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NATIONAL OPEN UNIVERSITY OF NIGERIA
SCHOOL OF EDUCATION
COURSE CODE: LIB 810
COURSE TITLE: MANAGEMENT INFORMATION SYSTEM
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LIBS 810 MANAGEMENT INFORMATION SYSTEM
COURSE TEAM----DEVELOPER-PROF ZAKARI MOHAMMED A B U Zaria
WRITER- DR NURUDEEN M MAIFATA A B U Zaria
EDITOR PROF ZAKARI MOHAMMED A B U Zaria
MODULE 1
UNIT 1: OVERVIEW OF MANAGEMENT INFORMATION SYSTEMS
UNIT 2: MEANING OF MANAGEMENT INFORMATION SYSTEM (MIS)
UNIT 3: INFORMATION TECHNOLOGY
UNIT 4: SYSTEMS CONCEPT
UNIT 5: INFORMATION SYSTEMS, ORGANIZATIONS AND STRATEGY
MODULE 2
UNIT 1: COMPONENTS OF MANAGEMENT INFORMATION SYSTEM
UNIT 2: TYPES OF MANAGEMENT INFORMATION SYSTEM
UNIT 3: INFORMATION TECHNOLOGY AND INFORMATION PROCESSING
UNIT 4: MANAGING DATA RESOURCES
MODULE 3
UNIT 1: KNOWLEDGE MANAGEMENT
UNIT 2: ARTIFICIAL INTELLIGENCE
UNIT 3: INFORMATION SYSTEMS IN GLOBAL BUSINESS TODAY
UNIT 4: ELECTRONIC COMMERCE
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MODULE 4
UNIT 1: THE STRATEGIC ROLE OF INFORMATION SYSTEM AND INF.S.ORG
UNIT 2: DEVELOPING BUSINESS SYSTEMS
UNIT 3: IMPLEMENTING BUSINESS SYSTEMS
MODULE 5
UNIT 1: ETHICAL ISSUES AND FUTURE OF INFORMATION SYSTEMS
UNIT 2: TELECOMMUNICATIONS AND THE NEW INFORMATION ARCHITECTURE
UNIT 3: INFORMATION SYSTEMS SECURITY
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MODULE 1
UNIT 1: OVERVIEW OF MANAGEMENT INFORMATION SYSTEMS
CONTENTS
1.0 Introduction 2.0 Objectives
3.0 Main Content
3.1 Management
3.1.1 Process
3.2 Managerial Functions
3.2.1 Planning
3.2.2 Organising
3.2.4 Controlling
3.3 Levels of Management
3.3.1 Top or Strategic Level of Management
3.3.2 Middle or Tactical Level of Management
3.3.3 Lower or Operational Level of Management
3.4 System
3.4.1 Open Systems
3.4.2 Close Systems
3.5 Data
3.5.1 Data Processing
3.5.2 Characteristic of Data
3.6 Information
3.6.1 Characteristics of Good Information
3.6.3 Functions of Information
4.0 Conclusion
5.0 Summary
6.0 Tutor Marked Assignment 7.0 References/Further Readings
1.0 INTRODUCTION
Management Information Systems are foundation for conducting business today. In many
organizations, survival and even existence is difficult without extensive use of information
technology. We must bear in mind that in the application of management information system in
organization, we are dealing with the concept of management and technology, and how we can
harmoniously use the duo to achieve effective medium for analyzing organizational information.
2.0 OBJECTIVES
At the end of this unit, you should be able to:
Define management, information and systems
List managerial levels and functions
Distinguish between data and information
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Describe how data are processed to give information.
Identify the characteristics of good information and functions of information.
3.0 MAIN CONTENT
3.1 Management
The complexity of management is such that the word carries a number of acceptable meanings.
The term management may therefore, be applied in different ways, its meaning discernible from
content. McFarland (1974) defines management as that process by which managers create, direct, maintain and operate purposive organizations through systematic coordinated cooperative
human effort. In their own way Brech et al (1972) say management is concerned with seeing that jobs get done and done efficiently. While according Fayols in (Cole: 1986) he defined management as: to forecast, plan, organize, command, coordinate and control.
In Fayols view to forecast plan mean to examine the future and drawing a plan of action. To organize means building a structure of both material and human in an organization. To command
means maintaining activities among employees. To control means to ensure everything is in
conformity with the plan and standard.
From the above, it may be deduced that managerial action can direct and control to a great extent
the nature, degree and pace of change within the organization. It also shows that the process of
management is rooted in the action of people at work.
3.1.1 Process
A process is a systematic way of doing things, process management is the ensemble of activities
of planning and monitoring the performance of process. Hence, we define management as a
process because all managers regardless of their particular attitude or skills engage in certain
related activities in order to achieve their objectives. In order to achieve the objectives of the
organizations, there is need for assessing an organizations goals and creating a realistic, detailed
plan of action for meeting those goals and it is necessary to bring together all available resources
called Six Ms of management i.e. men, machine, material, methods, money and market. These basic steps in the process which involve creating a road map that outlines that each task the
organization must accomplish to meet its overall objectives.
3.2 Managerial Functions
The major functions of management include the following:
3.2.1 Planning
In designing an environment for effective performance of individuals working together in
groups, the most essential task is to see that purposes and objectives, and method of attaining
objectives are clearly understood. If group effort is to be effective, people must know what they
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are expected to accomplish. This is the planning function that is the basic of all the managerial
functions.
George (1964)defines planning as the selecting and relating of fats and the making and using of
assumptions regarding the future in the visualization and formulation of proposed activities
believed necessary to achieve desired results, this is to say, in planning, a manager uses facts,
reasonable premises and constraints and from all of these he visualizes and formulates what the
necessary activities are, how they will be conducted and what will be their contribution to
achieving desired results.
Effective planning is based on facts not emotions or wishes. Planning is intellectual in nature, it
is a mental work. Planning can also be simply put as the process of setting objectives and putting
up the necessary steps to achieve the objects.
3.2.2 Organizing
Hodgets m. Richard (1992), in Bagobirin and Kassah (2009)define organization as the process of assigning duties and coordinating efforts among all organization personnel to ensure
maximum efficiency in the attainment of objectives. This implies that the jobs that need to be
done are grouped together into departments. This is done so that each employee would know
precisely what he should do and what is expected from him. Organizing can also be defined as
that part of managing that involves establishing an internal structure of roles for people in an
enterprise to fill.
In looking at organization as a process, several fundamental inputs must be considered which
Koontz and Weilrich(1984) in Bagobirin and Kassah (2009) outlined as follows:
(i) The structure must reflect objectives and plans because enterprise activities are derived from these.
(ii) The structure must reflect the authority available to enterprise managers; this depends upon such social institutions as private properly, representative government and sanctions
individuals in operating a business, a university or any group venture.
(iii) Organization structure must reflect its environment. The structure must be designed to work to permit contributions by members of a group and to help people gain objectives
efficiently in a changing future. In this sense a workable organization structure can never
be either mechanical or static.
(iv) The organization must be staffed with people obviously, the activity groupings and authority provisions of an organization structure must take into account peoples limitations and customs, that is, the kind of people who are to be employed.
3.2.3 Coordination
Coordination is a process combining activities in a consistent and harmonious way to ensure
efficiency and effectiveness in an organization. George R. Terry (1964) defines coordinating as
the orderly synchronization of efforts to provide the proper amount, timing and directing of execution resulting in harmonious and unified action to a stated objective. It can be viewed as the effort to find the winning combination from the basic resources on hand.
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Coordination deals with unifying the effort of people and is concerned with:
(i) The amount of these efforts, both as to quantity and quality. (ii) The timing of these efforts. (iii) The directing of or determining the causes of these efforts.
