MB0047 MANAGEMENT INFORMATION SYSTEM

1. In the current e-world any organisations massive operations are

managed by various types of information systems that help them to
achieve their goals of servicing their clients. This can be done by the
growth of modern organization. Discuss some of the essential
features of modern organisation.
Essential features of modern organization:
1 IT-Enabled organisation
2 Networked organisation
3 Dispersed organisation
4 Knowledge organisation
IT-Enabled organization: The organisations discussed above are modern in the
sense that they have built into their structure the elements of information
technology (IT) that enable them to function in a manner appropriate to the
demands of the environment. This is a fundamental difference between a modern
organisation and its older, pre modern incarnation. Tata Motors, for instance, upon
its initiation in 1945 would also have put in place built-in mechanisms to respond to
its environment and to function in a manner appropriate to that time. However,
what distinguishes Tata Motors functioning then and now is the difference in the
current use of IT to shape its functioning and responsiveness.
Networked organization: Modern organisations function in a world of digital
networks in addition to the physical world that was the same for the old
organisations. The organisations are linked as nodes on the network where they
receive and transmit information. Remaining on the network requires sensing and
responding to this flow of information. The digital network consists of the Internet
and telecommunication networks that rely on digits (ones and zeros) to carry
information across large distances. Sensing the world means frequent monitoring of
the news and information that becomes available. This information is in the form of
text, audio, or video. Organisations such as Tata Motors have to constantly monitor
their digital environment to learn about the markets, their competition, their
partners, and the business they operate in.
Responding to the digital information available to organisations is also a modern
challenge. Information is widely available instantly and in multiple forms.
Responding means taking those actions that will move the organisation towards its
goals. The response could be in the form of further transfer of information on the
digital networks, say, by issuing messages or by taking action in the physical world.
Responses are shaped by the context of the situation that the organisation operates
in and by the nature of the sensed information. For example, when Tata Motors
launched its widely popular Nano car, it anticipated a huge demand for information
from its website by prospective customers. Therefore, it designed the site in such a
manner that it could handle the rush adequately.

MB0047 MANAGEMENT INFORMATION SYSTEM

Dispersed organization: Another key aspect of many large modern organisations
is that they are highly dispersed. Tata Motors, for instance, has operations in many
cities in India and in other parts of the world. The companies disperse their
operations to best meet customer needs or to locate functions where the resources
such as skilled labour or raw materials are available. Multinational organisations are
well known to seek out new destinations for their operations and also new markets.
They are able to do this owing to laws and facilities that are created by host nations,
as it benefits their economy. The challenge for multinational organisations is to fully
use the opportunities thus created and manage work and organisational issues in a
new environment.
Knowledge organization: Modern organisations rely on knowledge workers to a
much larger extent than older organisations. These workers differ from blue-collar
workers as their work responsibilities involve accessing and dealing with knowledge
about the work and the environment, as opposed to repetitive manual labour
related to production. Knowledge workers enjoy greater autonomy in their work and
the variety of work they have to perform. Consequently, they are better educated
and more informed about the business they are working in.
A major function of modern organisations is to process information. They create
information about goods and services, accumulate it within the organisation and
use it to achieve their goals. Information is like glue that binds the organisation and
its functions together. For commercial organisations, it is a key component for
competing in the market. Information is stored, processed and converted into forms
that make it an integral part of an organisation. This is referred to as the
organisations knowledge base. Knowledge stored and accessed in this manner
enables the organisation to drive action and shape its own understanding of the
world.
2. Marketing managers are keener to look for a least cost route that
also allows a sales person to meet all his customers. Identifying a
least cost route with this features is slightly complicated. Therefore,
managers depend on decision support tools to find the most cost
effective routes to cover the market. The travelling salesman
problem is one of such tool. Describe the tool with a diagram.
The figure below depicts the travelling salesman problem which is an example of an
operational decision. The salesman has to cover all the cities in one tour at the
lowest possible cost.

MB0047 MANAGEMENT INFORMATION SYSTEM

Fig: Travelling salesman problem (the figure shows the distances

between seven cities in India)
The salesman can start from Bangalore and then follow any sequence, such as
ChennaiMumbaiBhopalNew DelhiKolkataRanchi or KolkataRanchiNew Delhi
MumbaiBhopalChennai. If all the combinations of cities are counted, there are 720
ways in which the salesman can cover all the cities after starting from Bangalore.
Each of these is called a tour. For the lowest cost tour the salesman would have to
calculate the distance covered for each possible tour and take the shortest one.
If the salesman starts the tour from any of the other six cities, the problem
increases to 5040 possible tours! It is very difficult to compute the lowest cost for
such a large number of tours. Hence it is a wise step to rely on a decision support
system that can do the job efficiently.
The travelling salesman problem is a very well-known and well-researched problem.
When the number of cities increases to about 20, the possible tours increase to
more than 2 1018 tours which are about 2 million trillion tours! Such a large
number of calculations become hard to complete, even for computers.
3. There are many examples of digital goods. Companies such as
Amazon.com are selling digital versions of books over their site.
These digital books can be read on special readers that display the
pages on a screen.
a. List the important properties of information goods
b. Explain positive feedback with diagrams
a) Information goods have certain properties that make them distinct from
physical goods. Information goods are typically expensive to produce but very
cheap to reproduce. For example, the original cost of producing a music track by
a professional band may run into millions of rupees. However, once the digital
3

