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Chapter # 1

Introduction Statement of the Problem

The aggressive and extensive use of modern state of the art communication technology and automated tools (Computer) in the national development is one of the prime differences between the developed and underdeveloped economies of the world today. No country can achieve its development goals without utilizing these instruments effectively and efficiently, which have enables the modern developed western economies to improve their products, optimize manpower productively, enhance their competitiveness in global market and devise plan on scientific basis with realistic and accurate parameters. When we go deep into the matter, it becomes absolutely clear that all this has become a reality through extensive use of computer in every walk of life. This wonderful invention of the modern science is considered to be the back bone/foundation of each developed and advanced countrys economy. Similarly, under developed economies who are lagging far behind in comparison to the developed economies in the field of science and computer technology are striving hard to achieve mastery over it, inorder to keep pace with new environment and technological challenges. Pakistan as a developing country cannot ignore these challenges. We have to gear ourselves to achieve mastery over this technology inorder to enter 21 st century as a proud and developed nation. Computer literacy and application in public and private sector organization is presently the needs of the hour. Computer are not restricted only to business, But non profit organization especially public enterprises are extensively using computer to provide facilities all possible amenities to the general public computer can help in law enforcement crimes control and solving some social and environmental problems. So we can easily make conclusion that computer is indispensable to modern manager and to society as whole. Objective of the Study The main objective of the study is to pin point the important role, computer can play in the field of management. How computer affect and influence the decision of the manager regarding planning, organizing, staffing, and controlling function of the management .beside, an elaborate decision has been made on management information systems and decision making process to acquaint the reader with impact of computer on manager decision making at different levels of management. Justification of the Study It is crystal clear from the preceding discussion that computer is the need of the hour. In order to motivate the executives in public/private sector organization towards the extensive use of computer; it becomes very much necessary but obligatory for us to brief them about the benefits/advantages that can be achieved through the use of computer either in the form of monetary benefits or intangible benefits in the form of reduction in cost, increase in efficiency and productivity, improved moral and products and elevation of the stature/repute of the organization. In modern organization, data processing capability has been strained by the growth in size and complexity of organization. this capability is further strained by the increased demand for data from external sources and the demand of the administrator for more information, which contains the properties of accuracy, relevancy, conciseness and timelines. So, fortunately it is computer that comes to our rescue which give an economical and speedy processing of information. Further, we often get information when they are

2 no longer needed in decision making so, it is computer that gives us timely information for decision making. Increasing cost of labor and materials associated with non-computer data processing have often forced the manager to look to computer usage for economic relief. Today computer are being used in virtually all the areas of human endeavor. They have been found invaluable and indispensable tools by management for helping to resolve some difficult s immediate problems and for long term planning, keeping in the mind the above points, this study can be termed justified. If we want to be included in developed nation of the world, we must resort to the extensive use of the computer in all walks of life. Dera Dera ismail gomal Methodology The study is based on desk research. The analysis and conclusions are the results of the secondary data, derived from several books of renowned writers and experts of the field, and articles/papers in academic and research journals/periodicals. Brief interviews of the experts in the fields of management and computer sciences were also held to get their expert opinion /advice on the contents and organization of the paper. Articles appearing in newspapers were also consulted for putting/fitting new ideas recently introduced, in the paper. The main reason behind selecting this topic was based on the fact that experts of both the fields management and computer science were available. They werequite supportive and encouraging. Especially our research advisor Dr. Rashidur-rehman Khan, providing me with his research papers, some how related to my study and giving able guidance during the completion of this paper. Mr.Humayun of Preston University Islamabad Campus also provided invaluable assistance in locating relevant material and explaining some difficult terms. My interest in computer also compelled me in selection of this topic. Because I have great desire to increase my know how in this field, and I have definitely achieved my this objective. Organization of the Study The paper is structured in to six chapters. The first one is logically introductory, containing statement of the problem, objective of the study, justification of the study, the reasons behind the extensive use of computer and the methodology of research. Here at this juncture, question arises that if the computer has reached its climax, solely due to the development in computer systems or changes/; progress in other fields of technology also effected it is present position. This fundamental question is answered in chapter two where the influences of communication technology on computer are explained in detail. This chapter contains, the explosive growth of computer and communication and business world.and benefits of computer-based systems. In chapter three computer based information system and its sub systems are defined. Then the role of computer is evaluated in decision making process at different level of management hierarchy. Common people and even some managers pose question as to how computer can be used for effective planning and controlling. In chapter four, the application of computer in planning is discussed at length with special reference to decision making techniques such as networking, mathematical programming and simulation. While chapter five contains the details of the revolutionary changes bought by computers in management control functions. The final chapter, is a brief summary in which conclusions have been made on the basis of the facts and figures presented in the earlier chapters. An implicit appeal to developing countries is made to achieve mastery over computers. Reasons Behind Extensive Use of Computer

