KMBN-208-MIS Notes-Uint-1st & 2nd.pptx

Jagran Institute Of Management
MBA:FIRST YEAR-2nd Semester-
Session-2021-22
(KMBN208)-MANAGEMENT INFORMATION SYSTEMS
Subject Start Date:11th-April-2022
NameofFaculty:
VishnuKr.Shukla
(Assistant Professor)
Dept.ofMCA

MANAGEMENT INFORMATION SYSTEMS
Course Objective –
1. To help the students understand the importance of information
management in business and management.
2. To provide understanding about different types of information
systems in business.
3. To apply the theory and concepts in practical with help of
software.
4. To understand various security and ethical issues with Information
Systems.
5. To provide hands on learning of applications on Spreadsheet and
database software.

UNIT -1 (6 Hours)-
Management Information Systems - Need, Purpose and
Objectives, Contemporary Approaches to MIS,
Information as a strategic resource, Use of information
for competitive advantage, MIS as an instrument for
the organizational change.
Information Technology – Characteristics and emerging
trends, IT Capabilities and their organizational impact,
IT enabled services. Transaction Processing System:
Characteristics and its importance.
You can also visit for MIS Notes-
https://theintactone.com/2021/03/07/kmbn208-management-

UNIT -II (6 Hours)-
Information, Management and Decision Making -
Attributes of information and its relevance to
Decision Making, Types of information. Models
of Decision Making - Classical, Administrative
and Herbert Simon's Models.
Management Support Systems: Decision Support
Systems, Group Decision Support Systems,
and Executive Information Systems.

UNIT -III (8 Hours)
Managing Data Resources- The need for data
management, Challenges of data management, Data
independence, Data redundancy, Data consistency,
Data administration.
Database Management System – Concepts and types of
DBMS, Fields, Records, Table, View, Reports and
Queries. Data warehouse and Data mining –
Characteristics and uses of Data warehouse,
Techniques of Data Mining,
Business Intelligence Database Management System
(Lab): Creation of Table, View and Reports. Basics of
SQL and running queries.

Suggested Readings
1. Management Information System – James ‘O’ Brian.
2. Management Information Systems, Laudon and Laudon, 7th
Edition, Pearson Education Asia .
3. Management Information Systems, Jawadekar, Tata
McGraw Hill .
4. Analysis and Design of Information Systems, Rajaraman,
Prentice Hall .
5. Database Management Systems: A Business-Oriented
Approach Using ORACLE, MySQL and MS Access, by Sotirios
Zygiari .
6. Computer Applications in Business (CBCS) by Dr. Sushil
Kumar Sharma & Ms. Mansi Bansal (Taxmann) .
7. Excel 2019 All-In-One: Master the new features of Excel
2019 / Office 365, Lokesh Lalwani (BPB.)

CO1 Be able to understand the importance of information
management in business and management
Knowledge( K2) /
Remembering (
K1)
CO2 To understand and formulate different types of
information systems in business
Knowledge ( K2)
CO3 Be able to apply the theory and concepts in practical
with help of software
Applying ( K 4)
CO4 To apply various security and ethical issues with
Information Systems
Applying ( K 4)
CO5 To synthesize applications on Spread sheet and
database software
Synthesizing ( K6)/
Evaluating ( K7)

Before starting subject-
Overview of Computers:
Block diagram and its description, digital computer & types with
specification.
Computer Hardware: Input device/Output devices.
Storage Devices/ Introduction to Memory.
Computer Software:
System Software & Application Software.
Number Systems.
Introduction to programming language:
Different levels of PL: High Level language, Assembly language, Machine
language.
Language Translator :-Introduction to Compiler, Interpreter, Debugger,
Linker, Loader, Assembler.

INTRODUCTION TO
MANAGEMENT INFORMATION SYSTEM:-
MIS is the use of information technology, people, and
business processes to record, store and process data to
produce information that decision makers can use to
make day to day decisions.
Or Management Information Systems (MIS), referred to as
Information, Management and Systems, is the discipline
covering the application of people, technologies, and
procedures collectively called information systems, to
solving business problems.
“'MIS' is a planned system of collecting, storing and
disseminatingप्रसारdata in the form of information needed
to carry out the functions of management.”

According to Philip kolter-
A management information system consist of
people, equipment and procedures together,
sort, analyze, evaluate and distribute the
needed timely and accurate information and
marketing decision makers.
MIS is also knows as Information Systems/
Information and Decision Systems/ Computer-
Based Information Systems.

Definitions of MIS:
1. MIS is defined as a system whichprovides informationsupport
for decision-makingin theorganization.
2. MIS is defined as an integrated system of manand machine for
providinginformationto theoperations,management&
decision-makingfunctionin theorganization.
3. MIS is definedas a system basedon thedatabaseof the
organizationfor thepurposeof providing informationto people
in organization.
4. MIS is defined as a Computer-basedInformationSystem.

Another Meaning of MIS
Academically, the term is commonly used to refer to the
group of information management methods tied to the
automation or support of human decision making.
e.g. Decision Support Systems, Expert Systems, and Executive
Information Systems.

According to Subhalakshmi Joshi:- Management information
system, or MIS, broadly refers to a computer based system
that provides managers with the tools to organize, evaluate
and efficiently manage departments within an organization.

COMPONENTS OF MIS:-
1. Management: Word “management” identifies a
special group of people whose job is to direct
the effort and activities of other people toward
common objective.
“Management is the process of coordinating
work activities so that they are completed
efficiently and effectively with and through other
people”.
Another concept of MANAGEMENT is the
effective utilization of human and material
resources to achieve the enterprise objective.
Or Management is art of getting things done

The basic functions performed by a
manager in an organization are:
It is a process consisting of the five basic functions:
Planning,
Controlling,
Staffing,
Organizing, and
Directing.

• 2. INFORMATION:-
• Information is data that has been
manipulated to be useful to someone.
Information must have value. Information tells
people something they don’t already know or
confirms something that they suspect.
• Information is considered as valuable
component of an organization.
• So, in MIS, means the processed data that
helps the management in planning,
controlling and operations.

What is Data: Data is raw, unorganized
facts that need to be processed. Data can
be something simple and seemingly
random and useless until it is organized.
What is Information: When data is
processed, organized, structured or
presented in a given context so as to
make it useful, it is called information.

• Data are the facts or details from which
information is derived. Individual pieces of data
are rarely useful alone. For data to become
information, data needs to be put into context.
Data is a single unit. A group of data which
carries new and meaningful data is called
Information.

• Some more differences between data and information:
• Data is used as input for the computer system. Information is the
output of data.
• Data is unprocessed facts figures. Information is processed data.
• Data doesn’t depend on Information. Information depends on data.
• Data is not specific. Information is specific.

Data are the facts or details from which information is derived.
Individual pieces of data are rarely useful alone.
Data is a single unit. A group of data which carries new and meaning
is called Information.
Data doesn’t carry a meaning. Information must carry a
logical meaning. Data is the raw material. Information is
the product.
It is an entity piece of information that is fact.
Information = Instruction + Data
DATA-------→PROCESSING------ →INFORMATION
Data involves facts and figures-Information on the other
hand is like a finished product.

