July 2011

Master of Computer Application (MCA) – Semester 4

MC0076 – Management Information Systems

(Book ID: B0901)

Assignment Set – 1

Q1. What do you understand by Information processes data?

Ans:The Concept of Information Meaning

Information is a complex concept that has a variety of meanings depending on its context and the perspective in which it is studied. It could be described in three ways1) Processed data,2) The opposite of uncertainty, and 3) A meaningful signal-to illustrates the richness of the concept of information.

Information as Processed Data

Data are generally considered to be raw facts that have undefined uses and application; information is considered to be processed data that influences choices, that is, data that have somehow been formatted, filtered, and summarized; and knowledge is considered to be an understanding derived from information distinctions among data, information, and knowledge may be derived from scientific terminology. The researcher collects data to test hypotheses; thus, data refer to unprocessed and unanalyzed numbers. When the data are analyzed, scientists talk about the information contained in the data and the knowledge acquired from their analyses. The confusion often extends to the information systems context, and the three terms maybe used interchangeably.

Information as the Opposite of Uncertainty

A different perspective on information derives from economic theory and defines information as the negative measure of uncertainty; that is, the less information is available, the more uncertainty exists, and conversely, the more information is available, the less uncertainty exists? In microeconomic theory the equilibrium of supply and demand depends on a market known as a perfect market, where all buyers and sellers have complete knowledge about one another and where uncertainty does not exist. Information makes a market perfect by eliminating uncertainties about supply and demand. In macroeconomic theory, firms behave according to how they read the economic climate. Economic signals that measure and predict the direction of the economy provide information about the economic climate. The firm reduces its uncertainty by decoding these signals.

Taking an example of Federal Express in USA, each incoming aircraft has a scheduled arrival time. However, its actual arrival depends on unforeseen conditions. Data about when an aircraft departed from its destination is information in the economic sense because it reduces uncertainty about the aircraft’s arrival time, thereby increasing Federal Express’s ability to handle arriving packages.

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Managers also define information in terms of its reducing uncertainty. Because managers must project the outcomes of alternatives in making decisions, the reduction of uncertainty about the outcomes of various alternatives improves the effectiveness of the decision- making process and the quality of the decision.

Information as a Meaningful Signal

Information theory, a branch of statistics concerned with measuring the efficiency of communication between people and/or machines, defines information as the inputs and outputs of communication. Electronic, auditory, visual, or other signals that a sender and receiver interpret similarly convey information. For example, in the recruitment scenario about, the resumes and applications for the open positions are information because they are signals sent by the applicants, and interpreted similarly by both.

The Managers in their roles as communicators both generate and receive information. They receive reports that organize signals or data in a way that conveys their meaning. Reports of sales trends become information; so do reports about hazardous waste sites. Managers derive meaning from the information they see and hear as part of communication and use it to make decisions. This definition of information requires a manager to interpret a given signal as it was intended. For example, a manager’s incorrect interpretation of body language in a negotiation would not be considered to be information from this perspective, although we know that managers use both correct and incorrect perceptions as information in decision making and other managerial functions. Again, this view of information suggests the complexity of the concept and the value of a multifaceted definition.

Q.2 Discuss the Components of an Organizational Information System.

Ans:

Components of an Organizational Information System

The environment in which organizations operate from the informational perspective in terms proposed by George Huber of the University of Texas, who has studied the organizational design required by an information society. His conclusions provide a framework for determining what is required of an organizational information system.

These, according to Huber, are the hallmarks of an information society:

1) Dramatic Increase of Available Knowledge

Whether measured in terms of the number of scholarly journals, patents and copyrights, or in terms of the volumes of corporate communications, both the production and the distribution of knowledge have undergone a manifold increase.

2) Growth of Complexity

Huber characterizes complexity in terms of numerosity, diversity, and interdependence. A growing world population and the industrial revolution combined to produce numerosity, or a growing number of human

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organizations. To succeed, people and organizations learned to specialize: they do things differently and organize themselves differently to accomplish specialized tasks. These differences lead to diversity.

Two principal factors have led to increased interdependence. The first as been the revolution in the infrastructure of transportation and communication. The second factor is specialization in firms that make narrowly defined products, as opposed to the self-sufficiency of companies producing a complex product down to its minute elements. A company’s product is typically a part of a larger system, produced with contributions from a number of interdependent firms (consider a car or a computer). Moreover, interdependence has increased on a global scale. Even the most isolated of countries participates in some way in the international division of labor.

Organizations operating in the public sector, while rarely in a competitive situation, are still governed by the demands of society. Pressures on the public sector in democratic societies, along with the pressures conveyed from the private sector, also make the environment in which public organizations operate more complex.

3) Increased Turbulence

The pace of events in an information society is set by technologies. The speeds of today’s computer and communication technologies have resulted in a dramatic increase in the number of events occurring within a given time. Consider the volumes and speed of trades in the securities and currency markets. Widespread use of telefacsimile, as another example, has removed the "float"-the lag between sending and receiving-in written communications. Equally important, because of the infrastructure discussed earlier, the number of events that actually influence an organization’s activities (effective events) has also grown rapidly.

The great amount of change and turbulence pressuring organizations today thus calls for rapid innovation in both product and organizational structure. To thrive, an organization must have information systems able to cope with large volumes of information in a selective fashion.

