NATIONAL OPEN UNIVERSITY OF NIGERIA SCHOOL OF EDUCATION COURSE CODE: LIB 810 COURSE TITLE: MANAGEMENT INFORMATION SYSTEM

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NATIONAL OPEN UNIVERSITY OF NIGERIA

SCHOOL OF EDUCATION

COURSE CODE: LIB 810

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LIBS 810 MANAGEMENT INFORMATION SYSTEM

COURSE TEAM----DEVELOPER-PROF ZAKARI MOHAMMED A B U Zaria WRITER- DR NURUDEEN M MAIFATA A B U Zaria

EDITOR PROF ZAKARI MOHAMMED A B U Zaria

MODULE 1

UNIT 1: OVERVIEW OF MANAGEMENT INFORMATION SYSTEMS UNIT 2: MEANING OF MANAGEMENT INFORMATION SYSTEM (MIS) UNIT 3: INFORMATION TECHNOLOGY

UNIT 4: SYSTEMS CONCEPT

UNIT 5: INFORMATION SYSTEMS, ORGANIZATIONS AND STRATEGY MODULE 2

UNIT 1: COMPONENTS OF MANAGEMENT INFORMATION SYSTEM UNIT 2: TYPES OF MANAGEMENT INFORMATION SYSTEM

UNIT 3: INFORMATION TECHNOLOGY AND INFORMATION PROCESSING UNIT 4: MANAGING DATA RESOURCES

MODULE 3

UNIT 1: KNOWLEDGE MANAGEMENT UNIT 2: ARTIFICIAL INTELLIGENCE

UNIT 3: INFORMATION SYSTEMS IN GLOBAL BUSINESS TODAY UNIT 4: ELECTRONIC COMMERCE

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3 MODULE 4

UNIT 1: THE STRATEGIC ROLE OF INFORMATION SYSTEM AND INF.S.ORG UNIT 2: DEVELOPING BUSINESS SYSTEMS

UNIT 3: IMPLEMENTING BUSINESS SYSTEMS MODULE 5

UNIT 1: ETHICAL ISSUES AND FUTURE OF INFORMATION SYSTEMS

UNIT 2: TELECOMMUNICATIONS AND THE NEW INFORMATION ARCHITECTURE UNIT 3: INFORMATION SYSTEMS SECURITY

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4 MODULE 1

UNIT 1: OVERVIEW OF MANAGEMENT INFORMATION SYSTEMS CONTENTS 1.0Introduction 2.0 Objectives 3.0 Main Content 3.1 Management 3.1.1 Process 3.2 Managerial Functions 3.2.1 Planning 3.2.2 Organising 3.2.4 Controlling 3.3 Levels of Management

3.3.1 Top or Strategic Level of Management 3.3.2 Middle or Tactical Level of Management 3.3.3 Lower or Operational Level of Management 3.4 System 3.4.1 Open Systems 3.4.2 Close Systems 3.5 Data 3.5.1 Data Processing 3.5.2 Characteristic of Data 3.6 Information

3.6.1 Characteristics of Good Information 3.6.3 Functions of Information

4.0 Conclusion 5.0 Summary

6.0 Tutor – Marked Assignment 7.0 References/Further Readings 1.0 INTRODUCTION

Management Information Systems are foundation for conducting business today. In many organizations, survival and even existence is difficult without extensive use of information technology. We must bear in mind that in the application of management information system in organization, we are dealing with the concept of management and technology, and how we can harmoniously use the duo to achieve effective medium for analyzing organizational information. 2.0 OBJECTIVES

At the end of this unit, you should be able to:

 Define management, information and systems  List managerial levels and functions

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 Describe how data are processed to give information.

 Identify the characteristics of good information and functions of information. 3.0 MAIN CONTENT

3.1 Management

The complexity of management is such that the word carries a number of acceptable meanings. The term management may therefore, be applied in different ways, its meaning discernible from content. McFarland (1974) defines management as that “process by which managers create, direct, maintain and operate purposive organizations through systematic coordinated cooperative human effort”. In their own way Brech et al (1972) say management is concerned with seeing that jobs get done and done efficiently. While according Fayol’s in (Cole: 1986) he defined management as: “to forecast, plan, organize, command, coordinate and control”.

In Fayol’s view to forecast plan mean to examine the future and drawing a plan of action. To organize means building a structure of both material and human in an organization. To command means maintaining activities among employees. To control means to ensure everything is in conformity with the plan and standard.

From the above, it may be deduced that managerial action can direct and control to a great extent the nature, degree and pace of change within the organization. It also shows that the process of management is rooted in the action of people at work.

3.1.1 Process

A process is a systematic way of doing things, process management is the ensemble of activities of planning and monitoring the performance of process. Hence, we define management as a process because all managers regardless of their particular attitude or skills engage in certain related activities in order to achieve their objectives. In order to achieve the objectives of the organizations, there is need for assessing an organizations goals and creating a realistic, detailed plan of action for meeting those goals and it is necessary to bring together all available resources called ‘Six Ms” of management i.e. men, machine, material, methods, money and market. These basic steps in the process which involve creating a road map that outlines that each task the organization must accomplish to meet its overall objectives.

3.2 Managerial Functions

The major functions of management include the following: 3.2.1 Planning

In designing an environment for effective performance of individuals working together in groups, the most essential task is to see that purposes and objectives, and method of attaining objectives are clearly understood. If group effort is to be effective, people must know what they

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are expected to accomplish. This is the planning function that is the basic of all the managerial functions.

George (1964)defines planning as the selecting and relating of fats and the making and using of assumptions regarding the future in the visualization and formulation of proposed activities believed necessary to achieve desired results, this is to say, in planning, a manager uses facts, reasonable premises and constraints and from all of these he visualizes and formulates what the necessary activities are, how they will be conducted and what will be their contribution to achieving desired results.

Effective planning is based on facts not emotions or wishes. Planning is intellectual in nature, it is a mental work. Planning can also be simply put as the process of setting objectives and putting up the necessary steps to achieve the objects.

3.2.2 Organizing

Hodgets m. Richard (1992), in Bagobirin and Kassah (2009)define organization as the “process of assigning duties and coordinating efforts among all organization personnel to ensure maximum efficiency in the attainment of objectives. This implies that the jobs that need to be done are grouped together into departments. This is done so that each employee would know precisely what he should do and what is expected from him. Organizing can also be defined as that part of managing that involves establishing an internal structure of roles for people in an enterprise to fill.

