INFORMATION SYSTEMS IN THE ENTERPRISE

Levels of Management
Information systems serve the following three levels of management
1. 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 role of the top management can be summarized as follows –
a. lays down the objectives and policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures, schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & 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.
h. The top management is also responsible towards the shareholders for the performance of the
enterprise.
2. Middle Level of Management/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.
Their role of middle level managers.
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 & 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.
3.Lower Level of Management/Operational
- Also known as supervisory / operative level of management.
- It consists of supervisors, foreman, section officers, superintendent etc.
- Supervisory management refers to those executives whose work has to be largely with
personal oversight and direction of operative employees.
- They are concerned with direction and controlling function of management.
Their activities 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 etc 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 & guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. They arrange necessary materials, machines, tools etc 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.
m. They are the image builders of the enterprise because they are in direct contact with the workers.

Kinds of systems
- Four main categories of information systems serve different organizational levels: Operational-level
systems, Knowledge level systems, management-level systems, and strategic-level systems.
 Kind of Information System Group Served

Strategic Senior
Level Managers

Management Middle
Level Managers

Knowledge and
Knowledge Data Workers
Level

Operational Operational
Level Managers

Manufacturing Finance Accounting Human

Resources

Operational-level systems support operational managers by keeping track of the elementary

activities and transactions of the organization, such as sales, receipts, cash deposits, payroll, credit
decisions, and the flow of materials in a factory.
 The principal purpose of systems at this level is
o to answer routine questions
o to track the flow of transactions through the organization. How many parts are in
inventory? What happened to Mr. Williams‘s payment?
 To answer these kinds of questions, information must be easily available, current, and accurate.
 Examples of operational-level systems include a system to record bank deposits from
automatic teller machines or one that tracks the number of hours worked each day by
employees on a factory.
Knowledge level systems
 Two categories of information systems falls under this level.
o The Knowledge Work Systems (KWS) and
o Office Automation Systems (OAS).
 KWS aid knowledge workers in the creation and integration of new knowledge in the
organization.
 Examples of KWS are like computer aided design (CAD) and robotics systems. OAS can
be computer systems such as word processing, e-mail systems and scheduling systems,
which are designed to increase the productivity of data workers on the office
Management-level systems serve the monitoring, controlling, decision-making, and administrative
activities of middle managers.
 Two types of information systems involved Management Information System (MIS) and
Decision Support System (DSS).
 Management Information Systems serve the functions of
o planning,
o controlling and
o decision making by providing routine summary reports
 MIS serve managers interested in weekly, monthly or yearly results not day-today
activities.
 MIS generally address structured questions that are known well in advance but the systems
are not flexible and have little analytical capability.
 Most MIS uses simple routines such as summaries and comparisons as opposed to
sophisticated mathematical models or statistical techniques.
Some of the characteristics of MIS are as follows:
 MIS support structured decisions at operational and management control levels. However,
they are useful for planning purpose of senior management staff.
 MIS are generally reporting and control oriented. They are designed to report on existing
operations and therefore to help provide day-to-day control of operations.
 MIS rely on existing corporate data and data flows.
 MIS have little analytical capability.
 MIS generally aid in decision making using past and present data.
 MIS are relatively inflexible.
 MIS have an internal rather than an external orientation.
MIS usually serve managers interested in weekly, monthly or yearly results – not day-today
activities. MIS generally address structured questions that are known well in advance but the
systems are not flexible and have little analytical capability. Most MIS uses simple routines such
as summaries and comparisons as opposed to sophisticated mathematical models or statistical
techniques.
Some of the characteristics of MIS are as follows:
 MIS support structured decisions at operational and management control levels. However,
they are useful for planning purpose of senior management staff.
 MIS are generally reporting and control oriented. They are designed to report on existing
operations and therefore to help provide day-to-day control of operations.
 MIS rely on existing corporate data and data flows.
 MIS have little analytical capability.
 MIS generally aid in decision making using past and present data.
 MIS are relatively inflexible.
 MIS have an internal rather than an external orientation.

Transaction Processing System Management Information Systems

Order
processing
system Sales Data

Order file

Unit
Materials product
resource MIS Reports Managers
cost data
planning
systems
Production
master file Product
change
data
General
Ledger
system Expense
data
Accounting file

Decision Support Systems

- Information system at the management level of an organization that combines data and
sophisticated analytical models or data analysis tools to support semi-structured and
unstructured decision making.
- DSS helps manager make decisions that are semi-structured, unique or rapidly changing
and not easily specified in advance.
 - Besides using internal information from TPS and MIS, they often bring in information
from external sources like current stock prices or product prices of competitors.
- DSS have more analytical power than other systems.
- They built explicitly with a variety of models to analyze data, or they condense large
amounts of data into a form where they can be analyzed by decision makers. DSS are
normally designed in a way where the user can work with them directly, which means the
system explicitly include user-friendly software.
- DSS are interactive where the user can change assumptions, ask new questions and
include new data.
Some of the characteristics of DSS:
 DSS offers users flexibility, adaptability and quick response.
 DSS operate with little or no assistance from professional programmers.
 DSS provide support for decisions and problems whose solutions cannot be specified in
advance.
 DSS use sophisticated data analysis and modeling tools.
The following figure show an example of DSS that operates on a powerful PC and is used daily
by managers who must develop bids on shipping contracts:

Ship file (e.g.

speed, capacity)
Personal
computer Port distance
restrictions file
Analytical models
database Fuel consumption
cost file
Graphics

Reports Ship charter hire

history cost file

Strategic-level systems Port expense file

 Help senior management tackle and address strategic issues and long term trends, both in the
firm and in the external environment.
 It supports the long-range planning activities of senior management.
 It also helps the senior management to tackle and address strategic issues both in the firm
and in the external environment.
  ESSs employ the most advanced graphics software and can deliver graphs and data from
many sources immediately to a senior executive’s office or to a boardroom.
 Unlike other types of information systems, ESSs are not designed primarily to solve
specific problems.
 Instead, ESSs provide a generalized computing and telecommunications capacity that can
be applied to a changing array of problems.
 While many DSS are designed to be highly analytical, ESS comes with less analytical
capabilities.
 Since ESSs are designed to be used by senior managers who often have little, is any,
direct contact or experience with computer-based information systems, they incorporate
easy-to-use graphic interfaces

Example of an ESS which consists of workstations with menus, interactive graphics and
communication capabilities that can access historical and competitive data from internal
corporate systems and external databases:

ESS workstattions

Menus
Graphics
Communications
Local processing

ESS workstattions Internal data External data ESS workstattions

TPS/MIS data
Financial data
Office systems
Menus Menus
Modeling / analysis
Graphics Graphics
Communications Communications
Local processing Local processing

Others
Office automation system (OAS) :
 OAS provides individuals effective ways to process personal and organizational data,
perform calculations, and create documents. e.g. word processing, spreadsheets, file
managers, personal calendars, presentation packages
 They are used for increasing personal productivity and reducing "paper warfare". OAS
software tools are often integrated (e.g. Word processor can import a graph from a
spreadsheet) and designed for easy operation. OAS Subspecies:
Communication systems: helps people work together by sharing information in many
different forms Teleconferencing (including audio conferencing, computer conferencing,
videoconferencing), electronic mail, voice mail, fax
Groupware system: helps teams work together by providing access to team data, structuring
communication, and making it easier to schedule meetings. For sharing information, controlling work
flows, communication/integration of work