UNIT 5: MIS AND CONTROL SYSTEMS

Structure
5.1 Management Information Systems – An Introduction
5.2 Objectives
5.3 System View and Status of MIS in Organizations
5.4 Framework for Understanding MIS and its Role at Various
Management Levels
5.5 Organization and Information System-Two way relationship
5.6 MIS as Decision Assisting Tool
5.7 System Vulnerability, Abuse, and Auditing
5.8 Summary
5.9 Unit End Exercises
5.10 References and Suggested Further Readings

5.1 MANAGEMENT INFORMATION SYSTEM –

AN INTRODUCTION
The subject of Management Information System (MIS) has different
meaning for different people. MIS, initially, were built to process
transactional data of an organization and to produce regular reports. With
little more advancement the system generated a report in a suitable format
that created an impact on its user and provoked an action, a decision or an
investigation. Today, an information system has evolved to the stage where
they handle databases and secondary data available on the web to facilitate
decision-making. Accordingly, definition of MIS has also evolved. There
are many closely related definitions in use. The terms MIS is synonymously
used with terms the Information System (IS), the Information and Decision
System and the Computer based Information System.
The MIS is defined as an integrated system of man and machine for
providing the information to support the operations, the management, and
the decision-making function in the organization.
The above definition emphasizes an association between MIS and decision-
making. An application software that processes data, which is not used for
decision-making, cannot be called an MIS. For instance, a computer-aided
design system is not an MIS.
An MIS deals with information that is systematically and routinely collected
in accordance with a well-defined set of rules. In other words, data collection
is a planned activity for which resources are allocated and rules are defined.
The information provided by an MIS assists managers in planning,
organizing, staffing, coordinating, directing and controlling the operations
of an organization. The management experts have viewed these steps as
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Information Systems Management Control system. Figure 5.1 shows the relationship between
operations, planning and control.

Planning

Plan & Targets

Control

Corrective Actions
Operations

Figure 5.1: Management Control System

In any organization that has planned activities leading to the achievement

of the stated goals, there is always a control process in place that measures
progress towards these goals and enables the manager to deduct the deviations
from the original plan in time. It is the responsibility of the management to
take corrective actions before it is too late. The deviations may be due to
environmental changes or due to the mistakes made by people. An MIS
is concerned with planning and control. An MIS has large amount of data
as its integral part that is stored and managed by a data base management
system.
The exponential growth of information all around makes it necessary that
information is probably collected, stored and retrieved in various fields so
that it could be usefully exploited whether and when needed. The concern is
“What information does the manager need to manage effectively”? We are
interested in a system for providing the necessary management information.
MIS is a system that aids management in making, and implementing
decision. An MIS must have the following features:
1. It must be capable of handling voluminous data. The data as well as
transactions must be validated.
2. It must be able to perform operations on the data irrespective of the
complexity of the operations. Often time multi-dimensional analysis
is required.
3. An MIS should facilitate quick search and retrieval of information.
An MIS must support mass storage of data and information.
4. The information must be communicated to the recipient in time.
Moreover, the communicated information must be relevant.
5. The information system must always have internet link to dig out
related information and data from the web for better analysis helping
the management in taking decision.

5.2 OBJECTIVES
After reading this unit, you should be able to:
●● Identify the main features of a Management Information System
(MIS);
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●● Explain the Anthony and Simon framework for understanding the MIS and Control Systems
MIS and decision-making process;
●● Explain the basic overview of the systems concept;
●● Describe the management functions at various levels in the context of
relationships between management and informational needs;
●● Use MIS as a technique for making programmed decision;
●● Explain the vulnerability of an information system; and
●● Discuss the control and audit structure required for an information
system.

