M.C.a.(Sem - III) - Management Information System

8/15/2019 M.C.a.(Sem - III) - Management Information System

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M.C.A. (SEM III)

– PAPER VI

MANAGEMENT INFORMATION

SYSTEM


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Sr. No. Title Page No.

1 Managing The Digital Firm 01

2. Information System In The Enterprise. 17

3. Information Systems, Organiation,Management !n" Strategy 20

#. De$ision Ma%ing 2&

&. Information 3#

'. De(elopment Of Mis ##

7. )hoi$e Of Information Te$hnology &2

*. Enterprise !ppli$ations !n"

+siness -ro$ess Integration &7

. De$ision Spport Systems '#


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SYLLABUS

MANAGEMENT INFORMATION SYSTEMS

. Ma!agi!g t"e #igital $ir%

/hy information system

-erspe$ti(es on information system

)ontemporary approa$h to Information systemearning to se information systems e4 opportnities 4ith

te$hnology

&. I!$or%atio! S'te% i! t"e E!terrie

Ma5or types of system in organiationSystems from fn$tional perspe$ti(es

Integrating fn$tions an" 6siness pro$esses Intro"$tion toEnterprise appli$ation

*. I!$or%atio! S'te%+ Orga!i,atio!+ %a!age%e!t a!#

Strateg'Organisations an" Information Systems

o4 information system impa$t organiations an" 6siness

firm sThe impa$t of IT on management "e$ision ma%ing

Information 6siness an" 6siness strategy

-. e/iio! %a0i!g

De$ision ma%ing $on$eptsDe$ision metho"s, tools an" pro$e"res+eha(ioral $on$epts in "e$ision ma%ingOrganiational "e$ision ma%ing

MIS an" De$ision Ma%ing )on$epts

1. I!$or%atio!

Information )on$epts

Information a 8ality pro"$t)lassifi$ation of information

Metho"s of "ata an" Information $olle$tion9ale of information

:eneral m o"el of a hman as a information pro$essor Smmary of information $on$epts an" their impli$ationsOrganiation an" informationMIS an" Information $on$epts

2. e3elo%e!t o$ MIS

De(elopment of ong ;ange -lans of MIS!s$ertaining the $lass of InformationDetermining the Information ;e8irement

De(elopment an" Implementation of MIS

Management of


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7. e/iio! S6ort S'te%

DSS )on$ept an" -hilosophyDSS Deterministi$ Systems!I Systems=no4le"ge 6ase" e>pert system

MIS an" ;ole of DSS

Ter% 8or09Aig!%e!t : Ea$h $an"i"ate 4ill s6mit a 5ornal in

4hi$h assignments 6ase" on the a6o(e sylla6s an" the internal test

paper. Test gra"e" for 10 mar%s an" -ra$ti$al?s gra"e" for 1& mar%s.

Re$ere!/e :

1. Management Information System, O Thomson earning & th e"ition

2. Management Information System, /.S.@a4a"e%ar, 3 r" e"ition, TM

Management Information System, @ames O?+rien, 73. th e"ition, TM

#. Information Systems the fon"ation of EA+siness, Ste(en !lter, # th

E"ition -erson e"$ation

&. Information Te$hnology for management, Tr6an, M$ean,

/ether6e, # th e"ition, /iley

'. Management Information Systems, o"on an" o"on, 10 th

e"ition, -earsons E"$ations

7. Management Information Systems, @as4al O>for" -ress

)ase 6ase" approa$h $an 6e a"opte" to e>plain (arios $on$epts

"ring ttorials BInternal E(alationC

Aig!%e!t

SE of IS in "ifferent "omains as ospitality, ;etail, Spply $hain,(en"or management, in(entory, et$.

!t least & 4e6site?s $riti$al analysis in any of the "omain as a mar%et

sr(ey for "esigning the 4e6site for the parti$lar 6siness.

;esear$h paper on any topi$ of their interest of this paper

Optional

Bi;liogra"'

Management Information Systems A +y /.S.@a4"e%ar, Se$on"

E"ition. TM: -6li$ations

Management Information Systems A +y /.S.@a4"e%ar, Thir" E"ition.

TM: -6li$ations

Management Information Systems A Managing the Digital FirmA +y

=enneth a"on an" @ane a"on -I -6li$ations, inth E"ition

Management Information Systems A Managing the Digital FirmA +y

=enneth a"on an" @ane a"on -I -6li$ations, Tenth E"ition

Management Information Systems A +y :or"on an" Olson E"ition.

TM: -6li$ations


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MANAGING Tpe$t or 6siness partners aron" the

4orl" to 6e flly $onne$te".

Internet $ltre is glo6al.

Information te$hnology BITC refers to all of the $ompterA6ase"

information systems se" 6y organiations an" their n"erlying

te$hnologies. +riefly, information te$hnologies an" systems are

re(oltioniing the operation of firms, in"stries, an" mar%ets.

.& CAPITAL MANAGEMENT

Information te$hnology has 6e$ome the largest $omponent of $apital

in(estment for firms in the nite" States an" many in"strialie"so$ieties. In 200&, .S. firms alone 4ill spen" nearly G1.* trillion on ITan" tele$ommni$ations e8ipment an" soft4are. In(estment in

information te$hnology has "o6le" as a per$entage of total 6sinessin(estment sin$e 1*0, an" no4 a$$onts for more than oneAthir" of all$apital in(este" in the nite" States an" more than &0 per$ent of

in(este" $apital in informationA


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I!$or%atio! Te/"!olog' /aital i!3et%e!t

Information te$hnology $apital in(estment, "efine" as har"4are,

soft4are, an" tele$ommni$ations e8ipment, e>pan"e" from 1

per$ent of all 6siness in(estment to 3& per$ent "ring the perio " from1*0 to 2003. in the nite" States an" more than &0 per$ent of in(este" $apital in informationA

Intensi(e in"stries, s$h as finan$e, insran$e, an" real estate.

Fig sho4s that 6et4een 1*0 an" 2003, pri(ate 6siness in(estment in

information te$hnology Bhar"4are, soft4are, an" tele$ommni$ationse8ipmentC gre4 from 1 per$ent to more than 3& per$ent of all

"omesti$ pri(ate 6siness in(estm ent. If one in$l"e" e>pen"itres for

managerial an" organiational $hange programs an" 6siness an"$onslting ser(i$es that are re8ire" to se this te$hnology effe$ti(ely,total information te$hnology e>pen"itres 4ol" rise a6o(e &0 per$entof total pri(ate 6siness in(estment.

!s managers, many of yo 4ill 4or% for firms that are intensi(ely sing

information systems an" ma%ing large in(estments in information

te$hnology. o 4ill $ertainly 4ant to %no4 ho4 to in(est this money4isely. If yo ma%e 4ise $hoi$es, yor firm $an otperform

$ompetitors. If yo ma%e poor $hoi$es, yo 4ill 6e 4asting (ala6le$apital.

.* FOUNATION OF OING BUSINESS:

In many in"stries, sr(i(al an" e(en e>isten$e 4ithot e>tensi(e seof information systems is in$on$ei(a6le. O6(iosly, all of eA$ommer$e

4ol" 6e impossi6le 4ithot s6stantial IT in(estments an" firms s$has !maon, e+ay, :oogle, EHTra"e, or the 4orl"?s largest online

ni(ersity, the ni(ersity of -hoeni>, simply 4ol" not e>ist. To"ay?s

ser(i$e in"stries finan$e, insran$e, real estate as 4ell as personalser(i$es s$h as tra(el, me"i$ine, an" e"$ation $ol" not operate

4ithot IT. Similarly, retail firms s$h as /alAMart an" Sears an"

manfa$tring firms s$h as :eneral Motors an" :eneral Ele$tri$re8ire IT to sr(i(e an" prosper. @st li%e offi$es, telephones, filing

$a6inets, an" effi$ient tall 6il"ings 4ith ele(ators 4ere on$e of thefon"ations of 6siness in the t4entieth $entry, information

te$hnology is a fon"ation for 6siness in the t4entyAfirst $entry.


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T"e i!ter#ee!#e!/e ;et8ee! orga!i,atio! a!# i!$or%atio! S'te%.

There is a gro4ing inter"epen"en$e 6et4een a firm?s a6ility to se

information te$hnology an" its a6ility to implement $orporate strategiesan" a$hie(e $orporate goals as sho4n in fig. /hat a 6siness 4ol"

li%e to "o in fi(e years often "epen" on 4hat its systems 4ill 6e a6le to"o. In$reasing mar%et share, 6e$oming the highA8ality or lo4A$ost

pro"$er, "e(eloping ne4 pro"$ts, an" in$reasing employee

pro"$ti(ity "epen" more an" more on the %in"s an" 8ality of

information systems in the organiation. The more yo n"erstan"a6ot this relationship, the more (ala6le yo 4ill 6e as a manager.

In $ontemporary systems there is a gro4ing inter"epen"en$e 6et4een

a firm?s information syst ems an" its 6siness $apa6ilities. )hanges instrategy, rles, an" 6siness pro$esses in$reasingly re8ire $hanges

in har"4are, soft4are, "ata6ases, an" tele$ommni$ations. Often,4hat the organiation 4ol" li%e to "o "epen"s on 4hat its systems4ill permit it to "o.

.- PROUCTIVITY:

To"ay?s managers ha(e (ery fe4 tools at their "isposal for a$hie(ing

signifi$ant gains in pro"$ti(ity. IT is one of the most important tools

along 4ith inno(ations in organiation an" management, an" in fa$t,these inno(ations nee" to 6e lin%e" together. In(estment in IT plays a$riti$al role in in$reasing the pro"$ti(ity of firms, an" entire nations.

For instan$e, e$onomists at the .S. Fe"eral ;eser(e +an% estimate

that IT $ontri6te" to the lo4ering of inflation 6y 0.& to 1 per$entage

point in the years from 1& to 2000.

Firms that in(este" 4isely in information te$hnology e>perien$e"$ontine" gro4th in pro"$ti(ity an" effi$ien$y.

.1 STRATEGIC OPPORTUNITIES ? AVANTAGE

If yo 4ant to ta%e a"(antage of ne4 opportnities in mar%ets, "e(elop

ne4 pro"$ts, an" $reate ne4 ser(i$es, $han$es are 8ite high yo

4ill nee" to ma%e s6stantial in(estments in IT to realie these ne4

6siness opportnities. If yo 4ant to a$hie(e a strategi$ a"(antageo(er yor ri(als, to "ifferentiate yorself from yor $ompetitors, IT is

one a(ene for a$hie(ing s$h a"(antages along 4ith $hanges in

6siness pra$ti$es an" management. These a"(antages might not lastfore(er, 6t then again most strategi$ a"(antages throghot historyare shortAli(e". o4e(er, a string of shortAli(e" $ompetiti(ea"(antages is a fon"ation for longAterm a"(antages in 6siness, 5stas is tre of any athleti$ sport or ra$e.


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.2

IT Doesn?t Matter, 4hi$h is signifi$ant "e6ate isse in the 6siness$ommnity. This argment in a ntshell is that 6e$ase e(ery firm $an

pr$hase IT in the m ar%etpla$e, 6e$ase any a"(antage o6taine" 6y

one $ompany $an easily 6e $opie" 6y another $ompany, an" 6e$aseIT is no4 a $ommo"ity 6ase" on stan"ar"s Bs$h as the InternetC that

all $ompanies $an freely se, it is no longer a "ifferentiating fa$tor in

organiational performan$e.So that no firm $an se IT to a$hie(e a strategi$ e"ge o(er its

$ompetitors any more than it $ol" 4ith ele$tri$ity, telephones, or other

infrastr$tre. Therefore, it is m entione" that firm s shol" re"$espen"ing on IT, follo4 rather than lea" IT in their in"stry, re"$e ris%s

6y preparing for $ompter otages an" se$rity 6rea$hes, an" a(oi""eploying IT in ne4 4ays.

