Management Information Systems (MIS)

Management Information Systems:

Management Information Systems can be defined as the systematic or organized way of providing informational support to the managerial functions of an organization. The system utilizes computer hardware, software, manual procedures, models for analysis, planning, control, and decision-making, and a database. In other words “An MIS is an automated system which presents information, both internal and external to the business, that aids in making a specific set of routine decisions.”

(1) MIS is an organized or planned effort and not the result of some sporadic attempts.

(2) Meaningful and interpreted information is the output of the system.

(3) The primary function of the MIS is to provide information.

(4) MIS is a facilitating or supporting system to aid managerial functions and not merely help operational tasks, that is, the MIS provides information that assists managers at different levels in the organization.

(5) MIS is formed from a number of components, including hardware, software, manual procedures, models, and a database.

(6) MIS is a system of users and machines; the users are as important to the system as the machines.

Thus, the purpose of management information systems is to aid decision-making and not to automate the decision-making process itself. As a result, the decision maker is seen as having a dominant role, not the MIS. This in turn means that any attempt to design a system without the support and involvement of management is most often pointless. Another aspect of the definition is that the MIS should focus on routine decisions only. What this implies is that the determination of what should be included in an MIS is an economic decision by itself. The inclusion of any set of decisions, be they inventory, capital budgeting, scheduling, or line balancing, must be justified on a cost/benefit basis. There is a cost of including them in the system which consists of the model-building cost, then the cost of collecting and maintaining the relevant database, and finally, the computer costs. The benefits, on the other hand, include the stream of savings that the new system will accrue over the old. Only those decisions whose cost/benefit ratio is attractive should be included.

The potential for MIS in an operational system is substantial. Generally, the kinds of decisions that are made during the design, operation, and control of a transformation process exhibit much more structure and are much more routine than decisions made elsewhere in the firm. For example, there would be less controversy over the conceptualization, solution, and implementation of a model designed to solve an inventory problem than of one for setting a marketing strategy. Consequently, much of the effort in MIS has been directed at operational problems. There have, indeed, been countless successful applications. The record, however, has not been unblemished.

The field of management information systems (MIS) is the study of information and its impact on the individual, the organization, and society. Quite often, when we think about information systems we think of computers. Although computers are at the heart of today’s information systems, a number of important social, organizational, behavioral, and ethical issues also surround the study of information systems. An appropriate analogy is the field of medicine. Medicine and its branches revolve around the human body and its various parts and functions. Similarly, today’s information systems revolve around a business and its various components, such as people, products, and procedures. MIS is an interdisciplinary field; many other fields of study influence it as shown in the above figure. Areas that continue to influence the field of MIS include.

(1) Computer Science: Theories and methods of computation, efficient data storage and access, and their impact on information.

(2) Political Science- The political impact and uses of information, both within and outside the organization.

(3) Psychology- Cognitive models of human reasoning and behavior as they relate to information.

(4) Operations Research- Scientific models that enhance decision-making and make use of information to solve complex problems.

(5) Linguistics- Languages and human communications and their influence on the creation and use of information.

(6) Sociology- Principles governing society as it relates to shaping information policies and principles.

(7) Organization Theory and Behaviour- The nature and characteristics of an organization and their effect on the way human beings use information to make decisions.

MIS is a system that creates, processes, stores and generates information within and outside an organization. A system is a collection of parts that work together to achieve a common goal. The primary goal of MIS is to support organizational decision-making, though it has many other uses, such as designing and developing new products, ensuring the quality of goods and services, preventing theft and pilferage, and so on.

Information systems can be formal or informal. Formal systems are designed and developed using a set of well-established organizational policies, procedures, and principles to coordinate and facilitate communication between different functional units and the processes they support, and to meet the overall information needs of the business. The social, economic, and regulatory environment of a business fosters the development of formal systems. These systems can be manual or automated. In a manual system, information is collected, processed, stored, and disseminated by manual methods, such as keeping records with paper and pencil. A ledger book is a good example of a manual information system. In a computerized system, similar tasks are performed with the help of computers.

Informal systems, on the other hand, do not follow any formal or pre-established rules for collecting, processing, storing, or disseminating data. Employees create informal systems when they need information that is not readily available through formal systems. Informal systems are powerful; they thrive in many organizations and can play a useful role as long as they are not the result of dissatisfaction with existing formal systems, in which case they become divisive and unproductive. A good example of an informal system is office gossip, in which people try to acquire information through conversations with others. Recognize that informal systems are neither worse nor better than formal systems; they simply meet a different kind of need.

The two contexts in which the term MIS is used: