T 802 Information Systems And Management

Module 1


“Management comprises the processes or activities that describe what managers do in the operation of their organization: plan, organize, initiate, and control operations.”


A system can be described simply as a set of elements joined together for a common objective. A subsystem is a part of a larger system. All systems are part of larger systems.

Systems Approach To Management

. The systems approach was an idea born in the 1960s. It is based on the notion of synergism whereby the sum of two parts is greater than the whole.

i.e.; 2+2=5

It is based on the principle that the output of the total organization can be enhanced if the component parts can be integrated. The system approach to management is designed to utilize the scientific analysis in complex organizations for

  1. Developing and managing operating systems.

2. Designing information systems for decision-making.

Information system is used to assist in decision-making regarding the management of operating systems. A fundamental notion of the systems approach to organization and management is the interrelationship of the parts or the subsystem of the organization.

The systems approach has been used extensively since it was developed in the 1960s. Two major reasons for this acceleration are:

  1. The increased complexity of business
  2. The increased complexity of management.
1.The Increased Complexity of Business:

The increased complexity of business is due to four primary causes:

a)The technological revolution

b)Research and development

c)Product changes

d)The information explosion.

a)The Technological Revolution:

Fantastic changes have been wrought by the technological revolution of the past 20 to 25 years. The technological revolution is not a continuation of the Industrial Revolution; it is a vast and fundamental change. As advanced mechanization and automation techniques are adopted improvisations are brought in to all major areas. Two facts are very instantly recognizable:

  1. Changes will continue at an accelerated pace
  2. These changes will demand big steps in the improvisation of management.
b)Research & Development:

The breathtaking rate of the technological change racing through all types of industry is due to increasing expenditure for research and development. Though the number of firms involved in research and development is small its impact is felt by all.

c)Product changes:

Technological advancements that have occurred as a result of research and development and growing customers requirements have contributed extensively to the rate of product changes. Today’s managers deal with a very high product mortality rate. Organizations are also forced to face the necessity to optimize return from a given product in a much shorter time.

d)Information Explosion:

The Information Explosion has a very large impact on the complexity of management and organizations. Managers are given the responsibility to manage the storing, processing, retrieving of information and taking the right and the best decisions. To remain ahead of competitors and to keep pace with the technological revolution and its impact on the firms product or services the manager must keep abreast of selected information and must be capable of effectively organizing the same for effective decision making in the future.

2. Increased complexity of management:

There have been mainly 4 changes that have reflected as an improvisation in management process. These are:

a)The theory of information feedback systems

b)A better understanding of the decision making process

c)Operations research or management science techniques that permit an experimental or simulation approach to complex problems

d)The electronic computer.

a)Information Feedback Systems:

Feedback Systems are concerned with the way information is used for the purpose of control and they apply not only to business management but also to engineering, biological and other types of systems. The common trait is that the output of the system leads to a decision resulting in some type action that corrects the output, which in turn leads to another decision.

b)Decision Making:

A development of extraordinary importance to building a foundation for systems approach is the notion of automating or programming decisions. Those decisions maybe based upon a policy, a procedure or rule.

c) Management Sciences:

Closely allied to programmed decisions and decision rules are the techniques of management sciences. A primary purpose is design of programmed decision rules.

d) Electronic Computer:

A major development that has made the systems approach to management possible is the advancement of the electronic computer. Without it the vast amount of data transfers, handling, storage, processing and retrieval of data and information would not be possible. However the vital element is the human or the manager himself and it is the managerial talent.

Development of Organizational Theory

Organization theory and management theory differ in two ways. First, the former is concerned with the structure of interpersonal relations and the organization a mechanism for promoting human collaboration. Management, on the other hand, sees the organization largely as a vehicle for achieving an output or objective. Second, modern organization theory is a relatively new discipline, development of the past few years, based heavily on scientific research.

Among the more prevalent models of organization theory are the decision-making, bureaucracy, social systems and systems models. The foremost proponent of the decision making approach is Herbert Simon, who views organization members as decision makers and problem solvers and concludes that administrative processes are decisional processes. The bureaucracy model had its beginnings in the writings of Max Weber. It is still a valuable approach to organizations despite the widespread popularity of such satirical, antibureaucratic interpretations as Parkinson’s Law and the Peter Principle. The social systems model derived from sociology, states that organizations are social systems. A major proponent of this model is Talcott Parsons, who maintains that today’s bureaucratic organizations came into existence as a result of complex modern society and its functional specialization and differentiation.