Most management information system BMISC e>perts "isagree. Manyhighly a"ept firm s $ontinally o6tain sperior retrns on their in(estment in IT, 4hereas less a"ept firms "o not.

)opying inno(ations of other firms $an 6e "e(ilishly "iffi$lt, 4ith m$h

6eing lost in the translation. There is only one Dell, one /alAMart, one!maon, an" one e+ay, an" ea$h of these firms has a$hie(e" a

$ompetiti(e a"(antage in its in"stry 6ase" in large part on ni8e4ays of organiing 4or% ena6le" 6y IT that ha(e 6een (ery "iffi$lt to$opy. If $opying 4ere so easy, 4e 4ol" e>pe$t to fin" m$h more

po4erfl $ompetition for these mar%et lea"ers.

!lthogh falling pri$es for har"4are an" soft4are an" ne4 $omptingan" tele$ommni$ations stan"ar"s s$h as the Internet ha(e ma"e the

appli$ation of $ompters to 6siness m$h easier than in the past, this"oes not signal the en" of inno(ation or the en" of firms "e(eloping

strategi$ e"ges sing IT. Far from the en" of inno(ation,

$ommo"itiation often lea"s to an e>plosion in inno(ation an" ne4mar%ets an" pro"$ts. For e>ample, the a6n"an$e an" a(aila6ility of

materials s$h as 4oo", glass, an" steel "ring the last $entry ma"e possi6le a $ontining stream of ar$hite$tral inno(ation.

i%e4ise, the "e(elopment of stan"ar"s an" lo4ering $osts of $ompter har"4are ma"e possi6le ne4 pro"$ts an" ser(i$es s$h as

the !pple i-o" an" iTnes, the Sony /al%man porta6le msi$ player,

;eal Me"ia online streaming msi$, an" the entire online $ontentin"stry. Entirely ne4 6sinesses an" 6siness mo"els ha(e emerge"for the "igital "istri6tion of msi$, 6oo%s, 5ornals, an" olly4oo"

films.

It is srely $orre$t in stating that not all in(estm ents in IT 4or% ot or

ha(e strategi$ (ale. Some are 5st nee"e" to stay in 6siness, to$omply 4ith go(ernment reporting re8irements, an" to satisfy thenee"s of $stomers an" (en"ors. -erhaps the more important8estions are ho4 m$h "oes IT ma%e a "ifferen$e, an" 4here $an it

6est 6e "eploye" to ma%e a $ompetiti(e "ifferen$e Entreprener $an

se information te$hnology an" systems to $reate "ifferentiation fromyor $ompetitors an" strategi$ a"(antage in the mar%etpla$e. /e nee"to a$hie(e any measre of s$$ess, in(estment in IT mst 6ea$$ompanie" 6y signifi$ant $hanges in 6siness operations an"

pro$esses an" $hanges in management $ltre, attit"es, an" 6eha(ior. !6sent these $hanges, in(estment in IT $an 6e a 4aste of pre$ios in(estor resor$es.

.4 = IGITAL CONVERGENCE AN T


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te$hnologies 4ith signifi$ant 6siness impli$ations for m$h of this$entry.

There are fi(e fa$tors to $onsi"er 4hen assessing the gro4ing impa$t

of IT in 6siness firm s 6oth to"ay an" o(er the ne>t ten years.• Internet gro4th an" te$hnology $on(ergen$e

•Transformation of the 6siness enterprise

•:ro4th of a glo6ally $onne$te" e$onomy•:ro4th of %no4le"ge an" information A6ase" e$onomies•

Emergen$e of the "igital firmThese $hanges in the 6siness en(ironment, smmarie" in nm6er of ne4 $hallenges an" opportnities for 6siness firms an" their

managements.

Internet :ro4th te$hnology )on(ergen$e e4 6siness Te$hnologies 4ith the fa(ora6le $ostEA6siness, EA$ommer$e, EAgo(ernment;api" $hanges in mar%et mar%et str$tre

In$rease" o6soles$en$e of tra"itional 6siness mo"els

Transportation of the 6siness enterprise

FlatteningDe$entraliationFle>i6ilityo$ation In"epen"en$e

o4 transa$tion $oAor"ination $ost

Empo4erment)olla6orati(e 4or% team 4or%

:lo6aliationManagement $ontrol in a glo6al mar%et pla$e)ompetition in mar%et

:lo6al 4or%grops:lo6al "eli(ery systems

;ise in the Information E$onomy=no4le"ge informationA6ase" e$onomi$s

e4 pro"$ts ser(i$es

=no4le"ge as a $entral pro"$ti(e strategi$ asset

TimeA6ase" $ompetitionShorter pro"$t life $y$leimite" employee %no4le"ge 6ase

Emergen$e of the "igital firmDigitally ena6le" relationships 4ith $stomers, sppliers employeesDigital net4or%sDigital management

!gile sensing respon"ing to en(ironmental $hanges

The internet is 6ringing a6ot a $on(ergen$e of te$hnologies, rollingmar%ets, entire in"stries firms in the pro$ess. e4 organiation

str$tre is 6ilt p, Telephone net4or%s are merging to internet et$.

Tra"itional mar%ets "istri6tion $hannels are 4ea%ening ne4mar%ets are 6eing $reate".

.5 TRANSFORMATION OF BUSINESS ENTERPRISE:

!long 4ith rapi" $hanges in mar%ets an" $ompetiti(e a"(antage are$hanges in the firms themsel(es. The Internet an" the ne4 mar%etsare $hanging the $ost an" re(ene str$tre of tra"itional firms an" are

hastening the "emise of tra"itional 6siness mo"els.

For instan$e, in the nite" States, 20 per$ent of tra(el sales are ma"eonline, an" e>perts 6elie(e that &0 to 70 per$ent of tra(el sales 4ill 6eonline 4ithin a "e$a"e. ;ealtors ha(e ha" to re"$e $ommissions onhome sales 6e$ase of $ompetition from Internet real estate sites. The 6siness mo"el of tra"itional lo$al telephone $ompanies, an" the (aleof their $opperA6ase" net4or%s, is rapi"ly "e$lining as millions of


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$onsmers s4it$h to $elllar an" Internet telephones.

The Internet an" relate" te$hnologies ma%e it possi6le to $on"$t

6siness a$ross firm 6on"aries alm ost as effi$iently an" effe$ti(ely as

it is to $on"$t 6siness 4ithin the firm. This means that firms are nolonger limite" 6y tra"itional organiational 6on"aries or physi$allo$ations in ho4 they "esign, "e(elop, an" pro"$e goo"s an"

ser(i$es. It is possi6le to maintain $lose relationships 4ith sppliersan" other 6siness partners at great "istan$es an" otsor$e 4or%

that firms formerly "i" themsel(es to other $ompanies.

For e>ample, )is$o Systems "oes not manfa$tre the net4or%ing

pro"$ts it sellsJ it ses other )ompanies, s$h as Fle>troni$s, for this prpose. )is$o ses the Internet to transmit or"ers to Fle>troni$s an"

to monitor the stats of or"ers as they are shippe". .

!t the Or6it /e6 site, (isitors $an ma%e online reser(ations for airlines, hotels, rental $ars, $rises, an" (a$ation pa$%ages an" o6taininformation on tra(el an" leisre topi$s. S$h online tra(el ser(i$es are

spplanting tra"itional tra(el agen$ies.

In a""ition to these $hanges, there has also 6een a transformation in

the management of the enterprise. The tra"itional 6siness firm 4as an" still is a hierar$hi$al, $entralie", str$tre" arrangement of

spe$ialists 4ho typi$ally relie" on a fi>e" set of stan"ar" operating

pro$e"res to "eli(er a massApro"$e" pro"$t Bor ser(i$eC. The ne4style of 6siness firm is a flattene" Bless hierar$hi$alC, "e$entralie",fle>i6le arrangement of generalists 4ho rely on nearly instantinformation to "eli(er massA $stomie" pro"$ts an" ser(i$es

ni8ely site" to spe$ifi$ mar%ets or $stomers.

The tra"itional Teams an" in"i(i"als 4or%ing in tas% for$es, an" a$stomer orientation to a$hie(e $oor"ination among employees. Thene4 manager appeals to the %no4le"ge, learning, an" "e$ision

ma%ing of in"i(i"al employees to ensre proper operation of the firm.On$e again, information te$hnology ma%es this style of management

possi6le.

.7 GLOBALI@ATION

! gro4ing per$entage of the !meri$an e$onomy an" other a"(an$e"

in"strial e$onomies in Erope an" !sia "epen"s on imports an"

e>ports. Foreign tra"e, 6oth e>ports an" imports, a$$onts for morethan 2& per$ent of the goo"s an" ser(i$es pro"$e" in the nite"States, an" e(en more in $ontries s$h as @apan an" :ermany.

)ompanies are also "istri6ting $ore 6siness fn$tions in pro"$t"esign, manfa$tring, finan$e, an" $stomer spport to lo$ations in

other $ontries 4here the 4or% $an 6e performe" more $ost

effe$ti(ely. The s$$ess of firms to"ay an" in the ftre "epen"s ontheir a6ility to operate glo6ally.

To"ay, information systems pro(i"e the $ommni$ation an" analyti$

po4er that firms nee" to $on"$t tra"e an" manage 6sinesses on a glo6al s$ale. )ontrolling the farAflng glo6al $orporation

$ommni$ating 4ith "istri6tors an" sppliers, operating 2# hors a"ay in "ifferent national en(ironments, $oor"inating glo6al 4or% teams,an" ser(i$ing lo$al an" international reporting nee"s is a ma5or

6siness $hallenge that re8ires po4erfl information systemresponses.

:lo6aliation an" information te$hnology also 6ring ne4 threats to

"omesti$ 6siness firms +e$ase of glo6al $ommni$ation an"management systems, $stomers no4 $an shop in a 4orl"4i"emar%etpla$e, o6taining pri$e an" 8ality information relia6ly 2# hors a

"ay. To 6e$ome $ompetiti(e parti$ipants in international mar%ets, firmsnee" po4erfl information an" $ommni$ation systems.


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. RISE IN Tamples of 6siness pro$esses, an" the 4ays organiations

a$$omplish their 6siness pro$esses $an 6e a sor$e of $ompetiti(estrength.

=ey $orporate assets intelle$tal property, $ore $ompeten$ies, an" finan$ial an" hman assets are manage" throgh "igital means. In a

"igital firm, any pie$e of information re8ire" to spport %ey 6siness"e$isions is a(aila6le at any time an" any4here in the firm.Digital firms sense an" respon" to their en(ironments far more rapi"lythan tra"itional firms, gi(ing them more fle>i6ility to sr(i(e in tr6lent

times. Digital firms offer e>traor"inary opportnities for more glo6al

organiation an" management. +y "igitally ena6ling an" streamliningtheir 4or%, "igital firms ha(e the potential to a$hie(e npre$e"ente"le(els of profita6ility an" $ompetiti(eness. Ele$troni$ally integrating %ey

6siness pro$esses 4ith sppliers has ma"e this $ompany m$h more

agile an" a"apti(e to $stomer "eman"s an" $hanges in its spplier net4or%. Fig illstrates a "igital firm ma%ing intensi(e se of Internetan" "igital te$hnology for ele$troni$ 6siness. Information $an flo4seamlessly among "ifferent parts of the $ompany an" 6et4een the$ompany an" e>ternal entities its $stomers, sppliers, an" 6siness partners. More an" more organiations are mo(ing to4ar" this "igitalfirm (ision.


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)ompanies $an se Internet te$hnology for eA$ommer$e transa$tions4ith $stomers an" sppliers, for managing internal 6siness

pro$esses, an" for $oor"inating 4ith sppliers an" other 6siness

partners. EA6siness in$l"es eA$ommer$e as 4ell the m anagement

an" $oor"ination of the enterprise.

