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.An Overview

of Management




\:CO<\ ~~231<

personal computers and powerful software for accessing data. developing' models and performing information processing directly. Thus, MIS function does not remain centralised but users control their own development and operation of information systems. The details of end-user computing have been provided in chapter 11 dealing with approaches for information system design.



C\J i~~


As pointed out earlier, MIS are federation of different information systems ~ach system pro~O~9P_re~.Q.~~c area ~llch m~~~enti(re~ U!l",,_~ Qasjs,,",otJllanagem~n.t tev~eJs- ~p, middle, cin<f lo~f.~Jorg nisatlQn~",X~!:?tions-production, _marketing, ffii-a~~Et1a" pe[sonneL.o ullctions of i!!.rQiJ.'Q~!l2,n s;rst,eins-data proceSSin ,operational planning and control. management control. and strategic planningious ~=.
infoI1n.9:tion systems and their int~grati~.~ determine the MIS architecture. Thus, MIS 9.1J'.hitecture. <;)15.0 known as structure:-repTesents'~~'"bllTdtl-

framework within which individual, informati~n ~x~ms fit. When fuese individual information ~y.Stem~esGr.ibea.:..wtili1n-"irie"coilfext of MIS, '" . they can be treated as ~J!.~~Tn,..designing. MIS architecture, two issue~ are Involve~-it!~r:tiryt~p; sJJ~Y..s1ems and interconnecting these





Subsystems, as described earlier, are components of,a system. The use of subsystems as building blocks is basic to the analysis'and the development of the system. A complex system is too difficuItto comprehend when considered as a whole. Therefore, the system is decoiIlposed or divided into subsystems. Subsystems of MIS can be identified on following bases: 1. 2. 3. 4. Levels of management. Management functions. Organisational functions. MIS support facilities.

Levels of Management. In an organisation, people are' arranged in a hierarchy creating different levels. Managerial personnel may be arranged into top, middle, and lower levels. Though managers at all these levels perform all managerial functions, the nature of their functions differs considerably. Therefore, their information requirements differ considerably and only specific information systems are relevant to managers at each level as discussed in Chapter 2. Management Functions. Management functions are those activities and processes that are performed by different managers. Though the classical model of management functions' classifies these into planning, organising.





Management Infonnation Systems


staffing. directing. and controlling. to put proper emphasis on functions l performed by different level managers. these functions may be classified as l'

strategic planning. management control. and operation~l planning and

control. Organisational Functions. Subsystems of an organisation as a system


can be identified on thp basi.g...ef-fH.fl-etie~Hs:ta-at:tJ:;re:ar.gan1sa1i.Q!l~"~:required.~ to perform In Order to achieve Its objectives. Depending on the nature of I J

organisations. there may be different types of functions. However. in the h case of a business organisation. these functions can -be grouped into four j, Ii' broad categories-pro~.D."m~~~e. ano per&u:u)e!. ~ach' ofr~ these functions can be furth~r~~~(L uu: example. Brodu.,ction fiito t manufacturhtg. Im~.:..control.quality~~conqQ)r maintenance. ~ - plant

and developmel!~!. ~~~;,Qr~mfU:kejJJ:)g iQt~L.:5.alea.~&aJ,e,...l2[Q!.Il,j>tion t

produ~~butI9R~;:marketing~!~s~Pl:!!:.~e-. Such a classification can go on till we arrive at the level Droperatives involved in a particular broad function. . MIS Support Facilities. In order to perform various functions. MIS need certain support facilities. For example. in computer-based information Qsystems. we need computer hardware. computer software; databases. and oi~IS professionals. All these subsystems of MIS support faciliti~s perform
'? different functions.


Interconnecting For a system

Subsystems to be effective.. it is not ust eno ". t'.- as various


fJ' ;t~


subsystem but it is essential t - . hese sul?yst~..!!!.,. ari~.anged. proper way and interconnections are provided amQn~em.~r~onnectio~:,

in a

among various subsystel!!.~c--a~.hi.~ve_~~or<!!!!~t~pn



integratio~ ,~1!g !hese subsysteID~ ..Q..lhat..eac~,..subs~stem-G9fttHButes positiv~to other supsystems. Because of this positive contributioIL2f eac1L subs~s~~. the systefn g~,!l!:!.a!~~~m~J:gy. a~p:henQm~nQn.ilL w1!!sh

the total contribution of the system ~.!!lQE--tb.illJ._JJ1~,1QtaLQ( ,~..QnltlQ!l..!ion rn~de oJ a1r-su6system~B"I~~Y:iiot ~t>eel} coordinated.

