Tag: MIS

  • What is the Concept of Corporate Planning?

    Learn and Explain, What is the Concept of Corporate Planning?

    A plan is a predetermined course of action to be taken in the future. It is a document containing the details of how the action will be executed and it is made on a timescale. The goals and the objective that a plan is supposed to achieve are the prerequisites of a plan. The setting of the goals and the objective is the primary task of the Management without which planning cannot begin. Also learned, Management As a Control System! What is the Concept of Corporate Planning?

    Planning means taking a deep look into the future and assessing the likely events in the total business environment and taking a suitable action to meet any eventuality. It further means generating the courses of action to meet the most likely eventuality. Planning is a dynamic process. As the future becomes the present reality, the course of action decided earlier may require a change. Planning, therefore, calls for a continuous assessment of the predetermined course of action versus the current requirements of the environment. The essence of planning is to see the opportunities and the threats in the future and predetermine the course of action to convert the opportunity into a business gain and to meet the threat to avoid any business loss.

    Planning involves a chain of decisions, one dependent on the other since it deals with a long-term period. A successful implementation of a plan means the execution of these decisions in a right manner one after another.

    Planning, in terms of future, can be long-range or short-range. Long-range planning is for a period of five years or more, while short-range planning is for one year at the most. The long-range planning is more concerned about the business as a whole and deals with the subject like the growth and the rate of growth, the direction of the business, establishing some position in the business world by way of a corporate image, a business share and so on. On the other hand, short-range planning is more concerned with the attainment of the business results of the year. It could also be in terms of action by certain business tasks, such as the launching of a new product, starting a manufacturing facility, completing the project, achieving intermediate milestones on the way to the attainment of goals. The goals relate to long-term planning and the objective related to the short-term planning. There is a hierarchy of objectives which together take the company to the attainment of goals. The plans, therefore, relate to the objectives when they are short-range and to goals when they are the long-range.

    Long-range planning deals with resource selection, its acquisition, and allocation. It deals with the technology and not with the methods or the procedures. It talks about the strategy of achieving the goals. The right strategy improves the chance of success tremendously. At the same time, a wrong strategy means a failure in achieving the goals.

    Corporate business planning deals with the corporate business goals and objectives. The business may be a manufacturing or a service; it may deal with the industry or trade; may operate in a public or a private sector; may be a national or an international business. Corporate business planning is a necessity in all cases. Though the corporate business planning deals with a company, its universe is beyond the company. The corporate business plan considers the world trends in the business, the industry, the technology, the international markets, the national priorities, the competitors, the business plans, the corporate strengths and the weaknesses for preparing a corporate plan. Planning, therefore, is a complex exercise of steering the company through the complexities, the difficulties, the inhibitions and the uncertainties towards the attainment of goals and objective.

    #Dimensions of Planning:

    The corporate business plan has five dimensions. These are time, entity, organization, elements and characteristics.

    #Time:

    The plan may either be long-range or short-range, but the execution of the plan is, year after year. The plan is made on a rolling basis where every year it is extended by one year, keeping the plan period for the next five years. The rolling plan provides an opportunity to correct or revise the plan in the light of any new information the planner may receive.

    #Entity:

    The planning entity is the thing on which the plan is focused. The entity could be the production in terms of quantity or it could be a new product. It could be about the finance, the marketing, the capacity, the manpower or the research and development. The goals and the objectives would be stated in terms of these entities. A corporate plan may have several entities.

    #Organization:

    The corporate plan would deal with the company as a whole, but it has to be broken down for its subsidiaries, if any, such as the functional groups, the divisions, the product groups and the projects. The breaking of the corporate business plan into smaller organizational units helps to fix the responsibility for execution. The corporate plan, therefore, would be a master plan and it would comprise several subsidiary plans.

