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Unit IUnit IPart IIPart II

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A Sample Organization ChartA Sample Organization Chart

C h ie fA cco u nta n t

B u dg etA n a lyst

V ice P re sid e n tF in an ce

P la n tS u pe rin ten de nt

M a in te na n ceS u pe rin ten de nt

V ice P re sid e n tM a nu fa c tu ring

T ra in ingS p e c ia list

B e ne fitsA d m in is tra to r

D ire c to rH u m an R e so u rces

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TYPES OF INFORMATION SYSTEMSTYPES OF INFORMATION SYSTEMS

DATA WORKERSDATA WORKERS

KIND OF SYSTEM GROUPS SERVEDKIND OF SYSTEM GROUPS SERVED

STRATEGIC LEVEL SENIOR STRATEGIC LEVEL SENIOR MANAGERSMANAGERS

MANAGEMENT LEVEL MIDDLE MANAGEMENT LEVEL MIDDLE MANAGERSMANAGERS

OPERATIONAL OPERATIONAL

OPERATIONAL LEVEL OPERATIONAL LEVEL MANAGERS MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE & KNOWLEDGE LEVEL KNOWLEDGE &

SALES & MANUFACTURING FINANCE ACCOUNTING HUMANSALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESRESOURCESMARKETINGMARKETING

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MANAGEMENT INFORMATION MANAGEMENT INFORMATION SYSTEMSSYSTEMS

• A Management Information System is used by managers throughout the organization to help them in directing, planning, coordinating, communicating, and decision-making

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MIS-DefinitionMIS-Definition• MIS (Management Information Systems) is a general

term for the computer systems in an enterprise that provide information about its business operations. It's also used to refer to the people who manage these systems.

• Typically, in a large corporation, "MIS" or the "MIS department" refers to a central or centrally-coordinated system of computer expertise and management, often including mainframe systems

• The study of effective systems for the development and use of information in an organization.

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MIS-DefinitionMIS-Definition

• MIS is a formalised computer information system which can integrate data from various sources to provide the information necessary for decision-making at the management level.

• An organized assembly of resources and procedures required to collect, process, and distribute data for use in decision-making.

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MIS-DefinitionMIS-Definition• MIS refers broadly to a computer-based system that

provides managers with the tools for organizing, evaluating and efficiently running their departments.

• In order to provide past, present and prediction information, an MIS can include software that helps in decision-making, data resources such as databases, the hardware resources of a system, decision support systems, people management and project management applications, and any computerized processes that enable the department to run efficiently

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History of the Role of ISHistory of the Role of IS

Data Processing

ManagementReporting

DecisionSupport

Strategic &End User

Electronic Commerce

1950-1960 1960-1970 1970-1980 1980-1990 1990-2000

ElectronicData Processing- TPS

ManagementInformationSystems

DecisionSupportSystems- Ad hoc Reports

End UserComputingExec Info SysExpert SystemsSIS

ElectronicBusiness & Commerce-InternetworkedE-Business &Commerce

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Role Of MISRole Of MIS

• MIS plays very vital role in the management, administration and operation of the organization.

• The system ensures that an appropriate data is collected from various sources, processed and sent further to all the needy destinations.

• fulfill the information needs of an individual and top management

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Role Of MISRole Of MIS

Basic roles of MIS can be outlines as below :

• Hardware administration

• Software development, and support

• End user support

• Computing standards

• DB administration

• Corporate data access

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Role Of MISRole Of MIS• At every phase of the management process, managers

constantly need information in order to make effective decisions.

• It does not include purely functional information or technical information.

• Management information is the information required by managers as they make their decisions, such as the – number of staff required to be employed by each department, – their training requirements, – career development plans, – job descriptions, – budgets, – overall forecasts, – benchmark surveys, and – progress reports on socio economic conditions.

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The Role of MISThe Role of MIS(i) Timely and Accurate Transaction Processing.(ii) Streamlining Accounting and Records

Management.(iii) Providing Managers with ad hoc and

interactive support in decision-making.(iv) Provision of an easy and systematic way in

digging out critical information tailored according to specific requirements, and customized in preferred formats.

(v) Enables an organization to gain competitive advantage over others.

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The Role of MISThe Role of MIS(vi) Better communication, inter-organizational

computing, and internet-working. Supports business operations and successful management of business enterprises.

(vii) Better use of executive resources by automating routine functions.

(viii) Increased ability to make sound, rational and informed decisions involving complex combinations of factors, and doing so with more confidence and speed.

(ix) Better use of time by making facilities available every time they are required.