In i~terconnecting various ,~n}.bs}l'~leJns!~ .~~a~:peEts_JIlust be taken into consideration-differe iation and integration. Differentiation refer~ differences in specific feature.J>f.a,.sub$Y-S1~IllJat differentiate a subsystem

from ~o

that after interconne..!jng..lt_w.fili~>.others.-~an

be identif!.,ed. Integration re~il"n:<L9..~~_~of s!-a.!~f eqyJlibr!1Jm-among ~ Vari~syst~ n:qJ1jr~,1Q. achieve un1t~L_~ffQr.tJ)y~tb~-,.,XJ~. There may .b_~_yarg)!!~me~._~hiC~, u~~~ to in!~E~ppnect variol;is"

system~ Jnan


example. ~~~mcw' da~abase




all inrorniatlon

on th; as tdentlficatron of various can Based be designed shown in Figure 1.2. subsystems.

MIS architecture,


An Overview of Management Information Systems




Management functions Strategic planning

Overall management Organisational Functions

Information systems

levels Top

Executive support systems

Managemen control Middle Operational planning an Control

0 ;; 0 :J "'0 0 ...


I ,


C> c: Q) ;; Q) -0 c: <U ... <U c:

c: c: 0 (/) ...

Decision support systems Expert Systems Structured information Systems

Q) u: a.

MIS support facilities Hardware Software Database MIS professionals

Transaction processing Systems

FIGURE 1.2: MIS architecture

Generally, the MIS structure is designed from bottom to top in which

MIS support facilities J?J.ovide b~~e" f~~1~evel-E!!lg various inforn;tati~n

sy~ tbt.QJlg~!!9n ~~transaction prOceS$ln~stemsJJ?L~arious organisational functions. For each of these functions,. informati!l sysi~s ar~pe~lgD'~4<;O'ol:-plannirig - ~d_~~~, ~t -,>l.:>~er ~~g. "~idg!e, ,management leve~mt~IQQlJ.a~l~tg,p pl~~~, ~!",~y'e JoIW, lo~!" t~, ~iddle
managem en t. Whll eat 1~r...J.e.xel...Jransact1oI1-Pt.o.c.~$~~t;rjJgj)red

information systems ~re ~evantl

at ~dQl~...mWi!gemeDt",,"5tt]1c1ured

in!o?iiirno~ ~~~!~ms.4,~1!!.~J2yr_J~?~pe~..t sX~~E'!..~ (in some areas) ana decIsion support s stems. At the top level, overall managemellt funct- ons are p~r,.oI]1..~~t.b e !p~s~~.!p of strategIc planning and management control for which executive support ;jstems'ana-"sliffi'fffiii-y of control reports generatedl5y stn1cture~~~~~::~b~q':llred. -'-""-4 ~._" ~"'-_K'~'-,'-' ~-'

Many of the ideas which form the part of MIS are found in other academic disciplines and MIS has integrated ideas drawn from these disciplines.These disciplines are management accounting, management and organisation theory, operations research, and computer science. Management Accou,nting Accounting is broadly classified into two parts-financial accounting and management accounting. Financial accounting is concerned with the measurement of income for specific periods of time and reporting of financial -









positions at the end of the period. Its reports are more oriented towards Sl investors. As a result. it has limited usefulness for manag~rial decision e: 0 making. In contrast to financial accounting. management accounting includes the' methods and concepts necessary for effective planning. I choosing among alternative business actions and control through the d e evaluation and interpretation of performances. Thus. management accounting provides inputs for decision making in the areas of planning I and control. The MIS concept includes much of management accounting: however. the support systems which provide users With access to data and ~
! c:

models are beyond the scope of traditional management


Contemporary organisational practices are to retain the cost and budget analysis within the management accounting function and to have the MIS function provide dat~ and model support.
, ,

and Organisation


MIS is a support system for effective organisational functioning. Therefore.

it draws heavily from manag~ment and organisation theory. The fields of .~..I

management and organisation theory provide several concepts which are . key to understanding of the functions of a MIS in an organfsation. Some..~

of the major concepts are behaviour~ theory of organisational and individual decision making. group processes and group decision making. individual

motivation. leadership

process. orgranisational

change process.

organisation structure design. T~e knowledge of these concepts helps the designer of MIS to ascertain the types of decisions maq.e at different levels of an organisation and to align the MIS tQ provide relevant information for

making these decisions.

Operations Research

Operations research is applied decision theory where the managers seek rationality while dealing with problems through the use of scIentific. logical. or mathematical means. In operations research. various elements of a problem on which decision is to be made are expressed in numerical forms. the relationships among these elements are established. and the decision is made on the basis of analysis of these relationships. Operations research is quite relevant to MIS because it has developed procedures for the analysis and computer-based solutions of many types of decision problems. The systematic approach to problem solving. use of models. and computer-based solutions are generally incorporated in the decision support system concept of MIS.
. .



Computer science deals with the hardware and software of computer systems. The knowledge of computer science has enabled speedy information storage. processing. and retrieval. Computer science 1,s important for MIS because it covers topics such as algoritpms.computatiOli.