SYSTEM:- A system is defined as a set of elements
which are joined together to achieve a common
objective. The elements are interrelated and
interdependent.
Or
A system is a group of interrelated components
working together toward a common goal (according
to a plan to achieve a specific objective) by
accepting inputs and producing output in an
organized transformation process.

Manual Information Systems VS Computerized Information Systems
(MIS)
Data is the bloodstream of any business entity. Everyone in an
organization needs information to make decisions. An information
system is an organized way of recording, storing data, and retrieving
information.
In this section, we will look at manual information systems vs.
computerized information systems.
Manual Information System
A manual information system does not use any
computerized devices. The recording, storing and
retrieving of data is done manually by the people, who
are responsible for the information system.

The following are the major components of a manual
information system
People –people are the recipients of information system
Business Procedures –these are measures put in place that
define the rules for processing data, storing it, analyzing it
and producing information
Data –these are the recorded day to day transactions
Filing system – this is an organized way of storing information
Reports –the reports are generated after manually analyzing
the data from the filing system and compiling it.

Advantages and Dis-advantages of a manual information
system
Advantages:
The following are the advantages of manual information systems
Cost effective – it is cheaper compared to a computerized system
because there is no need to purchase expensive equipment such
as servers, workstations, printers, etc.
Flexible –evolving business requirements can easily be implemented
into the business procedures and implemented immediately
Disadvantages:
The following are some of the disadvantages of a manual information
system.
Time consuming –all data entries need to be verified before filing,
this is a time consuming task when done by humans. Retrieving
data from the filing system also takes a considerable amount of
time

Prone to error – the accuracy of the data when verified and validated by
human beings is more prone to errors compared to verification and
validation done by computerized systems.
Lack of security – the security of manual systems is implemented by
restricting access to the file room. Experience shows unauthorized
people can easily gain access to the filing room
Duplication of data –most departments in an organization need to have
access to the same data. In a manual system, it is common to
duplicate this data to make it easy to accessible to all authorized
users. The challenge comes in when the same data needs to be
updated
Data inconsistency – due to the duplication of data, it is very common
to update data in one file and not update the other files. This leads to
data inconsistency
Lack of backups – if the file get lost or mishandled, the chances of
recovering the data are almost zero.

Computerized information system
Computerized systems were developed to address the challenges of manual
information systems. The major difference between a manual and computerized
information system is a computerized system uses a combination of software and
hardware to record, store, analyze and retrieve information.
Advantages and Disadvantages of a computerized information system (MIS)
The following are some of the disadvantages of a computerized information system.
Advantages:
The following are the advantages of computerized information systems
Fast data processing and information retrieval – this is one of the biggest advantages
of a computerized information system. It processes data and retrieves information
at a faster rate. This leads to improved client/customer service
Improved data accuracy – easy to implement data validation and verification checks in
a computerized system compared to a manual system.
Improved security – in addition to restricting access to the database server, the
computerized information system can implement other security controls such as
user’s authentication, biometric authentication systems, access rights control, etc.

Reduced data duplication – database systems are designed in such a way that
minimized duplication of data. This means updating data in one department
automatically makes it available to the other departments
Improved backup systems – with modern day technology, backups can be stored in
the cloud which makes it easy to recover the data if something happened to the
hardware and software used to store the data
Easy access to information – most business executives need to travel and still be able
to make a decision based on the information. The web and Mobile technologies
make accessing data from anywhere possible.
Disadvantages:
It is expensive to set up and configure – the organization has to buy hardware and the
required software to run the information system. In addition to that, business
procedures will need to be revised, and the staff will need to be trained on how to
use the computerized information system.
Heavy reliance on technology – if something happens to the hardware or software
that makes it stop functioning, then the information cannot be accessed until the
required hardware or software has been replaced.
Risk of fraud – if proper controls and checks are not in place, an intruder can post
unauthorized transactions such as an invoice for goods that were never delivered,
etc.

• Thus every system is said to be composed of
subsystems. A system has one or multiple inputs,
these inputs are processed through a
transformation process to convert these input( s) to
output.
• Ex. Human body is a system composed of various parts,
which are working together towards a common
objective , that is to live

SWOT:
Strengths, Weaknesses, Opportunities, and Threats
analysis
• What is SWOT:
• SWOT Analysis is a simple but useful framework
for analysing your organization's strengths,
weaknesses, opportunities, and threats. It helps you
to build on what you do well, to address what
you're lacking, to minimize risks, and to take the
greatest possible advantage of chances for success.
• What is Six Sigma:
• Six Sigma is a method that provides organizations tools to improve the capability of their
business processes. This increase in performance and decrease in process variation helps
lead to defect reduction and improvement in profits, employee morale, and quality of
products or services.

What is CMMI:
Capability Maturity Model Integration (CMMI) is a
process level improvement training and appraisal
program. CMMI defines the following maturity levels for
processes: Initial, Managed, Defined, Quantitatively
Managed, and Optimizing.
• The Capability Maturity Model Integration, or CMMI, is
a process model that provides a clear definition of what
an organization should do to promote behaviours that
lead to improved performance. With five “Maturity
Levels” or three “Capability Levels,” the CMMI defines
the most important elements that are required to build
great products, or deliver great services, and wraps
them all up in a comprehensive model.
• The CMMI helps us understand the answer to the
question “how do we know?”

TYPES OF MIS :-
There are various types of MIS-
1. Transaction Processing System (TPS):- -designed to
process routine transactions efficiently and accurately.
Managers often use these systems to deal with such tasks
as payroll, customer billing and payments to suppliers. Or
MIS produce fixed ,regularly scheduled reports based on
data extracted and summarized from the firms underlying
transaction processing systems to middle and operational
level managers to identify and inform structured and semi
structured decision problems.

2. Decision support system (DSS):- This are computer
applications used by middle management to
compile information from a wide range of sources
to support problem solving and decision making.
3. Executive Support System (ESS):- Executive Support
System (ESS) is software used by companies which
has information related to business, which enables
the top management to take better decisions in
favor of the company.

4. Knowledge Management Systems ("KMS")-to help businesses create
and share information. These are typically used in a business where
employees create new knowledge and expertise - which can then be
shared by other people in the organization to create further
commercial opportunities.
5. Customer Relationship Management (CRM):- This are MIS designed
specifically for managing the marketing aspects of the business .
6. Office Automation Systems (“OAS”)-that try to improve the
productivity of employees who need to process data and information.
Wide range of software systems that exist to improve the productivity
of employees working in an office (e.g. Microsoft Office XP) or
systems that allow employees to work from home or whilst on the
move.

Why MIS ?
• Manager makes decisions all the time.
• There is an overload of information.
• All information is not useful.
• Anything which helps manager improve his decision-making
will obviously lead to better result.
• MIS is a system, where data is the input, which is processed
to provide output in the form of information reports,
summaries, etc .
Which aid the manager’s decision-making process.

