K.L.E.

Society’s
Bachelor of Computer Applications (B.C.A.)
J.T. College , Gadag.

UNIT : 1 MANAGEMENT INFORMATION SYSTEMS

1.1 MANAGEMENT INFORMATION SYSTEM (MIS): CONCEPT

The initial concept of MIS was to process data from the organisation and present it in the
form of reports at regular intervals. The system was largely capable of handling the data
from collection to processing.
The concept of MIS gives high regard to the individual and his ability to use the information.
MIS gives information through data analysis.
The conceptual view of the MIS is shown as a pyramid in Fig. 1.1.

Fig. 1.1 Conceptual View of MIS

The physical view of the MIS can be seen as an assembly of several subsystems based on
the databases in the organisation.The subsystems could be at a functional level or a
corporate level. The information is evolved through them for a functional or a departmental
management and it provides the information for the management of business at the
corporate level. The physical view of the MIS is shown as in Fig. 1.2. All the systems
shown here together are MISs.

Fig. 1.2 Physical View of MIS

Prof. Sudeepkundgol, BCA, J.T College, Gadag 1

 K.L.E. Society’s
Bachelor of Computer Applications (B.C.A.)
J.T. College , Gadag.

1.2 MIS: DEFINITION

The Management Information System (MIS) is a concept of the last decade or two. It has
been understood and described in a number of ways. It is also popularly known as the
Information System, the Information and Decision System, the Computer-based Information
System.
The MIS has more than one definition, some of which are given below.
1. The MIS is defined as a system which provides information support for decision-
making in the organisation.
2. The MIS is defined as an integrated system of man and machine for providing the
information to support the operations, the management and the decision-making
function in the organisation.
3. The MIS is defined as a system based on the database of the organisation evolved for
the purpose of providing information to the people in the organisation.
4. The MIS is defined as a Computer-based Information System.

In order to get a better grip on the activity of information processing, it is necessary to have
a formal system which should take care of the following points:
 Handling of a voluminous data.
 Confirmation of the validity of data and transaction.
 Complex processing of data and multidimensional analysis.
 Quick search and retrieval.
 Mass storage.
 Communication of the information system to the user on time.
 Fulfilling the changing needs of the information.

The management information system uses computers and communication technology to

deal with these points of supreme importance.

1.3 ROLE OF THE MANAGEMENT INFORMATION SYSTEM

The role of the MIS in an organisation can be compared to the role of heart in the body. The
information is the blood and MIS is the heart. In the body the heart plays the role of supply-
ing 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 organisation. 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 functionaries: the managers and the
top management.
 The MIS satisfies the diverse needs through a variety of systems such as Query Systems,
Analysis Systems, Modelling 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
reference on a variety of documents. The MIS helps the junior management personnel

Prof. Sudeepkundgol, BCA, J.T College, Gadag 2

 K.L.E. Society’s
Bachelor of Computer Applications (B.C.A.)
J.T. College , Gadag.

by providing the operational data for planning, scheduling and control, 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 organisation.

1.4 IMPACT OF THE MANAGEMENT INFORMATION SYSTEM

 The impact of MIS on the functions is in its management. With a good MIS support, the
management of marketing, finance, production and personnel becomes more efficient.
The tracking and monitoring of the functional targets becomes easy
 The MIS begins with the definition of a data entity and its attributes. It uses a dictionary
of data, entity and attributes, respectively, designed for information generation in the
organisation.
 The MIS calls for a systemisation of the business operations for an effective system
designThis process brings a high degree of pro- fessionalism in the business operations.
 A well designed system with a focus on the manager makes an impact on the
managerial efficiency.
 Since the MIS works on the basic systems such as transaction processing and databases,
the drudgery of the clerical work is transferred to the computerised system, relieving
the human mind for better work.

1.5 MANAGEMENT INFORMATION SYSTEM AND COMPUTER

 Computer based information systems are composed of hardware, software,

telecommunications, people and procedures that are configured to collect, manipulate,
store, and process data into information.
 Hardware is the equipment used to perform input, processing, and output devices.
Software is the set of predefined instructions to the computer that determines the
sequence of operations performed by the computer.
 Telecommunications allow organisations to link computer systems into effective
networks. Networks can connect computers and computer equipment in a building,
around the country, or across the world.
 Computer based information systems have enabled managers to automate some of the
decisions that earlier required expert judgment of experienced managers.

1.6 MANAGEMENT INFORMATION SYSTEM AND ACADEMICS

 One main area of academics is operational research. The operational research is used
for developing the models of management and they are then incorporated in the MIS as
decision support systems. The inventory control, queuing theory, and resource
programming are used in the MIS as decision support systems. The network theory is
used for planning and controlling large projects. The application of PER / CPM to a
project planning is now easily possible through the MIS support.

Prof. Sudeepkundgol, BCA, J.T College, Gadag 3

 K.L.E. Society’s
Bachelor of Computer Applications (B.C.A.)
J.T. College , Gadag.

