Examples of Management Information System at The Tactical Level:
Middle management are largely concerned with specific functions in the organization i.e. personnel, marketing, Accounting and so on. The following examples chosen are drawn from a typical manufacturing firm.
1. Marketing And Sales:
a. Scope:
MIS in the area helps to provide information to enable Marketing and Sales Management to control and monitor current operations (orders, enquiries, sales campaigns, representatives, distribution etc.) and to provide a basis for policy development on pricing and discounts, patterns of promotions and distribution, changes in product mix, changes in product design etc.
b. Typical Reports Produced:
- Trend of orders
- Order position by product/area
- Order progress
- Customer analyses and profiles
- Product Profitability
- Market Surveys
- Finished Stock positions and forecasts
- Selling Costs by product/area/representative
- Distribution costs by product/area/representative
- Discount Forecasts by area/product
c. Typical Inputs Handled:
I. Internal:
- Sales orders
- Dispatch notes
- Goods inwards
- Returns
- Representative returns
- Cost data
II. External:
- Market Research data
- Economic statistics
- Trade and Industry data
III. Major relationships:
The marketing and sales MIS has major relationships with other systems as follows:
- Financial Accounting (for Credit control)
- Cost Accounting
- Production control (for order progress)
d. Boundaries of system:
The exact extent of any MIS depends largely on the structure and organization of a particular firm but some decisions must be taken on the boundaries between systems. For example:
- Is credit control a sales or accounting responsibility?
- Is invoicing a sale or accounting responsibility?
- Is order handling and documentation a sales or production control responsibility?
2. Personnel:
a. Scope:
MIS in this area provide information to help Personnel and other Management in the selection, recruitment and training of personnel, wages and salaries, administration, and promotion and grading. In addition, information must be provided for the development and operation of policies on Welfare, Health and Safety, Conditions of Employment, and Industrial Relations.
b. Typical Reports Produced:
- Wages and Salary analysis
- Labor Turnover Statistics
- Accident and Absentee reports
- Training Returns
- Job Descriptions
- Joint consultation reports and minutes
- Pension analysis and projections
- Job Evaluation reports
- Manpower planning reports and projections
c. Typical Inputs Handled:
I. Internal:
- Time cards and production data
- Application forms
- Interview summaries
- Staff reviews data
- Factory review data
- Factory level trade union data
- Training summaries
II. External:
- College/University reports
- National Trade Union Agreements and proposals
- Government legislation (Factories Acts, Labor Law)
- Wage and salary comparative data
- Relevant economics statistics, e.g. employment trends
- Pension fund performance
III. Major relationships:
Personnel must have close relationships with all functional areas to provide them with services and data on all aspects of staffing but it also has specific operational links with a number of functions including:
- Accounting (for Wages and Salary payment)
- Production (for absentee and attendance data)
d. Boundaries:
The boundaries of a Personnel system vary considerably from one organization to another. For example:
- Does the Personnel Department actually engage an employee or does it provide the services necessary to produce a short list of suitable candidates for the appropriate functional manager to make the final decision?
- Does the personnel department arrange for the putting up and payment of wages or is this considered to be part of the Accounting Function?
- Does Production Management carry out negotiations with Trades Unions or is this a function of the Personnel Department. These and numerous other boundaries have to be resolved in designing any system.
3. Management Accounting:
a. Scope:
MIS in this area provide management in all functional areas with cost and budget data, control data, contribution and profitability analyses to guide and control current operations. In addition, investment appraisals, special investigations, comparative profitability and contribution data etc. provide background material for strategic and tactical planning and decision making.
b. Typical Reports Produced:
- Operating Statement
- Budget Statements
- Standard Costs and Variance returns
- Cost investigations
- Project Investment appraisals
- Expenditure analyses
- Profit forecasts
- Cash flow statements and forecasts
c. Typical Inputs Handled:
I. Internal:
- Labor bookings
- Material usage
- Stores issues . Standards
- Product data
- Output details
- Asset data
II. External:
- Market projections
- Comparative Cost Data on national/industrial basis
- Government legislation
III. Major relationships:
Management Accounts department supply control and planning data to all areas, functions, and levels of management. Specific operational links include:
- Financial Accounting (for taxation purposes)
- Production (for output and performance
data) .
- Material Control (for material usage and issue)
d. Boundaries:
The dividing line between Management Accounting and Financial Accounting varies considerably from firm to firm but typically Financial Accounting would deal with such matters as Taxation, Financing, preparation of Annual statements etc. i.e. more exclusively with the external financial affairs whereas management accounting would be concerned with the internal financial control and planning. Another boundary decision relates to the extent to which detailed day-to-day costing matters (e.g. production cost data, material usage etc.) would be dealt with centrally or under the control of Production
management.
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