Unit-1

Management Information System

Management information systems facilitate a firm’s daily operations. It is present in every
organization. Record keeping is significantly easier with information systems. The primary role
of an information system is to simplify workflow; it saves the time and energy of employees.

Data is crucial for every business. In the internet era, firms are bombarded with too much data,
not just relevant data. Firms collect data in files, documents, cloud storage, hard copies, and
soft copy formats. Primarily the MIS stores data in a secure manner. For example, a bank
maintains records of account deposits, withdrawals, and customer details.

What is MIS?
MIS is an organized integration of hardware and software technologies, data, processes, and
human elements. It is a software system that focuses on the management of information
technology to provide efficient and effective strategic decision making.

What is MIS? MIS is the acronym for Management information systems. MIS is a set of
procedures which, when executed, provides information to support decision making.

Management Information System

A Management Information System is:

• An integrated user-machine system
• For providing information
• To support the operations, management, analysis, and decision-making functions
• In an organization
The system utilizes:
• Computer hardware & software
• Manual procedures
• Models for analysis, planning, control, and decision making, and
• A database

MIS Definition
Management Information Systems (MIS) is an integrated man/machine system for providing
information to hold up the operations, management, and decision-making functions in an organization.

MIS Meaning
MIS Meaning: A Management Information Systems is an acronym of three words, viz.,
Management, information, system. To fully understand the term MIS, let us try to understand
these three words.

1. Management: Management is the art of getting things done through and with the people in
formally organised groups.

2. Information: Information is data that is processed and is presented in a form which assists
decision-making. It may contain an element of surprise, reduce uncertainty, or provoke a
manager to initiate an action.

3. System: A system is an orderly grouping of interdependent components linked together

according to a plan to achieve a specific goal. The term system is the most loosely held term in
management literature because of its use in different contexts.

Components of MIS
The major components of MIS are:

Components of MIS

• People Resources: People are required for the operation of all information system.
• Data Resources: Database holds processed and organized data.
• Software Resources: It includes all sets of information processing instruction.
• Hardware Resources: Include all physical devices and materials used in information
processing.
 • Process: is a step undertaken to achieve a goal.

Objectives of MIS
MIS has five major objectives which include:

1. Data Capturing
2. Processing of Data
3. Storage
4. Retrieval
5. Dissemination

Objectives of MIS

These MIS objective is discussed below in detail:

Data Capturing

MIS capture data from various internal and external sources of the organization. Data capturing
may be manual or through computer terminals.

Processing of Data

The captured data is processed to convert into the required information. Processing of data is
done by such activities as calculating, sorting, classifying, and summarizing.
Storage of Information

MIS stores the processed or unprocessed data for future use. If any information is not
immediately required, it is saved as an organization record, for later use.

Retrieval of Information

MIS retrieves information from its stores as and when required by various users.

Dissemination of Information

Information, which is a finished product of MIS, is disseminated to the users in the

organization. It is periodic or online through a computer terminal.

Characteristics of MIS
What is MIS Characteristic? MIS plays a very important role in every aspect of an organization.
These characteristics are generic in nature.

Following are the characteristics of MIS:

1. System Approach
2. Management Oriented
3. Need-Based
4. Exception Based
5. Future Oriented
6. Integrated
7. Long Term Planning
8. Sub-System Concept
9. Central Database
System Approach

The information system follows a System’s approach. The system’s approach implies a holistic
approach to the study of system and its performance in the light for the objective for which it
has been constituted.

Management Oriented

The top-down approach must be followed while designing the MIS. The top-down approach
suggests that the system development starts from the determination of management needs and
overall business objectives.

The MIS development plan should be derived from the overall business plan. 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, strategic planning level, management control level and operational control level. In
other words, MIS should cater to the specific needs of managers in an organization’s hierarchy.

Exception Based

MIS should be developed on the exception-based reporting principle, which means an

abnormal situation, i.e., the maximum; minimum or expected values vary beyond tolerance
limits. In such situations, there should BE exception 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 be initiated.

Integrated

Integration is a necessary characteristic of a management information system. 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 setup costs, Workforce, Overtime rates, Production capacity, Inventory level,
Capital requirements and Customer services.
Long Term Planning

MIS is developed over relatively long periods. Such a system does not develop overnight. A
heavy element of planning is involved. The MIS designer must have the future objectives and
needs of the company in mind.

Sub-System Concept

The process of MIS development is quite complex, and one is likely to lose insight frequently.
Thus, the system, though viewed as a single entity, must be broken down into digestible sub-
systems which are more meaningful at the planning stage.

Central Database

A central database is a mortar that holds the functional systems together. Each system requires
access to the master file of data covering inventory, personnel, vendors, customers, etc. It seems
logical to gather data once, validate it properly and place it on a central storage medium, which
can be accessed by any other subsystem.