 In the area of accounting application, it uses the accounting principles to ensure that the
data is correct and valid.It uses the principles of double entry bookkeeping for
balancing the accounts. It uses the accounting methodology for generating a trial
balance sheet and other books of accounts.
 The MIS uses the communication theory in a significant manner. The principle of
feedback is used while designing analysis.While designing the report format, attention
is paid to avoid noise and distortions in the communication process.
 The MIS further relies heavily on the decision methodology. It uses different
mathematical techniques to handle the situation of decision making uses the method of
decision- making under certainty for decision- making and action.
 The MIS is based on database structures, viz., hierarchical; network and relational
database have roots in the mathematics and the set theory. The MIS becomes rich in
content and more useful when it becomes more and more a decision- making or
decision- support system.

1.7 MIS AND THE USER

Every person in the organisation is a user of the MIS. The people in the organisation operate
at all levels in the hierarchy. A typical user is a clerk, an assistant, an officer, an executive or
a manager. Each of them has a specific task and a role to play in the management of
business. The MIS caters to the needs of all persons
 A clerk can use the MIS for a quick search and reporting the same to higher level.
 An assistant has the task of collecting and organising the data, and conducting a
rudimentary analysis of it. The MIS offers the user tools to perform these tasks.
 An officer has a role of integrating the data from different systems and disciplines to
analyse it and make a critical comment if anything adverse is found
 An executive plays the role of a decision maker. The MIS provides facilities to analyse
the data and offers the decision support systems to perform the task of execution.
 The manager has a position of responsibility and accountability for the business
results.The MIS provides information in a structured or unstructured format for him to
react
 At the level of an officer and an executive, the MIS does the job of data manipulation
and integration.

1.8 ROLE AND IMPORTANCE OF MANAGEMENT

1.8.1 INTRODUCTION TO MANAGEMENT

Management’s job is to make sense out of the many situations faced by organizations, make
decisions, and formulate action plans to solve organizational problems.
The management can be group into 3 hierarchical levels –
 Top Management: - It is establishes the policies, plans, objectives and budget
framework under which various departments will operate of the organisation.
 Middle Management: - It has the responsibility of implementing the policies and
overall plans of the top management.
 Junior Management:-It has the responsibility of implementing day to day operations
and decisions of the middle management to produce goods and services to meet the
revenue, profit and other goals.

Prof. Sudeepkundgol, BCA, J.T College, Gadag 4

 K.L.E. Society’s
Bachelor of Computer Applications (B.C.A.)
J.T. College , Gadag.

1.8.1.2 APPROACHES TO MANAGEMENT / PRINCIPLES OF OPERATIONS

MANAGEMENT

Federick W Taylor , is recognised as the father of scientific management. His principles can
be summarised as follows

1. Replace the rules of thumb with scientific rules.

2. Obtain a harmony in group action.
3. Achieve cooperation of human beings, rather than chaotic individualism.
4. Work for a maximum output.
5. Develop all workers to the fullest possible potential for their own highest possible
prosperity.

1.8.2 FUNCTIONS OF THE MANAGER

The specific nature of the activities is determined by such managerial functions as planning,
organising,staffing, directing, leadership and controlling.

 Planning: It is the process of deciding in advance the courses of action to be followed

and when and how to undertake these. Its objectives in the best possible manner and for
anticipating future opportunities and problems.
 Organising: It is formal grouping of people and activities to facilitate achievement of
the farm’s objectives. It is need for assigning responsibilities, jobs and hierarchy among
personnel.
 Staffing: Appropriate selection of the person or person ensuring that they together will
achieve the goal and objectives of the organisation.
 Controlling: It is the checking the progress of plans and correcting any deviations that
may occur along the way.
 Directing: It is the process of activating the plans, structure and group efforts desired
direction. It is needed for implementation of plans by providing desired leadership
motivation and proper communication.
 Coordinating: is the function which brings a harmony and smoothness in the various
group activities and individual efforts directed towards the accomplishment of goals.

1.8.3 MANAGERS AND THE ENVIRONMENT

 The external environment is classified into five classes as the Economical,

Technological, Social, Political and Ethical environment.
 Economical Environment : Economical Environment comprises Capital, Labour,
price change, Productivity, Fisacl and monetary policy and Customers.
 Technological Environment : Any change in the technology changes the work
culture, the methods and the systems. It effects the speed of the operations and
gives a boost to the productivity of the production systems.
 Social Environment : Rural marketing is different from urban marketing. In spit of
technology advances, frozen foods are not finding consumer preferences.
Introduction of computers in the service industry is still a difficult proposition.

Prof. Sudeepkundgol, BCA, J.T College, Gadag 5

 K.L.E. Society’s
Bachelor of Computer Applications (B.C.A.)
J.T. College , Gadag.

 Political Environment : The changes in ruling party brings economic policy

changes , effecting the business. The manger has to deal with such changes
effectively.
 Ethical environment : The business ethics emerge from the professional conduct,
the business norms and codes on confidentiality, the payment and documentation,
the adherence to general accepted standards of accounting and auditing.