Coordination can also be seen as the process of integrating the objectives and activities of the
separate unit (departments or functional areas) of an organization in order to achieve
organizational goal efficiently.
3.2.4 Controlling
The real test of any manager is the result that he achieves. Nothing is accomplishing unless
efforts bring about results. To apply the real test to any manager necessitates a criterion by which
results can be evaluated and, if required corrective measures adopted. If the other fundamental
functions of management were performed perfectly, there would be little need for controlling.
However, very rarely, if ever, is perfect planning achieved, organizing above any possible
reproach and coordinating a hundred percent (100%) effective. Some mistakes, loss of efforts,
friction and misdirected effort, may results and make for deviations from the intended goals.
George (1964) defined controlling as determining what is being accomplished, that is, the performance, evaluating the performance, and if necessary applying corrective measures so that
performance takes place according to plans.
Cole (1996) notes that if planning represented the route map for the journey, then organizing
represented the means by which one could arrive at the chosen destination. We can now add that
controlling ensured that the travelers know how well they are progressing along the route, how
correct their map is, and what deviations, if any, they need to make to stay on course.
SELF ASSESSMENT EXERCISE
Define the term management and vividly explain the functions of management.
3.3 LEVELS OF MANAGEMENT
Managers are classified by their levels within the organization. There are three basic
management levels: top managers, middle managers and first-line managers as shown in figure
1.1
Top Management
Middle Managers
First-Line Managers
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Fig. 1.1 Levels of Management
3.3.1 First-Line Managers
In general first-line manager are directly responsible for the production of good or services. They
may be called sales managers, section or production supervisors; depending on the organization.
This level of management is the link between the production or operations of each department
and the rest of the organization. However, first-line manager in most companies spend little time
with higher management or with people from other organizations. Most of their time is spend
side-by-side with the people they supervise.
3.2.2 Middle Manager
Middle managers received broad, general strategies and policies from top managers and translate
them into specific goals and plan for first-line-managers to implement. Middle managers
typically have titles such as department head, plant manager and director of finance.
3.3.3 Top Mangers
The overall direction and operations of an organization is the responsibility of top managers.
Typical titles of top managers are chief executive officer, president, chairman, division president
and executive vice president. Top managers develop goals, policies, and strategies for the entire
organization.
3.4 SYSTEM
Systems are composed of interrelated parts or sub-systems and the system can only be explained
as a whole. This is known as holism or synergy. Holism states that any whole is more than the
sum of its individual parts.
There are many definitions of the term system. A comprehensive one is that used by the Open University:
A. System is an assembly of part where: 1. The parts or components are connected together in an organized way. 2. The parts or components are affected by being in the system (and are changed by leaving
it).
3. The assembly does something. 4. The assembly has been identified by a person as being of special interest (Carter et al
1984).
This definition contains the essential elements of parts, relationships and objectives. It is very
broad and can apply to any of the systems around us, such as: The university, railway, hospital,
manufacturing company etc. A system could be open or closed.
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3.4.1 Open Systems
An open system is a system which interacts with it environment. It receives inputs and influences
from the environment and in turn, passes back outputs and influenced to the environment. All
social organizations are open systems. They that organization adapts to changes in the
environment is the key element in an organizations success and indeed its very survival.
Organizations as open systems attempt to monitor and anticipate environment disturbances.
3.4.2 Close Systems
A close system is the one that is isolated from its environment. Close systems are self-contained
so that the external environment does not influence the behavior of the system, nor does the
system influence its environment. The idea can only strictly be applied to mechanical and
physical systems as all social systems have some interaction with their environment.
Closed systems are required for stability and consistency, whereas open systems are required for
uncertain conditions. Closed systems are designed for efficiency, open systems for survival.
Fig. 1.2 Model of an Open System
3.5 DATA
Data is unprocessed facts and figures. Plain collected data, as raw facts cannot help in decision
making. However, data is the raw material that is organized, structured and interpreted to create
useful information system.
Data is defined as groups of non-random symbols in the form of text, images, voice representing qualities, action and objects.
3.5.2 DATA CHARACTERISTICS
a. They are facts obtained by reading, observation, counting, measuring and weighing etc. which are then recorded
b. Data are derived from external and internal sources (activities with firm). c. Data may be produced as an automatic by-product of some routine but essential operation
such as the production of an invoice or alternative a special counting or measuring
procedure must be introduced and the result recorded.
d. The source of data need be given considerable attention because if the sources of the data flawed, any resulting information will be worthless.
Conversion or Process
Outputs Environment
Inputs Environment
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3.5.1 Data Processing
Data or processing systems perform the essential role of collecting and processing the daily
transactions of the organizations. Data processing is necessary to ensure that the day-to-day
activities of the organization are processed, recorded and acted upon. Files are maintained which
provide both the current data for transaction, for example the amount invoiced and cash received
during the month for statement preparation, and which also serve as a basis for operational and
tactical control and for answering enquiries.
Fig. 1.3 Data Processing Systems
3.6 INFORMATION
Information is interpreted data; created from organized structured and processed data in a
particular context, information can be recorded as signs, or transmitted as signals. Information is any kind of event that affects the state of a dynamic system that can interpret the information.
Conceptually, information is the message (utterance or expression) being conveyed. Therefore, in
a general sense, information is knowledge communicated or received concerning a particular fact or circumstance.
SELF ASSESSMENT EXERCISE 2
1. Define the following term: (i) Data (ii) Information
2. List 4 characteristics of Data
3.6.1 Characteristics of Good Information
Good information is that which is used and which create value. Experience and research shows
that good information has numerous qualities which are:
1. Relevance: Information must be relevant to the problem being considered. Too often reports, messages, tabulations etc. contain irrelevant parts which most prevent the user of
the information to get the actual meaning of what the sender wants.
2. Accuracy: Information should be sufficiently accurate for it to be relied upon by the manager and for the purpose for which it is intended.
3. Completeness: Ideally, all the information required for a decision should be available. However, in practice, this is not often obtainable. What is required is that the information
is complete in respect of the key elements of the problem. This suggests that there should
be interaction between information provides and users to ensure that the key factors are
identified.
4. Confidence in the source: For information to have value it must be used. For it to be used managers must have confidence in the source. Confidence is enhanced:
Data Processes Output
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a. The source has been reliable in the past b. There is good communication between the information producer and the manager. 5. Communication to the right person: All persons have a defined sphere of activity and
responsibility and should receive information to help them carry out their designated
tasks. In practice this is not always as easy as it sounds. It is quite common for
information to be supplied to the wrong level in the organization. a superior may not pass
it on the person who needs it whilst subordinates may hold onto information in an attempt
to make themselves seem indispensable.
3.6.2 Functions of Information a. Reduction of Uncertainty: Uncertainty exist where there is less than perfect knowledge.
Rarely, if ever is there perfect knowledge but relevant information help to reduce the
unknown.
b. And an aid to monitoring and control: By providing information about performance and the extent of deviations from planned level of performance, management are better
able to control operation.
c. As a means of communication: Managers need to know about developments, plans, forecasts, impending changes and so on.
d. As a memory supplement: By having historical information about performance, transactions, results of past actions and decisions available for reference, personal
memories are supplemented.
e. As an aid to simplification: By reducing uncertainty and enhancing understanding, problems and situations are simplified and become more manageable.
4.0 CONCLUSION
MIS exists in organization in order to help them 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.
5.0 SUMMARY
Management Information System is seen as a way of evaluating, analyzing and processing an
organization data to produce meaningful and useful information from which the management can
take decision to ensure future growth and development of the organization.
6.0 TUTOR-MARKED ASSIGNMENT
1. What are the functions of information in an organization?
2. Distinguish between data and information?
2. Define management and explain its role in a modern organizations?
4. Discuss managerial levels and explain their functions?
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7.0 REFERENCES/FURTHER READINGS
Bagobiri, Y.E. and Kassah V. (2009) Principles of Management (2nd
Ed.) Kaduna; Wonderful
Press.
