«Karim, Akram Jalal The significance of management information systems for enhancing strategic and tactical planning JISTEM: Journal of Information ...»
JISTEM: Journal of Information Systems and
Universidade de São Paulo
Karim, Akram Jalal
The significance of management information systems for enhancing strategic and tactical planning
JISTEM: Journal of Information Systems and Technology Management, vol. 8, núm. 2, 2011, pp. 459-
Universidade de São Paulo
São Paulo, Brasil
Available in: http://www.redalyc.org/articulo.oa?id=203219451011
How to cite
Complete issue Scientific Information System More information about this article Network of Scientific Journals from Latin America, the Caribbean, Spain and Portugal Journal's homepage in redalyc.org Non-profit academic project, developed under the open access initiative JISTEM Revista de Gestão da Tecnologia e Sistemas de Informação Journal of Information Systems and Technology Management Vol. 8, No. 2, 2011, p. 459-470 ISSN online: 1807-1775 DOI: 10.4301/S1807-17752011000200011
THE SIGNIFICANCE OF MANAGEMENT INFORMATION
SYSTEMS FOR ENHANCING STRATEGIC AND TACTICAL
PLANNINGAkram Jalal Karim Ahlia University, Manama, Kingdom of Bahrain _____________________________________________________________________________________
Keywords: Management Information Systems, Strategic Planning, Tactical Planning, Decision Making Process.
Currently, organizations are in the race for enhancing their capability in order to survive in the competitions of the new century global market. Therefore, organizations are attempting to advance their agility level by improving the decision making process to be more efficient and highly effective to meet the successive fluctuations of the market. In an effort to achieve this, many modern organizations, either mid or large sized, have concerned with a cycle of progressive investments in and adopted new management information systems components. During last decade, a high percentage of financial organizations frequently used Management Information Systems to facilitate _____________________________________________________________________________________
Recebido em/Manuscript first received: 16/05/2011 Aprovado em/Manuscript accepted: 10/07/2011 Endereço para correspondência/ Address for correspondence Akram Jalal Karim, Management Information System Department, College of Business and Finance, Ahlia University, P.O. Box 10878, 1st Floor Gosi Complex Exhibitions Road, Manama Kingdom of Bahrain Tel: 973E-mail: email@example.com
ISSN online: 1807-1775Publicado por/Published by: TECSI FEA USP – 2011460 Karim, A. J.
the provision of services; and that the speed of the adoption is expected to grow further as the technology expands.
Whitten et al. (2004, p.12.), stated that “information is an arrangement of people, data, process, and information technology that interact to collect, process, store and provide as output the information needed to support an organization,” which indicates that information system is an arrangement of groups, data, processes and technology that act together to accumulate, process, store and provide information output needed to enhance and speed up the process of decision making. In a Bank’s information system, there is always a potential crisis which makes the bank endure an insufficiency; thus, an advanced information system supported by a superior mechanism control is required to make certain that an information system has achieved the required processes.
If the relevant information required in a decision-making process or an organization planning is not available at the appropriate time, then there is a good change to be a poor organization planning, inappropriate decision-making, poor priority of needs, and defective programming or scheduling of activities (Adebayo, 2007).
Information is essential for the endurance of a financial organization in the global and competitive market.
The nature of globalization and competitiveness in the market stress on the importance of developing an organization capability through better enhancing MIS.
Accordingly, the stored information must then be recalled and distributed for the use of an organization leadership and top management as well as mid-level managers to take effective long term (strategic) and short term (Tactical) decision-making. MIS is deemed to be a system which provides organizations top management and, even lower level management, with appropriate information based on data from both internal and external sources, to allow them to make effective and timely decisions that best achieve their organization goals and satisfy stakeholder requirements (Argyris, 1971, p. 291).
The conception of information catches the attention of different professionals from different fields such as computer science, economics, business and management, political science, statistics, communication and information studies (Newman 2001).
However, the question is “what type of information”? How Information management can play an essential role in the decision making process? How can the coordination between different departments (internal and/or external) and sharing information at the real time accelerate and enhance the process of decision making and avoid decision making errors?
This paper focuses on how information management is needed to generate proper planning and then decisions at both strategic and tactical levels in the two selected financial organizations.
The process of dealing with the financial institutions was tainted by a lot of sensitivity, because of the refusal of those institutions to reveal their decision-making mechanism due to their Disclosure Rules. So we decided to call the first selected institutions case one and case two referring to the second selected organizations.
1.1 Significant Research Few authors have explored that the critical information required by midlevel and strategic level management is efficiently provided by MIS. A small amount of research has deliberated that the limitations and deficiencies in the process of management information system performance are the main reason for diminishing the efficiency of decision-making process in the organization (Fabunmi, 2003; Knight Moore, 2005).
