Professional Documents
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Management Information & Control System
Management Information & Control System
CONTROL SYSTEM
CONCEPT OF MIS :
Initial Concept was to process data & present it in the
form of reports at regular intervals.
Concept was modified with distinction made between
Data & Information.
Concept is similar to Raw Material (Input) & Finished
Product (Output) System Concept of MIS.
Another Concept is : Data is one but can be viewed by
different people in different ways.
Concept of Database & The MIS based on the Database
is more effective. 1
Gradually the concept of End User Computing using
Multiple Database emerged this give Decentralisation of
MIS System.
Analysis of Data relies on many academic discipline.
This includes : Operation Research / Management
Accounting / Human Behaviour / Psychology etc. making
MIS more meaningful .
The academic disciplines are used in designing the MIS.
The Foundation of MIS is the Principles of Management
& its Practice.
The concept therefore is a blend of Principles, Theories
& Practices of the Management, Information & Systems.
2
DEFINITION OF MIS :
MIS can be defined as a system that
1) Provides information to Support Managerial Functions
like Planning, Organising, Directing, Controlling etc.
2) Collects information in a systematic & routine manner
which is in accordance with a well defined set rules.
3) Includes Files, Hardware, Software & Operation
Research Models & Process, Storing, Retrieving &
Transmitting information to users.
MIS has more than one definition :
• A system which provides information support to the
organisation. 3
• A system based on the Database of the organisation
evolved for the purpose of providing information to the
people of the organisation.
4
ROLE OF MIS IN AN ORGANISATION :
Role of MIS can be compared to the Role of Heart in the
Body.
Ensures appropriate data is collected from the various
sources, process & sent to all the needy destinations.
The system is expected to fulfill information needs of an
individual, group of individual, the various management
levels.
The MIS satisfies the diversified need : Through variety
of systems, such as:
- Query Systems
- Analysis Systems
- Modelling Systems
- Decision Support Systems 5
MIS helps in Strategic Planning, Management
Controls, Operational Controls, Transaction Processing
etc.
15
MIS & THE USER :
Every person in the organisation is user of MIS &
different category of users have different information
needs.
Each level of user has a specific task or role &
corresponding informations need.
Example : Need of information of a Clerk, Executive,
Manager (Operational, Middle or Top Level).
It is observed that at lower level, MIS gives a sense of
insecurity. MIS takes away the drudgery of repetitive
search, collection, preparing statements & submitting to
higher level.
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Work vacuum so created is not easily filed up. Thus
crating a sense of insecurity & loss of importance of the
person.
Positive aspect is clerk can make a quick search.
At the level of an Officer/Executive of MIS does the
role of Data Analysis in a predetermined manager. This
means knowledge of business is transferred from an
individual to the MIS & made available to all in the
organization.
Concept of information is power with individual is
Lost.
17
The Psychological impact is higher, if the person is not
able to cope up with change by expanding or enriching
his job.
PROCESS OF MANAGEMENT :
23
MIS AS A TOOL FOR MANAGEMENT PROCESS :
The various processes of management require lot of data
& information.
The requirement arises due to the fact that each step of
management , variety of decisions are taken to correct
the course development.
The decisions or actions are prompted by the feedback
given by the control system of MIS.
The control of overall performance is made possible by
way of budget summary & MIS report.
The MIS report showing sales, expenditure, ROI etc.
Throws light on the direction the organization is moving.
24
Exception reports identify weakness in the management
system.
If effective management system is to be assured it
has to be based on PROMPT business information.
Management performance improves in the business
risks & uncertainties are handled effectively with
adequate information.
A good MIS provides information to the managers to
expand their knowledge base. He must know the adverse
trends in business, the shortfalls of failures in the
management process.
A good MIS highlights the critical success factors &
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supports key areas of management.
Modern fiercely competitive business scenario needs
handling of business operations with skills
& foresight to avert crisis & relies heavily on MIS.
ORGANISATION AS A SYSTEM & MIS :
A system is an assembly of elements arranged in a
logical order to achieve certain objectives.
Organisation is viewed as a socio technical system
consisting of sub system of people, task, technology,
culture & structure.
Organisation continuously exchange information with
environment & is influenced by the changes.
Accordingly organisation has to be built in such a fashion
that it adjusts with changes in environment & the goals &
objectives are satisfied – OPEN SYSTEM. 26
MIS should be designed viewing the organisation as a
system.
MIS should give due importance to the human side of
the organisation & its culture. Task & technology are
physical aspects of the organisation but culture & people
are very difficult to assess from MIS design point of view.
MIS & ORGANISATION :
In a vertical structure with high degree of centralisation,
MIS should give control information to the higher
management where decision is centred.
If the organisation structure is based on a functional basis
(Horizontal span of control, where functional head is key
decision maker & all functions are equally importance than
MIS will have a functional design with information support
to functional head. 27
MODIFIED MODEL OF
ORGANISATION SYSTEM
TASKS
PEOPLE STRUCTURE
GOALS
TECHNOLOGY CULTURE
28
STRATEGIC MANAGEMENT OF
BUSINESS & MIS
CONCEPT OF CORPORATE PLANNING :
Plan is a predetermined course of action to be taken in
future.