Functions of MIS
The broad functions of MIS are as follows:

• To Improve Decision-Making
• To Improve Efficiency
• To Provide Connectivity
• Data Processing
• Prediction
• Planning
• Control
• Assistance

To Improve Decision-Making

The Management Information System (MIS) furnishes relevant information on diverse matters,
thereby enhancing the decision-making process of the management. By utilizing the speedy
and precise data provided by the MIS, managers can make prompt and informed decisions,
which ultimately enhances the quality of decision-making and contributes to the company’s
value.

To Improve Efficiency

The Management Information System (MIS) facilitates managers in executing their duties with
enhanced ease and efficiency, resulting in improved productivity.

To Provide Connectivity

The MIS provides managers with better connectivity with the rest of the organization.
The Management Information System (MIS) is commonly utilized in decision-making
processes within a system. One such application of MIS is to identify issues that require prompt
attention, offer timely feedback, and inform senior management of the current progress and
areas for improvement.

Therefore, the main functions of MIS may vary depending on the specific tasks performed by
an organization.

Data Processing

Data processing involves collecting, transmitting, storing, and processing data to generate an
output. Prediction involves analyzing data using modern mathematics, statistics, or simulation
to anticipate future scenarios.

Prediction

By utilizing methods of modern mathematics, statistics, or simulation, data analysis is

conducted to predict potential future scenarios.

Planning

The analysis of data of a regular nature may give many indications on likely future events or
situations and this can be utilized in planning or reviewing the plan already made earlier.

Control

By examining records of daily, monthly, quarterly, or annual activities, certain factors that
require management and control can be identified. If these factors are identified in a timely
manner, they can be managed relatively easily. However, some factors may require the
attention of senior management to remain under control. It is essential to note that ignoring
smaller factors at the beginning may have the potential to disrupt other factors as well.

Assistance

One of the principal functions of MIS is to support senior management by analyzing regular
records and drawing inferences about various factors related to the company’s operational
performance, such as human resources, financial resources, material resources, and more.

Advantage of MIS
• Generate Competitive Advantages
• Implementation of Management by Objectives Techniques
• Fast Reaction to Market Changes
• MIS as Strategic Resource
• Change in Industry Structure
 • Functional Use
• External and Internal Change
• Availability of Customer Data

Generate Competitive Advantages

Business houses succeed or fail based on how they face competitive challenges. MIS if
implemented properly, provides a wealth of information to allow management to construct and
develop effective plans to meet, and beat, their competition.

Implementation of Management by Objectives Techniques

MIS allow all participants, both management and staff, to view, analyse and interpret useful
data to set goals and objectives.

Fast Reaction to Market Changes

MIS can deliver facts, data, and trends to business with lighting speed. Having this information
allows business houses to react quickly to market changes, regardless of the type (positive or
negative) or volatility.

MIS as Strategic Resource

• MIS helps in taking strategic, tactical, and operational decisions. It is one of the critical and
important resource.
• It helps the management to understand cost, quality, price, technology, productivity, and
product.
• It helps to smoothen the business process and thereby facilitate managing of business
operations.
• It helps to maintain the business standards like ISO, QS, CMMI, six sigma etc.
• It helps to be a head in the competition.
• It helps company in analysing their own SWOT.
• It also helps in maintaining its own profitability.
• It will help in taking new business decisions like new plans, new product, new business line
etc.
• It protects company from business cycles.
• It provides future direction to the organisations.
• It also provides the competitive edge.

Change in Industry Structure

MIS helps in changes in industry structure includes five forces:

• Customers’ bargaining power

• Suppliers’ bargaining power
• Threats of new entrant in market
• Pressure from substitute products and services and u Existing industry competitors
• Birth of new business/ New business initiatives. new way of doing business.
Functional Use

Functional use of MIS includes:

• Lower the cost.

• Information and information system facilitate value chain. e.g., product delivery quality. It
increases the speed, accuracy, and timeliness of the organisation. It helps in simplifying the
business processes. It helps organisation in meeting the standards and benchmarks.

External and Internal Change

MIS creating knowledge is an asset. It helps to achieve change in work lifestyle for better
results. MIS has made the world smaller. Worldwide reorganisation environment and attempt
to control the calamity. Health conscious among the group lead to less sufferings.

MIS helps in Internal Change: MIS will change the business process, MIS will change
the old standards and set new standards. MIS is a key for continuous improvement process.
MIS will reduce the hierarchy and hence less operation cost. MIS focuses on “shared
information”. MIS also measures the result and performance.

Availability of Customer Data

MIS giving an overall picture of the company and acting as a communication and planning
tool. The availability of the customer data and feedback can help the business houses to align
their business process according to the need of the customers.

