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Stable, Formal, Social Structure that
takes the resources from the
environment, process them to
produce the output.
Formal legal entities with internalrules and procedures
A formal and coordinated group of
people who function to achieve
particular goals
Collection of rights, privileges,obligations and responsibilities.
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StructureHierarchyDivision of labor
Rules, proceduresBusiness processesCulture
ProcessRights/obligationsPrivileges/valuesResponsibilitiesNormsPeople
Environmentalresources Environmental
Outputs
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Organization
Two or more people who work together in a structured way to
achieve a specific goal or set of goals.
Goals
Purpose that an organization strives to achieve; organizations often
have more than one goals, goals are fundamental elements of
organization.
The Role of Management
To guide the organizations towards goal accomplishment
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Managementrefers to the
tasks and activities involved in
directing an organization or
one of its units: planning,
organizing, leading, and
controlling.
The process of reaching
organizational goals by
working with and throughpeople and other
organizational resources.
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Organizing
Planning
Controlling
Leading
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Top
Manage-ment
Middle
Management
Supervisory oroperational management
Conceptual skills
Human skills
Needs
Needs Technical Skills
Needs
Management levels Skills needed
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Monitor elementary activities and daily transactions
of the organization
support the monitoring, controlling, decision-making and administrative activities ofmiddle managers
support the long-range planning activities ofsenior management
Operational-levelsystem
Management-levelsystem
Strategic-levelsystem
Different Kinds of Systems
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Four major Types of systems1.) Executive support system
5 yrs sales trend forecasting, operational plan, budgets
forecasting, profit planning, personnel planning
2.) Management Information SystemSales management , inventory control, annual budgeting,
capital investment analysis, relocation analysis
3.) Decision support system
Sales region analysis, Production Scheduling, cost
analysis, pricing/profitability analysis, contract cost analysis.4.) Transaction Processing System
Order tracking/processing, plant scheduling, material movement, pay roll,account payable/receiveable, training & development, employee record
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Transactions Basic business
operations such ascustomer orders,purchase orders,receipts, time cards,invoices, and payrollchecks in anorganization
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Transaction processing system (TPS)
A computerized system that keeps the daily
records of routine transactions like sales order,employee record keeping, customer orders,purchase orders, receipts, time cards, invoices,
and payroll checks.
An organized collection of people, procedures,
software, databases, and devices used to record
completed for business related exchanges
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Process data generated by and about transactions
Maintain a high degree of accuracy
Ensure data and information integrity and accuracy Produce timely documents and reports
Increase labor efficiency
Help provide increased and enhanced service
Help build and maintain customer loyalty
Achieve competitive advantage
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Data entry & input
ProcessingDocuments& reports
Database
Internally generatedtransactions:
shipped orders
purchase orders
employee time cards
Externally generatedtransactions:
customer orders
vendor invoices
customer payments
Database update:
customer orders
inventory
purchase orders
customers
suppliers
Documents:
pick list
cheques to vendors
receiving notices pay cheques
Operational reports:
finished product inventorystatus
raw materials; packing
materials; spare parts;inventory status
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Output
Terminal
Terminal
Terminal
Terminal
Terminal
Immediate
processingof eachtransaction
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Raw materialsPacking materialsSpare partsInventory control
Purchase orderprocessing
Receiving
Accountspayable
Employees
Supplier
Inventory control
status report
Purchaseorder
Material
Cheque
Invoice
Receivingnotice
Purchaseorder
Purchaseorder
request
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Inventory control Maintains stock of items such as raw materials, packing
materials, spare parts, and supplies
Purchase order (P.O.) processing
A system that helps purchasing department completetransactions quickly and efficiently
Receiving A system that creates a record of expected and actual receipts Reconciles purchase orders with what is actually received
Accounts payable A system that increases an organizations control over
purchasing, improves cash flow increases profitability, and provides more effective
management of current liabilities
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Accounting systems
Consist of
Budget
Accounts receivable
Accounts payable
Payroll
Asset management
General ledger
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Payroll Generates payroll checks , as well as W-2 statements at the end
of the year for tax purposes
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Payrollsystem
EmployeeDatabase
To General ledger
Management Report
Outline queries
Employee numberNameAddPay rateMedicalTaxGross payNet pay
Government Agencies
Employee pay cheque
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Management information system (MIS)
An MIS provides managers with information andsupport for effective decision making, and provides
feedback on daily operations
Output, or reports, are usually generated throughaccumulation of transaction processing data
Each MIS is an integrated collection of subsystems,which are typically organized along functional lineswithin an organization
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Common
databases
Marketing
management
information
system
Financial
management
Information
system
Manufacturing
management
Information
system
Order
managementinformation
system
TPS
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Scheduled reports Produced periodically, or on a schedule (daily, weekly, monthly)
Key-indicator report Summarizes the previous days critical activities
Typically available at the beginning of each day
Demand report Gives certain information at a managers request
Exception report Automatically produced when a situation is unusual or requires
management action
Drill Down Report: Gives you the detailed report.