Huber concludes that these factors – an increase of available knowledge, growth of complexity, and increased turbulence-are not simply ancillary to a transition to the new societal form. Rather, they will be a permanent characteristic of the information society in the future. Moreover, we should expect that these factors would continue to expand at an accelerating rate (a positive feedback exists). Barring some catastrophic event, we expect that the rapidly changing environment will be not only "more so" but also "much more so." To succeed in an information society, organizations must be compatible with this environment.

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Q.3 what are the features contributing to success and failures of MIS models?

Ans:

Contributing to success of MIS models:

If MIS is to be success, then it should have all the features listed below:

1) MIS is integrated into the management function. It sets clear objectives to ensure that MIS focuses on the major issues of the business. Also adequate development resources are provided and human & organizational barriers to progress are removed.2) An appropriate information processing technology required to meet the data processing and analysis needs of the users of MIS is selected.3) MIS is oriented, defined and designed in terms of the user’s requirements and its operational viability is ensured.4) MIS is kept under continuous surveillance, sot that its open system is modified according to the changing information needs.5) MIS focuses on results and goals, and highlights the factors and reasons for non-achievements.6) MIS is not allowed to end up into and information generation mill avoiding the noise in the information and the communication system.7) MIS recognizes that a manager is a human being and therefore, the systems must consider all the human behavioral aspects in the process of management.8) MIS is easy to operate and therefore, the design of MIS has such good features which make up a user friendly design.9) MIS recognizes that the information needs become obsolete and new needs emerge. The MIS design, therefore, has a potential capability to quickly meet newer and newer needs of information.10) MIS concentrates on developing the information support to manage critical success factors. It concentrates on the mission critical applications serving the needs of the top management.Features contributing to failures of MIS model:The common factors which are responsible for this are as follows:1) MIS is conceived as a data processing and not as an information system.2) MIS does not provide that information which in needed by managers but it tends to provide the information generally the function calls for. MIS then becomes an impersonal function.3) Understanding the complexity in the business systems and not recognizing it in the MIS design leads to problems in the successful implementation.4) Adequate attention is not given to the quality control aspects of the inputs, the process and the outputs leading to insufficient checks and controls in MIS.5) MIS is developed without streamlining the transaction processing systems in the organizations.6) Lack of training and appreciation that the users of the information and the generators of the data are different, and they have to play an important role in the MIS.7) MIS does not meet certain critical and key factors of its users, such as a response to the query on the database, an inability to get the processing done in a particular manner, lack of user friendly system and the dependence on the system personnel.8) A belief that the computerized MIS can solve all the management problems of planning and control of the business.9) Lack of administrative discipline in following the standardized systems and procedures, wrong coding and deviating from the system specifications result in incomplete and incorrect information.10) MIS does not give perfect information to all users in the organization.Any attempt toward such a goal will be unsuccessful because every user has a human ingenuity, bias and certain assumptions not known to the designer.

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MIS cannot make up these by providing perfect information.

Q.4 List down the Potential External Opportunities, potential internal Weaknesses

Ans:

Strategic management includes situational analysis-the process of collecting and analyzing information about a company’s strengths, weaknesses, opportunities, and threats. The acronym SWOT is often used for these four components of situational analysis. Strengths and weaknesses are internal characteristics of the organization that enhance and impede its ability to compete. A reputation for quality exemplifies strength, while having costs above the industry average typifies a weakness. Opportunities and threats are external or environmental factors that may help or hinder an organization in meeting its strategic goals. Weak competitors illustrate an opportunity, while adverse regulatory rulings represent a threat.

Major issues to consider in situational analysis

Potential Internal Strengths

· A distinctive competence · Adequate financial resources · Good competitive skill · Well thought of by buyers · An acknowledged market leader · Well-conceived functional area strategies · Access to economies of scale · Insulated (at least somewhat) from strong competitive pressures · Proprietary technology · Cost advantages · Better advertising campaigns · Product innovation skills · Proven management · Ahead on experience curve · Better manufacturing capability · Superior technological skills

Potential External Opportunities · Serve additional customer groups · Enter new markets or segments · Expand product line to meet broader range of customer needs · Diversify into related products · Vertical integration · Falling trade barriers in attractive foreign markets · Complacency among rival firms · Faster market growth

Potential Internal Weaknesses · No clear strategic direction · Obsolete facilities · Lack of managerial depth and talent

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· Missing key skills or competence · Poor track record in implementing strategy · Plagued with internal operating problems · Falling behind in R&D · Too narrow a product line · Weak market image · Weaker distribution network · Below-average marketing skills · Unable to finance needed changes in strategy· Higher overall unit costs relative to key competitors

Q.5 What do you understand by Multinational corporation, Global corporation, International corporation, Transnational corporation.

Ans:

Organization Structure and Information

An organization’s structure refers to the division of labor, coordination of positions, and formal reporting relationships that exist in the organization. Effective organizations have a structure that is congruent with their strategy. The structure chosen may promote specific information needs for the organization. We can characterize the organizations of the next century in two ways.

First, increasing decentralization of decision making replaces centralization of this managerial function. A faster response to a dynamic and unpredictable environment requires that lower-level managers assume greater responsibility and accountability in an organization. Empowering of workers to make decisions calls for ensuring the ready availability of diverse types of information throughout the organization.