In looking at organization as a process, several fundamental inputs must be considered which Koontz and Weilrich(1984) in Bagobirin and Kassah (2009) outlined as follows:

(i) The structure must reflect objectives and plans because enterprise activities are derived from these.

(ii) The structure must reflect the authority available to enterprise managers; this depends upon such social institutions as private properly, representative government and sanctions individuals in operating a business, a university or any group venture.

(iii) Organization structure must reflect its environment. The structure must be designed to work to permit contributions by members of a group and to help people gain objectives efficiently in a changing future. In this sense a workable organization structure can never be either mechanical or static.

(iv) The organization must be staffed with people obviously, the activity groupings and authority provisions of an organization structure must take into account people’s limitations and customs, that is, the kind of people who are to be employed.

3.2.3 Coordination

Coordination is a process combining activities in a consistent and harmonious way to ensure efficiency and effectiveness in an organization. George R. Terry (1964) defines coordinating as “the orderly synchronization of efforts to provide the proper amount, timing and directing of execution resulting in harmonious and unified action to a stated objective”. It can be viewed as the effort to find the winning combination from the basic resources on hand.

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Coordination deals with unifying the effort of people and is concerned with: (i) The amount of these efforts, both as to quantity and quality.

(ii) The timing of these efforts.

(iii) The directing of or determining the causes of these efforts.

Coordination can also be seen as the process of integrating the objectives and activities of the separate unit (departments or functional areas) of an organization in order to achieve organizational goal efficiently.

3.2.4 Controlling

The real test of any manager is the result that he achieves. Nothing is accomplishing unless efforts bring about results. To apply the real test to any manager necessitates a criterion by which results can be evaluated and, if required corrective measures adopted. If the other fundamental functions of management were performed perfectly, there would be little need for controlling. However, very rarely, if ever, is perfect planning achieved, organizing above any possible reproach and coordinating a hundred percent (100%) effective. Some mistakes, loss of efforts, friction and misdirected effort, may results and make for deviations from the intended goals. George (1964) defined controlling as “determining what is being accomplished, that is, the performance, evaluating the performance, and if necessary applying corrective measures so that performance takes place according to plans”.

Cole (1996) notes that if planning represented the route map for the journey, then organizing represented the means by which one could arrive at the chosen destination. We can now add that controlling ensured that the travelers know how well they are progressing along the route, how correct their map is, and what deviations, if any, they need to make to stay on course.

SELF ASSESSMENT EXERCISE

Define the term management and vividly explain the functions of management. 3.3 LEVELS OF MANAGEMENT

Managers are classified by their levels within the organization. There are three basic management levels: top managers, middle managers and first-line managers as shown in figure 1.1

Top Management

Middle Managers

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Fig. 1.1 Levels of Management 3.3.1 First-Line Managers

In general first-line manager are directly responsible for the production of good or services. They may be called sales managers, section or production supervisors; depending on the organization. This level of management is the link between the production or operations of each department and the rest of the organization. However, first-line manager in most companies spend little time with higher management or with people from other organizations. Most of their time is spend side-by-side with the people they supervise.

3.2.2 Middle Manager

Middle managers received broad, general strategies and policies from top managers and translate them into specific goals and plan for first-line-managers to implement. Middle managers typically have titles such as department head, plant manager and director of finance.

3.3.3 Top Mangers

The overall direction and operations of an organization is the responsibility of top managers. Typical titles of top managers are chief executive officer, president, chairman, division president and executive vice president. Top managers develop goals, policies, and strategies for the entire organization.

3.4 SYSTEM

Systems are composed of interrelated parts or sub-systems and the system can only be explained as a whole. This is known as holism or synergy. Holism states that any whole is more than the sum of its individual parts.

There are many definitions of the term “system”. A comprehensive one is that used by the Open University:

A. System is an assembly of part where:

1. The parts or components are connected together in an organized way.

2. The parts or components are affected by being in the system (and are changed by leaving it).

3. The assembly does something.

4. The assembly has been identified by a person as being of special interest (Carter et al 1984).

This definition contains the essential elements of parts, relationships and objectives. It is very broad and can apply to any of the systems around us, such as: The university, railway, hospital, manufacturing company etc. A system could be open or closed.

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9 3.4.1 Open Systems

An open system is a system which interacts with it environment. It receives inputs and influences from the environment and in turn, passes back outputs and influenced to the environment. All social organizations are open systems. They that organization adapts to changes in the environment is the key element in an organization’s success and indeed its very survival.

Organizations as open systems attempt to monitor and anticipate environment disturbances. 3.4.2 Close Systems

A close system is the one that is isolated from its environment. Close systems are self-contained so that the external environment does not influence the behavior of the system, nor does the system influence its environment. The idea can only strictly be applied to mechanical and physical systems as all social systems have some interaction with their environment.

Closed systems are required for stability and consistency, whereas open systems are required for uncertain conditions. Closed systems are designed for efficiency, open systems for survival.

Fig. 1.2 Model of an Open System 3.5 DATA

Data is unprocessed facts and figures. Plain collected data, as raw facts cannot help in decision making. However, data is the raw material that is organized, structured and interpreted to create useful information system.

Data is defined as ‘groups of non-random symbols in the form of text, images, voice representing qualities, action and objects.

3.5.2 DATA CHARACTERISTICS

a. They are facts obtained by reading, observation, counting, measuring and weighing etc. which are then recorded

b. Data are derived from external and internal sources (activities with firm).

c. Data may be produced as an automatic by-product of some routine but essential operation such as the production of an invoice or alternative a special counting or measuring procedure must be introduced and the result recorded.

d. The source of data need be given considerable attention because if the sources of the data flawed, any resulting information will be worthless.

Conversion or Process Outputs Environment Inputs Environment

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Data or processing systems perform the essential role of collecting and processing the daily transactions of the organizations. Data processing is necessary to ensure that the day-to-day activities of the organization are processed, recorded and acted upon. Files are maintained which provide both the current data for transaction, for example the amount invoiced and cash received during the month for statement preparation, and which also serve as a basis for operational and tactical control and for answering enquiries.