(x) Improved customer services and improved personnel relations within the organization

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The role of MIS in a Business The role of MIS in a Business EnterpriseEnterprise

The Role of Management Information Systems

Support to Business Operations

Support to Managerial Decision-making

Business Transaction Processing

Control of Business Processes

Team and Workgroup

Collaboration

Reporting System for Managers

Interactive Decision Support

Tailored Information for

Executives

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Impact of MISImpact of MIS

• MIS creates, an impact on the organization’s function, performance and productivity.

• With MIS support management of all departments of an organization can become more effective.

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Impact of MISImpact of MISImpact on Management

Targets tracking and monitoring becomes easy. Top level managers can be informed accordingly. Probable trends in various aspects of business can be traced. This helps in log-term planning and forecasting. Exception conditions can be brought to the noticed, so that manages can take decision in that matter. Information reporting system helps entire organization.

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Impact on Understanding of Business

MIS brings clarity in the communication, due to common understanding of terms and terminology.

Brings high degree of professionalism in the business operations.

Impact on Managerial Efficiency

Helps him to use different tools and techniques, which are impossible to use manually.

Decision-making ability is improved.

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WHAT IS MANAGEMENTWHAT IS MANAGEMENT

• Management : Mary Follett defined management as “the art of getting things done through people.”

• Manager : Person who achieves the organization goals by motivating others to perform, not doing himself.

• Management (For MIS) : Defined as a process of planning, organizing, staffing, coordinating and controlling the efforts of the members of the organization to achieve command stated goals of the organization.

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APPROACHES TO APPROACHES TO MANAGEMENT MANAGEMENT

There are various approach to managementprocess, few to them are explained below : 1.Scientific management theory by Fredrick

Taylor.2.Administrative theory by Henry Fayol.3.Human Relation Theory by Elten Mayo and

Henery Gantt.4.Motion Study by Frank Gilbreth.

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Frederick Winslow Taylor (1856-Frederick Winslow Taylor (1856-1915)1915)

• F. W. Taylor is known as the "father of scientific management".• In a company "Midvale Steel" he identified the principles defining

how the work could be done. • According to Taylor, once these principles were defined, all the

workers could be trained to do the work "the one best way", rather than relying on their own various rules of thumb.

• Taylor found that the workers are deliberately working at less than full capacity called soldiering.

• Based on his extensive observations, he then experimented with ways to improve the worker's performance, changing everything from how they did their jobs to the tools they used.

• Based on these experiments, Taylor then trained the workers to perform the tasks in the most efficient way. The result of Taylor's scientific approach were impressive.

• In 1911, Taylor published his conclusions from these and other experiments in a book titled "Principle of Scientific Management".

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Taylor's Four Principles of Taylor's Four Principles of Scientific Management Scientific Management

1. Scientifically study each part of worker's task and developthe best method for performing the task, which replaces theold rule of thumb.

2. Scientifically select the workers and train them to performthe task by using the scientifically developed method.

3. Co-operate fully with workers to ensure that they use theproper method.

4. Divide work and responsibility between the management andworkers so that the management is responsible for planningwork method using scientific principles and workers areresponsible for executing the work accordingly.

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Henry Fayol (1841-1925)Henry Fayol (1841-1925)

• Henry Fayol, a French industrialist is known as the "father of modern management theory".

• Henry Fayol was trained as a mining engineer, he Joined a coal-and-iron combine as an apprentice and reached to top position of managing director.

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Fayol's Management ActivitiesFayol's Management Activities• On the basis of Fayol's experience as a top-level manager, Henri Fayol

realize that it is possible to develop theories about management that could be taught to individuals with administrative responsibilities. In 1916, he published monograph titled "General and Industrial Management".

• Fayol has classified industrial and business operations into six distinct activities.

• Management activities and their related functions are -i) TechnicalTechnical activities include production and manufacturing.ii) CommercialCommercial activities include purchasing and sellingiii)FinancialFinancial activities include use of capital to its optimum use

and financing.iv)SecuritySecurity includes protection of life and property.v) AccountingAccording function includes balance sheet, costing, statisticsvi)Administrative or Managerial Managerial or administrative function

includes planning, organizing, commanding, co-ordinating, controlling.

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Management ActivitiesManagement Activities

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Henry Fayol's Principles of Henry Fayol's Principles of ManagementManagement

1. Division of work2. Authority and Responsibility3. Discipline4. Unity of command5. Unity of direction6. Subordination of individual interest to general interest7. Remuneration8. Centralization9. Scalar chain10.Order11.Equity12.Stability of personnel tenure13.Initiative14.Esprit de corps

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PrinciplesPrinciples1. Division of Work :

Division of work or work specialization results in efficient use of resources and increases productivity. This is applicable to both managerial and technical functions.