The effective management of customer data can help the company to perform direct marketing
and promotion activities. Therefore, information is an important asset for any company in the
modern competitive world.

Role of MIS
A management information system (MIS) plays an important role in business organizations.

What is MIS role: There are many roles of MIS and some of the important MIS role are
discussed below:

• Decision making
• Coordination among the department
• Finding out Problems
• Comparison of Business Performance
• Strategies for an Organization
Decision making

Management Information System (MIS) plays a significant role in the decision-making process
of any organization. In any organization, a decision is made based on relevant information
which can be retrieved from the MIS.

Coordination among the department

Management Information System satisfy multiple need of an organization across the different
functional department.

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 MIS, information will help in finding out the
solution to that problem.

Comparison of Business Performance

MIS store all past data and information in its Database. That why the management information
system is very useful to compare business organization performance.

Strategies for an Organization

Today each business is running in a competitive market. An MIS supports the organization to
evolve appropriate strategies for the business to assent in a competitive environment.
Pre-requisite for effective MIS
An effective Management Information System (MIS) is crucial for organizations to collect,
process, store, and distribute information for decision-making and daily operations. To ensure
an MIS is effective, certain prerequisites and best practices need to be in place. These include:

1. Clear Organizational Goals and Objectives: The MIS should align with the
organization's strategic goals and objectives. The system's purpose, functions, and data
should all serve the broader mission of the organization.
2. Top Management Support: High-level support is essential for securing resources,
funding, and commitment to implementing and maintaining the MIS. Senior
management should endorse the MIS's importance and actively participate in its
development and utilization.
3. Skilled and Trained Personnel: Adequately trained and competent staff are needed to
manage, operate, and use the MIS effectively. This includes database administrators,
analysts, programmers, and end-users who can navigate and interpret the system's data.
4. Clear Data Governance Policies: Establish data governance policies that define data
ownership, security measures, quality standards, access controls, and data retention
policies. This ensures data is managed and maintained consistently.
5. Appropriate Technology Infrastructure: The MIS should be built on a robust
technology infrastructure that can handle the volume and complexity of data required.
This includes hardware, software, databases, and network infrastructure.
6. Data Integration: Data should be integrated from various sources and departments to
provide a holistic view of the organization. This integration may involve data from
finance, marketing, operations, human resources, and other areas.
7. Data Quality Management: Data accuracy, reliability, and consistency is crucial.
Implement data quality management practices to ensure that data is error-free and up to
date.
8. Security Measures: Robust security measures, including data encryption, access
controls, and user authentication, are necessary to protect sensitive and confidential
information stored in the MIS.
9. User-Friendly Interfaces: The MIS should have a user-friendly interface that allows
non-technical users to access and interact with the system easily. This reduces the
learning curve and encourages utilization.
10. Regular Maintenance and Updates: Routine maintenance and updates are essential
to keep the MIS operating efficiently and to adapt it to changing organizational needs
and technological advancements.
11. Scalability: The MIS should be scalable to accommodate future growth and increasing
data volumes. This involves the capacity to expand hardware and software capabilities
as needed.
12. Real-time Data: For some organizations, real-time or near real-time data is essential.
The MIS should be capable of providing timely information to support decision-
making.
13. Effective Communication Channels: The MIS should have mechanisms in place for
disseminating information to relevant stakeholders in a timely and understandable
manner. This includes the ability to generate and distribute reports, dashboards, and
alerts.
14. User Training and Support: Training programs should be available to users, ensuring
they understand how to navigate the MIS effectively. Technical support and
documentation should also be in place to assist users when issues arise.
 15. Performance Metrics: Implement performance metrics to evaluate the effectiveness
and efficiency of the MIS. This includes measuring system uptime, data accuracy, user
satisfaction, and the system's impact on decision-making.
16. Adherence to Data Privacy Regulations: Ensure that the MIS complies with data
privacy regulations, especially when dealing with personal or sensitive data.
17. Feedback Mechanisms: Establish mechanisms for users to provide feedback and
suggestions for improving the MIS. This continuous feedback loop can help enhance
the system's functionality and utility.

Challenges of MIS
There are three major challenges of MIS: high cost, training of employees and maintenance
cost. These are briefly discussed below:

1. High Cost
2. Training of Employee
3. Maintenance Cost

High Cost

Development of new computerized based information system is a problem for the organization
due to the cost factor and it creates problems because with the change of time there is need of
up to date of the information system.

Training of Employee

Employees should have the capacity of learning of the information system with the changing
competitive and business environment; otherwise, it will be difficult for the organization to
stay in the market.

Maintenance Cost

Sometimes a problem arises due to server crash and website crash. Sometimes it leads to the
loss of information. So, maintenance cost is needed to tackle the above problem.