Fig. 1.3 Data Processing Systems 3.6 INFORMATION

Information is interpreted data; created from organized structured and processed data in a particular context, “information can be recorded as signs, or transmitted as signals. Information is any kind of event that affects the state of a dynamic system that can interpret the information. Conceptually, information is the message (utterance or expression) being conveyed. Therefore, in a general sense, information is ‘knowledge communicated or received concerning a particular fact or circumstance”.

SELF ASSESSMENT EXERCISE 2 1. Define the following term:

(i) Data

(ii) Information

2. List 4 characteristics of Data

3.6.1 Characteristics of Good Information

Good information is that which is used and which create value. Experience and research shows that good information has numerous qualities which are:

1. Relevance: Information must be relevant to the problem being considered. Too often reports, messages, tabulations etc. contain irrelevant parts which most prevent the user of the information to get the actual meaning of what the sender wants.

2. Accuracy: Information should be sufficiently accurate for it to be relied upon by the manager and for the purpose for which it is intended.

3. Completeness: Ideally, all the information required for a decision should be available. However, in practice, this is not often obtainable. What is required is that the information is complete in respect of the key elements of the problem. This suggests that there should be interaction between information provides and users to ensure that the key factors are identified.

4. Confidence in the source: For information to have value it must be used. For it to be used managers must have confidence in the source. Confidence is enhanced:

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b. There is good communication between the information producer and the manager.

5. Communication to the right person: All persons have a defined sphere of activity and responsibility and should receive information to help them carry out their designated tasks. In practice this is not always as easy as it sounds. It is quite common for information to be supplied to the wrong level in the organization. a superior may not pass it on the person who needs it whilst subordinates may hold onto information in an attempt to make themselves seem indispensable.

3.6.2 Functions of Information

a. Reduction of Uncertainty: Uncertainty exist where there is less than perfect knowledge. Rarely, if ever is there perfect knowledge but relevant information help to reduce the unknown.

b. And an aid to monitoring and control: By providing information about performance and the extent of deviations from planned level of performance, management are better able to control operation.

c. As a means of communication: Managers need to know about developments, plans, forecasts, impending changes and so on.

d. As a memory supplement: By having historical information about performance, transactions, results of past actions and decisions available for reference, personal memories are supplemented.

e. As an aid to simplification: By reducing uncertainty and enhancing understanding, problems and situations are simplified and become more manageable.

4.0 CONCLUSION

MIS exists in organization in order to help them implement the organizational structure and dynamics of the enterprise for the purpose of managing the organization in a better way and capturing the potential of the information system for competitive advantage.

5.0 SUMMARY

Management Information System is seen as a way of evaluating, analyzing and processing an organization data to produce meaningful and useful information from which the management can take decision to ensure future growth and development of the organization.

6.0 TUTOR-MARKED ASSIGNMENT

1. What are the functions of information in an organization? 2. Distinguish between data and information?

2. Define management and explain its role in a modern organizations? 4. Discuss managerial levels and explain their functions?

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12 7.0 REFERENCES/FURTHER READINGS

Bagobiri, Y.E. and Kassah V. (2009) Principles of Management (2nd Ed.) Kaduna; Wonderful Press.

Cole, G.A. (1986) Management Theory and Practice, (2nd Ed.) London: Menthen.

George R. Terry (1964) Principles of Management, Richard D. Irwin, Inc. Homewood Illinois, USA. Ghost Prentice Hall, Plc.

Koslowski. P. (ed.), (2010) Elements of a Philosophy of Management and Organization, Studies in Economic Ethics and Philosophy, Springer-Verlag Berlin Heidelberg.

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13 MODULE 1

UNIT 2: MEANING OF MANAGEMENT INFORMATION SYSTEM (MIS) CONTENTS

1.0 Introduction 2.0 Objectives 3.0 Main Content

3.1 Definition of Management Information System (MIS) 3.2 Objectives of MIS

3.3 Characteristics of MIS

3.4 MIS Need for Information Systems 3.5 Planning/Design of MIS

3.6 Problems with MIS 3.7 Goals of MIS 3.8 Role of the MIS 3.9 MIS and Computer

3.10 The Challenges of Information 4.0 Conclusion

5.0 Summary

6.0 Tutor-Marked Assignment 7.0 Reference/Further readings 1.0 INTRODUCTION

This unit examines how management information systems can support management decision making and it also dwells on the details of what management information systems in organization encompass.

2.0 OBJECTIVES

At the end of this unit, you should be able to:

1. Define Management Information Systems (MIS) 2. Mention Characteristics of MIS

3. Highlight Objectives of MIS 4. State the Problems with MIS 3.0 MAIN CONTENT

3.1 Management Information System

Lucey (2005) defined management information systems as: - a system using formalized procedures to provide management at all levels in all functions with appropriate information based on data from both internal and external sources, to enable them to make timely and

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effective decisions for planning, directing and controlling the activities for which they are responsible.

Management information systems can be described as tools that help managers organize and make decisions from their data. More simply, effective MIS aids communication. Unsurprisingly, it’s still true that people generally accomplish more together than they do apart, and the old concept collaboration and communication is still at the core of business. Management information systems strive to efficiently collect, format and communicate information to a wide variety of people.

More so, Management Information System (MIS) is a computer-based system for collecting, storing, processing and providing access to information used in the management of an organization (Chartered Management Institute 2003).

3.2 OBJECTIVES OF MIS

Goals of an MIS are to implement the organizational structure and dynamics of the enterprise for the purpose of managing the organization in a better way and capturing the potential of the information system for competitive advantage.

Following are the basic objectives of an MIS:

1. Capturing Data: Capturing contextual data, or operation information that will contribute in decision making from various internal and external sources of organization.

2. Processing Data: The captured data is processed into information needed for planning, organizing, coordinating, directing and controlling functional of strategies, tactical and operational level.

3. Information System: Information or processed data need to be stored for future use. 4. Information Retrieved: The system should be able to retrieve this information from the

storage as and when required by various users.

5. Information Propagation: Information or the finished product of the MIS should be circulated to its users periodically using the organizational network.

3.3 CHARACTERISTICS OF MIS Following are the characteristics of an MIS

1. It should be based on a long-term planning.

2. It should provide a holistic view of the dynamics and structure of the organization. 3. It should work as a complete and comprehensive system covering an interconnecting

sub-system within the organization.

4. It should be planned in a top-down way, as the decision makers or the manager should actively take part and provide clear direction at the development stage of the MIS.

