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KMBN-208-MIS Notes-Uint-1st & 2nd.pptx

  1. 1. Jagran Institute Of Management MBA:FIRST YEAR-2nd Semester- Session-2021-22 (KMBN208)-MANAGEMENT INFORMATION SYSTEMS Subject Start Date:11th-April-2022 NameofFaculty: VishnuKr.Shukla (Assistant Professor) Dept.ofMCA
  2. 2. MANAGEMENT INFORMATION SYSTEMS Course Objective – 1. To help the students understand the importance of information management in business and management. 2. To provide understanding about different types of information systems in business. 3. To apply the theory and concepts in practical with help of software. 4. To understand various security and ethical issues with Information Systems. 5. To provide hands on learning of applications on Spreadsheet and database software.
  3. 3. MANAGEMENT INFORMATION SYSTEMS UNIT -1 (6 Hours)- Management Information Systems - Need, Purpose and Objectives, Contemporary Approaches to MIS, Information as a strategic resource, Use of information for competitive advantage, MIS as an instrument for the organizational change. Information Technology – Characteristics and emerging trends, IT Capabilities and their organizational impact, IT enabled services. Transaction Processing System: Characteristics and its importance. You can also visit for MIS Notes- https://theintactone.com/2021/03/07/kmbn208-management-
  4. 4. MANAGEMENT INFORMATION SYSTEMS UNIT -II (6 Hours)- Information, Management and Decision Making - Attributes of information and its relevance to Decision Making, Types of information. Models of Decision Making - Classical, Administrative and Herbert Simon's Models. Management Support Systems: Decision Support Systems, Group Decision Support Systems, and Executive Information Systems.
  5. 5. MANAGEMENT INFORMATION SYSTEMS UNIT -III (8 Hours) Managing Data Resources- The need for data management, Challenges of data management, Data independence, Data redundancy, Data consistency, Data administration. Database Management System – Concepts and types of DBMS, Fields, Records, Table, View, Reports and Queries. Data warehouse and Data mining – Characteristics and uses of Data warehouse, Techniques of Data Mining, Business Intelligence Database Management System (Lab): Creation of Table, View and Reports. Basics of SQL and running queries.
  6. 6. MANAGEMENT INFORMATION SYSTEMS Suggested Readings 1. Management Information System – James ‘O’ Brian. 2. Management Information Systems, Laudon and Laudon, 7th Edition, Pearson Education Asia . 3. Management Information Systems, Jawadekar, Tata McGraw Hill . 4. Analysis and Design of Information Systems, Rajaraman, Prentice Hall . 5. Database Management Systems: A Business-Oriented Approach Using ORACLE, MySQL and MS Access, by Sotirios Zygiari . 6. Computer Applications in Business (CBCS) by Dr. Sushil Kumar Sharma & Ms. Mansi Bansal (Taxmann) . 7. Excel 2019 All-In-One: Master the new features of Excel 2019 / Office 365, Lokesh Lalwani (BPB.)
  7. 7. MANAGEMENT INFORMATION SYSTEMS CO1 Be able to understand the importance of information management in business and management Knowledge( K2) / Remembering ( K1) CO2 To understand and formulate different types of information systems in business Knowledge ( K2) CO3 Be able to apply the theory and concepts in practical with help of software Applying ( K 4) CO4 To apply various security and ethical issues with Information Systems Applying ( K 4) CO5 To synthesize applications on Spread sheet and database software Synthesizing ( K6)/ Evaluating ( K7)
  8. 8. Before starting subject- Overview of Computers: Block diagram and its description, digital computer & types with specification. Computer Hardware: Input device/Output devices. Storage Devices/ Introduction to Memory. Computer Software: System Software & Application Software. Number Systems. Introduction to programming language: Different levels of PL: High Level language, Assembly language, Machine language. Language Translator :-Introduction to Compiler, Interpreter, Debugger, Linker, Loader, Assembler.
  9. 9. MANAGEMENT INFORMATION SYSTEMS INTRODUCTION TO MANAGEMENT INFORMATION SYSTEM:- MIS is the use of information technology, people, and business processes to record, store and process data to produce information that decision makers can use to make day to day decisions. Or Management Information Systems (MIS), referred to as Information, Management and Systems, is the discipline covering the application of people, technologies, and procedures collectively called information systems, to solving business problems. “'MIS' is a planned system of collecting, storing and disseminatingप्रसारdata in the form of information needed to carry out the functions of management.”
  10. 10. According to Philip kolter- A management information system consist of people, equipment and procedures together, sort, analyze, evaluate and distribute the needed timely and accurate information and marketing decision makers. MIS is also knows as Information Systems/ Information and Decision Systems/ Computer- Based Information Systems.
  11. 11. MANAGEMENT INFORMATION SYSTEMS Definitions of MIS: 1. MIS is defined as a system whichprovides informationsupport for decision-makingin theorganization. 2. MIS is defined as an integrated system of manand machine for providinginformationto theoperations,management& decision-makingfunctionin theorganization. 3. MIS is definedas a system basedon thedatabaseof the organizationfor thepurposeof providing informationto people in organization. 4. MIS is defined as a Computer-basedInformationSystem.
  12. 12. Another Meaning of MIS Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making. e.g. Decision Support Systems, Expert Systems, and Executive Information Systems.
  13. 13. According to Subhalakshmi Joshi:- Management information system, or MIS, broadly refers to a computer based system that provides managers with the tools to organize, evaluate and efficiently manage departments within an organization.
  14. 14. MANAGEMENT INFORMATION SYSTEMS COMPONENTS OF MIS:- 1. Management: Word “management” identifies a special group of people whose job is to direct the effort and activities of other people toward common objective. “Management is the process of coordinating work activities so that they are completed efficiently and effectively with and through other people”. Another concept of MANAGEMENT is the effective utilization of human and material resources to achieve the enterprise objective. Or Management is art of getting things done
  15. 15. MANAGEMENT INFORMATION SYSTEMS The basic functions performed by a manager in an organization are: It is a process consisting of the five basic functions: Planning, Controlling, Staffing, Organizing, and Directing.
  16. 16. MANAGEMENT INFORMATION SYSTEMS • 2. INFORMATION:- • Information is data that has been manipulated to be useful to someone. Information must have value. Information tells people something they don’t already know or confirms something that they suspect. • Information is considered as valuable component of an organization. • So, in MIS, means the processed data that helps the management in planning, controlling and operations.
  17. 17. What is Data: Data is raw, unorganized facts that need to be processed. Data can be something simple and seemingly random and useless until it is organized. What is Information: When data is processed, organized, structured or presented in a given context so as to make it useful, it is called information.
  18. 18. • Data are the facts or details from which information is derived. Individual pieces of data are rarely useful alone. For data to become information, data needs to be put into context. Data is a single unit. A group of data which carries new and meaningful data is called Information.
  19. 19. • Some more differences between data and information: • Data is used as input for the computer system. Information is the output of data. • Data is unprocessed facts figures. Information is processed data. • Data doesn’t depend on Information. Information depends on data. • Data is not specific. Information is specific.