3 Mangers are supported to be the information processors, however simultaneous assemblage storage and retrieval of data is beyond the natural potentials of these peoples. The conventional record keeping techniques have failed keep pace with the day to day requirements of the modern business/ organization. The advent of computer coupled with massively capacitate databases having facilities to retrieve data in response to the complicated calls of the user, has eliminated the data related problems. It has becomes indispensable for modern dynamics organization for sustainable growth to passes the computerized base system, net worked with executive work-station through state-of-the-art communications technology. Basic changes like information technology and introduction of computer and the conversion of existing methodologies to computer based systems, requires the attention of the top executives .It has becomes necessary for manager to restructure the organization in the interest of great efficiency. Work group needs re-alignment, task formerly assigned to a number of departments may be eliminated or the scope of their operation may be curtailed. With the computer a greater degree of centralized control can be supported in business, because top manager are furnished with timely, speedily and precise information from different department to make appropriate/rational decision with out delay. In the start, since computers were very expensive thus government and very affluent organization afforded them but, in the late seventies, small inexpensive micro-computer like apple II and TRS-80 appeared and were snapped up by office managers. Expert comments that Information is data made useful, and to be useful information must be communicated Therefore, data bases supplemented with electronics communication systems and PCs or executives workstations facilities a number of user, irrespectively of their physical and logical location. Though all managerial level viz. strategic, tactical and operational do benefits from computer, but its interface with the top-level management is unprecedented and highly appreciative. M.J Riley endorse the idea by adding that the initial impetus for a computer based data-is likely to come from manager and often from top management. This expectation has a utopia until recently, but innovations in computer-cum-communication technology, conceived of decision support system (DSS), export system (ES) executives support system (ESS), executive mind support system and electronics communication system etc, interfacing with gigantic data-base, has revolutionized the practices/activities/ operation of contemporary enterprises. Modern age is called the era of computers and the age of information. Information is really the fuel that drives organizations. Lawrence S.Orilia observes that with the industrial revolution, fortunes were made or lost because information was or was not available:Similarly, government and business institutions have come to depend more on advanced information technology. Since advanced nations are currently referred to as information societies, it would not be untimely to record that a piece of information is no more less in value/power than an internationally recognized currency. But a piece information to be of real value it should b accurate complete, relevant, precise and timely, Otherwise, delayed information is useless to the manager of modern dynamic organization so it is to through computer accurate, complete, and concise information are acquired for appropriate decisions. The emergence of computer technology, somewhere before fifties-revolutionized the world of data users who were so far, destined to rely on conventional record keeping comprising paper and pen accompanied with wooden and metal racks and teams of clerks. The decisions were usually made on the basis of intuition hunches and trial and error strategies rather than on solid facts and figure objectively in a rational systematic and logical manner. Managers were unable to decide with a broader spectrum of information, projecting a wide range of posteriori and prior relationship among ultimate quantum of decision variables. Computercan also improve the firms economic position by reducing the ratio of expenses to revenue in tangible and intangible ways (profit earned or what effect the information will have on the decision made by manager). Managers are forced to use computers. Otherwise they will not be able to keep pace with the competitors in the development and use of new information system.