Second, organizations more frequently assume a more organic structure. In addition to pushing decision making down in the organization, this structure involves more flexible interactions among parts of the organization. A bank manager may serve on a task force to develop new products for the bank and several months later participate in a reorganization of the sales functions in the bank. Project and product management structures group workers according to the project or product on which they work; the matrix structure simultaneously groups workers functionally and by project or product. These structures create intense information needs for workers throughout the organization to ensure the coordination of activities. In more bureaucratic structures, in contrast, such coordination occurs through the hierarchy or by standard rules and procedures rather than through the widespread dissemination of information. The more organic structures also have a high information-processing capacity, which reduces barriers to lateral communication. Electronic media can further increase the information processing capacity of such organizations.

These flatter, more decentralized organizations will become more information based, that is, "composed of specialists who direct and discipline their own performance through organized feedback from colleagues, customers, and headquarters. Such a structure can replace managers, service staffs (e.g., legal, public relations), and central management with systems that make information readily available to workers at all levels in the organization. In information-based organizations individuals take responsibility for identifying their information needs and creating links to the sources of the required information. A recent study suggests that information technology will eventually result in more

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individuals acting as sources of information, fewer individuals formally included in an organizational subunit, fewer organizational levels involved in processing information, and more rapid decision making.

International Strategy

In a global market, an organization may adopt a variety of strategies, including multinational, global, international, or transnational, to deal with its foreign subsidiaries.

Multinational Corporation

A multinational corporation has built or acquired a portfolio of national companies that it operates and manages with sensitivity to its subsidiaries’ local environments. The subsidiaries operate autonomously, often in different business areas. A company that follows a multinational strategy has little need to share data among its subsidiaries or between the parent and subsidiaries except to consolidate financial positions at year’s end.

Global Corporation

A global corporation has rationalized its international operations to achieve greater efficiencies through central control. Although its strategy and marketing are based on the concept of a global market, a headquarters organization makes all major decisions. A company pursuing a global strategy needs to transfer the operational and financial data of its foreign subsidiaries to headquarters in real time or on a frequent basis. A high level of information flows from subsidiary to parent, while limited data move from parent to subsidiary.

International Corporation

An international corporation exports the expertise and knowledge of the parent company to subsidiaries. Here subsidiaries operate more autonomously than in global corporations. Ideally, information flows from the parent to its subsidiaries. In practice, subsidiaries often rely on the parent to exercise its knowledge for the subsidiaries’ benefit rather than simply to export it to the subsidiaries. For example, a subsidiary without a great deal of human resources expertise may "pay" its parent to operate its human resources function. Although the information theoretically should stay within the subsidiary, in this case it may flow back and forth between the parent’s location and the subsidiary’s location.

Transnational Corporation

A transnational corporation incorporates and integrates multinational, global, and international strategies. By linking local operations to one another and to headquarters, a transnational company attempts to retain the flexibility to respond to local needs and opportunities while achieving global integration. Because transnational operate on the premise of teamwork, they demand the ability to share both information and information services.

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Q.6 What are the limitations of ERP systems? How ERP packages help in overcoming theses limitations.

Ans:Enterprise Resource PlanningManufacturing management systems have evolved in stages over the few decades from a simple means of calculating materials requirements to the automation of an entire enterprise. Around 1980, over frequent changes in sales forecasts, entailing continual readjustments in production, as well as the unsuitability of the parameters fixed by the system, led MRP (Material Requirement Planning) to evolve into a new concept: Manufacturing Resource Planning (or MRP2) and finally the generic concept Enterprise Resource Planning (ERP) The initials ERP originated as an extension of MRP (material requirements planning then manufacturing resource planning). ERP systems now attempt to cover all basic functions of an enterprise, regardless of the organization's business or charter. Nonmanufacturing businesses, nonprofit organizations and governments now all utilize ERPsystems. To be considered an ERP system, a software package must provide the function of at least two systems. For example, a software package that provides both payroll and accounting functions could technically be considered an ERP software package. However, the term is typically reserved for larger, more broadly based applications. The introduction of an ERP system to replace two or more independent applications eliminates the need for external interfaces previously required between systems, and provides additional benefits that range from standardization and lower maintenance to easier and/or greater reporting capabilities. Some organizations -typically those with sufficient in-house IT skills to integrate multiple software products - choose to implement only portions of an ERP system and develop an external interface to other ERP or standalone systems for their other application needs. For example, one may choose to use the HRMS from one vendor, and the financials systems from another, and perform the integration between the systems themselves. Ideally, ERP delivers a single database that contains all data for the software modules, which would include: Enterprise Resource Planning is a term originally derived from manufacturing resource planning that followed material requirements planning. MRP evolved intoner when "routings" became a major part of the software architecture and company’s capacity planning activity also became a part of the standard software activity.ERP systems typically handle the manufacturing, logistics, distribution, inventory, shipping, invoicing, and accounting for a company. Enterprise Resource Planning or ERPsoftware can aid in the control of many business activities, like sales, marketing, delivery, billing, production, inventory management, quality management, and human resource management.ERP systems saw a large boost in sales in the 1990s as companies faced the Y2K problem in their legacy systems. Many companies took this opportunity to replace their legacy information systems with ERP systems. This rapid growth in sales was followed by as lump in 1999, at which time most companies had already implemented their Y2K solution.ERPs are cross functional and enterprise wide. All functional departments that are involved in operations or production are integrated in one system. In addition to manufacturing, warehousing, logistics, and information technology, this would include accounting, human resources, marketing, and strategic management.The Ideal ERP SystemAn ideal ERP system is when a single database is utilized and contains all data for various software modules. These software modules can include:1.Manufacturing: Some of the functions include; engineering, capacity, workflow management, quality control, bills of material, manufacturing process, etc.2.Financials: Accounts payable, accounts receivable, fixed assets, general ledger and cash management, etc.3.Human Resources: Benefits, training, payroll, time and attendance, etc4.

