MANAGEMENT

Management comprises of processes and activities like planning, organizing, controlling, directing and initiating. Decision making is a fundamental prerequisite for management processes There are two tools for the decision making framework: Highlighting the characteristics of Mission ,Objectives, Goals, Strategies The other one underlying the policies, programmes and procedures.

MISSION

Reflects the scope of its business interests

The organizations reason for existence

Is dependent on the viewpoint of customer Is extrapolated with the external environment The idea is based on setting procedures to identify and implement the perceived and value added benefits to the customers Is static not static in nature In nutshell, it is concrete justification and rationale on which the business activities of the organization are based.
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OBJECTIVES

Action orientation of its mission Segmented into workable objectives and assigned at all levels of management hierarchy Objectives are manifold and priority levels are to be set for allocation of resources, to meet the objectives within specific timeframe

GOALS

Are time bound targets a desired future state that the organization attempts to realize Are necessary to move in the direction of achievements of organization objectives Fulfillment of objectives is dependent on the goals such as allocation of resources that are specific to objectives

STRATEGY

These are the specific methodologies chosen by the organization

POLICIES

Are the guidelines framed to gear up the internal structure and operational activities of the business enterprise They provide the backup support to meet the objectives of an organization Org. efficiency depends directly upon framing up the right guidelines within the purview of the goals of an org. They are dynamic in nature

PROGRAMMES

They are concerned with the scheduling and organizing of the repetitive activities The constitution of the pragramme is based on the policies

PROCEDURES

These are the specifications of the sequence of steps to be undertaken in the activities to be performed. Are laid down to assist in a proper implementation of the programme by ensuring that the task activities are completed as per the prescribed schedule
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FUNCTIONS OF A MANAGER

To be skilled in functional specialty, such as engineering, marketing, sales, IT, legal or HR Traditional functions of planning, organizing, controlling, and initiating To be able to participate in design and utilization of computerized IS

FUNCTIONING OF MANAGEMENT

Planning: includes the strategy to select the course of action The following processes are needed in the course of planning Forecast Set objectives Develop strategies Decide programme Set budget Set procedures Develop policies

Organizing: Work is arranged efficiently Staffing : selection of qualified persons Directing : steps associated with getting things done through people Controlling : measures taken to carry out plan effectively and efficiently in pursuit of satisfactorily implementation of action towards the predetermined goals of an organization.

INFORMATION

Data that has been organized into a meaningful context. The processes such as collection, summarizing, analysis, interpretation, presentation of data leads to value addition to data. Cluster of facts that are meaningful and useful in various processes like decision making It is data that has been processed to add or create meaning and knowledge for the person who receives it.

USE OF INFORMATION

Organize Data into information Analysis of Information to give knowledge

Information
Difference Between Data & Information
1) 2)

3)

Information is useful for decision making but data has got no value. Information brings clarity and creates an intelligent human response in the mind. Information is like a finished product whereas data is like raw material.

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Types of information
Information could be classified on the basis of the purpose for which it is utilized: Strategic information: required by the managers at the strategic level of management for the formulation of the organizational strategies. these relate to long term planning policies of the organization eg information pertaining to new technologies, new products, competitors etc. Tactical information: is used at management control level and is a short term planning. eg sales analysis and forecasts, production resource requirement etc

Operational information: applies to short periods which may vary from an hour to few days. It is generally used by decision makers at the operational level. (often required to take immediate actions) eg stock-inhand, work-in-progress levels, outstanding orders from the customers etc

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INFORMATION QUALITY

Timeliness Accuracy Relevance Adequacy Completeness Explicitness Exception based

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SYSTEM
Is assembly of interrelated elements/components comprising a unified whole The term system means to combine, to set up ,to place together A system typically consists of components that are connected together in order to facilitate the flow of information , matter or energy A system is set of interrelated components working together to achieve a common purpose eg Education system, computer system, respiratory system. System works towards a common goal by accepting inputs and producing outputs

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System

control

feedback

input

process

output

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SYSTEMS CONCEPTS IN BUSINESS

The systems approach is a way of analyzing business problems This approach views the business organization as a system of interrelated parts designed to accomplish goals Each subsystem is a self-contained unit, but is also a part of the whole system Managers need to understand the goals of the business and design the functions of the subsystems to achieve these goals

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What is an Information System?