5. It should be based on need of strategic, operational and tactical information of manager of an organization.

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6. It should be able to make forecasts and estimates and generate advanced information, this providing a competitive advantage. Decision makes can take actions on the basis of such predictions.

7. It should create linkage between all subsystems within organization, so that the decision makers can take the right decision based on integral view.

3.4 MIS NEED FOR INFORMATION SYSTEM

Managers make decisions. Decision making, generally takes a fourfold path: 1. Understanding the need for decision or the opportunity.

2. Preparing alternative course of actions 3. Evaluating all alternative course of actions. 4. Deciding the right path for implementation.

3.5 PLANNING FOR MIS

MIS design and development process has to address the following issues successfully:

1. There should be effective communication between the developers and users of the system.

2. There should be synchronization in understanding of management, processes and IT among users as well as the developers.

3. Understanding of the information needs of manager from different functional areas and combining the needs into a single integrated system.

4. Creating a unified MIS covering the entire organization will lead to a more economical, faster and more integrated system, however, it will increase in design complexity manifold.

5. The MIS has to be interacting with the complex environment comprising all other sub-systems in the overall information system of the organization. So it is extremely necessary to understand and define the requirements of MIS in the context of the organization.

6. It should keep pace with changes in environment, changing demands of the customers and growing competition.

7. It should take care of not only the users i.e. the managers but also other stakeholders like employees, customers and suppliers.

SELF ASSESSMENT EXERCISE

Explain factors to be considered in planning MIS? 3.6 PROBLEM WITH MIS

There are abundant problems associated with MIS because the computer equipment used has had relatively little success in providing management with the information it needs. The typical reasons discovered for this include the following:

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2. Narrow and or inappropriate emphasis of the computer system

3. Undue concentration on low level data process applications particular in the accounting area.

4. Lack of knowledge of computers.

5. Poor appreciation by information specialist of management’s true information requirement and organization problems

6. Lack of top management support.

3.7 GOALS OF MIS

An institution Management Information System (MIS) should be designed to achieve the following goals:

1. Enhance communication among the institution. 2. Deliver complex material throughout the institution.

3. Provide an objective system for recording and aggregating information 4. Reduce expenses related to labour intensive manual activities.

5. Support organization’s strategic goals and direction. Because MIS supplies decision makers with facts, it supports and enhances the overall attainment of organizational goals.

3.8 ROLE OF THE MANAGEMENT INFORMATION SYSTEMS (MIS)

The role of the MIS is an organization can be compared to the role of heart in the body. The information is the blood and MIS is the heart. In the body the heart plays the role of supplying pure blood to all the elements of the body including the brain. The heart works faster and supplies more blood when needed. It regulates and controls the incoming impure blood, processes it and sends it to the destination in the quantity needed. It fulfils the needs of blood supply to human body in normal course and also in crisis.

The MIS plays exactly the same role in the organization. The system ensures that an appropriate data is collected from the various sources, processed and sent further to all the needy destinations. The system is expected to fulfill the information needs of an individual, a group of individuals, the management functionaries; the managers and the top management.

The MIS satisfies the diverse needs through a variety of systems such as query systems, analysis systems, modeling system and decision support systems, the MIS helps in strategic planning, management control, operational control and transaction processing.

The MIS helps the clerical personnel in the transaction processing and answers their queries on the data pertaining to the transaction, the status of a particular record and references on a variety of documents. The MIS helps the junior management personnel by providing the operational data for planning, scheduling and control, and help them further in decision making at the operational level to correct an out of control situation. The MIS helps the middle management in short term planning, target setting and controlling the business functions. It is supported by the use of the

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management tools of planning and control. The MIS helps the top management in goal setting, strategic planning and evolving the business plans and their implementation.

The MIS plays the code of information generation, communication, problem identification and helps in the process of decision making. The MIS, therefore, plays a vital role in the management, administration and operation of an organization.

3.9 MANAGEMENT INFORMATION SYSTEM AND COMPUTER

Translating the real concept of the MIS into reality is technically, an infeasible proposition unless computers are used. The MIS relies heavily on the hardware and software capacity of the computer and its ability to process, retrieve and communicate with no serious limitations.

The variety of the hardware having distinct capabilities makes it possible to design the MIS for a specific situation. For example, if the organization needs a large database and very little processing, a computer system is available for such a requirement. Support the organization has multiple business location at long distances and if the need is to bring the data at one place, process and then send the information to various location, it is possible to have a computer system with a distributed data processing capability. If the distance is too long, then the computer system can be hooked through a satellite communication system. The ability of the hardware to store data and process it at a very fast rate helps to deal with the data volumes, its storage and access effectively. The ability of the computer to sort and merge helps to organize the data in a particular manner and process it for complex lengthy computations.

Since the computer is capable of digital, graphic, word image, voice and text processing, it is exploited to generate information and present it in the form which is easy to understand for the information user.

The ability of a computer system to provide security of data brings a confidence in the management in the storage of data on a magnetic data in an impersonal mode. The computer system provides the facilities such as READ ONLY where you cannot delete to UPDATE. It provides an access to the selected information through a password and layered access facilities. The confidence nature of the data and information can be maintained in a computer system. With this ability, the MIS becomes a safe application in the organization.

The software, an integral part of a computer system, further enhances the hardware capability. The software is available to handle the procedural and non-procedural data processing. For example, if you want to use a formula to calculate a certain result, an efficient language is available to handle the situation. If you are not to use a formula but have to resort every time to a new procedure, the non-procedural languages are available.

The software is available to transfer data from one computer system to another. Hence, you can compute the results at one place and transfer them to a computer located at another place for some other use. The computer system being able to configure to the specific needs helps design a flexible MIS.

The advancement in computers and the communication technology has the distance, speed, volume and complex computing an easy task. Hence, designing the MIS for a specific need and simultaneously designing a flexible and open system becomes possible, thereby saving a lot of

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drudgery of development and maintenance of the system. The concept of user-friendly systems and the end user computing is possible, making information processing a personalized function. However, the application of the management principles and practices in today’s complex business world is possibly only when the MIS is based on computer system support.

SELF ASSESSMENT EXERCISE

Give three reasons for using computer for MIS in the organization? 3.10 THE CHALLENGE OF INFORMATION SYSTEMS

Increasingly, information systems are bringing about changes in business goods, relationship with customers and suppliers and internal operations. Building, operating and maintaining information systems are challenging activities for a number of reasons. We believe there are five key challenges that managers should heed;

1. In the Strategic Business Challenge: How can businesses use information technology to design organizations that are competitive and effective?

