“ MANAGEMENT INFORMATION SYSTEM ”. By Kishor Deshmukh. Management Information System. UNIT-I. MIS: DEFINATION. The system which provides information for decision making in an organization.
“MANAGEMENT INFORMATION SYSTEM” By KishorDeshmukh
MIS: DEFINATION • The system which provides information for decision making in an organization. • It is also known as Information System, Information & decision system, Computer based information system. • The system which support decision making function in org. • In every org. time goes in data collection, processing, documenting & communicating the people. • MIS plays a role of information generation, communication.
DATA, INFORMATION & SYSTEM • Generating Information: • Computer-based ISs take data as raw material, process it, and produce information as output.
DATA, INFORMATION & SYSTEM • Examples: • Data: Thermometer readings of temperature taken every hour: 16.0, 17.0, 16.0, 18.5, 17.0,15.5…. • Information– today’s high: 18.5 • today’s low: 15.5
DATA, INFORMATION & SYSTEM • What Is a System? • System: A set of components that work together to achieve a common goal • Subsystem: One part of a system where the products of more than one system are combined to reach an ultimate goal • Closed system: Stand-alone system that has no contact with other systems • Open system: System that interfaces with other systems
DATA, INFORMATION & SYSTEM Environment Organisation Processing Input Output Feedback
Information System DATA, INFORMATION & SYSTEM External Environment Organisation People Technology
Role Of MIS • Role of MIS can be compared to the role of heart in the body. • MIS satisfies the needs through variety of systems such as Query system, Analysis system, Modelling Systems, & Decision Support System. • MIS plays a role of information generation, communication. • It helps in the process of decision making. • It is supported by the use of mgt. tools of planning & control
Impact Of MIS • MIS plays very important role. • It creates impact on organization’s functions, performance, & product. • with good MIS support, the mgt. of marketing, finance, production becomes more efficient. • Time required is very less. • The tracking & monitoring of functional targets becomes easy.
MIS & The User • Every person in organization is user of MIS. • The people in organization operate at all levels in the hierarchy. • A typical user is a clerk, an assistant, an officer, an executive or a manager. • Each of them has specific task & a role to play in the mgt of business. • MIS has to satisfy the needs of all the person.
MIS: Concept • MIS is necessity of all the organization. • To process data from org. & present it in the form of reports. • The information is a product of analysis of data. • System should present information in such a form & format that it creates an impact on its user. • Some modifications & sort of selective approach is necessary. • The norm for an exception is necessary.
MIS: Concept Support Structure To MIS Conceptual View of MIS
MIS: Concept Integrated Information System Structure Physical View of MIS
A Support To The Management • Mgt process is executed through a variety of decision taken at each step of planning, organizing, staffing, directing, coordinating and control. • MIS aids decision making. • Objective of MIS is to provide information for decision support. • Business goals are achieved in most efficient manner. • Decision making is not restricted to a particular level.
Characteristics Of Valuable Information • Accurate, • Complete, • Economical, • Flexible, • Reliable, • Relevant, • Simple, • Timely • Verifiable, • Accessible, • Secure.
Management Information System UNIT-II
Unit-II • Basics of MIS : • Decision making. • Decision methods. • Behavioral concepts. • Organizational decision making. • MIS and decision making concepts. • Information concepts and classification. • Methods of data and information collection. • Value of information, organization and information. • Human as an information processor. • Development of MIS and choice of IT.
Decision-Making Concepts • Decision: a reasoned choice among alternatives. • Examples: • Where to advertise a new product • What stock to buy • What movie to see • Where to go for dinner Decision Making:-- a process of choosing among alternative courses of action for the purpose of attaining a goal or goals
Characteristics of Business Decision Making Sequential in nature. Exceedingly complex due to risks & trade offs. Influenced by personal values. Made in institutional setting & business environment.
Rational Decision Making • Ensures the achievement of the goal. • If it is raining it is rational to look for a cover. • The rationality of decision made is not the same in every situation. • It will vary with the organization. • Any business decision if review by a share holder, a customer, an employee will result in different criticism due to difference individual’s rationality
Steps in Rational Decision Making • Define the problem • Identify the decision criteria • Allocate weights to the criteria • Develop the alternatives • Evaluate the alternatives • Select the best alternatives
1. Define the problem 6. 2. Select the Identify the best alternative criteria Making a Decision 5. 3. Evaluate the Allocate weights alternatives to the criteria 4. Develop alternatives Steps in Rational Decision Making
The Problems in Making Rational Decisions • Ascertaining the problem • Insufficient knowledge • Not enough time to be rational • The environment may not cooperate • Other limitations
Decision Making Process • Decision making is a process which the decision maker uses to arrive at a decision. • The process is described by Herbert Simon in a model.
