NAME: FAITH ABIGAEL WAITHIRA WAHOME

REG NO.BIT/2021/84746
E-COMMERCE
TERM PAPER (MAY-AUG 2023)

MANAGMENT INFORMATION SYSTEMS

Management is the art of getting things done as described by Mary Follet.
Therefore, a manager motivates others to perform to reach organizational
goals. They do not partake in the performance but rather encourage others.
An argument is raised of whether management is an art or a science, however
modern management in the environment of technology falls more of a science
than an art.
In relation to Management Information Systems (MIS) management is the
process of planning, organizing, staffing, coordinating, and controlling the
efforts of the members of the organization to achieve common stated goals of
the organization.
A manager uses scales, materials, and scientific methods to perform all the
activity leading to the achievement of the goals.
Management process entails resolving conflicts interfering with achievement
of goals. Some of the conflicts include:
 Human conflicts
 Conflict of the goals between alternative resources
 Conflict of time
 Conflict of approach/method
 Conflict of choice
An effective technique used to execute and handle management process is to
treat the organization as a system.
A system as defined in management is that it is a comprehensive assembly of
parts becoming an organization to achieve the stated goal. It can either be
open or closed.
The key difference between an open and closed system is that an open system
interacts with the environment while the closed system does not interact with
the environment.
A system is defined mainly by it’s boundaries within which it performs. It is
therefore a subject to it’s environment. Systems strive to remain in an
equilibrium and therefore take responsibility for each collective action taken.
This however doesn’t disregard it of faults.
Management of a system helps in identifying critical variables constraints and
interaction with one another.

The manager is able to look at a situation in a way that regard is given to the
consequences arising of interaction with related element or subject .
FRAMEWORK FOR THE MIS ORGANIZATION AND MANAGEMENT
It consists of three components :
i. Strategic planning
Strategic planning focuses on methods of improvement in goals of the
organization .
To achieve this objective some methods must be used including policies
that are part of the frame by the management expert to control organize
and use the organizational resources to reduce the cost and maximise
the profit.
Most organizations focus on maximising the profits. Strategic planning
helps in designing the strategies of the company and is used in
formulating policies to control the acquisition, handling of business
activities and used to defend the strategy whenever required.
Philosophically, strategic planning must be a design in a such a way that
an organization may achieve its aim and objective as well as it can keep
itself up to date with the new development through changes to the
objective the financial aspect of the needed and the guiding principles
and the policies followed in obtaining using organizational resources.
Strategic planning is mostly done by the owners/shareholders of the
company and they determine policies of the company.

2.Management Control
It is the process of ensuring that resources are collected and effectively
and efficiently used thus resulting in accomplishment of the
organizational key objective.
 The executive or the supervisors or managers use productivity of each
department or each area of specialization to identify issues and
formulate new innovative strategies and make some rules of control set
protocols and evaluate the risk of allocation of resources.
They are mainly the enforcers of the policies and they have different
strategies to achieve specific policies set by the strategic team.

3.Operational Control
It is the process of manging operational activities of an organization
carried out to achieve optimal utilization of resources and successful
implementation of the operational activities in an organization. Some of
the activities include: production, stock management, financial
processes, human resource etc to run it smoothly.
Operational managers have developed basic tools of managing this level
for instance there are directives set by supervisors followed as per the
ability of different teams that will perform things effectively. They are
often performed as a routine.

LEVELS OF MANAGEMENT
This is a simple representation of the organization

R
Chief Executive Officer, Chief Marketing Officer, Chief
TOP E
A Sales Officer, Chief Technology Officer, President,
MANAGEMENT S
U Managing Director
P
T
O
H
MIDDLE N
O Marketing Manager, Purchase Head, Sales
MANAGEMENT S
R Manager, Operation Manager, Branch
Manager, Finance Manager I
I
B
T
IL
Y
I
LOWER OR OPERATIVE MANGEMENT Supervisor, Foreman, Junior T
Manager, Inspector, Clerk Y