How is a Management Information System Useful in
Companies?
Planning and Control : MIS improves the quality of plants by providing
relevant information for decision – making. MIS serves as a link
between managerial planning and control. It improves the ability of
management to evaluate and improve performance.
MIS Minimizes Information Overload : MIS change the larger amount of
data into summarized form and therefore, avoids the confusion which
may arise when managers are flooded with detailed facts.
MIS Encourages Decentralization : Decentralization of authority is
possibly when there is a system for monitoring operations at lower
levels. MIS is successfully used for measuring performance and
making necessary change in the organizational plans and procedures.

Costs : Invest in a consultant to help define your core
requirements that include information for strategic
planning and project management. To be useful and
successful, a management information system should focus
on company products and services, customers, operating
costs, marketing opportunities and the company's exposure
to risk.
• MIS brings Coordination : MIS facilities integration of
specialized activities by keeping each department aware of
the problem and requirements of other departments. It
connects all decision centers in the organization . MIS
assembles, process , stores , retrieves , evaluates and
disseminates the information .

Impact of the Management Information System
• • With a good MIS support, the management of marketing
, finance, production and personnel becomes more
efficient.
• • The MIS begins with the definition of a data entity and its
attributes, respectively, designed for information
generation in the organization.
• • The MIS calls for a systemization of the business
operations for an effective system design.
• • This leads to streamlining of the operations which
complicate the system design.

• • MIS improves the administration of the business
by bringing a discipline in its operations as
everybody is required to follow and use systems &
procedures.
• • This process brings a high degree of
professionalism in the business operations.
• • Since the goals and objectives of the MIS are the
products of business goals & objectives, it helps
indirectly to pull the entire organization in one
direction towards the corporate goals and
objectives by providing the relevant information to
the people in the organization.

Objectives of MIS :
The goals of an MIS are to implement the organizational structure and
dynamics of the enterprise for the purpose of managing the
organization in a better way and capturing the potential of the
information system for competitive advantage.
Following are the basic objectives of an MIS:-
1. Data Capturing : MIS capture data from various internal
and external sources of organization. Data capturing
may be manual or through computer terminals.
2. Processing of Data : The captured data is processed to
convert into required information. Processing of data is
done by such activities as calculating, sorting,
classifying, and summarizing.
Processing data means −
– making calculations with the data

3. Storage of Information : MIS stores the processed or
unprocessed data for future use. If any information is not
immediately required, it is saved as an organization record,
for later use.
4. Retrieval of Information : MIS retrieves information from its
stores as and when required by various users.
5. Dissemination of Information : Information, which is a
finished product of MIS, is disseminated to the users in the
organization. It is periodic or online through computer
terminal.

NEED FOR MIS:-
MIS is an information system that provides
information in the form of standardized reports and
displays for the managers. MIS is a broad class of
information systems designed to provide
information needed for effective decision making.
Data and information created from an accounting
information system and the reports generated
thereon are used to provide accurate, timely and
relevant information needed for effective decision
making by managers.
MIS Need for Information Systems
• Managers make decisions. Decision-making

Here ,discussed about some points regarding needs of MIS-
Decision makers need information to make effective
decisions-
Management Information Systems (MIS) make this possible.
MIS systems facilitate communication within and outside the
organization –
Employees within the organization are able to easily access the
required information for the day to day operations.
Facilitates such as Short Message Service (SMS) & Email make it
possible to communicate with customers and suppliers from
within the MIS system that an organization is using.

Business Need Information Technology?-
The fundamental reasons for the use of information
technology in business are:
Support of business operations
Support of managerial decision making
Support of strategic competitive advantage.
Emergence of the Global Economy
Transformation of the Business Enterprise
Competitive Business Environment
Record keeping – Management information systems record
all business transactions of an organization and provide a
reference point for the transactions.

PURPOSE OF MIS:-
The purpose of MIS is reporting and is to provide the necessary information to
the managers and supervisors at various levels to help them to discharge
their functions of organising, planning, control and decision making.
The primary purpose of a management information system, or MIS, is to
assist managers in making strategic, tactical and operational decisions in
an efficient and productive manner. It provides managers with essential
information that is gathered from a variety of sources, pooled into a single
database and compiled in a readable format.
Management Information Systems are primarily concerned with the delivery of
information (both internal and external) to organizational members from
the shop floor workers to the management.

In other terms, The purpose of MIS is to help the smooth running of the
business by providing information on the firms data (such as accounting
figures) employees from different levels will then evaluate this information
so that decisions can be made to ensure that the business remains
competitive and successful.
A management information system consists of a set of systems and
processes that distributes information to managers. This tool is used to make
reports and comprehensive overviews that help managers conduct
performance reviews and make a wide range of decisions, such as an in-
depth analysis of operational concerns.
It provides internal reports that are presented in an easily understandable
format. Information collected by a MIS are either financial or operational
depending on the needs of management.

A MIS is generally capable of collecting any type of
information required by managers. It views financial
data, such as daily expenses and revenues, and
attributes these data to respective departments.
Personnel are able to manage outgoing shipments
and incoming deliveries from any location
connected to the MIS.
MIS have been created to support the whole range of
business's administration and regulatory activities

Advantage Or Benefits of MIS:-
A good management information system can be used
not only for the storage of electronic data alone but
must be able to support the analysis required by
management.
There are many advantages of MIS which are utilized
by manager to achieve organization goal..
• Data can easily be accessed and analyzed without
time consuming manipulation and processing.

Significant cost benefits, time savings, productivity gains and process re-
engineering opportunities are associated with the use of data
warehouse for information processing.
The following are some of the benefits of a good MIS:-
• Increased customer satisfaction.
• Improved quantity and quality of information.
• Improved quality and quantity management decisions.
• Improved responsiveness number of the competitor’s condition.
• Improved operational efficiency and flexibility.
• Improved quality of internal and external communications.
• Improved quality of planning.
• Improved quality control and supervision.

• Limitations Or Disadvantage of MIS:-
Even though MIS has many benefits but it also has its
limitations.
• Limitations of MIS are discussed below:
• While MIS may solve some critical problems but it
is not a solution to all problems of an organization.
• It cannot meet the special demands of each
person.
MIS if designed in an improper manner does not

Challenges of MIS:-
• There are three major challenges of MIS. These are
briefly discussed below:
• High Cost
• Training of Employee
• Maintenance Cost
1. High Cost:-
Development of new computerized based information
system is a problem for the organization due to the cost
factor and it creates problems because with the change
of time there is need of up-to-date of the information
system.
2. Training of Employee:-

Information is Strategic Resources.
Because Information helps in taking Strategic, Tactical and operational Decisions. It is
one of critical and importance resource. It helps us understand Cost, Quality, price,
technology, productivity and product.