Technical change moves much faster than humans and organizations are changing. The power of computer hardware and software has grown much more rapidly than the ability of organization to apply and use this technology. To stay competitive, many organizations actually need to be redesigned. They will need to use information technology to simplify communication and coordination, eliminate unnecessary work, and eliminate the inefficiency of out model organization structures. If organization merely automates what they are doing, they are largely missing the potential of information technology. Organization need to rethink and redesign the way they design, produce, delivery and maintain goals and services.

2. The Globalization Challenge: how can firms understand the business and system requirements of a global economic environment? The rapid growth in international trade and the emergence of a global economy call for information systems that can support both producing and selling goods in many different countries. In the past, each regional office of a multinational corporation focused on solving its own unique information problems. Given language, cultural and political differences among countries, this focus frequently resulted in chaos and the failure of central management controls. To develop integrated multinational information systems, business must develop global hard ware and communications standards and create cross-cultural accounting and reporting structures (Roche, 1992; Buss, 1982).

3. The information Architecture: How can organizations develop an information architecture that supports their business goals? While information technology can suggest some new ways of doing business, firms still need to have a clear idea of their business goals and how these can best be supported by information systems. Many organizations cannot meet their goals because they are crippled by fragmented and incompatible computer hardware, software, telecommunication networks and information system. Integrating these “islands of information” into a coherent architecture is now a priority.

4. The Information Systems Investment Challenge: How can organization determine the business value of information system? A major problem raised by the development of powerful

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inexpensive computers involves not technology but rather management and organization. It’s one thing to use information technology to design, delivery and maintain new products. It’s another thing to make money doing it. How can organizations obtain a sizeable payoff from their investment in information systems?

Engineering massive organizational and system changes in the hope of positioning a firm strategically is complicated and expensive. Is this an investment that pays off? How can you tell? Senior management can be expected to ask these question: Are we receiving the kind of return on investment form our systems that should be? Do our competitors get more? While understanding the costs and benefit of building a single system is difficult enough, it is daunting to consider whether the entire system effort is “wroth it”. Imagine then, how a senior executive must think when presented with a major transformation in information architecture a bold venture in organizational change costing tens of millions of dollars and taking many years.

5. The responsibility and Control Challenge: How can organizations design systems that people can control and understand? How can organizations ensure that their information systems are used in an ethically and socially responsible manner?

Information systems are so essential business, government and daily life that organization must take special steps to ensure that they are accurate, reliable and secure. Automated or semi-automated systems that malfunction or are poorly operated can have extremely harmful consequences. A firm invites disaster if it uses systems that don’t work as intended, that don’t deliver information in a form that people can interpret correctly and use, or that have control rooms where control don’t work or where instruments give false signals. The potential for massive fraud, error, abuse and destruction is enormous.

Information systems are so essential to business, government and daily life that organizations must take special steps to ensure that they are accurate, reliable and secure. Automated or semi-automated systems that malfunction or are poorly operated can have extremely harmful consequences. A firm invites disaster if it uses systems that don’t work as intended, that don’t deliver information in a form that people can interpret correctly and use, or that have control rooms where controls don’t work or where instruments give false signals. The potential for massive fraud, error, abuse and destruction is enormous. Information systems must be designed so that they function as intended and so that human can control the process.

4.0 CONCLUSION

In general MIS is an information system that evaluates analyzes and processes an organizations data to produce meaningful and useful information on which the management will take right decision to ensure future growth of the organization.

5.0 SUMMARY

In this unit you have learnt about the importance of MIS in an organization as well as the various challenges of MIS.

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20 6.0 TUTOR-MARKED ASSIGNMENT

1. (a) What is Management Information System? (b) Discuss the characteristics of MIS

2. What are key challenges to the success of MIS in organization? 3. Outline the objectives of MIS in an organization?

7.0 REFERENCES/FURTHER READINGS

Bagobiri, Y.E and Kassah, V. (2009), Principle of Management (2nd Ed) Wonderful Press, Kaduna.

Harsh, Stephen B., L. J. Connor, and G. D. Schwab. (1981). Managing the Farm Business. Prentice-Hall, Inc., Englewood Cliffs, New Jersey.

House, William C. (1983). Decision Support Systems – A Data-Based, Model-Oriented User-Developed Discipline. Petrocelli Books, Inc. New York, NY.

Landon, K.C. and Laudon J.P (1996) Management Information Systems: Organization and Technology, (4th Ed.) Prentice Hall Inc, Upper Saddled River, New Jersey.

Lucey, T. (2005) Management Information Systems, 9th Ed. Thomson Learning, High Holborn, 50-51 Bedford Row, London

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21 MODULE 1

UNIT 3: INFORMATION TECHNOLOGY CONTENTS

1.0 Introduction 2.0 Objectives 3.0 Main Content

3.1 Definition of Information Technology 3.2 Application of IT in Information Systems 3.2.1 Data Processing/Transaction Processing System 3.2.2 Office Support System

3.2.3 End-User Computing

3.3 The Impact of IT on Organizations 3.4 Technology and Job Changes 4.0 Conclusion

5.0 Summary

6.0 Tutor-Marked Assignment 7.0 References/Further Readings

1.0 INTRODUCTION

This unit helps you to see the connection between Information Technology (IT) and MIS in business performance. The use of Information and Communication Technologies (ICT) by individuals and organizations dominates the business world.

2.0 OBJECTIVES

At the end of this unit, you should be able to: 1. Define Information Technology (IT)

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22 3.0 MAIN CONTENT

3.1 INFORMATION TECHNOLOGY

Information Technology is the technology which supports the activities involving the creation, storage, manipulation and communication of information with their related methods, management and applications. Lucey (2005) supplied a useful definition given by the Department of Trade and Industry: The acquisition, processing, storage and dissemination of vocal, pictorial, textual and numeric information by a micro-electronics based combination of computing and telecommunications. Information technology is a broad term which covers all aspects of the use of computer technology.

In short, IT is the medium by which information is passed across to all levels of management either internally or from external sources. Some of the IT facilities include computers of various types, scanners, printers, servers and processors, photocopiers etc. and other devices for information acquisition and dissemination such as teleconferencing/video conferencing, network, Teletext, facsimile, internet, E-mail and voice mail etc.

