4. mba 204 management information systems assignment 2nd semester

MBA 204 MANAGEMENT INFORMATION SYSTEMS Page 1

MASTER OF BUSINESS ADMINISTRATION (MBA)

SEMESTER- II

SUBJECT CODE & NAME -MBA204 & MANAGEMENT INFORMATION SYSTEMS

SET- 1

Q.1 What are the different challenges a manager face in managing Information systems?

Answer:

Managing Information System in organizations is a highly challenging and complex task. One

reason for this complexity is that neither organizations nor the IS they use remain static over

time – both change continuously, and it is the job of management to ensure that the

systems remain useful and relevant for their organizational goals at all times. Organizations

change to respond to the needs of the business and economic environment in which they

thrive. They may have to change their services, their products, their internal structure, and

the manner in which they do their business to meet the challenges of the environment.

Organizations also change as their employees gain more experience and learn and adjust to

their work environment. The employees change the manner in which they work, including

the manner in which they work with IS, and with this they change the way processes within

organizations are carried out.

First-order and second-order effects

The outcome of the implementation of a new IS could be positive or not, and this will

depend on the situation at the organization. The outcomes that arise as a direct

consequence of the introduction of an IS are known as first-order effects. They are usually

visible in organisations in the form of increased speed of processing of data or increa sed

volume of processing and these are what any organization would have intended to gain

from the IS that it has implemented.

The first-order effects can be positive or negative depending on how the organization

adapts to the new system.

Effects of competition and organizational traits


Whether an IS is successful and is able to meet its intended effects is largely dependent on

the organization it is being implemented in and on the competitive environment, culture,

structure, the processes the organization follows, and the IT infrastructure already in place

in the organization.

The competitive environment is the competition that the firm faces in the market in which it

operates. Often the decision for adopting an IS is based on what competitors are doing and

how one can keep up or get ahead of the competition. In the late 1990s many firms across

the world adopted e-commerce because that was the means by which they could remain

competitive in a rapidly changing environment.

Effects of organizational structure

The structure of an organization is the manner in which employees are constituted or

grouped within the organization. Many government departments, for instance, are

structured as a hierarchy where the highest level person has the greatest authority and

those reporting to that person are delegated responsibility and authority. For example, in a

government department the person at the top of the hierarchy would be a minister and

reporting to him/her would be secretaries. Below the secretaries would be joint secretaries

and so on, down to the lowest level consisting of offi ce workers. Along with authority, the

functions of different people in the hierarchy would also be different, and these functional

differences are used to create divisions, departments, and groups within the larger

department.

Support for organizational processes

Some organizations use information systems to change or challenge the existing hierarchy in

place. Workflow systems may alter the manner in which employees receive and process

documents, thus helping to introduce efficiencies in the process.

Q.2 Explain the concepts of

a) Transaction Processing System

b) Management Information System


Answer:

a) Transaction Processing System

A transaction is any activity of the organization that generates information. For example, the

activities related to buying a ticket from the Indian Railways generates many transactions,

each of which produces information that is recorded by the systems. Some transactions

involve exchange of goods or services while others may be purely informational. A

transaction processing system records all the transactions as they happen. In this sense,

such systems are considered to be online systems.

When users initiate transactions, the systems respond in a pre-specified manner, such as

asking the user to fill in information about themselves. Most systems are designed to serve

many users simultaneously. They are also designed to respond quickly and in a manner that

makes the systems appear ‘live’ to the user.

Most transaction processing systems present carefully designed interfaces to the user that

guide the transactions. A transaction processing system helps the user during a transaction

by changing screens and the information on the screen.

This requires the systems to provide information that is relevant for the situation. The

exchange of information is highly sensitive to the context that is desired by the user.

Modern transaction systems allow users to change the information input by them and

backtrack to earlier parts of the transaction stream.

b) Management Information System

Management information systems (MIS) process the information generated by the

transaction processing systems of an organization and create reports for use by the

management. A typical MIS report may consist of the following information that depicts

various activities of the organization:

1. A report on the average daily sales of the organization with details for each product and

each region.

2. The daily production of goods.

3. The seasonal sales of the organization with regard to each region and product.


4. The cash balances for each division, with details of inflows and outflows for the week.

5. A report on personnel and project assignments and the number of hours logged in by

each person for the month and for the week.

6. A report on printing and paper charges across the organization for the year, with details

related to divisions and seasons.

Q.3 How Information system can be used to support Competitive strategy? Substantiate

with suitable examples.

Answer:

The promise of information systems is that they enable the competitive strategy of

commercial firms. The competitive strategy of a commercial firm is its long-term

competitive position, such as of being a low-cost player or a differentiator, which the firm

adopts. A firm’s strategy is the set of activities it engages in as part of its long -term

competitive goals. Strategies lead to operational goals and to tactics that the firm

undertakes.

Long-term goals are of value to non-commercial organizations too. For example,

government departments may adopt a goal of reaching out to all citizens to provide

services, for which they can evolve a strategy based on information systems. Government

departments do not face competition as such, and their main concerns are of service

delivery and efficiency.