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Supply Chain Management: Inventory, supply chain planning, supplier scheduling, claim processing, order entry, purchasing, etc.5.Projects: Costing, billing, activity management, time and expense, etc.6.Customer Relationship Management: sales and marketing, service, commissions, customer contact, calls center support, etc.7.Data Warehouse: Usually this is a module that can be accessed by an organizations customers, suppliers and employees.Limitations of ERPSuccess depends on the skill and experience of the workforce, including training about how to make the system work correctly. Many companies cut costs by cutting training budgets. Privately owned small enterprises are often undercapitalized, meaning their ERP system is often operated by personnel with inadequate education in ERP in general, such as APICS foundations, and in the particular ERP vendor package being used.1.Personnel turnover; companies can employ new managers lacking education in the company's ERP system, proposing changes in business practices that are out of synchronization with the best utilization of the company's selected ERP.2. Customization of the ERP software is limited. Some customization may involve changing of the ERP software structure which is usually not allowed.3.Reengineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage.4.ERP systems can be very expensive to install often ranging from 30,000 US Dollars to 500,000,000 US Dollars for multinational companies.5.ERP vendors can charge sums of money for annual license renewal that is unrelated tothe size of the company using the ERP or its profitability.6.Technical support personnel often give replies to callers that are inappropriate for the caller’s corporate structure. Computer security concerns arise, for example when telling non programmer how to change a database on the fly, at a company that requires an audit trail of changes so as to meet some regulatory standards.7.ERPs are often seen as too rigid and too difficult to adapt to the specific workflow and business process of some companies this is cited as one of the main causes of their failure.8.Systems can be difficult to use.9.Systems are too restrictive and do not allow much flexibility in implementation andusage.10.The system can suffer from the "weakest link" problem an inefficiency in one department or at one of the partners may affect other participants.11.Many of the integrated links need high accuracy in other applications to work effectively. A company can achieve minimum standards, then over time "dirty data “will reduce the reliability of some applications.12.Once a system is established, switching costs are very high for any one of the partners (reducing flexibility and strategic control at the corporate level).13.The blurring of company boundaries can cause problems in accountability, lines of responsibility, and employee morale.14.Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software.15.Some large organizations may have multiple departments with separate, independent resources, missions, chainsofcommand, etc, and consolidation into a single enter price may yield limited benefits.16.There are frequent compatibility problems with the various legacy systems of the partners.17.The system may be over engineered relative to the actual needs of the customer. Before ERP systems, each department in an organization would most likely have their own computer system, data and database. Unfortunately, many of these systems would not be able to communicate with one another or need to store or rewrite data to make it possible for cross computer system communication. For instance, the financials of accompany were on a separate computer system than the HR system, making it more intensive and complicated to process certain functions. Once an ERP system is in place, usually all aspects of an organization can work in harmony instead of every single system needing to be compatible with each other. For large organizations, increased productivity and less types of software are a result.-18-

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Q.6:-Explain the relationship between artificial intelligence and neural networks with the help of a scenario.

Ans:-Artificial Intelligence is the science and technology based on various functions to develop a system that can think and work like a human being. It can reason, analyze, learn, conclude and solve problems. The systems which use this type of intelligence are known as artificial intelligent systems and their intelligence is referred to as artificial intelligence. It was said that the computer don’t have common sense. Here in AI, the main idea is to make the computer think like human beings, so that it can be then said that computers also have common sense. More precisely the aim is to obtain a knowledge based computer system that will help managers to take quick decisions in business. Artificial Intelligence can be classified into various branches like Natural Language Processing (NLP), Speech Recognition, Automated Programming, Machine Learning, Pattern Recognition and Probabilistic Networks. Most of the software developed for AI have been through Prolog, C++, Java and LISP. These programming languages provide facility of creating various functions of business activity, extension of a function, handling dynamic situations in business, providing uniformity in application etc. A neuron is a micro cell which is connected to thousands of other micro cells in the brain and all the other parts of the human body containing nerves. It is a system which tries to learn from the database and the manager then decides what the right answer is. The entire neural network is realized in the form of software. The software renders the computer as a problem solver. The neural networks goes on building strong database for problem solving depending upon the decisions taken by the manager in the form of response confirmation given to the system by the manager. Neural networks can because in various business applications like forecasting, stock analysis, market analysis etc.Advantages of Neural Networks Neural networks are used to forecast some complex data patterns. When designed properly, they can be used as experts for a particular project. They have the ability to adjust to the changing environment and thus are very flexible. For example, it can forecast net asset values of mutual funds. Artificial intelligence is a field of science and technology based on disciplines such as computer science, biology, psychology, linguistics, mathematics and engineering. The goal of AI is to develop computers that can simulate the ability to think, see, hear, walk, talk and feel. In other words, simulation of computer functions normally associated with human intelligence, such as reasoning, learning and problem solving. Alcan be grouped under three major areas: cognitive science, robotics and natural interfaces. Cognitive science focuses on researching on how the human brain works and how humans think and learn. Applications in the cognitive science area of AI include the development of expert systems and other knowledge based systems that add a knowledge base.

