Evolution of Management Information System

There have been a lot of changes in the way in which information processing has come up. This change in information processing system can be seen from the point of view of the enabling technologies as well as the increasing demands of the information processing capabilities of organizations. In the past, small organizations were owned and operated by one man. The owner was both president and chief-executive who single handedly undertook all the functions required to operate the organization, including accounting, inventory control, public relations, research and so on. The owner personally gathered information necessary to carry out various functions, either using it as it was gathered or storing the information in his memory for later retrieval. Once a decision is made, the owner undertook the necessary action himself.

For a small organization, the owner-oriented information system was often very efficient. For the owner himself, a highly integrated information system was in used. Information was expressed and stored in that system as if, that was readily understood by all levels o f management. The owner-oriented information system could also be expected to be efficient, if more than one person worked in the organization, provided those involved were relatively close in their experience and knowledge. The individual’s similarity of purpose and experience in such circumstances usually allow a close communication between them and facilitate the interaction between their respective stores of information.

In recent times, many of the smaller organizations have been superceded by larger corporations or incorporated into them. Private business and industry have grown in the size and scopes of the national and global economies of the leading industrial nations have expanded. The development of modem industrial economies has a number of effects on the organization involved in both public and private sectors. The growth o f organizations has made it much more difficult for one-man to control and direct the activities of an enterprise as did in small organizations. As the staff of an organization increased, the amount of authority that must be delegated also increased naturally. Responsibility for routine activities and the accompanied decision making are delegated to managers at the lower and middle levels of management of the organization. Consequently, top level management concerns itself with the less routine activities of planning and policy making.

A necessary counterpart of delegation of authority is the reporting of the results of the activities that have been assigned. Delegation of authority therefore, must be accompanied by establishing a communication channel through which these results can be reported and discussed. The greater the degree of delegation, the larger is the number of communication channels needed as part of the information system.

Another effect on the growth of an organization is that the extent to which the experience and knowledge of individual members of the organization tend to decline. In the initial stage of expansion of an organization, the owner, president or director of the small organization usually did the hiring of working force himself. Normally the persons with whom he can communicate easily and readily were chosen. But as the organization grows, the hiring process itself is delegated. This delegation of authority usually results in the hiring of individuals with a wider range of knowledge and experience. So it is quite obvious that individuals with different backgrounds place different interpretations on information that has been acquired. This diversity of viewpoint often is a source of strength to the organization. Thus greater attention to communicate between individual members is needed as the organization grows in size. This need is particularly acute if the expansion of the organization involves geographically dispersed areas.

Complexity of the activities is another factor with which modem organizations must contend. The complexity of the external environment in which modem organizations operate has greatly increased the amount of information that must be processed within the organization. Organizations have met the demands of the increased complexity of their activities by diverting an increased proportion of their effort and resources to administrative tasks and information systems.

The information system as it was used in the early stage, were oriented exclusively towards the financial and accounting functions. It is note-worthy to mention that the main initial effort of the induction of computer into organization was an increase in the amount of routine clerical and data manipulating capacity available to the accounting function.

Another change in the Management Information system can be seen from the point of view of the development and evolution of Computer Based Information System (CBIS) and their organizational implications. The emerging technology underlying CBIS focus on traditional and social context within which the evolution of information system takes place. Information system technology is one of the many tools available to managers for coping with change. More importantly today, information technology is the glue that holds the organization together. CBIS utilize computer hardware, software, storage, and telecommunication technologies. Computer hardware is the physical equipment used for input, processing, and output activities in an information system. It consists of the following: the computer processing unit; various input, output and storage devices; and physical media to link these devices together. Computer software consists of detailed pre-programmed instructions that control and coordinate the computer hardware components in an information system. Storage technology includes both the physical media for storing data, such as magnetic or optical disk or tape and software governing the organization of data on the physical media. Telecommunication Technology, consisting of both physical devices and software links to various pieces of hardware and transfers data from one physical location to another.

However, the idea of information systems to guide management decision predates the use of computers, which have nurtured the organizational capabilities for implementing such a system. Thus four main areas of system development can sum up the evolution of Management Information system concepts. These are: Management accounting, Management Science, Management theory, and Computerization.

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