Cole, G.A. (1986) Management Theory and Practice, (2nd
Ed.) London: Menthen.
George R. Terry (1964) Principles of Management, Richard D. Irwin, Inc. Homewood Illinois,
USA. Ghost Prentice Hall, Plc.
Koslowski. P. (ed.), (2010) Elements of a Philosophy of Management and Organization, Studies
in Economic Ethics and Philosophy, Springer-Verlag Berlin Heidelberg.
Simon, H. A. (1960)The New Science of Management Decision. NewYork: Harper & Row.
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MODULE 1
UNIT 2: MEANING OF MANAGEMENT INFORMATION SYSTEM (MIS)
CONTENTS
1.0 Introduction 2.0 Objectives 3.0 Main Content
3.1 Definition of Management Information System (MIS)
3.2 Objectives of MIS
3.3 Characteristics of MIS
3.4 MIS Need for Information Systems
3.5 Planning/Design of MIS
3.6 Problems with MIS
3.7 Goals of MIS
3.8 Role of the MIS
3.9 MIS and Computer
3.10 The Challenges of Information
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 Reference/Further readings
1.0 INTRODUCTION
This unit examines how management information systems can support management decision
making and it also dwells on the details of what management information systems in
organization encompass.
2.0 OBJECTIVES
At the end of this unit, you should be able to:
1. Define Management Information Systems (MIS) 2. Mention Characteristics of MIS 3. Highlight Objectives of MIS 4. State the Problems with MIS
3.0 MAIN CONTENT
3.1 Management Information System
Lucey (2005) defined management information systems as: - a system using formalized
procedures to provide management at all levels in all functions with appropriate information
based on data from both internal and external sources, to enable them to make timely and
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effective decisions for planning, directing and controlling the activities for which they are
responsible.
Management information systems can be described as tools that help managers organize and
make decisions from their data. More simply, effective MIS aids communication. Unsurprisingly,
its still true that people generally accomplish more together than they do apart, and the old concept collaboration and communication is still at the core of business. Management
information systems strive to efficiently collect, format and communicate information to a wide
variety of people.
More so, Management Information System (MIS) is a computer-based system for collecting,
storing, processing and providing access to information used in the management of an
organization (Chartered Management Institute 2003).
3.2 OBJECTIVES OF MIS
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. Capturing Data: Capturing contextual data, or operation information that will contribute in decision making from various internal and external sources of organization.
2. Processing Data: The captured data is processed into information needed for planning, organizing, coordinating, directing and controlling functional of strategies, tactical and
operational level.
3. Information System: Information or processed data need to be stored for future use. 4. Information Retrieved: The system should be able to retrieve this information from the
storage as and when required by various users.
5. Information Propagation: Information or the finished product of the MIS should be circulated to its users periodically using the organizational network.
3.3 CHARACTERISTICS OF MIS
Following are the characteristics of an MIS
1. It should be based on a long-term planning. 2. It should provide a holistic view of the dynamics and structure of the organization. 3. It should work as a complete and comprehensive system covering an interconnecting sub-
system within the organization.
4. It should be planned in a top-down way, as the decision makers or the manager should actively take part and provide clear direction at the development stage of the MIS.
5. It should be based on need of strategic, operational and tactical information of manager of an organization.
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6. It should be able to make forecasts and estimates and generate advanced information, this providing a competitive advantage. Decision makes can take actions on the basis of such
predictions.
7. It should create linkage between all subsystems within organization, so that the decision makers can take the right decision based on integral view.
3.4 MIS NEED FOR INFORMATION SYSTEM
Managers make decisions. Decision making, generally takes a fourfold path:
1. Understanding the need for decision or the opportunity. 2. Preparing alternative course of actions 3. Evaluating all alternative course of actions. 4. Deciding the right path for implementation.
3.5 PLANNING FOR MIS
MIS design and development process has to address the following issues successfully:
1. There should be effective communication between the developers and users of the system.
2. There should be synchronization in understanding of management, processes and IT among users as well as the developers.
3. Understanding of the information needs of manager from different functional areas and combining the needs into a single integrated system.
4. Creating a unified MIS covering the entire organization will lead to a more economical, faster and more integrated system, however, it will increase in design complexity
manifold.
5. The MIS has to be interacting with the complex environment comprising all other sub-systems in the overall information system of the organization. So it is extremely
necessary to understand and define the requirements of MIS in the context of the
organization.
6. It should keep pace with changes in environment, changing demands of the customers and growing competition.
7. It should take care of not only the users i.e. the managers but also other stakeholders like employees, customers and suppliers.
SELF ASSESSMENT EXERCISE
Explain factors to be considered in planning MIS?
3.6 PROBLEM WITH MIS
There are abundant problems associated with MIS because the computer equipment used has had
relatively little success in providing management with the information it needs. The typical
reasons discovered for this include the following:
1. Lack of management involvement with the design of MIS
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2. Narrow and or inappropriate emphasis of the computer system 3. Undue concentration on low level data process applications particular in the accounting
area.
4. Lack of knowledge of computers. 5. Poor appreciation by information specialist of managements true information
requirement and organization problems
6. Lack of top management support.
3.7 GOALS OF MIS
An institution Management Information System (MIS) should be designed to achieve the
following goals:
1. Enhance communication among the institution. 2. Deliver complex material throughout the institution. 3. Provide an objective system for recording and aggregating information 4. Reduce expenses related to labour intensive manual activities. 5. Support organizations strategic goals and direction. Because MIS supplies decision
makers with facts, it supports and enhances the overall attainment of organizational goals.
3.8 ROLE OF THE MANAGEMENT INFORMATION SYSTEMS (MIS)
The role of the MIS is an organization can be compared to the role of heart in the body. 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 fulfils 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 functionaries; the managers and the top management.
The MIS satisfies the diverse needs through a variety of systems such as query systems, analysis
systems, modeling system 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 control, and help them further in decision making at the operational
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
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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 code 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 operation of an organization.
3.9 MANAGEMENT INFORMATION SYSTEM AND COMPUTER
Translating the real concept of the MIS into reality is technically, an infeasible proposition unless
computers are used. The MIS relies heavily on the hardware and software capacity of the
computer and its ability to process, retrieve and communicate with no serious limitations.
The variety of the hardware having distinct capabilities makes it possible to design the MIS for a
specific situation. For example, if the organization needs a large database and very little
processing, a computer system is available for such a requirement. Support the organization has
multiple business location at long distances and if the need is to bring the data at one place,
process and then send the information to various location, it is possible to have a computer
system with a distributed data processing capability. If the distance is too long, then the computer
system can be hooked through a satellite communication system. The ability of the hardware to
store data and process it at a very fast rate helps to deal with the data volumes, its storage and
access effectively. The ability of the computer to sort and merge helps to organize the data in a
particular manner and process it for complex lengthy computations.
Since the computer is capable of digital, graphic, word image, voice and text processing, it is
exploited to generate information and present it in the form which is easy to understand for the
information user.
The ability of a computer system to provide security of data brings a confidence in the
management in the storage of data on a magnetic data in an impersonal mode. The computer
system provides the facilities such as READ ONLY where you cannot delete to UPDATE. It
provides an access to the selected information through a password and layered access facilities.
The confidence nature of the data and information can be maintained in a computer system. With
this ability, the MIS becomes a safe application in the organization.
The software, an integral part of a computer system, further enhances the hardware capability.
The software is available to handle the procedural and non-procedural data processing. For
example, if you want to use a formula to calculate a certain result, an efficient language is
available to handle the situation. If you are not to use a formula but have to resort every time to a
new procedure, the non-procedural languages are available.