2. Authority and Responsibility :Authority means right to give order or command. Responsibility is the obligation to achieve objectives. Responsibility comes with authority. Authority and responsibility pinpoints the accountability of work.

3. Discipline :Discipline is absolutely necessary for the smooth running of the organization. Discipline means following rules, regulations, policies and procedures by all employees of organization. There must be clear and fair agreement for observing rules and regulations also punishment for disobedience and in discipline.

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PrinciplesPrinciples4. Unity of Command :

An employee should receive orders from one supervisor only to avoid possible confusion and conflict i.e. any worker should not be under control of more than one supervisors. It avoids mistakes and delays in getting work done.

5. Unity of Direction : All the activities must be aimed at one common objective. The activities should be organized such that there should be one plan and one person in charge. This enables directions of efforts towards attainment of one goal.

6. Subordination of Individual Interest to General Interest :The interests of one employee or group should not be given importance over

the interests and goals of organization.7. Remuneration :

Compensation and the methods of compensation should be fair to both the employee and the employer. Exploitation of employees of any kind must be avoided.

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PrinciplesPrinciples8. Centralization :

The centralization of authority and power to some extent is necessary where it is most feasible otherwise there should be decentralization of authority and power for smooth functioning of the organization. A balance between both must be achieved. The objective is the optimum use of the capabilities of personnel.

9. Scaler Chain :A scaler (hierarchical) chain of authority extends from the highest to lowest rank of an organization and defines the communication path. However, horizontal communication is also encouraged as long as the managers in the chain are kept informed.

10. Order :Order is principle of arrangement of things and people. Everything should occupy its proper place i.e. everything should be in order. Due to good organization and selection the right person should be in the right place. Order leads to the creation of sound organization with efficient management. Good organization removes confusion.

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PrinciplesPrinciples11. Equity :

Employees are human beings. Employee's loyalty and devotion should be treated with kindness and justice. Organization's run best when managers are fair with their employees.

12. Stability of Personnel Tenure :Stability of tenure of personnel in the organization increases the efficiency of the employees and is a symbol of sound management. Because time is required to become effective in new jobs, high turnover of employees should be prevented. Instability (high turnover) is a symbol of weak management.

13. Initiative :Managers should encourage and develop the subordinates to take initiative. It is the result of creative thinking and imagination and helps in formulating, planning also its execution.

14. Esprit de corps :Esprit de corps means spirit of co-operation. Since union is strength, harmony and team work are essential. These are prerequisites for better performance and effective organization.

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FUNCTIONS OF MANAGERFUNCTIONS OF MANAGER

• A manager is “someone who works with and through other people by coordinating, their work activities in order to accomplish organizational goals”

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FUNCTIONS OF MANAGERFUNCTIONS OF MANAGER

• Planning,

• Organizing,

• Staffing,

• Directing,

• Co-ordinating and

• Controlling.

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PlanningPlanning• Planning is nothing but the process of determining

the goals and objectives and strategies for achieving goals of the organization.

• According to Lorange, when doing planning managers need to :

1) Write or review the organization’s mission, 2) Identify and analyze opportunities, 3) Establish goals, 4) Select a course of action to achieve these goals, 5) Determine resources needed.

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OrganizingOrganizing

• deciding what work needs to be done, assigning the tasks, and arranging them into a decision-making framework.

• Organization involves evolving the structure of the people working in the organization and their roles.

• Organizing is the process by which the structure and allocation of jobs is determined.

• Organizing involves determining activities required to achieve the established company objectives, grouping these activities in a logical basis for handling by persons, managers and, finally assigning persons to the job designed.

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StaffingStaffing

• The primary purposes of staffing are to find, hire, train, develop, reward and retain the required amount of good people, helping them meet their needs while they help the company meet its goal.

• This statement addresses several important aspects of staffing including recruiting, training and retaining employees that will benefit the company.

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ControllingControlling

• Controlling is the management function, in which managers set and communicate performance standards for people, processes, and devices.

• The four steps of the control process are :

1) Establishing performance standards,

2) Measuring performance,

3) Comparing measured performance to established standards,

4) Taking corrective action..

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DirectingDirecting

• Directing is influencing people’s behavior through motivation, communication, group dynamics, leadership and disciples.

• The purpose of directing is to channel the behaviors of all personnel to accomplish the organization’s mission and objectives while simultaneously helping them accomplish their own career objectives.

