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They are mostly used in every profession. Information systems are not
meant for a select class or profession of people in the society.
Information systems are indispensable, as it helps its users to remain updated
and competitive in the environment he/she is working.
Data is a collection of raw facts and figures. Data is a element of transaction.
Any transaction facts collected which reflect about the lifestyle of credit card
customers, or point of sales or demographics and geographic are examples of
Information is a collection of data (facts and figures) arranged in more
meaningful manner, which helps in decision-making. It is not enough to just
process the data but it has to be useful for decision making purpose.
Knowledge is defined as the experience and expertise acquired by an individual.
Knowledge can also be defined as level of understanding in interpreting the
information available for effective decision-making purpose.
System can be defined as group of entities that work together to achieve a
common predefined goal.
A system can be open or closed; stable or dynamic
A closed system is one that does not interact with other systems or with the
An Open system is one that interacts with other systems and also with the
Stable system is a static system, where as the dynamic system is one which
changes with the change in needs. While creating systems, one prefers to
create dynamic open systems.
Information system is a set of procedures that collect, process, store and
disseminate information to support decision-making.
Computer based information systems (CBIS) are the systems that are dependent
on Information Technology.
Information systems also includes inputs, process, output and feedback.
The above diagram shows the Components of System
The following diagram shows the components of Information system.
Information systems have a pre-defined boundary and operate in an
environment which includes other systems and also players like customers,
suppliers and government departments, etc.,
Information technology versus information system
is a means to Information System as they are similar to heart and soul
In today’s technology one cannot think of building information system
solution without strong information technology backbone.
Information technology provides effective and efficient means of storing,
processing and disseminating information.
Information system provides best practices to manage business
Major characteristics of Information Systems
i. Accurate and error free information
ii. Meet the objective of the system
iii. Information must be gathered from reliable and authenticated
i. Information systems are easily accessible
ii. While providing accessibility, access security must be
i. Relevant information as per the context
ii. Information System must add valut to the outputs
iii. Timeliness—must provide timely information when it is
iv. Completeness—must generate complete reports
v. Information needs to be made available as per defined
i. Interpretability—Easy to interpret the reports.
ii. Ease of usage and understanding
iii. Concise representation
iv. Consistent representation
5) Information system needs to be economical to develop and maintain.
6) Information system needs to be flexible and adaptable.
USES OF INFORMATION
Organizations need information for many purposes. The needs of each
organization are different at different levels. The main uses of information
Identification is used to identify the information associated with the existing and
required resources. i.e. right information leads to right decision, so
identification of right information is key usage.
Collection: information identified needs to be collected and stored for further
processes. Information needs to be collected to manage the business properly.
Controlling: It is important to ascertain the quality and relevance of information,
which in turn help in managing the business properly.
Measuring: For the success of any business it is important to keep measuring its
performance. We use information to measure performance of any business
Decision Making: One of the major usages of information is decision-making. It
can be used to take decisions at all levels in an organization. Information can be
used to take decisions at the lowest possible level in an organization to the
FUNCTIONS OF A MANAGER:
Planning is the basics of management. It is the foundation upon which all the
areas of management should be built. Planning is an ongoing process of
developing the organizational goals and objectives and determining how they
will be accomplished.
Organising: It also means to establish the internal organizational structure of
the organization. The focus is division, coordination, and control of tasks and
the flow of information within the organization.
Directing: It helps the management to control and supervise the actions of the
staff. It also means to influence staff behavior through motivation,
communication, group dynamics, leadership and discipline. The purpose of
directing is to channel the behavior of all personnel to accomplish the
organization’s goal and objectives while simultaneously helping them
accomplish their own career objectives.
Controlling: It is a multi stage process which includes establishing performance
standards based on the firms objectives; evaluating and reporting actual job
performance; comparing the two, and taking corrective or preventive action as
There are three basic management skills
Technical skill is the ability to use tools, techniques, and specialized knowledge
to carry out a method, process, or procedure.
Human Skills are used to build positive interpersonal relationships, solve human
relations problems, build acceptance of co-workers, and subordinates.
Conceptual Skills involve the ability to see the organization as a whole and to
solve problems in a way that benefits the entire organization. Analytical,
creative, intuitive talents make up the manager’s conceptual skills.
The relative importance of the above management skills changes as a person
progresses from lower to middle to top management.
Although all three management skills are important at all three levels of
management, conceptual skills become relatively more important at the top
level of management.
In organizations, there are typically three levels of management.
1) Top level
2) Middle level
3) Lower level
These three main levels of managers form a hierarchy, in which they are ranked
in order of importance.
In most of the organizations, the number of managers at each level is such that
the hierarchy resembles a pyramid, with the largest number at the lowest level
managers, lesser middle managers, and the lease managers at the top level.
There are differences across the management levels as to what the types of
management tasks each level does and the roles that they perform in their jobs.
There are a number of changes that are occurring in many organizations that
are altering the management hierarchies in them, such as increasing use of
teams, the prevalence of outsourcing, and the flattening of organizational
The information needs of each of these three levels must be met if an effective
solution is to be reached in the long term.