5.3 SYSTEM VIEW AND STATUS OF MIS IN

ORGANIZATIONS
Today besides professional managers, all administrators, politicians,
academicians have become aware of the need for adopting an integrated
holistic perspective by using the systems approach to problem-
conceptualization and decision-implementation. Today we find everyone
talking of systems - the transport system, educational system, healthcare
delivery system, defence system, economic system, communication system,
management information system, transaction processing system, decision
support system, computer systems, etc. But what exactly do we mean by a
system? Let us elaborate to know about.
What is a system?
It is an entity; conceptual or physical, which consists of interdependent parts
or components. It is this interdependency which is characteristic of the parts
of the system. A system is a complex of elements or components directly
or indirectly related in a casual network. This brings in the notion of some
type of feedback and control to see whether or not the system is a position to
achieve the goals/purpose/objectives of the system. Any system must have
an objective or a set of objectives or a hierarchical set of objectives. In a
large context, a system is an assembly of procedures, processes, methods,
routines techniques etc. united by some form of regulated interaction to
form an organized whole. In fact no system, unless it be a totally closed
system, can exist in isolation.
A system is made up of sub-systems, which may be composed of further
sub-systems. We could carry on this refinement till we arrive at the so-
called ‘black box’ level, which is some perceptible manageable level. Just
as system is made up of sub or sub-sub-system, it itself is part of a super or
supra system. This could be termed as the environment in which the system
operates.
We can graphically depict the above narrative description in the form of
Figure 5.2 below. Let us give an illustration in the context of Figure 5.2. One
could think of an industrial system or a factory system. A factory system
has various sub-systems like the production sub-system, the shipping
sub-system, the financial sub-system, the marketing sub-system and the
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Information Systems personnel sub-system. Now a production sub-system could consist of sub-
sub-systems of production control, materials control, quality control etc.
the materials sub-sub-system can be further broken down into ‘black boxes’
say purchasing, stores, transportation etc. In turn, the factory system is part
of the larger economic system of the country which would be the so-called
superior or supra system.

Super or Supra System

The System under

Other Systems
consideration

Sub system - 1 Sub system - 2 Sub system - N

Sub Sub System

SSS - 2 SSS - M
(SSS – 1)

Black
BB - 2 BB - Q
Box BB-1

Figure 5.2: Hierarchy of Systems

Activity A
Think of at least three examples in the context of the Figure 5.2
…………………………………………………………………
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Let us have another example in the context of Figure 5.3 below. Data could
be a set of input into a data processing, which would process/transform/
convert the data into output or information. One could think of raw material
entering as input into production system, which is converted/transformed or
processed into an output i.e. some final product.
Basic Systems Module

Processor/ Set of
Set of
Transformer/ Outputs
Inputs
Converter

Figure 5.3 (a)

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 Boundary wall Environment MIS and Control Systems

Input Output
Adjusted
Processor

Measured output
Information (MOI)

MOI

Comparison Control
Effector of MOI & STD Module

STD

Standard Norm/
Budget
Information

Figure 5.3 (b)

Activity B
In the context of Figure 5.3, give at least three examples mentioning the
inputs, the processor, and the set outputs.
Input Processor Output
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……………………………………………………………………………

Top
Management

Policies Plans Budgets Objectives

Revenue Costs Profit

Middle Management

Schedules Measurements

Goods Services Performance

Operating Management

Figure 5.4: Interaction of Management Levels

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Information Systems Continuing the example further in the context of Figure 5.4 this time, the
quality of the finished product could be measured by comparing it with the
standard specifications of the finished product. Depending on the deviations
or variances the manager can then adjust the quality and quantity of the
raw materials. The environment of the factory system under consideration
could be other factories, competitors, customers, markets, sociopolitical
and cultural factors, government etc.
Information systems are used in all functional areas and operating divisions
of business. In finance and accounting, information systems are used to
forecast revenue and business activity, determine the best sources and
uses of funds. Information systems have been used for managing cash and
other financial resources, and analyzing investment. Financial health of an
organization is also checked using IS. In sales and marketing, information
systems are used to develop new goods and services (product analysis),
determining the best location for production and distribution facilities (site
analysis), determine the best advertising and sales approaches (promotion
analysis) and set product prices to get the highest total revenues (price
analysis).
In manufacturing, information systems are used to process customer
orders, develop production schedules; control inventory lends and monitor
product quality. Service industries such as airline industry and railways
use information systems to serve their customers better. Banks and other
investment firms’ use IS to make good investments and sanction sound
loans. Publishing houses, healthcare organizations, and retail companies
all make use of information systems to serve their customers better and
maximize their profit.
Activity C
Detail some functional MIS systems in your organization or any organization
of your choice. What are their distinguishing characteristics? Why are they
failures or successes?
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5.4 FRAMEWORK FOR UNDERSTANDING

