What is Management Information - Term Paper Example

Introduction Today’s organizations are really complex organizations in terms of their information requirements. The overall nature of the competition in any industry requires that the organizations must have access to the timely information that can allow them to take timely and accurate decisions. Further, organizations are now becoming knowledge based organizations wherein the dimensions of doing business depends upon how much knowledge and information is possessed by the employees and management of the firm. The management information therefore not only requires the deployment of technology as well as improvements in business processes but also outline the need for radical change in the way business use to perform traditionally. This also requires that the firms must ensure that the flow of information is in correct direct with adequate and right access to information at right time. Thus improvement of the information management is considered as key for improving the overall performance and efficiency of the organization. Flow of information therefore provides the organizations necessary advantage in terms of exploring the market and make timely and correct decision. As such it is therefore necessary that the correct information must flow in for each level of management to make correct assessment of the situation to make right decisions. This paper will critical discuss the notion of what exactly is Management information by discussing some of the theoretical concepts, practical examples in order to provide a critical overview of what management information is and how management information can play critical role in the success of the organization. What is Information? As the modern world transformed into post industrial era, businesses no longer were relying on their muscle power but rather the competition was based on quickly and efficiently information was processed by the firms. It is also important to note that there are very subtle differences between the nature of data and information and as such what is most significant for the organization is information and not the data. In more traditional sense, information is defined as something which we can perceive and provide the stimuli. This therefore includes any type of information including the written, oral as well as any other conceivable forms of information. It is also important to note that there is a critical difference between data and information as data is anything but information whereas data is converted into information when it is used for some specific purposes. In a sense, information is processed data which is used for some purpose and mostly for the purpose of making decisions. Thus data is nothing more than facts and figures that have been recorded whereas information is data which has been processed for some specific purpose and have been communicated and interpreted in such as manner that it is of some use for the receivers of the information.(Davis, 2001). The significance of information became more critical with the changes in the basic characteristics of the Western societies as they entered into the post-industrial era. The possession and processing of information therefore became one of the essential characteristics of conducting business and possession and correct processing of information therefore created strong inclination for the management to properly institutionalize management information into their organizations. It is important to note that information can be characterized in many ways and its classification depends on depends upon various factors. Some of the factors which classify the information in various categories include external information, quantitative information, strategic information etc. Information and Organizations The above definition of information indicates that data is successfully converted into information when it is processed for some specific use. However, from the organizational point of view, the process of data and its conversion to information is relatively more complex and require broader understanding of the various inter-related concepts. From organizational perspective, it is the user who defines whether the information is useful or not and as such the whole process of managing the information is dependent wholly on the nature of the user. If processed data is not understood or is of no use for the user, the information may not be characterized as the useful information from the organizational perspective. It is because of this reason that the relevance of information plays key role in information management and businesses rely heavily on converting and processing correct, relevant and timely information.(Mcleod, 2008). From the organization perspective, information can only be useful and manageable if it is easily understandable and reduces the ambiguity as well as uncertainty. Further, information with the organization need to be classified and characterized with pre-defined usage and access to the information. This also means that the information within an organization needs to be managed also. Information and Modern Management It has been the hallmark of the modern management that it hardly takes any participation into the day to day operations of the firm. Rather they rely on the information to make decisions and implement them down the line for their implementation. However, to obtain the required information they rely on many critical sources which can provide them both structured as well as unstructured information to make correct decisions. Such sources therefore can either be internal or external depending upon the nature of information required. It is therefore argued that the managers must understand as to what type of information they require and from where to get. The relevancy of information therefore is of critical importance because only relevant and timely information can provide managers right information to make correct decisions. However, relevant information always has the certain characteristics that make it relevant for the managers. Relevant information therefore is one which increases the knowledge, reduces the overall riskiness or uncertainty and is useful for its intended purpose.