MIS as an instrument for the organizational change:-
MIS can deliver facts, data and trends to businesses with lightning speed. Having this
information allows companies to react quickly to market changes, regardless of the
type (positive or negative) of volatility.
MIS acts’ as an agent or a catalyst to bring about organizational change that is needed
to cope up with the changing business environment and the effect of external forces.
MIS has shifted from back office to front office. The role of the MIS in an organization
can be compared to the role of heart in the body.
Example : The information is the blood and MIS is the heart. In the body, the heart
plays the role of supplying pure blood to all the elements of the body including the
brain.
The heart works faster and supplies more blood when needed.
It regulates and controls the incoming impure blood, processes it and sends it to the
destination in the quantity needed. It fulfills the needs of blood supply to human body
in normal course and also in crisis.
The MIS plays exactly the same role in the organization.

The system ensures that an appropriate data is collected from the
various sources, processed, and sent further to all the needy
destinations.
The system is expected to fulfill the information needs of an individual, a
group of individuals, the management : the managers and the top
management.
The MIS satisfies the diverse needs through a variety of systems such as
Query Systems, Analysis Systems, Modeling Systems and Decision
Support Systems.
The MIS helps in Strategic Planning, Management Control, Operational
Control and Transaction Processing.
The MIS helps the clerical personnel in the transaction processing and
answers their queries on the data pertaining to the transaction, the
status of a particular record and references on a variety of documents.

The MIS helps the junior management personnel by providing the
operational data for planning, scheduling and Controlling and helps
them further in decision making at the operations level to correct an out
of control situation.
The MIS helps the middle management in short-term planning, target
setting and controlling the business functions.
It is supported by the use of the management tools of planning and
control.
The MIS helps the top management in goal setting, strategic planning
and evolving the business plans and their implementation.
The MIS plays the role of information generation, communication,
problem identification and helps in the process of decision making.
The MIS, therefore, plays a vital role in the management, administration
and operations of an organization.

External Changes:-
1. MIS has made world smaller.
2. Worldwide reorganization environment and attempt to control the calamity.
आपदा
3. Health conscious among the group leading less sufferings.
4. Change in the work lifestyle for better result.
5. Creating Knowledge is an asset.
Internal Change:-
1. MIS will change the Business Process.
2. MIS will change the old standards and set new standards.
3. MIS key for Continuous improvement Process.
4. MIS will reduce the hierarchy and hence less operation cost.
5. MIS focus on “Shared information.
6. MIS will accelerate restructure work flow for both line and staff functions.
7. MIS will bring change in Authority and power by merit and not by age or number of
years of experience.
8. MIS brings cultural change.
9. MIS measures the results and performance.
10. MIS brings Continuous addition to Organizational knowledge base.

Contemporary Approaches to information systems:-
Although information systems are a collection of electrical and
mechanical devices, they require the organization, and the people that
work within the organization for them to be successful.
Or
Information systems are sociotechnical systems. Although they are
composed of machines, devices, and "hard" physical technology, they
require substantial social, organizational, and intellectual investments to
make them work properly. Since problems with information systems—
and their solutions—are rarely all technical or behavioral, a
multidisciplinary approach is needed.

When an information system is being developed, much importance should be given to
the structure of the organization, culture of the organization, etc. But along with these,
especial attention should also be given to the technical side of MIS. The various
contemporary approaches to MIS development can be summarized as:
The Behavioral Approach
a) Based on the impact of the behavior and also on the response of the people in the
organization.
b) Motivational Feasibility forms a very important and demanding part of such an
approach towards MIS development.
• Deals with behavioral issues that arise in the development, and long term
maintenance of the information system.
• Different disciplines, such as psychologists, sociologists, Economists, study
information systems, and the impacts they have in the organizational environment.
Behavioral changes can occur within the organization during, and after information
system development. The key to this approach is to find the solution to the behavior,
which is not a technical issue.

The Technical Approach: The technical approach uses
mathematical models to test the capabilities of information
systems.
These disciplines include:
• Computer Science - concerned with methods of
computability, computation, and data storage and access.
• Management Science - emphasized the development of
models for decision making, and management practices.
Operations Research - focuses on mathematical techniques
for optimizing selected parameters of
organizations.(inventory control, transaction costs).

Information System:-
Before discussion of information system you should know
the-
What is Digital Convergence: It is an approach by which all types of
media and communication will be digitized allowing them to be used
through a single worldwide network.
What is Information Technology: Hardware and software that perform
data processing tasks, such as capturing, transmitting, storing,
retrieving, manipulating or displaying data.
What is IT Architecture: A conceptual design for the implementation of
information technology in an organization, including its hardware,
software, and network technology platforms, data resources,
application portfolio, and IS organization.

Introduction to Information System:
A collection of elements(devices) that capture data and
convert it in information and disseminate to the
decision-makers in an organization.
In other words, An information system is an organized
combination of people, hardware, software,
communications network, and data resources that
collects, transforms, and disseminates in an
organization.
An information system contents information about an
organization and its surrounding environment. Three
basic activities – input, processing, and output produce
the information organization needs.

Components of Information System :-
It is a combination of –
Input
Processor
Output
People
Hardware(physical devices) :
Software (information processing instructions)
Data
Network (communication channels)
Input:-In computing, an input device is a piece of equipment used to provide data and
control signals to an information processing system such as a computer or information
appliance. Examples of input devices include keyboards, mouse, scanners, cameras,
joysticks, and microphones.

Processor :-A processor, or "microprocessor," is a small chip that resides
in computers and other electronic devices. Its basic job is to receive
input and provide the appropriate output. While this may seem like a
simple task, modern processors can handle trillions of calculations
per second.
Output:-An output is data that a computer sends. Computers only work
with digital information. Any input that a computer receives must be
digitised. Often data has to be converted back to an analogue format
when it's output, for example the sound from a computer's speakers.
People :-The term “People" probably means the group of team
members (executives and other managers) who are primarily
responsible for making decisions in the organization.

Hardware(physical devices) :Computer hardware
refers to the physical devices such as servers,
desktop computers, laptops, portable devices,
networking devices, storage devices and printers,
etc. Let's now look at each of these elements
separately
Software (information processing instructions) :-The
software runs on top of the hardware. Software

• Network (Telecommunication channels):-Networking
devices are used to link computers and other
telecommunication devices together. The devices used
to create a network depend on the type of network
work that you want. For example, a wired Local Area
Networks (LANs) will require a network switch and RJ-
45 cables.
• networking devices are used to interconnect computing
resources so that they can communicate with each
other. Common networking devices include networking
hubs and switches, Wi-Fi routers, etc. Hubs and
switches are used to provide network connectivity via a
physical cable, and they are usually used to connect
desktop computers. Wi-Fi routers are used to provide
wireless networking capabilities. Wi-Fi routers are

Types of information systems:- A business has several
information systems :
• (A) Formal Information System
• (B) Informal Information System
• (C) Computer Based Information System
(A) Formal Information System : It is based on organizational
chart represented by the organization.
(B) Informal Information System : It is an employee based
system designed to meet personal and vocational needs
and to help in the solution of work-related problems. It also
funnels information upward through indirect channels. It
works within the framework of the business and its stated
policies.

(C) Computer Based Information System (CBIS) : This
category of information system depends mainly on
the computer for handling business application.
System analysis develops different types of
information system to meet variety of business
needs.
There is class of system known as collectively as
computer based information system.
Types of Information system:-
They are categorized in the following 6 classes:

• These classification of Information Systems can be done
on the basis of business functions also.
This classification is done to achieve the maximum
efficiency in business functions.
• There are lot many considerations we have to bother
while we do business.
• The role played by the Internet and Information
Technologies to support electronic commerce, enterprise
communications and collaboration, and Web-enabled
business processes both within a networked enterprise,
and with its customers and business partners will
definitely require specialized Information Systems for
Business functions.

Figure shows the specific types of information systems that
correspond to each organizational level.

• The organization has executive support systems
(ESS) at the strategic level;
• management information systems (MIS) and
decision-support systems (DSS) at the management
level;
• knowledge work systems (KWS) and office
automation systems at the knowledge level; and
• transaction processing systems (TPS) at the
operational level.
• Systems at each level in turn are specialized to serve
each of the major functional areas.

Function of an Information System

• Organizations can be divided into strategic,
management, knowledge and operational levels and
into five major functional areas- sales and
marketing, manufacturing, finance, accounting, and
human resource. Information system serves each of
these levels and functions.

• 1. TPS (Transaction Processing System): TPS are the basic
business systems that serve the operational level of the organization. A TPS is a
computerized system that performs and records the daily routine transactions
necessary to conduct business. Examples are sales order entry, hotel
reservation system, payroll, employee record
mgmt., etc.
• Managers need TPS to monitor the status of
internal operations and firm’s relations with
external environment. TPS are also measure
producers of information for the other type of
system.
• TPS processes transaction and produces reports. It
represents the automation of the fundamental,
routine processing used to support business

• Transaction Processing Systems (TPS) are cross-
functional information systems that process data
resulting from the occurrence of business transactions.
• Transactions are events that occur as part of doing
business, such as sales, purchases, deposits,
withdrawals, refunds, and payments. Transaction
processing activities are needed to capture and process
data, or the operations of a business would grind to a
halt.

Types of Transactions
• There are mainly two types of transaction and these
are:
• Internal transaction
• External transaction
• Internal Transactions: Those transactions, which
are internal to the company and are related with
the internal working of any organization.
• Example: Recruitment Policy, Promotion Policy,
Production Policy, etc.
• External Transactions: Those transactions, which
are external to the organization and are related

Characteristics of Transaction Processing Systems
• Various characteristics of TPS are:
• A TPS records internal and external transactions
for a company. It is a repository of data that is
frequently accessed by other systems.
• A TPS performs routine, repetitive tasks. It is
mostly used by lower-level managers to make
operational decisions.
• Transactions can be recorded in batch mode or

Features of TPS:-Various features of TPS are:
• A TPS supports different tasks by imposing a set of
rules and guidelines that specify how to record,
process, and store a given transaction. There are many
uses of transaction processing systems in our everyday
lives, such as when we make a purchase at retail store,
deposit or withdraw money at a bank, or register for
classes at a university. Almost all organizations,
regardless of the industry in which they operate, have a
manual or automated TPS.
• A TPS is the data lifeline for a company because it is
the source of data for other information systems, such
as MIS and DSS (Decision Support Systems). Hence, if
the TPS shuts down, the consequences can be serious

• 2. Management Information System (MIS):- MIS is
an information system, which processes data and
converts it into information. A management
information system uses TPS for its data inputs. The
information generated by the information system
may be used for control of operations, strategic and
long-range planning. Short-range planning,
management control, and other managerial
problem solving. It encompasses processing in
support of a wide range of organizational functions
& management processes. MIS is capable of
providing analysis, planning & decision making
support. The functional areas of a business may be
marketing, production, human resource, finance

• It is the Information system at the management level of an organization that serve
the functions of planning, controlling and decision making by providing routine
summary and exception reports.
• 3. DSS (Decision Support System) :-
• It is the information system at the organizations management level that combines
data and sophisticated analytical models or data analysis tools to support semi-
structured and unstructured decision making.
• DSS use internal information from TPS and MIS; they often bring in information
from external sources such as current stock prices or product prices of competitors.
DSS have more analytical power then other systems. It is an interactive system in
which user can change assumptions, ask new questions and include new data.

• A Decision Support System (DSS) is an interactive
computer-based system, which helps decision-makers
utilize data and models to solve unstructured problems.
• Decision support systems couple the intellectual
resources of individuals with the capabilities of the
computer to improve the quality of decisions. It is a
computer-based support system for management
decision-makers who deal with semi-structured and
unstructured problems.
• A decision support system is an information system
whose primary purpose is to provide knowledge
workers with information on which to base informed
decisions.
• The decision support systems take the data and present

• A decision support system is a computer-based
system consisting of three interacting components:
• 1. A language system: A mechanism to provide
communication between the user and other
components of the DSS,
• 2. A knowledge system: The repository of problem
domain knowledge embodied is DSS either as data
or procedures, and
• 3. A problem processing system: The link between
the other two components, containing one or more
of the general problem-handling capabilities
required for decision-making.
• So, a decision support system is:
• (a) An information system

• 4. KWS (Knowledge Work System) and Office
Systems: KWS and office systems serve the
information needs at the knowledge level of
organization. Knowledge work system aid
knowledge workers whereas office systems
primarily aid data workers. Knowledge workers are
people who hold formal university degrees and who
are often members of recognized profession such as
engineers, doctors, lawyers, scientists, etc. Their
jobs consist primarily of creating new information
and knowledge. Data workers typically have less
formal advanced educational degrees and tend to
process rather than create information. They consist
primarily of secretaries, book-keepers, filing clerks

• 5.ESS (Executive Support System) :
• It is the information system at the organizations
strategic level designed to address unstructured
decision making through advanced graphic and
communication. ESS is designed to incorporate data
about external events such as new tan laws and
competitors. They filter, compares and track critical
data, emphasizing the reduction of time and effort
required to obtain information useful to executive.
ESS employs the most advanced graphic software
and can deliver graphs and data from many sources
immediately to a senior executive’s office or to a
board room.

• The Nature of Executive’s Work
• We now know the basics of ESS. Now before continuing
further I want to discuss the nature of an executives
work. This means that which type of work executives
normally do or perform for which they require not a
DSS but ESS.
• This is highly required before building an ESS because
without the knowledge of executives work we cannot
decide about the system which is suitable for him.
• Basically manager’s role is divided into three
categories:
• Interpersonal Role: Roles like figurehead, leader, and
liaison
• Informational Roles: Roles of monitor, disseminator,

• We divide the work of executives in relation to the
decision roles into 2 phases:- Phase 1 is the
identification of problems or opportunities. Phase 2 is
the decision of what to do about it.
• The figure below provides the flowchart that describes
about the process of information flow in decisional
roles.
• Functional units like finance, production, accounting,
and personnel, etc. generate the internal information.
The external information comes from the sources such
as online databases, newspaper, industry newsletters,
government reports, personal contacts, etc.
• We know that the combined information is very
important because that is the source needed for

• Advantages of ESS:
• Advantages of ESS are:
• Simple for high-level executives to use Operations do
not require extensive computer experience.
• Provides timely delivery of company summary
information.
• Provides better understanding of information.
• Filters data for better time management.
• Provides system for improvement in information
tracking.
• Disadvantages of ESS
• Disadvantages of ESS are:
• Computer skills required to obtain results.