3.2 APPLICATION OF IT IN INFORMATION SYSTEM

There are major areas of IT application in information system. The three areas are: 1. Data processing (or transaction processing)

2. Office support system. 3. End user systems

3.2.1 Data Processing or Transacting Processing Systems

Data or transaction processing systems perform the essential role of collecting and processing the daily transactions of the organization, hence the alternative term, transaction processing. Typically these include all forms of ledger keeping, accounts, receivable and payable, invoicing, credit control, rate demands and stock movement. Transaction processing is essential to keep the operations of the organization running smoothly and provides the base for all other internal information support.

Transaction processing is necessary to ensure that day-to-today activities of the organization are processed, recorded and acted upon. Files are maintained which provide both the current data for transactions, for example the amount invoiced and cash received during the month for statement preparation, and which also serve as a basis for operational and tactical control and for answering enquiries.

Transaction, processing can be sub-divided into: a. Current activity processing.

b. Report processing c. Inquiry processing.

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23 3.2.2 Office Support Systems

The type of office supports systems used influences information available for management. Office support systems or office automation technologies are now used for virtually all everyday information processing tasks in offices and business organizations. They enable people to perform their own work, such as letters and report writing, store and process data through databases and communicate through email. Office automation technologies include a wide array of software application tools such as spreadsheets (e.g. excel), word processors (e.g. word) and desktop publishing tools (e.g. publisher), presentation packages (e.g. PowerPoint) and database systems (e.g. Microsoft Access).

These technologies also enable members of a group to interact with each other and organize their work. They can communicate with each other through email, fax and teleconferencing and they plan and coordinate their activities through schedules. As these technologies improve communication and the sharing of information, they have enabled teleworking (the process where staff work at locations other than the company office, usually at home) and video conferencing to become a reality.

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Fig. 1.4 ICT based Office Support Systems 3.2.3 End User Systems

These systems seek to provide management with direct assistance with their work. Examples include: decision support systems, expert systems, executive information systems.

The introduction of personal computers, terminals, networks, user-friendly software, databases, etc. has altered the position dramatically and has led to the growth of end-user computing and the consequent availability of personalized information for management rather than oust the pre-specified output of computer processing, important though these outputs often are;

End-user computing may be broadly defined as; “The direct, hands on approach to computers by users-non indirect use through systems professionals. Users may include managers, office staff, sales people, production workers and others.” With the spread of end-user computing, employees and managers are able to access data and analyse it directly themselves in an individual manner.

Microform systems, disk storage, view

data/teletext Electronic mail, teleconferencing, communicaiton, networks, telephones, data/facsimile transmission

Micros, VDUS,

disk storage

Word

processing,

copying, desktop

publishign

Office Support Systems Telecommunications Computing

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They are able to explore and investigate, carry out various types of analysis, obtain assistance in decision making, monitor operations and results in more specific ways and generally enhance the ways in which they carry out their work.

3.3 THE IMPACT OF IT ON ORGANIZAITONS

Technology, which includes ICT, influences organizations in a variety of ways. In summary, technology alters the skills requirements for individuals and it changes jobs and the way they are done. It can also alter relationships between individuals and departments within the organization and may affect some relationships outside the organization, e.g. with customers, suppliers and clients. It is likely to be major factor in determining the type of information available and how the information is used and consequently how the organization operations.

3.4 TECHNOLOGY AND JOB CHANGES

Technology simplifies and reduces tasks needing manual skills and strength especially in factories and all forms of production. Properly applied, it can increase productivity. The use of reprogrammable robots for such tasks as welding, spraying, materials handling and others helps to eliminate dirty or hazardous and repetitive work. Robots and Computer Aided Manufacturing (CAM) as well as reducing costs, improve quality and consistency of finished products. The use of technology requires enhanced problem-solving skills and the ability to interpret data and is thus likely to lead to a widening gulf between skilled and unskilled workers. Routine tasks requiring a low level of skill are disappearing fast. As an example, the copy typists has all but disappeared from many offices. The availability of word processors, flexible printers and photocopies have effectively eliminated copy typing.

4.0 CONCLUSION

Office support systems cover different types of aids including, word processing, electronic mail, data transmission, microform system etc. Electronic transmission is supplementing traditionally based communication.

5.0 SUMMARY

ICT systems affect how the organizations operates, how it is managed and its structure and culture.

6.0 TUTOR-MARKED ASSIGNMENT

(1) Outline some of the implications that ICT may have for organization? (2) What work do data processing/transaction processing system do?

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26 7.0 REFERENCES/FURTHER READINGS

Cole, G.A. (1986) Management Theory and Practices, 2nd Edition.

Harsh, Stephen B., L. J. Connor, and G. D. Schwab. (1981). Managing the Farm Business. Prentice-Hall, Inc., Englewood Cliffs, New Jersey.

House, William C. (1983). Decision Support Systems – A Data-Based, Model-Oriented User-Developed Discipline. Petrocelli Books, Inc. New York, NY.

Laudon, K. & Laudon, J. (2006) Management Information Systems: Managing the Digital Firm, 9th ed. Prentice Hall.

Lucey, T. (2005) Management Information Systems, 9th Edition Thomson Learning, High Holborn, 55-5, Bedford Row London.

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27 MODULE 1

UNIT 4: SYSTEMS CONCEPTS CONTENTS

1.0 Introduction 2.0 Objectives 3.0 Main Content

3.1 Definition of System 3.2 Features of the System

3.3 Closed Systems and Open Systems 3.4 Systems and Adaptability.

3.5 Shared and Overlapping System. 3.6 Socio-technical systems 4.0 Conclusion 5.0 Summary 6.0 Tutor-Marked Assignment 7.0 Reference/Further Readings. 1.0 INTRODUCTION

The system approach is a method or framework which helps us to analyze and explore the exploration and interactions which exist in the systems around us.

2.0 OBJECTIVES

At the end of this unit you should be able to: (1) define a system

(2) know the main features of the systems approach (3) distinguish between open and closed systems. 3.0 MAIN CONTENT

3.1 DEFINITION OF SYSTEM

Systems are composed of interrelated parts or sub-systems and the system can only be explained as a whole. This is known as holism or synergy. Holism states that any whole is more than the sum of its individual parts.

