Management Information Systems: Classical Models and New Approaches

Objectives

• List and describe the classic functions of managers: planning, organizing, staffing, directing, and controlling
• Describe the purpose and components of a management information system (MIS)
• Explain how computer networking and related software have flattened the classic management pyramid
• Describe how companies use employees in task-oriented teams
• Describe the purpose and function of sophisticated software for top managers
• Explain the problems and solutions related to managing personal computers
• Explain the concept of total cost of personal computer ownership

Summary

• All managers have five main functions: planning, organizing, staffing, directing, and controlling. A management pyramid shows that top-level managers focus primarily on strategic functions, especially long-range planning; middle-level managers focus on the tactical, especially the organizing and staffing required to implement plans; and low-level managers are concerned mainly with operational functions—controlling schedules, costs, and quality—as well as with directing personnel.
• A management information system (MIS) is a set of business systems designed to provide information for decision making. A computerized MIS is most effective if it is integrated throughout the entire organization.
• The MIS manager, a person who is familiar with both computer technology and the organization’s business, runs the MIS department.
• The traditional management pyramid has been flattened by the dissemination and sharing of information over computer networks. The impact of groupware has removed exclusive manager access to information and has forced managers to share decision-making. Some companies are organizing workers into teams around tasks.
• A decision support system (DSS) is a computer system that supports managers in nonroutine decision-making tasks. A DSS involves a model, a mathematical representation of a real-life situation. A computerized model allows a manager to try various "what-if" options by varying the inputs, or independent variables, to see how they affect the outputs, or dependent variables. The use of a computer model to reach a decision about a real-life situation is called simulation. Since the decision-making process must be fast, the DSS is interactive, allowing the user to communicate directly with the computer system and affect its activities.
• An executive information system (EIS) is a decision support system for senior-level executives, who make decisions that affect an entire company.
• When personal computers first became popular in the business world, most businesses did not have general policies regarding them, which led to several problems. Many businesses created the position of personal computer manager (later called the network manager or LAN manager) to ensure coordination of personal computers, established acquisition policies to solve the compatibility problem, established information centers or support centers to provide assistance to users, provided formal and informal training for users, and used software to monitor their existing personal computers.
• Many organizations rely on the one-shot, teacher-in-the-classroom model for training, if they offer training at all. Follow-up support is necessary, and can be provided through in house gurus or information centers. CD-ROM and Web-based training have also proved to be effective, both for initial and follow up training.
• Managers often have little idea of how many computers are in use within a department or company or what software is being used on them. Software is available to keep track of all hardware and software installed on company networks.
• Total Cost of Ownership (TCO) refers to a methodology originally developed by the Gartner Group to determine all the costs involved in owning personal computers. These costs involve not only the original purchase price of the hardware and software, but also less obvious costs such as training, support, upgrades, and maintenance.

Key Terms

controlling - decision support system (DSS) - dependent variables - directing - executive - information system (EIS) - independent variables - information centers or support centers - management information system (MIS) - MIS manager - model - organizing - personal computer manager or network manager or LAN manager - planning - simulation - staffing - Total Cost of Ownership (TCO)