4 Recently the galloping nature of organizational transactions is lodging pressing demand over data processing professionals to adopt in tune with the tempo of both organizational operations and data handling technologies. The moment computer invaded the organizational environment the ever first data manipulation service, was off line batch processing (where in transaction to e processed were first recorded from the source document on intermediary devices like punch card later on magnetic tapes or desks in shape of batches of job and their After sent to the computer for processing) Now days we have on line processing. Inorder to completely/comprehensively acquaint us with the computer impact on Management/function and manager decision making, it would be better to briefly explain on line processing. On-line Processing Innovation in computer technology has introduced a metamorphosis in hardware and software, partially, because of personal interests of the professionals thereon, and partially due to rapid pace of business. Experience testifies that information which is not timely and accurate is almost as good as no information at all and sometimes worst. So, data processing industry is undergoing unprecedented changes as new ways of performing date processing functions are rendering traditional methods obsolete, because they do not provide information with the properties of timeliness, completeness, conciseness and relevancy. As the need for quick and instantaneous information became crucial to the recurring complicated/changing decision situations a shift desirable from off-line batch system to on-line direct interaction with the computer processor and data bank became indispensable. Unprecedented raid of microcomputer on all the horizon of data manipulation endorses the thesis of Golden C,Everest, who notes, probably the most significant factor in the use of micro computer system is inherently on-line. A system designed to run on a micro computer must be in constant communication with the user, responding to the request and advising on the status of the action on line batch processing reduce the delays associated with batch processing, since data does not pass through a time consuming, conversationally process. On-line is the term verily worded to convey direct interaction of data user with the processor (CPU) and data bank without using any media (punched card of magnetic tape). It also denotes a peripheral machine connected directly to, and capable of unassisted communication with the control processor. On-line system involves a user setting in front of a computer terminal that is connected via hardware and a communication line to large computer. Advent of micro processing along with surprising cost reduction thereof, has elevated on-line mode to become indispensable wherein, sophisticated analytical, graphical, and computer interface capabilities are able to generate, integrate and present data in a flexible and easy to use format. Surprising innovations in computer technology and rising personnel costs stimulated search for efficient techniques of data processing. With the Remote job entry (RTE) terminals, printing terminal, dump display terminals, intelligent terminals and the microcomputers. These all served to get the user on-line. R.L. Martino glosses that, we want knowledge and information in the real time of its occurrence or in other words, in appropriate frame of action. It is only possible through on-line. Todays preferred operational mode is on-line data processing. It provides users with the fastest processing of data and with the immediate access to computers information. The term ion-line denotes that a communications link exist between users (terminal) and theyre supporting system (supporting computer) Main Advantages (Strengths) of Computers. In recent years people have becomes aware of the influences that computer are exerting on our environment. Each day we receive many services that are computer supported. An issue faced by many people relates to what task computer can undertake. Computer are essential to our government and business, they also provide entertainment and invaluable education support. Three factors that might lead to the implementation of computer system are speed, accuracy and reliability.

Speed. Speed current computer is capable of amassing, manipulating and providing data in thousandths of second. Current computers can handle over 10 million computations per-second. Two terms frequently associated with the speed of computer are volume and frequency. Volume relates to the overall amount of data processed, whereas frequency defines how often a specific item of data is accessed. Accuracy The accuracy of computer is astonishing. Contrary to popular belief, most computers related errors are caused by humans, not by equipment malfunction. The majority of the error is the result of improperly prepared data, which has been to the computer. Reliability Computers are extremely reliable devices. They are capable of operating for long period of time under the worst condition and will consistently produce the same accurate results. The reliability of computer may lend invaluable support in the successful operation of any business. Computer has the ability to amass and analyze the data, rapidly display this information. This capacity is vital to organization enabling them to respond rapidly to changing business conditions. Computer change as new technologies is introduced enabling them to be applied to the new fields. An emerging field is ROBOTICS, where computer- controlled robots perform production tasks. The use of robots in manufacturing is closely linked to the CAD/CAM operation computer- aided design (CAD) describes the computerized design of items to be manufactured. Computer- aided manufacturing (CAM) facilities use computer to control the production of CAD items. An integral part of CAD/CAM operation is the use of robots on production lines. Artificial Intelligence (AI) relates to research efforts under way to produce a thinking computer. The American and Japanese industries are investing Billion of dollars to build such a machine. Thinking computer will use logical processing sequences that will parallel the human thought process, operating 1000 times faster than current systems. A component in these new machine may be Josephine-switching device which operates in Pasco seconds (trillionth of second). The new computer incorporating these and other advancement will be referred to as fifth generation computers. Classification of Computers Computer can be classified as to how they handle data and as to their respective processing capabilities. Computer system can be group into three broad categories. Analog and digital computers Hybrid computers. Specialpurpose and general-purpose computers. Analog computers are said to measure toward answer, because they assign numeric values as the result of measuring some physical property i.e. (electric current through a vacuum tube might represent a number). Analog computer support energy conversation system, which manages the heating and air conditioning resources, used by organizations. Digital compute represents their data as number or distinct number. Data is represented by an exact number of digits and enables digital computer to count toward their answers. Adding machine and

6 pocket calculators are the example of digital devices. The majority of computer supporting business application are digital. Hybrid computers combine the best features of analog and digital computers. These computers possess the speed of analog and accuracy of digital computers. Hybrid computers are frequently used to control computerized manufacturing processes, where their operation characteristics are fully used. They effectively support CAD/CAM operation. General-purpose computers can support almost any type of Computerized processing with equal ease, they may handle business data and scientific equations. They offer a wide range of applications to users. Special purpose computers are primarily digested to handle specialized application. They are normally assigned one job and no other activities. A simulator is a special purpose computer used in training of pilots, navigators and other specialists. Using simulations it is possible to create the conditions under which these individual must often operate and to test their operational effectiveness. Computer Systems Computer system hardware refers to the computer equipment or actual machinery used in the computer system.

