The Benefits of Installing Management Information System in Small Business - Dissertation Example

The definition of small business varies from country to country, for example, it is 50 in terms of employees in European Union. Economic criteria are also used for classification, based on capital employed or business turnover. However, for our study an organization consisting of at least 25 people and a maximum of 100 employees may be considered for inclusion in the survey. The developments in information technology, telecommunications, media and social networks necessitates the small business community to reorient their strategies to be competitive in the business, and MIS plays an important role in the backdrop of liberalization and globalization of the economies.

This research may contribute significantly in this respect by highlighting the benefits of installing MIS in small businesses. Research Questions 1. What are the benefits of implementation of MIS in small business? 2. Is the cost of installation of MIS justifiable in relation to the benefits? 3. Is it true that the implementation of MIS enhances stability in the organization? Research aim The study aims to assess the impacts of implementation of MIS in the small businesses with regard to cost and benefits, both tangible and intangible that may accrue to the small businesses with a view to make recommendations based on the analysis and findings.

Research Objectives To study the impact of MIS in relation to the operations and management of the small businesses with a view to analyze: 1. the impacts of the cost of installation of MIS and 2. the factors which govern installation of an appropriate system in relation to the size. Hypothesis The analysis of the survey results would be useful in evaluating the hypothesis: When the world is moving toward liberalization and the countries pursue a policy of globalization, installation of MIS in small businesses is crucial for efficiencies in the operations and for a sustainable development.

The financial and non-financial benefits derived from the installation of MIS outweigh the cost involved in the installation, and MIS enhances stability of the organization. Literature review According to Garnengo, Nudurupati & Bititici (2007, p. 683) in the small and medium enterprises the deficiencies in MIS obstruct PMS [performance measurement system] use because the required data cannot be captured. It is observed (p. 683)”during the first implementation phase entrepreneurs obstructed MIS investment, and only free software and internal knowledge could be used.

However, in a few months PMS advantages were highlighted and, consequently, MIS investment was planned and supported by entrepreneurs”. The expertise in processing of the information and reporting is crucial for the business success. Brouthers, Andriessen & Nicolaes (1998, p. 136) found “When it comes to making strategic decisions, the small firm managers in this study tended to ignore the information gathered and the analyses performed, relying instead on their intuition”. In order to compete efficiently in the market, strategic decisions based on the information properly analyzed are very essential.

According to Street &Meister (2004, p. 473), “Small business growth is known to strain internal communication processes, for example, which likely limits growth opportunities”. Resistance to change and fear of unknown could be the major