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July 2011

Master of Computer Application (MCA) – Semester 4

MC0076 – Management Information Systems

(Book ID: B0901)

Assignment Set – 2

Q.1 Explain with relevant examples the concept of business process. Also mention their elements.

Ans:

Business process

For initiating business re-engineering, one is required to make some very basic and fund a- mental changes in one’s conventional thinking. The business is re-engineered through process reengineering and the business has a number of processes which together produce the business results. You concentrate on the ‘process’ and not on the task when it comes to re- engineering. The business process is defined as ‘a set of activities performed across the organization creating an output of value to the customer’. Every process has a customer who may be internal or external to the organization. The scope of the process runs across the departments and functions and ends up in substantial value addition which can be measured against the value expectation of a customer. For example, the order processing scope in the traditional sense is within the marketing department. But when it comes to re-engineering, the scope expands to manufacturing, storing, delivering and recovering the money. Likewise, the scope of the bill payment is not limited to the accounts and finance departments but it covers ordering the vendors, receipt and acceptance or goods and paying the bill amount. In a classical organizational set-up, the different processes are handled in parts within the four walls of the department and the functions are limited to the responsibility assigned to them. When the bill payment process is to be re-engineered, it will be re-engineered right from the purchase ordering to cheque payment to the vendor. The reason for covering the purchase ordering as a part of the bill payment process is that the purchase order information decides the number of aspects of bill payment. The basic element of the processes is motivation to perform certain activities. In the process execution, the data is gathered, processed and stored. The data is used in the process to generate the information which would be checked, validated and used for decision making. The decision is then communicated. The process is executed through the basic steps such as receiving the input, measuring the input, analyzing the document, performing, processing, recording, accessing data, producing the results and communicating them. Basic elements of business process are: · Motivation to perform · Data gathering, processing and storing · Information processing · Checking, validating and control · Decision making · CommunicationAll these relate to human initiative. A business process in any area of the business organization performs through basic steps, such as, receive input, measure, analyze, document, perform, process, record / store, access, produce and communicate.

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These steps are performed a number of times across the execution process. When the process is performed, it consumes resources and time. The re-engineering approach attempts to eliminate or shorten the steps so that resource consumption is reduced and time of process execution is shortened. It eliminates redundancy by eliminating the steps, which do not contribute, to the value customer is looking for.A business process defined for re-engineering has a clear cut ’start and end’, resulting into a business result. In organization, there are long processes and short processes. There are critical processes and not so critical processes. The critical business processes are those, which contribute to the value significantly. While the non-critical processes do not contribute much to the value, the customer is looking for. For example, the process of receiving a visitor in the organization could be considered as noncritical. But the process of new product development from the concept to the prototype is critical as it is expected to contribute high value to the customer. If the external customer focus is taken as a criterion for process selection, then all the processes which generate and add value to the customer are called the value stream processes. The value stream processes are critical and become the immediate candidates for re-engineering. The other processes in the organization contribute to the overheads of performing the business function. For example, the processes involving attendance, leave, payment of wages, security, travelling and accounting are not value stream processes as the resources employed in them do not create a value or improve a value to the customer. Such processes are a second priority as far as re-engineering is concerned. Every process is made of a series of activities. In each activity some ‘work’ is done which produces some result for processing into the next activity. If the work done under any activity is analyzed, it will be seen that the people are moving papers and products to achieve some result. In the process they collect the information for decision making and then carry out a physical activity of pushing the product or the output using the paper for record, document and communication.

Work model

Figure shows this work model comprising six elements.

The people who manage the business are engaged in the series of such work modules distributed across the organization. When such work modules are viewed together as a single entity, it is a business process. In such process, participating people are considered as a team working with the sole objective of achieving the customer expectation on value. In re-engineering exercise all the six entities, viz., people, paper, activity, information, decision and product stand to scrutiny through a fundamental rethinking for radical redesign to produce dramatic results.

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Q.2 Explain the control issues in management information systems.

Ans:

