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Managemengt
Information
Systems
By
a
management
information
system,we
propose
the
follow
alternate
definition:
an
integrated
uer/machine
system
(usually
computerized)
for
providing information to support
decision making in an enterprise.
The key elements of this
definition are
—
An integrated uer/machine
system
—
For
proving information
—
To
support decision making
—
In
an enterprise
A management information
system utilizes
—
Computer
hardware and software
—
Manual procedures
—
Models for analysis
—
A database
Just
as there is a logical flow of materials in the
creation of a product, there is
logical
flow
of
information
in
a
management
information
manufacturing,raw
materials
move
through
a
process
that
transforms
the
raw
materials
into usable products. In a similar fashion, in an
information system,data
are supplied to
a system(input), the data are
manipulated(processed),and they are
transformed
into
information(output).In
its
simplest
form
,a
management
information
systemed
may
be
depicted
by
an
input-process-output(IPO)
model
(Fig.10.1). An
understanding of
this model
is worthwhile becaue it can be used
to
represent
all
in
that
figure
that
the
MIS,
through
its
processing
technology
(of
collecting,
coding,storing,processing,decoding,and
reporting),
transforms the
data coming into an enterprise into usable
information.
Inputs
Transforation Process
Outputs
Data
ProcessingTechnology
Information
Fig.10.1 An
Input-Process-Output Medel of a Management
Information System
We
may
further
enhance
our
understanding
of
management
information
systems by
discussing their general function and major
elements. These systems
exist
in
most
enterprises,
whether
public
or
private,
primarily
to
assist
management
in
improving
revenues,
reducing
costs
and
managing
assets.
Therefore, improving
the performance of an enterprise is the ultimate
objective
of management infoemation
systems- not the storage of data, the generation
of
reports,or
even
”
getting
the
right
information
to
the
right
person
at
the
right
time.
”
And
MIS
can
best
improve
an
enterprise
’
s
performance
by
helping
to
improve the quality of managerial
decisions.
Transaction
processing
(TP),
reporting
systems(RS),
and
decision-support
systems(DSS)
are
the
major
elements
of
a
management
infortion
primary
role
of
TP
in
an
enterprise
is
the
collection,
storage,and
processing
of
data in such a way that
transactions within an enterprise are described
and thus
the procedural actions of the
enterprise supported .More specifically, a TP
system
may be viewed as a computer-
based means of capturing transaction so that may
be
recreated.
The
out
of
a
transaction-processing
system
includes
stored
transaction images,
documents needed by an enterprise to fulfill its
mainstream
purposes(invoices,production
orders,shipping
orders,purchase
orders,
mailing
lists, pay checks,
work orders,and so forth), and listings of
transaction that have
occurred over a
period of time (for confirmation or references).
Reporting systems(RS) and decision-
support systems (DSS) often are confused
with each other and thus misunderstood.
Yet, each has a clear orientation. And
distinctions may be drawn in terms of
their areas of impact on the payoff to an
enterprise
and
their
relevance
to
a
manager.
So
an
RS
provides
standardized
reports based on well-known policies,
procedures, and rules. And a DSS provides
information to help management with new
, unstructured decision making.
A
pyramid
may
be
used
to
illustrate
the
dimensions
of
an
information
system(Fig.10.2).The
vertical
dimension
represents
the
levels
of
management
(first-line,
middle,
and
top
management)
,
and
the
horizontal
dimension
represents the
main functional areas of a business firm (for
example, marketing,
production,
and
finace).The
depth
dimension
indicates
the
major
management
information systems that provide
support for managerial activities: the structured
and
required
reporting
systems(RS)
and
decisionmaking
system(DSS) .
These
dimensions rest on a base of
transactions processing(TP).
Managerial
Lexels
Finance
Production
Marketing
MIS
Transaction Pocessing
DSS
Fig.10.2 The Dimension of a Management
Information System
As the figure illustrates, RS and DSS
(drawing on the TP system ) are utilized
at all managerial levels and acress all
function areas . There, it is te management
information
system(of
TP
,RS
,and
DSS
)
that
integrates
both
the
level
of
management and functional areas .To
further demonstrate how the subsystems fit
together,
the
definition
of
MIS
is
recreated
in
the
following
table
,
with
the
components of MIS
related to the defintional frame work.
Table10.1 Definition of Management
Information System (MIS)
A
management information system is
.An integrated user/machine system
.Computer, models
.For providing
information .System output
MIS
Subsystems
.To support decision making
./MS
.
In an enterprise
.Frameworkforthe information
The system
utilizes
.Computer hardware and
software .Computer system
.Manual
procedures .Books,manuals,people
.Models for analysis
.Operations research
.A database
.Computer ,people
Developing
a
compensation
plan
to
pay
executive,
managerial,
and
professional employees
is similar in many respects to developing a play
for and
employees. The basic aims of
the plan are the same in that the goal is to
attract
good
employees
and
maintain
their
commitment.
Furthermore,
the
basic
methods of job
evaluation , classifying jobs, ranking them , or
assigning points to
them ,for instance,
are about as applicable to managerial and
professional jobs as
to production and
clerical ones.
1)Yet for managerial and
professional jobs , job evaluation provides only a
partial answer to the question of how
to pay these employees, Such jobs tend to
emphasize nonquantifiable factor like
judgment and problem solving more than
do production and clerical
jobs . There is
also
a tendency to pay manager and
professionals based on abilitybased on
their performance or on what they can do
–
rather
than
on
the
basis
of
static
job
demands
like
working
conditions.
Developing compensation plans for
managers and professionals, therefore, tends
to be relatively complex,2) and
evaluation, while still important, usually plays a
secondary issues, like bonuses,
incentives, and benefits.