• According to functions or behaviour IS can be divided into
following types:-
• Sales and Marketing System
• Manufacturing and Production Systems
• Finance and Accounting Systems
• Human Resources Systems
• 1.Sales and Marketing System :
• The sale and marketing function is responsible for
selling the organization’s products or services.
Marketing is concerned with identifying the
customers for the firm’s products or services,
determine what they need or want, planning and
developing products and services to meet their

• Sales are concerned with contacting customers, selling the products
and services, taking orders and following up on sales. Sales and
marketing information systems support these activities (example)

• 2. Manufacturing and Production Systems :
• The manufacturing and production function is
responsible for actually producing the firm’s goods
and services. Manufacturing and production
activities deal with the planning, development, and
maintenance of production facilities; the
establishment of production goals; the acquisition,
storage, and availability of production materials;
and the scheduling of equipment, facilities,
materials, and labour required to fashion finished
products. Manufacturing and Production
information systems support these activities
(example)

• 3. Finance and Accounting Systems :-The finance function is responsible for
managing the firm’s financial assets, such as cash, stocks, bonds, and other
investments, in order to maximize the return on these financial assets. The finance
function is also in charge of managing the capitalization of the firm. In order to
determine whether the firm is getting the best return on its investments, the
finance function must obtain a considerable amount of information from sources
external to the firm.
• The accounting function is responsible for maintaining and managing the firm’s
financial records-receipts, depreciation, payroll to account for the flow of funds in a
firm. Finance and accounting share related problems such as how to keep track of a
firm’s financial assets and fund flows. Financial and accounting information system
keep of the firm’s financial assets and fund flows.

• 4. Human Resources Systems :-
• The human resource function is responsible for
attracting, developing, and maintaining the firm’s
workforce. Human resources information systems
support activities such as identifying potential
employees, maintaining complete records on
existing employees, and creating programs to
develop employees’ talents and skills.
• Strategic-level human resources system identify the
employee requirements (skills, educational level,
types of positions, number of positions, and cost)
for meeting the firm’s long term business plans.

Contemporary Approach to Information System :- MIS combines the work of
computer science, management science, and operations research
with a practical orientation toward developing system solutions to
real-world problems and managing IT resources. There are several
different approaches to Information Systems: technical, behavioural,
sociotechnical
• Technical Approach :-
• - It emphasis mathematically based models to study Information
System, as well as the physical technology and formal capabilities
of these systems.
• - The disciplines that contribute to technical approach are
computer
science, management science and operation research.
• - Computer science is concerned with establishing theories of
computability, methods of computation and methods of efficient
data storage and access.
• - Management science emphasis the development of models for
decision making and management practices.
• - Operations research focuses on mathematical techniques for

OR-Technical Approach:-
The technical approach to information systems emphasizes mathematically based models to
study information systems, a well as the physical technology and formal capabilities of these
systems.
The disciplines that contribute to the technical approach are:
Computer science,
Management science
Operations research
Computer science is related with instituting speculations of computability, methods of
computation, and techniques of efficient data storage and access.
Management science highlights the expansion of models for decision-making and management
practices.
Operations research concentrates on mathematical techniques for optimizing chosen parameters
of organizations like transportation, inventory control, and transaction costs.
From a technical approach, an information system is observed from a mathematical point of
view.
Mathematical models are used to study information systems and to elucidate how they
can be applied. By means of a technical perspective, management would like to establish
speculations of computability which can be utilized to recognize how to apply information
systems.

2. Behavioural Approach :-
• - It is concern with behavioural issues that arise in the
development and long term maintenance of
information system.
• - Issues such as strategic business integration design,
implementation, utilization and management cannot
be explored usefully with the models used in technical
approach.
• - Other behavioural contribute system with an eye
toward how group and organizations shape the
development of the system and also how systems affect
individuals groups and organizations.
• - Psychologist study information system with an interest
in how human decision makers perceive and use formal

3. Sociotechnical Approach:-
Information systems are sociotechnical systems.
Although they are composed of machines, devices,
and "hard" physical technology, they require
substantial social, organizational, and intellectual
investments to make them work properly. Since
problems with information systems—and their
solutions—are rarely all technical or behavioural, a
multidisciplinary approach is needed.
OR
In the sociotechnical view of systems, optimal
organizational performance is achieved by jointly
optimizing both the social and technical systems used

• Information technology (IT)
• Information technology (IT) is the use of computers
to store or retrieve data and information. IT is
typically used within the context of business
operations as opposed to personal or
entertainment technologies. IT is considered to be a
subset of information and
communications technology (ICT).
• An information technology system (IT system) is
generally an information system, a communications
system, or, more specifically speaking, a computer
system – including all hardware, software,
and peripheral equipment – operated by a limited

• Information technology is the study, design,
development, implementation, support or
management of computer-based information
systems—particularly software applications and
computer hardware. IT workers help ensure that
computers work well for people.

• Emerging Trends in Information Technology:-
• According to Information Technology Association of America,
information technology is defined as “the study, design,
development, application, implementation, support or
management of computer-based information systems.”
• Information technology has served as a big change agent in
different aspect of business and society. It has proven game
changer in resolving economic and social issues.
• There are several emerging digital trends impacting the
information technology sector as a whole. The IT industry has
been experiencing a consistent expansion and growth in its
capabilities. As the information technology sector continues to
expand, the available job opportunities, organizational
structure, and available technologies of the IT industry has
significantly changed.

Emerging IT technologies have already significantly impacted
major industries like entertainment, business, education, law
enforcement, and marketing.
Advancement and application of information technology are
ever changing.
Some of the trends in the information technology are as
follows:
Cloud computing, The Internet of Things (IoT), Big Dta, Cyber
security, Automation, Artificial Intelligence, & Machine
Learning, Virtual relating, Block chain & 3D printing etc.

• One of the most talked about concept in
information technology is the cloud computing.
Clouding computing is defined as utilization of
computing services,
• Automation, artificial intelligence, and machine
learning are one of the most advanced emerging
technologies impacting the information technology
sector as a whole. Automation is he simulation of
human intelligence tasks through machines and
computer systems.
• AI-empowered systems possess the machine ability
to think and learn. When properly deployed,
artificial intelligence can be utilized to optimize

• IT Capabilities and their organizational impact

The Impact of IT on Organizations
"Many of the impacts of Information Technology are straightforward.
But they are not necessarily obvious, nor are they trivial"
(Jack Nilles, Centre for Future Research)
Information technology (IT) is dramatically changing the business
landscape. Although organization cultures and business
strategies shape the use of IT in organizations, more often the influence
is stronger the other way round.
IT significantly affects strategic options and creates opportunities and
issues that managers need to address in many aspects of their business.