! fe4 firms, s$h as )is$o Systems or Dell )ompters, are $lose to

6e$oming flly "igital firms, sing the Internet to "ri(e e(ery aspe$t of their 6siness. In most other $ompanies, a flly "igital firm is still more

(ision than reality, 6t this (ision is "ri(ing them to4ar" "igitalintegration. Firms are $ontining to in(est hea(ily in informationsystems that integrate internal 6siness pro$esses an" 6il" $loser

lin%s 4ith sppliers an" $stomers. The /in"o4 on Organiations"es$ri6es s$h a "igital firm in the ma%ing. )eme>, a 4orl" lea"ing

glo6al $ement an" $onstr$tion materials firm , has a$hie(e"

impressi(e reslts throgh rthless fo$s on operational e>$ellen$e.Management too% an enterpriseA4i"e (ie4 of its 6siness pro$essesan" "e(elope" a series of information systems to trn the $ompany

into a lean, effi$ient, agile ma$hine that $ol" instantly respon" to$hanges in $stomer or"ers, 4eather, an" other last minte e(ents.

Ele$troni$ 6siness an" ele$troni$ $ommer$e in the emerging "igital firm

.& PERSPECTIVE OF INFORMATION SYSTEMS:

Information systems $an 6e 6est 6e n"erstoo" 6y loo%ing at themfrom 6oth a te$hnology an" a +siness perspe$ti(e. !n informationsystem $an 6e "efine" te$hni$ally as a set of interrelate" $omponents

that $olle$t Bor retrie(eC, pro$ess, store, an" "istri6te information tospport "e$ision ma%ing an" $ontrol in an organiation. In a""ition to

spporting "e$ision ma%ing, $oor"ination, an" $ontrol, information

systems m ay also help managers an" 4or%ers analye pro6lems,

(isalie $omple> s65e$ts, an" $reate ne4 pro"$ts. Informationsystems $ontain information a6ot signifi$ant people, pla$es, an"things 4ithin the organiation or in the en(ironment srron"ing it. +y

information 4e mean "ata that ha(e 6een shape" into a form that ismeaningfl an" sefl to hman 6eings. Data, in $ontrast, are streamsof ra4 fa$ts representing e(ents o$$rring in organiations or the

physi$al en(ironment 6efore they ha(e 6een organie" an" arrange"into a form that people $an n"erstan" an" se.


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F6!/ti

o! o$ a! i!$or%atio! 'te%

Three a$ti(ities in an information system pro"$e the information thatorganiations nee" to ma%e "e$isions, $ontrol operations, analye

pro6lems, an" $reate ne4 pro"$ts or ser(i$es. These a$ti(ities areinpt, pro$essing, an" otpt. Inpt $aptres or $olle$ts ra4 "ata from

4ithin the organiation or from its e>ternal en(ironment. -ro$essing

$on(erts this ra4 inpt into a more meaningfl form. Otpt transfersthe pro$esse" information to the people 4ho 4ill se it or to thea$ti(ities for 4hi$h it 4ill 6e se". Information systems also re8irefee"6a$%, 4hi$h is otpt that is retrne" to appropriate mem6ers of

the organiation to help them e(alate or $orre$t the inpt stage.

!n inform ation system $ontains information a6ot an organiation an"

its srron"ing en(ironment. Three 6asi$ a$ti(ities inpt, pro$essing,an" otpt pro"$e the information organiations nee". Fee"6a$% is

otpt retrne" to appropriate people or a$ti(ities in the organiation toe(alate an" refine the inpt. En(ironm ental fa$tors s$h as$stomers, sppliers, $ompetitors, sto$%hol"ers, an" reglatoryagen$ies intera$t 4ith the organiation an" its information systems.

Eg. In Integrate" 9olme -lanning system of (ehi$les, ra4 inpt$onsists of "ealer i"entifi$ation nm6er, mo"el, $olor, an" optionalfeatres of $ars or"ere" from "ealers. )ompters store these "ata an"

pro$ess them to anti$ipate ho4 many ne4 (ehi$les to manfa$tre for

ea$h mo"el, $olor, an" option pa$%age. The otpt 4ol" $onsist of or"ers to sppliers spe$ifying the 8antity of ea$h part or $omponentthat 4as nee"e" an" the e>a$t "ate ea$h part 4as to 6e "eli(ere" to

pro"$tion fa$ilities to pro"$e the (ehi$les that $stomers ha(eor"ere". The system pro(i"es meaningfl information s$h as 4hat

mo"els, $olors, an" options are selling in 4hi$h lo$ationsJ the most

poplar mo"els an" $olorsJ an" 4hi$h "ealers sell the most $ars an"tr$%s. The system re8ires nm6ers or $o"es for i"entifying ea$h

(ehi$le part or $omponent an" ea$h spplier. Informal informationsystems Bs$h as offi$e gossip net4or%sC rely, 6y $ontrast, on nstate"

rles of 6eha(ior. There is no agreement on 4hat is information or onho4 it 4ill 6e store" an" pro$esse". S$h systems are essential for the

life of an organiation, 6t an analysis of their 8alities is 6eyon" the

s$ope of this te>t.

Formal information system s $an 6e either $om pter 6ase" or manal.

Manal systems se paperAan"Apen$il te$hnology. These manalsystems ser(e important nee"s. )ompterA6ase" information systems

B)+ISC, in $ontrast, rely on $ompter har"4are an" soft4arete$hnology to pro$ess an" "isseminate information. From this point on,4hen 4e se the term information systems, 4e are referring to

$ompterA6ase" information systems formal organiational systemsthat rely on $ompter te$hnology.Eg. nite" -ar$el Ser(i$e B-SC in(ests hea(ily in informationsystems te$hnology to ma%e its 6siness more effi$ient an" $stomerAoriente". It ses an array of information te$hnologies in$l"ing 6ar A$o"e s$anning systems, 4ireless net4or%s, large mainframe


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$ompters, han"hel" $ompters, the Internet, an" many "ifferent pie$es of soft4are for tra$%ing pa$%ages, $al$lating fees, maintaining$stomer a$$onts, an" managing logisti$s.

!lthogh $om pterA6ase" information systems se $ompter te$hnology to pro$ess ra4 "ata into meaningfl information, there is asharp "istin$tion 6et4een a $ompter an" a $ompter program on the

one han", an" an information system on the other. Ele$troni$$ompters an" relate" soft4are programs are the te$hni$al fon"ation,

the tools an" materials, of mo"ern information system s. )ompters pro(i"e the e8ipment for storing an" pro$essing information.)ompter programs, or soft4are, are sets of operating instr$tions that

"ire$t an" $ontrol $ompter pro$essing. =no4ing ho4 $ompters an"$ompter programs 4or% is important in "esigning soltions to

organiational pro6lems, 6t $ompters are only part of an information

system.

sing a han"hel" $ompter $alle" a Deli(ery Information !$8isitionDe(i$e BDI!DC, -S "ri(ers atomati$ally $aptre $stomers?

signatres along 4ith pi$%p, "eli(ery, an" timeA$ar" information.-S

information systems se these "ata to tra$% pa$%ages 4hile they are

6eing transporte".

! hose is an appropriate analogy. oses are 6ilt 4ith hammers,

nails, an" 4oo", 6t these "o not ma%e a hose. The ar$hite$tre,"esign, setting, lan"s$aping, an" all of the "e$isions that lea" to the$reation of these featres are part of the hose an" are $r$ial for sol(ing the pro6lem of ptting a roof o(er one?s hea". )ompters an"

programs are the hammer, nails, an" lm6er of )+IS, 6t alone they$annot pro"$e the information a parti$lar organiation nee"s. To

n"erstan" information systems, yo mst n"erstan" the pro6lemsthey are "esigne" to sol(e, their ar$hite$tral an" "esign elements,an" the organiational pro$esses that lea" to these soltions.

T"e ;6i!e i!$or%atio! 3al6e /"ai!

Managers an" 6siness firms in(est in IT an" systems 6e$ase they pro(i"e the e$onomi$ (ale to the 6siness. From a 6siness

perspe$ti(e, information systems are part of a series of (aleAa""inga$ti(ities for a$8iring, transforming an" "istri6ting the information

that m anagers $an se to impro(e "e$ision ma%ing, enhan$e

organiational performan$e to in$rease the firm profita6ility.

sing the information system s it is e>pe$te" to n"erstan" the

organiation, management an" IT shaping the system s. !n informationsystem $reates (ale for the firm as an organiational an"management soltion to $hallenges pose" 6y the en(ironment.

i%e!io! o$ I!$or%atio! S'te%

Orga!i,atio!

Information system is the integral part of the organiation. The %ey

elements of organiation are its people, str$tre, 6siness pro$ess, politi$s, an" $ltre. Organiations are $ompose" of "ifferent le(els

an" spe$ialties in terms of le(els an" fn$tions. !n organiation$oor"inates 4or% throgh a str$tre" hierar$hy. It $an 6e formal or

informal in natre. Organisation re8ires many "ifferent %in"s of s%illsan" people s$h as %no4le"ge 4or%ers, "ata 4or%ers an" pro"$tion

4or%ers. Ea$h organiation has a ni8e $ltre. Different le(els an"spe$ialties in an organiation $reate "ifferent interests an" points of

(ie4.

Ma!age%e!tManagement is responsi6le to ta%e a sense ot of many sitations

fa$e" 6y organiations, ma%e "e$isions an" formlate a$tion plans tosol(e the pro6lems. It rests to the managerial le(el people. It isimportant to %no4 the managerial roles an" "e$isions (ary at "ifferentle(els of the organiation s$h as senior, mi""le, operational an" 5nior manager. !ll the le(el of management is e>pe$te" to 6e$reati(e, to "e(elop no(el soltions to a 6roa" range of pr o6lems.Ea$h le(el of management has "ifferent nee"s an" re8irements.


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Te/"!olog'

IT is one of the tools to $ope p 4ith the $hange. )ompter har"4are

is the physi$al e8ipment se" for inpt, pro$essing an" otpt

a$ti(ities in system. )ompter soft4are $onsists of "etaile" preprogramme" instr$tions that $ontrol an" $oor"inate the har"4are$omponents. Storage te$hnology in$l"es 6oth the physi$al me"ia for

storing "ata in magneti$ "is%, opti$al "is%, tape et$. )ommni$ationte$hnology $onsisting 6oth the physi$al an" soft4are re$orses lin%s

the (arios parts of har"4are an" transfers "ata from one lo$ation toother. )ompters an" $ommni$ation e8ipments $an 6e $onne$te"into net4or% for sharing the resor$es.

Co!te%orar' aroa/"e to i!$or%atio! 'te%

Mltiple perspe$ti(es on information systems sho4 that the inform ation

systems are the so$iote$hni$al systems. It $an 6e "i(i"e" into t4oapproa$hes

Te/"!i/al aroa/"

This emphasies mathemati$ally 6ase" mo"els to st"y information

systems as 4ell as the physi$al te$hnology an" formal $apa6ilities of

these systems. )ompter s$ien$e is $on$erne" 4ith esta6lishingmetho"s of $omptation, storage an" a$$ess. Management s$ien$e

emphasies on "e(elopment of mo"els for "e$ision ma%ing an"

management pra$ti$es.

Be"a3ioral aroa/"

It is $on$erne" 4ith the isses li%e strategi$ 6siness integration,

"esign, implementation, tiliation an" managem ent. It ma5orly fo$seson the $ogniti(e style of an in"i(i"al. It also fo$ses on te$hni$al

soltions, $hanges in attit"es, management an" organiational poli$ies.

