Management Information Systems Explained

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A management information system (MIS) is set of internal controls that aid company management in running a business on a daily basis. The MIS is not just a computer information system that gathers information, but an overall decision-making tool used by management.

Information System

  • All businesses today utilize some form of a technological information system in their company. Using an automated system to record and process business transactions is essential to running a profitable company and responding to market fluctuations. However, information systems are best for just collecting and reporting company information; management must still review and use the information for achieving company goals.

Management Methods

  • The information reported by the MIS will help management find areas that need improvement in their company. How this information is used to correct business operations relies on the style of management used in a business. Using a de-centralized management style allows for corrections to be made by the front-line manager; this allows for a great deal of autonomy in management positions. Centralized management styles rely on top-level managers to correct business operations.

Resource Management

  • MIS reporting helps business understand how well they are utilizing the resources of their business. Production facilities, asset management, and labor are examples of resources that must be reviewed by management. Inefficiently using resources can raise costs and limit growth of a company, creating lower profit margins and reduced sales.

Decision Process

  • All companies use some form of a decision process when reviewing the information gathered from their MIS. Each piece of information is reviewed and used to decide whether operations should be increased or decreased, new markets found for products, or profit margins increased. The decision process includes all parts of the company management, seeking to create the most informed decision possible relating top the reported information.

Communication

  • Proper communication aids the success of management decisions based on the information from the MIS. Communication allows top-level management to discuss the information will department level and front-line managers, creating a downward communication flow for decisions. Upward communication is also important regarding decisions, allowing front-line employees an opportunity to discuss the MIS information with upper management. Open communication lines allow companies to receive input from all employee levels, making the best decisions from the MIS information.

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