Management Information System – Unit 1 – Based on BSc IT Calicut University

UNIT I (12T+3L)

Introduction to information Systems: Definition of a management information system, MIS as an

evolving concept, MIS & other academic disciplines, Subsystems of an MIS, Operating elements of
an information system, Management information system support for decision making, MIS structure
based on management activity, MIS structure based on organizational function, synthesis of MIS
system structure, some issues of MIS

INTRODUCTION TO MIS

Computers are essential for organizational information processing. This is due to their technological
power and ability to handle large volumes of data.
Early adoption: Computerized information processing began in 1954 with payroll processing.
Current routine: Today, computerized transaction data processing is a standard practice in large
organizations.
Expanded scope: Automation of information processing has broadened the use of formalized
organizational information.
Current challenge: The primary challenge now is to leverage computer capabilities to support
knowledge work, including managerial activities and decision-making.
MIS Definition: The diverse range of computer resources used for transaction processing, formal
information/reporting systems, and managerial decision support are collectively known as the
organization's Management Information System (MIS).

DEFINITION OF MANAGEMENT INFORMATION SYSTEM

A definition of a management information system, as generally understood is an integrated, user-

machine system for providing information to support operations, management, analysis and decision-
making functions in an organization. The system utilizes computer hardware and software, manual
procedures: models for analysis, planning, control and decision making; and a database.

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Management Information System (MIS) - Pyramid Structure

 The Management Information System (MIS) can be conceptualized as a pyramid, where each of
its four distinct layers addresses different organizational information needs.
 The foundational Level 1 supports basic daily operations like transaction processing.
 Level 2 focuses on operational control, providing data for day-to-day management, such as
performance reports.
 Moving up, Level 3 aids middle management in tactical planning and decision-making with
information like budget analysis and project progress.
 Finally, the top Level 4 supports senior management in strategic planning and policy
formulation, relying on insights from market trends and economic forecasts.
 While higher levels often utilize aggregated data from lower levels, new external data can also be
integrated at any point, providing a comprehensive information flow for diverse decision-making
processes.

Computer-Based User-Machine System

 While a Management Information System (MIS) can be conceptualized without computers, their
power is crucial for its practical feasibility and effectiveness.
 The core idea is a "user-machine" system, where tasks are optimally divided: humans excel at
judgment and context, while computers handle speed, accuracy, and data processing.
 An MIS user is anyone who provides input, instructs the system, or uses its output.

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 This often involves interactive dialogue through devices like terminals, allowing for immediate
input and results (e.g., "what-if" analyses).
 For successful implementation, system designers need expertise in both computer applications
and human behavior, while users, though not required to be computer experts, benefit from
understanding information needs and basic computer interaction for effective system utilization.

Integrated System

 An Integrated System, central to MIS, provides the framework for unifying an organization's
information processing.
 Without integration, various applications, often developed independently, can lead to
inconsistencies, incompatible data definitions, redundant efforts, and significant difficulty in data
analysis across different systems.
 To achieve integration, the first step is an overall information system plan that guides the design
of individual applications as a cohesive "federation" of smaller, interconnected systems.
 This is further supported by MIS-defined standards, guidelines, and procedures that ensure data
sharing, compliance, and multi-user access.
 The modern trend emphasizes separating application processing from the data it uses, with a
dedicated database serving as the primary mechanism for integrating data across numerous
applications and ensuring its consistent availability to all users.

Need for a Database

 A fundamental need for any Management Information System is a robust database, as

"information" (meaningful data) is derived from raw "data."
 The core concept is that data must be effectively managed, which involves both specialized
software, known as a Database Management System (DBMS), and organizational oversight.
 A DBMS ensures data consistency across all uses and applications, meaning a single update to a
data item automatically applies everywhere it's used.
 This integration necessitates a central authority to control the database, regardless of whether the
data is stored in one location or distributed across multiple computers.

Utilization of Models

 Beyond mere raw or summarized data, effective decision-making often requires that data be
processed and presented using decision models.