A comprehensive definition of “system” is that used by the Open University: A system is an assembly of part where:

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2. The parts or components are affected by being in the system (and are changed by leaving it).

3. The assembly does something.

4. The assembly has been identified by a person as being of special interest (Carter et al 1984).

This definition contains the essential elements of parts, relationships and objectives. It is very broad and can apply to any of the systems around us such as: The university, railway, hospital, manufacturing company, an information system, a local authority. In effect, any arrangement which involves the handling, processing or manipulating of resource of whatever type can be represented as a system.

3.2 FEATURES OF THE SYSTEMS APPROACH

The systems approach has many facets of which the following are the most important.

(a) All systems are composed of interrelated parts or sub-systems and the system can only be explained as a whole. This is known as holism or synergy. Holism states that any whole is more than the sum of its individual parts. When the appropriate parts are combined, properties appear from the whole which the parts alone do not possess. These are known as emergent properties. Examples are:-

Taste: A property of water not the constituent hydrogen and oxygen atoms.  Growth: A property arising from the combination of seeds and soy.

Obsolescence: likely to arise from consideration of financial, technical and personal factors. A machine may still work but may be too expensive or dangerous to run or may no longer be required for current production.

(b) Systems are hierarchical in other parts of subsystems are made up of other smaller parts. For example, the accounting systems of an organization may be a subsystem of the information system which itself a subsystem of the planning system, which is a sub-system of the organization as a whole.

(c) The parts of a system cannot be altered without affect the parts. Many organizational problems stem from ignoring this principle. For example, a departmental procedure or form might be changed without considering the ripple effects on the other departments affected with dire consequences.

(d) The sub-systems should work toward the goal of the higher systems and not pursue their own objectives independently. Where sub-systems to pursue their own objectives to the detriment of higher objectives, then a condition of sub-optionality is said to exist and, in general, MIS designers seek to avoid sub-optimality wherever possible. Ideally, there should be goal congruence between all the subsystems that make up the system as a whole. Goal congruence simply means that the objectives of the subsystems should align with the objectives of the system, or organization as a whole.

Three key features of a systems, namely the transformation process, system boundaries and the environment of the systems.

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29 3.2.1 The Transformation Process

All systems are composed of the same basic elements; inputs, processes and outputs.

Systems theory gives a much more embracing meanings to the terms inputs and outputs than would normally be considered. For example, the inputs to a production system include; raw materials, labour (skills, quantity) equipment and plant facilities, job specifications, standards of all types, maintenance facilities, power supplies, etc. A similar, almost endless list could be given for the output side of the system.

Fortunately, it is not usually necessary (or possible) to consider all possible inputs and outputs. The usual procedure when analyzing systems is:

(a) To choose those outputs with which we are concerned. These are usually those outputs most relevant to the system objectives; and

(b) To choose those inputs for examination and control which are considered to have significant effects on the output considered important.

In all systems other than physical or mechanical ones, the transformation process is controlled by information. In the simplest case, information on the output of the system is used as a basis for control of the input of the system. This is known as feedback or information feedback.

3.2.2 System Boundaries

The features which define the extent of a system are its boundaries. In mechanical, physical and biological systems, the boundaries are readily identifiable as they tend to arise naturally. With any form of social organizations, boundaries are not obvious and often change to meet differing demands. In social organizations, there are many transfer across boundaries of ideas, people, materials and information within organizations boundaries are determined by management and vary from organizations to organizations. For example, in one organization the sales department may be responsible for invoicing whereas, in another, invoicing may be within the boundary of the accounting department.

3.2.3 The Environment of Systems

In the widest sense, a system’s environment is all those elements not in the system. The environment can be defined as those external elements whose changes in attitudes, behavior or properties affect the state of the system and those external elements which are changed by the system’s behavior. In effect, this means that the relevant environment of any system comprises those elements with which it has some connotation or relationship.

3.3 Closed Systems and Open Systems Open Systems

An open system is a system which interacts with it environment. It receives inputs and influences from the environment and in turn, passes back outputs and influenced to the environment. All social organizations are open systems. The organization that adapts to changes in the environment is the key element in an organization’s success and indeed its very survival.

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Organizations as open systems attempt to monitor and anticipate environment disturbances. Closed Systems

A close system is the one that is isolated from its environment. Closed systems are self-contained so that the external environment does not influence the behavior of the system, nor does the system influence its environment. The idea can only strictly be applied to mechanical and physical systems as all social systems have some interaction with their environment.

Closed systems are required for stability and consistency, whereas open systems are required for uncertain conditions. Closed systems are designed for efficiency, open systems for survival.

3.4 Systems and Adaptability

To be successful and to remain in existence organizations must be flexible and adapt to change. This means change not only in the organization’s relationship with the external environment but also in its internal methods and structures. Successful organizations are characterized by their internal openness and their readiness to accept that yesterday’s methods and products are very unlikely to be suitable for tomorrow. Recognizing the need for changing, initiating change and managing change successfully are the hallmark of good quality management. Organizations do not automatically adjust to change.

Adaptation only occurs as a result of management decision and action. Successful change is change that is planned and considered, this means that the effects on the organization as a whole must be considered when making a change to part of the organization.

3.5 Shared and Overlapping Subsystem

Sub-system can belong to more than one system and there is a need to recognize the overlap and to design operations and processes accordingly. The recognition of overlap is particularly important when changes are made in one of the systems which share the same sub-system. An example of a shared subsystem is shown in figure 1.5

Fig. 1.5. Sub-system overlap

Overlap is often an efficient and economical management. For example, a central purchasing subsystem used by various companies in a group may be able to obtain greater discounts and may aid the standardization of parts and materials. A centralized computer facility may be shared by all departments within an organization with a reduction in overall cost. However, such overlaps are likely to increase communication difficulties and may have longer response times.

National Warehouse system

The company warehouse subsystem

The company system The local distribution

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Because of the need to coordinate activities and to obtain numerous approach for change. Such structures may be less flexible in rapidly changing condition.

Kate and Kahn; identified five sub-systems within organizations. These can be summarized as follows:

1. Production or technical sub-systems: These deals with the basic tasks of the organization, i.e. the production of goods or the production of services.

2. Supportive sub-systems. These maintain the relationship between the production subsystem and the external environment, i.e. the procurement of inputs and the disposal of outputs.