    #Elements:

    The plan is made out of several elements. The plan begins with the mission and goal which the organization would like to achieve. It may provide a vision statement for all to understand as also the purpose, focus, and direction the organization would like to move towards. It would at the outset, place certain policy statements emerging out of management s business philosophy, culture and style of functioning followed by policy statements. Next, it would declare the strategies in various business functions, which would enable the organization to achieve the business objectives and targets. It would spell out a program of execution of plan and achievements. It provides support for rules, procedures, and methods of plan implementation, wherever necessary. One important element of the plan is a budget stipulated for achieving certain goals and business targets. The budgets are provided for sales, production, stocks, resources, expenses which are monitored for the time in execution period. The budgets and performance provide meaningful measure about success and failure of the plan designed to achieve certain goals.

    #Characteristics:

    There are no definite characteristics of a corporate plan. The choice of characteristics is a matter of convenience helping to communicate to everybody concerned in the organization and for an easy understanding in execution. The features of a plan could be several and could have several parts. The plan is a confidential written document subject to the charge and known to a limited few in the organization. It is described in the quantitative and qualitative terms. The long-term plan is normally flexible while the short-term one is generally not. The plan is based on the rational assumptions about the future and gives weight age to the past achievements and corporate strength and weal messes. The typical characteristics of a corporate plan are the goals, the resources, the important milestones, the investment details and a variety of schedules.

    #Concepts of Corporate Planning:

    Corporate planning is the process of creating a path to profitability for the enterprise, including determining how and where to market the company’s products and services. When preparing a business plan the small business owner also forecasts financial results for the upcoming year — revenues, expenses and the resulting profit. Planning has its own terminology, concepts, and techniques that must be understood in order for the business owner to be able to create a realistic plan that can be implemented successfully.

    • Mission Statement: In defining his mission statement, the small business owner states the value he wants to provide his customers, employees or society as a whole. He articulates why he decided to go into business — what he wants to accomplish through building the company.
    • Business Model: The concept of a business model has two components: how the company is going to generate sales and why the company will be profitable. The business may have several revenue streams, such as selling products, offering service contracts for the products and selling subscriptions to premium content on the company’s website. The company also has factors related to its operations that will cause it to be able to earn a profit. Lower production costs, relative to other companies in its industry, is a positive factor for the company.
    • Goals: Goals, or objectives as they are also called, describe the end result the business owner seeks to achieve. During the planning process, the business owner and his management team set numerous goals — major goals, such as revenues and profit margin percentage, as well as goals for each department and sometimes each individual — to ensure that all members of the organization put forth their best efforts and work as a cohesive team.
    • Strategies and Tactics: Strategies describe how the company’s resources will be directed to accomplish the goals. A strategy could be, for example, to sell the company’s products through independent sales reps and in-house salespeople. Tactics are specific steps taken to implement each of the strategies, showing who is responsible for implementing them and when each step needs to be completed.
    • Competitive Advantage: Companies succeed over the long term because they create and maintain competitive advantages — aspects of their products or service levels that deliver greater value to customers than those of competitors. The customers perceive this greater value and continue to do business with the company becoming loyal, repeat customers.
    • Financial Forecast: The forecast is created using spreadsheet software. The business owner builds revenue models that calculate the expected sales — units and dollars. He then estimates what the expenses for the company will be — what will it cost to create products or services, market them and fund the company’s operations including facilities costs and staff salaries.
    • Risk Factors: All businesses, including small ones, face risks — environmental factors that may cause the company to not perform as well financially as anticipated. It is important for the small business owner to recognize these risks and plan ways to change his business strategy if necessary in response to the risks. These planned responses are called contingency plans.
    • Exit Strategy: A business owner may have a long-term goal of selling the company someday. How he intends to divest the business is termed his exit strategy. Although larger companies’ shareholders sometimes exit through selling their shares to the public through an initial public offering — IPO — a small business owner commonly exits the business through selling it to another individual who wants to operate it, or to a larger company.

  • Explain Management As a Control System!

    Learn and Study, Explain Management As a Control System!

    Planning, organizing, staffing, coordinating, directing and controlling are various! Steps in a management process. All the steps prior to a control are necessary but are not necessarily self-assuring the results unless it is followed by a strong control mechanism. The management experts have viewed these steps as Management Control System. They postulate the hypothesis that unless a control is exercised on the process, the goals will not be achieved. They advocate a system of effective control to ensure the achievement of the business objectives. Also learn, Management as, What? As an Art…As a Process! Explain Management As a Control System!