  20. 20. MANAGEMENT INFORMATION SYSTEMS Data are the facts or details from which information is derived. Individual pieces of data are rarely useful alone. Data is a single unit. A group of data which carries new and meaning is called Information. Data doesn’t carry a meaning. Information must carry a logical meaning. Data is the raw material. Information is the product. It is an entity piece of information that is fact. Information = Instruction + Data DATA-------→PROCESSING------ →INFORMATION Data involves facts and figures-Information on the other hand is like a finished product.
  21. 21. MANAGEMENT INFORMATION SYSTEMS SYSTEM:- A system is defined as a set of elements which are joined together to achieve a common objective. The elements are interrelated and interdependent. Or A system is a group of interrelated components working together toward a common goal (according to a plan to achieve a specific objective) by accepting inputs and producing output in an organized transformation process.
  22. 22. Manual Information Systems VS Computerized Information Systems (MIS) Data is the bloodstream of any business entity. Everyone in an organization needs information to make decisions. An information system is an organized way of recording, storing data, and retrieving information. In this section, we will look at manual information systems vs. computerized information systems. Manual Information System A manual information system does not use any computerized devices. The recording, storing and retrieving of data is done manually by the people, who are responsible for the information system.
  23. 23. The following are the major components of a manual information system People –people are the recipients of information system Business Procedures –these are measures put in place that define the rules for processing data, storing it, analyzing it and producing information Data –these are the recorded day to day transactions Filing system – this is an organized way of storing information Reports –the reports are generated after manually analyzing the data from the filing system and compiling it.
  24. 24. Advantages and Dis-advantages of a manual information system Advantages: The following are the advantages of manual information systems Cost effective – it is cheaper compared to a computerized system because there is no need to purchase expensive equipment such as servers, workstations, printers, etc. Flexible –evolving business requirements can easily be implemented into the business procedures and implemented immediately Disadvantages: The following are some of the disadvantages of a manual information system. Time consuming –all data entries need to be verified before filing, this is a time consuming task when done by humans. Retrieving data from the filing system also takes a considerable amount of time
  25. 25. Prone to error – the accuracy of the data when verified and validated by human beings is more prone to errors compared to verification and validation done by computerized systems. Lack of security – the security of manual systems is implemented by restricting access to the file room. Experience shows unauthorized people can easily gain access to the filing room Duplication of data –most departments in an organization need to have access to the same data. In a manual system, it is common to duplicate this data to make it easy to accessible to all authorized users. The challenge comes in when the same data needs to be updated Data inconsistency – due to the duplication of data, it is very common to update data in one file and not update the other files. This leads to data inconsistency Lack of backups – if the file get lost or mishandled, the chances of recovering the data are almost zero.
  26. 26. Computerized information system Computerized systems were developed to address the challenges of manual information systems. The major difference between a manual and computerized information system is a computerized system uses a combination of software and hardware to record, store, analyze and retrieve information. Advantages and Disadvantages of a computerized information system (MIS) The following are some of the disadvantages of a computerized information system. Advantages: The following are the advantages of computerized information systems Fast data processing and information retrieval – this is one of the biggest advantages of a computerized information system. It processes data and retrieves information at a faster rate. This leads to improved client/customer service Improved data accuracy – easy to implement data validation and verification checks in a computerized system compared to a manual system. Improved security – in addition to restricting access to the database server, the computerized information system can implement other security controls such as user’s authentication, biometric authentication systems, access rights control, etc.
  27. 27. Reduced data duplication – database systems are designed in such a way that minimized duplication of data. This means updating data in one department automatically makes it available to the other departments Improved backup systems – with modern day technology, backups can be stored in the cloud which makes it easy to recover the data if something happened to the hardware and software used to store the data Easy access to information – most business executives need to travel and still be able to make a decision based on the information. The web and Mobile technologies make accessing data from anywhere possible. Disadvantages: It is expensive to set up and configure – the organization has to buy hardware and the required software to run the information system. In addition to that, business procedures will need to be revised, and the staff will need to be trained on how to use the computerized information system. Heavy reliance on technology – if something happens to the hardware or software that makes it stop functioning, then the information cannot be accessed until the required hardware or software has been replaced. Risk of fraud – if proper controls and checks are not in place, an intruder can post unauthorized transactions such as an invoice for goods that were never delivered, etc.
  28. 28. MANAGEMENT INFORMATION SYSTEMS • Thus every system is said to be composed of subsystems. A system has one or multiple inputs, these inputs are processed through a transformation process to convert these input( s) to output. • Ex. Human body is a system composed of various parts, which are working together towards a common objective , that is to live
  30. 30. SWOT: Strengths, Weaknesses, Opportunities, and Threats analysis • What is SWOT: • SWOT Analysis is a simple but useful framework for analysing your organization's strengths, weaknesses, opportunities, and threats. It helps you to build on what you do well, to address what you're lacking, to minimize risks, and to take the greatest possible advantage of chances for success. • What is Six Sigma: • Six Sigma is a method that provides organizations tools to improve the capability of their business processes. This increase in performance and decrease in process variation helps lead to defect reduction and improvement in profits, employee morale, and quality of products or services.
  31. 31. What is CMMI: Capability Maturity Model Integration (CMMI) is a process level improvement training and appraisal program. CMMI defines the following maturity levels for processes: Initial, Managed, Defined, Quantitatively Managed, and Optimizing. • The Capability Maturity Model Integration, or CMMI, is a process model that provides a clear definition of what an organization should do to promote behaviours that lead to improved performance. With five “Maturity Levels” or three “Capability Levels,” the CMMI defines the most important elements that are required to build great products, or deliver great services, and wraps them all up in a comprehensive model. • The CMMI helps us understand the answer to the question “how do we know?”
  32. 32. MANAGEMENT INFORMATION SYSTEMS TYPES OF MIS :- There are various types of MIS- 1. Transaction Processing System (TPS):- -designed to process routine transactions efficiently and accurately. Managers often use these systems to deal with such tasks as payroll, customer billing and payments to suppliers. Or MIS produce fixed ,regularly scheduled reports based on data extracted and summarized from the firms underlying transaction processing systems to middle and operational level managers to identify and inform structured and semi structured decision problems.
  33. 33. MANAGEMENT INFORMATION SYSTEMS 2. Decision support system (DSS):- This are computer applications used by middle management to compile information from a wide range of sources to support problem solving and decision making. 3. Executive Support System (ESS):- Executive Support System (ESS) is software used by companies which has information related to business, which enables the top management to take better decisions in favor of the company.
  34. 34. MANAGEMENT INFORMATION SYSTEMS 4. Knowledge Management Systems ("KMS")-to help businesses create and share information. These are typically used in a business where employees create new knowledge and expertise - which can then be shared by other people in the organization to create further commercial opportunities. 5. Customer Relationship Management (CRM):- This are MIS designed specifically for managing the marketing aspects of the business . 6. Office Automation Systems (“OAS”)-that try to improve the productivity of employees who need to process data and information. Wide range of software systems that exist to improve the productivity of employees working in an office (e.g. Microsoft Office XP) or systems that allow employees to work from home or whilst on the move.
