CHAPTER ONE

1.0 INTRODUCDTION

The researcher wants to investigate “the use of information system and business productivity” at

some selected water well drilling companies in Mogadishu. This chapter consists of eight

sections: first section presents background of the study, second section explains problem

statement, third section illustrates purpose of the study, fourth section lists the objectives of the

study, fifth section discusses the questions and hypothesis of the study, sixth section indicates the

scope of study, seventh section identifies the significance of the research and the last section

makes the operational definition of variables.

1.1 BACKGOUND OF THE STUDY

The use of the Information systems has evolved over a period of time comprising many unusual

sides of the organizational productivity. Information systems have been growing since the

appearance of the first applications of this information processing technology to support

organizational work in the 1950s.

According to A.Sarras (1999). Information systems are a necessity of all the

organizations. The initial concept of information system was to process data from the

organization and presents it in the form of reports at regular intervals. The system was largely

capable of handling the data from collection to processing. It was more impersonal, requiring

each individual to pick and choose the processed data and use it for his requirements in many

developed countries, the development process of IS relates with the long-term business plans of

the organizations and IS requires resources like capital, time and capacity.

Early IS were quite easy to describe and explain: there were several organizational

activities that involved carrying out some combination of arithmetic operations. Although the

calculations that had to be done were normally quite simple, the large amounts of information to

be processed made this procedures repetitive and error prone when carried out by humans.

Carvalho (2006).

However, the historical perspective of information systems at the side of productivity

cannot be ignored. This perspective gives a sense of how these systems have evolved, been

refined and adapted as new technologies have emerged, and how changing economic conditions

and other factors have influenced the use of information systems. Kolhapur (2011)

In developing countries, Most of the organizations do not recognize information as a

resource. They see information as a routine necessity. As an organization grows, the information

also increases manifold. The IS plans are developed concurrent to the business plans. An

organization of any size deals with numerous pieces of information. Jawadekar (2007)

In Somalia, since the fall down of central government in (1991), many businesses started

to boom up fast especially service industry. These organizations include water well drilling

companies which perform the drilling services to provide water to Somali society. The

fundamental issue they are focusing is to develop high productivity and carrying capacity of the

catchment whilst achieving acceptable environmental quality and protection of the land and

water resources through high quality of information systems.

In this study, information system is defined as a system which provides information

support for decision makes in the organization, integrated system of man and machine for

providing the information to support the operations, the management and the decision making

function in the organization Jawadekar (2007). The definition of information system of this

study is the adopted from Jawadekar (2007). Information system is integrated system of human,

hardware, and software and data resources for providing information to support operations. In

this study information systems will be characterized being a tool for decision making, perceive

information and to achieve success in productivity.

According to Sarras (1999) Productivity is a result of the capital, labor and technology.

The definition of productivity is adopted from sarras (1999). Productivity is the consequences of

organizational capital, human resources and technology.

Information system is combination of man and machine which consists of hardware and

its peripherals. Jawadekar (2007). Information systems are important for organizational

productivity because it provides managers a tool for proper decision making. Ideally,

Information system should affect organizational productivity directly due to its positive relation

with it. In Somalia service organizations especially water drilling companies use less effective

information systems and this may hinder their productivities.

On the other hand, productivity is the result of capital, labor and technology. Sarras

(1999). Ideally, productivity is the central aspect of business success and relates directly with the

use of information system as tool for decision making. In our context these may not happen due

in effective awareness.

1.2 STATEMENT OF PROBLEM

Information system is to provide information for a decision support in the process of

management. It should help in such a way that the business goals are achieved in the most

efficient manner. Since the decision making is not restricted to a particular level, the information

systems are expected to support all the levels of the management in conducting the business

operations. Oka,(2009)

In Somalia, especially Mogadishu during last decade, after preliminary study it was felt

that service organizations such as water well drilling companies use less effective information

systems to support their decisions and to use it as a tool for decision making. This indicates that

business goals are achieved in inefficient manner.

In view of this, the researcher recognized that there is a need to know the degree

relationship between information systems and organizational productivity in the context of

service companies especially water well drilling companies.

1.3 PURPOSE OF THE STUDY

The aim of this study is to explore the relationship between information systems and

organizational productivity and to apply decision making tool for the allocation and development

of water well drilling companies’ productivity.