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Daily Sales Detail Report
Prepared: 08/10/xx
Order#
CustomerID
SalesRep ID
ShipDate Quantity Item # Amount
P12453 C89321 CAR 08/12/96 144 P1234 $3,214
P12453 C89321 CAR 08/12/96 288 P3214 $5,660
P12453 C03214 GWA 08/13/96 12 P4902 $1,224
P12455 C52313 SAK 08/12/96 24 P4012 $2,448
P12456 C34123 JMW 08J/13/96 144 P3214 $720
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Daily Sales Key Indicator Report
ThisMonth
LastMonth
LastYear
Total Orders Month to Date $1,808 $1,694 $1,014
Forecasted Sales for the Month $2,406 $2,224 $2,608
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Daily Sales by Sales Rep Summary Report
Prepared: 08/10/xx
Sales Rep ID Amount
CAR $42,345
GWA $38,950
SAK $22,100
JWN $12,350
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Earnings by Quarter (Millions)
Actual Forecast Variance
2NDQtr 1999 $12.6 $11.8 6.8%
1stQtr 1999 $10.8 $10.7 0.9%
4thQtr 1998 $14.3 $14.5 -1.4%
3rd
Qtr 1998 $12.8 $13.3 -3.0%
Drill DownReportsProvide detaileddata about a
situation.
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Provides reports with fixed and standardformats
Hard-copy and soft-copy reports Uses internal data stored in the computer
system End users can develop custom reports Requires formal requests from users
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Data may be made available frommanagement information systems on a
companys intranet Employees can use browsers and their PC to
gain access to the data
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MIS is an integrated collection of functionalinformation systems, each supporting
particular functional areas.
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Provides financial information to all financialmanagers within an organization.
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Financial statements
Uses and managementof funds
Financial statisticsfor control
Operationaldatabases
Databasesof valid
transactionsfor each
TPS
Transactionprocessingsystems
Businesstransactions
Businesstransactions
Internetor
Extranet
FinancialMIS
Businesstransactions
Databases ofexternal data
Databases ofinternal data
FinancialDSS
FinancialES
Financialapplications
databases
Customers,Suppliers
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Quality control reports
Process control reports
JIT reportsOperationaldatabases
Databases
of validtransactions
for eachTPS
Transaction
processingsystems
Businesstransactions
Businesstransactions
Internetor
Extranet
ManufacturingMIS
Businesstransactions
Databases ofexternal data
Databases of
internal data
Manufacturing
DSS
ManufacturingES
Manufacturingapplicationsdatabases
Customers,Suppliers
MRP reports
Production schedule
CAD output
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Strategic plan or corporate policies. The TPS:
Order processing Inventory data
Receiving and inspecting data
Personnel data
Production process External sources
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Design and engineering
Master production scheduling
Inventory control
Manufacturing resource planning Just-in-time inventory and manufacturing Process control
Computer-integrated manufacturing (CIM)
Quality control and testing
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Supports managerial activities in productdevelopment, distribution, pricing decisions,
and promotional effectiveness
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Strategic plan and corporate policies The TPS External sources:
The competition
The market
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Marketing research Product development Promotion and advertising Product pricing
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Concerned with all of the activities related toemployees and potential employees of the
organization
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Human resource planning Personnel selection and recruiting Training and skills inventory Scheduling and job placement Wage and salary administration
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Geographic information systems (GISs)
Enables managers to pair pre-drawn maps or
map outlines with tabular data to describe
aspects of a particular geographic region.
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Decision Support SystemAn organized collection of people, procedures, software,databases, and devices used to support problem-specific
decision making.
Provide interactive ad hoc support for decision makingprocesses to the manager.
Perform what-if-analysis as a part of decision.
A DSS helps a manger do the right thing
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Companies migrates towards e-business,they are investing new data driven decision
support applications framework to help them1. Respond rapidly to changing marketcondition
2. Customer need
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How are decisions made???
What methodologies can be applied?
What is the role of information systems
in supporting decision making?
DSSDecis ion
Suppor t
Systems
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Type of the information required depends on levels of managementdecision making and structure of decision situation they face
Strategic mgt
Executives & Directors
Tactical mgtManagers & self Directed team
Operational mgtManagers & self Directed team
Decision Structure Information Characteristics
Unstructured
Semi-structured
Structured
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Decision: a reasoned choice among alternativesExamples:
Where to advertise a new product
What stock to buy What movie to see Where to go for dinner
Decision Making: a process of choosing among
alternative courses of action for the purpose ofattaining a goal or goals
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Structured Problems
Routine and repetitive with standard solution
Well defined decision making procedure
Given a well-defined set of input, a well defined set of output isdefined
Semi-structured Problems
Has some structured aspect
Some of the inputs or outputs or procedures are not well defined Unstructured Problems
All phases of decision making process are unstructured
Not well defined input, output set and procedures
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Operational Planning and Control:
Focus on efficient and effective execution of specific tasks.
They affect activities taking place right now
E.g... What should be today's production level Management Control and Tactical Planning
Focus on effective utilization of resources
more longer range planning horizon
E.g... What is next years production level
Strategic Planning Long-range goals and policies for resource allocation
E.g... What new products should be offered
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Systematic Decision-Making Process
Intelligence
Design
Choice
Implementation
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Collects, processes, stores, analyzes, and
disseminates information for a specific
purpose
Is often at the heartof many organizations
Accepts inputs and processes data to provide
information to decision makers and helps
decision makers communicate their results
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Effectiveness is the degree to which goals are
achievedDoing the r igh t th ing!
Efficiency is a measure of the use of inputs (orresources) to achieve outputsDoing the th ing r ight!
Productivity (eff ic iency/effect iveness)
Measurable?
several non-quantifiable, conflicting goals
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Characteristics Operational Managerial Strategic
Accuracy High Low
Level of detail Detailed Aggregate
Time horizon Present Future
Use Frequent Infrequent
Source Internal External
Scope Narrow WideNature Quantitative Qualitative
Age Current Current/old