Failure to address any one of the levels will lead to failure of the system, which
may not fit well within the strategic goals of the organization.
Top level Managers or Top managers, are also called senior management or
executives or strategic level, which is composed of the Chief Executive Officer
(CEO), The Chief Operating Officer (COO), and other department heads.
They take decisions affecting the entire organization
They define policies for the organization.
Top managers do not direct the day to day activities of the organizations,
rather set goals for the organizations and direct the company to achieve them.
Top managers are ultimately responsible for the performance of the
organization, and often, take strategic decisions.
At the top level, one needs to create the corporate information that is
useful for the entire organization. This ‘global’ information is generally fairly
well addressed by the corporate network, which may include policies and
procedures, HR information, online forms, phone directory, etc.,
Middle level Managers, or middle managers or tactical level, are those in the
levels below top managers.
They are responsible for carrying out the goals set by the top
They can motivate and assist lower level managers to achieve business
They may also communicate upward, by offering suggestions and
feedback to the top managers.
The middle level managers are more involved in the day to day working of
a company, they may provide valuable information to top managers to help
improve the organization’s bottom line.
It is most important as it covers all the information shared within teams,
divisions, business units, etc.,
Lower Level Managers are also called first line managers or supervisors or
They are responsible for the daily management of line workers
They do not set goals for the organizations, they have a very strong
influence on the company.
These are the managers that most employees interact with on a daily
basis, and if the managers perform poorly, employees may also perform poorly,
may lack motivation.
MANAGEMENT LEVELS AND MANAGERIAL FUNCTIONS:Managers at different levels of the organizations expand variable time as
required, on the four managerial functions of
planning is choosing appropriate organizational and the correct
directions to achieve those goals.
Organizing involves determining the tasks and the relationships that allow
employees to work together to achieve the planned goals.
With directing, managers motivate and coordinate employees to work
together to achieve organizational goals.
When controlling, managers monitor and measure the degree to which the
organization has reached its goals.
The degree to which top, middle, and lower level managers perform each of
these functions is shown in the following diagram.
The top managers do considerably more planning, organizing, and controlling
than do managers at any other level.
The task of directing is much less at the top level. Most of the directing is done
by first line managers with respect to daily activities.
The amount of planning, organizing, and controlling decreases down the
hierarchy of management; directing increases as one moves down the
hierarchy of management.
MANAGEMENT ROLES:In addition to broad categories of management functions, managers at
different levels of the hierarchy perform different managerial roles.
These roles were categorized and grouped into three major types;
Decisional Roles require managers to plan strategy and utilize resources.
There are four specific roles that are decisional.
The following figure tries to show the decision roles performed by the different
levels of managers in an organization.
The complexity of decisions taken by different level manager varies—decisions
taken by lower level manager are routine decisions and hence can be easily
automated (or programmed), whereas decisions taken by top level managers
are more complex and most of the time they are unstructured, so are difficult to
Interpersonal Roles:They require managers to direct and supervise employees and the
The figurehead is typically a top level manager.
These managers may communicate future organizational goals or ethical
guidelines to employees at company meetings;
A leader acts as an example for other employees to follow, gives
commands and directions to subordinates, make decisions, and mobilizes
Informational Roles:They are those in which managers obtain and transmit information. These
roles have changed dramatically as technology has improved. The monitor
evaluates the performance of others and takes corrective action to improve the
performance, if necessary. Monitoring occurs at all levels of management,
although managers at higher levels of organization are more likely to monitor
external threats to the environment than middle or line managers.
Organisational functions:The following are the six key functions
Design and production
Sales and Marketing
Research and Development.
Each of the function need to combine together to achieve organisational
objectives. To achieve the objective, communication across the various
functions is the key activity. A starting point for this type of communication is
the creation of a clear set of company objectives which each function needs to
be aware of.
Value Chain Model:
Information technology is changing the way companies operate. It is
affecting the entire process by which companies create their products and
services that they offer to their customers. Porter developed useful tool for
analyzing the organisation’s competive advantage. The basic concept is that to
understand the competitive advantage of any organization, one need to look at
the organization has a whole. Rather it is necessary to identify the key activities
being performed by an organization to do business transactions. Each
organization performs a collection of activities that add value to the final
product or service being delivered to the customer. These activities are
numerous and are unique to every industry. It is only these activities where cost
advantage or differentiation can be gained.
As per porter’s Value Chain Model, the organization’s activities can be
divided into nine generic activities. These nine activities are further classified
as primary and support activities. Primary activities are the activities that help
the organization in creating the product, marketing it, delivering it and servicing
of the product. There are five primary activities, which directly add value to
organization’s factors of production they are linked, generally in a chain, and
are together referred as Value Chain. The five primary activities are:
1) Inbound Logistics:
This deals with receipt, storage and management of raw materials.
Deals with manufacturing or service steps.
3) Outbound Logistics:
This deals with collection, storage and distribution of finished
4) Marketing and Sales:
This includes order booking, price management, and customer