MIS AND ITS ROLE AT VARIOUS
MANAGEMENT LEVELS
There is too much data and information in an organization. In order to design
a MIS successfully, we need a framework to structure the information so
that the data and information relevant for decision-making can be separated
from rest of the data. Before we talk about the design of MIS, let us
understand the strategic management of a business. An organization must
respond to market forces, competition, to environment and to technological
changes. The scope of business is wide, touching many fronts. A business,
among other activities, must do a long-term strategic planning. There are
many methodologies for strategic planning. According to model presented
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by Robert Anthony, the strategic planning is one of the major activities in MIS and Control Systems
business planning and control. The other two are the management control
and operational control. This framework is illustrated in Figure 5.5.

Strategic Planning

Planning and
Management Control
Control System

Operation Control

Figure 5.5: Framework of business planning and control

1. Strategic Planning is the process of deciding objectives of the

organization, determining the possible shift in objectives, deciding
on the resources used to attain their objectives and the policies that
govern the acquisition, use and disposition of their resources.
2. Management Control is the process by which managers assure that the
resources are obtained and used effectively and efficiently to attain
the objectives of the organization.
3. Operational Control is the process of assuming that specific tasks are
carried out effectively and efficiently.
It is useful to classify the above definitions with some examples. The
table below gives instances of planning and control activities in different
functional areas.
Table 5.1: Planning and Control Activities in Different Functional Areas
← ACTIVITIES →
Functional
Areas Strategic Management Operational
Planning Control Control
Production Location of a new Determine the product Scheduling specific
factory mix for a monthly jobs on specific
production program machines in a shift
Marketing Entering the export Media planning for Planning sales
market advertising expenditure contacts to be made
by a salesman in the
next week
Finance Raising capital by Determining maximum Determining what
issuing new shares levels of credit for action to take against
customers nonpayment by a
specific customer
Personnel/ Deciding on Determining who will be Determining which
HR changes to be made promoted to fill a vacated workers will be on
in the organization post at middle and lower each shift.
structure levels, in the organization.

Anthony’s framework enables us to understand the characteristics of

information needed to support the three types of planning and control
process. The table 5.2 below depicts these characteristics and highlights