3. Maintenance sub-systems. These provide the rules, rewards and roles of those who work in the organization.

4. Adaptive subsystems; whereas the above the subsystems are concerned with the present organization, the adaptive sub-system is concerned with the future, i.e. new markets, new products, new methods etc.

5. Managerial subsystems. These consist of the controlling and coordinating activities which govern all the subsystems which make up the total system. These include; coordination, decision making, planning and control.

3.6 Socio-Technical Systems

The socio-technical view of organization was developed by Trust and the Tavistock Institute and arose from consideration that any production system requires both a technical organization, i.e. the equipment, processes, methods etc. and a work organization relating to those who carry out the necessary tasks to each other, i.e. the social system. Based on this view on organization is not just a technical or social system but is the structuring of human activities found various technologies. The technologies involve determine the technical sub systems and very widely. Consider, for example, the differing skills, procedures, machinery, equipment and the layout of facilities required in an electronic company, a car manufacturer, a hospital or a computer bureau. In addition to the technical subsystem, every organization has a social sub system which consists of the aspirations, expectations, interactions and value systems of the members. The two sub-systems-the technical and the social- cannot be looked at separately but must both be considered interrelating within the organization. Socio-technical theory suggests that the organization consists of four interrelated elements-tasks, people, structure and technology as shown in figure 1.6

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Fig. 1.6 Socio-Technical view of organizations

More traditional approaches to organizations and their problems have tended to concentrate on one or other of the subsystems with little or no recognition of the other. For example, the production engineering/management science approach to organizational problems concentrated on the economic technical sub system and on fairly mechanistic techniques for quantifying decision making, control and of planning production.

The human relations and behavioural schools concentrated on the social subsystem and considered motivation, aspirations, group dynamics and other related factors with scant regard to the technologies involved. The socio-technical view consider each of the primary subsystems and its interrelationships and effects on each other and thus makes a genuine attempt at a comprehensive understanding of the systems we call organizations.

4.0 CONCLUSION

Systems in the organization help in the analysis of a problem that the organization will try to solve with an information system. Systems concepts help you understand technology, application, development and management in organization.

5.0 SUMMARY

The systems view is that the whole is greater than the sum of the individual parts and all systems comprises of inputs, processes and outputs. Parts or sub systems cannot be altered without other parts.

Technology

People

Tasks

Structure

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33 6.0 TUTOR-MARKED ASSIGNMENT

1. What are the key features of the system approach? 2. Give several alternative definitions of a system? 3. What is the transformation process?

4. What is an open system?

5. What is a socio-technical system?

8.0 REFERENCE/FURTHER READING

George R. Terry (1964) Principles of Management, Richard D. Irwin, Inc. Homewood Illinois, USA. Ghost Prentice Hall, Plc.

Harsh, Stephen B., L. J. Connor, and G. D. Schwab. (1981). Managing the Farm Business. Prentice-Hall, Inc., Englewood Cliffs, New Jersey.

House, William C. (1983). Decision Support Systems – A Data-Based, Model-Oriented User-Developed Discipline. Petrocelli Books, Inc. New York, NY.

Lucey T. (2005) Management Information System, 9th Ed. Thomson learning, High Holborn, 50-51 Bedford Row, London.

Laudon, K.C. and Laudon, J.P. (1996) Management Information Systems: Organization and Technology, 4th Ed. Prentice-Hall Inc, Upper Saddle River, New Jersey. W

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34 MODULE 1

UNIT 5: INFORMATION SYSTEMS, ORGANIZATIONS AND STRATEGY CONTENTS

1.0 Introduction 2.0 Objectives 3.0 Main Content

3.1 Organizations and Information Systems 3.2 What is an Organization

3.2.1 Features of an organizations

3.3 How Information Systems Impact Organizations 3.3.1 Economic Impact

3.3.2 Organizational and Behavioural Impact

3.4 Using Information Strategies to Achieve Competitive Advantage 3.4.1 Porters Competitive Forces Model

3.5 Information Systems Strategies 3.6 Conclusion

3.7 Summary

3.8 Tutor-Marked Assignment 3.9 References/Further Readings 1.0 INTRODUCTION

Information Systems are a part of organizations and it influence one another. Information systems are built by managers to serve the interests of the organization.

2.0 OBJECTIVES

At the end of this unit you should be able to:

1. Identify and describe important features of organizations that managers need to know about.

2. Evaluate the impact of information systems on organizations

3. Assess the challenges posed by strategic information systems and management solution. 3.0 MAIN CONTENT

3.1 ORGANIZATIONS AND INFORMATION SYSTEMS

Information systems and organizations influence one another. Information systems are built by managers to serve the interests of the business firm. At the same time, the organization must be aware of and open to the influences of information systems to benefit from new technologies. The interaction between information technology and organization is complex and is influenced by many mediating factors, including the organization’s structure, business processes, politics, culture, surrounding environment and management decisions (see figure 1.7) you will need to understand how information systems can change social and work life in your organization. You

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will not be able to design new systems successfully or understand existing systems without understanding your own business organization.

Fig. 1.7 The interaction between information technology and organization

The complex two-way relationship is mediated by many factors, not the least of which are the decisions mad-or not made-by managers. Other factors mediating the relationship include the organizational culture, structure, politics, business processes and environment.

As a manager, you will be the one to decide which system will be built, what they will do, and how they will be implemented. You may not be able to anticipate all of the consequences of these decisions. Some of the changes that occur in business firms because of New Information Technology (IT) investment cannot be foreseen and have results that may or may not meet your expectations. Who would have imagined ten years ago, for instance, email and instant messaging would become a dominant form of business communication and that many managers would be inundated with more than 200 email messages each day (Walker, 2004)?

3.2 WHAT IS AN ORGANIZATION?

An organization is a stable, formal social structure that takes resources from the environment and processes them to produce outputs. This technical definition focuses on three elements of an organization. Capital and labour are primary production factors provided by the environment. The organization (the firm) transforms these inputs into products and services in a production function. The products and services are consumed by the environments in return for supply inputs.

An organization is more stable than informal group (such as a group of friend that meets every Friday or lunch) in term of longevity and routines. Organizations are formal legal entit ies with internal rules and procedures that must abide by laws. Organizations are also social structures

Mediating factors Environment Culture Structure Business processes Politics Management decision Information Technology Organizations

Figure

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