7 Super Computer Systems The most largest, expensive, and sophisticated computer systems, which have CPUs of 5000k or larger, disk storage in excess of 1000 megabytes, and cost over $10 million. The most complex application, execrating 50 to 100 million transactions per second. Super computer support real time tasks involving worldwide telecommunications for vast organizations. Mainframe Computer Systems The term currently assigned to most general-purpose digital computer is Mainframe. The term is broad enough to cover most computers, while excluding specialized systems. Mainframes possess good size CPUs and secondary storage composed of disk devices. They focus on line processing employing a variety of 1/0 devices for data handling and out put operations. Mainframe system handles both business and scientific data, generally operating on a 24-hour basis. Mainframe supports the vast majority of computer organization. Mini Computer Systems Mini computer smaller version main frame, processing specific but limited task orientation, introduced mid 60s. They can support wide range of on-line activities comparable to those of larger Mainframe systems, but more cheaply. Micro Computer Systems The smallest computing hardware. Micro Computers are built using computer chips called microprocessor. Microcomputer used a variety of RAM, ROM, PROM, EPROM chips (erasable programmable read only memory) to handle processing and data storage. Microcomputers are more widely recognized as personal or home computer.

8 CHAPTER # 2 ELECTRONIC COMMUNICATION TECHNOLOGY W hile moving through the contents of the preceding pages most of the terms reflected the meaning of connecting something to another like users to computers, and computer to computers arranging a set of on line (internal) data entry, data processing and data retrieval in the range of what ever distance. It is so important because with the increased impasses on quick response system, greater emphases are laid on data communications facilities. The phenomenon of on line processing is of course elevated to the high level of esteem when incorporated with electronic communications systems, which expands the formers profitability to the nation wide and global range of lucrativeness in the form of INTERNET, which is the big source of information and communication, providing managers with every bit of information about almost every thing. Over 30 million people use it worldwide. A person in Pakistan can get him connected with intend via PUBLIC DATA NETWORK (PDN),everybody can get himself connected with INTERNET if he has a PC, modem, telephone line and expertise in computer. Lawrence Oriole reports that according to an industry wise marketing survey, spending on data communication equipment have increased and would continue to do so, and the increased use of on line modes has resulted form the technological ability of communications activities. Syed Kamal Hussain annotates that in to days competitive global business environment communications is more important than ever The Explosive Growth of Computer and Communication Technology. The last forty years have seen explosive growth in the use of computers and electronics. From very crude calculators and transistors, we have progressed to very high- speed computer use from desktop level upped organizations level. Growth in computer systems, however cannot be simply in terms of advances in separate devices or stand alone equipments, rather a major component of the growth in computer use in the last twenty years has been data communications. Communications constitutes a value-added contributor to the growth of computer systems. Communication itself has expanded rapidly to support voice and message traffic around the world. Advances in computer technology have provided a foundation for these communications utilities, and they continue to support the vast increase in the telephone instruments, telephone traffic, and the wider scope of traffic that includes images of document sand video transmission. Electronic Communication and Business World Telecommunication is a technology that is continually adding new dimension to the computerized handling of data. It has permitted on-line processing operations to dominate the computer industry, providing the means to transfer business data throughout the world. In the business world we must collect information on particular situation make decision disseminate information decisions and evaluate and assess the effect of these decisions on the business situation. An electronic communication system adds speed and reliability to these procedures, these inturn, may improve the services or products offered by the organization and thus increase its efficiency and profitability. Components of a Communications System Any communications system consists of three major components. 1. Transmission: receiver. Transmission covers the movement of information between the sender and

2. Hardware: Hardware includes all communication and computer equipment that supports the communications system. 3. Software: Software is the method of communication, or protocol and the software support. Languages such as English on French are forms of protocol.