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Information Systems the substantial differences in information required for strategic planning,
management control, and operational control.
Table 5.2: Differences in Information required for three types of Planning
and Control Processes
S. Information Strategic Management Operational
No. Characteristic Planning Control Control
1 Volume Low Intermediate High
2 Level of Aggregation High Intermediate Low
3 Frequency of use of a Low Intermediate High
particular type of data
4 Currency requirement Low Intermediate High
5 Accuracy Low Intermediate High
6 Scope Wide Intermediate High
7 Source Significant amount Mostly Internal Entirely
from external sources Internal
8 Predictability with user Low Fairly High Very High
9 Variability with user High Intermediate Low
10 Distance of user (in Fair Fairly close Close
Organizational terms)
from sources within
organization
Let us now look at Simon’s framework that has broken down the process
of decision making into three stages:
1. Intelligence: This is the stage in which the decision maker recognizes
that there is a problem or opportunity that requires him to make a
decision.
2. Design: The decision maker determines the alternatives that are
available to him to resolve the problem or exploit the opportunity.
3. Choice: In this stage, an alternative generated in stage-2 is singled out
to be pursued. The selection process may involve feasibility analysis
or cost-benefit analysis.
With this framework, we can distinguish between three major classes of
decisions.
a) Programmed Decisions are there in which all stages are handled
by following a preset well-defined procedure. The decisions are
repetitive and routine which arise often and are capable of being
modeled mathematically in their entirety. The classic example would
be inventory-ordering decisions.
b) Non-programmed decisions are difficult to structure in logical-
mathematical terms. These decisions cannot be handled in well-
defined and pre-specified procedures. There opportunities are not
repetitive in nature and they require fresh intelligence, design and
choice phases to be executed. An example would be the decision to
set up a new factory or launch a new line of product.
c) Semi-programmed decisions are those in which at least one and no
more than two of the above stages can be handled by well-defined
preset procedures. An example where the intelligence phase is
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 well structured would be the diverse kinds of variance analysis. A MIS and Control Systems
comparison with a budget or standard is undertaken in a well-defined
way to signal the need for a decision. Subsequent stages of design and
choice, however, are not handled by a set procedure.
Recall that an MIS supports problem-specific decision-making. Depending
on the framework used by the organization for decision-making and goal set
for MIS, the designer should determine the information needs.
An MIS should not automate the existing procedures. MIS should act as a
catalyst of change in the processes of an organization. For instance, a private
bank sanctions loans by using a sequential process. An applicant applies for
a loan, the details provided by him are verified, and his application details
are entered into the bank application format along with his credit limit. The
computer application is then passed on to the loan sanctioning authority.
The process takes two weeks time even though the staff spends about thirty
minutes on the application. A workflow system should not automate the
existing process. It should aim to reduce the application processing time
to less than a week. The present workflow systems let everyone look at the
application simultaneously and each concerned person adds his feedback.
The sequential process has been changed to a parallel process. The total
time has come down to less than a week.
According to Zani, the important determinants of MIS design are:
1. Opportunities and risks
2. Company strategy
3. Company structure
4. Management and decision-making process
5. Available technology
6. Available information sources.
An MIS should be designed, viewing the organization. A company’s structure
sub-divides essential tasks to be performed, assigns them to individuals, and
spells out the interrelationships of their tasks. The organizational structure
and the tasks determine the information needs of the company.
The MIS designer must plan to deliver reports in line with the organization
structure. This means that the main decision makers and the power centers
must be recognized in the MIS. If the decision-making responsibilities are
clearly defined and allocated in the organization, MIS must capture them.
If the organization culture provides sufficient incentives for efficiency and
results, the MIS support this culture by providing such information, which
will aid the promotion of efficiency.
The organization system is an open system and MIS should be so designed
that it highlights the changes to the concerned level in the organization so
that the action can be taken to correct the situation.
The designer of the MIS should take care of the data problems. The input
data to the MIS may contain bias and error. The inputs to the MIS must be
controlled to ensure impartiality, reliability and consistency.
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Information Systems If the organization culture provides sufficient incentives for efficiency and
results, the MIS should provide information that will aid the promotion of
efficiency.
If the organization is an open system then MIS should be designed to
highlight critical changes in the system or in its environment.
In designing an MIS there are two types of situations one may come across.
If the organization has no experience of computing applications, which
will create the maximum impact on the organization, it can be identified
by using Zani’s framework. Key success variables are however seldom
obtained through a questionnaire survey of managers. Data on environment,
past company performance must be analyzed and discussed to identify key
success variable. It is sometimes useful to pen down a quantitative measure
of such variable. For example the performance of a textile unit can be
summed up through two indicators: contribution per loom shift and fixed
cost per loom shift. Similarly the performance of a shipping company may
be measured as gross operating profit per day per voyage. Precise definitions
of performance indicators enable the analyst to understand and quantify the
likely impact of improvement in different task of planning and monitoring.
An analysis of the company’s key success variables can be done only after
a thorough understanding of the company’s operations. Consultants and
vendors who do not spend adequate time in understanding the operations
are unlikely to throw up application areas, which will create the maximum
impact. They are likely to suggest “off-the-shelf” applications. One should
use standard software, which is available for such applications.
For a company getting into automation using information system, a list
of applications would have to be generated, keeping in view the future
perspective, a least for five years, on the basis of which a suitable configuration
would be decided. However the development and implementation of the
applications would have to be done in a phased manner. The first few
applications must be those, which can create an impact on the performance
of the organization, are quick to implement with the least amount of changes
in the existing procedures and systems.
By and large an effort is made to create useful databases, which capture data
during the execution of routine data processing systems. Such data are then
analyzed to produce periodic planning report for monitoring.
Examples of such systems are the sales analysis based on invoice processing;
inventory control based on stock accounting; costing and profitability
analysis on the basis of financial accounting system. Marginal additions to
data fields, new coding structure, and revised procedures are introduced to
make the data base and reporting more useful.
Factors Facilitating Implementation of MIS
A few factors, which will increase the chances of a successful implementation
of MIS, are:
1) Involvement of top management in the computerization effort, in
defining the purpose and goals of computers within the organization.
2) Selection of an IT Manager who is well versed with IT tools and
also has the skills to involve managers in choosing application areas,
identifying information needs and designing reports.
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3) A computer staff, which has interdisciplinary skills in computers, MIS and Control Systems
management, and operations research.
4) A balanced expenditure on hardware and software.
Now let us look into the role of MIS at various management levels. We
come across saying that management can be understood by observing what
managers do. Management can also be understood by the type of functions
a manager performs. A manager usually performs the following functions:
planning, organizing, Staffing, Directing, Coordination, Feedback,
Reporting and Budgeting. In fact management is a process of achieving an
organization’s goal and objectives by judiciously making use of resources
of men, material, machines, money, methods, messages and moments (the
last two in the context of information being vital resources to the manager/
decision-maker).
Management can also be seen as structured into three hierarchical levels
namely, top level, middle level and bottom level or strategic, tactical and
operational levels, respectively. Although lines of demarcation are not
absolute and clear-cut, one can usually distinguish certain layers within the
organization, which are characterized by, the classical pyramidical type of
structures as shown in Figure 5.4. Top management establishes the policies,
plans and objectives of the company as well as a budget framework under
which the various departments will operate. These factors are promulgated
and passed down to middle management. They are translated into cost
or profit centre concept. These are reviewed, analyzed and modified in
accordance with the overall plans and policies until agreement is reached.
Middle management then issues the specific schedules and measurement
yardsticks to the operational management. The operational levels has the
responsibility of producing goods and services to meet the revenue, profit
and other goals, which in turn will enable the organization achieves its
overall and objectives.

