Management Information Systems (MIS) –

Lecture 2 Notes
Introduction – Part 2 of 2

Course: Management Information Systems

Professor: Prof. Surojit Mukherjee
Institution: Vinod Gupta School of Management, IIT Kharagpur
Week: 01, Lecture 02

6 Strategic Business Objectives of Information Systems

Objective Description & Examples

1. Operational Excellence Enhance efficiency and profitability via information

systems technology.

Examples: Amazon, Flipkart, Alibaba (smooth order handling, quick delivery, seamless returns, operational
backend via MIS).

2. New Products/Services & Business Models Digital platforms enable new models (Uber, Airbnb,
Amazon, Flipkart, Alibaba, iPad, Android, Netflix),
huge impact on retail, travel, etc. MIS is a critical
enabler.

3. Customer & Supplier Intimacy Serving and tracking customer preferences leads to
loyalty and higher revenue (examples: High-end
hotels, Amazon, Swiggy). Supplier intimacy lowers
costs and ensures quality (e.g., Maruti and its
component vendors).

4. Improved Decision Making Accurate, timely data enables better decisions

(avoids over/underproduction, resource
misallocation, poor response; reduces losses). Poor
information leads to mistakes.

5. Competitive Advantage Deliver superior performance, innovate, charge

competitive prices, respond in real-time. Examples:
Apple, Walmart, UPS, Uber, Airbnb, OYO.
 6. Survival IT is essential for business continuity (compliance,
statutory needs, e.g., GST, financial records,
remote work during pandemic). Lack of MIS can
threaten business existence.

Organizational Structure and Influencers

 Information technology and organizations influence each other.

o Both are mutually dependent for effectiveness.

 Major organizational influencers:

o Structure: Hierarchical model (CEO → VPs → Managers → Staff)

o Business Processes: Standardized steps ensure operations run smoothly.

o Politics: Internal power relationships impact decisions.

o Culture: Values, norms, and behaviors shape perception (e.g., MNC, Indian
PSUs, Tatas, Birlas)

o Environment: Business and ecological external surroundings (impacts and

dependencies)

o Management Decisions: Effective MIS required for timely and informed

decisions.

Features of Organizations

 Hierarchical Structure: Chain of command from top (MD/CEO) to base staff

 Accountability and Authority: Decisions must have responsible owners; authority

can be delegated

 Efficiency Principle: Time and resource optimization is expected (customers

expect quick results)

 Business Processes: Well-defined, stepwise procedures for consistent outcomes

 Organizational Politics, Culture, and Environment: Impact overall work climate

  Ethical Practices: Vital for reputation; scandals and fraud hurt long-term survival

Economic Impacts of Information System Technology

 Reduces the relative cost of information: Efficient procedures (emails, digital

payments, video calls) cut costs

 Considers IT as a factor of production: Alongside labor, capital, and raw

materials

 Improves efficiency and productivity: Banks serve more with fewer employees
due to automation

 Shrinking firm size: Outsourcing and digitization reduce the labor requirement

Behavioral and Structural Impacts

 IT Flattens Organizations: Fewer management levels, empowerment of lower

ranks, faster decisions, greater span of control

 Relies on knowledge and competence, not just hierarchy: More effective

teams

 Reduces organizational layers and bureaucracy

Organizational Resistance to Change

 Resistance is common: Fear of job loss, disruption, or discomfort

 Transition example: Computerization in banks faced initial resistance but now has
become essential

 Failure of large projects: Often due to political and organizational resistance, not
technology itself

 Adaptability is crucial: Change is the only constant in life and business (COVID
pandemic as a recent example)
Michael Porter’s 5 Competitive Forces Model (and IT’s role)

Force IT-Driven Example

Traditional Competitors Low-cost leadership: Walmart

New Market Entrants Disruption by Apple, Google

Substitute Products/Services Focused offerings: Uber, Airbnb (alternative to

hotels/taxis)

Customers Strengthening relationships: Netflix, Amazon (user

focus)

Suppliers eCommerce platform: Amazon (supplier

relationship, marketplace)

Internet’s Impact:

 Intensified rivalry (e.g., travel agencies, printed media disrupted, Booking.com

discounts)

 Universal standards let anyone enter markets (Amazon in cloud computing vs.
IBM/MS)

 New channels for brand-building (Uber, Airbnb) and loyal customer bases

Key Examples

 Operational Excellence: Amazon’s fast, reliable logistics, real-time tracking, and

easy returns

 New Business Models: Uber, Airbnb innovate traditional sectors; iPad, Android
phones, Netflix modernize content delivery

 Customer Intimacy: High-end hotels, Amazon track preferences and personalize

service

 Competitive Advantage: Apple (product excellence), Walmart (cost leadership),

OYO (hospitality innovation)

 Survival: IT enables remote work and digital education during pandemics;

compliance and continuity depend on robust MIS
Recommended Reading

1. "The World is Flat" – Thomas Friedman (globalization, Indian IT)

2. "Management Information Systems: Managing the Digital Firm" – Kenneth & Jane
Laudon

Next Topics Preview

 Information System and Organization Strategy

 Michael Porter’s Model: Detailed discussion

 ERP and backend systems for enterprise management