    A definition of control is the process through which managers assure that actual activities conform to the planned activities, leading to the achievement of the stated common goals. The control process measures a progress towards those goals and enables the manager to detect the deviations from the original plan in time to take corrective actions before it is too late. Robert J Mockler defines and points out the essential elements of the control process.

    The management is a systematic effort to set the performance standards in line with the performance objectives, to design the information feedback systems, to compare the actual performance with these predetermined standards, to identify the deviations from the standards, to measure its significance and to take corrective actions in case of significant deviations. This systematic effort is undertaken through the management control system.

    The control system is essential to meet the environmental changes discussed earlier, to meet the complexity of today s business, to correct the mistakes made by the people, and to effectively monitor the delegation process. A reliable and effective control system has the following features.

    Early Warning Mechanism:

    This is a mechanism for predicting the possibility of achieving the goals and the standards before it is too late and allowing the manager to take corrective actions.

    Performance Standard:

    The performance standard must be measurable and acceptable to all the organization. The system should have meaningful standards relating to the work areas, responsibility, and managerial functions and so on. For example, the management would have standards relating to the business performance, such as production, sales, inventory, quality, etc.  The operational management would have standards relating to the shift production, rejections, downtime, utilization of resources, sale in a typical market segment and so. On. The chain of standards, when achieved, will ensure an achievement of the goals of the organization.

    Strategic Controls: 

    In every business there are strategic areas of control knows the critical success factors. The system should recognize them and have controls instituted on them.

    Feedback: 

    The control system would be effective; it continuously monitors the performance and sends the information to the control center for action. It should not only highlight the progress but also the deviations.

    Accurate and Timely: 

    The feedback should be accurate in terms of results and should be communicated in time for corrective action.

    Realistic: 

    The system should be realistic so that the cost of control is far less than the benefits. The standers are realistic and are believed as achievable. Sufficient incentive and rewards are to be provided to motivate the people.

    The Information Flow:

    The system should have the information flow aligned with the organization structure and the decision makers should ensure that the right people get the right information for action and decision making.

    Exception Principle:

    The system should selectively approve some significant deviations from the performance standards on the principle of management by exception.

    A standard is control system has a set of objectives, standards to measure, a feedback mechanism and an action center as elements of the system. They need to be properly evolved and instituted in the organization with due recognition to the internal and the external environment. The system as a whole should be flexible to change with ease so that the impact of changed environment is handled effectively.

  • Characteristics of MIS Management Information Systems

    Characteristics of MIS Management Information Systems

    Characteristics of MIS (Management information systems). It is a set of systems that helps management at different levels to take better decisions by providing the necessary information to managers, for long-term planning. The management information system is not a monolithic entity but a collection of systems that provide the user with a monolithic feel as far as relevant information delivery, transmission and storage are concerned. Also learned, the Role of The MIS, and its Characteristics!

    Learn, Explain the Characteristics of Management Information Systems (MIS)! 

    The different subsystems working in the background have different objectives but work in concert with each other to satisfy the overall requirement of managers for good quality information. Management information systems can install by either procuring off the self-systems or by commissioning a completely customized solution.

    A management information system has the following characteristics:

    System approach:

    The information system follows a System approach. The system’s approach implies a holistic approach to the study of the system and its performance to achieve the objective for which it has stood formed.

    Management-oriented:

    For designing MIS top-down approach should follow. The top-down approach suggests that system development starts from the determination of the management needs and overall business objectives. Management-oriented characteristic of MIS also implies that the management actively directs the system development efforts.

    Need-based:

    MIS design and development should be as per the information needs of managers at different levels that are strategic planning level, management control level, and operational control level.

    Exception-based:

    MIS should develop with the exception-based reporting principle. This means an abnormal situation, that is the maximum, minimum or expected values vary beyond the limits. In such cases, there should be exceptions reporting to the decision-maker at the required level.

    Future-oriented:

    Besides exception-based reporting, MIS should also look at the future. In other words, MIS should not merely provide past or historical information. Rather it should provide information based on projections based on which actions may initiate.