Limitations of MIS
Even though MIS has many benefits, but it also has its limitations. Limitations of MIS are
discussed below:

• While MIS may solve some critical problems, but it is not a solution to all problems of an
organization.

• It cannot meet the special demands of each person.

• MIS if designed in an improper manner does not serve the management and hence is of little
relevance.

• The MIS is not good if the basic data is obsolete and outdated.
 • Mostly information provided by the MIS is in quantitative form. Hence, it ignores the
qualitative information like the attitude of an employee.

MIS at Different Levels

The needs of managers at various levels in the organization are different. Some need
information that is real-time and detailed while others need information that is aggregated and
covers a long period.

Those at the highest level of any organization, such as Managing Directors and Chief
Executives, usually need information that is aggregated, enables drilling down, summarises all
activities, and provides details about the industry at large. MIS that provide reports for
executives at this level is often called executive support systems (ESS).

An example of a typical screen of an ESS is shown Some examples of information provided

by such systems are:

• A report on sales forecasts for all products, plotted against the forecasts for the entire industry.

• A summary of cash balances for all divisions for the year, the month, and the week, with the
ability to drill down to details for all divisions.

• A summary of completion of all projects, with details of work remaining, estimated overruns
on time, and cost with comparison figures of projects in the past.

Executive support systems are usually highly visual with graphs, charts, and diagrams used to
convey most of the information. While designing these systems, the designers must understand
the style of functioning of the executive. ESS is usually linked to other MIS and transaction
processing systems and databases that provide industry data.

Managers in the organization, who report to the executives, use MIS, and require reports,
examples of which have been provided above. The systems used by managers are usually
categorized as either MIS or Decision Support Systems. The latter use scientific models of
decision-making to help managers in the specific tasks of making decisions based on available
data.

Another class of employees, like managers but not directly involved with decision-making, are
the specialized knowledge workers such as designers, planners, and analysts. They use
transaction data and other data related to the industry and economy to make strategic-level
plans and do analyses for the organization. They too use sophisticated models of analysis and
produce reports that assist executives and managers with their decision-making.

For example, strategic planners may consult the industry and economy data and compare this
with internal sales data to predict which products of the organization will have a better chance
of success in the competitive environment. Models such as time series analysis and forecasting
may be used to arrive at such analysis.

Requirements of Management Information System

Following are the requirements of a management information system:
 1. Database
2. Qualified System and Management Staff
3. Top Management Support
4. Active Participation of Operating Management
5. Control and Maintenance of Management Information System
6. Evaluation of Management Information System

MIS applications in business

Management Information Systems (MIS) play a vital role in businesses by helping
organizations collect, process, store, and distribute information for decision-making and daily
operations. MIS applications in business encompass a wide range of functions and processes.
Here are some key areas where MIS applications are commonly used in business:

1. Data Collection and Storage:

o MIS applications collect, store, and manage large volumes of data from various
sources within the organization, such as sales, inventory, financial transactions,
and employee records.
2. Reporting and Analytics:
o MIS applications generate reports and dashboards that offer insights into
various aspects of the business, helping managers and executives make
informed decisions. Analytics tools provide data analysis and visualization to
identify trends and patterns.
3. Inventory Management:
o MIS applications track inventory levels, manage stock replenishment, and
optimize supply chain processes. They help minimize carrying costs, prevent
stockouts, and ensure efficient inventory turnover.
4. Sales and Customer Relationship Management (CRM):
o CRM systems within MIS applications store and manage customer data,
including purchase history, preferences, and communication records. They
enable businesses to personalize interactions and improve customer satisfaction.
5. Financial Management:
o MIS applications assist in financial management by providing budgeting,
accounting, and financial analysis tools. They help organizations track
expenses, revenues, and cash flow.
6. Human Resources Management:
o MIS applications handle HR functions such as employee records, payroll,
recruitment, performance evaluations, and training. They ensure compliance
with labor laws and support talent management.
7. Supply Chain Management:
o MIS applications optimize supply chain operations by coordinating
procurement, production, distribution, and logistics. They enhance supply chain
visibility and efficiency.
8. Production and Operations Management:
o MIS applications monitor and control production processes, ensuring that
production schedules, quality standards, and resource utilization are optimized.
9. Marketing and Market Research:
o MIS applications provide marketing tools for campaign management, lead
tracking, and market analysis. They help businesses identify target markets and
assess marketing ROI.
 10. E-commerce and Online Sales:
o In the age of digital business, MIS applications support e-commerce platforms
and online sales, managing online transactions, inventory, and customer
information.
11. Quality Control and Assurance:
o MIS applications implement quality control processes to maintain product and
service quality. They track defects, conduct root cause analysis, and ensure
quality standards are met.
12. Project Management:
o MIS applications facilitate project planning, scheduling, and collaboration.
They track project progress, allocate resources, and help manage budgets and
timelines.
13. Risk Management:
o MIS applications support risk assessment and management, helping businesses
identify, analyze, and mitigate risks related to operations, finance, compliance,
and more.
14. Compliance and Reporting:
o MIS applications aid in compliance with industry regulations and reporting
requirements. They generate and submit reports to regulatory bodies and track
adherence to standards.
15. Strategic Planning:
o MIS applications provide data and tools for strategic planning, helping
organizations set long-term goals and develop strategies based on data-driven
insights.
16. Communication and Collaboration:
o MIS applications enable communication and collaboration among employees
and departments, supporting teamwork, document sharing, and project
collaboration.
17. Customer Support and Service:
o MIS applications help manage customer support by tracking service requests,
resolving issues, and analyzing customer feedback for continuous improvement.
18. Mobile and Remote Access:
o Many MIS applications now offer mobile and remote access, allowing
employees to access critical information and perform tasks from anywhere,
enhancing flexibility and productivity.