Lear!i!g to 6e i!$or%atio! 'te%: Ne8 oort6!itie 8it"te/"!olog'

There are fe4 %ey management isses in terms of the $hallenges$onfronte" to managers

The information systems in(estment $hallenge It fo$ses on

ho4 $an organiation o6tain 6siness (ale from their information systems

The strategi$ 6siness $hallenge It is $on$erne" 4ith 4hat$omplementary assets are nee"e" to se the information

te$hnology effe$ti(elylo6aliation $hallenge It emphasies on ho4 $an firmsThe g

n"erstan" the 6siness an" system re8irements of glo6ale$onomi$ en(ironment

The information te$hnology infrastr$tre $hallenge It e>plainsho4 $an organiations "e(elop in information te$hnologyinfrastr$tre that $an spport their goals 4hen 6siness

$on"itions an" te$hnologies are $hanging so rapi"ly

Ethi$s an" se$rity The responsi6ility an" $ontrol $hallenge It"es$ri6es hoe $an organiation ensre that their inform ation

systems are se" in an ehi$ally an" so$ially responsi6le

manner

EERCISE UESTIONS:

1C /hat are the "imensions of information system 2C Des$ri6e the $apa6ilities of "igital Firm. /hy are "igital firms so

po4erfl

3C E>plain the term :lo6aliation.

#C ist an" "es$ri6e 4hy information systems are so important for 6siness to"ay.

&C /hat is the prpose of inform ation system from 6siness perspe$ti(e /hat role "oes it play in the 6siness inform ation(ale $hain


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&

INFORMATION SYSTEM IN Tternal information se" in the 6siness. E>ampleAImagine the senior management team in an air$raft$o$%pit A 4ith the instrm ent panel sho4ing them thestats of all the %ey 6siness a$ti(ities. ESS typi$allyin(ol(es lots of "ata analysis an" mo"eling tools s$h asK4hatAifK analysis to help strategi$ "e$isionAma%ing.


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Ma!age%e!t ! %a!age%e!t i!$or%atio! 'te% (MIS) is mainlyI!$or%atio! $on$erne" 4ith internal sor$es of information. MIS

S'te% sally ta%e "ata from the transa$tion pro$essingsystems an" smmaries it into a series of m anagement

reports.MIS reports ten" to 6e se" 6y mi""lemanagement an" operational sper(isors.

e/iio!D De$isionAspport systems BKDSSKC are spe$ifi$allyS6ort "esigne" to help management ma%e "e$isions in

S'te% sitations 4here there is n$ertainty a6ot the possi6le

ot$omes of those "e$isions. DSS $omprise tools an"te$hni8es to help gather rele(ant information an"

analye the options an" alternati(es. DSS often in(ol(esse of $omple> sprea"sheet an" "ata6ases to $reate

K4hatAifK mo"els.

S'te% $ro% $6!/tio!al ere/ti3e

Information $an 6e $lassifie" 6y the spe$ifi$ organiational fn$tion.

Sales an" mar%eting systems

It is responsi6le for selling the pro"$ts or ser(i$es. Mar%eting is$on$erne" 4ith the $stomers for the firmLs pro"$ts, "etermining

the $stomer nee"s an" a"(ertising an" promoting the pro"$t

a$$or"ingly. Sales are $on$erne" 4ith $onta$ting $stomers,selling the pro"$ts, ta%ing or"ers an" follo4 p the sales.

Manfa$tring an" -ro"$tion systems

It is responsi6le for a$tally pro"$ing the firmLs goo"s an"

ser(i$es. It "eals 4ith the planning, "e(elopment an" maintenan$e

of pro"$tion fa$ilities. It %eeps tra$% of the pro"$tion at (ariosle(els.

Finan$e an" a$$onting system

It is responsi6le for managing the firmLs finan$ial assets, s$h as$ash, sto$%, 6on"s, other in(estment. The a$$onting fn$tion is

responsi6le for maintaining an" managing the firmLs finan$ial

re$or"s s$h as re$eipts, "epre$iation, payroll et$.man resor$e system

It is responsi6le for attra$ting, "e(eloping an" maintaining thefirm Ls 4or%for$e. It spports the a$ti(ities s$h as i"entifying the

potential employees, maintaining the re$or"s et$. Strategi$ le(el"ete$ts the manpo4er re8irements.

&.& INTEGRATING FUNCTIONS AN BUSINESS

PROCESSES:

B6i!e ro/e a!# i!$or%atio! 'te%:

+siness pro$esses are referre" to sets of logi$ally relate" a$ti(itiesfor a$$omplishing the spe$ifi$ 6siness reslt. It spports ma5or fn$tional areas. Eg or"er pro$essing, a$$onting, manfa$tring et$.

S'te% $or E!terrieD 8i#e ro/e i!tegratio!:

Enterprise system $reates an integrate" organiation 4i"e platform$oor"inate %ey internal pro$esses of the firm. It $an 6e "one 4ith thehelp of Spply )hain Management an" )stomer ;elationshipManagement.

EERCISE UESTIONS:

1C /hat are the "ifferent types of systems in organiationE>plain.

2C /hat are the enterprise systems o4 "o they $hange the 4ayof organiation 4or%

3C /hat is the role of %no4le"ge management system in theenterprise#C Des$ri6e the relationship 6et4een ESS, MIS, an" DSS.


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*INFORMATION SYSTEMS+ ORGANI@ATION+

MANAGEMENT AN STRATEGY.

U!it :3.1 Organiations an" information systems3.2 )ommon featres of Organiations

3.3 ;otines an" +siness pro$esses3.# Organiational politi$s

3.& Organiational $ltre3.' o4 information system s im pa$t organiations an" 6siness firms

3.7 The impa$t of IT on management "e$ision ma%ing

*. ORGANI@ATIONS AN INFORMATION SYSTEMS.

The intera$tion 6et4een IT an" Organiation is $omple> an" isinflen$e" 6y many me"iating fa$tors, in$l"ing organiation str$tre,stan"ar", politi$s, $ltre an" management "e$ision.

The organiation is a sta6le, formal so$ial str$tre that ta%esresor$es from the en(ironment an" pro$esses them to pro"$e

otpts. There are three main elem ents of or ganiation )apital an"la6or are primary pro"$tion fa$tors pro(i"e" 6y the en(ironment. The

organiation transforms these inpts into pro"$ts an" ser(i$es in

organiation. Then it $onsme" 6y en(ironment in retrns for spply

inpts. !n organiation is more sta6le than informal grop.Organiation is a $olle$tion of rights, pri(ileges, o6ligations, an"responsi6ilities that is "eli$ately 6alan$e" o(er a perio" of time throgh$onfli$t an" $onfli$t resoltion. Organiations are so$ial str$tres

6e$ase they are $olle$tion of se(eral elem ents. In 6eha(ioral (ie4 of the firm, people 4ho 4or% in the organiation "e(elop $stomary 4ays

of 4or%ing they gain atta$hments to e>isting relationshipsJ they ma%eagreements 4ith s6or"inates an" speriors a6ot the 4or%.

*.& COMMON FEATURES OF ORGANI@ATIONS

+ase" on the hierar$hi$al str$tre of an organiation all the

organiations shares same $hara$teristi$s li%e

)lear "i(ision of la6or, hierar$hy, e>pli$it rles an" pro$e"res,impartial 5"gments, te$hni$al 8alifi$ations for positions, ma>imm

organiations effi$ien$y. !ll organiations "e(elop 6siness pro$esses, politi$s, an" $ltres.

*.* ROUTINES AN BUSINESS PROCESSES:

In"i(i"als in the firm "e(elop a rotine for pro"$ing goo"s an"ser(i$es. ;otines sometimes $alle" as stan"ar" operating pro$e"resin terms of rles, pro$e"res. !s employees learn these rotines they

6e$ome highly pro"$ti(e an" effi$ient. +siness pro$esses "es$ri6esthe fn$tions in(ol(e" in the firm.

*.- ORGANI@ATIONAL POLITICS:

-eople in organiation o$$py "ifferent positions 4ith "ifferentspe$ialties, $on$erns an" perspe$ti(es. -oliti$al resistan$e is one of the great "iffi$lties 6ringing a6ot organiational $hanges. Managers4ho %no4 ho4 to 4or% 4ith the politi$s of an organiation 4ill 6e more

s$$essfl than less s%ille" managers.

*.1 ORGANI@ATIONAL CULTURE:

Organiational $ltre is the set of fn"amental assmptions a6ot4hat pro"$ts the organiation shol" pro"$e, 4hen, 4hy, an" f or 4hom. Organiational $ltre is a po4erfl restraint on $hange inte$hnologi$al $hanges.


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*.2 i6ility of organiationsIT helps to in$rease the a6ility to sense an" respon" to $hanges in the

mar%etpla$e an" to ta%e a"(antage of ne4 opportnities. In smallsystems Information systems helps in %eeping the tra$% of in(entory,manfa$tring "epartment. arge organiations $an se IT to a$hie(esome of the fn$tions of small organiations. Information systems $an

ma%e the pro"$tion pro$ess more fle>i6le.

n"erstan"ing organiational resistan$e to $hangeImplementing information systems has $onse8en$es for tas% arrangements, str$tres, te$hnology an" people. Information systems

potentially $hange in organiation str$tre, $ltre, politi$s an" 4or%.The most $ommon reason for failre is a politi$al resistan$e to $hange

in the organiation.

The internet an" organiations

The internet mainly /// is 6eginning to ha(e an important impa$t on

the relationships 6et4een the firms an" e>ternal entities an" e(en on

the organiation of 6siness pro$esses insi"e the firm. The internetin$reases the a$$essi6ility, storage an" "istri6tion of information an"%no4le"ge for organiation.

*.4 T sin$e manager is responsi6le to ta%e (ariostypes of "e$isions. Manager?s responsi6ility ranges from ma%ing


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"e$isions, to 4riting reports, to atten"ing meetings et$. This is moren"erstan"a6le 6y the $lassi$ mo"el of management. There are somefn$tions of a manager "es$ri6e" 6y enry Fayol as planning,

organiing, $oA$oor"inating, an" $ontrolling 4hi$h $an 6e $alle" as

formal fn$tions of manger. +t it is nsatisfa$tory to n"erstan" the"etail 4or%ing of manager. This $an 6e "epi$te" 6y some 6eha(ioralmo"els.

+eha(ioral mo"els+eha(ioral mo"els state that the a$tal 6eha(ior of manager appears

to 6e less systemati$, more informal, less refle$ti(e, more rea$ti(e, an"r?s 6eha(ior has fi(e attri6tesless organie" one. ManageManagers perform a great "eal of 4or% 4ithot stopping the

4or%.Managerial a$ti(ities are fragmente".

Managers prefer in(estment in terms of ;OI B;etrn on

In(estmentC terms.They prefer oral $ommni$ation.Managers gi(e high priority to maintain the system to4ar"s the

a$hie(ements of goals.Managerial roles fell into three $ategories as interpersonal roles,

informational roles an" "e$isional roles. There are se(eral mo"els of

"e$ision ma%ing

Ratio!al %o#el: !s per this mo"el of hman 6eha(ior an in"i(i"al

i"entifies the goals, ran%s all the possi6le a$tions 6y their $ontri6tionto4ar"s the goals.

Orga!i,atio!al Mo#el It $onsi"ers the str$tral an" politi$al

$hara$teristi$s of an organiation.

B6rea6/rati/ %o#el It is se" to preser(e the organiation i.e. tore"$e the n$ertainty.

-oliti$al mo"el It gi(es the 4or%ing of organiation as a reslt of politi$al 6argains str$% among the %ey lea"ers an" interest grops.

I!$or%atio! 'te% a!# ;6i!e trateg':

+siness strategy is a set of a$ti(ities an" "e$isions. This helps instrategi$ planning of an organiation. It "etermines the "e$isions

relate" to pro"$ts an" ser(i$es, $ompetition, long term goals. To

n"erstan" hoe IT fits into the strategi$ planning it is ne$essary to$onsi"er the three le(els o 6siness strategy s$h as +siness le(elstrategy, firm le(el strategy, in"stry le(el strategy.

