In any organization, the role of information in decision making is crucial. All the effective decisions are made on the basis of timely, accurate and relevant information. An organization where the relevant information is not available, it leads to poor planning, poor priority of needs, inappropriate decision making, and defective scheduling of programs and activities. The importance of information for proper decision making led to the development of management information system for organizations. The management information system in decision making aims to develop a system for the viable and effective use of modern information approach in the modern management practices (Laudon and Laudon, 2009).
Management Information System (MIS) is concerned with the streamlined process of collecting, processing, storing and transmitting the relevant and required information to support entire management operations in any organization. Management Information System comprises of three resources:
Academically, management information system and decision making is commonly referred to the automation of human decision making including Decision Support Systems, Expert systems and Executive information system (Laudon and Laudon, 2009).
Criteria to select data and information to support decision making
There is certain criterion which must be followed in order to select data and information. The criteria include following points:
Source of information
Reason for which that particular source collected the information
The problem which will be solved by that information
Evaluation of different sources for acquiring best information along with best format and mode for information
Parts of information which will be used
Additional information required
Presentation of information in order to understand the situation and take decisions ((Laudon and Laudon, 2008)
Impact of Information Management System in an organization
The Management Information System is being used extensively by many businesses worldwide. The MIS is designed by the top management and is used as a tool for accumulating and assembling facts and figures about all the important business processes including:
Time and expense management
Work force management
The implementation of Management Information System in an organization ensures the appropriate flow of information to relevant departments and people without bottlenecks. This helps in making decisions not only at internal level but at external level too (Laudon and Laudon, 2008). The entire process of MIS provides the complete, reliable, timely and quality information to decision makers. The four types of computer based management information systems used commonly in organizations are:
Transaction processing system
Operating information system
Decision support system
The Management Information System impacts the organization in following ways:
The MIS in an organization ensure the accurate and timely transaction processing. The processes become efficient as there are fewer chances of duplicate data entry and maintenance.
The MIS in an organization helps in streamlining records and accounting management. The business processes become standardized due to MIS.
MIS provides interactive support to managers which help them in decision making.
MIS provides a systematic and easy way to dig out critical information as per specific requirements in preferred formats.
MIS due to its time saving feature enables the organizations to gain competitive advantage over others.
Although McDonalds has a market share in South Asia but it needs to do more research and gather information regarding the flavors to be introduced, customer expectations and other relevant market information. After collecting this information, this food chain needs to communicate this information efficiently to its employees in order to have the internal opinions for final decision making (O’Brien and Marakas, 2008). By collecting information along with the data and information criteria, the business will be able to have a greater level of insight into how business actually works.
Importance of information sharing within the organization
Every organization has different hierarchical levels constituting managers, executives, employers, employees, administrative staff and lower staff. These levels in an organizational structure are developed for the sake of job description and designations in order to make every employee, manager and executive accountable of his/her actions. Various departments in an organization have their own sets of information which are of formal and informal nature. This information usually consist of work description, company policies, rules and regulations, budget for specific department, targets for specific department, goals for department and much more (McLeod and Schell, 2006).
For any organization to be successful, interaction between different business departments or units is essential. The harmonized communication within the organization leads to better understanding of different jobs which are being carried out. The employees understand their perspective goals and the contribution of every department in accomplishing those goals. The inter-departmental communication helps in developing a team force directed towards achieving the goals. For achieving goals, formal information must be communicated along departments in order to have opinions from the employees as they being part of the organization could come up with better feedback. In addition to this, the information sharing within the organization has importance in the following way:
By sharing information within the organization, inter-organizational communication and networking will improve. The communication between different organizational levels will support successful management of business and business operations.
The information sharing within the organization will help in the sufficient use of executive resources.
The sharing of information in an organization between different departments will increase the overall ability to make rational, sound and informed decisions involving combination of complex factors. The sharing of information will also enhance confidence and speed of decision making as well.
The time factor will reduce and more work could be done as the work force will know every business dimension.