Workforce
LEVELS OF MANAGEMENT
LEVELS AND THEIR FUNCTIONS
Top-level Management
It consists of the senior-most executives and decision makers in an
organisation.
Each member here is responsible for the direction and growth of the company.
A sound top-level management in a company defines the success and future of
the company.
They answer to the shareholders.
They are responsible for strategizing and making plans for the business. They
form the company’s mission and vision which help customers and employees
understand fundamentals of every business.
It drafts policy of the company and manages finances and resources.
Middle-level Management
It mainly consists heads of various departments in an organisation. They are
responsible for communication between top-level management and lower
level of management. They handle most executions and micro-management
within an organisation.
They comprise of the marketing manager, patches heads sales manager,
operational manager, branch manager, finance manager.
It’s main function is to communicate missions set by the top level
management, handle all communication and maintaining a healthy business
environment.
Middle level managers handle various duties to different teams such as hiring
employees and manage company resources to the optimum. They connect the
key performance indicators(KPIs).
Operational level Management
It is responsible for managing the coordination between the operative
workforce and middle-level management. They micromanage specific tasks to
operative workers and manage teams. Operational level management has very
few decision making powers and generally execute orders of the middle-level
management. They execute day to day activities.
 INFORMATION SYSTEMS
Organizations as a whole capture data which may lack significance to them,
however, this data could be used to understand an organization better.
Most company’s managers take decisions. prepare plans and control their
company’s activities using information processed from data.
We can define data as raw facts that have not been processed.
Information on the other hand is data that has been processed.
An Information system comprise of hardware, software as telecommunication
databases human resources and procedures.
Our system being an organisation can be divided into sub-systems.
Information is related to other systems and the environment that are involved.
Information systems carry out functions classified as:
 Data capture and collection
Capturing contextual data /operational information that will contribute
in decision making from various internal and external sources of an
organization.
 Information storage
Information or processed data need to be stored for future use.
 Data processing
Captured data is processed into information that will contribute in
decision making from various internal and external sources of an
organization. This includes :
 Making calculations with data
 Sorting data
 Classifying data
 Summarizing data

 Distribution/dissemination of information
Information or the finished product of the MIS should be circulated to its
users periodically using organizational network.
Characteristics of MIS
It should be based on long- term planning
It should provide a holistic view of the dynamics and the structure of the
organization.
It should work as a complete and comprehensive system covering all
interconnecting sub-systems within the organization.
It should also take care of exceptional situations by reporting such situations.
It should create linkage between all sub-systems within the organization, so
that the decision predictions.
It should allow easy flow of information through various sub-systems, thus
avoiding redundancy and duplicity of data. It should simplify the operations
with as much practicability as possible.
Although the MIS is an integrated, complete system, it should be made in such
a flexible way that it could easily be split into smaller sub-systems as when
required.
A central database is the backbone of a well-built MIS

The system components include:

 Hardware- This is the tangible bit of the computer.it includes the PCs or
peripheral devices
 Software – It is intangible bit of the computer it includes the programs .
 Database consists of data organized in the required structure
 Network consists of hubs, communication media and network devices.
 People consist of device operators, network administrators and system
specialist
 TYPES OF INFORMATION SYSTEMS
Hierarchical representation of information systems

Executive Information System is used

by EXECUTIVE for strategic decisions

E.I.S
Decision Support System is used by
SENIOR MANAGERS for decision
making Decision
Management Information System is
Support System
used by MANAGERS for operational
efficiency Management
Information System
Transaction Processing
System is used by WORKERS
for BASIC REPORTING
Transaction Processing System

TRANSACTION PROCESSING SYSTEM

It is the cornerstone of the company’s information system and compile the
daily business operations.
Transaction Processing System(TPS) gathers, process and store data that
reflects as business transactions i.e. sales, purchases payments e. t. c.
They are the most defined or structured information processes in the
organization, automating the central core of its operations. An example being
an A.T.M machine an automated money dispatcher.
Their purpose is to improve the company’s routine activities. Some of the
activities being invoicing, payrolls, production and reception of orders.
The common characteristic of all TPS is that they are the backbone of all the
data collected in an organization.
All the activities are carried out at the operative level.