Planning Planning
Control Org.
Org. Sta
Sta ffin
ffin g
Control g Coord.
Co
ord
.

Top Level Bottom Level

Planning
Org.
Sta
ffin
Control g
Co
ord
.

Middle Level
Figure 5.6: The Allocation of Managers’ Time
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Information Systems The hierarchical view of management is important for two reasons:
information needs tend to be different at different levels of management
and the amount of time devoted to any given function varies considerably
with the level as can be seen in Figure 5.6. The job content at various
management levels is further elaborated in Table 5.3.
In the context of MIS, management can perhaps be best defined as a
process of (i) selection of objectives (ii) judicious allocation of resources
(iii) determining operational plans and schedules (iv) keeping control of
progress and (v) evaluation through feedback. Each of these areas requires
certain decisions to be made.
Thus we take strategic decisions at the top level, tactical decisions at the
middle and operational decisions at the junior level. As can be seen from
Table 5.3, the type of problems and decisions at the junior level are quite
deterministic and structured, so we can have programmed decisions.
Table 5.3: Job Content of Management Levels
S. Character Top Middle Operating
No. Management Management Management
1 Focus on Heavy Moderate Minimum
Planning
2 Focus on Control Moderate Heavy Heavy
3 Time Frame 1-5 years Up to 1 year Day to Day
4 Scope of Activity Broad Entire functional area Single sub-
function
5 Nature of Activity Relatively Moderately Highly
6 Level of Very Complex, Less complex, better Straightforward
Complexity many variables defined variables
7 Job Measurement Difficult Less Difficult Relatively Easy
8 Result of activity Plan, policies Implementation, End-product
& strategies schedules,
performance
yardsticks
9 Type of External Internal, reasonable Internal,
Information accuracy historical level
utilized of accuracy
10 Mental Attributes Creative Responsible, Efficient,
innovative persuasive, effective
administrative
11 Number of People Few Moderate number Many
Involved
12 Department/ Intra-division Intra-division, Inter Intra-
Divisional dependent department
interaction
Source: J.Kanters-”Management Information Systems”, Prentice Hall: Englewood Cliffs
Through the classic pyramidical structure is generally acceptable;
unfortunately in the modern complex organization this neat, militaristic,
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configuration seldom (!) fits the reality. The modern manager must be MIS and Control Systems
capable of managing his/her information systems for strategic planning,
management control, and operational control.
Activity D
Can you visualize MIS without computers? Justify your answer.
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5.5 ORGANIZATION AND INFORMATION

SYSTEM – TWO-WAY RELATIONSHIP
A system is an assembly of elements arranged in a logical order to active
certain objectives. An organization is also a system. H. J. Leavitt advocates
that an organization should be viewed as a socio-technical system consisting
of people, tasks, technology, culture and structure. The modified Leavitt’s
model is shown in the Figure 5.7 below:

