MIS provides useful
information to the different levels of management for discharging their
function more effectively and efficiently. In order to understand design of suitable
management information system.
This means that the
structure of management information can be expressed in terms of different
levels of management activity. There are three important levels of management
namely strategic management,
management control or tactical management and operational management. These
levels of management activity are discussed below.
Strategic Management
The first area of
management is strategic planning level or top level management. Top level
management consists of board of directors and other chief executives. They are
ranking officers of the organization. Top level management develops over all
organizational goals, strategies, policies and objectives through long range
strategic planning. They integrate the functions of entire organization.
Strategic managers make
decisions that affect the entire organization. Their decisions may also leave a
long term impact in the organization. Here the decision maker develops
objectives and allocates resources to attain these objectives. Decisions of
this type are made over a long period of time and usually involve huge investments.
Developing and introducing a new product in the market, the opening of branches
abroad, mergers or acquisition etc. is some of the examples for strategic
decisions.
Management Control or
Tactical Management
Management control level
or middle level management decisions involve financial or [personal
consideration. They make wide ranging decisions for their subordinates on the
basis of general guide lines received from the top level management. They
develop medium range plans and defining objectives of their departments. These
managers are responsible for finding the best operational measures to
accomplish the strategic decisions set by the top level management.
They make plans and
compare the actual performance with standards. Then they determine variances if
any and take remedial measures to avoid them in future. For example if the top
level managers to make decisions regarding the acquisition of hardware,
software and imparting training to staff under him.
Operational Management
Operational management or
lower level management deals with routine activities. They make short term
plans to carry out day to day activities more effectively and efficiently. They
are in charge of small group or subordinates. These managers’ implements
policies handed over to them by their superiors. With in these policies, they
make decisions that affect their small units for a short period .preparation of
pay roll and inventory management are examples of operational control level
decisions.
Management level and
Information requirement
The information
requirement of management depends on the different levels of management. The
model of ‘managerial pyramid’ was popularized by Robert N. Anthony. He
contributed new levels of management on the basis of planning level, management
control level and operational control level are these three revised levels of
management.
It true that the top
level managers spend more time on strategic decisions than supervisors in the
bottom level of management. While top managers spend very little time,
operational supervisors spend more time to take operational decisions. The type
of information required by managers is directly related to the level of
management and structure of decision situation. The operational management
level requires regular detailed reports to manage the day to day affaires of
business.
Three levels of
management activity can be differentiated on the basis of the planning aspects
for each level. Different management activities functions will have different
information characteristics. The following table provides different information
characteristics by different level of management. It is based on the work of G.
Anthony Gory and Michael Scott Morton in the early 1970’s.
*Information System
for operational management
The responsibility of operational
level management is to supervise operational activities. Operational control
makes use of pre-established procedures and decision rules. A large percentage
of decisions are programmable. The procedures to follow are quite stable. They
supervise the day to day activities.
The informational source
of operational control is mainly come from internal data generated from
transactions.
* Informational system for tactical
management
Management control
information is required by managers of departments, profit centers etc to
measure performance, decide control actions,
Formulate new decision
rules to be applied by operational personnel. They require only information in
summary form
Management control makes
use of both internal &external data.
*Information system
for strategic management
The purpose of strategic
planning is to formulate strategies to achieve organization goals. They make
long term plans. Strategic planning decisions occur only once in a while.
Strategic planning requires summarized data from a variety of source. They
depend upon external data such as competitor’s policy, market condition,
government policies etc. or decision making.
Management information
system cannot be applied effectively at the strategic planning level. The
success of the strategic decisions depends on the skills, experience and the
judgment ability of human decision makers in the interpreting data and
information. Hence decisions at the strategic level are unstructured and non
programmed.
Therefore it is concluded
that many of the changes in the information needs can be attributed to the
degree of decision structure at each level will be more structured , those at
the management control level are semi-structured and those at the strategic
level are more unstructured. Therefore the information system should be
designed to meet the information requirements of managers at all levels.
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