(Lucey, 2004). It is believed that the overall success of a company in managing its information depends largely upon the information infrastructure, processes, people as well as the overall culture of the organization. As such organization therefore transcend through different levels of information evolution which finally culminate into the successful use of information for achieving the strategic objectives of the firm. Management of information is also critical for the modern managers because of the fact that different levels of managers require different type of information to process in order to take decisions. As the management hierarchy within the organization becomes higher, the need for unstructured and fuzzy information increases as top management of the firm often takes decisions which are based on mostly unstructured information. As such it becomes the responsibility of the MIS department of the organization to process data into information in such a manner that it serves the purpose of each layer of the management. What is also significant to understand that management information needs to be tailored according to the specific requirements of the different layers of the management within the organization? (Laudon, 2006). The classification of the data into different types of information therefore ensures that the every layer of the management within the organization has access to right type of information. The information requirements at the lowest level of the organization is mostly transactional in nature therefore organization must ensure that the transaction processing capability of the firm is up to date. However, as the information moves up to the higher level management, it is really critical that the information must be to the specific needs of the higher level management. It is also because of this reason that the organizations often have two different information management systems in place- one that serves the information requirements of the line and middle managers and is often called transaction process system whereas the strategic information systems are put in place in order to serve the information requirements of the higher management of the organization. As such the overall information requirements with an organization shall be tailored according to following organizational hierarchies: Operational Information The lowest level of the management within an organization requires operational information to conduct the day to day business. The line managers who are often involved in operational activities therefore require structured information to perform their tasks. It is therefore important for the organization to manage the information at operational level in such a manner that it only provides access to the operational level information to the line managers to process. Operational level information is also considered as necessary because it allows the line managers to ensure the compliance with the rules and procedures of the organization and work in accordance with the overall strategic objectives of the firm. Tactical Information Mid tier management often requires tactical information which is semi-structured in nature and fulfills both the requirements of operational information as well as tactical information. This type of information is required in order to bridge the link between the line managers and higher management of the firm. This is because of the fact that higher level management often requires information which can indicate as to how the operational performance of the firm is going. As such tactical information management provides the necessary link between the higher management as well as the lower level management of the firm. Strategic Level Information Management As discussed above that the strategic level information management is often unstructured and fuzzy in nature and required by the top management of the organization. This is critical due to the fact that the higher management of the firm often need to look at the future and must conceive of the changes that can take place in future. This therefore requires that the leadership of the organization must have access to diverse and unstructured information in order to make decisions. Since the job of the top management of the firm requires providing vision to the organization and set its future orientation and direction therefore strategic level information needs to be unstructured in nature. Unstructured information therefore does not need to be in any particular format and it’s the top management of the firm which decides as to how to utilize this unstructured information to understand the trends and future changes that can affect the organization. Based on this assessment, future strategies are made in order to equip the organization to meet the challenges of the future.( Gallier & Leidner, 2003). Above discussion indicates that the management information means different things at different organizational levels. Each organizational layer perceives and processes information in different manner in order to customize it according to the particular needs. What is also however, important to note that it becomes the responsibility of the organization as a whole and top management of the firm to design the overall infrastructure in such a manner that it provides access to timely and correct information to all concerned? Conclusion There are very subtle differences between information and data and both are often used interchangeably. However, information is that form of data which is specifically processed for a particular use therefore the usefulness of the information is often perceived from the point of view of user rather than its sender. The changes in the basic economic structure of the developed societies required a transition towards post-industrial economy which depended more on the possession of information. As such those organizations became more successful which were effective in obtaining the right information at right time and utilize it for their specific purposes. The management of information therefore became one of the critical aspects for achieving success in modern world those organizations became successful which developed the capability of information management in better manner. The management information requirements within the organization often vary according to the level of management. Lower level of management i.e. line managers require more structured information because of the nature of their job whereas higher management require more unstructured information. The difference in information requirements of various levels of management is basically due to the implicit roles of each layer of management i.e. line managers are required to perform operational work whereas higher management of the firm is required to take strategic decisions and involve themselves into strategy formulations. Thus their information requirements are mostly unstructured in nature with more focus on understanding the future trends. References 1. Davis (2001). Management Information Systems. Illustrated. ed. New York: McGraw-Hill. 2. Galliers,R,& Leidner, D (2003). Strategic information management: challenges and strategies in managing information systems. 3. ed. London: Butterworth-Heinemann. 3. Laudon, K (2006). Management Information Systems: Managing the Digital Firm. 10. ed. New York: Pearson Education. 4. Lucey, T (2004). Management information systems. 9. ed. New York: Cengage Learning EMEA,. 5. Mcleod, R (2008). Management Information Systems. 10. ed. London: Pearson Education. Read More