Information in decision making:

Information is a cornerstone of effective decision making across all aspects of life, from
personal choices to organizational strategies. In the context of decision making, information
refers to data that is collected, processed, and presented in a way that is meaningful and useful
for individuals or groups facing choices. The importance of information in decision making
cannot be overstated, as it serves as the fundamental building block upon which decisions are
founded. Here are key aspects of information in decision making:

1. Information as the Bedrock:

• Information provides the foundation upon which decisions are built. It is the raw
material from which insights and knowledge are derived.
2. Problem Identification:

• Information aids in identifying problems, challenges, and opportunities. It illuminates

the current situation, making it possible to discern issues that need to be addressed.

3. Alternative Evaluation:

• When making decisions, people and organizations often consider various alternatives.
Information enables the evaluation of these options by providing the necessary data to
compare them.

4. Resource Allocation:

• Effective resource allocation is reliant on information. Decisions about where to invest

time, money, and other resources are guided by data regarding costs, benefits, and
potential outcomes.

5. Monitoring and Control:

• Information is essential for monitoring the progress and outcomes of decisions. It helps
in assessing whether the chosen course of action is yielding the desired results.

6. Adaptation to Change:

• The world is constantly changing, and information allows individuals and organizations
to adapt to new circumstances. It enables decision makers to respond to shifts in
markets, technology, regulations, and other factors.

Meaning of Information in decision making:

Information is data that has been processed and organized to provide context and significance.
It encompasses facts, figures, statistics, and insights that offer clarity and understanding. In the
context of decision making, information refers to the collection, analysis, and presentation of
data in a way that aids individuals or organizations in making informed and rational choices.

Information involves turning raw data into something actionable and meaningful. It involves
transforming a list of numbers or facts into insights that guide decision makers. Information
serves as the bridge between data and knowledge, making it comprehensible and valuable.

Importance:
The importance of information in decision making is multifaceted and fundamental to personal,
professional, and organizational success. Here are key reasons why information is of
paramount importance in decision making:

1. Informed Choices: Information empowers individuals and organizations to make

decisions based on knowledge rather than guesswork. It provides the necessary
background to assess situations and determine the most appropriate course of action.
 2. Problem Solving: Information assists in identifying and understanding problems or
challenges. It sheds light on the underlying causes and helps formulate solutions.
3. Alternative Evaluation: Effective decision making often involves considering
multiple options. Information facilitates the evaluation and comparison of these
alternatives, making it possible to select the best one.
4. Resource Allocation: Deciding how to allocate resources, be it time, money, or
manpower, relies on information. It allows for the allocation of resources in a way that
maximizes efficiency and effectiveness.
5. Monitoring and Control: Information is essential for tracking the progress of
decisions. It helps in assessing whether the chosen path is leading to the desired
outcomes, allowing for adjustments as needed.
6. Adaptation to Change: The business and social environments are constantly evolving.
Information enables individuals and organizations to adapt to new circumstances by
providing insights into emerging trends and challenges.
7. Risk Management: Information helps in assessing risks associated with various
decisions. It allows for risk mitigation strategies to be developed and implemented.
8. Competitive Advantage: In a competitive landscape, access to the right information
can provide a significant advantage. It helps in understanding market dynamics,
customer preferences, and competitor strategies.
9. Innovation: Information serves as a catalyst for innovation. It provides insights into
emerging technologies, market gaps, and customer needs, fostering innovative ideas
and solutions.
10. Legal and Ethical Compliance: In many cases, legal and ethical compliance requires
informed decision making. Information ensures that decisions align with laws and
ethical standards.