The next level is the Middle level which consists of:

MANAGEMENT INFORMATION SYSTEM(MIS)
Management Information System provide information for users with similar
needs.
It’s main purpose is to provide managers with the information they need to
make decisions and solve problems.
They are usually supported by corporate databases which include data
generated by transaction processing system.
Every organization have to make decision on many decisions that may arise on
regular basis in which certain information is required. e.g. the credit worth of a
client. This can be acquired by transactions done at the TPS level.
At this level different sections are able to generate different reports that help
the top level management to make some long-term decision.

DECISION SUPPORT SYSTEM (DSS)

They lie between management level and the executive management level.
It is important to note that not all companies that decisions are recurrent and
some have do not have to be made frequently or are made once.
Decision Support system have specialized in dealing with less precisely
structured/defined problem that arise once in a while.
Th system helps with managers who have to take non-structured decision.
A decision is considered non-structured if there is no clear procedures in a
place to take a decision, and it is not possible to identify beforehand all the
factors that need to be considered in the decision.
An example of this is a frequent customer in a banking system where there
could be an outlier transaction where a customer who banks a specific amount
of money maybe a ten thousand dollars and out of nowhere they deposit a
large amount of money totalling a hundred million dollars. Such a case could
raise an alarm, therefore a decision has to be made whether to freeze the
account and follow up on why the sudden increase In amount deposited.
Research can assume the particular client has won a jackpot, the manager can
advice the client to upgrade their account from a regular account to a gold
level account.
Decision Support Systems are interactive and aim to expand human reasoning
capacity to resolve specific non-structured decision making problems.

EXECUTIVE INFORMATION SYSTEMS(EIS)

Unlike the powerful EIS tool, which primarily supports control operations, DSS
primarily supports planning tasks.
Top-level managers can make simple decisions that can have an impact on
policies and the decision's long-term viability since the DSS feeds the EIS with
data that has been thoroughly summarized and improved.
An executive who makes use of an EIS is better able to examine every facet of
the business' operations and look for opportunities and issues.
 THE EVOLUTION OF INFORMATION SYSTEMS

EIS
1980:DSS

1970:MIS

1960:TPS

The first system to appear was the TPS where they placed the manual
procedures or the paperwork.
It’s main purpose was to automate payrolls as well as get rid of paperwork and
eliminating human capture and removing physical files.
MIS followed closely and it assisted in saving and helping the tactical and
middle level managers to make decision.
They were also responsible in arranging data in a specific format
DSS was the next system which was a bit comprehensive and helped in
strategic information system and helping in decision making to take place.
EIS is the latest system, which has incorporated the use of AI and other factors
that help decision makers to be precise about their decisions and the future of
the organization.
EIS mainly forecasts on the future of the company and projecting about future
profits and making decisions about different structures of policies within the
organization.
Conclusion
Information can be considered a resource, it is therefore essential in
making good decisions.
Management Information systems are basically a computer-based
system that provides managers with the tools for organizing, evaluating
and efficiently running their departments.
To achieve this the right information should be provided to the right
person at the right place and time, in the right form and at the right cost.
(MIS BASIC CONCEPTS, 2017)
 CASE ANALYSIS
Seattle-based Amazon is an illustration of a business that uses MIS to
direct growth and management. Amazon is a significant online retailer.
Jeff Bezos, an investment banker by trade, identified an opportunity in
the untapped internet market in 1995. He created a website where
products could be purchased directly from clients online. As one of the
first major retail companies to conduct business online, the company
accomplished a significant milestone. By utilising MIS, Amazon.com has
transformed into one of the most significant online merchants.

