Shruti Speak's

Risks Associated With MIS Risk reflects the potential, the likelihood, or the expectation of events that could adversely affect earnings or capital. Management uses MIS to help in the assessment of risk within an institution. Management decisions based upon ineffective, inaccurate, or incomplete MIS may increase risk in a number of areas such as credit quality, liquidity, market/pricing, interest rate, or foreign currency. A flawed MIS causes operational risks and can adversely affect an organization's monitoring of its fiduciary, consumer, fair lending, Bank Secrecy Act, or other compliance-related activities. Since management requires information to assess and monitor performance at all levels of the organization, MIS risk can extend to all levels of the operations. Additionally, poorly programmed or non-secure systems in which data can be manipulated and/or systems requiring ongoing repairs can easily disrupt routine work flow and can lead to incorrect decisions or impaired pla

Achieving Sound MIS The development of sound MIS is the result of the development and enforcement of a culture of system ownership. An "owner" is a system user who knows current customer and constituent needs and also has budget authority to fund new projects. Building "ownership" promotes pride in institution processes and helps ensure accountability. Although MIS does not necessarily reduce expenses, the development of meaningful systems, and their proper use, will lessen the probability that erroneous decisions will be made because of inaccurate or untimely information. Erroneous decisions invariably misallocate and/or waste resources. This may result in an adverse impact on earnings and/or capital. MIS which meets the five elements of useability is a critical ingredient to an institution's short- and long-range planning efforts. To achieve sound MIS, the organization's planning process should include consideration of MIS needs at both the tactical and s

(a) Ascertaining the problem: As Peter Drucker points out, .the most common source of mistakes in the management decisions is the emphasis on finding the right answers rather than the right questions.. The main task is to define the right problem in clear terms. The management may define the problem as the .Sales are declining. Actually, the decline of sales is symptomatic; the real problem may be somewhere else. For example the problem may be the poor quality of the product and you may be thanking of improving the quality of advertising. (b) Insufficient knowledge: For perfect rationality, total information leading to complete knowledge is necessary. An important function of a manager is to determine whether the dividing line is reached between insufficient knowledge and the enough information to make a decision. (c) Not enough time to be rational: The decision maker is under pressure to make decisions. If time is limited, he may make a hasty decision which may not satisfy the te

A rational decision is the one which, effectively and efficiently, ensures the achievement of the goal for which the decision is made. If it is raining, it is rational to look for a cover so that you do not get wet. If you are in business and want to make profit, then you must produce goods and sell them at a price higher than the cost of production. In reality, there is no right or wrong decision but a rational or an irrational decision. The quality of decision making is to be judged on the rationality and not necessarily on the result it produces. The rationality of the decision made is not the same in every situation. It will vary with the organization, the situation and the individual’s view of the business situation. The rationality, therefore, is a multi-dimensional concept. For example, the business decisions in a private organization and a Public Sector Undertaking differ under the head of rationality. The reason for this difference in rationality is the different objectives o

Decision making can be regarded as an outcome of mental processes (cognitive process) leading to the selection of a course of action among several alternatives. Every decision making process produces a final choice. The output can be an action or an opinion of choice. Human performance in decision making terms has been the subject of active research from several perspectives. From a psychological perspective, it is necessary to examine individual decisions in the context of a set of needs, preferences an individual has and values they seek. From a cognitive perspective, the decision making process must be regarded as a continuous process integrated in the interaction with the environment. From a normative perspective, the analysis of individual decisions is concerned with the logic of decision making and rationality and the invariant choice it leads to. Yet, at another level, it might be regarded as a problem solving activity which is terminated when a satisfactory solution is fo

MIS provides the following advantages . 1. It Facilitates planning : MIS improves the quality of plants by providing relevant information for sound decision – making . Due to increase in the size and complexity of organizations, managers have lost personal contact with the scene of operations. 2. In Minimizes information overload : MIS change the larger amount of data in to summarized form and there by avoids the confusion which may arise when managers are flooded with detailed facts. 3. MIS Encourages Decentralization : Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures. 4. It brings Co ordination : MIS facilities integration of specialized activities by keepi

Types of Management Information Systems A management information system (MIS) is a computer-based system that provides the information necessary to manage an organization effectively. An MIS should be designed to enhance communication among employees, provide an objective system for recording information and support the organization's strategic goals and direction. There are four types of MIS that will be introduced in ascending order of sophistication. Transaction Processing Systems These systems are designed to handle a large volume of routine, recurring transactions. They were first introduced in the 1960s with the advent of mainframe computers. Transaction processing systems are used widely today. Banks use them to record deposits and payments into accounts. Supermarkets use them to record sales and track inventory. Most managers use these systems to deal with tasks such as payroll, customer billing and payments to suppliers. Operations Information Systems These systems w