This gentleman won a Nobel Prize! Decision Making Process • Herbert Simon’s decision making model • Simple • Decision process modeled as a “flow” of events
Decision Making Process • Intelligence Phase • Collect raw material • Process & examine • Identify the problem calling for decision
Decision Making Process • Design Phase • Identify the key variables • Create model to aid decision making. • Identify the alternative solutions.
Decision Making Process • Example of Statistical Model-Factory Should we be concerned about model? The model sounds good
Decision Making Process • Choice Phase • Select one alternative as a decision, based on the selection criteria. • Selection criteria such as max profit, least cost, least time.
Decision Making Process • Implementation Phase • Implement the decision • Monitor • Make adjustments
Types of Decision Making System • There are two types of systems based on the managers knowledge about the environment. • Closed decision making system • Open decision making system
Types of Decision Making System • Closed decision making system • Known set of decision alternatives. • Outcomes are known. • The manager has model or rule. • Based on some goal manager can choose one of them. • Eg: examination system to declare pass or fail, fixed deposits.
Types of Decision Making System • Open decision making system • Manager does not Know all the decision alternatives. • Outcome of decision is not known fully. • No method, rule or model is available to study. • It is difficult to decide an objective or goal. • Eg: Pricing of a new product, plant location
Goal of MIS • MIS tries to convert every open system into closed system by providing information support. • MIS gives information support so that manager knows more & more about environment.
Nature of Decision • Decision making is a complex situation. • To resolve the complexity, the decisions are classified as programmed & non programmed decisions.
Nature of Decision • Programmed Decision • Decision can be based on a rule, method or even guidelines. • If such rules can be developed then MIS can be designed to make a decision. • The system in such case plays a role of decision maker based on a given rule or method.
Nature of Decision • Non-programmed Decision • Decision which can not be made by using rule or method. • Such decisions are infrequent. • MIS can help to some extent in identifying the problem. • MIS can develop support system in the non-programmed decision making situation.
Assignment Discuss the various activities performed through an MIS in any business organization. What are different types of strategies. Explain it in brief. State the differences between MIS & the computer system. What are the different methods to avoid misuse of information.
Behavioural Concepts in Decision-Making • One manager may not the same as that of other managers. • They differs on the behavioural platform. • The manager differ in their approach towards decision making in the organization. • They can be classified into two categories • Achievement Oriented • Task Oriented
Behavioural Concepts in Decision-Making • Achievement Oriented • Looking for excellence • Always opt for the best. • He will be scientific & therefore more rational.
Behavioural Concepts in Decision-Making • Task Oriented • Looking of completion of the task somehow. • Achievement doesn’t matter.
Behavioural Concepts in Decision-Making • The managers personal values will influenced. • Behaviour is influenced by position he holds. • Behaviour is also influenced by fear & an anxiety.
Methods for Deciding Decision Alternatives • There are different methods to help the manager decide among the alternatives. • There are methods for selection of decision alternatives with the goals. • Optimization Techniques. • Payoff Analysis. • Decision Tree Analysis.
Methods for Deciding Decision Alternatives • Optimization Techniques. • Linear Programming, Integer Programming, Dynamic Programming, Queuing Models & so on are examples of optimization techniques. • Computer algorithms and programs are readily available to handle many problems of this class. • The major problem is to construct the model correctly.
Statistical Decision Theory • Decision Theory provides a rational framework for choosing between the different alternatives when the choices are imperfectly known. • The theory provides techniques for mathematically evaluating the outcomes of alternative action in a given situation. • In all cases decision maker has an objectives (eg. Maximize profit) • Two methods: Payoff Matrix & Decision Tree
Methods for Deciding Decision Alternatives • Payoff Analysis • When all the alternatives & their outcomes are not known with certainty. • The payoff matrix consists of rows for the alternatives or strategies available and columns for the conditions that affect the outcomes. • Each cell contains the payoff (the consequences) in dollars if that strategy is chosen and that state occurs.