By knowing every department and its role, the customer service will flourish as customer service agents will be able to answer every question easily. This will also improve the personnel relations with the organization as every employee will understand the nature of work and individual contribution of every department.
The sharing of information will help bring clarity in communication within the organization as every department would be able to understand common terms and terminology.
With such sharing, the business operations will develop higher degree of professionalism. (O’Brien and Marakas, 2008)
Although sharing information has been promoted in most of the organizations but there is a need for guidance when it comes to information sharing. The organizations must understand that employees must be confident that their personal information has been kept in privacy and secure from being accessed by any other employee. The privacy rights of every employee need to be maintained. The organizations must take the employees in confidence regarding the share of information. In this, the employees must have a clear idea how their personal data’ might be accessed or used by the company. Same is the case with work related information sourcing, sharing and storing. Some of the work related information of other departments must be communicated in order to streamline the processes to achieve the organizational goals. However there are certain decisions and approaches applied in department judging the requirement of the work. Such information must not be shared unless proper consent has been given by higher management. The employees must only share such information with an open consent of higher officials (McLeod and Schell, 2006).
Similarly, the organization need to streamline and direct which information should go to which department. There should be filters in the bulk of information so that the concerned employee or department receives the information only. The information of sensitive nature must be kept safe with secure privacy system so that only relevant higher management could access it.
Format for offering information
For any organization, choosing information sharing format must be based on underlying condition according to which a data format should only be approved for information preservation if it is fully known to the organization and the authority in charge of preserving information. There are various information sharing formats:
Publicly standardized format
These and other formats are available to organizations for offering information. However the organization must ensure that the format used must be clear to them in terms of its functioning. McDonalds must promote information sharing within departments in order to know their opinions so a better product could be launched.
Use of information to support strategic decision making
Decision making for any organization is the selection of course of action. The process of decision making produce a final choice and this choice can be an opinion or an action. The decision making process must be routed down to lowest possible level in the organization. But for every decision in an organization, proper and relevant information is required based on which analysis could be made and further implemented. Producing data and information should not be an end in itself but it should be made an integral part of the performance management, operations and governance arrangements of an organization. Organizations that pay central attention to the use of information while making decisions often end up making reliable choices. However, good quality data is an essential ingredient when it comes to development of reliable decision. The data must be relevant and perfect for the purpose with timely and accurate representation. In addition to this, an organization must reach for a balance between the importance of information required and cost of collecting such data (Haag and Cummings, 2009).
Use of information to support strategic decision making could be achieved by following this timeline:
Identify the decision to be made along with the goals that organization has to achieve through the decision. In this regard, determine the limitations and scope of the decision. In case of McDonalds, they can use this technique before launching the new product. They can decide if the new product should be launched in proper market or just test market. On these lines, the company needs to be very clear about their goals as well.
Get as many facts as you can about the decision an organization is going to take. McDonalds must go for detailed information regarding their performances in Asian region to get the drift of their problem. After collecting these facts, the organization must communicate these facts to employees of every department in order to get the opinion on the launch of the product.
After getting the facts, develop choices by developing alternatives. McDonalds can change the ingredients of their products in order to prepare different flavors. Along with identifying alternatives, create as well.
This is the evaluation phase of every alternative. McDonalds now need to consider the negative aspect of every alternative (cost, problems, consequences, time needed etc) and the positives (time saved, money saved, creativity, employees happy, customers happy etc).
In decision making, there is always some uncertainty regarding the choice made. So the risk comparison amongst the many alternatives must be completed before making the choice. The choice with minimum risk along with other positive aspects would work in the end.
Finally take the decision. After taking the decision, implement it and then evaluate the implementation.
Once the organization follows this process, it will become part of every strategic decision making. The aggregate of this information can further be used to predict trends and patterns. In case of McDonalds, they can take up this approach and use the data and information in future before launching their new product in a problem area. By following these steps, McDonalds will have a an information pool from all business processes including financial, human resource, inventory, logistics, quality control, resources etc giving out a perfect base to McDonalds in making future strategic business decisions (McDonalds, 2011).