Sources and Types of Information:

Information is a critical component of decision-making processes, and it can be sourced from
various places and take on various forms. Understanding the sources and types of information
is essential for making well-informed decisions. Let's delve into a more detailed explanation
of each category:

Sources of Information:

1. Internal Sources:
o These sources provide data generated within an organization and are often
proprietary and specific to the company's operations.
o Examples:
▪ Company Data: This includes internal reports such as sales reports,
financial statements, production records, and quality control data.
▪ Employee Feedback: Employee surveys, performance reviews, and
feedback on internal processes and policies.
▪ Operational Data: Information related to day-to-day operations, such
as inventory levels, order fulfillment metrics, and production schedules.
▪ Customer Data: Customer feedback, transaction history, and profiles.
2. External Sources:
o Information from sources outside the organization, including public data, third-
party data providers, and government agencies.
o Examples:
 ▪ Market Research: Data on industry trends, market size, customer
preferences, and emerging technologies obtained from market research
firms.
▪ Competitor Analysis: Information about competitors' strategies,
products, market share, and customer reviews.
▪ Government Data: Economic indicators, demographic data, and
industry regulations provided by government agencies.
▪ Media and Publications: News articles, industry publications,
academic research, and public information available in newspapers,
journals, and online sources.
3. Primary Sources:
o Primary sources involve the direct collection of firsthand data, often through
research or data collection efforts conducted by the organization.
o Examples:
▪ Surveys and Questionnaires: Custom-designed surveys aimed at
gathering specific information from customers, employees, or
stakeholders.
▪ Interviews: Conducting one-on-one or group interviews with experts,
customers, or employees to gain insights and opinions.
▪ Observations: Directly observing processes, events, or behaviors,
either in person or through monitoring systems.
4. Secondary Sources:
o Secondary sources involve using data collected by others for a different purpose
than the original intent.
o Examples:
▪ Databases: Utilizing existing databases, reports, and studies from
public or private sources, which may contain historical or aggregated
data.
▪ Literature Review: Summarizing or synthesizing research studies,
articles, and publications to gather relevant information.
▪ Archives: Accessing historical records, documents, or data from past
events or activities, such as financial reports from previous years.

Types of Information:
The seven types of information are factual, conceptual, procedural, emotional, behavioural,
attitudinal, and motivational. In general, organizations should manage different types of
information in a way that is consistent with their overall organizational goals and objectives.
 types of information

1- Factual

Factual information is information that can be proven to be true. It can be verified by looking
at evidence or using a scientific method. Facts are also referred to as “verifiable facts” or
“data.”

Organizations can benefit from factual information by using it to make informed decisions.
Factual information can help organizations understand their customers, learn about new
market trends, and make better decisions about product development, pricing, and marketing.
Additionally, factual information can help organizations improve their operations and reduce
costs.

Examples of factual information include:

• The number of products a company produces.

• The number of employees a company has.
• The locations of a company’s offices or factories.
• The names of a company’s products.
• The dates when a company was founded or when products were launched.

Among the different types of information, Factual information is considered the most
important one.

2- Conceptual

Conceptual information refers to the mental models and mental representations that people
use to understand the world around them. This includes both the knowledge that people have
about the world and the way that they think about that knowledge.
It is important to note that conceptual information is not just factual knowledge, but also
includes people’s beliefs, values, and assumptions about the world.

Conceptual information can help organizations to develop a better understanding of their

customers, to improve their communication with customers, and to develop more effective
marketing strategies. Additionally, conceptual information can also help organizations to
improve their internal communication and to better align their activities with their strategic
goals.

Examples of conceptual information include:

• The mission, vision, and values of the organization

• The organizational structure
• The strategies and goals of the organization
• The culture of the organization
• The history of the organization

Conceptual information is another type of information that should be properly controlled

within organizations.

3- Procedural

Procedural information is a type of information that provides a step-by-step guide on how to

do something. It can be presented in several different formats, including written instructions,
diagrams, and videos.

Organizations can benefit from procedural information by using it to streamline their

processes and improve their efficiency. By understanding and following the procedures laid
out in this type of information, organizations can avoid costly mistakes and save time.

Additionally, procedural information can help organizations to train new employees more
effectively, ensuring that they are able to hit the ground running and avoid any costly errors.

Examples of procedural information include:

• The name, address, and telephone number of the organization

• The hours of operation of the organization
• A description of the services offered by the organization.
• The eligibility requirements for receiving services from the organization.
• The process for applying for services from the organization.
• The geographical areas served by the organization.
• The languages spoken by staff at the organization.
• The payment methods accepted by the organization.

Among the different types of information, Procedural information is needed to regulate and
control how different operations are executed within organizations.
4- Emotional

Emotional information is any type of information that can provoke an emotional reaction in a
person. This can include anything from words and phrases to images and videos. Emotional
information can be positive or negative, and it can be used to influence a person’s mood and
behavior.