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 These models are crucial for directly supporting decisions, such as using a capital expenditure
model for investment choices.
 Different types of models exist to aid various stages of decision-making: intelligence models
identify problems, analysis models explore solutions, and choice models (like optimization) help
select the best option.
 Since diverse problems require diverse solutions, a comprehensive MIS includes a "model base"
comprising both general models for common situations and specific models for unique decisions,
as well as models for planning and control (e.g., inventory models, budgeting models).
 Many of these models facilitate interactive dialogue, allowing users to explore different scenarios
and iterate on choices.

MIS AS AN EVOLVING CONCEPT

 Initially, the vision for Management Information Systems (MIS) was a single, all-encompassing
system, though some doubted its ability to support complex managerial decisions.
 This monolithic approach proved too difficult to implement.
 Consequently, the modern MIS concept has evolved into a "federation of subsystems," meaning
various specialized information systems are developed as needed but align with an overarching
plan and standards.
 This flexible approach allows organizations to have multiple interconnected information systems
that collectively serve diverse managerial needs.
 The MIS concept itself continues to develop, branching out into related areas like Decision
Support Systems (DSS) and Information Resources Management (IRM), with end-user
computing also emerging as a significant trend.

MIS versus Data Processing

 While a Data Processing (DP) system primarily handles routine transactions and generates
reports, essentially automating basic operational tasks, a Management Information System (MIS)
is far more extensive.
 An MIS encompasses data processing but extends its reach to support a broader range of
organizational functions and management processes, including analysis, planning, and decision-
making.
 The distinction isn't a simple "yes or no" question of adding a few features; rather, MIS
represents an orientation—a degree to which an information system prioritizes supporting
management functions.

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 A key difference lies in an MIS's capability to provide tools for analysis, planning, and decision
support, giving users access to decision models and ad-hoc query capabilities for the database,
which is also fundamental to routine DP.
 Ultimately, an MIS orientation means leveraging information resources to enhance decision-
making, boost organizational effectiveness, and even gain a competitive edge.

MIS and Decision Supporting System

 A Decision Support System (DSS) is a specific type of information system application designed
to help users with decision-making, particularly in planning, analyzing alternatives, and making
projections.
 DSS typically feature interactive dialogues via terminals and integrate various decision models.
 They are considered a crucial category of Management Information System (MIS) applications.

MIS and Information Resource Management

 Information Resource Management (IRM) is a management approach that views information as a

critical organizational resource.
 Consequently, the information system executive's role is to manage this broadly defined resource,
encompassing data, communications, personal computers, and traditional data processing.
 IRM emphasizes the overall organizational effectiveness of information systems rather than just
the technical aspects of hardware and software.
 The MIS concept, as presented here, inherently incorporates this resource-oriented view of
information, and IRM principles are directly applicable to managing the MIS function itself.

End-User Computing

 A significant recent development impacting MIS design is end-user computing, where users
gain direct access to information resources through terminals, personal computers, and powerful
software.
 Driven by more affordable and powerful technology, this trend is decentralizing control over
information systems.
 Increasingly, the central MIS function is shifting from direct control to providing support,
enabling users to manage their own information system development and operations.

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MIS AND OTHER ACADEMIC DISCIPLINES

Many core ideas within Management Information Systems (MIS) are also rooted in other academic
fields, particularly managerial accounting, operations research, management and organization theory,
and computer science.

Managerial Accounting

 Managerial Accounting, distinct from financial accounting which reports to external parties,
focuses on providing internal analysis and relevant cost information essential for managerial
control and decision-making, including budgeting.
 Historically, accounting departments handled early data processing due to its direct relevance.
While MIS incorporates much of managerial accounting's content, the broader scope of MIS,
offering users access to diverse data and decision models, extends beyond traditional managerial
accounting.
 In current practice, cost and budget analysis typically remain within the managerial accounting
function, with MIS providing the necessary data and model support.