An information system is the set of interrelated components that collect, process, store and distribute information used by/support one or more business process.

Input: The collection of raw data. Processing: The manipulation of data into information. Output: Distributing valuable information.
Also Includes both technology and people

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Market research subsystem

Input
Manufacturing subsystem

Process

Output

Customer needs

Input
Marketing subsystem

Process

Output
Finished goods

Input Service subsystem Input

Process

Output

Product in use

Process THE FIRMS SUBSYSTEMS

Output

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Environment Organization Information System Processing Classify Arrange Calculate Feedback

INPUT

OUTPUT

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Basic Components of Information Systems

Hardware is a device such as a processor, monitor, keyboard or printer Software is a program or collection of programs that enable hardware to process data. Database is a collection of related files or tables containing data. Network is a connecting system (wireline or wireless) that permits different computers to share resources. Procedures are the set of instructions about how to combine the above components in order to process information and generate the desired output. People are those individuals who use the hardware and software,

interface with it, or uses its output.

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AN INFORMATION SYSTEM AS A SYSTEM

The major purpose of an information system is to convert data into information The information system is a subsystem of the business system of an organization Information systems that provide information on day to day activities of a business are known as operational systems Information systems that provide information to allow the management to allocate resources effectively are known as tactical systems Information systems that support the strategic plans of a business are known as strategic planning systems

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INFORMATION SYSTEM PRIMARY PURPOSE

Collects data, processes it into information then converts information into knowledge for a specific purpose.

Data: Elementary description of things, events, activities, and transactions that are recorded, classified, and stored, but not organized to convey any specific meeting
Information Data that has been organized so that they have meaning and value to the recipient Knowledge Information that has been organized and processed to convey understanding, experience and expertise as they apply to a current problem or activity
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Roles of IS

Support daily tasks of line workers within a business function across business functions knowledge work and production work support effectiveness and efficiency Support decision making across management levels and functions individual and group strategic, control (e.g., scheduling, resource allocations) Provide feedback Effectiveness (e.g., conformance), Efficiency (e.g., cost, cycle time), Adaptability (e.g., response time) Between levels, between functions Facilitate communication Policy and Goals Coordination and direction Interact with environment (e.g., Customers, Suppliers).
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IS at the Organisational Level

Operational-level

Elementary activities and routine transactions Data current and accurate Support knowledge and data workers Integrate new knowledge into the business Office automation Periodic monitoring, control, decision-making and administration Is the business working well?

Knowledge-level

Management-level

Strategic-level

Long-term (e.g. 5 year) planning and strategy Internal and external information

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Examples

What examples can you think of at the different organisational levels?

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MANAGEMENT INFORMATION SYSTEM

Its acronym of three words Management Information System It is a set of organized procedures which when executed provides information to support decision making Its a combination of human and computer based resources which result in collection , storage, retrieval, communication, and use of data for the purpose of efficient management of operation and for business planning A system to convert data from internal and external sources into information to communicate the information in an appropriate form to managers at all levels , in all functions, directing and controlling the activities for which they are responsible. A set of computer based systems and procedures implemented to help managers in their crucial job of decision making
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CHARACTERISTICS

System approach Management oriented Management directed Need based Exception based Future oriented Integrated Common data flows Long term planning Sub system concept Control database Flexible Reliable Simple
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MIS FUNCTIONS

Data capturing Processing of data Storage of information Retrieval of information Dissemination of management information Confirmation of validity of data and transactions Reactive and proactive response Communication of information

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KINDS OF INFORMATION SYSTEMS

KIND OF SYSTEM
STRATEGIC LEVEL

GROUPS SERVED
SENIOR MANAGERS

MANAGEMENT LEVEL

MIDDLE MANAGERS

KNOWLEDGE LEVEL

KNOWLEDGE & DATA WORKERS OPERATIONAL MANAGERS

MANUFACTURING FINANCE & ENGINEERING ACCOUNTING HUMAN RESOURCES

OPERATIONAL LEVEL
SALES & MARKETING

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TYPES OF IS

Executive Support Systems (ESS) Management Information Systems (MIS) Decision Support Systems (DSS) Knowledge Work Systems (KWS) Office Automation Systems (OAS) Transaction Processing Systems

(TPS)

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Transaction Processing Systems (TPS)