10 Benefits of Computer Based Communication System. The cost incurred on communication based systems are often substantially outweighed by tangible benefits to the organization stemming from the communication systems. The following list gives some specific benefits driving form electronic communications. Improved sharing of information among staff and between manager and staff. Increased visibility of information for background analysis and decision making. Improved capture transaction through reports on line and editing, as data is inputs. Greater management control through reports on individual transaction counts and job performance. Reduced cost of communication compared to telephone calls, typing, mailing and handling. Increased uniformity of procedure and practices in remote sites, ensuring consistency of handling and processing. Reduced paper work and file through the access of information on-line. Improved customer service and customer satisfaction through quicker and more efficient handling of customer request and issues. Improved accuracy and completeness of data through control of entry, editing and processing. Improved competitive position with other firms through reduced cost and increased responsiveness. Reduction in staff through elimination of clerical work and automation of field and processing. Flexibility in meeting new business location through adding to document, table driven system that is on line. Effectiveness Looking at these benefits, we would rank first the increased effectiveness of the organization with the communication system in place. For example, an Airline reservation system is a necessity if an organization is to compete successfully in the airline travel market on large scale. Similar requirement exit for banking and military command and control systems. Thus, though communication costs may be very high, these costs may pale in comparison to the revenue and business that the system generates. Control An another major benefit is the control of costs. When staff member are given computer terminals, productivity may and usually does increased significantly. In some organization, an on line terminal system has increased productivity over the existing manual system by more than 100 percent. That is, with the communication system the average employees are able to perform twice the amount of work performed using the manual method of operation. Saving may also occur because there is less paperwork with the on line system, which translates to less filling and a reduced need for clerical support. The ranks of management may also gradually change; some organizations have experienced a flattening of their organizational charts, as fewer levels of management are required. What do employees think about such changes? In some countries there are business office unions that seeks to control changes in particular the introduction of automation. Conversely, some companies have found that on line communication system have resulted in more satisfied employees with less absenteeism and job turn over. Nevertheless, the impact of automation in the office, as in the factory, is still a major controversial issue. Flexibility Another benefit is flexibility. With a communications system in place, a firm can set up a new office in a remote town in less time. The new staff requires less training because software for the on line system provide self-training. Financial institution has used this approach to test new branch lacerations. Trailer and mobile buildings, equipped with terminals, may be erected,

11 and if the branch generats enough volume, the company makes the branch a permanent addition. If there is not enough business the company can close the branch at less expense. Flexibility and mobility go hand in hand. A communication system enable sales people, auditors, manager, and other the employees to works at remote location and connect through communication network. Some of the jobs they might perform include. Input of new customer orders. Input of audit and review results. Entry and review of electronic mail. Input of financial information. Since less than half of the telephone calls placed actually reach the desired receiver (due to busy signal, no answer, messages left, and so on), and it is no wonder that the use of data communication is increasing. Many people focus on the benefits described in the preceding paragraph and ignore the managerial benefits, If remote groups are using the same system, there will be a higher level of consistency of work and uniformity of procedures. In a manual mode or with separate computer, many groups develop different procedure and work rules. Consistency means greater economies of scale in documentation and training, and it simplifies the transfer of personnel from one branch or department to another. Management can monitor and control remote sites more effectively and efficiently with data communications. The volume of work done can be accessed by the manager via the computer. Today many manager use such system to: Review individual orders, transaction, and issues. Monitor productivity and staff utilization. Analyze costs in remote sites, such as offices, factories, and warehouses. Receive and review financial projections and actual expenditures. Assess the sales of a new product line or service. Some of these benefits are magnified by connection of remote sites to signal main computer complex. In one organization the manager review each morning the productivity and the workload handled by the staff during the previous day. As a result, the manager may approve overtime, adjust staff levels and work schedules, change inventory levels, or order goods to be shipped between warehouses. An electronic communications system also offers two way management communications. That is, the manager may send an electronic message or letter to another manager at a field office. The message can be sent by the manager during the day and stored in an electronic mailbox. The field manager can review the letter a few minutes later, saving hours or days compared to the paper path and mail system. As with the impact on employees these managerial benefits can have widespread ramifications. For example, central managers may choose to control field sites much more closely reducing the de facto responsibility given to the field manager. Communication occurs not only between remote site and headquarters but also between different remote sites. In a retail fast food chain, point of sale terminals record sales of hamburgers, soft dirks and so on and transmit this information to computer. The computer may then automatically produce an order for additional food supplies at a terminal in a food wholesaler location. By identifying sales trends in stores in a given metropolitan area, market analysts can modify an advertising campaign dynamically. Sales offices can transmit orders and check on available and uncommitted stock at a warehouse location. Many automobile dealers are tied into several net works; aparts network, a sales network, and ordering network for additional new vehicles. These examples show that a major benefit of communication network is the inter connection of major parts of a business. This has psychological as well as financial benefits. The remote sites feel more strongly that they are increase productivity. In addition emerging communications systems now connect many organizations in diverse industries. Thus, in the automotive field, dealerships are linked to distributors, suppliers, banks (for credit), and the manufacturer. The manufacturer is in turn linked to suppliers and manufacturers of subassemblies.