Operations Research

Operations research is the application of the scientific method and quantitative analysis techniques.
Some of its key concepts are:

1. Emphasis on systematic approaches to problem solving

2. Use of mathematical models and mathematical and statistical procedures in analysis

3. Goal of seeking optimal decisions or optimal policy

Operations research is important relative to management information systems because it has

developed procedures for the analysis and computer-based solutions of many types of decision
problems. The systematic approach to problem solving, use of models, and computer-based solution
algorithms are generally incorporated into the decision support system component of MIS.

Management and Organization Theory

Since the MIS is a support system for organizational functions, it draws upon concepts of
organization, organizational behaviour, management, and decision-making. The fields of
management (or organizational behaviour) and organization theory provide several important

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concepts which are key to understanding the function of an MIS in an organization. Some of these
concepts are:

1. Behavioral theory of organizational and individual decision-making

2. Individual motivation
3. Group processes and group decision-making
4. Leadership techniques
5. Organizational change processes
6. Organizational structure and design
Computer Science

 Computer science is important to management information systems because it covers topics such
as algorithms, computation, software, and data structures.
 However, the academic field of management information systems is not an extension of
computer science; rather, it is an extension of management and organizational theory.
 The fundamental processes of management information systems are more related to
organizational processes and organizational effectiveness than computational algorithms.
 The emphasis in MIS is on the application of the technical capabilities computer science has
made possible.

SUBSYSTEMS OF AN MIS

MIS is a broad concept, envisioned as interconnected subsystems. These subsystems can be defined
either by the organizational functions they serve or the managerial activities they support.

Organizational Subsystems

Because organizational functions are somewhat separable in terms of activities and are defined
managerially as separate responsibilities, MIS may be composed of distinct information systems—
one for each major organizational function.

There may be common support systems used by more than one, such as procedures, programs, and
models, etc. Typical major subsystems in a business organization engaged in manufacturing are:

Major functional System Some Typical Uses

Marketing Sales forecasting, sates planning, customer and
sales analysis
Manufacturing Production planning and scheduling,

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cost control analysis

Logistics Planning and control of purchasing.
inventories. distribution
Personnel Planning personnel requirements,
analyzing performance, salary
administration
Finance and Accounting Financial analysis, cost analysis.
capital requirements planning, income
measurement
Information Processing Information system planning,
cost-effectiveness analysis
Top Management Strategic planning, resource allocation
The database is the primary means of integration of the various subsystems. A data item that is stored
or updated by one subsystem is then available to the other subsystems. For instance, the sales and
inventory information used by the marketing subsystem is supplied through the logistics subsystem;
the same data is used by the manufacturing subsystem for production planning and scheduling
(Figure 1-3).

Activities Subsystem

Another approach to understanding the structure of an information system is in terms of the

activities subsystems. Some of the activities subsystems will be useful for more than one
organizational function subsystem; others will be useful for only one function. Examples of major
activities subsystems are:

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Activity subsystem Some typical uses

Transaction processing Processing of orders, shipments, and
receipts
Operational control Scheduling of activities and performance
reports
Management control Formulation of budgets and resource
allocation
Strategic planning Formulation of objectives and strategic
plans

OPERATING ELEMENTS OF AN INFORMATION SYSTEM

If one requested to be shown the information system of an organization, he or she would probably be
shown its physical components. An inquiry as to what these physical components do might be
answered in terms of processing functions or perhaps in terms of system outputs for users.

Physical Components

The physical components required for an organizational information system are hardware, software,
database, procedures, and operations personnel.

Physical Description
Component
Hardware Hardware refers to physical computer equipment and associated devices.
Hardware must provide for five major functions:
1 Input or entry
2 Output
3 Secondary storage for data and programs
4 Central processor (computation, control, and primary storage)
5 Communications
Software Software is a broad term given to the instructions that direct the operation
of the hardware. The software can be classified into two major types: system
software and application software.
Database The database contains all data utilized by application software. An individual
set of stored data is often referred to as a file. The physical existence of

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stored data is evidenced by the physical storage media (computer tapes,

disk packs, diskettes, etc.) used for secondary storage.
Procedures Formal operating procedures are physical components because they exist in a
physical form such as a manual or instruction booklet. Three major types of
procedures are required:
1 User instructions (for users of the application to record data, employ a terminal
to
enter or retrieve data, or use the result)
2 Instructions for preparation of input by data preparation personnel
3 Operating instructions for computer operations personnel
Operations Computer operators, systems analysts, programmers, data preparation personnel,
Personnel information systems management, data administrators, etc.