  35. 35. MANAGEMENT INFORMATION SYSTEMS Why MIS ? • Manager makes decisions all the time. • There is an overload of information. • All information is not useful. • Anything which helps manager improve his decision-making will obviously lead to better result. • MIS is a system, where data is the input, which is processed to provide output in the form of information reports, summaries, etc . Which aid the manager’s decision-making process.
  36. 36. MANAGEMENT INFORMATION SYSTEMS How is a Management Information System Useful in Companies? Planning and Control : MIS improves the quality of plants by providing relevant information for decision – making. MIS serves as a link between managerial planning and control. It improves the ability of management to evaluate and improve performance. MIS Minimizes Information Overload : MIS change the larger amount of data into summarized form and therefore, avoids the confusion which may arise when managers are flooded with detailed facts. MIS Encourages Decentralization : Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures.
  37. 37. MANAGEMENT INFORMATION SYSTEMS Costs : Invest in a consultant to help define your core requirements that include information for strategic planning and project management. To be useful and successful, a management information system should focus on company products and services, customers, operating costs, marketing opportunities and the company's exposure to risk. • MIS brings Coordination : MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centers in the organization . MIS assembles, process , stores , retrieves , evaluates and disseminates the information .
  38. 38. MANAGEMENT INFORMATION SYSTEMS Impact of the Management Information System • • With a good MIS support, the management of marketing , finance, production and personnel becomes more efficient. • • The MIS begins with the definition of a data entity and its attributes, respectively, designed for information generation in the organization. • • The MIS calls for a systemization of the business operations for an effective system design. • • This leads to streamlining of the operations which complicate the system design.
  39. 39. MANAGEMENT INFORMATION SYSTEMS • • MIS improves the administration of the business by bringing a discipline in its operations as everybody is required to follow and use systems & procedures. • • This process brings a high degree of professionalism in the business operations. • • Since the goals and objectives of the MIS are the products of business goals & objectives, it helps indirectly to pull the entire organization in one direction towards the corporate goals and objectives by providing the relevant information to the people in the organization.
  44. 44. MANAGEMENT INFORMATION SYSTEMS Objectives of MIS : The goals of an MIS are to implement the organizational structure and dynamics of the enterprise for the purpose of managing the organization in a better way and capturing the potential of the information system for competitive advantage. Following are the basic objectives of an MIS:- 1. Data Capturing : MIS capture data from various internal and external sources of organization. Data capturing may be manual or through computer terminals. 2. Processing of Data : The captured data is processed to convert into required information. Processing of data is done by such activities as calculating, sorting, classifying, and summarizing. Processing data means − – making calculations with the data
  45. 45. 3. Storage of Information : MIS stores the processed or unprocessed data for future use. If any information is not immediately required, it is saved as an organization record, for later use. 4. Retrieval of Information : MIS retrieves information from its stores as and when required by various users. 5. Dissemination of Information : Information, which is a finished product of MIS, is disseminated to the users in the organization. It is periodic or online through computer terminal.
  46. 46. MANAGEMENT INFORMATION SYSTEMS NEED FOR MIS:- MIS is an information system that provides information in the form of standardized reports and displays for the managers. MIS is a broad class of information systems designed to provide information needed for effective decision making. Data and information created from an accounting information system and the reports generated thereon are used to provide accurate, timely and relevant information needed for effective decision making by managers. MIS Need for Information Systems • Managers make decisions. Decision-making
  47. 47. MANAGEMENT INFORMATION SYSTEMS Here ,discussed about some points regarding needs of MIS- Decision makers need information to make effective decisions- Management Information Systems (MIS) make this possible. MIS systems facilitate communication within and outside the organization – Employees within the organization are able to easily access the required information for the day to day operations. Facilitates such as Short Message Service (SMS) & Email make it possible to communicate with customers and suppliers from within the MIS system that an organization is using.
  48. 48. Business Need Information Technology?- The fundamental reasons for the use of information technology in business are: Support of business operations Support of managerial decision making Support of strategic competitive advantage. Emergence of the Global Economy Transformation of the Business Enterprise Competitive Business Environment Record keeping – Management information systems record all business transactions of an organization and provide a reference point for the transactions.
  49. 49. PURPOSE OF MIS:- The purpose of MIS is reporting and is to provide the necessary information to the managers and supervisors at various levels to help them to discharge their functions of organising, planning, control and decision making. The primary purpose of a management information system, or MIS, is to assist managers in making strategic, tactical and operational decisions in an efficient and productive manner. It provides managers with essential information that is gathered from a variety of sources, pooled into a single database and compiled in a readable format. Management Information Systems are primarily concerned with the delivery of information (both internal and external) to organizational members from the shop floor workers to the management.
  50. 50. In other terms, The purpose of MIS is to help the smooth running of the business by providing information on the firms data (such as accounting figures) employees from different levels will then evaluate this information so that decisions can be made to ensure that the business remains competitive and successful. A management information system consists of a set of systems and processes that distributes information to managers. This tool is used to make reports and comprehensive overviews that help managers conduct performance reviews and make a wide range of decisions, such as an in- depth analysis of operational concerns. It provides internal reports that are presented in an easily understandable format. Information collected by a MIS are either financial or operational depending on the needs of management.
  51. 51. A MIS is generally capable of collecting any type of information required by managers. It views financial data, such as daily expenses and revenues, and attributes these data to respective departments. Personnel are able to manage outgoing shipments and incoming deliveries from any location connected to the MIS. MIS have been created to support the whole range of business's administration and regulatory activities
  52. 52. Advantage Or Benefits of MIS:- A good management information system can be used not only for the storage of electronic data alone but must be able to support the analysis required by management. There are many advantages of MIS which are utilized by manager to achieve organization goal.. • Data can easily be accessed and analyzed without time consuming manipulation and processing.
  53. 53. MANAGEMENT INFORMATION SYSTEMS Significant cost benefits, time savings, productivity gains and process re- engineering opportunities are associated with the use of data warehouse for information processing. The following are some of the benefits of a good MIS:- • Increased customer satisfaction. • Improved quantity and quality of information. • Improved quality and quantity management decisions. • Improved responsiveness number of the competitor’s condition. • Improved operational efficiency and flexibility. • Improved quality of internal and external communications. • Improved quality of planning. • Improved quality control and supervision.
  54. 54. • Limitations Or Disadvantage of MIS:- Even though MIS has many benefits but it also has its limitations. • Limitations of MIS are discussed below: • While MIS may solve some critical problems but it is not a solution to all problems of an organization. • It cannot meet the special demands of each person. MIS if designed in an improper manner does not
  55. 55. Challenges of MIS:- • There are three major challenges of MIS. These are briefly discussed below: • High Cost • Training of Employee • Maintenance Cost 1. High Cost:- Development of new computerized based information system is a problem for the organization due to the cost factor and it creates problems because with the change of time there is need of up-to-date of the information system. 2. Training of Employee:-
  56. 56. Information is Strategic Resources. Because Information helps in taking Strategic, Tactical and operational Decisions. It is one of critical and importance resource. It helps us understand Cost, Quality, price, technology, productivity and product.