The questions related to what extent the managing of these information systems assists different decisions at different management levels and the type of responsibility of the financial institution´s senior and tactical management in enhancing the management information has been raised with low empirically investigation and examination.
The Significance of Management Information Systems for Enhancing Strategic and Tactical 461 Planning
1.2 The purpose of the research The purpose of this research is to explore the extent to which management information systems are used to make effective decisions of long and short term planning in two financial organizations at the Kingdom of Bahrain. The study will examine whether the government financial institution (Case one) and the Private financial institution (Case two) differ as to the use of management information systems for leadership decision makes in short and long term planning.
This paper aims to evaluate the impact of current MIS models being developed at the selected organizations, and how far they practice this concept in order to enhance their tactical and strategic planning.
1.3 The research organization The remainder of this paper is organized as follows. Sections 2 and 3 discuss the literature review and research methods. In Section 4, we present results and analysis. In section 5, a discussion will be presented. Finally, conclusion and recommendations are presented in sections 6 and 7, respectively.
2 LITERATURE REVIEW
There is a lof of research on the approaches, techniques and technologies for the design and development of MIS. However, there are a few articles that cover the impact of Management Information Systems on planning strategies and decision making. While there are no universally accepted definitions of MIS and those that exist in literatures are just prejudices of the researchers (Adeoti-Adekeye, 1997). Lee, (2001) defined MIS as “a system or process that provides information needed to manage organizations effectively”.
Additionally, Baskerville and Myers (2002) broadly define MIS as “the development, use and application of information systems by individuals, organizations and society”. In his study, Becta (2005) describes an information system as “a system consisting of the network of all communication channels used within an organization”.
In their study, Laudon and Laudon (2003) have defined MIS as “the study of information systems focusing on their use in business and management”. The abovementioned definitions showed that MIS has underlined the development, application and validation of relevant theories and models in attempts to encourage quality work in the area.
Referring to the literatures, the field of Management Information Systems (MIS) has had a variegated development in its relatively short life span. MIS has developed its own theme of research and studies (Baskerville and Myers, 2002).
Tracing previous literatures, we can report that during its first few decades, MIS
concentrated on the information in the context of:
• Electronic data processing which carries out transaction processing functions and records detailed factual data.
• Management reporting systems which scrutinize the operational activities of an organization, providing summaries, information and feedback to management.
Only during the last two decades, the MIS field has shifted to the primary, considered the second type of communication, namely, instruction-based. This has become known as the domain of expert systems (Sasan Rahmatian, 1999). In attempts to review published studies on MIS and articles, Alavi and Carlson (1992) have identified popular research topics, the dominant research perspective, and the 462 Karim, A. J.
relationship between MIS research and practice. In contrast, Baskerville and Myers (2002) have examined the MIS field and found a constant shift of MIS research from a technical focus to a technology-organizational and management-social focus.
Skyrius (2001) underlines the decision maker's attitudes towards different factors influencing the quality of business decisions; these factors include information sources, analytical tools, and the role of information technologies.
Handzic (2001) also pays attention to the impact of information availability on people's ability to process and use information in short and long term planning and in decision making tasks. He revealed that the better the availability of information, the better the impact on both efficiency and accuracy of business decisions.
Liu and Young (2007) talk about key information models and their relationships in business decision support in three different scenarios. The authors proved that global businesses are in advance due to the Enterprise Applications System provided by modern IT tools such as Enterprise Resource Planning (ERP), Knowledge Management Systems (KMS) and Customer Relations Management (CRM) to enhance the efficiency and effectiveness of the Decision Making process.
In order to improve the financial organizational capability and enhance its level of competition in the market, financial organizations should understand the dimensions of the Information Management, and clearly define and develop the resources in case of human, technological, and internal operations, among others,, and manage them well across the organizational boundaries. However, establishing the link between Information System Management, planning and decision making is, at best, tricky.
In an article by Shu and Strassmann (2005), a survey was conducted at 12 banks in the US between 1989 and 1997. They noticed that even though Information Technology had been one of the most essentially dynamic factors relating all efforts, it could not improve banks’ earnings.
However, conversely, there are many literatures approving the positive impacts of Information Technology expenses on business value. Kozak (2005) investigates the influence of the evolution in Information Technology on the profit and cost effectiveness of the banking zone during the period between 1992 and 2003. The study indicates an optimistic relationship among the executed Information Technology, productivity and cost savings.
Organizations that do not have formal Information sharing practices will fail to leverage their managers’ intellectual capital for business innovation and growth (O'Neill & Adya, 2007). MIS enables the exchange of experiences, which transfers the required information to the management levels to sustain competitive advantage since it affects the decision making to improve the quality of services provided. Therefore, Barachini et al. (2009) supported that it is imperative that these organizations continuously motivate their employees to share valuable information so that their intellectual capital can be leveraged.