8d893MODULE 1 (IIIRD CLASS).ppt

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Amity Business School

COURE: MBA(HR)

MANAGEMENT INFORMATION SYSTEM

MODULE ICLASS-IV

FACULTY:

ANITA VENAIK




Firm (or organization) - Consists of a largenumber of interdependent business processes

that work together to generate products of

services in a bus iness envi ronment

ORGANIZATIONAL STRUCTURE: Refer to organizational

subunits and the way they relate to the overall organization.

An organization structure depends on it goals and approachto management and can affect how it views and use

information system.




Business Process

A business process is a sequence of activities followed

by individuals in a business to achieve some business

goal.

Often these are manual activities executed by

employees who play certain roles in the business in

addition to others who are external to the business:

cus tomers, bus iness partners, etc.




Business process consists of

Manner in which work is organized, coordinated, andfocused to produce a valuable product or service

Concrete work flows of material, information, and

knowledge—sets of activities

Unique ways to coordinate work, information, and

knowledge

Ways in which management chooses to coordinate work




Business Processes and Information Systems

Information systems help organizations

achieve great efficiencies by automating parts

of processes

IS also contributes to completely rethinking

processes.

Business processes typically span several

different functional areas.




An Example of Business Process




Examples of Business Processes

Manufacturing and production:

Assembling product, checking quality, producingbills of materials

Sales and marketing:

Identifying customers, creating customerawareness, selling




Finance & accounting:

Paying creditors, creating financial statements,managing cash accounts

Human resources:

Hiring employees, evaluating performance,enrolling employees in benefits plans




Cross-Functional Business Processes:

Transcend boundary between sales, marketing,

manufacturing, and research and development

Group employees from different functional

specialties to a complete piece of work

Example: Order Fulfillment Process




The Order Fulfillment Process




Enterprise applications:

Designed to support organization-wide process

coordination and integration




This is what it does: attempts to integrate all data

and processes of an organization into a unified

system. A typical ERP system will use multiple

components of computer software and hardware to

achieve the integration. A key ingredient of mostERP systems is the use of a unified database to

store data for the various system modules.

BUINESS PROCESS USING ERP SYSTEMS




ERPs are cross-functional and enterprise wide. Allfunctional departments that are involved in

operations or production are integrated in one

system. In addition to manufacturing, warehousing,

logistics, and Information Technology, this wouldinclude accounting, human resources, marketing,

and strategic management.




SAP, Oracle Applications, PeopleSoft,

JD Edwards, Great plains etc. areworld’s leading ERP packages




Traditional “Silo” View of Information

Systems

Within the business:

There are functions, each having its uses ofinformation systems

Outside the organization’s boundaries:

There are customers and vendors

Functions tend to work in isolation




Traditional View of Systems




Enterprise Systems




Benefits of Enterprise Systems

Help to unify the firm’s structure and

organization: One organization

Management: Firm wide knowledge-basedmanagement processes

Technology: Unified platform

Business: More efficient operations & customer-

driven business processes




Challenges of Enterprise Systems

business processes

• Difficult to build: Require fundamental changes in

the way the business operates

• Technology: Require complex pieces of software

and large investments of time, money, and

expertise

• Centralized organizational coordination and

decision making: Not the best way for the firms to

operate



The

Manager as aDecision Maker



Managerial Decision Making

• Decision making: the process by whichmanagers respond to opportunities andthreats by analyzing options, and making

decisions about goals and courses ofaction.

• Decisions in response to opportunities: managers respond to ways to improve

organizational performance.• Decisions in response to threats: occurs

when managers are impacted by adverse

events to the organization.



Types of Decision Making

• Programmed Decisions: routine, almost automaticprocess.

– Managers have made decision many times before.

– There are rules or guidelines to follow.

– Example: Deciding to reorder office supplies.

• Non-programmed Decisions: unusual situations thathave not been often addressed.

– No rules to follow since the decision is new.

– These decisions are made based on information,

and a manger’s intuition, and judgment. – Example: Should the firm invest in a new

technology?



The Classical Model

• Classical model of decision making: aprescriptive model that tells how thedecision should be made.

– Assumes managers have access to all theinformation needed to reach a decision.

– Managers can then make the optimum decision

by easily ranking their own preferences amongalternatives.

• Unfortunately, mangers often do not haveall (or even most) required information.



The Classical Model

List alternatives

& consequences

Rank each alternative

from low to high

Select best

alternative

Assumes all information

is available to manager

Assumes manager can

process information

Assumes manager knows

the best future course of

the organization



The Administrative Model

• Administrative Model of decisionmaking: Challenged the classicalassumptions that managers have andprocess all the information.

– As a result, decision making is risky.Bounded rationality: There is a large

number of alternatives and information isvast so that managers cannot consider it all.

– Decisions are limited by people’s cognitiveabilities.

Incomplete information: most managers donot see all alternatives and decide based on

incomplete information.



Why Information is Incomplete

Uncertainty

& risk

Ambiguous

Information

Time constraints &

information costs

Incomplete

Information



Incomplete Information Factors

• Incomplete information exists due to manyissues:

– Risk: managers know a given outcome can fail

or succeed and probabilities can be assigned. – Uncertainty: probabilities cannot be given for

outcomes and the future is unknown.

• Many decision outcomes are not known such as a

new product introduction. – Ambiguous information: information whose

meaning is not clear.

• Information can be interpreted in different ways.



Decision Making Steps

Recognize need fora decision

Frame the problem

Generate & assessalternatives

Choose among alternatives

Implement chosenalternative

Learn from feedback



Decision Making Steps

1. Recognize need for a decision: Managersmust first realize that a decision must bemade.

• Sparked by an event such as environment changes.

2. Generate alternatives: managers must

develop feasible alternative courses ofaction.• If good alternatives are missed, the resulting decision

is poor.

• It is hard to develop creative alternatives, somanagers need to look for new ideas.

3. Evaluate alternatives: what are theadvantages and disadvantages of eachalternative?

• Managers should specify criteria, then evaluate.



Evaluating Alternatives

• Is it legal? Managers must first be sure thatan alternative is legal both in this countryand abroad for exports.

• Is it ethical? The alternative must be ethicaland not hurt stakeholders unnecessarily.

• Is it economically feasible? Can ourorganization’s performance goals sustainthis alternative?

• Is it practical? Does the management havethe capabilities and resources to do it?

8d893MODULE 1 (IIIRD CLASS).ppt

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