Competitive

Strategy

Use of Information

Systems

Example

Create barriers

to entry for

competition

To create barriers to entry

of

new competition, fi rms

may

lock-in existing customers

Yatra.com is an online

travel portal that enables

customers to buy airline

and railway tickets from

its site. It maintains a


with

loyalty programmes and

free access

accounts created with

Information systems. Data

from such loyalty

programmes

can also be used to

identify

customer tastes and

patterns

of buying to further

provide

them with goods and

services.

loyalty programme by

providing discount coupons

to customers who

Purchase frequently.

Reduce bargaining

power of

suppliers

The bargaining power of

suppliers

is reduced by creating

customized logistics

channels

with suppliers that enables

an exclusive access, thus

increasing costs for

suppliers

if they want to seek other

Customers.

Deutsche Post DHL has

information systems to link

all its partners in its logistics

Chain. This not only

creates barriers to entry

to competition, but also

prevents its suppliers from

Seeking other partners.

Reduce bargaining

power of

buyers

The bargaining power of

buyers

is reduced by providing

low-cost,

bundled services from

By creating an online

facility for buying tickets,

the Indian Railways has

reduced the need for its

Customers to seek


a single source that is

highly

Customized to their needs.

They

would not be prone to

seek

alternative sources if a

sufficient

lock-in is created.

alternatives.

Provide low cost

Products

Transactions costs are

reduced by having

information

systems that increase the

Volume and speed of

transactions.

When scaled up, this

gives a significant

competitive

Advantage.

The ICICI Bank initiated

a network of automated

teller machines (ATMs)

across India to reduce

Costs of banking for clients.

Clients could access

their accounts any time

and easily.

Provide niche

Products.

A differentiation strategy is

possible by reaching out to

new markets and

customers

Using the Internet.

Information

systems help customize

offerings

and also provide high

efficiency levels for

implementing

The strategy.

The United Parcel Service

(UPS) created a special

information systems that

kept track of parcels as

They were shipped. This

was a unique offering,

differentiating it from its

Rivals.


SET -2

Q.1 Explain the following concepts

a) Electronic Data Interchange (EDI)

b) Online Payment Technology

c) Mobile Commerce

Answer:

a) Electronic Data Interchange (EDI)

Before the growth of the common standards for the Internet and the growth of Extranets,

firms exchanged data electronically through private networks. This process was called

electronic data interchange (EDI). The EDI standards were initiated in the 1960s in the USA

and Europe to allow transportation firms to exchange data across national boundaries.

Later, many trade bodies evolved further standards for exchange of commerce-related data.

EDI standards are not similar to the data standards used by the Internet; they are based on

different, often proprietary, standards that are used only by the partner organizations.

b) Online Payment Technology

One of the biggest challenges posed to e-commerce has been the issue of payments. In a

typical commercial transaction conducted manually, a customer is able to pay cash for a

purchased item or pay by credit card. If it is by credit card, this transaction is verified by a

service to ensure that the card is valid, and then the transaction is posted. The seller can

also verify the authenticity of the buyer by seeing an identity card.

Online payment technologies address the issue of managing transactions in a secure and

efficient manner. Establishing the identity of the buyer is one of the first problems that the

payment technologies face. Once the identity is established, the next challenge is to have an

easy process by which the payment can be made without the intervention of too many

intermediaries and also at a reasonable cost. Once a payment has been secured, the


remaining problem is that of chargeback’s, that is cancellation, for some reason, of the

transaction and a subsequent reversal of the payment.

c) Mobile Commerce

With the pervasive availability of mobile phones, some firms have created innovative

payment solutions through mobiles. The idea is to create the twin assurances of security

and ease of payments with the mobile phone. One such service, known as Playmate, works

in a way discussed below.

The customer creates an account with Playmate that links to customer’s bank or the credit

card owned by the customer. The customer also provides her mobile phone number to

Paymate, which then gives the customer a unique personal identification number (PIN) that

he/she can use to verify the transaction. When the customer accesses an e-commerce

website and is ready to make a payment, he/she selects the Playmate option and provides

her phone number. At this point Palmate initiates an automated phone call to the customer,

asking the customer to enter his/her PIN. This acts as a verification. After this, Paymate

charges the customer’s bank with the relevant amount and sends a message to the

customer’s mobile about the same.

The main advantage of payment through mobile service is that it can be used without a

computer or access to the Internet and without a credit card. For this service to work, the

merchant has to have an account with the service, similar to the arrangements merchants

have with credit card companies.

Q.2 What is DSS? How it is different from MIS? How DSS helps in Decision making?

Answer:

Decision support systems (DSS) are used extensively across organizations to assist

managers with making decisions. DSS are different from management information systems

as they are used on an as-needed basis and created for solving special types of decision


problems. Decision making by managers involves the phases of intelligence, design, and

choice, and DSS help mainly with the choice part. DSS support structured and unstructured

types of decisions.

Modern approaches to decision support include analytics and artificial intelligence

techniques for predictive and real-time analysis of data. Use of tools such as neural

networks, decision trees, clustering, and visualisation are quite extensive.

