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MIS – Information Needs and Its Economics

MIS | Information Needs & Economics: In this tutorial, we will learn about the MIS (Management Information System) Information Needs and Its Economics. By IncludeHelp Last updated : June 01, 2023

MIS controls the information system of the organization using a computerized system. In the management decision-making process, Management Information Systems (MIS) represent an important assist (and/or useful instrument). MIS is very useful for the management functions of efficient and productive planning and control.

MIS would be instrumental in getting things done by supplying management with fast and timely details. It provides executives with critical knowledge so that they can effectively carry out organizational control, management control, and strategic planning.

MIS is the primary source for supplying managers with appropriate (e.g. reliable and timely) information; and managers at various levels of management have substantially different information needs because of the nature of their job and, in particular, decision-making. Because of the use of MIS, the issue of unfulfilled knowledge needs of managers (often viewed in business practice) is emphasized.

Information Needs and its Economics

MIS always facilitates organizations in many aspects. Following functions are shows the information needs and its economics. These are as follows –

Operational Control

• MIS provides highly reliable and detailed information on a daily or weekly basis to ensure organizational control.
• For instance, a manufacturing supervisor needs to know if material waste is unnecessary, if expensive overruns are planned, or if the time for a job has expired.
• A high volume of timely and accurate information extracted from daily operations is given by MIS.

Middle Management

• Middle-level managers need information on issues that impact their divisions, such as rapid drops in revenue, increased demand for a specific product line, large-scale supplier issues, etc.
• MIS contains summarized information from within the organization as well as from sources outside the organization on these matters.
• It is not beneficial to have large data in itself; it can even confuse the decision-maker in most instances.
• In MIS, the basic merit is that if the information is given in a thorough way such that timely, knowledgeable and rational decisions can be made.

Top Management

For top executives, MIS offers information for strategic planning and supervision of management.

External sources (economic climate, technological developments, competitive changes, etc.) are closely studied and comprehensively evaluated for strategic planning.

It is difficult to computerize this information since the supporting data is normally outside the organization's control.

MIS provides reports on the overall financial performance of the company to ensure top management power, such as information on quarterly revenue, earnings, inventory management, movements, etc. Regardless of the degree to which it is used, the fundamental purpose of the MIS remains the same as supplying administrators with the knowledge they need to conduct their duties effectively.

The importance of the information generated by an MIS depends on the consistency, quantity, timeliness, and relevance of the information to management behavior. It is important to weigh the cost of collecting the data against the advantages of the information.

For managerial work and in that context for managerial decision making, sufficient and timely knowledge is inestimable. MIS provides managers with information, so MIS needs to provide information that corresponds to the information needs of the manager. We make a recommendation on how to take the information needs of the manager more holistically into account to ensure that MIS (will) provide information that will adhere to the information needs of the manager.