The some of the key impacts of technology and the implications for management on:
Business strategy - collapsing time and distance, enabling electronic commerce
Organization Culture - encouraging the free flow of information
Organization Structures - making networking and virtual corporations a reality
Management Processes - providing support for complex decision making processes
Work - dramatically changing the nature of professional, and now managerial work
The workplace - allowing work from home and on the move, as in telework.

IT enabled services Or-Information Technology
Enabled Services (ITeS):-
• ITES, Information Technology Enabled Service, is
defined as outsourcing of processes that can be
enabled with information technology and covers
diverse areas like finance, HR, administration, health
care, telecommunication, manufacturing etc. Armed
with technology and manpower, these services are
provided from e-enabled locations. This radically
reduces costs and improve service standards. In
short, this Internet service provider aims in
providing B2B e-commerce solutions.
• OR-
• IT enabled Services (ITeS), also called web enabled

• Some of the most important areas where IT enabled
services can be deployed are:
• Some of the services offered include :
• • Medical Transcription
• • Document Processing
• • Data Entry and Processing
• • Data Warehousing
• • IT Help Desk Services
• • Application Development
• • Enterprise Resource Planning
• • Telecommunication Services
Telemarketing
• Helpdesk
• Customer Support Centres

What is information?
Information is a fact, thought or data conveyed or described
through various mediums, like written, oral, visual and audio
communications. It is knowledge shared or obtained through
study, instruction, investigation or news and you share it
through the act of communicating, whether verbally,
nonverbally, visually, or through written word. Information
has different names, including intelligence, message, data,
signal or fact. Knowing what type of information you need or
how to share it can help you save time, stay organized and
establish best practices for divulging information.

Types of information:-
There are six different varieties of information.
1. Conceptual information
Conceptual information comes from ideas, theories, concepts,
hypothesizes and more. With conceptual information, an abstract idea is
not always rooted in scientific foundation and rather is the fundamental
creation of beliefs, thoughts, philosophies and preferences. You can
form or share conceptual information through comparison and
reflection, creating philosophies that cannot be proven or seen.
Here are some examples of conceptual information:
Charles Darwin's theory of evolution
Copernican concept of astronomy
Conceptual art, where the method of producing it is more important
than the finished product

2. Procedural information
Procedural information, or imperative knowledge, is the method of how
someone knows to do something and used by performing a task. You
can refer to it as muscle memory, since it is knowledge that is hard to
explain and stored deeply in your mind.
Here are two examples of procedural information:
Riding a bicycle: Riding a bike takes physical practice to comprehend,
regardless of the amount or type of instructions given.
Driving a car: You can pass your written driving test or get a perfect
score, though have little knowledge of the procedural information it
takes to operate and drive a vehicle.
Tying a shoelace: Because the concept is hard to explain, it may take a
child several attempts to first learn how to tie a shoelace, even with
visual examples and descriptive words.

4. Stimulatory information
Stimulatory information is information that creates a response or
stimulation amongst a person or group of people. Stimulation
encourages the cause of activity and you can gain stimulatory
information a variety of ways, like in person through observation,
through word-of-mouth communication or through outlets like the
news.
One example may be a person observing the body language and
nonverbal communication of someone walking nearby. If the stimulation
is positive, they may say hello and start a conversation perhaps or, if the
stimulation is not positive, they may respond by walking the other way,
running away or creating more distance between them.
Here are other examples of stimulatory information:
Victory day celebrations after a sports team wins a championship
The physiological fight-or-flight reaction response to perceived harm

6. Directive information:-
Directive and descriptive information is about providing directions to a
person or group of people to achieve a particular result and outcome.
You can use directive information with or without dictating the means to
achieve the desired result. Directive information often comes in verbal
or written form and can apply to leadership at work, in the military or
government and with everyday experiences, like legal, life and safety
matters.
Here are some examples of directive and descriptive information:
Medical do not resuscitate (DNR) orders
Organ donation paperwork
Living wills
Coaching
Mode of operations in any organization
Employment performance reviews
Military commands
Directive leadership

5. Empirical information
Empirical information means information gained through human senses,
observation, experimentation and the testing of a hypothesis by
establishing documentation of patterns or behavior. It almost always has
a scientific foundation and verifies the truth or falsehood of a claim
through qualitative and quantitative factors.
Here are several examples of empirical information, rooted in science:
Electricity
Atomic theory
Theory of gravity
Kinetic theory of matter
Genetics and DNA
Empirical information and evidence is opposite of anecdotal information
and evidence, which is a conclusion based on informal collection
methods, most often a personal experience and testimony.

3. Policy information:-
Policy information focuses on decision making and the design, formation
and selection of policies. It comprises laws, guidelines, regulations, rules
and oversight for an organization, group of people or place. You can gain
policy information through pictures, diagrams, descriptions and other
visual, audio or written messages.
Here are some examples of policy information:
Food pyramid diagram
Periodic table of elements
Organizational charts
Employee handbooks
The United States Constitution
Government restrictive, regulatory or facilitating policies

Other classifications of information
Another way to classify information is through these four attributes:
Factual information: Factual information deals only with truthful and
proven concepts, like the scientific fact the freezing point of water is 32
degrees Fahrenheit.
Analytical information: Analytical information is the interpretation of
factual information, determining what is implied or inferred, like you can
make ice cubes by storing them in freezers colder than 32 degrees.
Subjective information: Subjective information is that from one point of
view, like opinions.
Objective information: Objective information is that from several points
of view that offer all sides of an argument, like scientific or medical
journal articles and publications.

Attributes of Information:-
There are various types attributes of information -
1. Accuracy शुद्धता :
Accuracy means more than just one plus one equals two.
• It means that information is free from mistakes and errors, is clear and
accurately reflects the meaning of data on which it is based.
• It also means that information is free from bias.
2. Relevanceप्रासंगिकता, योग्यता, सिगत : Information is said to be
relevant if it answers, What, Why, Where, When, Who, and How For the
recipient.
However, what is relevant for one may not be relevant for another. For
example, the relevance of a specific customer order may vary among
the employees of a company.

3. Adequacy पयााप्तता : Means information must be sufficient
in quantity.
MIS report should not give inadequate information or more
than adequate information.
• Whereas inadequacy of information leads to a crisis, its
overload results in chaos.
4. Completeness संपूर्ाता:
• Information must be complete and should meet all the
needs of a manager.
• Incomplete information may result in wrong decisions.

5. Explicitness मुखरता :
• Means fully and clearly expressed
• A report is said to be of good quality if it does not
require any further analysis by the recipient.
• Reports should be such that manager does not
waste any time on further processing, and must be
able to extract the required information directly.

6. Exception-Based अपवाद-आधाररत :
• Today most of the organizations are being run on the
principle of management by exception.
• Top managers need only exception reports.
• Exception reporting principle states that only those items of
information be reported which will of particular interest to a
manager.
• Usually these items indicate that normal operations have
gone away from the expected direction.
• This approach helps save precious time of the top
management.