Two additional theories of organization–behavioral and decision theories-have influenced the development of modern organization and management theories.

  1. Classical Process Theory

The basic tenets attributed to classical theorists such as Henri Fayol, Frederick W Taylor, L.Gullick and Lyndall Urwick and J.D Mooney are:

a)Clear lines of authority:

Every individual should be related through a chain of command to the top manager (scalar chain).

b)Specialization of labor:

Breaking work down into small tasks that are easily learned leads to greater productivity. The company can then be departmentalized on the basis of grouping of similar tasks.

c)Unity of command:

No person should report to more than one manager or supervisor.

d)Span of control:

The number of people reporting to a manager should be limited by the nature of the tasks. Many articles argued whether, span should be broad or narrow and tried to establish an ideal number.

e)Clear separation of line and staff:

The staff members (or managers) are to act as advisors to line managers and not to influence other organizational members directly.

The basic premise of the classical school is that organizing is a logical, rational process. Given the objective, what you want accomplished, you determine the work to be done, group this work into logical units and define positions within these units in terms of a structure of accountability. The classical theory assumed that workers were rational and logical and would perform as expected. Moreover, workers prefer to have their job limits clearly defined.

In summary, the classical theory is valuable and is widely used today. It is limited by its concentration on the formal anatomy and structure of organizations and its insistence that human problems will take care of themselves if tasks are assigned and duties are organized. Classical theory is still very much alive, is widely utilized, and is probably the approach taken by the preponderance of practicing managers.

2. Behavioral Theory

The shortcomings of organization and management were uncovered by the Hawthorne experiments of 1927 to 1932. At the Western Electric Company plant there, Elton Mayo, F. J. Roethlisberger, and their associates found that employee attitudes could be more important to productivity than the technical and physical environment. This discovery opened the way for a flood of research on organizational behavior, leadership and motivation. The results are so important for an understanding of the systems approach and MIS.

  1. Decision Theory

Decision-making is the most important task of managers; many scholars believe that decision making and the process leading up to it account for most of what executives do. Among those people who place great Importance on the process is Herbert Simon, who states, "I shall find it convenient to take mild liberties with the English language by using 'decision making as though it were synonymous with managing.

Decision making in its broadcast context includes among the activities preceding the decision:

1) Finding occasions for making a decision

2) Finding possible courses of action

3) Choosing among courses of action.

The systems approach to management would use the decision as its central focus. Although the decisions may be a major result of managing, other approaches, schools, disciplines and processes provide the manager with the total body of the knowledge that he/she may requires. At any rate the armed forces were largely responsible for promoting a structured approach to decision making. Cyert, March, and Simon are among those who had advanced the notion of adapting these decision making methodologies to administration and opening a new era in which organization members are viewed as “decision makers and problem solvers”. This idea is one of the key concepts of organization and management theory and a vital one in the design of management information systems.

  1. Systems Theory Of Organization And Management:

We may synthesize the functions of management and the separate approaches to the study of organization and management to obtain a system of organization and management. The task is to construct a conceptual model through which we can understand how to manage the transformation of resource flows through the organization by means of a system approach. Such an approach must also include as essential components the functions of the management processes, modern organization theory and the techniques of the various schools of management.

Because our model will utilize the basic functions of the management and the techniques of the other approaches as the foundation, it is first desirable to indicate how these can be integrated.


Managing and Organizational Theory

For managers to implement the managerial functions and organizational plans and processes, they must have a motivated and supportive work force. The management organizes its resources, structures the work, seeks involvement of workers in these activities, and establishes communication in the organization so that the information systems will match actual organization requirements and increase productivity.

The major factors affecting productivity are shown below.

Organizational Behavior:

The behavior of an organization is a result of the following factors:

  1. Organizational Culture

The culture is a set of attributes, beliefs, values, norms and understandings; the people have in the organization. The culture is a collective behavioral result of the people who man the organization. Depending upon the person, whether he is a manager, an officer or a worker, the cultural pattern emerges and it is known as a managerial culture and a work culture, etc. Long-term performance and managerial actions depend on the managerial culture and the achievement of the targets depends on the work culture.