B6i!e le3el trateg': It is 6ase" on the (ale $hain mo"el for managing spply $hain. It is $on$erne" 4ith the le(eraging te$hnology,information system pro"$ts an" ser(i$es, systems to fo$s on mar%et

tren"s, spply management an" $stomer relationship.

Fir% le3el trateg': It fo$ses the sa6ility of information te$hnology.

It helps to n"erstan" the $on$ept of enhan$ing $ore $ompeten$ies,

I!#6tr' le3el trateg' It analyes the strategy at in"stry le(el. The

prin$ipal $on$ept of this strategy is information partnership, the$ompetiti(e for$es mo"el, 6siness systems, an" net4or% e$onomi$s.

EERCISE UESTIONS:

1C /hat are the featres of organiation2C /hat are the impa$t of the internet on organiations an" the

pro$ess of management3C /hat is information system /hat is its strategy

#C /hat is the impa$t of IT in "e$ision ma%ing


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-ECISION MAING

U!it :

#.1 De$ision ma%ing $on$epts#.2 )hara$teristi$s of De$ision Ma%ing#.3 ;ational De$ision Ma%ing

#.# Types of rationality#.& The pro6lems in ma%ing the rational "e$ision

#.' Steps in the "e$ision ma%ing pro$ess#.7 De$ision metho"s tools an" pro$e"res

#.* Metho"s of "e$i"ing the "e$ision !lternati(es

-. ECISION MAING CONCEPTS:D

The 4or" "e$ision is "eri(e" from the atin root "e$i"o? that is $t off.

De$ision $an 6e settlement, a fi>e" intention on 6ringing $on$lsi(ereslt, a 5"gment on a soltion. ! "e$ision is a $hoi$e ot of se(eral

a$tion ma"e 6y the "e$ision ma%er to a$hie(e some o65e$ti(es in thegi(en sitation. +siness "e$isions are those 4hi$h are ma"e in the

pro$ess of $on"$ting the 6siness to a$hie(e its o65e$ti(e in the gi(enen(ironment.

!$$or"ing to aynes an" Massie, ! "e$ision is a $orse of

a$tion 4hi$h is $ons$iosly $hosen for a$hie(ing a "esire"reslt.

!$$or"ing to Tre4atha an" e4port, De$ision ma%ing in(ol(es

the sele$tion of $orse of a$tion from among t4o of more possi6le alternati(es in or"er to arri(e at a soltion for a gi(en

pro6lem.

-.& C$ee"ingly $omple> "e to ris% an" tra"e off.

Ma"e in instittional setting an" 6siness

en(ironment.In 6siness "e$ision ma%ing, the "e$isions are not in"i(i"al. Ea$h of

them has relation to some other "e$ision or sitation.

De$ision ma%ing is sitational. It is "iffere" from one sitation to other

ta%en 6y a single person.The personal (ales of "e$ision ma%ers plays a ma5or role in "e$isionma%ing i.e. the $ltre "is$ipline an" the in"i(i"als $ommitment to thegoal 4ill "e$i"e the pro$ess an" s$$ess of "e$ision.

The "e$ision ma%ing pro$ess is the $omple> pro$ess in the higher

management. The $omple>ity is the reslt of many fa$tors s$h asinterrelationship among the "e$ision ma%ers, 5o6 responsi6ility, an"8estion of feasi6ility, ethi$s an" the pro6a6le impa$t on the 6siness.

De$ision ma%ing pro$ess re8ires $reati(ity, n"erstan"ing the hman po4er, "is$o(ers nm6er of hman tangi6le an" intangi6le fa$torsaffe$ting the "e$ision pro$ess. It is ma"e a$$or"ing to the 6siness

en(ironment.

-.* RATIONAL ECISION MAING:D

! rational "e$ision ensres the a$hie(ement of the goal effe$ti(ely an"

effi$iently for 4hi$h "e$ision is ma"e.

Eg If it is raining then it is rational to loo% for m6rella. The 8ality of "e$ision ma%ing is to 6e 5"ge" on the rationality an" not ne$essar ilythe reslt it pr o"$es. The rationality of "e$isions ma"e is not same ine(ery sitation.


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Fi>ing a pri$e of the pro"$t mst 6e greater than its manfa$tring$ost. -ro"$ti(ity is "epen"ent on the type of $stomers as 4ell a8ality of pro"$t. ere a "e$ision may 6e rational or irrational.

It 4ill (ary 4ith the organiation, sitation an" the in"i(i"als.Therefore rationality is ha(ing mltiA"im ensional $on$ept. !ny

6siness "e$ision if as% to 6e re(ie4e" 6y share hol"er, $onsmer,

employeeJ spplier 4ill reslt in "ifferent $riti$ism 4ith referen$e totheir in"i(i"al rationality. This is 6e$ase ea$h one of them 4ill (ie4

the sitation in "ifferent $onte>t. There are three "imensions of rationality as satisfa$tion to an in"i(i"al, feasi6ility in terms of o65e$ti(es, $onsisten$y in "e$isions.

-.- TYPES OF RATIONALITY:D

!$$or"ing to Simon er6ert a "e$ision in a gi(en sitation $an 6e of

follo4ing typesO65e$ti(ely rational A If it ma>im ies the (ale of the o65e$ti(e.

S65e$ti(ely rational AIf it ma>imies the (ale in the relation to%no4le"ge.

)ons$iosly relational A To the e>tent the pro$ess of "e$ision

ma%ing is a $ons$ios one.Organiationally rational A To the "egree of orientation to4ar"s

organiation.

-ersonally rational A To the e>tent it a$hie(es the in" i(i"al?s

personal goals.

-.1 T


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-.2 STEPS IN Tt step is "e$ision ma%ing pro$ess. In this pro$ess "e$isions are assesse" as per the feasi6ility st"y.

)on(erting "e$isions into a$tions !fter sele$ting the goo"

alternati(e, a manager is sppose" to $on(ert "e$ision intoa$tions in or"er to e>e$te the "e$ision.

Ensring fee" 6a$% It is relia6le to $ontrol the "e$isions 6yta%ing a re(ie4 of the "e$ision in a sitation.

-.4 ECISION METamine". It i"entifies the pro6lem $alling for a

"e$ision. Design phase means $reating, "e(eloping an" analying the

"ifferent "e$ision alternati(es 6y testing the feasi6ility of implementation. It asses the (ales of "e$ision ot$ome. )hoi$emeans sele$ting one alternati(e as "e$ision 6ase" on the sele$tion$riteria.

In the intelligen$e phase, MIS $olle$t the "ataJ the "ata is

s$anne", e>amine", $he$%e" an" e"ite". Frther it is sorte" an"merge" 4ith the other "ata an" the $omptations are ma"e,smmarie" an" presente".In this pro$ess, the attention of the manager is "ra4n to theentire pro6lem sitation 6y highlighting the "ifferen$es 6et4een a$tal

an" e>pe$te" things.In "esign phase the manager "e(elop a mo"el of pro6lemsitation on 4hi$h he $an generate an" test the "ifferent "e$isions to

fas$inate its implementation. In $ase of "ifferent alternati(es he $an

trn it to the $hoi$e.In the phase of $hoi$e, the manager e(ol(es sele$tion $riteria

s$h as ma>imm profit, least $ost an" time. In these 3 phases if themanager fails to rea$h a "e$ision, he $an start the pro$ess all o(er

again from the intelligen$e 4here the a""itional information is$olle$te".

e/iio!DMa0i!g 'te%:DThere are 2 types of systems 6ase" on the manager?s

%no4le"ge a6ot the en(ironment.

iC )lose" "e$ision ma%ing A If the manager operates in a %no4nen(ironment then it is $alle" as $lose" "e$ision ma%ing. The$on"itions of a $lose" "e$isionAma%ing systems areaC The manager has a %no4n set of "e$ision alternati(es 4ith their ot$omes flly in terms of (ales if implemente". 6C The manager has a mo"el, a metho", rles 4here the " e$isionalternati(es $an 6e generate", teste" an" ran%e".


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$C The manager $an $hoose one of the alternati(es 6ase" on thegoals an" o65e$ti(es. E>ample E>amination system to "e$lare a

pass an" fail.

+an%ing system to penalties a loan interest to the $stomer.

iiC Open "e$ision ma%ingA If the manager operates in an en(ironmentnot %no4n to him then the "e$isionAma%ing is $alle" as open

"e$ision ma%ing. The $on"ition areThe manager "oesn?t %no4 all the "e$ision alternati(es.aC

6C The ot$ome of the "e$ision is also not %no4n flly i.e. the%no4le"ge of the ot$ome may 6e pro6a6ilisti$ one.

$C o metho", rle or mo"el is a(aila6le to st"y an" finalie one

"e$ision among the set of "e$ision alternati(e.

It is "iffi$lt to "e$i"e o65e$ti(es an" goals. Therefore the manager reports to that "e$ision 4here aspirations an" "esires meet.

E>ample -ri$ing a ne4 pro"$t.!n esta6lishment of a ne4 6siness.

T'e o$ #e/iio!: DThe types of "e$isions are 6ase" on the %no4le"ge a6ot the

ot$ome on the e(ents yet to ta%e pla$e. If the manager has fll an"

pre$ise %no4le"ge of e(ent or ot$ome 4hi$h is to 6e o$$rring thenthere is no pro6lem in "e$isions may 6e terme" as s$$essfl"e$isions.

If the manager has fll %no4le"ge of system then it is sitation

of $ertainty. If the manager has partial or pro6a6ilisti$ %no4le"ge thenit is a ris% sitation. If the manager "oes not ha(e any %no4le"ge of

the sitation then it is "e$ision ma%ing n"er n$ertainty.

:oo" MIS

n$ertainty Top management

;is% manage mentNmi""le le(el

)ertainty lo4er le(el

Nat6re o$ #e/iio!:DDe$ision ma%ing is a $omple> sitation. De$isions are $lassifie"

in programme" "e$ision an" nonAprogramme" "e$isions.

i. -rogramme" "e$ision A If a "e$ision is 6ase" on rles,metho"s or some gi"elines then it is $alle" as programme""e$ision. The programme" "e$ision ma%ing $an 6e "elegate" toa lo4er le(el in the management. Eg If a sto$% le(el of an item

is 200 nm6er then a "e$ision to raise pr$hase re8isition for e>tra items in fe4 nm6ers.

ii. onA programme" "e$ision A ! "e$ision 4hi$h $annot 6e ma"e

sing a rle or metho" is $alle" as non programme" "e$isions.This "e$ision ma%ing is nonA"eterministi$ an" is han"le" 6y top

management. Eg. Sto$% le(el is 200.

T"e La8 o$ reH6iite 3ariet' AIn a programme" "e$ision ma%ing it is ne$essary for the manager

to enmerate all the stages of "e$ision ma%ing sitation an" pro(i"e the ne$essary spport throgh the rles an" formla for

ea$h one of them. The failre to pro(i"e the "e$ision ma%ing rlesin ea$h of them 4ill lea" to n$ertainty. Therefore the re8isite

(arieties of sitations arise means that for effi$ient programme""e$ision ma%ing it is ne$essary for the manager to pro(i"e

aC !ll the "e$ision alternati(es an" $hoi$es in ea$h state. 6C The "e$ision rles to han"le the sitation$C The system to generate "e$ision $hoi$e.)lose" "e$ision ma%ing is more effi$ient than Open"e$ision ma%ing.


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-.7 METample In linear programming mo"el se resor$es (Ns "eman" to

6alan$e the m a>imiation of profit. In in(entory $ontrol mo"el the $ostof han"ling in(entory (Ns $ost of pro$ring N 6"get $ost is se" to

6alan$e the "eman".