Tasks

People Structure
Goals

Technology Culture

Figure 5.7: An organization as a socio-technical system

An organization is an open system that has the capacity to adjust itself to

the changing environment. The goals of an organization change in response
to the changes in organization or in its environment. The organization must
change as system to stay in tune with the goals.
MIS should be designed viewing the organization as a system. MIS design
should give due weightage to the human side of the organization and its
culture. MIS should be designed to give reports to main decision maker. In
other words, the designer must study the organization structure and identify
the power centers.
In a tall hierarchy with a high degree of centralization, the MIS should give
control information to the higher management.
If the organization is structured on a functional basis, then the MIS should
have a functional design.
If the organization works on a standardized system where rules, policies,
systems and procedures have been laid down, then there become part of the
MIS.
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Information Systems
5.6 MIS AS DECISION ASSISTING TOOL
We have studied above that Simon’s Model divides decision-making into
three phases - Intelligence, Design and Choice. In the intelligence phase,
potential problems and opportunities are identified. In the design phase,
alternative solution to the problem is developed. In the choice stage, a
course of action is reflected.
In certain cases, the decision can be made using a rule, procedure or
quantitative method. Such problems are known as structured problem. For
example, an organization may decide to place a purchase order for every
purchase requisition without worrying about merging them. Such decision
can be easily programmed. The organization may have a fixed re-order
point and fixed re-order quantity irrespective of demand. Automated system
such as transaction processing systems and MIS are often used to handle
programmed decisions. Such systems generate reports for concerned people
so that they can take action. The decision taken is known as ‘Programmed
Decision’.
If the problem is unstructured, the solution cannot be arrived at using a
set of rules or procedures. The rules and procedures, at best, can help in
identifying alternatives. An information system that assists decision maker
in making a non-programmed decision is referred to as Decision Support
System (DSS). A decision support system usually has large amount of data
that is managed by a Database Management System. The DSS presents
various views of data to the decision maker to facilitate decision-making.
The views and reports may present details according to the needs of the
user. A user may prefer graph whereas another user may like to see data
in tabular form. A DSS is designed to provide presentation flexibility to its
users. Details can be rolled up or drilled down depending on the requirement.
For instance, sales manager of area A would be interested in knowing total
sales, details of each sub-area within the main area. The manager would also
like to know sales in area B, area C etc. to measure the relative performance.
The manager would not be interested in details of sub-areas of area B as C;
and will look down area A to get complete details.
DSS should provide facility to its user to perform statistical analysis of
data. The sales data, for instance, can be analyzed for identifying seasonal
fluctuations from regular demand change. It should also have provision to
dig out secondary data from web. There are whole lots of software packages
that can do amazingly good analysis of the data. Let us say, a company is
considering an investment in an IT Project. It can do a what-if-analysis
to analyze worst and best scenario. The expected cost and benefit can be
changed within limits to estimate pay back period.
These are situations when a closed form solution is not available. In such
situation a simulation model is constructed to gain insight. The model is
tested on large number of inputs. Sometimes, simulation is done to study
the behavior of system over a period of months in few days. A simulation
system assists manager decision-making.
A decision support system may help a manager in perform goal-seeking
analysis. In goal seeking analysis, you work backward starting with goal
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to arrive at conditions required to achieve that goal. For instance, you may MIS and Control Systems
allocate budget for inventory and then backward to figure cut the stock
level, re-order point, delivery time etc.
Ideally, one would like to have a DSS to help in decision making in every
situation. So far, no DSS has come close to being so general, perfect, and
useful at the same time. A DSS, in practice, is developed for assisting in
decision-making process for specific problems.