The culture may be reflected in the philosophy, policy, strategy, goals and managerial style of the organization. If the organization culture is generating a behavior, which affects the performance adversely, it can be changed by management actions.

  1. Organizational Power

The organizational power is the ability of the organization structure to use human and material resources to achieve the stated goals and objectives of the organization. The power of the organization is not disturbed uniformly all over the organization but it may be concentrated in small groups representing a function, a department or a section. It might be localized with the individuals.

Some individuals by virtue of their position, responsibility and seniority, enjoy more power than others. Some individuals by virtue of their nearness to the management and a strong personality, derive power in the organization structure

  1. Organizational Change

Even though the organization is structured properly, over the period of time it starts failing slowly due to changes in the environment, the people and the business. The process of organization outlives the purpose for which it is established moves much faster, if proper corrective action is not taken.

  1. Organizational Learning

The organizational behavior improves with the experience it gathers from all business fronts. With experience, people are in a position to identify the cause and effect relationship. It is possible to predict the errors and probable mistakes in the business operations.

The individuals in the organization are able to assess the strength and weaknesses within them and are able to take steps to improve. As organizational learning increases, the organization moves towards high degree of formalization, affecting the structure itself.

  1. Organizational Motivation

Organizational behavior can be monitored and directed if proper motivation is provided to the people. Motivation inspires the people to perform. Monetary rewards, presentations are the known methods of motivation. The leadership is an interpersonal influence on the subordinates, which persuades or motivates them to perform to achieve the goal.

Another method of motivation is through job environment. A job is to be designed in such a way that it provides challenge to the skills of an employee.

Need Models of Motivation

Needs are internal to the individual, and managers cannot impose them in the minds of their subordinates by edict, policy, or regulation. Managers may provide incentives with the hope that needs will arise. Relatively few workers are motivated to become “rate-busters” by externally offered rewards. A second important implication for manager is that a satisfied need is not a motivator.

Needs may generally be categorized as biological needs for maintenance of life and acquired needs arising from experience. The strength of a need depends upon expectancy (Degree of belief that a need can be satisfied) and availability. The proposition for the manager is, “set goals and rewards within the capabilities of each individual”. The management achieves these goals by increased income, security through vesting in a pension plan, vacation time, personal fulfillment in work, or status achievement.

A number of needs theories of motivation were proposed.

One of the best known but least substantiated models is the “hierarchy of needs” classification developed by A.H.Maslow. The five categories, from the highest priority to more acquired needs are:

  1. Physiological needs that are usually satisfied through the medium of money
  2. Safety, stability and security
  3. Affiliation, belonging to a group, love.
  4. Self-esteem and the esteem of others (social recognition)
  5. Self-actualization – fulfillment of the person’s potential and interests.

The highest need in the hierarchy is the need for self-fulfillment, the need to achieve all that the individual is capable of, and to achieve it in a kind of work that the individual enjoys.

Another needs theory is Frederick Herzberg’s two-factor theory. According to this, there are two different categories of motivating factors. Poor environment factors – such as working conditions, policies and administration, money, and reshuffling of tasks – may make workers dissatisfies, but improving these conditions, i.e. hygiene factors – does not motivate workers to greater productivity. On the other hand, the positive motivators are stimulated by

  1. Removing control over the worker but holding the worker accountable for results
  2. Giving a person a complete, natural module of work
  3. Granting the worker additional authority and job freedom
  4. Making periodic reports available to the employee so that he or she may initiate corrective action instead of being directed to take it.
  5. Introducing new and more difficult assignments so that the employee may learn and grow.

One of the most extensively researched models of motivation is the “achievement” model of D.C.McClelland and J.W.Atkinson. They identified three needs of people as

  1. Achievement – The need to set high attainable goals and be measured against them
  2. Affiliation – The need for warm friendly interpersonal relationships
  3. Power – The need to control and manipulate the individual’s environment

Achievement needs were relatively stable and developed over a person’s childhood.

Expectancy models of motivation have been developed by Victor H. Vroom and by co-researchers Lyman Porter and Edward Lawler. They view motivation as dependant on the strength of an individual’s desire for a set of goals and the likelihood that a specific type of behavior will lead to the achievement of the individual’s goal.

An individual starts with some desired outcome or goal in mind. He then constructs a bridge of likely happenings in terms of effort and performance to reach his particular goals. Motivation depends upon the bridge’s holding up.