MB0047 MANAGEMENT INFORMATION SYSTEM

version of the track is available, it can be reproduced or copied for almost no
cost or at a very low cost.
To broadcast cricket scores in India, the mobile phone companies have to pay a
high upfront fee to the cricket match organisers. Once the scores are purchased
and sent out on SMS networks, as is the case for many international cricket
matches in India, the cost of reproducing the message across the network is very
low. It is widely believed that owing to the spread of MP3 music fi les across the
Internet, the music industry as a whole has been deeply affected. Many new
businesses have evolved that directly sell music files off the Internet; the most
famous example of this is the iTunes store that sells music fi les for the Apple
music players. Many bands and music groups have also started selling and
distributing their songs directly over the Internet. Many argue that the life of the
physical, paper-based book is about to decline with the advent of the digital
book readers. Book buyers can now buy books directly over the Internet and
have them instantly available on their digital readers. The digital readers have
massive capacities; one such device can store thousands of books. Besides,
some of them provide access through wireless networks to a huge library of free
and paid books that the readers can access instantly. Another property of digital
goods is that they can be converted into versions quite easily. A version of a
good is a form that is different from the original, yet of the same nature. For
example, physical books are typically released in the market as cloth-bound
books that are more expensive; and a few months later the same book is
released in a paper-bound version. The content of both the books is exactly the
same except that the expensive version has a better quality of binding and
better printing; and the cheaper version usually has smaller print and the paper
is of lower quality. The main difference in the two is that one is released earlier
and one later. Those customers who are keen to read the book early pay a higher
price for the cloth-bound book. Information goods that have a time value can be
versioned quite easily using information technology. For example, cricket scores
that are sent out on SMS have a small price. However, the same scores can be
obtained a few minutes later in an online form for free. Many providers of free
stock quotes still give a delayed version, whereas the real-time quote is available
for a small fee.
Many software makers give away a free version of their software for users to
sample, and keep a priced version for sale. This addresses another property of
digital goods many information goods are experience goods. This implies that
the true value of the goods is evident only after they have been experienced. For
example, the value of a magazine article or a book can only be realised after it
has been read. This is true for all magazine articles and all books. Even the value
of weekly magazines, which arrive every week, can only be gauged when they
have been read. This is a strong contrast to consumables such as a soft drink
whose value is known after consuming it only once. Owing to the property of
experience, sellers of information goods often find it useful to allow customers to
sample the goods, often through a free download of a lesser quality version.
4

MB0047 MANAGEMENT INFORMATION SYSTEM

Many websites allow visitors to hear portions of a music track or see clips of
videos to allow them to experience the goods and make a choice about
purchasing them.
b) Positive feedback: In a situation where there is a benefit for individual users
when many others start using a network technology, the benefit from using the
network acts as a boost for all the users. For example, when people start using
e-mail that allows them to send messages and documents to many others, they
realise the benefit or value of the network and then are encouraged to use it
even more. When they use the e-mail network more often, others are further
encouraged too, and the usage of the technology grows. This is positive
feedback. Positive feedback has been observed in many technologies that have
network externalities. The growth in users of a network technology that has
positive feedback follows an S-shaped curve. The figure below shows positive
feedback influencing users and the S curve showing growth of users. At the
initial stages of introducing a technology, there are few users and they realise
less value from their use as there are very few other users. When the usage
grows, over a period of time, the value to individual users grows and this fi res
greater positive feedback. At a certain point, a critical mass of users is reached,
where the positive feedback is so strong that many other users now start to join
the network quickly. The curve rises sharply at this time. The number of users
finds a saturation point at which time the curve levels off.

Fig: (a) Positive feedback influencing users of Facebook and (b) the S
curve of growth of users
The S-shaped curve of positive feedback depicts the phenomenon explained above.
However, there are some issues that are pertinent. The flat part of the curve, where
users are still adding to the network and the critical mass has not been reached,
may last for a long time. For example, the fax machine was at the flat part of the
curve for over a hundred years before it reached critical mass and lots of
organisations started buying and using fax machines. The effect of positive
feedback is strongly evident in social networking sites such as Facebook. When
5