Computerized system that performs and records the daily routine transactions necessary to conduct the business; These systems serve the operational level of the organization Type: Inputs: Processing: Outputs: Users: Decision-making: Example Operational-level Transactions, Events Updating Detailed Reports Operations Personnel, Supervisors Highly Structured Payroll, accounts payable

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A Symbolic Representation for a payroll TPS

Employee data (various departments) To general ledger: wages and salaries

Payroll System

Management Reports Government documents

Payroll master file

Employee checks On-line queries

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Operational-level Systems Sales and marketing Order tracking Order processing Manufacturing Finance Accounting Human Resources Compensation

Machine control

Securities trading Cash management

Payroll

Plant scheduling

Accounts payable Accounts receivable

Training and development Employee records

Material movement and control

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Office Automation Systems (OAS)

Computer system, such as word processing, electronic mail system, and scheduling system, that is designed to increase the productivity of data workers in the office. Type: Inputs: Processing: Outputs: Users: Example: Knowledge-level Documents, Schedules Document Management, Scheduling, Communication Documents; Schedules Clerical Workers Document Imaging System Knowledge-level Systems
Word processing Document imaging E-mail / electronic calendars

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Decision Support Systems (DSS)

Information system at the management level of an organization that combines data and sophisticated analytical models or data analysis tools to support semistructured and unstructured decision making. Type: Inputs: Processing: Outputs: Users: Decision-making: Example: Management-level Low Volume Data Simulations, Analysis Decision Analysis Professionals, Staff Managers Semi-structured Sales Region Analysis

Management-level Systems Sales and Marketing Manufacturing Finance Accounting Human Resources

Sales region analysis

Production scheduling

Cost analysis

Pricing / profitability analysis

Contract cost analysis 34

Types of Decisions 1. Unstructured Decisions Novel, non-routine decisions requiring judgment and insights Examples: Approve capital budget; decide corporate objectives 2. Structured Decisions Routine decisions with definite procedures Examples: Restock inventory; determine special offers to customers 3. Semistructured Decisions Only part of decision has clear-cut answers provided by accepted procedures Examples: Allocate resources to managers; develop a marketing plan
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Characteristics of Decision-Support Systems

1. DSS offer users flexibility, adaptability, and a quick response. 2. DSS operate with little or no assistance from professional programmers. 3. DSS provide support for decisions and problems whose solutions cannot be specified in advance.

4. DSS use sophisticated data analysis and modelling tools.

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Management Information Systems (MIS)

Information system at the management level of an organization that serves the functions of planning, controlling, and decision making by providing routine summary and exception reports.
Type: Inputs: Processing: outputs: Users: Decision-making: Example: Management-level High volume data Simple models Summary reports Middle managers Structured to semi-structured Annual budgeting, Capital investment

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Characteristics of Management Information Systems

1. Support structured decisions at the operational and management control levels. However, they are also useful for planning purposes of senior management staff. 2. Its reporting and control oriented and help provide day-to-day control of operations. 3. It rely an existing corporate data-and data flows. 4. It have little analytical capability. 5. It generally aid in decision making using past and present data. 6. It are relatively inflexible. 7. It have an internal rather than an external orientation.

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Executive Support Systems (ESS)

Information system at the strategic level of an organization that address unstructured decision making through advanced graphics and communications.

Type: Inputs: Processing: Outputs: Users: Decision-making: Example:

Strategic Level Aggregate Data; Internal And External Interactive Projections Senior Managers Highly Unstructured 5 year operating plan
Strategic-level Systems

Sales and Marketing

Manufacturing

Finance

Accounting

Human Resources

5-year sales trend forecasting

5-year operating plan

5-year budget forecasting

Profit planning

Personnel planning

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Major Types of Information Systems

TYPES OF SYSTEM S ESS Strate gic Le ve l Sys te ms 5-ye ar 5-ye ar 5-ye ar Profit ope rating budge t s ale s tre nd planning plan fore cas ting fore cas ting M anpowe r planning

M IS DSS

Sale s manage me nt Sale s re gion analys is

Inve ntory Control Production Sche duling

M anage me nt-Le ve l Sys te ms Capital Annual Re location Inve s tme nt analys is analys is budge ting Cos t analys is Pricing/profitability Contract cos t analys is analys is