  57. 57. MIS as an instrument for the organizational change:- MIS can deliver facts, data and trends to businesses with lightning speed. Having this information allows companies to react quickly to market changes, regardless of the type (positive or negative) of volatility. MIS acts’ as an agent or a catalyst to bring about organizational change that is needed to cope up with the changing business environment and the effect of external forces. MIS has shifted from back office to front office. The role of the MIS in an organization can be compared to the role of heart in the body. Example : The information is the blood and MIS is the heart. In the body, the heart plays the role of supplying pure blood to all the elements of the body including the brain. The heart works faster and supplies more blood when needed. It regulates and controls the incoming impure blood, processes it and sends it to the destination in the quantity needed. It fulfills the needs of blood supply to human body in normal course and also in crisis. The MIS plays exactly the same role in the organization.
  58. 58. The system ensures that an appropriate data is collected from the various sources, processed, and sent further to all the needy destinations. The system is expected to fulfill the information needs of an individual, a group of individuals, the management : the managers and the top management. The MIS satisfies the diverse needs through a variety of systems such as Query Systems, Analysis Systems, Modeling Systems and Decision Support Systems. The MIS helps in Strategic Planning, Management Control, Operational Control and Transaction Processing. The MIS helps the clerical personnel in the transaction processing and answers their queries on the data pertaining to the transaction, the status of a particular record and references on a variety of documents.
  59. 59. The MIS helps the junior management personnel by providing the operational data for planning, scheduling and Controlling and helps them further in decision making at the operations level to correct an out of control situation. The 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. The MIS helps the top management in goal setting, strategic planning and evolving the business plans and their implementation. The MIS plays the role of information generation, communication, problem identification and helps in the process of decision making. The MIS, therefore, plays a vital role in the management, administration and operations of an organization.
  60. 60. External Changes:- 1. MIS has made world smaller. 2. Worldwide reorganization environment and attempt to control the calamity. आपदा 3. Health conscious among the group leading less sufferings. 4. Change in the work lifestyle for better result. 5. Creating Knowledge is an asset. Internal Change:- 1. MIS will change the Business Process. 2. MIS will change the old standards and set new standards. 3. MIS key for Continuous improvement Process. 4. MIS will reduce the hierarchy and hence less operation cost. 5. MIS focus on “Shared information. 6. MIS will accelerate restructure work flow for both line and staff functions. 7. MIS will bring change in Authority and power by merit and not by age or number of years of experience. 8. MIS brings cultural change. 9. MIS measures the results and performance. 10. MIS brings Continuous addition to Organizational knowledge base.
  61. 61. Contemporary Approaches to information systems:- Although information systems are a collection of electrical and mechanical devices, they require the organization, and the people that work within the organization for them to be successful. Or Information systems are sociotechnical systems. Although they are composed of machines, devices, and "hard" physical technology, they require substantial social, organizational, and intellectual investments to make them work properly. Since problems with information systems— and their solutions—are rarely all technical or behavioral, a multidisciplinary approach is needed.
  62. 62. When an information system is being developed, much importance should be given to the structure of the organization, culture of the organization, etc. But along with these, especial attention should also be given to the technical side of MIS. The various contemporary approaches to MIS development can be summarized as: The Behavioral Approach a) Based on the impact of the behavior and also on the response of the people in the organization. b) Motivational Feasibility forms a very important and demanding part of such an approach towards MIS development. • Deals with behavioral issues that arise in the development, and long term maintenance of the information system. • Different disciplines, such as psychologists, sociologists, Economists, study information systems, and the impacts they have in the organizational environment. Behavioral changes can occur within the organization during, and after information system development. The key to this approach is to find the solution to the behavior, which is not a technical issue.
  63. 63. The Technical Approach: The technical approach uses mathematical models to test the capabilities of information systems. These disciplines include: • Computer Science - concerned with methods of computability, computation, and data storage and access. • Management Science - emphasized the development of models for decision making, and management practices. Operations Research - focuses on mathematical techniques for optimizing selected parameters of organizations.(inventory control, transaction costs).
  64. 64. MANAGEMENT INFORMATION SYSTEMS Information System:- Before discussion of information system you should know the- What is Digital Convergence: It is an approach by which all types of media and communication will be digitized allowing them to be used through a single worldwide network. What is Information Technology: Hardware and software that perform data processing tasks, such as capturing, transmitting, storing, retrieving, manipulating or displaying data. What is IT Architecture: A conceptual design for the implementation of information technology in an organization, including its hardware, software, and network technology platforms, data resources, application portfolio, and IS organization.
  65. 65. MANAGEMENT INFORMATION SYSTEMS Introduction to Information System: A collection of elements(devices) that capture data and convert it in information and disseminate to the decision-makers in an organization. In other words, An information system is an organized combination of people, hardware, software, communications network, and data resources that collects, transforms, and disseminates in an organization. An information system contents information about an organization and its surrounding environment. Three basic activities – input, processing, and output produce the information organization needs.
  66. 66. Components of Information System :- It is a combination of – Input Processor Output People Hardware(physical devices) : Software (information processing instructions) Data Network (communication channels) Input:-In computing, an input device is a piece of equipment used to provide data and control signals to an information processing system such as a computer or information appliance. Examples of input devices include keyboards, mouse, scanners, cameras, joysticks, and microphones.
  67. 67. MANAGEMENT INFORMATION SYSTEMS Processor :-A processor, or "microprocessor," is a small chip that resides in computers and other electronic devices. Its basic job is to receive input and provide the appropriate output. While this may seem like a simple task, modern processors can handle trillions of calculations per second. Output:-An output is data that a computer sends. Computers only work with digital information. Any input that a computer receives must be digitised. Often data has to be converted back to an analogue format when it's output, for example the sound from a computer's speakers. People :-The term “People" probably means the group of team members (executives and other managers) who are primarily responsible for making decisions in the organization.
  68. 68. MANAGEMENT INFORMATION SYSTEMS Hardware(physical devices) :Computer hardware refers to the physical devices such as servers, desktop computers, laptops, portable devices, networking devices, storage devices and printers, etc. Let's now look at each of these elements separately Software (information processing instructions) :-The software runs on top of the hardware. Software
  69. 69. MANAGEMENT INFORMATION SYSTEMS • Network (Telecommunication channels):-Networking devices are used to link computers and other telecommunication devices together. The devices used to create a network depend on the type of network work that you want. For example, a wired Local Area Networks (LANs) will require a network switch and RJ- 45 cables. • networking devices are used to interconnect computing resources so that they can communicate with each other. Common networking devices include networking hubs and switches, Wi-Fi routers, etc. Hubs and switches are used to provide network connectivity via a physical cable, and they are usually used to connect desktop computers. Wi-Fi routers are used to provide wireless networking capabilities. Wi-Fi routers are
  70. 70. MANAGEMENT INFORMATION SYSTEMS Types of information systems:- A business has several information systems : • (A) Formal Information System • (B) Informal Information System • (C) Computer Based Information System (A) Formal Information System : It is based on organizational chart represented by the organization. (B) Informal Information System : It is an employee based system designed to meet personal and vocational needs and to help in the solution of work-related problems. It also funnels information upward through indirect channels. It works within the framework of the business and its stated policies.