MB0047 MANAGEMENT INFORMATION SYSTEM

people join the site and become users of Facebook, they may like the experience.
This prompts them to encourage their friends, family and colleagues to join too.
Potential users find that it is easy to join a networking site like Facebook. This
encourages new users to join and the cycle continues. As more users join the
network, the value that each derives is increased and thus their enjoyment too
increases. The opposite of positive feedback is negative feedback. In the above
example, if the new users find that they do not like the social networking site then
they will not encourage others to join. This will cause negative feedback which will
not allow the network to grow.
4. Decision support systems (DSS) are used extensively across
organisations to assist managers with making decisions. Decision
making by managers involves the phases of intelligence, design, and
choice, and DSS help mainly with the choice part as they support
structured and unstructured types of decisions.
a. What is it that managers do when they make decisions?
b. Explain the different types of decisions
Decision making process:
When making a decision, humans tend to follow Simons Intelligence-DesignChoice Model. In the first stage, that of intelligence, they collect information
about the issue from the environment and the surrounding context. For example,
if a person is faced with the problem of travelling from Bangalore to New Delhi, a
distance of about 2000 km, then in the intelligence stage the person will seek all
possible information of how to travel by air, by train, by bus, or by a personal
vehicle. This inquiry is open-ended and will involve searching for all possible
avenues by which the problem can be solved.
Once the intelligence information is available, the decision maker moves on to
the next stage which is the design stage. This question requires the decision
maker to settle on the criteria that are important, and then select or rank-order
them. For example, the choice of cost and time may be the most important
criteria for the decision-making process. In our example of the BangaloreNew
Delhi journey, it may also be specified that no more than a certain amount of
money may be spent and no more than a certain amount of time can be used for
the journey.
At the next stage, that of choice, the criteria are applied to select the best
answer from the available choices. For example, based on the criteria of cost and
time available, it may be best to travel to Delhi from Bangalore by train.
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.
6

MB0047 MANAGEMENT INFORMATION SYSTEM

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
prioritise 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.
Types of decisions:
The problem is to then find the best solution among the many possible tours the
salesman could go on. DSS effectively tackle such structured problems.
However, it should be mentioned that the travelling salesman problem is very
hard to solve, especially if the number of cities exceeds 30.
Unstructured problems do not have clearly defined parameters or criteria for
selecting solutions. For example, finding the best candidate for filling the
position of a Chief Executive Officer of a firm is an unstructured problem. The
criteria may not be sharply defined, the parameters by which to describe and
evaluate the candidates may also not be sharply identified, as they pertain to
subjective concepts like personality, leadership skills, vision, motivation, and so
on. Unstructured decision problems are usually solved by imposing some form of
structure in order to apply the analysis and select the best candidate.
Large classes of problems are of the nature of semi-structured problems where some parameters are specified, but other parameters have to be
determined by studying the problem domain carefully. The problem of finding the
best marketing campaign for a product, for example, is a semi-structured
problem where some parameters such as the budgets, the target population,
etc., are known, but others such as the effectiveness of the media may not be
known.
5. What is crowdsourcing? How does the site Galaxy Zoo manage
crowdsourcing?
Crowdsourcing:
Crowdsourcing is the process of obtaining needed services, ideas, or content by
soliciting contributions from a large group of people, and especially from an
online community, rather than from traditional employees or suppliers. While
this definition from Merriam Webster is valid, a more specific definition is heavily
debated.
Galaxy Zoo is a crowdsourced astronomy project which invites people to assist
in the morphology classification, large numbers of galaxies. It is an example of
citizen science as it enlists the help of members of the public to help in scientific
research.

MB0047 MANAGEMENT INFORMATION SYSTEM

Galaxy Zoo recruited volunteers to help with the largest galaxy census ever
carried out. Opening the project to amateurs saved the professional astronomers
the job of studying all the galaxies themselves, and it meant that the project
could classify over 900,000 galaxies in months rather than years. Computer
programs had been unable to reliably classify galaxies: several groups had
attempted to develop image-analysis programs. However, volunteers astonished
the projects organizers by classifying the entire catalog years ahead of
schedule. Indeed, because of the flood of emails with images and queries, an
online forum was set up two weeks after the initial start.
This Galaxy Zoo forum became a hotbed for the discussion of the SDSS images
and more general science questions. The contributions, both creative and
academic, that people have made to the forum are as stunning as the sight of
any spiral, and never fail to move me.
One of the original aims for Galaxy Zoo was to explore which way galaxies
rotated. Cosmologist Kate Land stated:" Some people have argued that galaxies
are rotating all in agreement with each other, not randomly as we'd expect. We
want people to classify the galaxies according to which way they're rotating and
I'll be able to go and see if there's anything bizarre going on. If there are any
patterns that we're not expecting, it could really turn up some surprises.
6. Data and information relating to individuals could be of sensitive
nature. Give some examples of such kind of data.
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 organisational databases that contain personnel data. The
data is specific to individuals and, for some organisations, also contains details
about the individuals 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 fire 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 fire an employee based on his visits to Yahoo.com from
an office computer. The firm had obtained details about the employees surfing
behaviour from server logs.
8

MB0047 MANAGEMENT INFORMATION SYSTEM

4. Security systems in some organisations, which are based on swipe cards or
security cards that enable doors and office 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 favour of such monitoring, it was
introduced to improve efficiency of staff.
5. Many organisations also check all incoming and outgoing e-mails of their
personnel. The e-mails are checked for content and attachments. Some
organisations either remove e-mails containing certain keywords, such as
expletives, or flag them to warn employees.