    Integrated:

    Integration is significant because of its ability to produce more meaningful information. For example, to develop an effective production scheduling system, it is necessary to balance such factors as set-up costs, workforce, overtime rates, production capacity, inventory level, capital requirements, and customer services. Integration means taking a comprehensive view of the subsystems that operate within the company.

    Common data flows:

    Because of the integration concept of MIS, there is an opportunity to avoid duplication and redundancy in data gathering, storage, and dissemination. System designers are aware that a few key source documents account for much of the information flow. For example, customer’s orders are the basis for billing the customer for the goods ordered, setting up accounts receivables, initiating production activity, sales analysis, sales forecasting, etc.

    The Following Characteristics of Good Management Information Systems Explained!

    For information to be useful to the decision maker, it must have certain characteristics and meet certain criteria.

    Some of the characteristics of good information discuss as follows:

    Understandable:

    Since information is already in a summarized form, it must understand by the receiver so that he will interpret it correctly. He must be able to decode any abbreviations, shorthand notations, or any other acronyms contained in the information.

    Relevant:

    Information is good only if it is relevant. This means that it should be pertinent and meaningful to the decision maker and should be in his area of responsibility.

    Complete:

    It should contain all the facts that are necessary for the decision maker to satisfactorily solve the problem at hand using such information. Nothing important should stand left out. Although information cannot always be complete, every reasonable effort should make to obtain it.

    Available:

    Information may be useless if it is not readily accessible ‘ in the desired form when it needs. Advances in technology have made information more accessible today than ever before.

    Reliable:

    The information should count on being trustworthy. It should be accurate, consistent with facts, and verifiable. Inadequate or incorrect information generally leads to decisions of poor quality. For example, sales figures that have not stood adjusted for returns and refunds are not reliable.

    Concise:

    Too much information is a big burden on management and cannot process in time and accurately due to “bounded rationality”. Bounded rationality determines the limits of the thinking process which cannot sort out and process large amounts of information. Accordingly, information should be to the point and just enough – no more, no less.

    Timely:

    The information must deliver at the right time and in the right place to the right person. Premature information can become obsolete or forgotten by the time it stands needed.

    Similarly, some crucial decisions can delay because proper and necessary information is not available in time, resulting in missed opportunities. Accordingly, the time gap between the collection of the central database and the presentation of the proper information to the decision maker must reduce as much as possible.

    Cost-effective:

    The information is not desirable if the solution is more costly than the problem. The cost of gathering data and processing it into information must weigh against the benefits derived from using such information.

    The Characteristics of Management Information Systems (MIS) - ilearnlot
    Characteristics of MIS Management Information Systems
  • Role of the Management Information System (MIS)!

    Role of the Management Information System (MIS)!

    Learn and Understand, Role of the Management Information System (MIS)! 

    The role of the MIS in an organization can be compared to the role of the 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. Also learned, What is MIS? Role of the Management Information System (MIS)!

    It fulfills the needs of blood supply to the human body in the 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, Modelling Systems 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 helps them further in decision making at the operations level to correct an out of control situation.

    If the gathered information is irrelevant than decision will also incorrect and Organization may face big loss & lots of Difficulties in Surviving as well.

    Helps in Decision making:

    Management Information System (MIS) plays a significant Role in Decision making Process of any Organization. Because in Any organization decision is made on the basis of relevant Information and relevant information can only be Retrieving from the MSI.

    Helps in Coordination among the Department:

    Management Information System also helps in establishing a sound Relationship among every person of the department to the department through proper exchanging of Informations.

    Helps in Finding out Problems:

    As we know that MIS provides relevant information about every aspect of activities. Hence, If any mistake is made by the management then Management Information Systems (MIS) Information helps in Finding out the Solution of that Problem.

    Helps in Comparison of Business Performance:

    MIS store all Past Data and information in its Database. That why management information system is very useful to compare Business organization Performance. With the help of Management information system (MIS) Organization can analyze his Performance means whatever they do last year or Previous Years and whatever business performance in this year and also measures organization Development and Growth.