  71. 71. (C) Computer Based Information System (CBIS) : This category of information system depends mainly on the computer for handling business application. System analysis develops different types of information system to meet variety of business needs. There is class of system known as collectively as computer based information system. Types of Information system:- They are categorized in the following 6 classes:
  72. 72. • These classification of Information Systems can be done on the basis of business functions also. This classification is done to achieve the maximum efficiency in business functions. • There are lot many considerations we have to bother while we do business. • The role played by the Internet and Information Technologies to support electronic commerce, enterprise communications and collaboration, and Web-enabled business processes both within a networked enterprise, and with its customers and business partners will definitely require specialized Information Systems for Business functions.
  73. 73. Figure shows the specific types of information systems that correspond to each organizational level.
  74. 74. MANAGEMENT INFORMATION SYSTEMS • The organization has executive support systems (ESS) at the strategic level; • management information systems (MIS) and decision-support systems (DSS) at the management level; • knowledge work systems (KWS) and office automation systems at the knowledge level; and • transaction processing systems (TPS) at the operational level. • Systems at each level in turn are specialized to serve each of the major functional areas.
  75. 75. Function of an Information System
  76. 76. • Organizations can be divided into strategic, management, knowledge and operational levels and into five major functional areas- sales and marketing, manufacturing, finance, accounting, and human resource. Information system serves each of these levels and functions.
  77. 77. • 1. TPS (Transaction Processing System): TPS are the basic business systems that serve the operational level of the organization. A TPS is a computerized system that performs and records the daily routine transactions necessary to conduct business. Examples are sales order entry, hotel reservation system, payroll, employee record mgmt., etc. • Managers need TPS to monitor the status of internal operations and firm’s relations with external environment. TPS are also measure producers of information for the other type of system. • TPS processes transaction and produces reports. It represents the automation of the fundamental, routine processing used to support business
  78. 78. • Transaction Processing Systems (TPS) are cross- functional information systems that process data resulting from the occurrence of business transactions. • Transactions are events that occur as part of doing business, such as sales, purchases, deposits, withdrawals, refunds, and payments. Transaction processing activities are needed to capture and process data, or the operations of a business would grind to a halt.
  79. 79. Types of Transactions • There are mainly two types of transaction and these are: • Internal transaction • External transaction • Internal Transactions: Those transactions, which are internal to the company and are related with the internal working of any organization. • Example: Recruitment Policy, Promotion Policy, Production Policy, etc. • External Transactions: Those transactions, which are external to the organization and are related
  80. 80. Characteristics of Transaction Processing Systems • Various characteristics of TPS are: • A TPS records internal and external transactions for a company. It is a repository of data that is frequently accessed by other systems. • A TPS performs routine, repetitive tasks. It is mostly used by lower-level managers to make operational decisions. • Transactions can be recorded in batch mode or
  81. 81. Features of TPS:-Various features of TPS are: • A TPS supports different tasks by imposing a set of rules and guidelines that specify how to record, process, and store a given transaction. There are many uses of transaction processing systems in our everyday lives, such as when we make a purchase at retail store, deposit or withdraw money at a bank, or register for classes at a university. Almost all organizations, regardless of the industry in which they operate, have a manual or automated TPS. • A TPS is the data lifeline for a company because it is the source of data for other information systems, such as MIS and DSS (Decision Support Systems). Hence, if the TPS shuts down, the consequences can be serious
  82. 82. • 2. Management Information System (MIS):- MIS is an information system, which processes data and converts it into information. A management information system uses TPS for its data inputs. The information generated by the information system may be used for control of operations, strategic and long-range planning. Short-range planning, management control, and other managerial problem solving. It encompasses processing in support of a wide range of organizational functions & management processes. MIS is capable of providing analysis, planning & decision making support. The functional areas of a business may be marketing, production, human resource, finance
  83. 83. • It is the Information system at the management level of an organization that serve the functions of planning, controlling and decision making by providing routine summary and exception reports. • 3. DSS (Decision Support System) :- • It is the information system at the organizations management level that combines data and sophisticated analytical models or data analysis tools to support semi- structured and unstructured decision making. • DSS use internal information from TPS and MIS; they often bring in information from external sources such as current stock prices or product prices of competitors. DSS have more analytical power then other systems. It is an interactive system in which user can change assumptions, ask new questions and include new data.
  84. 84. • A Decision Support System (DSS) is an interactive computer-based system, which helps decision-makers utilize data and models to solve unstructured problems. • Decision support systems couple the intellectual resources of individuals with the capabilities of the computer to improve the quality of decisions. It is a computer-based support system for management decision-makers who deal with semi-structured and unstructured problems. • A decision support system is an information system whose primary purpose is to provide knowledge workers with information on which to base informed decisions. • The decision support systems take the data and present
  85. 85. • A decision support system is a computer-based system consisting of three interacting components: • 1. A language system: A mechanism to provide communication between the user and other components of the DSS, • 2. A knowledge system: The repository of problem domain knowledge embodied is DSS either as data or procedures, and • 3. A problem processing system: The link between the other two components, containing one or more of the general problem-handling capabilities required for decision-making. • So, a decision support system is: • (a) An information system
  86. 86. • 4. KWS (Knowledge Work System) and Office Systems: KWS and office systems serve the information needs at the knowledge level of organization. Knowledge work system aid knowledge workers whereas office systems primarily aid data workers. Knowledge workers are people who hold formal university degrees and who are often members of recognized profession such as engineers, doctors, lawyers, scientists, etc. Their jobs consist primarily of creating new information and knowledge. Data workers typically have less formal advanced educational degrees and tend to process rather than create information. They consist primarily of secretaries, book-keepers, filing clerks
  87. 87. • 5.ESS (Executive Support System) : • It is the information system at the organizations strategic level designed to address unstructured decision making through advanced graphic and communication. ESS is designed to incorporate data about external events such as new tan laws and competitors. They filter, compares and track critical data, emphasizing the reduction of time and effort required to obtain information useful to executive. ESS employs the most advanced graphic software and can deliver graphs and data from many sources immediately to a senior executive’s office or to a board room.
