THE IMPACT OF MANAGEMENT INFORMATION SYSTEM TO BUSINESS ORGANIZATION: A STUDY OF UNION BANK PLC

CHAPTER ONE
1.0 Introduction
MIS stands for management information system, which we define as the development and use of
information system that helps businesses achieve their goals and objectives. This definition has
three key elements: development and use, information system, business goals and objectives
(kroenke, 2011). A system is a group of component that interact to achieving some purpose, an
information system (IS) is a group of component that interact to producing information. A model
of the components of an information system: computer hardware, software, data, procedures and
people (kroenke, 2011).
These five components are present in every information system, for example, when you use a
computer to write a report, you are using hardware (the computer, storage disk, keyboard, and
monitor), software (word, or other word-processing program), data (the words, sentences, and
paragraphs), procedures (the methods you use to starting the program to enter, save and back up),
and people (you). What is information? Information is knowledge derived from data, whereas
Data is defined as recorded fact or figures (kroenke, 2011)
MIS provides several benefits to the business organization: the means of effective and efficient
coordination between Departments; quick and reliable referencing; access to relevant data and
documents; use of less labor; improvement in organizational and departmental techniques;
Management of day-to-day activities (as accounts, stock control, payroll, etc.); day-to-day
assistance in a Department and closer contact with the rest of the world. MIS provides a valuable
time-saving benefit to the workforce. Employees do not have to collect data manually for filing
and analysis. Instead, that information can be entered quickly and easily into a computer
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program. As the amount of raw data grows too large for employees to analyze, business analysts
can build programs to access the data and information in response to queries by management.
With faster access to needed information, managers can make better decisions about procedures,
future directions, and developments by competitors and make them more quickly.
We are living in a time of great change and working in an Information Age. Managers have to
assimilate masses of data, convert that data into information, form conclusions about that
information and make decisions leading to the achievement of business objectives. For an
Organization, information is as important resource as money, machinery and manpower. It is
essential for the survival of the enterprise.
1.1 Background of the Study
The role of Management information system (MIS) is vital now-a-days in business environment
because it has evolved over time to becoming an integral part of its business operations. The use
of management information system has increased for last few years not only by firms, but also
by individuals and governments. Because of the today’s global environment where competition
is very high, it is the basic requirement of the organization to install management information
system to compete the market and to earn more profitability, invest in innovation in their
products, and to grow their businesses. All of these factors transformed the information system
from data processing systems to decision support systems and became the foundation of the new
business environment. In this study, we have investigated the contribution of management
information system on the performance of the organization. Management Information System
also takes into account integrative nature of information flow, as well as the structuring of the
organization around decision centers. Standards of performance are part of any good plans;
hence, determination of standards like other aspects of the planning processing’s depends on the
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availability of relevant management information system. Management information system aids
the functioning and monitoring of an organization. It also describes the components and
resources to ensuring the proper functioning of an organization.
This system also provides information that organizations needs to manage themselves efficiently
and effectively. Management information systems are typically computer systems used for
managing five primary components: hardware, software, data (information for decisions
making), procedures (design, development and documentation), and people (individuals, groups,
or organizations). Management information systems are distinct from other information systems,
in that they are used to analyzing and facilitating strategic and operational activities. MIS is
commonly used to referring to the study of how individuals, groups, and organizations evaluate,
design, implement, manage, and utilize systems to generate information so as to improve
efficiency and effectiveness of decision making, including systems termed decision support
systems, expert systems, and executive information systems. Organizations view the effective
adoption of Management Information System (MIS) as a way to combating competition by
improving productivity, profitability, and the level of information which is one common asset
shared by all business regardless of their nature, because it is a vital part of any business entity
irrespective of their forms of ownership as it enables conceptualization and creation of new
products and services.
Management information system has also changed the physical layout of offices to
accommodating local networks and departmental integrated systems. It is a formalized procedure
to providing management at all levels and in all functions with appropriate information from all
relevant source to enabling them make timely and effective decisions for planning, directing,
evaluating, and controlling the activities for which they are responsible. A major task also facing
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management in almost every field of Endeavour is to planning carefully so that the quantity and
quality of information obtained will be adequate to meeting its needs.
One potentially powerful resource available to managers is Information Technology (IT), though
it could also serve as a threat/problem, but the Top management has to be creative and strategic
enough through their conceptual and intellectual capacity to exploring full opportunities in all
strategic decisions of the enterprise which affect the long term objectives of the Organization.
More reports has shown how Information Technology has successfully given some companies an
advantage over their competitors both in the National and Global Markets.
A Management Information System (MIS) is a subset of the overall internal control of a business
covering the application of people, documents, technologies, and procedures by management
accountants to solving business problems such as costing a product, service, or a business-wide
strategy. Management Information Systems are distinct from regular information system in that
they are used to analyzing other information systems applied in operational activities in the
organization.
Financial accounting system is an important functional element or part of the total management
information system structure. However, they are more narrowly focused on the internal
balancing books to generating ledger and other financial accounting system. For example,
accrual adjustment reconciliation and correcting entries used to reconciling the financial system
to the general ledger are not always immediately entered into other management information
systems. Accordingly, although management information systems and accounting reconciliation
totals for related listing and activities should be similar, they may not necessarily balance.
Institutional management information systems should be designed to achieve the following;
i. Enhance communication among employees.
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ii. Deliver complex materials throughout the institution.
iii. Provide an object system for recording and aggregate information.
iv. Reduce expenses to labour intensive manual activities.
v. Support the organizations strategic goals and direction.