1.9 MANAGEMENT AS A CONTROL SYSTEM

 A definition of control is the process through which managers assure that actual
activities conform to the planned activities, leading to the achievement of the stated
common goals.
 to meet the complexity of today’s business, to correct the mistakes made by the people,
and to effectively monitor the delegation process. A reliable and effective control
system has the fol- lowing features.

Early Warning Mechanism

This is a mechanism of predicting the possibility of achieving the goals and the standards
before it is too late and allowing the manager to take corrective actions.
Performance Standard
The performance standard must be measurable and acceptable to all the organisation. The
system should have meaningful standards relating to the work areas, responsibility, manage-
rial functions and so on. For example, the top management would have standards relating to
the business performance, such as production, sales, inventory, quality, etc. The operational
management would have standards relating to the shift production, rejections, down time,
utilization of resources, sale in a typical market segment and so on. The chain of standards,
when achieved, will ensure an achievement of the goals of the organisation.
Strategic Controls
In every business there are strategic areas of control known as the critical success factors.
The system should recognize them and have controls instituted on them.
Feedback
The control system would be effective, if it continuously monitors the performance and
sends the information to the control center for action. It should not only highlight the
progress but also the deviations. The feedback should be accurate in terms of results and
should be communicated on time for corrective action.
Realistic

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 K.L.E. Society’s
Bachelor of Computer Applications (B.C.A.)
J.T. College , Gadag.

The system should be realistic so that the cost of control is far less than the benefits. The
standards are realistic and are believed as achievable. Sufficient incentive and rewards are to
be provided to motivate the people

1.10 MANAGEMENT BY EXCEPTION

 The exception is defined as a significant deviation from the performance, or the process
and the standard.
 The deviation could be abnormal on a positive or on a negative side of the standard.
The deviation could be predictive or could be arising out of random causes in the
business operations.
 The manager is interested in knowing the significant deviation by the yardsticks of
consistency and not out of random causes.The significant deviations are exceptional in
nature and require to be attended to immediately.
 A manager is further interested in knowing the reasons behind the exceptional nature of
the situation It is possible t trace the reasons of deviation, and it is possible to take a
corrective action
 The significant deviation can occur on account of wrong performance standards and
wrong management process. Many a times the standards are set very low and they need
to be looked into to avoid the misuse of resources. If the standards are set too high, then
the people fail to achieve them on account of demotivating factor of the high standards
 For an efficient and an effective management, without loss of time, it is, therefore,
necessary to report the significant deviations to the right persons in the organisation. In
this regard a manager himself has to provide the conditions of exceptions in the control
system so that they are highlighted and informed

1.11 MIS: A SUPPORT TO THE MANAGEMENT

The management process is executed through a variety of decisions taken at each step of
planning, organising, staffing, directing, coordinating and control.As discussed earlier, the
MIS aids decision-making. If the management is able to spell out the decisions required to
be taken, the MIS can be designed suitably. The decision required to be taken in these steps
are tabulated in the table

Steps in management Decision

Planning A selection from various alternatives—strategies,resources,methods, etc.

Organisation A selection of a combination out of several combinations of the goals, people, re- sources,method,
and authority.
Staffing Providing a proper manpower complement.
Directing Choosing a method from the various methods of directing the efforts in the organi-sation.

Coordinating Choice of the tools and the techniques for coordinating the efforts for optimumresults.

Controlling A selection of the exceptional conditions and providing the decision guidance to deal with them.

The objective of the MIS is to provide information for a decision support in the process of
management. It should help in such a way that the business goals are achieved in the most

Prof. Sudeepkundgol, BCA, J.T College, Gadag 7

 K.L.E. Society’s
Bachelor of Computer Applications (B.C.A.)
J.T. College , Gadag.

efficient manner. Since the decision-making is not restricted to a particular level, the MIS is
expected to support all the levels of the management in conducting the business operations.
Unless the MIS becomes a management aid, it is not useful to the organisation the below
figure illustrates the process discussed here

Assignment Questions for 5 to 8 marks

1. Define MIS and how one should take care of formal system, in order to get a better grip
on the activity of information processing
2. What is the scope of management information system(role of MIS)
3. How MIS support a manager in his functional responsibility?( impact of the management
information system)
4. Give Five reasons for using computer for MIS in the organisation.(Definition)
5. Brief note on principles of operational management.(Approaches to management)
6. Explain the functions of the manager.
7. List and explain the external environment in which a manager operates.(managers and
the environment)
8. With neat diagram explain management as control system.
9. Explain the importance of management by exception
10. List the decision involved in each phase of management process, starting from planing
to control.(Support to the management).
11. State which capabilities of computers are used in MIS to create an impact(management
information system and computer)
12. How MIS caters people of organisation?(MIS and the user)

Prof. Sudeepkundgol, BCA, J.T College, Gadag 8