MIS and DSS:

MIS essentially present data to managers in various forms and from various sources. The

intent of MIS is to enable managers to see the data pertaining to the functioning of the

organization in a summary manner that enables both a bird’s eye view as well as a

penetrating view of the data. MIS too process the data but in a manner as to show different

views and summaries. DSS, on the other hand, are designed to help managers with

decisions, and the analysis is meant only for a particular decision.

Differences between MIS and DSS

Management Information Systems Decision Support Systems

Provide managers with data and

reports on a regular basis

Support managers for decision making

on an ad hoc basis

Reports are targeted for specific users,

especially management

Find use across the organization, by

whoever needs help with problems.

At the choice stage, the criteria and parameters for the decision help curtail the amount of

search required to arrive at a decision. If the criteria are not specified sharply then the

number of alternatives to be considered to arrive at a decision may be very large. This stage

may also require returning to the intelligence gathering activity, and then to the design

stage to change or modify the criteria and the weights used to apply them. In his seminal

work, Herbert Simon also showed that decision makers have bounded rationality, implying

that they are restricted in the number of choices and criteria they can actually bring to bear


in a decision-making situation. These limitations exist, in part, because of the limits on the

cognitive abilities of humans or, in other words, the limits on the number of things that

people can think about at a time. Most people are content with a satisfactory answer, not

necessarily one that is the best or optimal.

DSS are designed to support mainly the choice stage of the decision-making process.

Managers can enter the relevant data into the system, select or priorities their criteria and

let the system decide on the final solution. Mathematical models are usually built into the

system to help analyse the data and arrive at solutions. Some modern software also assist

decision makers in the intelligence stage, where they seek out pertinent information from

organizational databases or from the Internet.

Q.3 Explain why privacy is important for individuals in the organizations? How workplace

electronic monitoring is done in the organizations?

Answer:

Information systems are used widely across organizations, and they enable data and

information to be widely distributed for use. When the data pertains to individuals (relating

to their work, personal habits, or personal life), and it resides on organizational information

systems, the question of privacy that arises here is: Whose data is this – of the individual or

of the organization?

Owing to the complex nature of information systems and the manner in which data is

created, stored, and manipulated, the answer to this question is usually difficult. To answer

the question of privacy one has to consider why it is important in the first place. Data and

information relating to individuals could be of sensitive nature. Some examples of such kind

of data are as follows:

1. Employees, who work extensively with computers, log in every morning when they come

to work and log out in the evening when they leave. During the working day, every time

they leave their desk or are not working on the computer, the system logs their inactivity at

work. For example, a United Airlines worker, in the USA, was threatened with job loss on the


grounds that she had spent more than the allotted time in the bathroom, making her co-

workers take up her work.

2. Medical records detailing illnesses and treatments, hospital visits, and medication

routines are all stored on organizational databases that contain personnel data. The data is

specific to individuals and, for some organizations, also contains details about the

individual’s family members. In the USA, for example, the medical records of the famous

singer Britney Spears were read by employees of a hospital in which she was treated. The

employees later leaked the information to the press. Spears took legal action against the

hospital, which had to fi re several employees.

3. Web surfing activities of individuals are also logged by corporate web servers. Which sites

individuals have visited, how long they have been on the site, and what kind of material

they have downloaded are also logged. A multinational media firm, for example, threatened

to fi re an employee based on his visits to Yahoo.com from an office computer. The Firm had

obtained details about the employee’s surfing behavior from server logs.

4. Security systems in some organizations, which are based on swipe cards or security cards

that enable doors and offi ce buildings to be opened or accessed, retain records of all

individual movements across buildings and workplaces. Data pertaining to individual

movements is available in security logs. In the Vatican, for example, swipes were re-

introduced in 2008 to monitor the movement of employees. This was in response to

criticism that employees were ‘slacking off’. Even though the Pope was not entirely in favor

of such monitoring, it was introduced to improve efficiency of staff.

5. Many organizations also check all incoming and outgoing e-mails of their personnel. The

e-mails are checked for content and attachments. Some organizations either remove e-mails

containing certain keywords, such as expletives, or flag them to warn employees.

There are many possible ways in which electronic monitoring can be effected in

organizations. Some of these are as follows:

1. Use of digital video cameras for internal monitoring of employees, offices, hallways, and

buildings. The video footage is stored for later retrieval and viewing.

2. Use of computer network logs to record all use of fi les, visits to websites, and access to


other computer networks and programs.

3. Scanning and storage of all outgoing and incoming e-mails from and to employees.

4. Use of employee identity cards to monitor physical movement of employees.

5. Access given to outside agencies to obtain personal data on employees, such as credit

card statements, bank records, medical records, and pharmacy purchases.

6. Access to all fi les on employees’ personal computers and laptops, including removable

storage devices.

Often, other types of workplace monitoring are also conducted by firms, such as testing for

drugs and alcohol. However, these are not dependent on digital technologies and are not

considered here.

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4. mba 204 management information systems assignment 2nd semester