  88. 88. • The Nature of Executive’s Work • We now know the basics of ESS. Now before continuing further I want to discuss the nature of an executives work. This means that which type of work executives normally do or perform for which they require not a DSS but ESS. • This is highly required before building an ESS because without the knowledge of executives work we cannot decide about the system which is suitable for him. • Basically manager’s role is divided into three categories: • Interpersonal Role: Roles like figurehead, leader, and liaison • Informational Roles: Roles of monitor, disseminator,
  89. 89. • We divide the work of executives in relation to the decision roles into 2 phases:- Phase 1 is the identification of problems or opportunities. Phase 2 is the decision of what to do about it. • The figure below provides the flowchart that describes about the process of information flow in decisional roles. • Functional units like finance, production, accounting, and personnel, etc. generate the internal information. The external information comes from the sources such as online databases, newspaper, industry newsletters, government reports, personal contacts, etc. • We know that the combined information is very important because that is the source needed for
  90. 90. • Advantages of ESS: • Advantages of ESS are: • Simple for high-level executives to use Operations do not require extensive computer experience. • Provides timely delivery of company summary information. • Provides better understanding of information. • Filters data for better time management. • Provides system for improvement in information tracking. • Disadvantages of ESS • Disadvantages of ESS are: • Computer skills required to obtain results.
  91. 91. • According to functions or behaviour IS can be divided into following types:- • Sales and Marketing System • Manufacturing and Production Systems • Finance and Accounting Systems • Human Resources Systems • 1.Sales and Marketing System : • The sale and marketing function is responsible for selling the organization’s products or services. Marketing is concerned with identifying the customers for the firm’s products or services, determine what they need or want, planning and developing products and services to meet their
  92. 92. • Sales are concerned with contacting customers, selling the products and services, taking orders and following up on sales. Sales and marketing information systems support these activities (example)
  93. 93. • 2. Manufacturing and Production Systems : • The manufacturing and production function is responsible for actually producing the firm’s goods and services. Manufacturing and production activities deal with the planning, development, and maintenance of production facilities; the establishment of production goals; the acquisition, storage, and availability of production materials; and the scheduling of equipment, facilities, materials, and labour required to fashion finished products. Manufacturing and Production information systems support these activities (example)
  94. 94. • 3. Finance and Accounting Systems :-The finance function is responsible for managing the firm’s financial assets, such as cash, stocks, bonds, and other investments, in order to maximize the return on these financial assets. The finance function is also in charge of managing the capitalization of the firm. In order to determine whether the firm is getting the best return on its investments, the finance function must obtain a considerable amount of information from sources external to the firm. • The accounting function is responsible for maintaining and managing the firm’s financial records-receipts, depreciation, payroll to account for the flow of funds in a firm. Finance and accounting share related problems such as how to keep track of a firm’s financial assets and fund flows. Financial and accounting information system keep of the firm’s financial assets and fund flows.
  95. 95. • 4. Human Resources Systems :- • The human resource function is responsible for attracting, developing, and maintaining the firm’s workforce. Human resources information systems support activities such as identifying potential employees, maintaining complete records on existing employees, and creating programs to develop employees’ talents and skills. • Strategic-level human resources system identify the employee requirements (skills, educational level, types of positions, number of positions, and cost) for meeting the firm’s long term business plans.
  96. 96. Contemporary Approach to Information System :- MIS combines the work of computer science, management science, and operations research with a practical orientation toward developing system solutions to real-world problems and managing IT resources. There are several different approaches to Information Systems: technical, behavioural, sociotechnical • Technical Approach :- • - It emphasis mathematically based models to study Information System, as well as the physical technology and formal capabilities of these systems. • - The disciplines that contribute to technical approach are computer science, management science and operation research. • - Computer science is concerned with establishing theories of computability, methods of computation and methods of efficient data storage and access. • - Management science emphasis the development of models for decision making and management practices. • - Operations research focuses on mathematical techniques for
  97. 97. OR-Technical Approach:- The technical approach to information systems emphasizes mathematically based models to study information systems, a well as the physical technology and formal capabilities of these systems. The disciplines that contribute to the technical approach are: Computer science, Management science Operations research Computer science is related with instituting speculations of computability, methods of computation, and techniques of efficient data storage and access. Management science highlights the expansion of models for decision-making and management practices. Operations research concentrates on mathematical techniques for optimizing chosen parameters of organizations like transportation, inventory control, and transaction costs. From a technical approach, an information system is observed from a mathematical point of view. Mathematical models are used to study information systems and to elucidate how they can be applied. By means of a technical perspective, management would like to establish speculations of computability which can be utilized to recognize how to apply information systems.
  98. 98. 2. Behavioural Approach :- • - It is concern with behavioural issues that arise in the development and long term maintenance of information system. • - Issues such as strategic business integration design, implementation, utilization and management cannot be explored usefully with the models used in technical approach. • - Other behavioural contribute system with an eye toward how group and organizations shape the development of the system and also how systems affect individuals groups and organizations. • - Psychologist study information system with an interest in how human decision makers perceive and use formal
  99. 99. 3. Sociotechnical Approach:- Information systems are sociotechnical systems. Although they are composed of machines, devices, and "hard" physical technology, they require substantial social, organizational, and intellectual investments to make them work properly. Since problems with information systems—and their solutions—are rarely all technical or behavioural, a multidisciplinary approach is needed. OR In the sociotechnical view of systems, optimal organizational performance is achieved by jointly optimizing both the social and technical systems used
  100. 100. • Information technology (IT) • Information technology (IT) is the use of computers to store or retrieve data and information. IT is typically used within the context of business operations as opposed to personal or entertainment technologies. IT is considered to be a subset of information and communications technology (ICT). • An information technology system (IT system) is generally an information system, a communications system, or, more specifically speaking, a computer system – including all hardware, software, and peripheral equipment – operated by a limited
  101. 101. • Information technology is the study, design, development, implementation, support or management of computer-based information systems—particularly software applications and computer hardware. IT workers help ensure that computers work well for people.
  102. 102. • Emerging Trends in Information Technology:- • According to Information Technology Association of America, information technology is defined as “the study, design, development, application, implementation, support or management of computer-based information systems.” • Information technology has served as a big change agent in different aspect of business and society. It has proven game changer in resolving economic and social issues. • There are several emerging digital trends impacting the information technology sector as a whole. The IT industry has been experiencing a consistent expansion and growth in its capabilities. As the information technology sector continues to expand, the available job opportunities, organizational structure, and available technologies of the IT industry has significantly changed.
  103. 103. Emerging IT technologies have already significantly impacted major industries like entertainment, business, education, law enforcement, and marketing. Advancement and application of information technology are ever changing. Some of the trends in the information technology are as follows: Cloud computing, The Internet of Things (IoT), Big Dta, Cyber security, Automation, Artificial Intelligence, & Machine Learning, Virtual relating, Block chain & 3D printing etc.