To support the strategic business decisions, there are various decision making tools and techniques which can be used. An organization can either use one or a combination of these tools depending on the amount of information and risks in decision making process. The decision making tools and techniques come in various forms and can help the organization in taking the core strategic business decision. Some of these tools are:
Cost benefit analysis model
Decision support system
PMI- Pluses, minuses, interesting points
Six thinking hats
McDonalds can use all these tools and techniques in order to expand their market share in Asia region. The need is to do research in every dimension and communicate that information within the organization. There should not be any bottlenecks within the organizational communication. The decision making process would become easier if all the above steps are streamlined within the given period of planning and launching the product. By building up credible information in the information pool, McDonalds will be able to expand its operation and market easily.
Evaluate and monitor Management Information System
The Management Information System in an organization primarily depends on the quality of information and its source which are people, research and other sources. However this system is maintained in an organization by using the Information Technology and Information Systems. These days, due to adoption of Management Information System in all organizations, the financial investments in Information Technology and Information Systems have increased. With the growing significance of Management Information System in organizational infrastructure development, the performance and evaluation of new technology being used in these systems remains a focus for management. The evaluation process of Management Information System requires the appraisal of techniques which are being used in the information system development. The evaluation process takes into account the technologies which an enterprise is using to integrate information systems between and within organizations. The evaluation purpose includes the costs, benefits and risks associated with the diffusion or adoption of certain technology for information systems and impact assessment through management information system in an organization (Oz, 2008).
Information is a vital asset of any organization which helps determine the enterprise in creating new products and services. Information helps the organization to either withdraw from the markets or enter new markets. But information presented in raw form does not serve the purpose. For maximizing the worth of information, it is captured, quantified, analyzed, compiled, manipulated, shared and made accessible. All this requires the strong foundation and network of information systems (Laudon and Laudon, 2009). Along with considering cost for developing the information systems, the organization must consider the following factors in monitoring and evaluation of the management information system and its components:
Number of users
Modularity of the system
Ease in integration of new components in the system
Ease to remove outdated component
Amount of information to be processed
Type of information to be processed
Computing power required by different organizational departments
The anticipated functional life of components or system
User friendly components for people involved
For any organization, the management information system must be maintained in a way to minimize downtime. The enterprise must monitor the processing time of information in order to assure the successful implementation of management information system. A vital consideration in terms of monitoring the management information system is the user’s access to information in the context that which users can access the information. The organization must ensure that the system grants access to different data by applying user-level permission for access in order to avoid any legal issues regarding privacy of the information. For this, the organization can create unique profiles for each user of the management information system with relevant user-level permissions providing proper clearance.
The enterprise can administer the MIS by using individual passwords in order to delineate each user along with their level of access rights. In addition to this, identification of tasks performed by each user will be possible with this password system. The user identification process can also help in gaining data, its measurement and assessment about the performance of any user (McLeod and Schell, 2006).
One of the most crucial aspect of monitoring the information system is maintaining the communication between the IS staff of the organization that are involved in the technical perspective, and the system users who communicate their needs or concerns in prosaic terminology. The organization need to monitor this situation by eliminating the language barriers between the IS staff and system users with patience, negotiation and understanding.
The organization must maintain a centralized body to provide assistance, information and services to the users of the systems. The information which is being stored by an enterprise builds up a current pool for all users. The archived of the information should not only be a place for storage of information but it must be updated from time to time in order to make it useable for current needs and requirements. An information system is more than software or hardware and people who design it, use it and maintain it are the integral part of this system. The staff of IS must be paired with training department in order to upgrade their skills for better application of the information system and its maintenance (Haag and Cummings, 2009).
McDonalds after developing the pool of information needs to monitor it so that the company could analyze the information in order to predict the trends and patterns of the future. As the problem McDonalds had to face was due to the lack of reliable and authentic information, so need of the hour is to build a strong management information system.