Processing Functions

A description of an information system in terms of physical components does not explain what the
system does, just as a description of a hardware configuration does not explain why it is configured
in that way. Another way to describe an information system is in terms of processing functions
(Figure 2-1). The major processing functions are the following:

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Outputs for Users

The user of a management information system provides inputs and receives outputs. The user's
assessment of the information system is therefore dependent somewhat on the ease of input but is
primarily based on the usefulness of the output the user sees. The outputs thus form one description
of an information system and can be classified as being of five major types:

1 Transaction documents or screens 2 Preplanned reports 3 Preplanned inquiry responses

4 Ad hoc reports and inquiry responses 5 User-machine dialog results

Examples of transaction documents are items such as sales invoices, payroll checks, customer
billings, and purchase orders. Transaction documents refer directly to the operations of the
organization, while the other types of outputs support management and control of those operations.

Transaction documents serve different purposes:

 Informational: Confirm an action has occurred or will occur (e.g., sales order confirmation,
goods receipt report). They provide feedback or a record.

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 Action: Request or instruct an action to be taken (e.g., purchase order, check, production order).
 Investigational: Report unusual conditions, exceptions, or errors that need further review, used
for control and future reference.

Reports, inquiry responses, and dialogue results provide four types of information:

 Monitoring Information: Confirms actions and status (financial or otherwise), offering

background for understanding and potential problem diagnosis, but without specifying actions.
 Problem Finding Information: Formatted to highlight issues, such as comparisons to standards or
performance projections.
 Action Information: Presented with explicit or implied actions.
 Decision Support: Geared towards analysis and decision-making.

Preplanned Reports have a fixed content and schedule (e.g., sales analysis, inventory status, budget
variance). They describe status at a point in time, summarize past periods, or project future results.

Preplanned Inquiries involve limited, specific output (e.g., "inventory of part 37518"). These are
typically handled interactively via a terminal with simple input, allowing direct user operation.

Ad hoc Reports and Inquiries are unscheduled and require data or analysis not previously
formatted. If data isn't available, it must be collected. If available, users might use an inquiry
language or an "information service" staffed by specialists to process their requests. Timely response
to these ad hoc needs is crucial.

User-Machine Dialog is distinct, involving interactive use of a terminal (like a visual display or PC)
with a computer model (e.g., analysis, planning, or decision models) to perform analysis or find
solutions (e.g., site planning, capital investment, portfolio management models).

MANAGEMENT INFORMATION SYSTEM SUPPORT FOR DECISION MAKING

Decisions vary by how much structure they have.

A structured decision is predictable, can be preplanned, and has clear, programmable rules (often
automated). These are typically routine and repeated.

In contrast, an unstructured decision is non-programmable, less frequent, and non-routine.

Information system support must adapt to these different decision types, as many decisions fall
somewhere between fully structured and completely unstructured.

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Structured Programmable Decisions

 For Structured, Programmable Decisions, organizations can create clear decision rules or
procedures (like formulas or flowcharts) that specify the necessary information and steps.
 Because they are predictable, lower-level staff or even automated systems can often handle them,
though human oversight is often preferred.
 Examples include inventory reorder points or credit approval rules. The information system
needs for these decisions are straightforward: clear input, validation, logical processing, and
output that is useful and easily understood. If a situation doesn't fit the predefined rules, it's
typically escalated to a human expert.

Unstructured, Nonprogrammable Decisions

 Unstructured, Nonprogrammable Decisions lack pre-established rules because they are either too
rare to justify formal procedures or too complex/variable to define clearly.
 Supporting these decisions requires flexible access to data and various analytical tools, as exact
data needs aren't known beforehand.
 Interactive decision support systems with ad-hoc inquiry and analysis capabilities are ideal for
this purpose.

