Management Information Categories

In this article we plan to sum up an identification of the categories of management information needed by managers. These categories relate to types of information needed at different levels of organization from top management to the first-line supervisors. Management information can be conveniently categorized in to three main areas:

1. Strategic planning information.
2. Management control information
3. Operational information.

Strategic planning information relates to the top management tasks of deciding on objectives of the organization, on the levels and the kinds of resources required to attain the objectives, and on the policies that govern the acquisition, use and disposition of resources. Strategic planning depends heavily upon information external to the organization. When this is combined with internal data, management can make estimates of expected results. The specifics of this information are often unique and tailor made to particular strategic problems.

Management control information sheds light on goal congruence; it helps managers take those actions which are in the best interest of the organization; it enables managers to see that resources are being used efficiently and effectively in meeting the organizational goals. It can be pointed out three types of information are needed for management control: costs by responsibility centers, direct program costs, and full program costs including allocations for indirect costs. Management control information ties together various sub activities in a coherent way so that managers can gauge resource utilization and compare expected with actual results. Management control information is often interdepartmental, in that the inputs come from various organizational groups, cutting across established functional boundaries.

Operational information pertains to the day-to-day activities of the organization and helps assure that specific tasks are performed effectively and efficiently. It also includes the production of routine and necessary information, such as financial accounting, payrolls, personnel rosters, equipment inventories, and logistic. Operational information, such as scheduling work flow through a department or producing a payroll, generally originates in one department.

Systems for handling each of these categories differ as a result of the varying degrees to which the tasks can be well defined. Operational information can be well defined and easily reduced to a routine of a series of instructions, whereas strategic information is difficult to define; control information falls in between.

These three categories are useful when developing management information system, because they identify the different types of needs of managers and because they point out a continuum from the well defined information typical of operational information to the other extreme of ill defined information characteristics of strategic planning information. This continuum is central to the problem of utilizing computers as the hardware in system design. A well defined body of information can be reduced to a series of written instructions; that is, it can be programmed. A programmed information system involves specific elements that remain unalterable and thus subject to straight forwards calculation. For example, the usual payroll information can be reduced to a definite rate per hour multiplied by a number of hours worked. Some programmed information may be quite complicated, but as long as each element can be precisely defined, the result can be precise and calculable. Strategic planning information is more difficult to program but, as we shall see, recent developments in strategic planning and computer hardware make the computer of increasing value in strategy formulation.

Information processing components:

The architecture of components of computers and their information interaction is a mirror of the functioning of the human physiological information system (nervous system). Likewise the architecture of computer systems is basically similar to the structure of information as organizations commonly handle it in business. Human beings, business organizations, and computer systems can all viewed as doing five things to data: (1) They receive data they find things out – they INPUT; (2) They remember or write data down for reference -they STORE; (3) They compare, think about or manipulate data – they PROCESS; (4) They convey or send data to others – they TRNSMIT; and (5) They record and publish data in written form – they OUTPUT.

These five processes are basic to understanding information system whether they are human nervous systems, organizational or managerial information systems, or computer system. The similarity of the three types of information systems has become much clearer as computers have become more sophisticated.

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