  104. 104. • One of the most talked about concept in information technology is the cloud computing. Clouding computing is defined as utilization of computing services, • Automation, artificial intelligence, and machine learning are one of the most advanced emerging technologies impacting the information technology sector as a whole. Automation is he simulation of human intelligence tasks through machines and computer systems. • AI-empowered systems possess the machine ability to think and learn. When properly deployed, artificial intelligence can be utilized to optimize
  105. 105. • IT Capabilities and their organizational impact
  106. 106. The Impact of IT on Organizations "Many of the impacts of Information Technology are straightforward. But they are not necessarily obvious, nor are they trivial" (Jack Nilles, Centre for Future Research) Information technology (IT) is dramatically changing the business landscape. Although organization cultures and business strategies shape the use of IT in organizations, more often the influence is stronger the other way round. IT significantly affects strategic options and creates opportunities and issues that managers need to address in many aspects of their business.
  107. 107. The some of the key impacts of technology and the implications for management on: Business strategy - collapsing time and distance, enabling electronic commerce Organization Culture - encouraging the free flow of information Organization Structures - making networking and virtual corporations a reality Management Processes - providing support for complex decision making processes Work - dramatically changing the nature of professional, and now managerial work The workplace - allowing work from home and on the move, as in telework.
  108. 108. IT enabled services Or-Information Technology Enabled Services (ITeS):- • ITES, Information Technology Enabled Service, is defined as outsourcing of processes that can be enabled with information technology and covers diverse areas like finance, HR, administration, health care, telecommunication, manufacturing etc. Armed with technology and manpower, these services are provided from e-enabled locations. This radically reduces costs and improve service standards. In short, this Internet service provider aims in providing B2B e-commerce solutions. • OR- • IT enabled Services (ITeS), also called web enabled
  109. 109. • Some of the most important areas where IT enabled services can be deployed are: • Some of the services offered include : • • Medical Transcription • • Document Processing • • Data Entry and Processing • • Data Warehousing • • IT Help Desk Services • • Application Development • • Enterprise Resource Planning • • Telecommunication Services Telemarketing • Helpdesk • Customer Support Centres
  110. 110. What is information? Information is a fact, thought or data conveyed or described through various mediums, like written, oral, visual and audio communications. It is knowledge shared or obtained through study, instruction, investigation or news and you share it through the act of communicating, whether verbally, nonverbally, visually, or through written word. Information has different names, including intelligence, message, data, signal or fact. Knowing what type of information you need or how to share it can help you save time, stay organized and establish best practices for divulging information.
  111. 111. Types of information:- There are six different varieties of information. 1. Conceptual information Conceptual information comes from ideas, theories, concepts, hypothesizes and more. With conceptual information, an abstract idea is not always rooted in scientific foundation and rather is the fundamental creation of beliefs, thoughts, philosophies and preferences. You can form or share conceptual information through comparison and reflection, creating philosophies that cannot be proven or seen. Here are some examples of conceptual information: Charles Darwin's theory of evolution Copernican concept of astronomy Conceptual art, where the method of producing it is more important than the finished product
  112. 112. 2. Procedural information Procedural information, or imperative knowledge, is the method of how someone knows to do something and used by performing a task. You can refer to it as muscle memory, since it is knowledge that is hard to explain and stored deeply in your mind. Here are two examples of procedural information: Riding a bicycle: Riding a bike takes physical practice to comprehend, regardless of the amount or type of instructions given. Driving a car: You can pass your written driving test or get a perfect score, though have little knowledge of the procedural information it takes to operate and drive a vehicle. Tying a shoelace: Because the concept is hard to explain, it may take a child several attempts to first learn how to tie a shoelace, even with visual examples and descriptive words.
  113. 113. 4. Stimulatory information Stimulatory information is information that creates a response or stimulation amongst a person or group of people. Stimulation encourages the cause of activity and you can gain stimulatory information a variety of ways, like in person through observation, through word-of-mouth communication or through outlets like the news. One example may be a person observing the body language and nonverbal communication of someone walking nearby. If the stimulation is positive, they may say hello and start a conversation perhaps or, if the stimulation is not positive, they may respond by walking the other way, running away or creating more distance between them. Here are other examples of stimulatory information: Victory day celebrations after a sports team wins a championship The physiological fight-or-flight reaction response to perceived harm
  114. 114. 6. Directive information:- Directive and descriptive information is about providing directions to a person or group of people to achieve a particular result and outcome. You can use directive information with or without dictating the means to achieve the desired result. Directive information often comes in verbal or written form and can apply to leadership at work, in the military or government and with everyday experiences, like legal, life and safety matters. Here are some examples of directive and descriptive information: Medical do not resuscitate (DNR) orders Organ donation paperwork Living wills Coaching Mode of operations in any organization Employment performance reviews Military commands Directive leadership
  115. 115. 5. Empirical information Empirical information means information gained through human senses, observation, experimentation and the testing of a hypothesis by establishing documentation of patterns or behavior. It almost always has a scientific foundation and verifies the truth or falsehood of a claim through qualitative and quantitative factors. Here are several examples of empirical information, rooted in science: Electricity Atomic theory Theory of gravity Kinetic theory of matter Genetics and DNA Empirical information and evidence is opposite of anecdotal information and evidence, which is a conclusion based on informal collection methods, most often a personal experience and testimony.
  116. 116. 3. Policy information:- Policy information focuses on decision making and the design, formation and selection of policies. It comprises laws, guidelines, regulations, rules and oversight for an organization, group of people or place. You can gain policy information through pictures, diagrams, descriptions and other visual, audio or written messages. Here are some examples of policy information: Food pyramid diagram Periodic table of elements Organizational charts Employee handbooks The United States Constitution Government restrictive, regulatory or facilitating policies
  117. 117. Other classifications of information Another way to classify information is through these four attributes: Factual information: Factual information deals only with truthful and proven concepts, like the scientific fact the freezing point of water is 32 degrees Fahrenheit. Analytical information: Analytical information is the interpretation of factual information, determining what is implied or inferred, like you can make ice cubes by storing them in freezers colder than 32 degrees. Subjective information: Subjective information is that from one point of view, like opinions. Objective information: Objective information is that from several points of view that offer all sides of an argument, like scientific or medical journal articles and publications.
  118. 118. Attributes of Information:- There are various types attributes of information - 1. Accuracy शुद्धता : Accuracy means more than just one plus one equals two. • It means that information is free from mistakes and errors, is clear and accurately reflects the meaning of data on which it is based. • It also means that information is free from bias. 2. Relevanceप्रासंगिकता, योग्यता, सिगत : Information is said to be relevant if it answers, What, Why, Where, When, Who, and How For the recipient. However, what is relevant for one may not be relevant for another. For example, the relevance of a specific customer order may vary among the employees of a company.
  119. 119. 3. Adequacy पयााप्तता : Means information must be sufficient in quantity. MIS report should not give inadequate information or more than adequate information. • Whereas inadequacy of information leads to a crisis, its overload results in chaos. 4. Completeness संपूर्ाता: • Information must be complete and should meet all the needs of a manager. • Incomplete information may result in wrong decisions.
  120. 120. 5. Explicitness मुखरता : • Means fully and clearly expressed • A report is said to be of good quality if it does not require any further analysis by the recipient. • Reports should be such that manager does not waste any time on further processing, and must be able to extract the required information directly.