Pa' o$ a!al'i:D

De$ision -ro6a6ility o In$rease De$rease E>pe$te"$hange gain

0.&0 0.20 0.30

o $hange # & * &.#0

in pri$eIn$rease ' # 3 #.70the pri$e

De$rease 10 12 # *.'0

the pri$e

/hen all the alternati(es an" their ot$omes are not %no4n 4ith$ertainty the "e$ision is ma"e 4ith the help of pay of analysis. The payof matri> is $onstr$te" 4here the ro4s sho4s alternati(es an" the$olmns sho4 the $on"ition 4ith the pro6a6ility of o$$rren$e. Theinterse$tion of $olmns an" ro4s sho4s the (ales of the ot$omereslting ot of the alternati(es an" state of the natre.

Eg If the "e$ision $hosen is no $hange in pri$e an" the $ompetition

"oes not $hange it then the gain is #. The "e$ision is ta%en 6y$hoosing the "e$ision alternati(e 4hi$h has ma>imm e>pe$te" (ale

of the ot$ome i.e.10 in"i$ate that the "e$ision to "e$rease the pri$e.The "e$ision $an 6e on the 6asis of tility of the "e$ision in terms of

money (ale. In this $ase, it is e>pe$te" to loo% after the e>pe$te" gainof the ot$ome.

e/iio! tree a!al'i: D

/hen the "e$ision ma%ers ha(e to ma%e the se8en$e of "e$ision, the

"e$ision tree analysis is se" in sele$ting a set of se8en$e "e$isions.De$ision trees are the pi$torial 4ay of sho4ing the se8en$e of

interrelate" "e$isions an" ot$omes that in$l"e the pro6a6ilities an"are e(alate" sing the e>pe$te" (ales. De$isions points are

represente" 6y s8are no"e an" their ot$omes 6y soli" or hollo4

$ir$le.

The "e$ision no"es are the points 4here a $hoi$e e>ists

6et4een the alternati(es an" the managerial "e$ision is ma"e 6ase"on estimates an" the $al$lations of retrns e>pe$te". The ot$ome

no"es are the points 4here the e(ents "epen" on the pro6a6ility.De$ision trees are e(alate" from right to left 4or%ing 6a$% from thelater "e$isions to the first.


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e/iio! %a0i!g ;e"a3ior:D

De$isions are "iffere" on the 6eha(ioral platform 6e$ase the

response of e(ery hman 6eing may not 6e same.The managers "iffere" in their approa$h to4ar"s "e$ision ma%ing

in the organiation, therefore they $an 6e $lassifie" into

a. !$hie(ement oriente" A loo%ing for the e>$ellent reslt. 6. Tas% oriente" A loo%ing for $ompletion of the tas%.

The manager personal (ales also inflen$e the 6eha(ior of

"e$ision ma%ing. Their 6eha(ior sho4s a "istin$t pattern in"i$atinga $onser(ati(e approa$h to the "e$isionAma%ing i.e. $hoi$e of the"e$isionAma%ing tools may "iffer from moti(es of manager.

The 6eha(ior is also inflen$e" 6y the position that the manager hol"s in the organiation i.e. it is inflen$e" 6y fear, personal (ale

or image, $arrier prospe$ts et$.

Orga!i,atio!al #e/iio! %a0i!g:D

!n organiation is an arrangement of the in"i(i"als ha(ing "ifferent

goals. Ea$h in"i(i"al han"les "ifferent po4ers an" the rights 6e$aseof his position, fn$tion an" the importan$e in the organiation. Sin$ethere is an im6alan$e in the po4er str$tre the "ifferent in"i(i"als

$annot e8ally inflen$e the 6eha(ior an" the management pro$ess. In

$ase of in$onsisten$e goals the $onfli$ts in the organiation in$reasesaffe$ting the organiational performan$e. To a(oi" this in$onsisten$y

the organiational "e$isionAma%ing theory pro(i"es "ifferent metho"sof $onfli$t resoltion a6ot the rationality of goals setting the goals,

a$$epta6le goalsJ a$hie(e the goals in se8ential manner.

eali!g 8it" 6!/ertai!t ':D

The mar%et n$ertainty, fl$tations, the $hanges in go(ernment, poli$y, te$hnologi$al $hanges are some of the fa$tors 4hi$h ma%e the

6siness en(ironment n$ertain. To "eal 4ith n$ertainty theorganiation 4ill (ote for the "e$ision 4ith the highest pro6a6ility 4ith

minimm profit. E>ample 0 $han$e of earning G1 million against a

"e$ision 4hi$h has 10 $han$e of earning G10 million. In this thehighest pro6a6ility "e$ision are $hosen.

There are 2 metho"s of "ealing 4ith the n$ertainty

1. De$i"e for a limite" short perio" an" ma%e a pro(ision to $orre$tthe "e$ision.

2. egotiate some "e$ision to $on(ert n$ertainty "e$ision to

$ertainty.

MIS a!# #e/iio! %a0i!g /o!/et:D

MIS pro(i"es er6ertASimon mo"el of "e$ision ma%ing 4hi$h allo4sanalying the "ata an" it pro(i"es the pro6lem sitation mo"el togenerate the "ifferent "e$ision alternati(e. It then allo4s sele$ting anyoption from the grop of $ertain "e$isions. MIS pro(i"es programme"an" nonAprogramme" "e$ision ma%ing to han"le the (aria6ility. It also pro(i"es open an" $lose" system in pro(i"ing the "e$ision fle>i6ility.Operational resear$h mo"els are a(aila6le to fin" the 6est "e$ision.


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Optim iation mo"el pro(i"es stati$ an" "ynami$ mo"el $alls for the pro6lem of pay of analysis. It also "efines the 6eha(ioral an"organiational aspe$ts of "e$ision ma%ing to han"le the organiational

$ltre an" $onstraints in MIS. The organiational learning ma%es the

"esigner a4are of the strength of MIS. en$e MIS is ha(ing a goo"spport as a "e$ision as%ing organiation.

EERCISE UESTIONS:

1C /hat is De$ision /hat are its types o4 is it "iffere" innatre

2C /hat are the $hara$teristi$s of "e$isions3C /hat is rational "e$ision /hy is it "iffi$lt to implement

E>plain.#C /hat are the pro6lems in rational "e$ision ma%ing E>plain.

&C Des$ri6e er6ert Simon mo"el of "e$ision ma%ing.

'C E>plain the term a4 of re8isite (ariety.-ayAoff analysis

De$ision Tree analysis.

7C Differentiate 6et4een open "e$ision ma%ing an" $lose""e$ision ma%ing.

1INFORMATION

U!it :

&.1 Information )on$ept

&.2 Information -resentation

&.3 +ias in Information&.# Metho"s to a(oi" the misse of information

&.& !ttri6tes of information&.' Information a 8ality pro"$t

&.7 -arameters of 8ality&.* )lassifi$ation of information

&. )lassifi$ation of information in terms of its appli$ation&.10 Metho"s of "ata an" information $olle$tion

&.11 :eneral Mo"el of a man as an Information -ro$essor

&.12 Organiation an" information

&.13 Smmary of Information $on$epts an" their im pli$ations&.1# MIS an" Information )on$epts

1. INFORMATION CONCEPT:D

The inform ation has a pre$ise meaning it is "ifferent from "ata. The

information $on$ept has a (ale in "e$isionAma%ing 6t the "ata has

not. Information 6rings the $larity. Data is li%e ra4 material, 4hileinformation is e8i(alent to the final pro"$t after pro$essing the ra4

material. Eg. In the report of IT st"ents ;oll nm6er, ame, )lass,:en"er, Mar%s are the "ata attri6tes. +t the a$tal information $an

6e re$ei(e" 6y filling the re$or"s in respe$ti(e "ata.

The $hara$teristi$s of information are li%e

1. Impro(es the representation of an entity.

2. p"ates the le(el of %no4le"ge.3. -ro(i"es the srprise (ale.#. ;e"$es n$ertainty.&. elps in "e$isionAma%ing.

The information is sai" to 6e the 6asis for "e$ision ma%ing. Da(i" an"

Olson "efine it as Data that has 6een pro$esse" into a form that ismeaningfl to the re$ipient an" is of real an" per$ei(e" (ale in $rrent"e$isions. The 8ality of the information $an 6e "e$ i"e" "epen"ing onthe a6o(e mentione" $hara$teristi$s. The information is the meaningflrepresentation of "ata to the re$ipient is of real or per$ei(e" (ale inthe $rrent or the prospe$ti(e a$tions or "e$isions of the re$ipient.Data $an 6e a grop of nonAran"om sym6ol in the form of te>t, imagesor (oi$e, a$tions o65e$ts.


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The information mst 6e transferre" from the sor$e to the "estination4ithot loss of "ata. Fig. sho4s the general mo"el of $ommni$ation.

Fig. sho4s the general mo"el of $ommni$ation.

So Transmitt )han ;e$ei( Destinatioer nel er nr$een$o"er "e$o"

er

oise an" "istortion

MIS is e8i(alent to the transmitter 4hi$h pro(i"es information an"

sen"s throgh the report $hannel to the (arios re$ei(ers 4hi$h is"e$o"e" at the "estination. The poor 8ality of information "e to(arios fa$tors 4ol" $reate the $onfsion an" misn"erstan"ing

4hi$h is e8i(alent to the noise an" "istra$tion in $ommni$ationmo"el. ! goo" MIS $ommni$ates the information 4ithot noise an"

"istra$tion to the ser.

1.& INFORMATION PRESENTATION

If the information is not presente" properly, it may fail to$ommni$ate the "egree of $ommni$ation. The "egree of

$ommni$ation is affe$te" 6y metho"s of transmission, the manner in

4hi$h the information is han"le" an" the limitation an" the $onstraintsof the re$ei(er as the information pro$essor an" organiation asinformation ser.

The metho"s se" for impro(ing the $omm ni$ation are6%%ari,atio! an" %eage ro6ti!g .

The $on$ept of smmariation is se" to pro(i"e the information 4hi$his nee"e" in the form an" $ontent. The smmariation inform ation $an

6e represente" 6y the %ey fa$tors.

The prin$iple of smmariation is that it sppresses the noise

an" "istortion i.e. $onfsion, m isn"erstan"ing or missing the prposean" aim of the information "e to e>tra information.

Eg Management position A responsi6ility A :eneral Manager,Di(isional ea", Mar%eting, Materials.

Message roting is another metho" of impro(ing the "egree of

$ommni$ation. The prin$iple here is to "istri6te the information to allthe pla$es that are a$$onta6le for the s6se8ent a$tion or "e$isionin any manner. This is a$hie(e" 6y sen"ing the $opies of report an"

"o$ments to all the $on$erne" people. The prin$iple of messageroting a$hie(es the sprea" of information to the appropriate 8arters.

Eg. ierar$hi$al str$tre of an organiation sggests the flo4 of

information.

1.* BIAS IN INFORMATION:D

The appropriate metho" of $ommni$ating the information al4aysreferre" as n6iase" information. /hile sing the te$hni8es of

$lassifi$ations or filtering the information it may happen that $ertaininformation get eliminate" or "oes not $lassify i.e. "eli6erate 6ias in$o(ering the $ertain information is to 6e a(oi"e". The 6ias enters

6e$ase people try to 6lo$% sensiti(e information 4hi$h affe$ts them.To o(er$ome this 6iasing a formal str$tre of an organiationshol" 6e a"opte"J the type of information an" its re$ei(er shol" 6e"e$i"e" 6y the top management. Many times the "ata theinformation are sppresse" 6t the inferen$es are informe" 4ith no or little possi6ility of (erifi$ation or rethin%ing. In this $ase one 4ho "ra4s


29/53

inferen$es may ha(e a 6ias in the pro$ess of $olle$tion, pro$essing presentation of information. There are possi6ility of personal 6ias,organiational 6ias management 6ias refle$te" in information. The

presentation of information 4ill generate a 6ias may inflen$e 6y the

ser. Eg. If the information is presente" in alpha6eti$al or"er if it islengthy, the first fe4 entities 4ill get m ore attention. Other part of "atamay 6e negle$te".