A management control systems (MCS) is a system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole considering the organizational strategies. Finally, MCS influences the behavior of organizational resources to implement organizational strategies. MCS might be formal or informal. The term ‘management control’ was given of its current connotations by Robert N. Anthony (Utley, 1994).According to Maciariello et al. (1994), management control is concerned with coordination, resource allocation, motivation, and performance measurement. The practice of management control and the design of management control systems draw upon a number of academic disciplines. Management control involves extensive measurement and it is therefore related to and requires contributions from accounting especially management accounting. Second, it involves resource allocation decisions and is therefore related to and requires contribution from economics especially managerial economics. Third, it involves communication, and motivation which means it is related to and must draw contributions from social psychology especially organizational behavior Management control systems use many techniques such as1.Balanced scorecardThe balanced scorecard (BSC) is a strategic performance management tool - a semi-standard structured report supported by proven design methods and automation tools that can be used by managers to keep track of the execution of activities by staff within their control and monitor the consequences arising from theseactions.2.Total quality management (TQM)Total Quality Management (or TQM) is a management concept coined by. Edwards Deming. The basis of TQM is to reduce the errors produced during the manufacturing or service process, increase customer satisfaction, streamline supply chain management, aim for modernization of equipment and ensure workers have the highest level of training. One of the principal aims of TQM is to limit errors to 1 per 1 million units produced. Total Quality Management is often associated with the development, deployment, and maintenance of organizational systems that are required for various business processes.3.Kaizen(Continuous Improvement)Kaizen (Japanese for "improvement" or "change for the better") refers to a philosophy or practices that focus upon continuous improvement of processes in manufacturing, engineering, supporting business processes, and management. It has been applied in healthcare, government, banking, and many other industries.4.Activity-based costingActivity-based costing (ABC) is a costing model that identifies activities in an organization and assigns the cost of each activity resource to all products and services according to the actual consumption by each: it assigns more in directcosts (overhead) into direct costs. In this way an organization can precisely estimate the cost of its individual products and services for the purposes of identifying and eliminating those which are unprofitable and lowering the prices of those which are overpriced.5.Target costingTarget costing is a pricing method used by firms. It is defined as "a cost management tool for reducing the overall cost of a product over its entire life-cycle with the help of production, engineering, research and design". A target cost is the maximum amount of cost that can be incurred on a product and with it the firm can still earn the required profit margin from that product at a particular selling price.6.Benchmarking and Bench trending Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and/or best practices from other industries. Dimensions typically measured are quality, time, and cost. Improvements from learning mean doing things better, faster, and cheaper.

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JIT: JIT may refer to:-(a)Various meanings of Just In Time.(b)Just-in-time compilation- a technique for improving the performance of virtual machines in computing. (c)Just-in-time (business)- a business inventory strategy. 7.BudgetingA budget (from old French baguette, purse) is generally a list of all planned expenses and revenues. It is a plan for saving and spending.[1] A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods. In other terms, a budget is an organizational plan stated in monetary terms.8.Capital budgetingCapital budgeting (or investment appraisal) is the planning process used to determine whether a firm's long terminvestmentssuch as new machinery, replacement machinery, new plants, new products, and research development projects are worth pursuing. It is budget for major capital, or investment, expenditures.9.Program management techniques, etc.

Q.3 Discuss the function for manager.

Ans:

Functions of Managers

Planning

Managers engage in a variety of planning activities that occur over short- medium and long-term periods. Driven in part by the need to respond to competition, the changing environment, and customer demands, managers develop the organization’s mission: goals and the means to accomplish them. Planning usually refers to both the specific of goals and the blueprint for achieving them. It can occur at the individual, group, organizational, or extra-organizational level. Managers may engage in strategic, tactical, or operational planning. They also engage in decision making, in which they allocate resources and act as negotiators, problem solvers, change agents, and disturbance handlers.

The top managers at LIC of India, for example, likely decide which insurance products and how to sell them as part of their strategic planning the long-term planning for accomplishing the organization’s mission. Information about LIC’s capabilities, its competitors’ competencies, and customer demands is essential for determining the organization’s goals and its strategic plan-long-term activities the organization must undertake to accomplish its mission. Knowledge about technological developments and their applicability to the insurance company, as well as about the supply of various types of workers, constitutes additional information incorporated into the strategic plan.

In most organizations middle managers more often engage in medium or short-term planning known as tactical planning. Tactical objectives describe what units within an organization must do to accomplish strategic objectives, and tactical plans refer to the steps for attaining the tactical objectives. Tactical plans may focus on decisions about staffing, advertising, and pricing, for example; or they may reflect other financial, marketing, or human resource decisions. What types of information would a manager need to determine the best advertising campaign for his or her products? The manager might need to know what competitive products exist, the nature of advertising for those products, and the cost of various media.

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Operational planning, or planning for the issues of implementation, often accompanies strategic and tactical planning. The public works director of a small town must plan the monthly work schedules for the road crews she supervises. The shipping supervisor in a large manufacturing company must determine how often to schedule a third shift of workers. The program chairperson must schedule the particular events that compose the national meeting of the Academy of Management. In each case, these managers require an array of information about their subordinates, their clients, and their jobs to design the operational plan. What information does the public works director need, for example, to meet the objective of rescuing people as the level of water is raising in the river due to continuous rainfall? She needs to know the availability of crews equipment, and the possibility of additional rainfall.

Managers at various levels determine the best way to reduce costs. A manager determines the assignment of people to tasks, the allocation of money materials to individuals, departments, and other work groups, and the scheduling of various organizational members’ time. Effective allocation requires the manager to have information about individuals’ existing work assignments, capabilities, and vacation schedules. The manager must also know the costs of various projects or products. Consider the situation face, the manager of a product development team for a new shampoo at Procter and Gamble or she must know how much overtime to budget into labor expenses to ensure a timely product launch.

Managers frequently negotiate with their subordinates or other managers about the allocation of resources or the best way to accomplish various group or organizational goals. In conjunction with resource allocation and negotiation, the manager as a problem solver defines problems in a situation, analyzes them, and then proposes solutions. When the problems can be handled in a relatively long time frame, the manager acts as a change agent. When problems must be solved in a short time frame, the manager engages in disturbance handling.