    The MIS helps the middle management, in short, them planning, target setting and controlling the business functions. It is supported by the use of the 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 role 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 operations of an organization.

    Role of the Management Information System (MIS) - ilearnlot

  • What is Management Information System (MIS)?

    What is Management Information System (MIS)?

    Learn and Study, What is Management Information System (MIS)?

    Management information system, or MIS, broadly refers to a computer-based system that provides managers with the tools to organize, evaluate and efficiently manage departments within an organization. In order to provide past, present and prediction information, a management information system can include software that helps in decision making, data resources such as databases, the hardware resources of a system, decision support systems, people management and project management applications, and any computerized processes that enable the department to run efficiently. Also learn, Concept of Investment, What is Management Information System (MIS)?

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    What is MIS? MIS is the use of information technology, people, and business processes to record, store and process data to produce information that decision makers can use to make day to day decisions. MIS is the acronym for Management Information Systems. In a nutshell, MIS is a collection of systems, hardware, procedures and people that all work together to process, store, and produce information that is useful to the organization.

    #Management Information System Definition:

    The Management Information System (MIS) is a concept of the last decade or two. It has been understood and described in a number of ways. It is also known as the Information System, the Information and Decision System, the Computer-based information System.

    A management information system (MIS) is a broadly used and applied term for a three-resource system required for effective organization management. The resources are people, information, and technology, from inside and outside an organization, with top priority given to people. The system is a collection of information management methods involving computer automation (software and hardware) or otherwise supporting and improving the quality and efficiency of business operations and human decision making.

    As an area of study, MIS is sometimes referred to as information technology management (IT management) or information services (IS). Neither should be confused with computer science.

    The MIS has more than one definition, some of which are given below.
    1. The MIS is defined as a system which provides information support for decision making in the organization.
    2. 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 functions in the organization.
    3. The MIS is defined as a system based on the database of the organization evolved for the purpose of providing information to the people in the organization.
    4. The MIS is defined as a Computer-based Information System.

    Though there are a number of definitions, all of them converge on one single point, i.e., the MIS is a system to support the decision-making function in the organization. The difference lies in defining the elements of the MIS. However, in today s world MIS a computerized .business processing system generating information for the people in the organization to meet the information needs decision making to achieve the corporate objective of the organization.

    In any organization, small or big, a major portion of the time goes in data collection, processing, documenting it to the people. Hence, a major portion of the overheads goes into this kind of unproductive work in the organization. Every individual in an organization is continuously looking for some information which is needed to perform his/her task. Hence, the information is people-oriented and it varies with the nature of the people in the organization.

    The difficulty in handling these multiple requirements of the people is due to a couple of reasons. The information is a processed product to fulfill an imprecise need of the people. It takes time to search the data and may require a difficult processing path. It has a time value and unless processed on time and communicated, it has no value. The scope and the quantum of information are individual-dependent and it is difficult to conceive the information as a well-defined product for the entire organization. Since the people are instrumental in any business transaction, a human error is possible in conducting the same. Since a human error is difficult to control, the difficulty arises in ensuring a hundred percent quality assurance of information in terms of completeness, accuracy, validity, timeliness and meeting the decision making needs.

    In order to get a better grip on the activity of information processing, it is necessary to have a formal system which should take care of the following points:

    • Handling of a voluminous data.
    • Confirmation of the validity of data and transaction.
    • Complex processing of data and multidimensional analysis.
    • Quick search and retrieval.
    • Mass storage.
    • Communication of the information system to the user on time.
    • Fulfilling the changing needs of the information.

    The management information system uses computers and communication technology to deal with these points of supreme importance.

    Why the Need for MIS?

    The following are some of the justifications for having an MIS system:

    Decision makers need information to make effective decisions. Management Information Systems (MIS) make this possible.

    MIS systems facilitate communication within and outside the organization: Employees within the organization are able to easily access the required information for the day to day operations. Facilitates such as Short Message Service (SMS) & Email make it possible to communicate with customers and suppliers from within the MIS system that an organization is using.

    Record keeping: Management information systems record all business transactions of an organization and provide a reference point for the transactions.

    What is Management Information System (MIS) - ilearnlot