5.7 SYSTEM VULNERABILITY, ABUSE, AND

AUDITING
Due to the potential of information systems, they are under constant attack
from intruders and hackers. Unauthorized access to data and programs may
cost an organization a fortune. For instance, an individual may disclose the
stock levels of an organization to a potential buyer who may decide to go
to the competitor if he feels that you may not be able to fulfill the order
in time. In the world of e-Commerce, and internet easily accessible, one
mistake could cost a client enough to justify a lawsuit. To avoid, abuse of
information system, proper controls must be set. There are many threats to
information systems such as hardware failure, software failure, user errors,
software changes, theft of data, services, equipment, and telecommunications
problems.
Systems become vulnerable because of system complexity. Any disaster
has an extensive effect. System vulnerabilities differ from person to person.
●● User: Identification, Authentication, and Subtle Software Modification
●● Programmer: Disables Protective Features; Reveals Protective
Measures
●● Maintenance Staff: Disables Hardware Devices; Uses Stand-alone
Utilities
●● System Operator: Doesn’t Notify Supervisor, Reveals Protective
Measures, disables or changes the network setup etc.
It is better to think of all possible misuse and fraud from within the
organization and establish system control to prevent them. Such controls are
reformed to as deterrence controls. We next discuss some of these controls.
Entry of people who use the system should be monitored through biometrics
systems such as finger print identifier, retina scanner, voice entry. Smart
card identifiers and sanitization system also may be used.
The standard procedure such as well chosen passwords and different levels
of access are always put in place.
Any output generated should leave an audit trail to identify any misuse of
the reports. All transactions through the information system should have
proper audit trail.
The database management system provides mechanism to give different
level of access to different uses to protect data. With proper configuration
and use of encryption, the network misuse can be prevented.
An information system is like any other system in the organization. It must
be audited and reviewed to make sure that it is operating and being used
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Information Systems as intended. The initial requirements and objective document serves as
a reference. The system is audited for its performance, use, cost, benefit
and other design criteria such as planned activity for which resources are
allocated and time frame is set. A planned review is time-driven that may be
done every 6 months or every year. The review must have a clear objective
and reviewers must produce a written report. The report must comment on
the following factors:
Objective: Is in tune with the organizational goal?
Hardware/Software/Network/DBMS: Are they being used as intended? Will
they be able to meet requirement for next few years? Is there any bottleneck?
Staff: Is staff sufficient and sufficiently trained? Are People controllable
using the system? In case of any skill gap because of version changes in
systems, proper training must be provisioned to bring the staff at the current
level of the updated system.
Safety: Are enough controls present to ensure safety? Are the controls
working effectively?
Cost Benefit: This is one of the key reasons for taking up review activity.
This is also the most difficult part of the review process. The reviews should
try to be as objective as possible.

5.8 SUMMARY
This unit has given you a fair understanding of the main feature of a
Management Information System in Organizational Context, describing its
various functions, importance and relationship with planning, control and
operations in an organization i.e. what an MIS is and what it is not.
Further, the unit systematically leads you to the prevailing status of MIS
in organizations, discussing the ever growing need of information and
its proper handling (processing), which in turn led to the development of
MIS and advent of computers therein to cope with the hazards faced in
coordinating and managing the organizational challenges. We have also
discussed different viewpoints about the MIS given by same management
scientists.
In this unit, we have learnt the basic structure of an information system. We
also learnt the MIS as an organizational unit within an organization. MIS
and its role at various levels of management were also discussed. MIS is
used for making programmed decision as well as in assisting the decision
making process. The information system is vulnerable and it can easily be
abused. An information system requires a control structure and it needs
regular audits.

5.9 UNIT END EXERCISES

1. Define MIS. What are the main features of an MIS?
2. What are the functions that MIS supports in an organization?
3. What is Simon’s framework for decision-making? How does it help in
MIS design?
4. What are the determinants of MIS design according to Zani?
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5. Explain the following statement, “there is a two way relationship MIS and Control Systems
between organization and Information Systems”.
6. Discuss fully the purpose of an information system.
7. “In the end, the information system is recognized only as a foundation
for human judgment, insight and inventiveness”. Discuss.
8. What impact does the implementation of programmed decision-
making have on the management system of an organization?
9. Compare and contrast programmed decision making information
system and decision assisting information system.
10. What are different types of controls and audits required for an
information system?

5.10 REFERENCES AND SUGGESTED FURTHER

READINGS
Davis, G.B., MIS Conceptual Foundations, Structure and Development,
McGraw Hill: New York.
Jawadekar, W.S., Management Information System, Tata McGraw Hill
Publishing Company Ltd.
Kanter, J., Management Oriented MIS, Prentice Hall Inc: Englewood-Cliffs.
Zani, W.S., “A Blue Print for MIS”, Harvard Business Review.

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