1.4 RESEARCH OBJECTIVES

1. To determine the relationship between information system and company productivity.

2. To examine effective decision making tool to increase productivity.

1.5 RESEARCH QUESTIONS

1. What type of relationship between information systems and business productivity?

2. What type of decision making tool to increase productivity?

1.6 SCOPE OF THE STUDY

Content scope

The study will focus on the use of information systems and business productivity.

Geographical scope

The researcher will study on water well drilling companies in Mogadishu.

Time scope

In terms of time, the study will be draw to a close at the end of this semester.

1.7 SIGNIFICANCE OF THE STUDY

This study is important for both contribution of additional knowledge in the use of information

systems and business productivity. And for potential researchers will use it as a base of their

research.

1.8 OPERATIONAL DEFINITIONS

1.8.1 Information systems are systems which provides information support for decision

Making in the organization.

1.8.2 Productivity is a result of the capital, labor and technology.

1.8.3 A DSS is a computer based system (an application program) capable of analyzing an

organizational (or business) data and then presents it in a way that helps the user to make

business decisions more efficiently and effectively.

CHAPTER TWO

LITERATURE REVIEW

2.0 INTRODUCTION

This chapter discusses the literature related to “the use of information system and business

productivity” at some selected water well drilling companies in Mogadishu.” It mainly focuses on

the findings of previous researches. In this section, the research reviews key literature in the

following areas. First review is about decision support systems concepts. Second section is about

transaction processing system concepts. Third section presents the organizational productivity

concepts. Fourth section indicates the relationship between information systems and

organizational productivity while fifth section, presents summary and conclusion of the chapter.

2.1 DECISION SUPPORT SYSTEMS

According Jahangir (2005) A DSS is a computer based system (an application program) capable

of analyzing an organizational (or business) data and then presents it in a way that helps the user

to make business decisions more efficiently and effectively. Preliminarily, it is inherent to state

that decision making is an integral part of any business (The maniac, n.d.). This is because a

majority of operations in an organization revolve around decisions made by the management and

other key stakeholders in the organization. And in order for decision to be made adequately, it is

vital for there to be a good information system since decisions are based on information

available.

In relations to this, Jahangir (2005) states that based on the significant role that

information plays in choice of decision to be made, organizations must ensure that they have a

good management information system. As a notable general observation, a good MIS ensures

good decision making just in the same way bad MIS propel the making of bad decisions.

UStudy. in (2010) supports the above observation by saying that “The quality of

managerial decision-making depends directly on the quality of available information” and the

managers should therefore cultivate an environment that encourages the growth and viable

sprouting of quality information. Essentially, before deciding on which MIS strategy to use, it is

vital to ensure that the choice made is fully compatible with your current system. This will not

only help in avoiding erratic choices but it will also save you the time and money that would

have been otherwise wasted by that person (Rhodes, 2010; Jahangir, 2005). In addition to that, it

is noteworthy for the MIS strategy or tool used to be in line with the decisions that are to be

made. In other words, there should be a connecting point between the decision to be made and

the MIS to be used by individual or corporate business owners (Jarboe, 2005).

As a key consideration, Management Information Systems is a highly complex and

delicate arena that calls for a lot of caution to be taken by its managers. It is for this reason that it

is recommendable for organizations to ensure that they carefully select the individuals who are

placed to control the systems. The more cautious and professional a person is, the better the

person gets an assurance of positive prospects of in MIS with regards to decision making and

other related areas of business (Lingham, 2006).

Having clearly delineated that, what then are some of the scholarly arguments, facts,

opinions and observations made by various macroeconomists with regards to the roles of

Management Information System in improving decision making?

To begin with, MIS provides a fitting platform for good decision making (Kumar, 2006).

Essentially, without the established systems of getting information in MIS, it would be extremely

difficult for organizations to make their decisions. This is because they would be forced to

making baseless information due to the lack of confirmed information. Moreover, MIS normally

lays a firm foundation for the establishment of concrete decisions through its systematic tools,

timely information and adequate managerial policies and regulations.

Furthermore, Management information Systems’ statutes regarding businesses act as

guidelines to business owners when making critical decisions about their businesses. As a result,

managers and key decision makers are bridled from overstepping their boundaries or exceeding

their business mandate. This is very crucial as it helps in keeping businesses checked and

balanced thus ensuring that only proven decisions are considered while the untried ones are

thwarted. More importantly, the capacity to guide decision-making facilitates progress and

improvement of the operations in a company (Lingham, 2006; Chambers, 1964, p.15-20).