• This in complex task of implementing the process of management.

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Co-ordinatingCo-ordinating• This function brings a harmony and smoothness in

the various group activities and individual efforts directed towards goals.

• It needs synchronizing individual efforts and actions which may differ.

• This is normally carried out by the authority of top level management.

• Co-ordinating includes communicating with others, providing directions and motivating people.

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MIS : A SUPPORT TO THE MIS : A SUPPORT TO THE MANAGEMENTMANAGEMENT

Management Steps

Decisions Taken by the Managers

Planning Deciding which method to select amongvarious alternatives like different strategies,resources or methods.

Organization Selection of a combination out of severalcombination available with him regarding

people,goals, authorities and methods.

Staffing Manage the positions in the organizationstructure and provide proper manpower.

Directing Selecting a method for directing efforts in theorganization.

Controlling Selection of exception condition and decisionguidelines.

Co-ordinating Choice of tool for coordinating.

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MIS : A TOOL FOR MIS : A TOOL FOR MANAGEMENT PROCESSMANAGEMENT PROCESS

• Management as a process consists of continuous decision-making, necessitated by variations in goals and also the fact that lack of complete knowledge creates risk and uncertainty associated with decision-making.

• Specific decisions are greatly influenced by the organizational goals, which have to be achieved.

• The complete process of management requires lots of data and information for execution of the plan.

• MIS is therefore, is definitely a tool for effective execution of management process.

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ORGANIZATION ORGANIZATION STRUCTURE AND THEORYSTRUCTURE AND THEORY

• Organization can be defined as, “Systematic grouping of task for providing a good means of co-ordination between the work of various people at various levels so that, this is no wasted efforts or duplication of work and the members of the group do not get into each other’s work”.

• Overall organizational agreements within an enterprise are provided by organization structure.

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Basic Model of OrganizationBasic Model of Organization

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• The organization structure is built on four basic principles :

- Hierarchy of authority

- Specialization

- Standardization (or formulation)

- Centralization

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Hierarchy of AuthorityHierarchy of Authority• Hierarchical structure of positions. • Each position has authority or right to

“command” associated with it. • control over resources, rewards, and the task

and authority to make decisions regarding those things.

• As a rule, authority is distributed according to the level in the hierarchy. Higher the level of position, greater the authority.

• Span Of Control

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SpecializationSpecialization

• It is division of labor in the organization.

• Normally the organization is divided into their functional lines like marketing, production accounting, finance etc., which encourages specialization within each function.

• Organization may be more or less specialized depending upon the services they provide .

• E.g. R&D rather than production

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FormalizationFormalization

• The degree of formalization is the extend to which rules and procedures exist to handle organizational activities.

• Some times decision rules are stated in advance.

• This is to make a person in an organization independent.

• People shall work on the basis of rules, procedures guidelines and policies.

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CentralizationCentralization

• Centralization refers to the level in the organization where decision-making takes place.

• Organization where it is highly centralized, most of the decisions making is done at the top of the hierarchy.

• More the authority of decision-making to lower level, greater is the decentralization.

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Factors Influencing Organizational Factors Influencing Organizational StructureStructure

Various factors influence organizational structure, which can be classified as :

1. Environment

2. Technology

3. Size

4. People

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1.1. EnvironmentEnvironment

• An organization is an open system. The environment includes all conditions, circumstances and influences surrounding and affecting the working of organization.

• For a business organization, social, economic, legal, political cultural and technological environments are important.

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2. Technology2. Technology

• Type of technology the organization adopts, affects the organizational structure.

• The nature of workflow, diversion of activities, amount of program specifications, number of levels, span of management all influence organization.

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3. Size of Organization3. Size of Organization

• Size is measured in terms of number of employees, scale operations, size of investment etc.

• It is found that a tendency of larger organizations is to be more decentralized, more specialized, more standardized and formalized as compared to small organizations

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4. People4. People

• To arrive at the appropriate organization structure the forces people must be analyzed.

• Managers, skills, personality, values philosophy largely influence organization structure.

• Degree of autonomy and freedom for subordinates has impact organizational behaviour.

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ORGANIZATION BEHAVIOURORGANIZATION BEHAVIOUR

• Actual performance of an organization is sometimes different from the goals and objectives.

• These are some factors, which are beyond the control of the management, which affects the performance of the organization.

• The performance in affected due to organization behavior, which is the result of following factors :– Organizational Culture– Organizational Power– Organizational Change– Organizational Learning– Organizational Motivation