The software is available to transfer data from one computer system to another. Hence, you can
compute the results at one place and transfer them to a computer located at another place for
some other use. The computer system being able to configure to the specific needs helps design a
flexible MIS.
The advancement in computers and the communication technology has the distance, speed,
volume and complex computing an easy task. Hence, designing the MIS for a specific need and
simultaneously designing a flexible and open system becomes possible, thereby saving a lot of
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drudgery of development and maintenance of the system. The concept of user-friendly systems
and the end user computing is possible, making information processing a personalized function.
However, the application of the management principles and practices in todays complex business world is possibly only when the MIS is based on computer system support.
SELF ASSESSMENT EXERCISE
Give three reasons for using computer for MIS in the organization?
3.10 THE CHALLENGE OF INFORMATION SYSTEMS
Increasingly, information systems are bringing about changes in business goods, relationship
with customers and suppliers and internal operations. Building, operating and maintaining
information systems are challenging activities for a number of reasons. We believe there are five
key challenges that managers should heed;
1. In the Strategic Business Challenge: How can businesses use information technology to
design organizations that are competitive and effective?
Technical change moves much faster than humans and organizations are changing. The power of
computer hardware and software has grown much more rapidly than the ability of organization to
apply and use this technology. To stay competitive, many organizations actually need to be
redesigned. They will need to use information technology to simplify communication and
coordination, eliminate unnecessary work, and eliminate the inefficiency of out model
organization structures. If organization merely automates what they are doing, they are largely
missing the potential of information technology. Organization need to rethink and redesign the
way they design, produce, delivery and maintain goals and services.
2. The Globalization Challenge: how can firms understand the business and system
requirements of a global economic environment? The rapid growth in international trade and the
emergence of a global economy call for information systems that can support both producing and
selling goods in many different countries. In the past, each regional office of a multinational
corporation focused on solving its own unique information problems. Given language, cultural
and political differences among countries, this focus frequently resulted in chaos and the failure
of central management controls. To develop integrated multinational information systems,
business must develop global hard ware and communications standards and create cross-cultural
accounting and reporting structures (Roche, 1992; Buss, 1982).
3. The information Architecture: How can organizations develop an information architecture
that supports their business goals? While information technology can suggest some new ways of
doing business, firms still need to have a clear idea of their business goals and how these can
best be supported by information systems. Many organizations cannot meet their goals because
they are crippled by fragmented and incompatible computer hardware, software,
telecommunication networks and information system. Integrating these islands of information into a coherent architecture is now a priority.
4. The Information Systems Investment Challenge: How can organization determine the
business value of information system? A major problem raised by the development of powerful
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inexpensive computers involves not technology but rather management and organization. Its one thing to use information technology to design, delivery and maintain new products. Its another thing to make money doing it. How can organizations obtain a sizeable payoff from their
investment in information systems?
Engineering massive organizational and system changes in the hope of positioning a firm
strategically is complicated and expensive. Is this an investment that pays off? How can you tell?
Senior management can be expected to ask these question: Are we receiving the kind of return on
investment form our systems that should be? Do our competitors get more? While understanding
the costs and benefit of building a single system is difficult enough, it is daunting to consider
whether the entire system effort is wroth it. Imagine then, how a senior executive must think when presented with a major transformation in information architecture a bold venture in
organizational change costing tens of millions of dollars and taking many years.
5. The responsibility and Control Challenge: How can organizations design systems that
people can control and understand? How can organizations ensure that their information systems
are used in an ethically and socially responsible manner?
Information systems are so essential business, government and daily life that organization must
take special steps to ensure that they are accurate, reliable and secure. Automated or semi-
automated systems that malfunction or are poorly operated can have extremely harmful
consequences. A firm invites disaster if it uses systems that dont work as intended, that dont deliver information in a form that people can interpret correctly and use, or that have control
rooms where control dont work or where instruments give false signals. The potential for massive fraud, error, abuse and destruction is enormous.
Information systems are so essential to business, government and daily life that organizations
must take special steps to ensure that they are accurate, reliable and secure. Automated or semi-
automated systems that malfunction or are poorly operated can have extremely harmful
consequences. A firm invites disaster if it uses systems that dont work as intended, that dont deliver information in a form that people can interpret correctly and use, or that have control
rooms where controls dont work or where instruments give false signals. The potential for massive fraud, error, abuse and destruction is enormous. Information systems must be designed
so that they function as intended and so that human can control the process.
4.0 CONCLUSION
In general MIS is an information system that evaluates analyzes and processes an organizations
data to produce meaningful and useful information on which the management will take right
decision to ensure future growth of the organization.
5.0 SUMMARY
In this unit you have learnt about the importance of MIS in an organization as well as the various
challenges of MIS.
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6.0 TUTOR-MARKED ASSIGNMENT
1. (a) What is Management Information System?
(b) Discuss the characteristics of MIS
2. What are key challenges to the success of MIS in organization?
3. Outline the objectives of MIS in an organization?
7.0 REFERENCES/FURTHER READINGS
Bagobiri, Y.E and Kassah, V. (2009), Principle of Management (2nd
Ed) Wonderful Press,
Kaduna.
Harsh, Stephen B., L. J. Connor, and G. D. Schwab. (1981). Managing the Farm Business.
Prentice-Hall, Inc., Englewood Cliffs, New Jersey.
House, William C. (1983). Decision Support Systems A Data-Based, Model-Oriented User-Developed Discipline. Petrocelli Books, Inc. New York, NY.
Landon, K.C. and Laudon J.P (1996) Management Information Systems: Organization and
Technology, (4th
Ed.) Prentice Hall Inc, Upper Saddled River, New Jersey.
Lucey, T. (2005) Management Information Systems, 9th Ed. Thomson Learning, High Holborn,
50-51 Bedford Row, London
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MODULE 1
UNIT 3: INFORMATION TECHNOLOGY
CONTENTS
1.0 Introduction
2.0 Objectives
3.0 Main Content
3.1 Definition of Information Technology
3.2 Application of IT in Information Systems
3.2.1 Data Processing/Transaction Processing System
3.2.2 Office Support System
3.2.3 End-User Computing
3.3 The Impact of IT on Organizations
3.4 Technology and Job Changes
4.0 Conclusion
5.0 Summary
6.0 Tutor-Marked Assignment
7.0 References/Further Readings
1.0 INTRODUCTION
This unit helps you to see the connection between Information Technology (IT) and MIS in
business performance. The use of Information and Communication Technologies (ICT) by
individuals and organizations dominates the business world.
2.0 OBJECTIVES
At the end of this unit, you should be able to:
1. Define Information Technology (IT) 2. Explain application of IT in information management.
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3.0 MAIN CONTENT
3.1 INFORMATION TECHNOLOGY
Information Technology is the technology which supports the activities involving the creation,
storage, manipulation and communication of information with their related methods,
management and applications. Lucey (2005) supplied a useful definition given by the
Department of Trade and Industry: The acquisition, processing, storage and dissemination of
vocal, pictorial, textual and numeric information by a micro-electronics based combination of
computing and telecommunications. Information technology is a broad term which covers all
aspects of the use of computer technology.
In short, IT is the medium by which information is passed across to all levels of management
either internally or from external sources. Some of the IT facilities include computers of various
types, scanners, printers, servers and processors, photocopiers etc. and other devices for
information acquisition and dissemination such as teleconferencing/video conferencing, network,
Teletext, facsimile, internet, E-mail and voice mail etc.
3.2 APPLICATION OF IT IN INFORMATION SYSTEM
There are major areas of IT application in information system. The three areas are:
1. Data processing (or transaction processing) 2. Office support system. 3. End user systems
3.2.1 Data Processing or Transacting Processing Systems
Data or transaction processing systems perform the essential role of collecting and processing the
daily transactions of the organization, hence the alternative term, transaction processing.
Typically these include all forms of ledger keeping, accounts, receivable and payable, invoicing,
credit control, rate demands and stock movement. Transaction processing is essential to keep the
operations of the organization running smoothly and provides the base for all other internal
information support.
Transaction processing is necessary to ensure that day-to-today activities of the organization are
processed, recorded and acted upon. Files are maintained which provide both the current data for
transactions, for example the amount invoiced and cash received during the month for statement
preparation, and which also serve as a basis for operational and tactical control and for answering
enquiries.
Transaction, processing can be sub-divided into:
a. Current activity processing. b. Report processing c. Inquiry processing.
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3.2.2 Office Support Systems
The type of office supports systems used influences information available for management.
Office support systems or office automation technologies are now used for virtually all everyday
information processing tasks in offices and business organizations. They enable people to
perform their own work, such as letters and report writing, store and process data through
databases and communicate through email. Office automation technologies include a wide array
of software application tools such as spreadsheets (e.g. excel), word processors (e.g. word) and
desktop publishing tools (e.g. publisher), presentation packages (e.g. PowerPoint) and database
systems (e.g. Microsoft Access).
These technologies also enable members of a group to interact with each other and organize their
work. They can communicate with each other through email, fax and teleconferencing and they
plan and coordinate their activities through schedules. As these technologies improve
communication and the sharing of information, they have enabled teleworking (the process
where staff work at locations other than the company office, usually at home) and video
conferencing to become a reality.
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Fig. 1.4 ICT based Office Support Systems
3.2.3 End User Systems
These systems seek to provide management with direct assistance with their work. Examples
include: decision support systems, expert systems, executive information systems.
The introduction of personal computers, terminals, networks, user-friendly software, databases,
etc. has altered the position dramatically and has led to the growth of end-user computing and the
consequent availability of personalized information for management rather than oust the pre-
specified output of computer processing, important though these outputs often are;
End-user computing may be broadly defined as; The direct, hands on approach to computers by users-non indirect use through systems professionals. Users may include managers, office staff,
sales people, production workers and others. With the spread of end-user computing, employees and managers are able to access data and analyse it directly themselves in an
individual manner.
Microform systems, disk storage, view
data/teletext
Electronic mail, teleconferencing, communicaiton,
networks, telephones, data/facsimile transmission
Micros, VDUS, disk storage
Word processing,
copying, desktop publishign
Office Support Systems
Telecommunications
Computing
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They are able to explore and investigate, carry out various types of analysis, obtain assistance in
decision making, monitor operations and results in more specific ways and generally enhance the
ways in which they carry out their work.
3.3 THE IMPACT OF IT ON ORGANIZAITONS
Technology, which includes ICT, influences organizations in a variety of ways. In summary,
technology alters the skills requirements for individuals and it changes jobs and the way they are
done. It can also alter relationships between individuals and departments within the organization
and may affect some relationships outside the organization, e.g. with customers, suppliers and
clients. It is likely to be major factor in determining the type of information available and how
the information is used and consequently how the organization operations.
3.4 TECHNOLOGY AND JOB CHANGES
Technology simplifies and reduces tasks needing manual skills and strength especially in
factories and all forms of production. Properly applied, it can increase productivity. The use of
reprogrammable robots for such tasks as welding, spraying, materials handling and others helps
to eliminate dirty or hazardous and repetitive work. Robots and Computer Aided Manufacturing
(CAM) as well as reducing costs, improve quality and consistency of finished products. The use
of technology requires enhanced problem-solving skills and the ability to interpret data and is
thus likely to lead to a widening gulf between skilled and unskilled workers. Routine tasks
requiring a low level of skill are disappearing fast. As an example, the copy typists has all but
disappeared from many offices. The availability of word processors, flexible printers and
photocopies have effectively eliminated copy typing.
4.0 CONCLUSION
Office support systems cover different types of aids including, word processing, electronic mail,
data transmission, microform system etc. Electronic transmission is supplementing traditionally
based communication.
5.0 SUMMARY
ICT systems affect how the organizations operates, how it is managed and its structure and
culture.
6.0 TUTOR-MARKED ASSIGNMENT
(1) Outline some of the implications that ICT may have for organization?
(2) What work do data processing/transaction processing system do?
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7.0 REFERENCES/FURTHER READINGS
Cole, G.A. (1986) Management Theory and Practices, 2nd
Edition.
Harsh, Stephen B., L. J. Connor, and G. D. Schwab. (1981). Managing the Farm Business.
Prentice-Hall, Inc., Englewood Cliffs, New Jersey.
House, William C. (1983). Decision Support Systems A Data-Based, Model-Oriented User-Developed Discipline. Petrocelli Books, Inc. New York, NY.
Laudon, K. & Laudon, J. (2006) Management Information Systems: Managing the Digital Firm,
9th ed. Prentice Hall.
Lucey, T. (2005) Management Information Systems, 9th Edition Thomson Learning, High
Holborn, 55-5, Bedford Row London.
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MODULE 1
UNIT 4: SYSTEMS CONCEPTS
CONTENTS
1.0 Introduction 2.0 Objectives 3.0 Main Content 3.1 Definition of System 3.2 Features of the System 3.3 Closed Systems and Open Systems 3.4 Systems and Adaptability. 3.5 Shared and Overlapping System. 3.6 Socio-technical systems 4.0 Conclusion 5.0 Summary 6.0 Tutor-Marked Assignment 7.0 Reference/Further Readings.
1.0 INTRODUCTION
The system approach is a method or framework which helps us to analyze and explore the
exploration and interactions which exist in the systems around us.
2.0 OBJECTIVES
At the end of this unit you should be able to:
(1) define a system (2) know the main features of the systems approach (3) distinguish between open and closed systems.
3.0 MAIN CONTENT 3.1 DEFINITION OF SYSTEM
Systems are composed of interrelated parts or sub-systems and the system can only be
explained as a whole. This is known as holism or synergy. Holism states that any whole
is more than the sum of its individual parts.
A comprehensive definition of system is that used by the Open University:
A system is an assembly of part where:
1. The part or components are connected together in an organized way.
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2. The parts or components are affected by being in the system (and are changed by leaving it).
3. The assembly does something. 4. The assembly has been identified by a person as being of special interest (Carter et al
1984).
This definition contains the essential elements of parts, relationships and objectives. It is very
broad and can apply to any of the systems around us such as: The university, railway, hospital,
manufacturing company, an information system, a local authority. In effect, any arrangement
which involves the handling, processing or manipulating of resource of whatever type can be
represented as a system.
3.2 FEATURES OF THE SYSTEMS APPROACH
The systems approach has many facets of which the following are the most important.
(a) All systems are composed of interrelated parts or sub-systems and the system can only be explained as a whole. This is known as holism or synergy. Holism states that any whole is
more than the sum of its individual parts. When the appropriate parts are combined,
properties appear from the whole which the parts alone do not possess. These are known
as emergent properties. Examples are:-
Taste: A property of water not the constituent hydrogen and oxygen atoms.
Growth: A property arising from the combination of seeds and soy.
Obsolescence: likely to arise from consideration of financial, technical and personal factors. A machine may still work but may be too expensive or dangerous to run or may
no longer be required for current production.
(b) Systems are hierarchical in other parts of subsystems are made up of other smaller parts. For example, the accounting systems of an organization may be a subsystem of the
information system which itself a subsystem of the planning system, which is a sub-
system of the organization as a whole.
(c) The parts of a system cannot be altered without affect the parts. Many organizational problems stem from ignoring this principle. For example, a departmental procedure or
form might be changed without considering the ripple effects on the other departments
affected with dire consequences.