KWS OAS

Engine e ring work s tations Word proce s s ing

Knowle dge -Le ve l Sys te ms Graphics work s tations Docume nt Imaging

M anage rial work s tations Ele ctronic Cale ndars

M achine control TPS Orde r Track ing Plant s che duling

Ope rational Le ve l Sys te ms Se curitie s Payroll trading Accounts payable

Compe ns ation Training & de ve lopme nt

Orde r proce s s ing M ate rial move me nt Cas h manage me nt control Sale s and mark e ting M anufacturing Finance

Accounts re ce ivable Employe e re cord k e e ping

Accounting

Human Re s ource s

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Expert System

An expert system is a computer program that represents and reasons with knowledge of some specialist subject with a view to solving problems or giving advice. Possess knowledge Specific domain Solving problem or giving advice

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Expert Systems Features

Expertise Capable of making expert level decisions Deep knowledge Knowledge base contains complex knowledge Self-knowledge Able to examine own reasoning

Explain why conclusion reached

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Major Components of Expert Systems

Three major components

1. Knowledge base Facts Special heuristics to direct use of knowledge the software that represents the knowledge 2. Inference engine Brain Control structure Rule interpreter The reasoning mechanism that draws conclusions (the interpreter or control structure) 3. User interface Language processor

The hardware and software that provide the dialog between user and the computer
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LIMITATIONS

Knowledge not always readily available Difficult to extract expertise from humans Approaches vary Natural cognitive limitations Vocabulary limited Wrong recommendations Lack of end-user trust Knowledge subject to biases Systems may not be able to arrive at conclusions

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Benefits of Expert Systems

Increased outputs Increased productivity Decreased decision-making time Increased process and product quality Reduced downtime Capture of scarce expertise Flexibility Ease of complex equipment operation Elimination of expensive monitoring equipment Operation in hazardous environments Access to knowledge and help desks

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Ability to work with incomplete, imprecise, uncertain data Provides training Enhanced problem solving and decision-making Rapid feedback Facilitate communications Reliable decision quality Ability to solve complex problems Ease of knowledge transfer to remote locations Provides intelligent capabilities to other information systems

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E.S in Business Applications

Finance Insurance evaluation, credit analysis, tax planning, financial planning and reporting, performance evaluation Data processing Systems planning, equipment maintenance, vendor evaluation, network management Marketing Customer-relationship management, market analysis, product planning Human resources HR planning, performance evaluation, scheduling, pension management, legal advising Manufacturing Production planning, quality management, product design, equipment maintenance and repair
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Functional Examples

Examples of IS by function:

Sales and marketing Manufacturing and production Finance and accounting Human resources

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Classification of IS by Functional Area

The accounting information system The finance information system The manufacturing (operations, production) information system The marketing information system The human resources information system

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Sales & Marketing Systems

Systems that help the firm identify customers for the firms products or services, develop products and services to meet customers needs, promote products and services, sell the products and services, and provide ongoing customer support.

EXAMPLES System Order processing Market analysis Description Enter, process, and track orders Identify customers and markets using data on demographics, markets, consumer behavior, and trends Determine prices for products and services Organizational Level Operational Knowledge

Pricing analysis

Management

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Manufacturing and Production Systems

Systems that deal with the planning, development, and production of products and services and with controlling the flow of production.

Examples System Description Machine control Control the actions of machines and equipment Computer-aided design (CAD) Design new products using the computer Production planning Decide when and how many products should be produced Facilities location Decide where to locate new production facilities

Organizational Level Operational Knowledge Management Strategic

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Finance and Accounting Systems

Systems that keep track of the firms financial assets and fund flows.

Examples System Description Accounts receivable Track money owed the firm Portfolio analysis Design the firm's portfolio of investments Budgeting Prepare short-term budgets Profit planning Plan long-term profits

Organizational Level Operational Knowledge Management Strategic

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Human Resources Systems

Systems that maintain employee records; Track employee skills, job performance, and training; And support planning for employee compensation and career development.

Examples System Description Training and development Track employae training, skills, and performance appraisals Career pathing Design career paths for employees Compensation analysis Monitor the range and distribution ofemployee wages, salaries, and bene6cs Human resources planning Plan the long-term labor force needs of the organization

Organizational Level Operational Knowledge Management Strategic

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