AMAZON ORGANIZATIONAL STRUCTURE

The organizational structure of Amazon is primarily hierarchical, with
certain functional and geographic divisions. Although Amazon began as a
lean, flat structure in its early years, as it grew, it changed into a
hierarchical organization with distinct positions and functions.
Amazon’s corporate structure has the following characteristics:
i. Global function-based groups(most significant structural feature)
ii. Global hierarchical structure
iii. Geographical divisions

Global Function-Based Groups

The organisational structure of Amazon is most strongly characterised by
function-based groups. Each important business function has a specific
team or group as well as a senior manager, such as the Consumer
Business function. Effective and efficient operations management across
the board for Amazon.com Inc. is the strategic goal of possessing this
structural trait. The availability of resources for diverse areas of
operation, such as consumer electronics design and development, is
impacted by function-based grouping in the organisational structure of
the organisation. According to Amazon.com Inc.'s general plan for
competitive advantage and aggressive growth strategies, the company
expands through this aspect of the corporate structure in terms of
assistance for developing new market operations. This feature of the
corporate structure of the internet retailer is a reflection of conventional
organisational design, which concentrates on fundamental business
operations.
The major function-based groups in Amazon’s organizational structure:
1.Office of the CEO, headed by Jeff Bezos
2.Business and Corporate Development, headed by SVP Jeff Blackburn
3.Worldwide Amazon Stores headed by CEO Doug Herrington
4.Amazon Web Services(AWS),headed by CEO Andy Jassy
5.Finance,headed by SVP & CFO Brian Olsavsky
6.International Consumer Business, headed by CEO Jeff Wilke
7.Accounting,headed by VP Shelly Reynolds
8.Legal and Secretariat, headed by SVP David Zapolsky

Global hierarchical structure

Organisational hierarchies are revered in corporations. They were the
original kind of organisational structure and are still used by the majority
of large companies today, particularly those with a global presence like
Amazon. For Amazon.com, the hierarchy is represented by a global
system of distinct lines of authority that have a significant impact on the
company's operations.

For instance, Jeff Bezos sits at the top and has ultimate influence over all
senior executives and managers. These individuals then apply directives
through the sectors they oversee, either independently or on Jeff
Bezos's instruction. All relevant offices of the organisation around the
world are affected by these directives.

These broad hierarchies allow managers to have total control over entire
organisations, even those with several product lines, services, and
divisions.

Geographical divisions
Geographic divisions are also incorporated into the Amazon
organisational framework. Groups are created by the company based on
physical locations and associated commercial objectives. For instance,
the company's e-commerce arm, Amazon.com Inc., employs these
divisions to make it simpler to operate the e-commerce operation based
on each areas' quirks, their regulatory environments, and any difficulties
like logistics.
 The strategic benefit of dividing up the corporation into geographical
divisions is that it allows Amazon to more effectively and precisely
address issues or challenges specific to each region while taking into
account the regional markets itself.

However, despite its scale, Amazon only has two geographical divisions:
North America and International.

The Amazon organizational structure has distinct features:

i. Hierarchical corporate structure
The structure at Amazon has developed due to the immense size of the
business.
ii. Hybrid project groups
Amazon's corporate structure employs hybrid project groups for product
and service development, attracting specialists from various
departments based on skills and competencies. They can work part-time
or full-time, reporting to project managers.
iii. Flexibility of the business
Amazon, despite its large size, remains highly flexible in adapting to
external marketplace changes. The company's organizational structure
integrates small teams, implementing the "two pizza rule" to ensure
meetings are held in teams with only two pizzas. This approach has led
to disruptive innovation in e-commerce and global logistics.

iv. Stability in the top management

Amazon's stability is key, with few turnovers among its key power
players, a rare occurrence in contemporary companies with frequent senior
management changes.

Conclusion

The secret to Amazon.com's success is its process for gathering and

keeping data from customers and using that data to make
decisions.Amazon.com has come up with a strategy to guarantee client
security and ongoing relevance. The company's success is largely due to its
ability to adapt to modernizing its information systems. In a highly
competitive market, the security measures put in place to detect internet
fraud are crucial to the company's reputation.
The web-based information system might be improved to make it
simpler for users to engage with it. The ability of Amazon.com to
develop a resilient and adaptable MIS that can change with the rapidly
evolving e-commerce sector is essential to the company's continued
profitability.

The Amazon business Model

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