Management Information Systems

Management information system is a system consisting of people, machines, procedures,

databases and data models, as its elements. The system gathers data from the internal and
external sources of an organization.
An information system is a set of interrelated components that collect, process, store and
distribute information to support decision making and control in an organization.

The framework for MIS in an organization and management

Components :
Management Information Systems could be classified on the basis of their purpose.

i. Strategic planning -

It is an organizational management activity that is used to set priorities, focus energy and
resources, strengthen operations, ensure that employees and other stakeholders are working
toward common goals, establish agreement around intended outcomes or results, and assess and
adjust the organization’s direction in response to a changing environment.
It articulates not only where an organization is going and the actions needed to make progress,
but also how it will know if it is successful.

ii. Management control-

This is a process of assuring that resources are collected and used effectively and efficiently,
resulting in the accomplishment of the organizational key objectives.
In this process, an executive or superiors, or managers will use to assess the productivity of
his/her department, identify the issues, formulate some new and innovative strategies, make
some rules of control, set protocol, and evaluate the risk allocation of resources.

iii. Operational information -

It involves control over intermediate-term operations and processes but not business strategies. It
is a process of managing operational activities of an organization that are carried out to achieve
optimal utilization of the resources and successful implementation of the operational activities in
an organization like production, production, stock management and financial process.
Levels of Management and their functions;

a) Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is
the ultimate source of authority and it manages goals and policies for an enterprise. It devotes
more time on planning and coordinating functions.
The functions of top level management are;

a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures, schedules.
c. It prepares strategic plans and policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls and coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.

b) Middle Level of Management or Managers

The branch managers and departmental managers constitute middle level. They are responsible
to the top management for the functioning of their department. They devote more time to
organizational and directional functions. In small organization, there is only one layer of middle
level of management but in big enterprises, there may be senior and junior middle level
management.
Their functions can be emphasized as:

a. They execute the plans of the organization in accordance with the policies and directives of the
top management.
b. They make plans for the sub-units of the organization.
c. They participate in employment and training of lower level management.
d. They interpret and explain policies from top level management to lower level.
e. They are responsible for coordinating the activities within the division or department.
f. It also sends important reports and other important data to top level management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level managers towards better performance.
 c) Lower Level of Management or Operational level

Lower level is also known as supervisory or operative level of management. It consists of

supervisors, foreman, section officers, and superintendent.
Supervisory management refers to those executives whose work has to be largely with personal
oversight and direction of operative employees. In other words, they are concerned with
direction and controlling function of management.
Their functions include:

a. Assigning of jobs and tasks to various workers.

b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good relation in the
organization.
e. They communicate workers problems, suggestions, and recommendatory appeals to the higher
level and higher level goals and objectives to the workers.
f. They help to solve the grievances of the workers.
g. They supervise and guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. They arrange necessary materials, machines, tools for getting the things done.
j. They prepare periodical reports about the performance of the workers.
k. They ensure discipline in the enterprise.
l. They motivate workers.

Information System
An Information System is an interconnected set of components that is software, hardware, and
telecommunication networks used to collect, store, process and transmit data and digital
information.

Type of Information System

a) Transaction processing system (TPS):

It collects and stores information about transactions, and controls some aspects of transactions. A
transaction is an event of interest to the organization. Example is a sale at a store.
A TPS is a basic business system.
It is often tied to other systems such as the inventory system which tracks stock supplies and
triggers reordering when stocks get low ,serves the most elementary day-to-day activities of an
organization;
Supports the operational level of the business, supplies data for higher-level management
decisions, is often critical to survival of the organization, mostly for predefined, structured tasks,
can have strategic consequences.

b) Decision support system (DSS):

Helps strategic management staff (often senior managers) make decisions by providing
information, models, or analysis tools. For support of semi structured and unstructured decisions
(structured decisions can be automated).It is used for analytical work, rather than general office
support.
They are flexible, adaptable and quick. The user controls inputs and outputs. They support the
decision process and often are sophisticated modeling tools so managers can make simulations
and predictions.
Their inputs are aggregate data, and they produce projections.

c) Management information system (MIS) :

Condenses and converts TPS data into information for monitoring performance and managing an
organization.
Transactions recorded in a TPS are analyzed and reported by an MIS.
They have large quantities of input data and they produce summary reports as output. Used by
middle managers. An example is an annual budgeting system.

d) Executive information system (EIS):

Also known as an Executive Support System (ESS), it provides executives information in a
readily accessible, interactive format. They are a form of MIS intended for top-level executive
use. An EIS/ESS usually allows summary over the entire organization and also allows drilling
down to specific levels of detail. They also use data produced by the ground-level TPS so the
executives can gain an overview of the entire organization.
Used by top level (strategic) management. They are designed to the individual. They let the CEO
of an organization tie in to all levels of the organization. They are very expensive to run and
require extensive staff support to operate.

The evolution of Information System

1960 - TPS
Transaction Processing System (TPS) was the first computerized system developed to process
business data. TPS was mainly aimed at clerical staff of an organization. The early TPS used
batch processing data which was accumulated over a period and all transactions were processed
afterward.
TPS collects, stores, modifies and retrieves day-to-day transactions of an organization. Usually,
TPS computerize or automate an existing manual process to allow for faster processing,
improved customer service and reduced clerical costs.

1970 - MIS
The role of IS evolved from TPS to Management Information Systems (MIS). MIS process data
into useful informative reports and provide managers with the tools to organize evaluate and
efficiently manage departments within an organization. MIS delivers information in the form of
displays and pre-specified reports to support business decision-making.

1980 - DSS
Decision Support System (DSS) provided historical and reports on both internal and external
information. The advancement brought a new level of decision making to organization,
management could more accurately forecast sale, perform risk analysis, and make bold strategic
decisions.
EIS
Top executives were neither using DSS nor MIS hence executive information systems (EIS) or
executive support systems (ESS) were developed. This trend led to new challenges of data
incompatibility, integrity and connectivity across different departments.

Conclusion
Information is an essential for the endurance of a financial organization in the global and
competitive market.
If the relative information required in a decision making process or an organization planning is
not available at the appropriate time, the there is a good to be poor organization planning,
inappropriate decision making , poor priority of needs , and defective m programming or
scheduling of activities.
MIS is deemed to be a system which provides organizations top management and even lower
level with appropriate information based on data from both internal and external sources to allow
them makes effective and timely decisions that best to archive the organization goals and satisfy
stakeholder requirements.
Information systems give the organizations a new dimension in managing it knowledge and help
in carrying out and maximizing the management initiatives strategies in long and short planning.