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Handling Computerized Data Computerized data is handled at many speeds depending on communication means used. The lowest transmission rate are handled on the NARROW BAND CHANNER It has a BPS rate of 45 to 150 bites per second, typically serviced by telegraph or teletype lines. MID RANGE is covered by VIOCE-GRADE CHANNEL where rates are 1800 to 9600 BPS. Common telephone lines. WIDE BAND CHANNEL offers the highest transmission speeds, handling rates of 19600 BPS and higher. Included in this category are Coaxial Cables. (Handle higher transmission reduce interference) Microwave transmission (high frequency radio signals). Satellite transmission and use of Fibber Optic (transmits light impulses over wires of silicon). International airlines use satellite to link sales offices to main computers located in Europe. This satellite orbiting the earth at a height of 23000 miles can relay data to computer centers located throughout the world.

13 CHAPTER # 3 COMPUTER BASED MANAGEMENT INFORMATION SYSTEMS AND DECISIONMAKING. Today, largely through advances in computer and communication technologies, we living at a time that many people call the information age , one major reason our era is so named is because most working people to day have jobs that are information intensive. For example, jobs such as teacher, accountant, lawyer and particularly manager or all predominantly based on the handling of information. The emphasis differs from that of earlier decades in which most jobs involved some type of physical labor applied on farms or in factories. By the late 1960s nearly half of (GNP) and over half the labor income in the US came from information related activities. In his book power shift Alvin Toffler suggest that we are coming to the end of the information age and beginning a new age information processing and communication capabilities that is best described a KNOWLEDGE AGE, According to Toffler, knowledge is further refined information. Advanced computing approaches such as intelligent data base management systems, multi-media systems and knowledge based systems such as neural networks and artificial intelligence and other fifth generation systems. Information technologies continue to shape not only the way the people perform work, but also the products that many businesses turnout and the manner in which many business compete. Information processing has become a matter of strategic importance for most of today organization. In many industries such as banking, insurance and travel, it is virtually impossible for an organization to compete unless its customers are given the level of service that is only possible with high technology systems. Managers largely depends on the skilful use of information and knowledge and that a sizable portion of this information will be computer generate, even the very future of manager hinges on strategically applying information technology in new and innovative way. Definition of Management Information System Any system that provides the people with date or information related to an organization operation. MIS support the activities of employees, owners, customers and other key people on organization environment either by efficiently processing data to assist with transaction work load or by effectively supplying information to authorized people in an timely manner. Computer Based Information System It is the collection of people hardware, software information and data to interact and provide timely information to decision-makers.

Management Information System

Transaction Processing System (TPS)

Management Reporting System (MRS)

Decision Support System (DSS)

Office Information System (OIS)

Figure: 1.1 sub systems of MIS

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Transaction processing system (TPS) It comprises the routine day-to-day accounting operation. These paper work processing operations many of which provide linkages among the customer, organization, warehouse, and factory-include A/C payable, inventory control and the relationship of these activities. A transaction processing system (TPS) collects and store data about transaction and some time control decisions made as a part of transaction. A trisection is a business event that generates or modify data store in an information system (TPS) were the first computerized information system. TPS have two types. 1. Batch processing 2. Real time processing Management Reporting System (MRS) Information reporting System Generates preplanned printed reports for decision making purpose .The reports produced are commonly the by products of the extensive and detailed data bases assembled by transaction processing system. Decision Support system (DSS) It provides a set of easy-to-use modeling, retrieving and reporting capabilities so that people can generate the information they feel will be useful to them when making decision. Further development of DSS, coupled with the trend towards net working personal computers, have resulted in group decision support system (GDSS) that support the activities and decision making of entire work team, rather than individual. Office Information System It includes the use of such computer based, office-oriented technologies as word processing, desk top publishing, electronic Mail, video Tele-conferencing. Knowledge based system like Expert system (ES) and artificial intelligence (AI) mimic human decision-making process. ES it typically a rule-based system that solves problem in a manner similar to human experts methods. AI includes robotics as vision-inspection system for spotting defects as product roll off the manufacturing assembly line. COMPUTER, MANAGEMENT, AND DECISION MAKING LEVELS OF MANAGEMENT Management positions are often down into three levels: Upper Level Management: (president, vice president) Upper level managers a primarily responsible for plotting the COs Future moves. Its most important task is STRATEGIC PLANNING-Determining the goals, objective and plans that chart the organization long-range course. They need broad-based information to strategic planning decisions. In the early days the manager based their decisions on intuition, as Waston Agor, an executive behavior researcher, claims, without exception, top managers in every organizations differ from middle and lower level managers in their ability to use intuition to make decision on the job these manager have a sense of vision of what is coming- and how to move their organization in response to the visions.