To plan effectively, managers often need forecasts about likely future conditions. For example, prevailing interest rates may affect whether a company should raise cash through the sale of debt or equity. The timing of a company’s plant opening can affect whether the company will purchase a component of its product from a wholesaler or whether it will manufacture the component itself. The forecasted market share of a competitor’s produce should influence a company’s production levels and possibly affect hiring and capacity decisions. No manager can be correct 100 percent of the time. Part of decision making involves assessing the risks of being wrong versus the rewards of being right. Managers may cushion the impact of incorrect foresight with contingency plans. Nevertheless, managers can increase their chances of correctly assessing future conditions by using quality forecasts.

Planning in organizations that function globally may pose special challenges. Managers may need to account for significant currency fluctuations, unpredictable political conditions or an unknown labor pool; they may need to consider variations in national customs, worker expectations, and product acceptance. Consider the information needs of a manager who must close the company’s manufacturing plants in a foreign country. He or she must know, for example, the legal provisions that govern the sale of assets as

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well as the legal regulations for compensating terminated workers. The information needs of global managers in these circumstances are extensive and particular to the special business problems they must solve.

Decision making also involves significant information needs. Managers require information about individuals, groups, and organizations involved in or affected by the problem situation. They need information about the alternatives available and the costs and benefits associated with each. Managers as change agents also need data about workers’ and management’s attitudes toward change, the resources available for the change, and the consequences of similar changes in other situations. Managers should diagnose each decision situation to identify its unique information needs.

Consider the decision that a manufacturer of outdoor clothing must make about whether to purchase a small manufacturing plant in China. What information does the manufacturer require in order to make that decision? What information does this manager need in order to make a quality decision? Managers must diagnose their information needs in each particular situation and then seek ways to obtain the required data.

Organizing

Managers must structure their organization and coordinate the organization’s resources to accomplish its goals. Organizing generally means establishing a formal reporting structure and a system of accountability among workers; it means forming employees into meaningful work groups with appropriate supervision. Defining the hierarchy of authority determining the location of decision making, and providing for coordination all contribute to the organizing process. First-line supervisors and middle managers generally establish a network of contacts within and even outside the organization to gather information. The manager may use interactions with coworkers or colleagues in other organizations to improve their job performance.

Managers at all levels attempt to build effective work teams by encouraging cooperation and handling conflict that arises. Managing work groups generally calls for the open exchange of information and ideas. Managers and workers may jointly develop group goals congruent with organizational goals and orchestrate collaborative activities. Increasingly managers must supervise multicultural teams of workers; managing these heterogeneous groups requires special information about the impact of cultural differences on job performance and the techniques for handling them.

Managers need to know the status of group activities so that they can modify schedules and resource allocations. Group members must receive and share information about the status of their activities and thought processes. Organizing effectively requires information about the content of jobs, the skills of workers, and the availability of resources in the organization.

Managers must also understand the assets and liabilities of various structural forms, such as functional structures, project structures, alliances, or networks. The options for organizing become increasingly complex as managers deal internationally. Securing sufficient and appropriate information to coordinate globally challenges managers to diagnose their information needs effectively so that they do not obtain too much, too little, or irrelevant information.

Leading

Leading generally refers to taking actions that direct and motivate employees to accomplish personal and organizational goals. Top executives, middle managers, and first-line supervisor help subordinates

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develop the skills, knowledge, materials, equipment, and time to perform their jobs. They offer guidance to subordinates about the best way to perform various job related activities. Managers also evaluate their subordinates, and sometimes even peers and superiors, as part of their leadership responsibilities.

The manager acquires information about how individuals view the goals the manager has set and seeks information about what would encourage subordinates to accept these goal and work hard to achieve them. What information does a manager need to handle the problem of a poorly performing worker? The manager might need data about the employee’s skill level and attitude, the job’s requirements, and any job-related goals set. The manager might also need information about unusual factors, such as family illness or defective equipment that might have affected the worker’s performance. The manager might also need information about training programs in which the worker has participated. Subordinates also acquire information about how the manager perceives their efforts and adjust their performance and priorities accordingly. In many organizations, formal human resource management systems provide mechanisms for this feedback.

What types of information do managers require in order to lead effectively? They first need a clear understanding of the organization’s goals and of their responsibilities for accomplishing them. They also benefit by having information about their boss’s needs and goals. Managers need data about the skills, abilities, knowledge, needs, and experience of subordinates; they must also regularly secure information about their subordinates’ performance. Managers must also have a comprehensive understanding of the situation to select the most appropriate leadership style for influencing workers to perform effectively. Researchers suggest that they need information about workers’ needs and maturity, the leader’s relationship with the subordinates, the task’s structure, the organization’s structure, and the organization’s environment.

What information needs are inherent in the interpersonal roles required for leading? Managers must know the nature of the tasks being performed, the expected standards of performance, and the potential barriers to their accomplishment. They must also have detailed information about the skills, experiences, and expectations of the workers they supervise. In addition, managers must have information about colleagues from whom they might gather information for the organization, listings of professional organizations, and data about colleagues employed by competitors. Effectively motivating and developing subordinates as well as influencing others and building relationships likely require extensive situation specific information that a manager should diagnose. Managers also should diagnose the information required to solve employee-related problems. Effectively leading a multicultural workforce creates both specific and generic information needs for managers functioning in the global arena.

