THE IMPACT OF MANAGEMENT INFORMATION SYSTEM TO BUSINESS ORGANIZATION (A STUDY OF UNION BANK PLC)
ABSTRACT
This study examines The Impact of Management Information System in Business Organization with reference to Union Bank Plc, it analyze general concern for every organization in recent times most especially because of the role it plays in the acquisition of skilled and knowledge required by employees in the performance of their job for the coherent of organizational effectiveness and it entails the provision of necessary information to individual managers in an organization in order to improve their productivity and efficiency in the attainment of the overall objectives of the organization, which are profitability, market standard, employees satisfaction and social responsibility. The data were collected to check the reliability, validity and accuracy in the process and table constructed for the respondents. Chi-square method was used and the statistical tables were constructed and tabulated to show respondent background such as level of education. Percentage and absolute are also used for construction of this research essay. ,”45 questionnaires were administered to the workers of Union Bank Nigeria Plc, using chi-square to test the research hypothesis. The findings revealed that companies should establish a record keeping system tailored to maintain its management information. It therefore recommend that the use of the management information system in investment appraisal, prospective investor, merger and acquisition, valuation of business, company tax computation and finally on employee and business valuation evaluation.
TABLE OF CONTENTS
Pages
Title page i
Declaration ii
Certification iii
Dedication iv
Acknowledgement v
Abstract vi
Table of contents vii
List of Tables ix
CHAPTER ONE – INTRODUCTION
Introduction1
Background of the study2
Statement of problem6
Research question7
Objectives of the Study7
Statement of the hypothesis7
Significance of Study8
Justification of the Study8
Scope of the Study9
Definitions of Terms9
CHAPTER TWO – LITERATURE REVIEW
Introduction11
Conceptual Framework12
Theoretical Framework21
Literature on the Subject Matter22
CHAPTER THREE – RESEARCH METHODOLOGY
Introduction29
Area of Study29
Research Design30
Source of Data30
Study Population and Sample Size Determination30
Method of Collecting Data31
Procedure for Data Collection and Data Analysis31
Research Instrumentation31
Limitations of the Study32
CHAPTER FOUR – DATA ANALYSIS, FINDINGS AND DISCUSSION
Introduction33
Findings of the Study33
Test of Hypothesis45
Discussion of Findings49
CHAPTER FIVE – SUMMARY, CONCLUSION AND RECOMMENDATIONS
Introduction51
Summary of Findings51
Conclusion51
Recommendations52
Proposal for Further Studies52
References 53
Appendix 56
LIST OF TABLES
Table 4.1.1: Gender of the respondents 33
Table 4.1.2: Age of the respondents 34
Table 4.1.3: Status of respondents 34
Table 4.1.4: Educational Background of the Respondents 35
Table 4.1.5: Years of Experience of the Respondents 35
Table 4.1.6: Do you have Management Information System or wants to
install MIS in your organization? 36
Table 4.1.7: Does Management Information System speedup the internal
communication? 36
Table 4.1.8: Does the Performance of the staff become improved after
using management Information System? 37
Table 4.1.9: Is Management Information System helpful for the scope and
adequacy of audit activities? 37
Table 4.1.10: Does the Management Information System remained helpful in
the increase of the turnover as compared to previous years? 38
Table 4.1.11: Does the Management Information System reduce the cost of
Human Resources? 38
Table 4.1.12: Does the Management Information System helpful in the relationship between effective decision making by the management,
and adequate supply of information in the organization. 39
Table 4.1.13: Is your Management Information System suitable enough to keep
pace with dynamic business environment? 39
Table 4.1.14: DoesManagement information system facilitates and enhances decision making in an organization to improve productivity and
performance? 40
Table 4.1.15: Does Management Information System helps to become an innovator? 40
Table 4.1.16: Does Management Information System have appropriate effect
on your company? 41
Table 4.1.17: Does Management Information System helps to make Decision
Timely to become Market Leader? 41
Table 4.1.18: Does Management Information System helps to get rid of mistakes
or erroneous problems? 42
Table 4.1.19: Does Management Information System helps to make continuous
growth in organization? 42
Table 4.1.20: Is it true that after arrival of Information System it provides easy
access to information for the customers? 43
Table 4.1.21: Does Management Information System is helpful for opening of new
branches and connecting to existing information system? 43
Table 4.1.22: Did Employees after using MIS have become skilled at collaborating
with each other to diagnose and solve problems? 44
Table 4.1.23: Does good management information system helps in playing role to
achieve competitive environment? 44
Table 4.1.24: Is there any direct relationship between Management Information
System with growth of the Organization? 45
Table 4.1.25: Has the control system been more effective than before using
Information System? 45
LIST OF FIGURES
2.1 Conceptual Framework of Management Information System 12
CHAPTER ONE
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
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.
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
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
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.
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.
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.
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?
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.
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?
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.
Statement of the Hypothesis
Five hypothesis are formulated and tested in this study:
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.
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.
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
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.
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.
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.
⦁ 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.
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