convenience, the organization is divided into 4
levels, viz., the top, the middle, the supervisory
and the operational.
 Physical Components
of Information Systems
The physical components required for an
organizational information system are :
hardware, software, database, and procedures
and operations personnel.
HARDWARE:

Hardware refers to physical computer equipment and

associated devices. Hardware must provide for five
major functions :

•Input or entry
•Output
•Secondary storage for data and programs
•Central processor (computation, control and primary
storage)
•Communication
SOFTWARE:

Software is a broad term given to the

instructions that direct the operations of the
hardware. The software can be classified into
two major types: -

•System software
•Application software
DATABASE:

The database contains all data utilized by

application software. An individual set of
stored data is often referred to as a file. The
physical existence of stored data is evidenced
by the physical storage media (computer
tapes, disk packs, diskettes, etc.) Used for
secondary storage.
PROCEDURES:
Formal operating procedures are physical
components because they exist in a physical
form such as a manual or instructions booklet.
Three major types of procedures are required:
-
User instructions (for users of the
application to record data, employ a
terminal to enter or retrieve data or use
the results).
Instructions for preparation of input by
data preparation personnel
Operating instructions for computer
operations personnel.
OPERATIONS PERSONNEL:

Computer operators, systems analysts,

programmers, data preparation personnel,
information systems management, data
administrators etc.
Control in a System
Definition of control in system:

Control consists of procedures to determine

deviations from plans & indicate Corrections.
Every measure organizational function has a
set of controls associated with it.

The basic of a system as input process &

outputs did not include regulation & control of
the system.
For control purposes, a feedback loop is added to the
basic module. In its simplest form outputs from the
systems are compared with the desired output.
[Standard] , & any difference causes & input to be sent to
the process to adjust the operations so that output will
be closer to the standard .

Feedback with seeks to dampen & reduce

fluctuations around the standard its term
negative feedback. It is used in feedback
control loops.

Positive feedback re-enforces the direction in which the

system is moving. In other words, positive feedback
causes the system to repeat or amplify adjustment or
action.
 Feedback Control Loop

Input Process Output

Control device Sensors
Feedback control loop in which the system
changes its operations , is not the only
adjustment an organizational system may
make. In the response to feedback the
organization may change its standards.
(Objectives, Goals, Purposes etc.)
Negative Feedback control :-

Negative feedback control is system means keeping

the system operating within certain limit of
performance. System, which is out of control function
outside the limit because the regulatory mechanism
are not operative.
Feed back control loop are classified as closed or
open. A closed control loop is an automatic control
such as a computer control process. A over control
loop is with random disturbance, such as those
associated with human control element. There are
variations between the two extreme.
A human machine system is thus an attempt to use
the best characteristics to both open and closed
control to make system as closed as possible.
WHAT IS LAW OF REQUISITE VARIETY?

Law of requisite variety is one of the basic notation of

system control theory, to obtain control. This has
various rigorous formulations, but a commonsense,
understanding is that to control each possible state of
system elements.

There must be a correspond control state; to control a

hundred state of the system elements there must be
hundred different state of control.

To view it another way, there must be at least as many

variations of control to be applied as there are ways for
the system to get out of control.
This means also that the control for the
system must be able to determine of variables
and send system change instructions for each
change.

The Law of requisite variety needs that for a

system to be control, every controller
(human/machine) must be provided with
enough control responses (what to do in each
case) to cover all possible condition the
system may face.
The law of requisite variety means that for a system to be
controlled, every controller(human and machine) must be
provided with:-
   1. Enough control responses (what to do in each case) to
cover all possible conditions the system may face.
2. The decision rules for generating all possible control
responses OR
   3.  The authority to become a self organizing system in
order to generate control responses.
Enumerating all responses is possible in simple cases. In
complex systems providing control responses is very
difficult.
Decision Making
Decision making is the cognitive process leading
to the selection of a course of action among
alternatives.
Every decision making process produces a final
choice called a decision. It can be an action or an
opinion. It begins when we need to do something
but we do not know what.
Therefore, decision-making is a reasoning process
which can be rational or irrational, and can be
based on explicit assumptions or tactic
assumptions.
Management information system supports for decision making.
Decisions vary with respect to the structure that can be provided
for making them.

A highly structured decision can be pre-planned or pre-specified,

whereas highly unstructured decisions cannot. Structured
decision can be said to be programmable.

An unstructured decision is said to be non programming . The

structured, programmable decisions tend to be routine &
frequently repeated; the unstructured decisions tend to occur
with less frequency & is non – routine.

Information system support will differ for the two types of

decisions.