In spite of the fact that management information system supplies decision makers with facts,
likewise, it supports and enhances the overall decision making process. MIS also enhance job
performance throughout an institution. At the most senior level, it provides the data and
information to help the board and management to making strategic decisions(top management
decisions or long lasting decisions) and at other levels of management MIS provides the means
through which the enterprise activities are executed, monitored, controlled and information are
distributed to management, supervisors, employees and customers.
Effective MIS should ensure the appropriate presentation, formats and time frames required by
operations and senior management are met. MIS can be maintained, evaluated and developed by
either manual or automated systems or a Combination of both. It should always be sufficient to
meeting an enterprise’s unique business goals and objectives.
Likewise it seeks to explore all available opportunities that can be explored by the organization
in the immediate, national and global economies. The effective delivery of an enterprise’s
products and services are supported by the MIS which has a great influence on the market share
portion, revenue generation, sales volume achieved, recruitment of best qualified candidates, the
goodwill of the enterprise and the customer’s perception about the organization and its output.
These systems should be comprehensive, accessible, flexible and useable at all appropriate levels
of the organization’s activities.
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MIS is a critical component of the institution’s overall risk management strategy; it supports
management’s ability to performing such reviews. MIS should be used to recognizing,
monitoring, measuring, limiting, and managing risks. Risk Management involves four main
elements, which include:
i. Policies or practices
ii. Operational processes
iii. Staff and management
iv. Feedback devices
Frequently, operational processes and feedback devices are intertwined and cannot easily be
viewed separately. The most efficient and useable MIS should be both operational and
informational. As such, management can use MIS to measure performance, allocate, manage,
control resources and help an institution to complying with regulatory requirements. One
Example of this would be the managing and reporting of loans to insiders. MIS can also be used
by Management to provide feedback on the effectiveness of risk controls.
1.2 Statement of the Problem
According to Barry (1988) information is a generic term, because it has been described as the
livewire of any enterprise (public, private, local firm, Multinational company, manufacturing,
merchandise, and franchise business, retailing stores, multiple chain stores or service oriented
organization). It provides the relevant concept and intelligence to enabling the right thing to be
done at the right time. The problems to be studied are as follows:
i. Is there any need for management information system in Nigeria business Organization?
ii. Does the status of a business determine the type of information system in it?
iii. Do MIS aid decision making in an organization?
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iv. Could there be any room for development or improvement of MIS in Nigeria?
Therefore, the contribution of Management Information system will make a positive impact in
any business or Non- business organization in terms of planning, decision making and
information.
1.3 Research Questions
For the purpose of this study the general research questions are as follows:
i. Is there any need for management information system in Nigeria business Organization?
ii. Does the status of a business determine the type of information system in it?
iii. Do MIS aid decision making in an organization?
iv. Could there be any room for development or improvement of MIS in Nigeria?
1.4 Objectives of the Study
The aims of this study are to critically examine the impact of Management Information System
on corporate performance. The objective of the study includes:
i. To determine if MIS policies or practices, processes, objectives and internal control are
adequate.
ii. To evaluate whether MIS application provides users with timely, accurate, consistent,
Complete and relevant information.
iii. To determine whether MIS application and enhancement system exist to adequately
Supports corporate goals.
iv. To identify the determine factors influencing MIS processes in Nigeria.
1.5 Statement of the Hypothesis
Five hypothesis are formulated and tested in this study:
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HO: Financial constraint is not a serious factor militating against effective management of MIS
in Nigeria.
H1: Lack of management skill does not hamper the efficient performance of management
information system of business organization in Nigeria.
H2: There is no significant relationship between effective decision making by the management,
and adequate supply of information in the organization.
H3: There is significant relationship between effective decision making by the management, and
adequate supply of information in the organization.
H4: Management information system does not facilitate and enhance decision making in an
organization to improving productivity and performance.
H5: Management information system facilitates and enhances decision making in an
organization to improving productivity and performance.
1.6 Significance of the Study
The study is relevant to the growth of management information system in a business organization
and bank performance. The research findings will help individual managers and firms to
understand the relationship between management information and bank performance, thereby
shedding light on how quality infrastructure can enhance decision making and all other aspect
that have a bearing in an organization capacity and ability to implementing its strategies and
achieve performance.
1.7 Justification of the Study
The main purpose of the MIS is to give managers feedback about their own performance; top
management can monitor the company as a whole information displayed by the MIS typically
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shows actual data over planned results and a result from a year before; thus it measures progress
against goals. Without doubt, MIS have done a great impact in the business world today.
1.8 Scope of the Study
These projects examine management information system in a business organization, revising the
review need and importance of management information system in relation to decisions in an
organization. The study will look at the nature and scope of information management and its
system; examine the weakness and opportunities, threat and strength in the organization.
The scope of the study gives a general view of management information system in the worth of
decision making and how management information system affects the decision making of every
organization. Also this study is only restricted to the analysis of the contribution of Management
Information System (MIS) to business organization with a particular reference to Union Bank of
Nigeria Plc.
1.9 Definition of Terms
 Data: This is the row facts and figures pertaining to the day to day activity of an
organization.
 Information: This represents data that has been processed; it is also data that have been
interpreted and understood by the recipient of the message.
 Planning: This is decision taken before one takes an action. It is an attempt at coping with
uncertainties by thinking what, how and when future course of action would be taken.
 Management Information System: This entails the provision of necessary information or
report to individuals; managers in an organization in order to improving their degree of
efficiency and effectiveness.
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 Information System: This refers to a set of information connected or inter-dependent, so as
to form a complex part in an orderly arrangement according to some plan.
 Information Technology: This is the contribution of science and technology towards
effective and efficient production and dissemination of information to the user accurately and
timely.
 Management Report: The information produced for management and the utilization to
another.
 Controlling: This is the comparison if actual performance with plan in order to take
necessary corrective measures.