1.- METt, pi$tre or graphi$s, print or "isplay, smmarie" or "etail.

Fre8en$y o4 often the information is nee"e" an" p"ate"

S$ope of reporting Athe $o(erage of information is represente" interms of area entities.

Sor$e of $olle$tionA It $an 6e internal or e>ternal to theorganiation.

Times$aleA Information may 6e relate" to past, $rrent, ftre or it

$an $o(er the entire time span.

;ele(an$e The information has rele(an$e to the sitation an" alsoto the "e$isionAma%ing an" "ata.

)omplete The information that $o(ers all the aspe$t of "e$ision,s$ope is %no4n as $omplete information.

Timeliness The re$eipt of information on time 4hen nee"e" ishighly sefl.

;e"n"ant information The e>tra nne$essary repetition of "ata is$alle" as re"n"ant information.

1.2 INFORMATION A UALITY PROUCT

Information is a pro"$t of "ata pro$essing. The 8ality of information

is high if it $reates the managerial impa$t lea"ing to attention, "e$ision

an" a$tion. The 8ality of the information $an 6e measre" in for "imensions

tility.

Satisfa$tion.

Errors.+ias.

Utilit' "im ension has # fa$ets the firm, the time, a$$ess an" the possession. If the information is represente" in the form manager

re8ires then its tility in$reases. If the information is a(aila6le 4hennee"e" then the tility is optimie". If the information is easily an"

8i$%ly a$$essi6le throgh the online pro$ess, its tility gets effi$ientte$hnology. If the information is possesse" 6y the manager 4ho nee"sit then its tility is highest. To in$rease the tility the $ost fa$tor shol" 6e in$rease".


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Sin$e the information is a(aila6le to many sers in system thes65e$ti(eness 4ol" (ary. The "egree of satisfa$tion $ol" "eterminethe 8ality of information. If the organiation has high "egree of

satisfa$tion then the information $an 6e a(aila6le at all the le(els to the

manager.

Errors o$$r 6e$ase of (arios reasons s$h as in$orre$t "ata

measrement, in$orre$t "ata $olle$tion, failre in "ata pro$essing,in$omplete "ata, poor appli$ation of "ata an" $ontrol system an"

"eli6erate 6iasing. To $lear the errors it is ne$essary to follo4 themetho"s of system analysis "esign.

-ro$e"re of $ommni$ating the information shol" 6e s$hthat the system is a6le to "ete$t the "egree an" the natre of the 6ias

an" $orre$t information a$$or"ingly.

1.4 PARAMETERS OF UALITY

The sers 6eing many, the information is "iffi$lt to $ontrol. Follo4ing

parameters are se" to $ontrol the 8ality of the information.

Impartiality Impartial information $ontains no 6ias an" has 6een

$olle$te" 4ithot any "istorte" (ie4 of the system.9ali"ity The (ali"ity of the information $reates to the prpose of the

system or the s$ope of the inform ation. It also "epen"ent on ho4 it

is se".;elia6ility It is $onne$te" to the representation an" the a$$ra$y of

4hat is 6eing "es$ri6e" in the information.

)onsisten$y The information is terme" as in$onsistent if it "eri(e"from a "ata 4hi$h "oes not ha(e a $onsistent pattern of the perio".

!ge If the information is too ol", it 4ill not 6e sefl in to"ay?ssystem. The $rren$y of inform ation ma%es all the "ifferen$es to

f the information is ol", it "oesn?t pro(i"e anythe ser. I

$hara$teristi$ as the p"ate of %no4le"ge, the element of srprise,representation an" the re"$tion of n$ertainty.

1.5 CLASSIFICATION OF INFORMATION

There are types of information

Strategi/ i!$or%atio!: This inform ation is re8ire" 6y top

management for strategi$ "e$ision ma%ing.

Ta/ti/al i!$or%atio! The information is re8ire" 6y mi""lemanagement for rnning the organiation.

Oeratio!al i!$or%atio! The "e$isions for "ay to "ay a$ti(itiesreferre" at this le(el. It is se" 6y operational le(el sers.

!$$or"ing to @ohn Dear"en information $an 6e $lassifie" in thefollo4ing 4ayA/tio! 39 !o a/tio! i!$or%atio! A The information 4hi$h

in$l"es the a$tion is $alle" as a$tion information. The information4hi$h $ommni$ates only the stats of sitation is $alle" as noa$tion information.E.g. There is no sto$% of item ! in a shop sggests pr$hasing

a$tion.Sto$% le"ger sho4s the sto$% 6alan$e#00 pro(i"e 5st the stats

of sitation i.e. no a$tion information.

Re/6rri!g 39 !o!re/6rri!g i!$or%atio! A The information

generate" at reglar inter(al is re$rring information.E.g. Monthly sales reportThe finan$ial analysis or the reports of mar%eting resear$h is nonA

re$rring information.

I!ter!al 39 Eter!al A The information generate" from internalsor$e of organiation is terme" as internal information. The

go(ernment represents in"stry sr(ey, resear$h information arethe e>ternal information as it is ta%en from the otsi"e sor$es tothe organiation.


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1.7 CLASSIFICATION OF INFORMATION IN TERMS

OF ITS APPLICATION: D

Pla!!i!g i!$or%atio! )ertain stan"ar"s, norms an" thespe$ifi$ation are se" in planning of any a$ti(ity. S$h information

is $alle" as planning information.E.g. Time $onstraint, operational stan"ar", "esigning stan"ar"set$.

Co!trol i!$or%atio! ;eporting the stats of an a$ti(ity throgh afee"6a$% me$hanism is $alle" as $ontrol information.

!o8le#ge i!$or%atio! ! $olle$tion of information throgh the"ifferent li6rary reports, resear$h st"ies to 6il"p %no4le"ge

6ase as information sor$e for "e$ision ma%ing is %no4n as%no4le"ge information.

The information $an 6e $lassifie" on its sage

Orga!i,atio! i!$or%atio! The information se" 6y e(er yone inthe organiation is $alle" organiation information.

ata;ae i!$or%atio! The information se" for mltiple prposesin "ifferent appli$ations is $alle" as "ata6ase information.

Oeratio!al i!$or%atio! The information se" in the 6sinessfn$tions is $alle" as operational or fn$tional information.

1. METperiment.

Sr(ey.

S65e$ti(e estimation.

Transa$tion pro$essing.

-r$hase" from otsi"e.

-6li$ation.

:o(ernment agen$ies.

Inter(ie4ing)ase st"y

O6ser(ation metho" "epen"s on the o6ser(er an" inflen$e" 6y the 6ias.

Information $an 6e $olle$te" throgh "esigning of the e>periment

4here the 8ality of information "epen"s on the e>perimentationte$hni8e. It is performe" on trial 6asis of $ontrolling the spe$ifi$

parameters.

Sr(ey m etho" o$$rs throgh the 8estioners? session. !$$or"ing tothe 8ality of 8estion, 8ality of information $an 6e "e$i"e".

S65e$ti(e estimation $an 6e $alle" as s6 e>pert. If the a6o(e 4aysare ns$$essfl then this applie" to $olle$t e>pert opinion.Transa$tion pro$essing This metho" $onsists of "ata pro$essing

leisre, representation throghot the organiation.

-6li$ation pro(i"es (arios p6li$ forms. Eg. e4spapers,go(ernment agen$ies, online information et$.

The information $an 6e pr$hase" from otsi"e at the spe$ifi$ rateeasily. It may 6e e>pensi(e an" it may ha(e a 6ias "epen"ing on the

sor$e.

:o(ernment agen$ies It is a(aila6le 6t $annot 6e "ire$tly se" 6y all.E.g. ;+I -6li$ations.Inter(ie4ing is a te$hni8e that is prim arily se" to gain ann"erstan"ing of the n"erlying reasons an" moti(ations for people?sattit"es, preferen$es or 6eha(ior. Inter(ie4s $an 6e n"erta%en on a


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personal oneAtoAone 6asis or in a grop. They $an 6e $on"$te" at4or%, at home, in the street or in a shopping $entre, or some other agree" lo$ation.

The term $aseAst"y sally refers to a fairly intensi(e e>amination of a single nit s$h as a person, a small grop of people, or a single$ompany. )aseAst"ies in(ol(e m easring 4hat is there an" ho4 it got

there. In this sense, it is histori$al. It $an ena6le the resear$her toe>plore, nra(el an" n"erstan" pro6lems, isses an" relationships.

1. GENERAL MOEL OF A ity of the 5o6 is "etermine". Theorganiation may 6e large or small performing at one or mltiplelo$ation. The information nee" is typi$al. It is therefore ne$essary ton"erstan" nee" of information, the natre, the se of information 4ithreferen$e to the types an" %e(els in the organiation.

The information has a (ale if it $ases the $hanges in the a$tion an"

6eha(ior of the "e$ision ma%er. The perfe$t information is theinformation 4hi$h helps in $on(erting the $ertainty or ris% to $ertainty. It

is a m yth an" "iffi$lt to a$hie(e in an organiation.

1.* SUMMARY OF INFORMATION CONCEPTS AN

T


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)ogniti(e Style It is thin%ing pattern of an in"i(i"al. It al4ays "iffersfrom person to person.

Fee"6a$% loop To e>e$te the system as per the e>pe$tation it isne$essary to re(ie4 the system. The me$hanism se" to $ontrol an"impro(e the system is $alle" as fee"6a$% system.

-er$ei(e" (ale of "ata Information may 6e sefl as per the perio" of

referen$e i.e. some information may not 6e sefl in the $rrent perspe$ti(e 6t may 6e important in ftre.

In"i(i"al "ifferen$es The information nee"s of an in"i(i"al may"iffere" "e to toleran$e le(el, e>perien$e le(el, organiation le(el,

%no4le"ge le(el, intelligen$e.

1.- MIS AN INFORMATION CONCEPTS

The goal of the MIS shol" 6e to pro(i"e the information 4hi$h has the

srprise (ale an" 4hi$h pro"$es the n$ertainty. It shol" pro$essthe "ata to $reate a %no4le"ge 6ase in the organiation. The

information shol" 6e represente" 4ithot any "istorting in asmmarie" or $entralie". Inform ation is a 8ality pro"$t for anorganiation. The 8ality of the information $an 6e measre" 6y #

"imensions tility, satisfa$tion, error an" 6ias.

The information $an 6e $ontrolle" 6y the parameters s$h as(ali"ity, impartiality, $onsisten$y, relia6ility, an" age.

The information $an 6e "istingishe" from a$tion, its sor$esan" its tiliation. The MIS shol" 6e "esigne" s$h that it meets thenee"s of total re$ogniing. It is ne$essary to re$ognie that theinformation may 6e misse" if it falls into 4rong han". The MIS sho l"

ha(e featres lo$%ing, separation an" "elaye" "eli(ere".

EERCISE UESTIONS:

1C /hat is Information /hat are its $hara$teristi$s2C /hat is $ommni$ation o4 "oes it represente" an" pro$esse"

E>plain.

3C E>plain the term +ias in information.

#C /hat are the attri6tes of Information&C o4 "o yo measre the 8ality of information E>plain.'C /hat is $lassifi$ation of information E>plain.

7C Des$ri6e the general mo"el of an information pro$essor.*C E>plain 4hy information has no spe$ifi$ation 6t it has a $hara$ter

an" (ale.