Controlling

Managers must also monitor the quality and impact of managerial actions. Controlling means ensuring that performance meets established standards, that workers’ activities occur as planned, and that the organization proceeds toward its established goals. Controlling, requires comparative information about the optimal way to implement organizational processes and their actual implementation. In the control process, managers establish standards and methods for measuring performance, assess performance, and then compare performance with the standards. They require information about the organization’s functioning to help them anticipate and handle organizational problems and challenges.

Managers commonly use information provided in budgets and financial controls to guide and constrain organizational activities. They also use cost information to maintain profitability. Executives at Russell Reynolds Associates, Inc., an executive search firm with offices worldwide, determined that top management required consistent and more detailed information from all offices. The director of interna-

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tional finance there led a design project that resulted in standard accounting procedures that conformed to USA, and international regulations.

Q.4 a. Describe business plan Vs MIS plan.

Ans:

Table shows equivalence of Business Plan and MIS Plan.

Business plan MIS PlanBusiness goals and objectives Management information system,

objectives, consistent to the business goals and objectives.

Business plan and strategy Information strategy for the business plan implementation playing a supportive role.

Strategy planning and decisions Architecture of the Management Information System to support decisions.

Management plan for execution and control

System development schedule, matching the plan execution.

Operation plan for the execution Hardware and software plan for the procurement and the implementation.

b. What are the different classes of information?

Ans:

Class Example of information User

Organizational

The number of employee’s. products, services, locations, the type of business, turnover and variety of the details of each one of these entities.

Many users at all the levels.

FunctionalPurchases, sales. production, stocks. receivables, payables, outstanding, budgets, statutory information.

Functional heads.

Knowledge The trends in sales, production Middle and-the Top

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technology. The deviations from the budgets, targets, norms etc. Competitor s information, industry and business information plan performance and target; and its analysis.

Management.

Decision support

Status information on a particular aspect, such as utilisation, profitability standard, requirement versus availability. Information for problem solving and modelling. Quantitative information on the business status. Non-moving inventory, overdue payments and receivables.

Middle Management and Operations Management.

Operational

Information on the production, sales. Purchase, despatches consumptions, etc. in the form of planned versus actual. The information for monitoring of execution schedules.

Operational and Management Supervisor, Section officer

Q.5 Explain the various cognitive style as identified by James McKinney and Peter Keen.

Ans:

Decision making is a cognitive activity, as are other phenomena such as learning or understanding language. In general, human cognition is human information processing. People display distinct cognitive styles in the ways they gather and evaluate information. In their analysis of how managers’ minds work, James McKinney and Peter Keen have classified the information related modes of thought along two dimensions: information gathering and information evaluation.

The information-gathering dimension focuses on perception, on the way a person organizes the verbal and visual stimuli he or she encounters. Perceptive individuals bring to bear concepts ("precepts") to filter incoming stimuli; from the framework of these concepts, they look for specific conformities with or deviations from the concepts they have already formed. Receptive decision makers focus on details rather than on a pattern and attempt to form a general picture of the situation from these details (a characteristic of inductive thinking).

Information evaluation relates to the way an individual brings information to bear in the process of decision making. A systematic (or analytic) decision maker approaches a problem by structuring it and applying a well-defined method expected to lead to a solution. An intuitive individual applies heuristics (rules of thumb) and shortcuts and uses trial and error to find a solution; these people are more willing to go with their "gut feeling" about the problem. McKinney and Keen stress that all of these modes of thought are appropriate in certain situations, and some combinations of them are particularly fit in certain occupations.

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While the importance of individual cognitive style in the design of MIS has been contested, the fact that significant differences exist among individual decision-making processes should inform the way systems are designed. In particular, developers of information systems tend to be systematic individuals and thus tend to assume that the users are (or should be) the same. End-user system development and a number of available packages have addressed the necds of intuitive (or heuristic) decision making. These systems allow the user to play out a variety of scenarios; the user is able to identify and test new alternatives. Such systems should not impose a preset processing order, but rather allow the user the freedom to set this order as he or she is working. It is desirable that the system allow an easy shift back and forth between summarized and detailed data (needed by receptive individuals). A variety of tabular and graphical output formats should also be available. Much of this wish list is now fulfilled in well-designed DSS and EIS.

Q.6 Bring out the table that indicate the various classes of information.

Ans:

Class of information

Ascertaining the information needs of the management for the business execution is a complex task. The complexity can be handled if the information is classified on the basis of its application and the user, which becomes the basis for the ascertainment. The classification could be as shown in table below.

Class Example of information User

Organizational

The number of employee’s. products, services, locations, the type of business, turnover and variety of the details of each one of these entities.

Many users at all the levels.

FunctionalPurchases, sales. production, stocks. receivables, payables, outstanding, budgets, statutory information.

Functional heads.

Knowledge

The trends in sales, production technology. The deviations from the budgets, targets, norms etc. Competitor s information, industry and business information plan performance and target; and its analysis.

Middle and-the Top Management.

Decision support

Status information on a particular aspect, such as utilization, profitability standard, requirement versus availability. Information for problem solving and modeling. Quantitative information on the business status. Non-moving inventory, overdue payments and receivables.

Middle Management and Operations Management.

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Operational

Information on the production, sales. Purchase, dispatches consumptions, etc. in the form of planned versus actual. The information for monitoring of execution schedules.

Operational and Management Supervisor, Section officer

The design of the MIS should consider the class of information as a whole and provide suitable information system architecture to generate the information for various users in the organization.

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