MIS STRUCTURE BASED ON MANAGEMENT ACTIVITY

Management information systems support management activity. This means that the structure of an
information system can be classified in terms of a hierarchy of management planning and control
activities.

Hierarchy of Management Activity

Management activities are structured in a hierarchy of three levels, each with distinct planning
horizons:

 Strategic Planning: Focuses on long-term goals, overall direction, and core objectives (e.g.,
market strategy, product mix).
 Management Control & Tactical Planning: Deals with medium-term resource acquisition,
tactical decisions (e.g., plant location, new products), and budget management.
 Operational Planning & Control: Concerns short-term, day-to-day execution, ensuring efficient
use of current resources within budget (e.g., pricing, production levels).

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Although managers may engage in activities across all levels, their primary focus shifts based on
their seniority (e.g., executives handle more strategic tasks, supervisors more operational).

These levels are interconnected, with decisions at one level impacting others, and thus, the required
MIS support varies significantly from strategic to operational levels.

Decisions at every management level vary in structure, though operational decisions are mostly
structured and strategic ones mostly unstructured.

Information systems supporting these differ: structured decision systems offer rigid rules and reports,
while Decision Support Systems (DSS) provide flexible database access, varied output, and decision
models to assist managers with unstructured choices.

Information Systems for Operational Control

Operational control ensures efficient daily activities using pre-set procedures and decision rules, with
many decisions being programmable and covering short timeframes (days/weeks). It handles both
individual transactions and summaries.

Support for operational control involves:

 Transaction Processing: Records daily events.

 Report Processing: Generates routine summaries.
 Inquiry Processing: Provides quick answers to specific questions.

These processes often embed decision-making logic. For instance, an inventory system can
automatically trigger a reorder based on stock levels, which an analyst can then approve or adjust.
Similarly, a system might rank job candidates or suggest product substitutes during a sales call, or
flag overdue orders in a report.

The database for operational control primarily uses highly current internal transaction data. Due to
the importance of real-time accuracy, data processing sequence is critical (e.g., recording new
inventory before withdrawals).

Information Systems for Management Control

Information systems for Management Control provide departmental managers with data to measure
performance, decide on actions, set new rules for operations, and allocate resources. This requires
summarized information to identify trends, understand performance variances, and suggest solutions.

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Key information types needed are:

1. Planned performance (budgets, standards)

2. Deviations from plans (variances)
3. Reasons for those deviations
4. Analysis of potential solutions

The database combines operational data with plans, budgets, and sometimes external benchmarks.
Processing involves:

 Planning and Budget Models: To help managers plan and revise budgets, including projecting
current actions' effects.
 Variance Reporting: Scheduled reports comparing performance to plans or competitors.
 Problem Analysis Models: To analyze data for decision input.
 Decision Models: To propose solutions for management review.
 Inquiry Models: To respond to specific questions.

Outputs include plans, budgets, reports, analyses, suggested decisions, and inquiry responses.

Information Systems for Strategic Planning

 Information systems for Strategic Planning help organizations define long-term goals and
significant shifts (e.g., diversifying into new markets).
 Unlike routine operational or management control, strategic planning is often irregular and
demands extensive external data (economic outlook, competitor capabilities, industry prospects,
political environment) alongside summarized internal data.
 While some argue a full MIS for strategic planning is impractical due to the reliance on
qualitative data (rumors, hunches), a more pragmatic view suggests it can still provide substantial
support.
 For instance, internal operational data can be specially summarized for planning, initial
projections can be based on historical data then adjusted by human judgment, and external
industry/competitor data can be stored in the organization's database or purchased.

MIS STRUCTURE BASED ON ORGANIZATIONAL FUNCTION

An information system's structure can be based on organizational functions (e.g., production, sales,
finance). Each function has unique information needs and requires tailored support. A Management

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Information System (MIS) acts as a "federation" of these functional subsystems, each containing
applications for transaction processing, operational control, managerial control, and strategic
planning.