In addition, most MIS programs are endowed with the capacity to give real-time updates

of the occurrences in company or system. By real-time, scholars simply refer to immediate

updates of occurrences in a system. These immediate updates help mangers to take necessary

actions as soon as is deemed appropriate—especially during the discovery and management of

crises. This augments progress and improvement in company operations through timely decision

making. This is important for companies in the modern-day generation where any slight lapse in

decision making can lead to very huge losses (Allen, et al., 2010)

2.2 COGNITION SYSTEM

Cognition systems Acknowledging that IS deal with knowledge opens up a whole new

perspective for looking at IS in organizations: organizations as cognition systems, i.e., systems

that exhibit cognition features similar to those that can be found in humans Chambers (1964). In

fact, organizations can be viewed as collective enterprises where purposeful action is carried out.

This action can correspond either to operational action (action to produce the results it is

supposed to produce according to its purpose) or to managerial action (action to guarantee the

organization’s survival and well being). Action demands acting capabilities that, for the cases of

intellectual/mental/cognitive action, can be presented as composed by knowledge and

intelligence (Allen, et al., 2010). Knowledge corresponds to images of the internal and external

state of affairs, models of the dynamics of the world and other mental images created based on

the others forms of knowledge. Intelligence might include capacities such as to perceive, to

memorize, to reason, to imagine, to solve problems, to plan a desired future Chambers (1964).

2.3 IMPORTANCE INFORMATION SYSTEMS

Management Information systems play the crucial role of providing a wide range of streamlined

options from which decision-makers are able to make their preferred choices Vittal & Shivraj

(2008, p.359-361). Vitally, this ensures that whatever choices are made by decision makers, the

outcome, more often than not, becomes positive. This, as a matter of fact, is the reason why

many decision makers tend to prefer using MIS tools when making tough business choices. And

as renowned concept, having good decision choices guarantees viable decisions in our businesses

(Vittal & Shivraj, 2008, p.360-365; Jawadekar, 2006, p.356-359).

2.4 SUMMARY/ CONCLUSION

In summary, this chapter discovers on main literature relating to the use of information systems

and organizational productivity with specific guideline from the problem statement and research

objectives of the study. We covered this chapter the key literature related in: prior DSS concepts,

cognitive system concepts, and importance of information systems (IS) concepts.

In the review of the literature showed above indicates that the use of information system

has a positive impact on organizational productivity, but the degree of such impact has not been

explored in Mogadishu. Therefore, this study will examine the possible relationship between the

uses of information systems on organizational productivity at some selected water drilling

companies in Mogadishu.

CHAPTER THREE

RESEARCH METHODOLOGY

3.0 INTRODUCTION

This chapter presents a detailed description of the research methodology. Methodology refers to

the detailed procedures to be followed to realize the research objectives. the objective of this

chapter is to discuss the seven sections by describing research design, research population such

as sample size & sample procedures , research instrument by identifying the reliability and

validity of data, procedures of gathering data ,As well as data analysis techniques , making

ethical considerations and describing research limitations.

3.1 RESEARCH DESIGN

This study will be conducted through correlation research design. correlation is a research design

that researcher determine whether or not, and to what extent an association exist between two or

more paired and quantifiable variables. (Oso & Onen, 2008,p.71) . the main purpose is to

explain the relationship between two variables , the use of information system and business

productivity. (Oso & Onen, 2008,p.71). This design is considered to be suitable for because is to

determine whether and to what degree a relationship exists between quantifiable variables. So

that questionnaire technique will be used in collecting the data.

3.2 RESEARCH POPULATION

The population of this study will be derived from some selected water well drilling companies in

Mogadishu. And the target population will be 130 employees of water well drilling companies in

Mogadishu.

3.2.1 SAMPLE SIZE

The sample of this study that select form target population were of employees of water well

drilling companies and will be distributed about 98 questionnaire to the respondents. The study

will use questionnaire to one primary group of employees.

To determine the ideal sample size for a population, the study will use Slovene’s formula

which is n=N/ (1+ (N*e^2)), where n= sample size, N= population size, 130 and e = margin of

error of 5 %. n=130/ (1+ (130*0.0025)) = 98 subjects.