(d) The sub-systems should work toward the goal of the higher systems and not pursue their own objectives independently. Where sub-systems to pursue their own objectives to the
detriment of higher objectives, then a condition of sub-optionality is said to exist and, in
general, MIS designers seek to avoid sub-optimality wherever possible. Ideally, there
should be goal congruence between all the subsystems that make up the system as a
whole. Goal congruence simply means that the objectives of the subsystems should align
with the objectives of the system, or organization as a whole.
Three key features of a systems, namely the transformation process, system boundaries and the
environment of the systems.
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3.2.1 The Transformation Process
All systems are composed of the same basic elements; inputs, processes and outputs.
Systems theory gives a much more embracing meanings to the terms inputs and outputs than
would normally be considered. For example, the inputs to a production system include; raw
materials, labour (skills, quantity) equipment and plant facilities, job specifications, standards of
all types, maintenance facilities, power supplies, etc. A similar, almost endless list could be given
for the output side of the system.
Fortunately, it is not usually necessary (or possible) to consider all possible inputs and outputs.
The usual procedure when analyzing systems is:
(a) To choose those outputs with which we are concerned. These are usually those outputs most relevant to the system objectives; and
(b) To choose those inputs for examination and control which are considered to have significant effects on the output considered important.
In all systems other than physical or mechanical ones, the transformation process is controlled by
information. In the simplest case, information on the output of the system is used as a basis for
control of the input of the system. This is known as feedback or information feedback.
3.2.2 System Boundaries
The features which define the extent of a system are its boundaries. In mechanical, physical and
biological systems, the boundaries are readily identifiable as they tend to arise naturally. With
any form of social organizations, boundaries are not obvious and often change to meet differing
demands. In social organizations, there are many transfer across boundaries of ideas, people,
materials and information within organizations boundaries are determined by management and
vary from organizations to organizations. For example, in one organization the sales department
may be responsible for invoicing whereas, in another, invoicing may be within the boundary of
the accounting department.
3.2.3 The Environment of Systems
In the widest sense, a systems environment is all those elements not in the system. The environment can be defined as those external elements whose changes in attitudes, behavior or
properties affect the state of the system and those external elements which are changed by the
systems behavior. In effect, this means that the relevant environment of any system comprises those elements with which it has some connotation or relationship.
3.3 Closed Systems and Open Systems
Open Systems
An open system is a system which interacts with it environment. It receives inputs and influences
from the environment and in turn, passes back outputs and influenced to the environment. All
social organizations are open systems. The organization that adapts to changes in the
environment is the key element in an organizations success and indeed its very survival.
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Organizations as open systems attempt to monitor and anticipate environment disturbances.
Closed Systems
A close system is the one that is isolated from its environment. Closed systems are self-contained
so that the external environment does not influence the behavior of the system, nor does the
system influence its environment. The idea can only strictly be applied to mechanical and
physical systems as all social systems have some interaction with their environment.
Closed systems are required for stability and consistency, whereas open systems are required for
uncertain conditions. Closed systems are designed for efficiency, open systems for survival.
3.4 Systems and Adaptability
To be successful and to remain in existence organizations must be flexible and adapt to change.
This means change not only in the organizations relationship with the external environment but also in its internal methods and structures. Successful organizations are characterized by their
internal openness and their readiness to accept that yesterdays methods and products are very unlikely to be suitable for tomorrow. Recognizing the need for changing, initiating change and
managing change successfully are the hallmark of good quality management. Organizations do
not automatically adjust to change.
Adaptation only occurs as a result of management decision and action. Successful change is
change that is planned and considered, this means that the effects on the organization as a whole
must be considered when making a change to part of the organization.
3.5 Shared and Overlapping Subsystem
Sub-system can belong to more than one system and there is a need to recognize the overlap and
to design operations and processes accordingly. The recognition of overlap is particularly
important when changes are made in one of the systems which share the same sub-system.
An example of a shared subsystem is shown in figure 1.5
Fig. 1.5. Sub-system overlap
Overlap is often an efficient and economical management. For example, a central purchasing
subsystem used by various companies in a group may be able to obtain greater discounts and
may aid the standardization of parts and materials. A centralized computer facility may be shared
by all departments within an organization with a reduction in overall cost. However, such
overlaps are likely to increase communication difficulties and may have longer response times.
National Warehouse system
The company warehouse subsystem
The company system The local distribution system
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Because of the need to coordinate activities and to obtain numerous approach for change. Such
structures may be less flexible in rapidly changing condition.
Kate and Kahn; identified five sub-systems within organizations. These can be summarized as
follows:
1. Production or technical sub-systems: These deals with the basic tasks of the organization, i.e. the production of goods or the production of services.
2. Supportive sub-systems. These maintain the relationship between the production subsystem and the external environment, i.e. the procurement of inputs and the disposal
of outputs.
3. Maintenance sub-systems. These provide the rules, rewards and roles of those who work in the organization.
4. Adaptive subsystems; whereas the above the subsystems are concerned with the present organization, the adaptive sub-system is concerned with the future, i.e. new markets, new
products, new methods etc.
5. Managerial subsystems. These consist of the controlling and coordinating activities which govern all the subsystems which make up the total system. These include;
coordination, decision making, planning and control.
3.6 Socio-Technical Systems
The socio-technical view of organization was developed by Trust and the Tavistock Institute and
arose from consideration that any production system requires both a technical organization, i.e.
the equipment, processes, methods etc. and a work organization relating to those who carry out
the necessary tasks to each other, i.e. the social system. Based on this view on organization is not
just a technical or social system but is the structuring of human activities found various
technologies. The technologies involve determine the technical sub systems and very widely.
Consider, for example, the differing skills, procedures, machinery, equipment and the layout of
facilities required in an electronic company, a car manufacturer, a hospital or a computer bureau.
In addition to the technical subsystem, every organization has a social sub system which consists
of the aspirations, expectations, interactions and value systems of the members. The two sub-
systems-the technical and the social- cannot be looked at separately but must both be considered
interrelating within the organization. Socio-technical theory suggests that the organization
consists of four interrelated elements-tasks, people, structure and technology as shown in figure
1.6
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Fig. 1.6 Socio-Technical view of organizations
More traditional approaches to organizations and their problems have tended to concentrate on
one or other of the subsystems with little or no recognition of the other. For example, the
production engineering/management science approach to organizational problems concentrated
on the economic technical sub system and on fairly mechanistic techniques for quantifying
decision making, control and of planning production.
The human relations and behavioural schools concentrated on the social subsystem and
considered motivation, aspirations, group dynamics and other related factors with scant regard to
the technologies involved. The socio-technical view consider each of the primary subsystems and
its interrelationships and effects on each other and thus makes a genuine attempt at a
comprehensive understanding of the systems we call organizations.
4.0 CONCLUSION
Systems in the organization help in the analysis of a problem that the organization will try to
solve with an information system. Systems concepts help you understand technology,
application, development and management in organization.
5.0 SUMMARY
The systems view is that the whole is greater than the sum of the individual parts and all systems
comprises of inputs, processes and outputs. Parts or sub systems cannot be altered without other
parts.
Technology
People
Tasks
Structure
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6.0 TUTOR-MARKED ASSIGNMENT
1. What are the key features of the system approach?
2. Give several alternative definitions of a system?
3. What is the transformation process?
4. What is an open system?
5. What is a socio-technical system?
8.0 REFERENCE/FURTHER READING
George R. Terry (1964) Principles of Management, Richard D. Irwin, Inc. Homewood Illinois,
USA. Ghost Prentice Hall, Plc.
Harsh, Stephen B., L. J. Connor, and G. D. Schwab. (1981). Managing the Farm Business.
Prentice-Hall, Inc., Englewood Cliffs, New Jersey.