Sales and Marketing Subsystems

The Sales and Marketing subsystem manages all activities related to promoting and selling
products/services. This includes:

 Operational Control: Hiring/training sales staff, scheduling sales efforts, and analyzing sales by
region, product, and customer.
 Managerial Control: Comparing overall performance against marketing plans, using data on
customers, competitors, and sales force needs.
 Strategic Planning: Considering new markets and strategies, requiring customer, competitor, and
demographic analyses, along with income and technology projections.

Production Subsystem

The Production subsystem covers all aspects of manufacturing, including:

 Product Engineering

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 Facility Planning, Scheduling, and Operation

 Personnel Employment and Training
 Quality Control and Inspection

It processes transactions like production, assembly, and scrap orders. Operational control focuses on
detailed performance reports and bottleneck identification.

Management control uses summary reports to compare planned versus actual performance (e.g., cost
per unit, labor used). Strategic planning explores alternative manufacturing approaches and
automation strategies.

Logistics Subsystem

The logistics subsystem manages purchasing, receiving, inventory control, and distribution. It
handles various transactions like purchase orders and shipping orders.

 Operational control uses reports to monitor past-due items, stock levels, and vendor performance.
 Managerial control focuses on comparing planned versus actual inventory levels and costs.
 Strategic planning analyzes new distribution methods, vendor policies, and "make versus buy"
decisions, requiring information on new technologies and alternatives.

Personnel Subsystem

The Personnel subsystem manages all aspects of employment: hiring, training, record-keeping,
payroll, and termination.

 Operational control handles routine actions like hiring, training, and pay changes based on
established procedures.
 Management control uses reports and analyses to compare planned vs. actual performance (e.g.,
hiring costs, training expenses, salary distribution) and ensure compliance.
 Strategic planning evaluates long-term strategies for recruitment, compensation, training, and
facilities to ensure the organization has the necessary talent, using data on employment trends
and wage rates globally.

Finance and Accounting Subsystem

The Finance and Accounting subsystem manages organizational finances and financial reporting.

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 Finance ensures adequate funding, handles credit, collections, cash, and financing (loans, stock
sales).
 Accounting classifies transactions, prepares standard financial reports (income statements,
balance sheets), creates budgets, and analyzes costs, providing crucial input for managerial
control across all functions.

This subsystem processes transactions like sales, billings, and payments. Operational control
involves daily error/exception reports and tracking delays.

Managerial control compares budgeted vs. actual financial resources and processing costs. Strategic
planning includes long-range financing, tax policy, and cost accounting system development.

Information Processing Subsystem

The Information Processing Subsystem ensures other functions have the necessary IT services and
resources.

 Transactions include requests for processing, data/program changes, performance reports, and
project proposals.
 Operational control monitors daily job schedules, error rates, and equipment failures. For new
projects, it tracks programmer progress.
 Managerial control compares planned vs. actual resource utilization, equipment costs, and project
development progress.
 Strategic planning focuses on overall IT organization (centralized/decentralized), the information
system plan, strategic IT uses, and hardware/software infrastructure (e.g., implementing
microcomputer workstations).

Office automation (often part of information processing) provides tools like word processing, email,
electronic filing, and communications for knowledge work and clerical tasks.

Top Management Subsystem

The Top Management Subsystem supports the CEO, their staff, and functional VPs in their executive
roles. It primarily processes inquiries and decisions, often requiring access to the organization's
database and decision models.

 Operational control for top management involves managing schedules, correspondence, and
contacts.

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 Managerial control uses summarized performance data from other functions to evaluate overall
organizational performance against plans.
 Strategic planning is a key focus, involving decisions on company direction, resource allocation,
and coordinating strategic efforts. This requires diverse summarized internal and external data,
often supported by ad-hoc analyses and decision support systems (DSS).

SYNTHESIS OF A MANAGEMENT INFORMATION SYSTEM STRUCTURE

The MIS structure can be understood by combining its support for decision-making, management
activities, and organizational functions. This creates a conceptual framework to describe information
systems, distinct from the actual physical way an MIS is built.

Conceptual Structure

The Conceptual Structure of an MIS is a "federation" of functional subsystems (e.g., Marketing,

Production). Each functional subsystem has four information processing components: transaction
processing, operational control, managerial control, and strategic planning.

