UNIT -3

UNIT -   2


TOPIC -Management Information System

Management Information System, often referred to simply as MIS , is  a planned system of collecting , storing , and disseminating data in the form of information needed to carry out the functions of management .

it’s composed from three terms : Management , Information and System .

1. Management :
   Management covers the planning, control, and administration of the operations of a concern.
2. Information :
   Information means the processed data that helps the management in planning, controlling and operations.
3. System :
   A system is made up of inputs, processing, output and feedback or control .

Objectives of Management Information System :

These are some goals of  an MIS :

1. Capturing Data .
2. Processing Data .
3. Information Storage .
4. Information Retrieval .
5. Information Propagation .

Characteristics of Management Information System :

•  It should be based on a long-term planning .
• It should provide a holistic view of the dynamics and the structure of the organization .
• It should be planned in a top-down way .
• It should be based on need of strategic, operational and tactical information 
• It should be able to make forecasts and estimates, and generate advanced information .
• It should create linkage between all sub-systems within the organization .
• It should have a central database .

Different types of management information system:

1 Process Control  : This system monitors the physical or industrial processes of business like an automobile assembly, petroleum processes, or metal fabrication. The process control system gathers data continuously and then makes a report on the performance of the system. It is one of the most important type of Management information system in any manufacturing company.

2 Management Reporting System:  This system is designed to produce reports about the operations and finances of all level of management in a company. Management report system helps the manager of the company to compare the performance of the company with the past year’s performance and with the expected performance

3 Inventory control :In this way, management determines when individual items are getting low and when they are required to restock in both the company’s warehouse as well as retail stores. Inventory system keeps the track of movement of inventory in the warehouse, from warehouse to department store, items sold, and returns on them. It is one of the most important type of Management information system in any company that deals with stocking and storage of goods.

4 Sales and Marketing :This system helps the management to execute and track the efficiency of a company’s marketing functions and sales.

5 Accounting and finance :Accounting and finance system track the investments and assets of a company. The data collected from these reports are assembled for financial reporting demanded by law to deal with functions like federal, payroll, local taxes, state, and pension funds. This system generates reports required for regular financial audits and also generate annual reports for upper management

6 Expert system :Artificial intelligence is an important part of an expert system. Expert system senses your actions on the basis of the actions you have taken in past in similar situations and take decision on the basis of those logical assumptions.

7 Executive information system :The executive information system is designed in such a way that it assists an executive manager to manage executives. This system provides information in the form of tables and charts which makes it easy for a manager to make analysis and make important decisions.

8 Transaction process system :The work of a transaction process system is to collect and process data produced during an organization’s routine activities. The activities are like orders, payments, deposits or reservation.

9 School information management system :The school information system has reduced the work of updating and managing student’s attendance registers. Now, School information system perform this activity in a smooth manner and saves the time of teachers for other productive activities.

10 Local databases :Local databases are also an example of management information system. local databases provide in-depth information about the communities living across a country. These databases take information from open business listing, public data, integrated local service offering, and social survey’s input

11 Decision Support System :It gathers data from both external as well as internal sources. Population trends, interest rates, and cost of new house construction are the few examples of external sources, whereas manufactory, sales, inventory or financial data are examples of internal source of information. For instance, a manager takes the help of a decision support system to consider external and internal factors while setting annual sales quotas.

12 Human resource:This system tracks financial elements like payroll, benefits, and retirement which are also the part of accounting and financial system. human resource system tracks of many other things also. It makes communication possible between employees, HR, and management by offering legal compliance notices, mandatory training events, and HR policies. It does all the work like track work attendance, employee timekeeping, keep the track of available and used leaves and allow employees to take sick or vacation leaves without making the manager involved physically.

 NEXT TOPIC -Management by objectives (MBO)

The comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed toward the effective and efficient achievement of organizational and individual objectives.

Features of Management by Objectives:

1. It is a technique and philosophy of management.
2. Objective setting and performance review are made by the participation of the concerned managers.
3. Objectives are established for all levels of the organization.
4. It is directed towards the effective and efficient accomplishment of organizational objectives.
5. It is concerned with converting an organizational objective into a personal objective on the presumption that establishing personal objectives makes an employee committed which leads to better performance.
6. The basic emphasis of MBO is on objectives. Management by Objectives tries to match objectives with resources.
7. Objectives in MBO provide guidelines for appropriate systems and procedures.
8. A periodic review of performance is an important feature of MBO.

Next topic - interaction with external environment

Organizations have an external and internal environment:

1. Internal environment / Micro environment.
2. External environment / Macro Environment.

Internal Environment of Organization

Forces or conditions or surroundings within the boundary of the organization are the elements of the internal environment of the organization.The internal environment generally consists of those elements that exist within or inside the organization such as physical resources, financial resources, human resources, information resources, technological resources, organization’s goodwill, corporate culture and the like.

The internal environment includes everything within the boundaries of the organization. 

Elements of internal environment are;

1. Owners and Shareholders.
2. Board of Directors.
3. Employees.
4. Organizational Culture.
5. Resources of the Organization.
6. Organization’s image/goodwill.

External Environment of Organization – Factors Outside of Organization’s Scope

Factors outside or organization are the elements of the external environment. The organization has no control over how the external environment elements will shape up.

The external environment embraces all general environmental factors and an organization’s specific industry-related factors. The general environmental factors include those factors that are common in nature and generally affect all organizations.

The external environment can be subdivided into 2 layers;

1. General Environment.
2. Task / Industry Environment.

General Environment of Organization – Common Factors that All company in the Economy Faces

The general environment usually includes political, economic, sociocultural, technological, legal, environmental (natural) and demographic factors in a particular country or region. The general environment consists of factors that may have an immediate direct effect on operations but influences the activities of the firm.

The factors of the general environment are broad and non-specific whereas the dimensions of the task environment are composed of the specific organization.

Elements of the General External Environment

1. Political factors.
2. Economic factors.
3. Sociocultural factors.
4. Economical factors.
5. Legal factors.
6. (Natural) Environmental factors.

Along with these, we can add additional factors that suit the current modern business atmosphere.

7. Demographic factors.
8. International factors.

Elements of the industry environment 

1. Suppliers.
2. Customers & Buyers.
3. Competitors & New Entrants.
4. Regulators.
5. Substitute Products.
6. Strategic Partners.