  121. 121. 6. Exception-Based अपवाद-आधाररत : • Today most of the organizations are being run on the principle of management by exception. • Top managers need only exception reports. • Exception reporting principle states that only those items of information be reported which will of particular interest to a manager. • Usually these items indicate that normal operations have gone away from the expected direction. • This approach helps save precious time of the top management.
  122. 122. Quality, however, is not an absolute concept. It is defined within a context. Roman R. Andrus has suggested a utility approach to determine the quality of information. In this regard he discusses four types of utilities of information, which are as follows: • Form Utility: form of information should closely match the requirements of the user. • Time Utility: information, if available, when needed, has a greater value. • Place Utility: value of information will increase if can be accessed easily. • Possession Utility: the person who has the information influences its value by controlling its dissemination to others.
  123. 123. Decision Making Models: The decision-making process though a logical one is a difficult task. All decisions can be categorized into the following three basic models.. (1) The Rational/Classical Model of decision-making (2) The Administrative or Bounded Rationality Model of Decision- making (3) The Retrospective Decision-Making (पूवाव्यापी गिर्ाय लेिा) Model. 1. The Rational/Classical Model of decision-making:- The rational model is the first attempt to know the decision-making- process. It is considered by some as the classical approach to
  124. 124. What is Rational Decision-Making Process? Rational decision making is considered logical and consistent with the intent to maximize the value, quality, or likelihood of achieving the intended outcome. Rational decision-making can be explained as several procedural steps: Identify Problem - Problems or potential problems may present themselves or become evident through appropriate monitoring. In carrying out this process, managers should identify goals at the outset of the decision-making process. Decision Criteria - Managers should identify criteria for potential solutions - as this will help you avoid bias in choosing an alternative. Allocate Weights - Some criteria will be more important to some stakeholders than others. The decision-making process necessary includes considering the interest of stakeholders. In some instances, it involves seeking stakeholder input. Develop Alternatives - Its important to develop as wide an array of potential solutions as possible. Analyze Alternatives - You will need to determine which criteria are most important and to what extent it is necessary to sacrifice one for another. Select an Alternative - After diligent evaluation of the alternatives, the manager must select an option to deal with the problem or situation. Implement the Decision - Selecting an approach is only part of the managers responsibility. Then comes the process of overseeing the implantation of the solution. Evaluate the Effect - Finally, the manager must evaluate the progress and effectiveness of the approach.
  125. 125. • Features of Classical Model: • 1. Problems are clear. • 2. Objectives are clear. • 3. People agree on criteria and weights. • 4. All alternatives are known. • 5. All consequences can be anticipated. • 6. Decision makes are rational. i. They are not biased in recognizing problems. ii. They are capable of processing ail relevant information iii. They anticipate present and future consequences of decisions. iv. They search for all alternatives that maximizes the desired results. The classical model views the decision-making process:
  126. 126. However, these conditions rarely, if ever, actually exist. This model may be represented in the following diagram:
  127. 127. • 2.Bounded Rationality Model or Administrative Model of Decision-making: Herbert A. Simon was of the first few scholars to recognize that decisions are not always made with rationality and logic. Simon, a winner of the Nobel Prize in Economics, instead of prescribing how decisions should be made, describes how decisions often actually are made. Decision-making involve the achievement of a goal. Rationality demands that the decision-maker should properly understand the alternative courses of action for reaching the goals. • He should also have full information and the ability to analyse properly various alternative courses of action in the light of goals sought. There should also be a desire to select the best solutions by selecting the alternative which will satisfy the goal achievement. • Herbert A. Simon defines rationality in terms of objective and intelligent action. It is characterized by behavioral nexus between ends and means. If appropriate means are chosen to reach desired ends the decision is rational. • Bounded Rationality model is based on the concept developed by Herbert Simon. This model does not assume individual rationality in the decision process.
  128. 128. • Instead, it assumes that people, while they may seek the best solution, normally settle for much less, because the decisions they confront typically demand greater information, time, processing capabilities than they possess. They settle for “bounded rationality or limited rationality in decisions. • The Administrative model holds that managers: (i) Have incomplete and imperfect information, (ii) Are constrained by bounded rationality, and (iii) Tend to satisfies when making decisions. As a matter of fact, the classical and administrative models paint quite different pictures of decision making. The classical model is prescriptive: it explains how managers can at least attempt to be more rational and logical in their approach to decisions.
  129. 129. The administrative model can be used by managers to develop a better understanding of their inherent biases and limitation.
  130. 130. • 3. Retrospective decision model (implicit favourite model): • This decision-making model focuses on how decision- makers attempt to rationalize their choices after they have been made and try to justify their decisions. This model has been developed by Per Soelberg. He made an observation regarding the job choice processes of graduating business students and noted that, in many cases, the students identified implicit favorites (i.e. the alternative they wanted) very early in the recruiting and choice process. However, students continued their search for additional alternatives and quickly selected the best alternative. • The total process is designed to justify, through the guise of scientific rigor, a decision that has already been made intuitively. By this means, the individual becomes convinced that he or she is acting rationally and taking a logical, reasoned decision.
  131. 131. • Case Study on MIS: • Information System in Restaurant • Case Summary: A waiter takes an order at a table, and then enters it online via one of the six terminals located in the restaurant dining room. The order is routed to a printer in the appropriate preparation area: the cold item printer if it is a salad, the hot-item printer if it is a hot sandwich or the bar printer if it is a drink. • A customer’s meal check-listing (bill) the items ordered and the respective prices are automatically generated. • This ordering system eliminates the old three-carbon-copy guest check system as well as any problems caused by a waiter’s handwriting. When the kitchen runs out of a food item, the cooks send out an ‘out of stock’ message, which will be displayed on the dining room terminals when waiters try to order that item. • This gives the waiters faster feedback, enabling them to give better service to the customers. Other system features aid management in the planning and control of their restaurant business. • The system provides up-to-the-minute information on the food items ordered and breaks out percentages showing sales of each item versus total sales. This helps management plan menus according to customers’ tastes. The system also compares the weekly sales totals versus food costs, allowing planning for tighter cost controls. In addition, whenever an order is voided, the reasons for the void are keyed in. • This may help later in management decisions, especially if the voids consistently related to food or service. Acceptance of the system by the users is exceptionally high since the waiters and waitresses were involved in the selection and design process. All potential users were asked to give their impressions and ideas about the various systems available before one were chosen.
  132. 132. • Questions: • A. Give the name of application tool. (01 Marks) • B. In the light of the system, describe the decisions to be made in the area of strategic planning, managerial control and operational control? What information would you require to make such decisions? (02 Marks) • C. What would make the system a more complete MIS rather than just doing transaction processing? (01 Marks) • D. Explain the probable effects that making the system more formal would have on the customers and the management. (01Marks) • E. How to make the Payment & delivery process complete by system. Explain. (01Marks)