Some decisions will fit easily into this classification, but many
decisions are more or less structured & have some elegant that
are programmable & some that are not programmable.
Structured programmable decisions –

When a decision can be programmed an organization can prepare a

decision rule & decision procedure. This can be expressed as a set
of steps to follow, a flow chart a decision procedure will almost
specify the information may acquire before the decision rules have
applied. Since, structured programmable decisions can be pre-
specified many of these decisions can be handled by lower
personnel with little specialized knowledge.

The information system requirement for structured decision are

clear & unambiguous : Procedures for entering the required input
data, validation procedures to ensure correct & complete input;
processing of the input using decision logic & output of the
decision in a form i.e. useful for action.

A useful output should be clear as to how it is to be used & should

contain enough data to assist the recipient to assess the
reasonableness of the decision.
Unstructured, non-programmable decisions-

The unstructured decision has no pre-established

decision procedure, either because the Decision is to
infrequent to justify the organizational cost of preparing
a decision procedure or because the decision process
is not understood well enough or is too changeable to
allow a stable pre-established decision procedure .The
support requirement for unstructured decision making
are accessed to data & a variety of analysis & decision
procedures that can be applied to the solution of the
problem.
The data requirements are not completely known in
advance, so data retrieval must arrive from ad hoc
retrieval request.
Management information system structure is based on
management activity.
There are also other two types of decision making, i.e.
open decision making, closed decision-making.

Open decision-making – When the environment is

unknown fully it is called as open system environment.
There are unknown sets of alternatives. The after effects
are unknown. Unknown model, method, procedures &
process. Here objectives are unknown.
Open systems are generally designed to satisfy the
aspiration of a group.

Closed decision-making – When the environment is

known fully it is called as a closed system environment.
There are known set of alternatives. The after effects are
known. Methods, procedures & processes are well known
.You are working for the known
objectives. The process of decision-making can be
delegated to the lower level or it can be automated.
Herbert Simon model for decision making:

A well known model proposed by Herbert A. Simon is used

as the basis for describing decision making process.

Intelligence

Design

Choice
The model consists of three major phases, Intelligence,
Design and Choice.

1.Intelligence: Intelligence in this context does not refer

to native intelligence(or the brains one is born with), but
with the process of gathering information. It involves an
awareness of the environment, an active attempt to
gather information from the environment . This phase
may be a continuous, ongoing phases or an intermittent
effort, depending upon the requirements of the decision
to be made.
2. Design: Design indicates the generation of alternatives
to solve the problem formulated. This is a creative process.
For a long time, it was thought that creativity is inborn.
However, Management Expert have proved that creativity
can indeed be taught and nurtured. There are several have
techniques that can be used for “Ideation(another term for
the generation of alternatives),including Free Thinking,
Analogy, Brainstorming, Checklists, etc.”
3.Choice: Once the manager has enough ideas or
alternatives to work with, he can apply a rational process
to choose the most viable alternatives to work with. He
thus makes a choice from the alternatives available to
select the path that would most likely solve the problem at
hand.
Decision Support
System
The term decision support system refers to a class of systems
which support the Process of decision making . The emphasis
is on “support” rather than on automation of decisions .
Decision support systems allow the decision maker to retrieve
data and test alternative solutions during the process of
problem solving .
Characteristics of decision support system :
The concept Decision support system is based on several
assumptions about the role of the computer in effective
decision making :
1. The computer must support the manager but not replace
his /her judgment .
It should therefore neither try to provide the “answers” nor
“inputs” a Predefined sequence of analysis .
2. The main payoff of computer support is for semi
structured problems , where parts of the analysis can be
systematized for the computer , but where the decision
makers insight and the judgment are needed to control the
process .

3. Effective problem solving is interactive and enhance by a

dialog between the user and the system . The users
explores the problem situation using analytic and information
providing capabilities of the system as well as human
experience and insights .
The decision support system should provide ease of access
to the Database containing relevant data and interactive
testing solutions . The designer must Understand the
process of decision making for each situation in order to
design a System to support it .
Organization
Management is interested in organization mainly from an
instrumental point of view. For a company organization
is a means to an end in order to achieve its goals.

In this sense organizations can be distinguished into

two fundamentally different sets of objectives:

Organizations whose goal is to generate specific

services and/or to produce goods (factories, service
enterprises, etc.) or to bring about specific effects in its
surrounding world (e.g. authorities, police, political
parties, interest groups, trade unions, etc.).

Organizations whose goal is to change individuals (e.g.

schools, universities, hospitals, prisons). This type of
organization is also known as a non-profit-organization.
With regard to the inner structure of organizations
two terms have to be distinguished:

Structural organization: the hierarchal structure of

the company (who is performing which task and
who has which decision-making power?)

Process organization: the processes and routines

of the manufacturing phases that occur within the
company (in which order is something done and
how?)