Categories Population Sample Size

Telecom 100 60

Nation link 30 38

Total 130 98

3.2.2 Sample procedures

This study will employ non- probability sampling and technique will be used for purposive

sampling to select the sample size. During the purposive sampling the researchers consciously

decides who will include the sample, the main purpose of purposive sampling is that it designed

to collect focused information. It is preferred for this study because of its efficiency particularly

it saves time and money.

3.3 RESEARCH INSTRUMENT

This study will be use adapted questionnaire as the main tool for collection data. Questionnaire

may be defined a technique of data collection in which each person is asked to respond to the

same set of questions in prêt ermined order (soundrs et al, 2009). The selection of this tool has

been guided by the nature of data to be collected , the time available as well as by the objectives

of the study and the overall aim of study is to investigate the impact of customer satisfaction on

customer loyalty. And questionnaire techniques have been adopted in collecting primary data as

it provides and efficient way of collecting responses from a large sample size. the researcher

will use questionnaire of this study because of the population is literate , , time constraints and

information needed can be easily described in writing. (Oso & Onen, 2008,p.85).

3.3.1 Validity and reliability of the instrument

The most important issue in the research is to ensure reliability and validity. Joppe (2000)

defines reliability as: “The extent to which results are consistent over time and an accurate

representation of the total population under study is referred to as reliability and if the results of a

study can be reproduced under a similar methodology, then the research instrument is considered

to be reliable” (p.36). Before distributing the questionnaire, the research team will do pilot-

testing with 3 experts including the supervisor. The slightly modification of questions and

possible answers will make as the result of this pilot test. Therefore, Reliability is defined as the

extent to which a questionnaire, test, observation or any measurement procedure produces the

same results on repeated trials (Miller, nd). So, to increase reliability and validity, the study will

adapt questionnaire by making slightly modification.

Validity refers to the extent to which data collection method accurately measures what it was

intended to measure or to the extent to which research findings are about what they are claimed

to be about (Saunders et al., 2009). To establish validity the instrument will be given to three

experts to evaluate the relevance of each item in the instruments to the objective. Therefore, the

next section will shed more light data gathering procedure.

3.4 DATA GATHERING PROCEDURES

In this study the data will collected from the sample size respondents from the target population

during 2012. Data will collected by self-administered questionnaire as measuring instrument.

This technique of self- administered give respondents time to thing and use resources

(nolinkske,2008,p.10) . The questionnaire will be distributed and collected by the hand of the

researchers and help to respondents to answer the questions without any bias.

3.5 DATA ANALYSIS

Data will be analyze by using statistical package of social science (SPSS.Version 16. 0) that will

measure the degree of relationship between customer satisfaction and customer loyalty. Also

researchers will be use correlation in order to explain the relationship between customer

satisfaction and customer loyalty

3.6 ETHICAL CONSIDERATIONS

In this study the researchers should keep on the ethical issues through the research project by

keeping the privacy, confidentiality and anonymity of respondents. To maintain ethical issue the

researcher will request to company’s administration to permit to distribute questionnaire to their

employees and also tell them that the information use only for academic purpose . and will keep t

the privacy, confidentiality and anonymity of respondents.

3.7 EXPECTED LIMITATIONS

The major expect limitation of this study are the first one that sample size is less, so the sample

size may not generalized of population

Second expect limitation there is language barrier which deteriorate the understanding of

respondents to the questionnaire, to enhance the validity of the study the researchers translate the

questionnaire into Somali language.

Third, the use of simple random sampling to obtain the samples for service company’s staff may

limit the generalizability of the results.

APPENDIX A

TIME FRAMEWORK

S/N Time frame Activities

1 March 10 /2012 – April 30/2012 Reviewing related literature

2 May 02/2012 – July 02/2012 Proposal writing

3 July 15 – 29/2012 Sending questionnaires and

gaining access of study sites

4 Aug 05 – 25/2012 Data inputs, data analysis

5 Sep 05 – 20/2012 writing the report and for oral

presentation

APPENDIX B

BUDGET

N

O

Items Amount in dollar

1 Carrying /Transportation cost $ 85

2 Printing and binding $ 60

3 Stationary and supply material $ 35

4 Accommodation $ 80

5 Internet access 50 $

Total 310$