15 Before 1980s, computer and communications technologies had little impact on the decision making processes of upper level management, but as today MIS has expanded beyond its traditional transaction processing roots into as a competitive tool, the upper level management is becoming more directly involved with using technology and confronting technology based issues. Recent boom in the user-friendly software and on line databases has also made it easier for upper level managers to interact, with computers. These have facilitated the acquisition and integration of the information needed for strategic planning and enterprise-wide management. Executive support system (ESS) and executive information system (EIS) have also been developed to satisfy the special information needs of the top- level-managers. Middle Level Management Managers responsible for any thing between upper and lower management. The information requirements of these managers are slightly. different from those of upper management. Middle management mostly involves tactical planning, which is determining the best way to get the job done and control. They must figure out what concrete actions should be taken to translate strategic financial, sales and production goals into result. The information requirement of middle managers has been partially satisfied by reports generated by management reporting system (MRS). DSS have also assisted middle managers that are called upon to make structured and non- structured decision. Lower Level Management It is directly responsible for planning and controlling the activities of workers so that higher level targets are met. Such manager need detailed reports that describe what needs to be done by each work unit and how well each unit is progressing towards production targets. Information needs of lower management are generally short term. The planning activity of lower level managers is frequently called the operational planning. Transaction Processing System (TPS) Management Reporting System (MRS) help lower level management decision making process. Supporting Information System Three levels of management examples of some of the ways in which the characteristics of the decision and information needs vary across levels. This figure should the types of information systems likely to provide managers at different level, information, they need to make decision.

16 Decision Making It is clear that computer is a powerful tool for extending man's brain power. Peter Drucker has pointed out that man has developed two types of tools. Those that add to his capabilities and enable him to do something that he otherwise could not do e.g. airplane, and Those that multiply his capacity to do that which he is already capable of doing (e.g. hammer).The computer also falls into the later category. It is an intelligent amplifier, helping the managers in decision-making. Director of Computer Sciences for UNIVAC notes that today computers have built into our society a mind-amplifying factor of 2000 to 1 i.e. behind every man woman, and child in United States there stands the power of 2000 human data processors. Computer enlarge the brain power because of the following properties. The ability to provide new time dimensions. The ability to perform certain logic operations. The ability to store and retrieve more information. The ability to control errors (parity chHAPTER #4 COMPUTER AND MANGEMEMENT PLANNING Management is defined as the process of achieving organizational objective through the efforts of other people. The manager is practitioner of art and science of management. His job is to carryout the basic management functions necessary to attain goals. Like planning, organizing, staffing and controlling. ROLE OF COMPUTER IN PLANNING What Is Planning Planning is to decide in advance on a future course of action. It involves making decisions with regard to selection of both short term and long term strategies and goals. development of policies and procedure that will help accomplish objective or counter threats. Establishment of operating standards that will serve as basis for control. The revision of earlier plans in the light of changing conditions. All these decisions require managerial skills and good quality of information. It is crystal clear that quality that information could support good decisions, good decisions should lead to effective performance should lead to the attainment of organizational goals. It is not surprising therefore that the acquistion and use of computer (or any tool that promises to dramatically improve the quality of information) may have important managerial implications. In the light of importance of information in the decision making process, it has became indispensable for top executive to use computer based systems to improve the quality of their decision. But, we lack such leadership in the near past, many primarily a technical problem, leaving the entire project to the data processing specialists. This behavior of the top executives has resulted in marginal results in a number of firms (No backing and underfined managerial information requirement, for example, a study of the performance of data processing operations of 150 top-computer-using organization in United States was conducted by international Data Corporation. The results of the study showed that about 95 percent of the responding organization felt some degree of dissatisfaction with their data processing data operations. Top managers should realize that their serious involvement in planning for computer is perhaps the most important single factor determining the success or failure of computer utilization.