Organizations can benefit from emotional information by using it to better understand their
customers and employees. This can help them to improve customer satisfaction and employee
engagement. Additionally, emotional information can be used to create more effective
marketing and sales campaigns.

Examples of emotional information include:

• Employees who feel supported by their organization are more likely to be engaged and
productive.
• Employees who feel like they are part of a supportive and positive work environment are
more likely to be satisfied with their job.
• A positive work environment can lead to increased creativity and innovation.
• When employees feel like their work is meaningful and they are supported by their
organization, they are more likely to be committed to their job.
• A positive work environment can help reduce stress levels and promote a healthy work-life
balance.

Among the different types of information, emotional information can play a very important
role to understand how customers feel about your brand and take decisions to improve it.

5- Behavioral

Behavioral information is defined as data that captures how individuals interact with
technology. This can include data such as website clicks, app usage, and social media
interactions.

Organizations can benefit from behavioral information by using it to assess employee

satisfaction, identify training and development needs, and improve communication and
workplace relationships. Additionally, behavioral information can be used to create a more
positive work environment, improve customer service, and increase sales and profits.

Examples of behavioral information in organizations include:

• Employee performance data

• Customer satisfaction ratings, and safety records

Among the different types of information available, Behavioral information is very important
to understand to better understand your employees and customers.
6- Attitudinal

Attitudinal information is information about people’s attitudes, beliefs, and values.

Organizations can use attitudinal information to better understand how customers feel about
their products or services. This type of information can help organizations make changes to
improve customer satisfaction or target marketing efforts.

Examples of Attitudinal information include:

• A company’s customer service policies

• A company’s dress code
• The way employees are expected to interact with customers.
• The way employees are expected to interact with each other.

7- Motivational

Motivational information is information that is designed to motivate someone to do

something. This can include things like inspirational quotes, stories of people who have
overcome adversity, or tips for setting and achieving goals.

Organizations can benefit from motivational information by using it to inspire and encourage
employees. This can lead to increased productivity and morale and can help create a positive
work environment. Additionally, motivational information can be used to help employees set
and achieve goals and can provide guidance and direction during challenging times.

Examples of behavioral information in organizations include:

• Employees who feel motivated at work are more likely to be productive and engaged in their
work.
• A motivated workforce is essential to any organization’s success.
• Employees who are motivated to do their best work are more likely to be satisfied with their
jobs and stay with their organization.
• Organizations that focus on employee motivation tend to be more successful overall.
• Motivated employees are more likely to be creative and come up with new ideas that can help
an organization grow and succeed.

Information Requirements at Different Management Levels:

Management levels in an organization have distinct roles and responsibilities, which
correspond to specific information requirements. Understanding these requirements is crucial
for ensuring that the right information is available to support decision-making at each level.
1. Operational Level:

Operational managers are responsible for the day-to-day activities of an organization. They
need information that allows them to make immediate decisions to ensure efficient operations.
The information requirements at this level include:

• Real-time Data: Operational managers require up-to-the-minute data to respond to

immediate challenges. This includes information on production schedules, inventory
levels, and employee workloads. Real-time data is critical for making quick adjustments
and maintaining smooth operations.
• Performance Metrics: Metrics related to productivity, quality, and efficiency are
essential. Examples of such metrics are the number of units produced per hour, error
rates, and order fulfilment times. These metrics help operational managers monitor
performance and identify areas for improvement.
• Workforce Information: Details about staffing, shifts, and employee availability are
important for scheduling and workforce management. Operational managers need to
know if they have the right personnel in place to meet production demands.
• Inventory and Supply Chain Data: Information on inventory levels, order processing,
and supplier performance is crucial for managing the supply chain effectively. This
information ensures that products are available when needed and that costs are
controlled.
• Customer Feedback: Operational managers benefit from direct customer feedback to
address immediate concerns and improve service quality. This includes customer
complaints, service requests, and feedback on product quality. Customer input helps
identify and address issues promptly.

2. Tactical Level:

Tactical managers are responsible for mid-term planning and strategy implementation. They
need information to make decisions that align with the organization's goals and objectives. The
information requirements at this level include:

• Market Research: Data on market trends, customer behavior, and competitor analysis
are essential for crafting strategies and making tactical decisions. Market research helps
tactical managers understand the external environment and identify opportunities and
threats.
• Budget and Financial Reports: Tactical managers need information about budgets,
revenue forecasts, and financial statements to allocate resources effectively and ensure
 financial targets are met. Financial data helps them make decisions about investments
and cost control.
• Sales and Marketing Data: Information on sales performance, marketing campaign
results, and customer segmentation is crucial for fine-tuning marketing strategies and
sales tactics. It informs decisions related to pricing, product positioning, and customer
targeting.
• Human Resources Metrics: Tactical managers require workforce data, including
employee turnover rates, skill gaps, and training needs. This information helps address
staffing and talent management issues, ensuring that the organization has the right
people with the right skills.
• Competitive Intelligence: Information about competitors' strategies, product
offerings, and market positioning is vital for tactical decisions related to pricing,
product development, and market entry. Competitive intelligence helps in identifying
gaps and opportunities.

