Management Information System and Corporate Performance

Content

The research sought to provide beneficial information that explains why the mere investment in information systems and new management tools does not always lead to improved business results. The study gets its importance from the continued increase in global competition, which intensifies the challenges that managers face. It relates to management accounting practice across the world but using a particular country situation to explore its hypothesis and explain observations. With a global focus, the literature review of the study covers diverse concepts in the topic of management and information systems. The study explores the success of information systems, information systems, and performance, as well as new management techniques and performance. It uses findings from other researchers to validate its hypothesis and provide a background for its study of findings related to its research questions.

Aims

Although there is no explicit mention of the study’s goals, there are research questions provided and a description of the study’s hypothesis. These help the reader to understand that the study seeks to find out whether companies that rate their information systems better end up improving their performance. It also aims to show the way information system quality and strategy influence the results of company performance. Also, the study wanted to find out the existence of a positive relationship between the use of new management tools and any observed improvement in company performance.

Methods

The study used an empirical method, where the researcher sent questionnaires to Spanish companies that were chosen for participation. The researchers used a principal component analysis to obtain three factors related to the management of information systems in the sampled firms. The three factors were the use of cost systems, information system quality, and information system strategy. The steps allowed the researchers to run a cluster analysis, where they came up with three types of firms based on a scoring method used for each firm’s management of information systems. They tested the hypotheses of the study using the non-parametric Kruskal-Wallis test and partial least squares. They also used logistic regression to identify the characteristics that differentiated the companies that exhibited improvement in financial performance. The authors used the factors defining the information system and the use of NMTs as the variables for the regression.

Findings and Conclusions

The study came up with the results of the typologies of firms based on their management information systems and the results of hypothesis testing. It also showed the relationship between information systems strategy and information system quality. Other results pointed to the relationship between firm size and information system quality, new management techniques, and cluster groups and the results of the logistic regression applied. The findings showed that large firms need complex information systems. In addition, their complex structure requires the systems to be formal, decentralized and specialized so that they can offer the firms a significant degree of functional and organization structure, as well as coordination. This is essential for large scale managerial decision-making. It also shows that information systems have to rely on quality information. Furthermore, information system strategy and quality positively affect the return on investment (ROI) change, while size negatively affects ROI change. In addition, the logistic regression showed that there existed a positive effect of NMTs on profitability improvement. However, they need to be part of the information system and enjoy a high strategic relevance in a firm. The study concluded that companies investing in a new information system have to ensure that they align the system or the management technique with their strategic direction. Such an action will require a high commitment to investment from the managers.

Limitations

The researchers admitted that their sample was small and could affect their conclusions. Moreover, the study used a limited number of variables and left out features that could affect a firm’s management information system. The study assumed a static environment when collecting and analyzing the data. However, the researchers cautioned that in reality firms operate in a dynamic environment. Therefore, the parameters studied may change, and there is a need to follow up with new variables or the evolution of the current study variables. Lastly, the study may lose its credibility in the current business environment because it was conducted before the global financial crisis of 2008.

Contributions

Despite its shortcomings, the study is instrumental in fulfilling its objective of providing insights on the factors that cause the implementation of information systems and new management tools to work or fail. Its use of real company samples allows its results to remain valid and useful for application to similar firm situations. The study also contributes to the literature on management information systems by highlighting the shortcomings that researchers might have when they aim to come up with comprehensive explanations of the factors that affect firm performance within and beyond the aspect of setting up information systems. The study gives future researchers information on the areas that need attention, which can serve as the basis for their problem statements.

Reference

Pérez-Méndez, José Antonio; Machado-Cabezas, A; (2015) “Relationship Between Management Information Systems and Corporate Performance”; Spanish Accounting Review 18.1 (2015); PP 32~43. Web.