Each subsystem uses unique data files, but also shares a general database managed by a Database
Management System (DBMS) for data accessed by multiple applications. Beyond unique programs,
there are also common applications and a model base (analytical and decision models) used across
various subsystems.

This means a functional subsystem has its own specific programs and files, but integrates with shared
common software, the model base, and the central database. The entire collection of these
interconnected functional subsystems forms the organization's complete MIS.

Crucially, the resources needed vary by management level: transaction processing is the largest
component (forming the base of a pyramid structure), providing the foundation for all other internal
support. As you move up the pyramid to strategic planning, the processing is less about high volume
and more about unstructured, ad-hoc decisions, primarily used by top management. The bottom
levels of the pyramid represent structured, well-defined processes for clerical and lower-level staff.

Physical Structure

The physical structure of an MIS would be identical to the conceptual structure if all applications
consisted of completely separate programs used by only one function, but this is frequently not the
case. Substantial economies can be achieved from:

1. Integrated processing 2. Use of common modules

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Integrated processing is achieved by designing several related applications as a single system in

order to simplify interconnections and reduce the duplication of input.

A good example is an order entry system. The recording of an order initiates a sequence of
processing, each step using new data but also much of the data from prior processing.

The major steps in a typical sequence are:

An order entry system is a good example of integrated processing because it generates many
documents and reports from initial order data, shipping details, payments, and returns. It relies on
existing customer and billing information and, importantly, spans multiple functions like sales,
marketing, logistics, and accounting, showing how one system can cross traditional departmental
boundaries.

Modularity in information system design means breaking it into small, reusable processing units
called modules. These modules, even if used only once, improve system development and
maintenance by making it easier to control and modify. Using common modules, like a universal
input validation routine, ensures consistency and completeness across many applications, forming a
crucial part of an information system's physical structure.

SOME ISSUES OF MIS

Several ongoing debates exist regarding MIS structure, including the balance between formal and
informal systems, managers' resistance to formal systems, the degree of integration for files and

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processing, the extent of user interaction, and whether systems should be generalized or highly
individualized.

Formal versus Informal Systems

 Organizational information processing involves both public (known and accessible to authorized
personnel) and private (individual-kept) systems.
 Within these, there are formal systems with predefined rules and records (like the MIS discussed
here) and informal systems that process vital information without formal documentation (e.g.,
casual conversations, electronic mail, or personal notes).
 The MIS, with its structured procedures, is part of the formal public system, accessible based on
organizational authority.
 However, organizations also have public informal systems (like water cooler chats) and many
private systems, both formal (e.g., a sales manager's personal performance file) and informal
(personal contacts).
 A comprehensive formal public MIS aims to centralize information, reducing the need for private
or informal systems and ensuring continuity when personnel change roles.
 However, developing these systems is costly. The rise of end-user computing also leads to more
individualized, formal private systems.
 There's an ongoing debate about the optimal balance: some argue formalizing more information
increases productivity, while others contend that critical decisions, especially at top levels,
heavily rely on informal channels, suggesting that enhancing these informal systems (e.g., with
electronic mail) might be more impactful on managerial productivity.

Extent of Integration

 "Total system" integration of all formal information processing is impractical due to complexity
and maintenance issues.
 Instead, information systems use a modular design with integration only where necessary, often
achieved through a common database.
 However, a single, fully integrated database isn't always ideal; some files are application-specific,
and different management levels (e.g., strategic planning vs. operational control) have varying
data needs that may benefit from separate databases.

Extent of User-Machine Interaction

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 Management Information System – Unit 1 – Based on BSc IT Calicut University

 Information systems are increasingly shifting towards online user-machine interaction for both
transaction processing and decision support.
 This is driven by falling technology costs and the desire for immediate responses, enabling
analysts and managers to interact directly with computer programs and models for "what if"
analysis.
 While a single system isn't always used, organizations provide various interactive model
alternatives (like in-house systems or personal computers) to empower users to develop their own
support tools rather than relying solely on the IT department.

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