All the managerial functions – planning, organizing, leading and controlling rely on a steady stream of information about what is happening at, and beyond, an organization. Only with accurate and timely information can managers monitor progress toward their goals and turn plans into reality. If managers cannot stay “on track” anticipating potential problems, developing the skills to recognize when corrections are necessary and then making appropriate corrections or adjustments as they progress their work may be both fruitless and costly.
Information systems enable managers to control how they do business. If you were to look at a new Toyota in a showroom, you would find the car has a computer generated sticker attached to the window to display the pricing and Environmental Protection Agency (EPA) information. The Toyota dealer probably has a computerized inventory system to tell you if a car is available with the options you want – perhaps even the color you have dreamed about. Should you need financing, the bank computer can help the salesperson check your credit quickly and close the sale. From the largest corporation to the modest hometown auto dealer, the computer plays a vital part in the control of business operations.
At your college or university, information about who you are and what you do is of interest to many people. Referring back to the opening segment of the illustrative case, the information listed in items 1 (courses you have taken) is of interest to professors and academic deans; the information in item 2 is of interest to library professionals. Continue down the list as we examine who is interested in each type of information: (3) Professors, financial administrators, and computer center staff; (4) Bookstore mangers; (5) Dining service managers; (6) Financial administrators and maintenance managers; (7) Athletics department managers; (8) Campus security officers; (9) Medical center staff; (10) Financial aid administrators; (11) academic deans and financial aid administrators; (12) Admissions staff and planners and (13) Academic deans and financial administrators. At this point, you may have noticed a lot of overlap. In fact, we probably haven’t listed all the overlaps in appetites for information about you.
Managers at all levels are finding that computer based information systems provide the information necessary for effective operation. These management information systems (MIS) are rapidly becoming indispensable for planning, decision making, and control. How quickly and accurately managers receive information about what is going right and what is going wrong largely determines how effective the control system be. With information systems playing such an important role in managing organization, it has become crucial for managers to understand how these systems should be designed, implemented and managed. With colleges and universities facing economic and enrollment pressures in the 1990s, the importance of management information systems can be seen every day on your college campus, if you look for it.
To appreciate the central role played by information in making control effective, consider a modest sized manufacturer of automobile replacement parts with annual sales of $10 million. Every year, the firm’s 350 employees service 20,000 customer orders. These orders must be processed, billed, assembled packed and shipped adding up to some 400,000 transactions that must be controlled.
And that is only the beginning. The firm writes 25,000 checks annually. Half of these cover wages. Must of the others pay for the 5,000 purchase orders issued every year. Costs are assembled from 17,000 time cards, 6,000 job orders and 20,000 materials requisitions. Each year that small $10 million firm is processing almost a million pieces of information related to its activities – and the figure does not include all the other pieces of information related to inventory and quality control. Nor does it include the market analysis and other information organization’s people collect as part of their strategic planning. Increasingly, information is being seen as a key factor in helping managers respond to the complex and turbulent environment.
Small wonder then, that more and more managers view information itself as a valuable asset – one that needs to be carefully managed and protected. To understand this view, we need to take a closer look at the nature of information and the differing of information.