Management Information System: Role in Business


Information systems play a critical in business enhancement since they allow managers to plan, organize, and execute policies effectively. The relationships among various stakeholders are handled through application of information system meaning that it has a positive impact towards business development. Additionally, they help in strengthening business strategies, irrespective of the size and nature. This paper looks at various aspects of management information system, including its definition, role, relationship with business strategies, impacts, and major functions in modern businesses.


A number of scholars define MIS variously, but some aspects are evident, including supervision of the human resources, technology, and organizations, which are achieved through utilization of computer aided software. In the modern organizational management, the use of information systems is critical, as it facilitates efficiency and effectiveness in handling of the day-to-day activities. Management information system aspires to establish the relationship among various organizational stakeholders as far as service delivery and productivity is concerned (Laudon, & Laudon, 2010). Through the information system, the firm is in a position to realize maximum profits, which is facilitated through quality management of personnel, the available tools, and various processes within the firm.

In other words, management of information systems is aimed at improving the delivery of service through the utilization of available technology. Information systems are applicable in various places and sectors, including customer care services and product development. It entails data gathering, processing, and storage with an aim of utilizing it to improve work (Bidgoli, 2004). The role of the administration is to sum up the data and distribute it in form of information to different concerned sections in order to help in carrying out daily operations. Everyone in the organization makes use of information systems in a business environment hence it is inevitable in any firm.

Role of MIS in business today

Management information systems serve one basic role, which is related to assisting business managers in making decisions in their various places of work. The systems have a role to play in the management process, as managers are able to synthesize information from databases, including current public transport record (CPTR), which is critical in decision-making. Before the introduction of information systems, managers took a lot of time in designing policies, but its invention has turned out to be a reliable process of gathering data that would be used in making critical decisions.

The introduction of the decision support system, which is part of the information system, is relied upon in coming up with important policies in the organization. Decision support system offers an output that is always in form of periodic report that simplifies decision-making in any work environment. For effective information dissemination, decision support system is divided into at least four parts, with each part having a definite role to play (Laudon, & Laudon, 2009). The database offers internal and environmental data, which are always stored in various databases.

The report writing software is charged with the role of producing specialized reports. The data produced is coded in a procedural language, such as COBOL to facilitate easier understanding. On the other hand, the mathematical model offers information through simulation, which entails several elements of physical system. This improves information dissemination and storage. Groupware is a form of software that plays a role of linking up various groups within the organization

The strategic objectives or aims of any business are the goals that are deemed important as far as current and future concerns of the organization are concerned. These objectives are determined through evaluation, such as conducting a SWOT analysis meaning that some of the strongholds of the organization are identified, the weakness are outlined, the opportunities are classified, and the threats are clearly stated. The most familiar areas that the organization has to pay attention to include pertaining to strategic management entails establishing the strengths of the organization in the market, the monetary ability, the physical wealth, productivity of the firm, efficiency, novelty, and action planning. For all these to be achieved, the use of information system is mandatory.

The first area of focus is augmenting the markets meaning that the organization ought to employ the best information systems in gaining competitive advantage in the market (Power, 2002). The software employed ought to explain the process through which the product would be offered in the market, how the organization will reach out to the targeted markets, and the analysis method to be employed in order to outmuscle the competitors.

For the organization to achieve the desired goals and objectives, some of the ways through which financial resources would be increased must be established. Since capital resources determine the success of any organization, the use of information systems in the finance department is very important. Building cash flow is the aim of any organization wishing to improve its financial base. The use of related software in handling the challenges that come with financial obligations is always recommended, as an organization would have an opportunity to monitor the progress. Physical resources entail the tangible products, such as machinery and building. Information systems are always employed effectively in monitoring the performance of any machine or instrument in the organization meaning that it could be used in resolving the issues in the department (Nokhbatolfoghahaayee, Menhaj, & Shafiee, 2010).

Any organization must be productive to attract investors hence information system is needed to boost investor confidence. Application of software in marketing and financial handling increases productivity, which automatically attracts investors. Another aspect of strategic management that can benefit from information system s is innovation. Through innovation, the organization is capable of competing effectively in the market. Finally, it is agreed among various scholars that an organization will never achieve its objectives without action planning. Based on this, information systems should be employed in enhancing some of the identified business objectives. When trying to establish smart goals, the organization should rely on software that is proved effective.

Impact of MIS on business processes

Information systems have an impact on the management of the organization, as they boost the marketing systems and the major aims of the finance department. Through the information system, the personnel are made much more efficient and the tracking system within the organization is improved. The role of managers is simply to coordinate the major activities, as the information systems offer solutions to line managers as regards to daily operations. Through information systems, the managers would understand the organization better, as adequate information would be available. First, management of information systems defines data entry process, as well as the attributes of any data. Information is power and if the management were able to access it, decision-making would be enhanced (Alonso, Herrera-Viedma, Chiclana, & Herrera, 2010).

The basic functions of IS

The main function of any information system is to offer a solution to the various problems that organizations face in their daily activities. Based on this, their functions are related to explaining the empirical phenomena of the real world. Some scholars refer to this as an explanation-oriented approach to any given solution.


It is concluded that any organization wishing to excel ought to make use of information systems effectively, as they have the ability of improving the performance of any firm in the ever-competitive market.


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Bidgoli, H., (2004). The Internet Encyclopaedia. New York, NY: John Wiley & Sons.

Laudon, K.,& Laudon, J. (2010). Management information systems: Managing the digital firm (11th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

Laudon, K.C., & Laudon, J.P. (2009). Management Information Systems: Managing the Digital Firm (11 ed.). New York, NY: Prentice Hall.

Nokhbatolfoghahaayee, H., Menhaj, M.B., & Shafiee, M. (2010). Fuzzy decision support system for crisis management with a new structure for decision making. Expert Systems with Applications, 37(5), 27-41.

Power, D. J. (2002). Decision Support Systems: Concepts and Resources for Managers. New York, NY: Greenwood Publishing.