Quality, however, is not an absolute concept. It is defined within a
context. Roman R. Andrus has suggested a utility approach to determine
the quality of information.
In this regard he discusses four types of utilities of information, which
are as follows:
• Form Utility: form of information should closely match the
requirements of the user.
• Time Utility: information, if available, when needed, has a
greater value.
• Place Utility: value of information will increase if can be
accessed easily.
• Possession Utility: the person who has the information
influences its value by controlling its dissemination to others.

Decision Making Models:
The decision-making process though a logical one is a
difficult task. All decisions can be categorized into
the following three basic models..
(1) The Rational/Classical Model of decision-making
(2) The Administrative or Bounded Rationality Model
of Decision-
making
(3) The Retrospective Decision-Making (पूवाव्यापी गिर्ाय
लेिा) Model.
1. The Rational/Classical Model of decision-making:-
The rational model is the first attempt to know the decision-making-
process. It is considered by some as the classical approach to

What is Rational Decision-Making Process?
Rational decision making is considered logical and consistent with the intent to maximize the
value, quality, or likelihood of achieving the intended outcome. Rational decision-making can be
explained as several procedural steps:
Identify Problem - Problems or potential problems may present themselves or become evident
through appropriate monitoring. In carrying out this process, managers should identify goals at
the outset of the decision-making process.
Decision Criteria - Managers should identify criteria for potential solutions - as this will help you
avoid bias in choosing an alternative.
Allocate Weights - Some criteria will be more important to some stakeholders than others. The
decision-making process necessary includes considering the interest of stakeholders. In some
instances, it involves seeking stakeholder input.
Develop Alternatives - Its important to develop as wide an array of potential solutions as
possible.
Analyze Alternatives - You will need to determine which criteria are most important and to what
extent it is necessary to sacrifice one for another.
Select an Alternative - After diligent evaluation of the alternatives, the manager must select an
option to deal with the problem or situation.
Implement the Decision - Selecting an approach is only part of the managers responsibility. Then
comes the process of overseeing the implantation of the solution.
Evaluate the Effect - Finally, the manager must evaluate the progress and effectiveness of the
approach.

• Features of Classical Model:
• 1. Problems are clear.
• 2. Objectives are clear.
• 3. People agree on criteria and weights.
• 4. All alternatives are known.
• 5. All consequences can be anticipated.
• 6. Decision makes are rational.
i. They are not biased in recognizing problems.
ii. They are capable of processing ail relevant
information
iii. They anticipate present and future consequences of
decisions.
iv. They search for all alternatives that maximizes the
desired results.
The classical model views the decision-making process:

However, these conditions rarely, if ever, actually exist. This model may be represented
in the following diagram:

• 2.Bounded Rationality Model or Administrative Model of Decision-making:
Herbert A. Simon was of the first few scholars to recognize that
decisions are not always made with rationality and logic. Simon, a
winner of the Nobel Prize in Economics, instead of prescribing how
decisions should be made, describes how decisions often actually
are made.
Decision-making involve the achievement of a goal. Rationality
demands that the decision-maker should properly understand the
alternative courses of action for reaching the goals.
• He should also have full information and the ability to analyse
properly various alternative courses of action in the light of goals
sought. There should also be a desire to select the best solutions
by selecting the alternative which will satisfy the goal
achievement.
• Herbert A. Simon defines rationality in terms of objective and
intelligent action. It is characterized by behavioral nexus between
ends and means. If appropriate means are chosen to reach desired
ends the decision is rational.
• Bounded Rationality model is based on the concept developed by
Herbert Simon. This model does not assume individual rationality
in the decision process.

• Instead, it assumes that people, while they may seek the
best solution, normally settle for much less, because the
decisions they confront typically demand greater
information, time, processing capabilities than they
possess. They settle for “bounded rationality or limited
rationality in decisions.
• The Administrative model holds that managers:
(i) Have incomplete and imperfect information,
(ii) Are constrained by bounded rationality, and
(iii) Tend to satisfies when making decisions.
As a matter of fact, the classical and administrative models
paint quite different pictures of decision making. The
classical model is prescriptive: it explains how managers
can at least attempt to be more rational and logical in their
approach to decisions.

The administrative model can be used by managers to
develop a better understanding of their inherent
biases and limitation.

• 3. Retrospective decision model (implicit favourite model):
• This decision-making model focuses on how decision-
makers attempt to rationalize their choices after they have
been made and try to justify their decisions. This model has
been developed by Per Soelberg. He made an observation
regarding the job choice processes of graduating business
students and noted that, in many cases, the students
identified implicit favorites (i.e. the alternative they
wanted) very early in the recruiting and choice process.
However, students continued their search for additional
alternatives and quickly selected the best alternative.
• The total process is designed to justify, through the guise of
scientific rigor, a decision that has already been made
intuitively. By this means, the individual becomes
convinced that he or she is acting rationally and taking a
logical, reasoned decision.

• Case Study on MIS:
• Information System in Restaurant
• Case Summary: A waiter takes an order at a table, and then enters it online via one of the six
terminals located in the restaurant dining room. The order is routed to a printer in the
appropriate preparation area: the cold item printer if it is a salad, the hot-item printer if it is
a hot sandwich or the bar printer if it is a drink.
• A customer’s meal check-listing (bill) the items ordered and the respective prices are
automatically generated.
• This ordering system eliminates the old three-carbon-copy guest check system as well as any
problems caused by a waiter’s handwriting. When the kitchen runs out of a food item, the
cooks send out an ‘out of stock’ message, which will be displayed on the dining room
terminals when waiters try to order that item.
• This gives the waiters faster feedback, enabling them to give better service to the customers.
Other system features aid management in the planning and control of their restaurant
business.
• The system provides up-to-the-minute information on the food items ordered and breaks
out percentages showing sales of each item versus total sales. This helps management plan
menus according to customers’ tastes. The system also compares the weekly sales totals
versus food costs, allowing planning for tighter cost controls. In addition, whenever an order
is voided, the reasons for the void are keyed in.
• This may help later in management decisions, especially if the voids consistently related to
food or service. Acceptance of the system by the users is exceptionally high since the
waiters and waitresses were involved in the selection and design process. All potential users
were asked to give their impressions and ideas about the various systems available before
one were chosen.

• Questions:
• A. Give the name of application tool. (01 Marks)
• B. In the light of the system, describe the decisions to
be made in the area of strategic planning, managerial
control and operational control? What information
would you require to make such decisions? (02 Marks)
• C. What would make the system a more complete
MIS rather than just doing transaction processing? (01
Marks)
• D. Explain the probable effects that making the
system more formal would have on the customers and
the management. (01Marks)
• E. How to make the Payment & delivery process
complete by system. Explain. (01Marks)

KMBN-208-MIS Notes-Uint-1st & 2nd.pptx

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KMBN-208-MIS Notes-Uint-1st & 2nd.pptx