Compensation
Managers
There
are
five
elements
in
a
manager
’
s
compensation
package:
salary,
benefits,
short-term
incentive,
long-term
incentives, and
perquisites.
The amount of salary
managers are paid usually depends on the value of
the
person
’
s work
to organization and how well the person is
discharging his or her
responsibilities.3)AS with other jobs ,
the value of the person
’
s
work is usually
determined
through job
analysis
and salary surveys
and
salary surveys
and the
resulting fine tuning of salary levels.
Salary
is
the
cornerstone
of
executive
compensation
:
It
is
on
this
element
that
the
others
are
layered,
with
benefits,
incentives
,
and
perquisites
normally
awarded in some
proportion to the manager
’
s
base pay .
4) There is
considerable disagreement regarding what
determines executive pay
and,
therefore
,
whether
top
executives
are
worth
what
are
paid
.
At
the
lower-management
levels(like
first-line
supervisor),there
is
no
debate
;
supervisors
’
pay
grades are usually set so that their median
salaries are 10% to
25% above those of
the highest-paid workers supervised. And many
employers
even pay supervisors for
scheduled overtime, although the Fair Labor
Standards
Act does not require them to
do so.
It is at the top-management
levels that questions regarding pay abound . The
traditional wisdom is that a top
manager
’
s salary is closely
tied to the size of the
firm . Yet two
experts who tested this idea for the 148 highest-
paid executives in
the
United
States
concluded
that
the
level
of
executive
responsibility
(as
measured by total
assets, total sales,total number of shares in the
company, total
value
of
the
shares,
and
total
corporate
profits)
is
not
an
important
variable
in
determing executive compensation .
Instead , say these experts , an
executive
’
s
pay
is
mostly
determined
by
the
industry
in
which
he
or
she
works,
and
the
corporate power structure ,since
executives who also serve on their
firms
’
boards
of
directors can heavily influence how they get paid.
Yet there is conflicting evidence. In
one study , for instance , the researcher
found
that
a
statistical
analysis
of
the
total
cash
compensation
of
the
chief
executive
officers
of
129
companies
showed
that
they
were
paid
for
both
responsibility
and
performance.
This
researcher
fond
that
four
compensable
factors-company
size
,
profitability,
number
of
employees,
and
experience-accounted
for
83%
of
the
differences
in
pay .Therefore,
it
appears
that there
are rational,
acceptable ,
and abiding
principles that
govern the total
cash
compensation of top executives in manufacturing
firms.
In
any
case,
shareholder
activism
is
combining
with
congressional
reform
and
other
changes
to
tighten
up
the
restrictions
on
what
firms
pay
their
top
executives .
For
example,
the
Securities
and
Exchange
Commission
voted
in
1992
to
approve
final
rules
rules
regarding
executive
compensation
chief
executive
officer
’
s
pay
is
always
to
be
disclosed
as
well
as
other
officers
’
pay
if
their
compensation(
salary
and
bonus)
exceeds
$$100,000.5 And for
bankers,the Federal Deposit Insurance Act of 1991
contains
a prohibition
on
excessive compensation. One result is
that boards of
directors
must
act
responsibly
in
reviewing
and
setting
executive
pay .
That
,
says
one
expert,
includes
determining
the
key
performance
requirements
of
the
executive
’
s job;
assessing the appropriateness of the
firm
’
s current compensation
practices
;
conducting
a
pay-
for-performance
survey;
and
testing
shareholder
acceptance of the
board
’
s pay proposals.
The general trend today is to reduce
the acceptance of base salary and boost
the importance of short-and long-term
executive incentives. The main issue here
is
identifying
the
appropriate
performance
measures
for
each
type
of
incentive
and
then determining how to link these to pay .
Typical short-term measures of
shareholder
value
include
revenue
growth
and
operating
profit
margin.
Long-term
shareholder
value
measures
include
rate
of
return
above
some
predetermined base.
Compensating
professional
employees
Compensating
nonsupervisory
professional employees like engineers
and scientists presents unique problems. 6)
Analytical
jobs
put
a
heavy
premium
on
creativity
and
problem
solving,
compensable
factors
not
easily
compared
or
measured.
Furthermore,
the
professional
’
s
economic impact on the firm is often related only
indirectly to the
person
’
s
actual
efforts;
for
example,the
success
of
an
engineer
’
s
invention
depends on many
factors, like how well it is produced and
marketed.
The
job
evaluation
methods
we
explained
previously
can
be
used
for
evaluating
professional
jobs.
The
compensable
factors
here
tend
to
focus
on
problem solving , creativity, job
scope, and
technical knowledge and
expertise.
Both the point method and
factor comparison methods have been used ,
although
the
job
classification
method
seems
most
popular
.
Here
a
series
of
grade
descriptions
are
written,
and
each
position
is
slotted
into
the
grade
having
the
most appropriate definition.
Yet
，
in
praction,
traditional
methods
of
job
evaluation
are
rarely
used
for
professional jobs since
“
it is simply not possible
to identify factors and degrees
of
factors
which
meaningfully
differentiate
among
the
values
of
professional
work
”
.
“
Knowledge
and
the
skill
of
applying
it
,
”
as
one
expert
notes
,
“
are
extremely difficult to quantify and
measure.
”
As
a
result
,
most
employers
use
a
market-
pricing
approach
in
evaluating
professional jobs
. They price professional jobs in the marketplace
to the best of
their ability to
establish the values for benchmark jobs . These
benchmark jobs
and the
employer
’
s other
professional jobs are then slotted into a salary
structure.
Specifically,
each
professional
discipline
(
like
mechanical
engineering
or
electrical engineering )
usually ends up having four to six grade levels ,
each of
which requires a fairly broad
salary range . This approach helps ensure that the
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