3. Strategic Level:

Strategic managers are responsible for setting the long-term direction and overall vision of the
organization. Their decisions have a profound impact on the organization's future. The
information requirements at this level encompass:

• Industry and Macro-Economic Trends: Knowledge of broader economic and

industry trends is essential for setting strategic goals and direction. This information
informs decisions about market expansion, diversification, or consolidation.
• Global Market Data: Information about international markets, trade regulations, and
global economic conditions is vital for expansion strategies. Strategic managers need
data on global market dynamics to assess opportunities and risks associated with
international operations.
• Risk Assessments: Comprehensive risk assessments, including market risks,
regulatory risks, and cybersecurity threats, inform strategic decisions to mitigate these
risks. Strategic managers must make informed choices about risk tolerance and risk
management strategies.
• Financial Projections: Strategic managers rely on detailed financial projections, such
as long-term revenue forecasts and investment requirements, to set financial goals.
These projections guide decisions about resource allocation and investment priorities.
• Innovation and Technology Trends: Information about emerging technologies and
innovative trends provides insights into potential strategic opportunities and threats.
Strategic managers need to understand how technology advancements can impact their
industry and business.
• Legislation and Regulatory Updates: Knowledge of legal and regulatory changes that
may impact the organization's operations or industry is crucial for compliance and
strategic planning. Strategic managers need to anticipate and adapt to regulatory
changes proactively.

Relevance of Information in Decision Making

The relevance of information in decision making cannot be overstated; it is a fundamental

factor that impacts the quality and effectiveness of decisions. Relevant information is data or
insights that directly pertain to the decision at hand, making it valuable and essential for the
decision-making process. Here's an in-depth look at the importance of information relevance
in decision making:

1. Informed Choices: Relevant information provides decision makers with the data they
need to make informed and rational choices. Without relevant data, decisions may be
based on assumptions, guesswork, or incomplete information, leading to suboptimal
outcomes.
2. Problem Solving: When facing challenges or problems, relevant information is crucial
for understanding the underlying issues and identifying potential solutions. It helps
decision makers diagnose problems accurately and devise effective remedies.
3. Alternative Evaluation: Decision making often involves considering multiple
alternatives. Relevant information allows for the evaluation and comparison of these
options. It helps decision makers weigh the pros and cons, predict outcomes, and select
the most appropriate course of action.
4. Resource Allocation: Deciding how to allocate resources, such as time, money, and
manpower, is dependent on relevant information. Information helps ensure that
resources are used efficiently and effectively to achieve organizational goals.
5. Risk Assessment and Mitigation: In many decisions, especially in business and
project management, relevant information is critical for assessing risks. It enables
decision makers to identify potential risks, evaluate their impact, and develop strategies
for risk mitigation.
6. Monitoring and Control: Relevant information serves as a feedback mechanism,
allowing decision makers to monitor the progress and outcomes of their decisions. It
helps in assessing whether the chosen path is leading to the desired results, and if not,
adjustments can be made in a timely manner.
7. Adaptation to Change: In a dynamic and ever-changing environment, relevant
information is essential for adaptation. Decision makers need to be aware of shifting
market conditions, customer preferences, and technological advancements to adjust
strategies and tactics accordingly.
8. Legal and Ethical Compliance: In some cases, legal and ethical compliance requires
that decisions be based on relevant and accurate information. Failure to consider such
information can lead to legal issues, ethical dilemmas, or reputational damage.
9. Resource Efficiency: Relevance ensures that decision makers focus on the most critical
data, preventing information overload. Decisions made with relevant information are
more efficient, as they concentrate on what truly matters.
10. Actionable Insights: Relevant information provides insights that can be acted upon. It
offers practical and actionable guidance, which is crucial for decision makers to
implement their choices effectively.
11. Cost-Effective Decision Making: Making decisions based on relevant information
reduces the risk of costly errors and missteps. It minimizes the need for rework and
corrections that can arise from uninformed decisions.
12. Stakeholder Confidence: In organizational settings, stakeholders such as employees,
customers, and investors have confidence in decisions based on relevant information.
It fosters trust and credibility.
13. Competitive Advantage: In a competitive environment, the ability to access and utilize
relevant information effectively can provide a significant advantage. It allows
organizations to stay ahead of competitors by making more informed and strategic
decisions.