House, William C. (1983). Decision Support Systems A Data-Based, Model-Oriented User-Developed Discipline. Petrocelli Books, Inc. New York, NY.
Lucey T. (2005) Management Information System, 9th Ed. Thomson learning, High Holborn, 50-
51 Bedford Row, London.
Laudon, K.C. and Laudon, J.P. (1996) Management Information Systems: Organization and
Technology, 4th Ed. Prentice-Hall Inc, Upper Saddle River, New Jersey. W
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MODULE 1
UNIT 5: INFORMATION SYSTEMS, ORGANIZATIONS AND STRATEGY
CONTENTS
1.0 Introduction 2.0 Objectives 3.0 Main Content 3.1 Organizations and Information Systems 3.2 What is an Organization
3.2.1 Features of an organizations 3.3 How Information Systems Impact Organizations
3.3.1 Economic Impact 3.3.2 Organizational and Behavioural Impact
3.4 Using Information Strategies to Achieve Competitive Advantage 3.4.1 Porters Competitive Forces Model
3.5 Information Systems Strategies 3.6 Conclusion 3.7 Summary 3.8 Tutor-Marked Assignment 3.9 References/Further Readings
1.0 INTRODUCTION
Information Systems are a part of organizations and it influence one another. Information
systems are built by managers to serve the interests of the organization.
2.0 OBJECTIVES
At the end of this unit you should be able to:
1. Identify and describe important features of organizations that managers need to know about.
2. Evaluate the impact of information systems on organizations 3. Assess the challenges posed by strategic information systems and management solution.
3.0 MAIN CONTENT
3.1 ORGANIZATIONS AND INFORMATION SYSTEMS
Information systems and organizations influence one another. Information systems are built by
managers to serve the interests of the business firm. At the same time, the organization must be
aware of and open to the influences of information systems to benefit from new technologies.
The interaction between information technology and organization is complex and is influenced
by many mediating factors, including the organizations structure, business processes, politics, culture, surrounding environment and management decisions (see figure 1.7) you will need to
understand how information systems can change social and work life in your organization. You
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will not be able to design new systems successfully or understand existing systems without
understanding your own business organization.
Fig. 1.7 The interaction between information technology and organization
The complex two-way relationship is mediated by many factors, not the least of which are the
decisions mad-or not made-by managers. Other factors mediating the relationship include the
organizational culture, structure, politics, business processes and environment.
As a manager, you will be the one to decide which system will be built, what they will do, and
how they will be implemented. You may not be able to anticipate all of the consequences of these
decisions. Some of the changes that occur in business firms because of New Information
Technology (IT) investment cannot be foreseen and have results that may or may not meet your
expectations. Who would have imagined ten years ago, for instance, email and instant messaging
would become a dominant form of business communication and that many managers would be
inundated with more than 200 email messages each day (Walker, 2004)?
3.2 WHAT IS AN ORGANIZATION?
An organization is a stable, formal social structure that takes resources from the environment and
processes them to produce outputs. This technical definition focuses on three elements of an
organization. Capital and labour are primary production factors provided by the environment.
The organization (the firm) transforms these inputs into products and services in a production
function. The products and services are consumed by the environments in return for supply
inputs.
An organization is more stable than informal group (such as a group of friend that meets every
Friday or lunch) in term of longevity and routines. Organizations are formal legal entit ies with
internal rules and procedures that must abide by laws. Organizations are also social structures
Mediating factors Environment Culture Structure Business processes Politics Management decision
Information Technology Organizations
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because they are a collection of social elements, much as a machine has a structure-a particular
arrangement of values, canes, shafts and other parts.
A more realistic behavioural definition of an organization is that it is a collection of rights,
privileges, obligations and responsibilities that is delicately balanced over a period of time
through conflict and conflict resolution. In this behavioural view of the firm, people who work in
organization develop customary ways of working; they gain attachments to existing
relationships; and they make arrangement with subordinates and superiors about how work will
be done, the amount of work that will be done, and under what conditions work will be done.
Most of these arrangements and feelings are not discussed in any formal rule book.
How do these definitions of organizations relate to information systems technology? A technical
view of organizations encourages us to focus on how inputs are combined to create outputs when
technology changes are introduced into the company. The firm is seen as infinitely malleable,
with capital and labour substituting for each other quite easily. But the more realistic behavioural
definition of an organization suggests that building new information systems, or rebuilding old
ones, involves much more than a technical rearrangement of machine and workers-that some
information systems change the organizational balance of rights, privileges, obligations,
responsibilities and feelings that have been established over a long period of time.
Changing these elements can take a long time, be very disruptive and require more resources to
support training and learning. For instance, the length of time required to implement effectively a
new information system is much longer than usually anticipated simply because there is a lag
between implementing a technical system and teaching employees and managers how to use the
system.
Technological change requires changes in who owns and control information, who has the right
to access and update the information; and who makes decisions about whom, when and how.
This complex view forces us to look at the way work is designed and the procedures used to
achieve outputs.
3.2.1 Features of Organizations
All modern organizations have certain characteristics. They are bureaucracies with clear-cut
divisions of labour and specialization. Organizations arrange specialists in a hierarchy of
authority in which everyone is accountable to someone and authority is limited to specific
actions governed by abstract rules or procedures. These rules create a system of impartial and
universal decision making. Organization try to hire and promote employees on the basis of
technical qualifications and professionalism (not personal connections). The organization is
devoted to the principle of efficiency; maximizing output using limited inputs. Other features of
organization include; Business processes, organizational culture, organizational politics,
surrounding environments, structure, goals, constituencies and leadership styles. All of these
features effect the kinds of information systems used by organizations.
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3.3 HOW INFORMATION SYSTEMS IMPACT ORGANIZATIONS
Information systems have become integral, online, interactive tools deeply involved in the
minute-to-minute operations and decision making of large organizations. Over the last decade,
information systems have fundamentally altered the economies of organizations and greatly
increased the possibilities for organizing work. Theories and concepts from economics and
sociology help us understand the changes brought about IT.
3.3.1 Economic Impact
From the point of view of economics, IT changes both the relative costs of capital and the costs
of information. Information system technology can be viewed as a factor of production that can
be substituted for traditional capital and labor. As the cost of information technologies decreases,
it substituted for labour, which historic lay has been a rising cost. Hence, information technology
should result in a decline in the number of middle managers and clerical workers as information
technology substitute for their labour (Laudon, 1990).
IT also obviously affects the cost and quality of information and changes the economics of
information. Information technology helps firms contract in size because it can reduce transition
costs-the costs incurred when a firm buys on marketplace what it cannot make itself.
Information Technology, especially the use of networks can help firms lower the cost of market
participation (transaction costs), making it worthwhile for firms to contract with external
suppliers instead of using internal sources.
3.3.2 Organizational and Behavioural Impacts
Theories based on the sociology of complex organizations also provide some understanding
about how and why firms change with the implementation of new IT applications.
IT flatters organization-large, bureaucratic organizations, which primarily developed before the
computer age are often inefficient, slow to change and less competitive than newly created
organizations. Some of these large organizations have downsized, reducing the number of
employees and the number of levels in their organizational hierarchies. Behavioural researchers
have theorized that information technology facilitates flattening of hierarchies by broadening the
distribution of information to empower lower-level employees and increased management
efficiency. IT pushes decision-making rights lower in the organization because lower-level
employees receive the information they need to make decisions without supervision. (This
empowerment is also possible because of higher educational levels among the workforce, which
give employees the capabilities to make intelligent decisions). Because managers now receive so
much more accurate information on time, they become much faster at making decisions, so fewer
managers are required. Management costs decline as a percentage of revenues and the hierarchy
becomes much more efficient.