Goals & objectives that a plan is supposed to achieve are
the pre-requisites of a plan & setting of goals & objectives
are primary task of management.
Planning is a dynamic process involving chain of
decisions.
Essence of planning is to see the opportunities & threats
in
future & predetermine course of action to convert
opportunity to business gain & meet the threat to avoid 29
Planning can be Long Range or Short Range.
Long Range Planning : Is for 5 years or more.
Deals with growth, Rate of growth & Image business
share etc.
Short Range Planning : Is for 1 year at the most.
Concerned with attainment of the business result for the
year.
Goals relate to long term planning.
Objectives relate to short term planning.
“Corporate Business Planning deals with Corporate
Business Goals & Objectives”.
30
Corporate plan considers the world trends in the
business, the industry, the technology, the international
markets, the competitors, the corporate strength &
weakness etc. & is a complex exercise to steer the
company through difficulties, uncertainties etc.
40
Budgets are CONTROL MECHANISM.
GOALS & OBJECTIVES
FINANCIAL BUDGET 41
BASIC OF MIS
DECISION MAKING CONCEPTS: It is a fixed
intention to bringing to a conclusive result, A
judgement !
INFORMATION CONCEPT:-
Information differs from data.
Information has a value in decision making – while data
does not have.
Information Characteristics:-
• Improves representation of an entity.
• Updates knowledge level (Ex: Sales Data)
• Reduces uncertainty
• Aids in decision making.
Ex: Sales Data progressively become information
when processed with other data such as target.
46
Conceptual model of communication:-
Transmitter Receiver
Source Channel Destination
Encoder De-coder
(Data / (MIS) (Reports) (Interprete) (MGMT.)
Information)
Noise
Distortion
Information BIAS:
Should not be biased while classifying & filtering /
Communicating information.
BIAS enters because people try to block sensitive
information.
To overcome this, a formal organization structure &
top management decides information type / received.
48
Way information is presented, may create BIAS. Ex: If
information is presented in alphabetic order & it is
lengthy.
INFORMATION : A QUALITY PRODUCT
Information is a product of data processing.
Quality of information can be measured on four
dimensions: (1) Utility (2) Satisfaction (3) BIAS (4)
Error.
1. UTILITY: Has four facets : (1) Form (2) Time (3)
Access (4) Possession.
2. SATISFACTION OF USER: Is a common key of
measuring utility.
3. ERROR: Error creeps in due to
Incorrect data & collection method. 49
Incorrect data processing.
Loss or Incomplete data.
Poor data validation or control.
Deliberate falsification.
Processing or data to information should be allowed
only
after thorough validation.
4. BIAS: If the information is processed out of biased
data, it will have BIAS.
PARAMETERS OF QUALITY OF
INFORMATION
1. Impartiality : No BIAS
2. Validity 50
3. Reliability
4. Consistency : Data should have consistent
5. Age : If the information is old, it is not useful today.
CLASSIFICATION OF INFORMATION:
1. Action vs. No. of action information:-
Ex: “No stock” report calls for purchase action.
2. Recurring vs. non Recurring information:-
Ex: Monthly sales report vs. market study information.
3. Internal vs. External information:-
Ex:-Information generated through internal resources
vs. information generated through govt. report.
4. Planning information:
Ex: Needs norms/ standards / specs.
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5. Control Information:-
Ex:Reports giving status of activity with feed back
mechanism.
6. Knowledge information:-
Ex: Collection of information through library reports /
research studies to build up a knowledge base for
decision making.
Information can also be classified
BASED ON USAGE:-
Organization information:- Used by all in
organization.
Database information :- When multiple use & apply.
Operational / Functional information:- When the
information is used for operations.
52
EXTERNAL LOW
Top
SOURCE OF Management STRUCTURED
INFO INFORMATION
Middle Management
Operational Management
HIGH
INTERNAL
53
METHODS OF DATA & INFORMATION
COLLECTION:-
Choice of methods have an impact on quality of
information.
Methods of data collection & processing is part of MIS.
Methods of Data & Information Collection
• Observation:
= This methods are chosen for data & information
collection & specific problem.
= Remaining are routine methods particularly
irrespective of a problem.
Ex:Visit customer to assess complaint.
• Experiment: Ex:Assess market response to new
packaging. (Thru test marketing) 54
• Survey: Ex: Market survey, opinion poll.
• Subjective Estimation:Ex: Data pertaining to future
like life style in 21st Century/ Future of alternative
energy source.
• Transaction Processing: Ex:Ledgers, Payroll, sales
report etc.
• Purchased from outside: Ex:Database on specific
subject, research study etc.
• Publication: Ex: Corporate publication, industry
publication, NCAER report.
• Government Agencies: Ex: RBI, tax publications
etc.
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Human Being as Information Processor :
An experienced Manager is a skillful information
processor & able to decide.
While processing, manager also uses knowledge from his
memory.
Filtering is a process whereby manager selectively accepts
input.
BRAIN
Use of Stored
Knowledge & Experience