C o4 "oes the 8ality of the information impro(e"10C /hat are the metho"s for the $olle$tion of "ata11C The $hara$ter an" (ale of information is lin%e" to the people in

the organiation an" to the management pro$ess in the

organiation. E>plain.


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2

EVELOPMENT OF MIS

U!it :

'.1 De(elopment of long range plans of MIS

'.2 )ontents of MIS plan or ong range planA'.3 !s$ertaining the )lass of Information'.# Determining Information ;e8irement

'.& De(elopment of MIS'.' ife $y$le

'.7 Implementation of MIS

'.* -arameters of management of 8ality in MIS'. Organisation for "e(elopment of MIS'.10 MISA The Fa$tors )ontri6ting To S$$ess

'.11 MISAFa$tors )ontri6ting to the Failre

2. EVELOPMENT OF LONG RANGE PLANS OF MIS:

/e nee" MIS fle>i6le enogh to "eal 4ith, $hanging information nee"s

of the organisation. It shol" 6e $on$ei(e" as an open system to

intera$t 4ith the 6siness en(ironment, 4ith a 6ilt in me$hanism to

pro(i"e "esire" information as per the ne4 re8irement. The "esigningof s$h open information is $omple>. Therefore the planning of MIS is

ne$essary. The MIS plan is $on$rrent to the 6siness plan of

organisation. The "e(elopment plan of MIS is lin%e" 4ith the steps of implementation in 6siness "e(elopment plan in the form of shortrange plan, long range plan.

+siness -lan MIS -lan1 +siness :oals an" )onsistent 4ith the 6siness.

o65e$ti(es2 +siness plan +siness spports to

. strategy.

Strategy in MIS.3 Strategi$ planning MIS itself is responsi6le for

"e$isions. "e$ision ma%ing.

# Management plan for the MIS pro(i"es systeme>e$tion "e(elopment. "e(elopment s$he"le plan

e>e$tion.

& Operational plan for e>e$tion ar"4are soft4are plan for the pro$rement the

implementation.

2.& CONTENTS OF MIS PLAN OR LONG RANGE

PLAN:D

MIS plan is lin%e" to the 6siness plan 4here it is ne$essary to

"e(elop the goal an" the o65e$ti(e for MIS 4hi$h 4ill spport the

6siness goal. This 4ill $onsi"er the management philosophy, poli$y,$onstraints, 6siness ris%s, internal e>ter nal en(ironment of the

organisation an" the 6siness.MIS follo4s the follo4ing steps in the long range plan.

Strateg' $or la! a/"ie3e%e!t:

The "esigner has to ta%e nm6ers of "e$ision for the a$hie(ement,

goo"s o65e$ti(es s$h as "e(elopm ent approa$h, online 6at$h real

time.aQ system "e(elopment it $an operational (Ns fn$tional, a$$onting(Ns "6 (Ns $on(entional, "istri6te" (Ns $entralise" ,SS!D (Ns OOT. 6Q resor$es for system "e(elopmentInternal (Ns e>ternal $stomie" "e(elopment.$Q man po4er $omposition nsi"ers the 8ality of manpo4er for analyst, programmer et$R.it $o


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Ar/"ite/t6re o$ MIS:

It pro(i"es the s6Asystem str$tre an" their INO 4ith lin%s. It $an also pro(i"e the relationship an" fn$tionality.

S'te% #e3elo%e!t /"e#6le:

/hile preparing the s$he"le some $onsi"erations is gi(en to the

implementation of system in the o(erall information re8irement.

S$he"le prepares the "e(elopment steps against the times$ale of

e>e$tion of the system "e(elopment.

Q Organisation an" e>e$tion of the plan fo$ses on the in"i(i"al toll

in the system.

>Q +"get fo$s on its $ost in(estment s$he"le.

2.* ASCERTAINING T


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F6!/tio!al i!$or%atio!:

Fn$tional information is "efine" as a set of information re8ire" 6y

the fn$tional hea" in $on"$ting the a"ministration an" management

fn$tion. It is prely lo$al to that fn$tional organisation an" 6y the"efinition it "oes not has any se else4here e>$ept for the manager.Fn$tional information is largely fa$tal, stati$ally an" "etail in

mlti"imensional fn$tional information is normally generate" at e8altime inter(al for n"erstan"ing the tren"s an" ma%ing the $omparison

against time s$ale.The fn$tional information $an 6e a$$esse" on the follo4ing 3 parameters

/or%ing "esign

;esponsi6ilityFn$tional O65e$ti(e

/or% "esign spe$ifies pro$e"re, 4or% $ltre et$. The fn$tionalresponsi6ility of in"i(i"als is se" for a$$onting an" "e$ision ma%ingfor a$hie(ing the target to i"entify the performan$e. Ea$h fn$tion has

its o4n o65e$ti(e 4hi$h is "eli(ere" ot of the $orporate goals.

The fn$tional goals an" o65e$ti(e are ne$essary to a$hie(e.

O(erall $orporate a$hie(ement s$h information $an 6e $olle$te" from

the manager an" their fn$tional hea" 4ho together e>e$tes the

6siness a$ti(ities.

!o8le#ge i!$or%atio!:It sho4s the tren" of the a$ti(ity or the reslt against the time s$ale. It

$reates an a4areness of those aspe$ts of the 6siness 4here themanager is for$e" to thin%, "e$i"e an" a$t. It highlights the "e(iationfrom nonAstan"ar"s an" also the a6normal le(el. The %no4le"ge

information spports the fn$tion of m i""le an" top management. It isre$or"e" in the graphi$al format for 8i$% grasp. If the sales are"e$lining the tren" is li%ely to $ontine. The pro"$t is $ontinosly

failing the reason $an 6e pro$ess of manfa$tre.

e/iio!D6ort i!$or%atio!:The information "oesn?t a$t as a "ire$t iNp to the "e$ision ma%inginformation. Information isse" in "e$isionAspport system mo"el

6il"ing pro6lem sol(ing in t4o 4ays 5stifying the nee" of "e$ision.

It ai"s in "e$ision ma%ing

eg The information on nonAmo(ing in(entory 5stifies the "e$ision of "isposal of item.

The "eman" fore$ast information ai"s in the "e$ision on "eterminingthe or"ers 8antity for or"ers sales. The sor$e of this inform ation

may 6e internal or e>ternal.

Oeratio!al i!$or%atio!:

This information is re8ire" 6y the operator an" the lo4er le(el of themanagement . the main prpose of this information is fa$t fin"ing an"

ta%ing s$h a$tion an" "e$ision 4hi$h 4il affe$t this operator at ma$ro

le(el.The sor$e of s$h information is largely internal throgh the

transa$tion pro$essing an" the information relate to the small time

span 4hi$h is mostly $rrent stats.

2.- ETERMINING INFORMATION REUIREMENT

+ase" on the n$ertainty le(el follo4ing metho"s are se" to han"le

the n$ertainty.

o4 %no4le"ge Bnear $ertaintyC

It is han"le" 6y operation m anagement 6y "etermining the nee"s

for the system.-re$ise pro6a6ilisti$ %no4le"geBris% sitationCIt is han"le" 6y mi""le le(el management 4hi$h "etermines thee>isting system, metho"s of "e$ision ma%ing pro6lem sol(ing.not a6le to "etermine pro6a6ilisti$ term B(ery ris%yCIt is han"le" 6y the mi""le an" the top le(el management 4hi$h is


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"etermine" throgh $riti$al fn$tions "e$ision ma%ing system.

igh ris% BTotal n$ertaintyC

It is han"le" 6y top m anagement 4hi$h is "etermine" 6y

e>perimentation, mo"eling an" sensiti(ity analysis.

!s%ing inter(ie4ing, "etermine the information re8irement 4hen theser ha(e to sele$t one ans4er from finite set of ans4er. ! $lose"

8estion shol" 6e as%e" instea" of open 8estion 4hi$h are the ra4

material se" for ma%ing a pro"$t in"i$ates a $lose" 8estion, 4hi$hare the ra4 materials se" for a pro"$t in"i$ates an open 8es. the

e>perts or the e>pertise sers are sppose to gi(e their 6est ans4ers.

This approa$h is $alle" as Delphi metho" 4here the system "esigner

has to $he$% the (ali"ity separately.

The a""itional information re8ire" $an 6e $olle$te" in minimm per$ent 6y "e$ision m a%ing an" pro6lem sol(ing 4here the other per$ent information is $ommon to the e>isting.

For E>ample payroll, a$$onting system et$.E(ery 6siness organisation performs s$$essflly on the 6asis of

$ertain $riti$al fa$tor 4hi$h are important an" the other plays aspporti(e role in fn$tioning the organisation. Many times a fn$tion is

singlarly $riti$al to the s$$essfl fn$tion of 6siness organisation.The e>perimentation 4ol" "efine the metho"ology for han"ling the$omple> sitation. If the metho" is finalie" information nee"s $an 6e"etermine". Mo"els are se" for "eterm ining initial nee"s an" they are

mo"ifie", "etermine" "ring the implementation on stage.

2.1 EVELOPMENT OF MIS:

/hen the system is $omple> the "e(elopment strategy is prototyping

the system. It is the progress of the information nee"s, "e(elopmentmetho"ology trying it ot in a smaller s$ale 4ith respe$t to the "ata

an" $omple>ity ensring that it spe$ifies the nee"s of the ser an"

a$$ess the pro6lem in "e(elopment. This pro$ess i"entifies the pro6lem area ina"e8a$ies in prototype the "esigner then ta%es the

steps to remo(e ina"e8a$ies. The prototype approa$h 6rings themltiple sers on same platform $hanging their attit"e to4ar"s a

$orporate goal is the managerial tas% of the system "esigner.

2.2 LIFE CYCLE:

There are many systems 4hi$h ha(e a life $y$le that is starting an"

en"ing step 4hi$h in"i$ates that the system is (ery m $h str$tre"an" rle 6ase". They ha(e 100 $larity of inpt their resor$es,

"efinite set of oNp in terms of the $ontents an" formats. This system

$an 6e "e(elope" in systemati$ manner egJ a$$onting , payroll et$R

Protot'e Aroa/" Li$e C'/le aroa/"

1 It refers to open system 4ith high It refers to open system 4ith"egree of n$ertainty of high "egree of $ertainty of information. information.

2 The system "esign is nsta6le The system "esign is sta6le"e to n$ertainty. "e to $ertainty.

3 It is ne$essary to try for fi>e" ere it is not ne$essaryi"eas an" $omplete information. 6e$ase it is alrea"y str$tre".

# It is ne$essary to fin" the $ost, S$ope, $ost of the system is

s$ope an" appli$ation of the flly "etermine" in $lear terms.system. E>perimentation is E>perimentation is notne$essary. ne$essary.

& Information nee"s are not fi>e". Information nee"s are fi>e".' It is )stom oriente" system. ife $y$le system is ni(ersalan" go(erne" 6y prin$iples pra$ti$es2.4 IMPLEMENTATION OF MIS:


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For the s$$essfl implementation of the system. The system "esigner shol"iQ Satisfy all the information nee"s of the ser

iiQ Offer the ser(i$es to the ser.

iiiQ ;espe$t the "eman"s of the ser i(Q ot to re$ommen" the mo"ifi$ation of the nee"s nless te$hni$allyfeasi6le.

(Q E>plain the natre of the system to the ser to realise theinformation re8irement of the $rrent system.

(iQ a(e a 6etter "e$ision ma%ing $apa6ility(iiQ ot e>pe$t the perfe$t n"erstan"ing from the ser as he may 6ethe ser of nonA$ompterie" system.

(iiiQ )on"$t a perio"i$al ser meeting on system 4here it is easier toget the opportnities to %no4 the ongoing "iffi$lties of the ser.i>Q e4in?s mo" el sggest 3 aspe$ts

Documents

M.C.a.(Sem - III) - Management Information System