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3.4 USING INFORMATION SYSTEMS TO ACHIEVE COMPETITIVE
ADVANTAGE
In almost every industry you examine, you will find that some firms do better than most others.
Firms that do better than others are said to have a competitive advantage over others. They either have access to special resources that others do not, or they are able to use commonly
available resources more efficiently-usually because of superior knowledge and information
assets. In any event, they do better in terms of revenue growth, profitability or productivity
growth (efficiency) all of which ultimately in the long run translate into higher stock market
valuations than their competitors.
3.4.1 Porters Competitive Forces Model Arguably, the most widely used model for understanding competitive advantage is Michael
Porters Competitive forces model (See figure 1.8).
Fig. 1.8 Porters Competitive Forces Model
In Peters competitive forces model, the strategic position of firm and its strategies determine not only by competition with its traditional direct competitors but also by four forces in the
industrys environment: new market, entrants, substitute products, customers and suppliers. 1. New market entrants: In a free economy with mobile labour and financial resources,
new companies are always entering the market-place. In some industries, there are very
low barriers to entry, whereas in other industries, entry is very difficult. For instance, it is
fairly easy to start a pizza business or just about any small retail business, but it is much
more expensive and difficult to enter the computer chip business, which has very high
capital costs and requires significant expertise and knowledge that is hard to obtain. New
companies have several possible advantages; they are not locked into old plants and
equipment, they often hire younger workers hw are less expensive and perhaps more
innovative, they are not encumbered by old, worn-out brand names, and they are more hungry (more highly motivated) than traditional occupants of an industry.
2. Substitute Product and Services: In just about every industry, there are substitute that your customers night use if your prices become too high. New technologies create new
substitutes all the time. Even oil has substitutes: Ethanol can substitute for gasoline in
cars; vegetable oil for diesel fuel in trucks; and wind, solar cola and hydropower for
industrial electricity generation.
3. Customers: A profitable company depends in large measure on its ability to attract and retain customer (while denying them to competitors) and charge high prices. The power
of customers grows if they can easily switch to a competitors products and services, or if
New Markets Entrants
Suppliers
Substitute products
Customers
The Firm Competitors
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they can force a business and its competitors to compete on price alone in a transparent
marketplace where there is little product differentiation, and all prices are known
instantly (such as the internet). For instance in the used college textbook market on the
internet, students (customers) can find multiple suppliers of just about any current college
textbook. In this case, online customers have extraordinary power over used-book firms.
4. Supplies: The market power of suppliers can have a significant impact on firm profits, especially when the firm cannot raise prices as fast as can suppliers. The more different
suppliers a firm has, the greater control it can exercise over suppliers in terms of price,
quality and delivery schedules. For instance, manufacturers of laptop PCs almost always
have multiple competing suppliers of key components, such as key boards, hard drives
and display screens.
3.5 Information Systems Strategies
There are four generic strategies, each of which often is enabled by using information technology
and systems: low-cost leadership, product differentiation, focus on market niche, and
strengthening customer and supplier intimacy. (Laudon, 2006).
1. Low-Cost Leadership Use information to achieve the lowest operational costs and the lowest prices.
2. Product Differentiation. Use information systems to enable new products and services, or greatly change the customer
convenience in using your existing products and services. For instance, google continuously
introduces new and unique search services on its website, such as google maps. Manufacturers
and retailers are using information systems to create products and services that are customized
and personalized to fit the precise specifications of individuals customers. 3. Focus on Market Niche Use information systems to enable a specific market focus, and serve this narrow target market
better than competitors. Information systems support this strategy by producing and analyzing
data fine-tuned sales and marketing techniques. Information systems enable companies to
analyze customer buying patterns, tastes and preferences closely so that they efficiently pitch
advertising and marketing campaigns to smaller and smaller target markets
4. Strengthen Customer and Supplier Intimacy Use information systems to tighten linkages with suppliers and develop intimacy with customers.
Chrysler Corporation uses information systems to facilitate direct access from suppliers to
production schedules, and even permits suppliers to decide how and when to ship suppliers to
Chrysler factories. This allows suppliers more lead time in producing goods. On the customer
side, Amazon.com keeps track of user preference for book and CD purchases, and can
recommend titles purchased be other to its customers. Strong linkages to customers and suppliers
increase switching costs (the costs of switching from one product to a competing product), and
loyalty to your firm.
5.0 CONCLUSION
Information systems often change the organization as well as its products, services and operating
procedures, driving organizations into new behavioural patterns. Successfully using information
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systems to achieve a competitive advantage is challenging and requires precise coordination of
technology, organizations and management.
5.0 SUMMARY
Mangers need to understand certain essential feature of organizations to build and use
information systems successfully. All modern organizations are hierarchical, specialized and
impartial, using explicit routines to maximize efficiency. The introduction of a new information
system will affect organizational structure, goals, and work design, competition between interest
groups, decision making, and day to day behavior.
6.0 TUTOR-MARKED ASSIGNMENT
1(a) What is an organization?
(b) Compare the technical definition of organizations with the behavioral definition?
2. Identify and describe the features of organizations that help explain differences in
organizations use of information systems?
3. Describe the major economic theories that help explain how information systems affect
organization?
4. What is porters competitive forces model? And what does it explain about competitive advantage?
5. What are four competitive strategies?
7.0 REFERENCES/FURTHER READINGS
Cole, G.A. (1986) Management Theory and Practice, (2nd
Ed.) London: Menthen.
George R. Terry (1964) Principles of Management, Richard D. Irwin, Inc. Homewood Illinois,
USA. Ghost Prentice Hall, Plc.
Koslowski. P. (ed.), (2010) Elements of a Philosophy of Management and Organization, Studies
in Economic Ethics and Philosophy, Springer-Verlag Berlin Heidelberg.
Laudon, K.C and Laudon, J.P. (2006)Management Information Systems: Managing the Digital
Firm (10th Ed.) Pearson Prentice-Hall Inc,Upper Saddle River, New Jersey.
OBrien, J.A. (2004). Management Information Systems Managing Information Technology in the Business Enterprise (6
th Ed.). McGraw Hill Iriwin, Inc., New York.
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MODULE 2
UNIT 1: COMPONENTS OF MANAGEMENT INFORMATION SYSTEM
CONTENTS
1.0 Introduction 2.0 Objectives 3.0 Main Content
3.1 Management 3.2 Information 3.3 System
4.0 Conclusion 5.0 Summary 6.0 Tutor-Marked Assignment 7.0 References
1.0 INTRODUCTION
To the Managers, Management Information System is an implementation of the organization
systems and procedures
The three components in MIS gives a more complete and focused definition, where system
suggest integration and holistic view, information stands for processed data and management is
the ultimate user, the decision makers.
2.0 OBJECTIVES
At The end of this unit you should be able to:
(1) State the three components of MIS (2) Define the three components of MIS
(a) Management (b) Information (c) Systems
3.0 MAIN CONTENT
3.1 MANAGEMENT
Management covers the planning, control and administration of the operations of a concern. The
top management handle planning; the middle management concentrates on controlling; and the
lower management is concerned with actual administration.
The complexity of management is such that the word carries a number of acceptable meanings.
The term management may therefore, be applied in different ways its meaning discernible from
content. McFarland (1974) defines management as that process by which managers create, direct, maintain and operate purposive organizations through systematic coordinated cooperative
human effort. While according Fayols in (Cole: 1986) he defined management as: to forecast, plan, organize, command, coordinate and control.
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In Fayols view to forecast plan mean to examine the future and drawing a plan of action. To organize means building a structure of both material and human in an organization. To command
means maintaining activities among employees. To control means to ensure everything is in
conformity with the plan and standard.
From the above, it may be deduced that managerial action can direct and control to a great extent
the nature, degree and pace of change within the organization. It also shows that the process of
management is rooted in the action of peop