17 Generally speaking computer usage of can improve planning by providing effective information which (I) leads to problem awareness (II) supports problem analysis and selection of alternatives (III) influence the choice of most appropriate option and (IV) permits field back on the implementation of decision. More specifically the use of computers can have an impact on the planning function by Causing faster awareness of problem and opportunities planning data stored on line may permit managers to probe and query files and receive quick replies to their questions It can quickly signal out of control conditions requiring corrective action when actual performance deviate form what as planned. Enabling managers to devote more time to planning. Free manager of clerical data gathering task and permits him to give more attention to analytical and intellectual matters. Permitting managers to give timely consideration to more complex relationships. The computer gives the manager the ability to evaluate more possible alternatives (and to consider more of the internal and external variables that may have a bearing on the out come of these alternatives). It makes it possible for administrator to do a better job of identighing and assessing the probable of economic and social effects of different of courses influence the ultimate decision. Assisting in decision implementation when decision has been made the computer can assist in the development of subordinate plans that will be needed to implement these decisions. Computer-based techniques to schedule project activities have been developed and are now widely used. Through the use of such techniques business resources can be utilized and controlled effectively. Computer based techniques of Network Analysis, Mathematical Programming & simulation have managerial implications. DECISION MAKING TECHNIQUES FOR PLANNING These techniques (which are often classified under the heading of operations research of management science) are used to 1. Speed up problem or opportunity awareness. 2. Permit more timely consideration of increasing complex relationships. 3. Assist in decision implementation NETWORK ANALYSIS Both PERT (Program Evaluation and Review Techniques) and CPM (Critical Path Method) are network model which are used to plan, schedule and control complex projects. Basic concepts of both are similar. Procedure used to set network model envisages that All the activities to be performed in the project must be identified. The sequence of each activity must be determined. I.e., it must be know that what elements have to be completed prior to the start of a particular activity and what tasks cannot commence until after its completion. The time interval required to complete each activity must be estimated. The longest sequence of the event must be identified, the sum of the individual activity times in this sequence of activities is know as the critical path. It is important to note that computation for small network can be produced manually, but a computer is needed with network of any significant size. Most computer manufacturers have PERT and CPM packaged program available and they are also available in the on-line libraries of many item sharing service. MATHEMATICAL PROGRAMMING Its purpose is to find best stately from among a large number of operation. Most mathematical programming involves to achieving a specified objective (which is typically to maximize to find best

18 contribution of limited resources the use of linker programming. Linear programming models is used to find profit and minimize cost) linear programming is being use for blending operations (cattle field, mixture of minerals, grains, fish, and meat products at least expansive selected). Scheduling manpower, selecting media for advertising purposes determining minimum transportation costs from given supply points to specified points of delivery and determining the most profitable product mix that may be manufactured in given plant with given equipment. This technique may also assist manager carrying out his other function. SIMULATION Simulation is similar to scientific experimentation. In complex situation few people fully understand all aspects of a situation, therefore, theories are developed which may focus attention on only one part of complex whole. In some situation Model may be built to test or represent a theory simulation is the use of a model in attempt to identify or and reflect the behavior of a real person, process or system. In organizations, the administrator may evaluate proposed projects or strategies by constructing theoretical models, They can then determine what happens to these models when certain conditions are given or when certain assumption are tested. Simulation is basically a trial-and error problemsolving approach. It is a planning aid to consider value for administrators. Simulation models help top executive decide whether or not to expand operation by acquiring as new plant. Among the dozens of complicated variables that would have to be incorporated in to such models are facets and assumptions about present and potential size of the total market present and potential company share of this total market product selling prices, and Investment required to achieve various production levels. All these information can be achieved effectively through computer Thus, in this way simulation help top executive in their strategic planning and decision-making activities. Middle level manager are also benefited in tactical planning and decision making e.g. simulation models are used to improve inventory management. The problem of managing inventory is complicated because there are conflicting desires among orgal units, what is best for one department may not be best for entire firm. Purchase department Want to buy large quantities of supplies and raw material to get at lower prices Production department Want large inventories on hand to eliminate shortages. Sales department Prefer large finished goods inventories so those sales will not be lost due to out of stock condition. Finance department On the other hand, view it with great concern because large inventories result in increase storage expense risk of spoilage is increased funds are tied up for a longer periods of time. But through the use computer simulation amount and simulated assumption, manager can experiment with various approaches tool arrive at more profitable inventory levels. Frank in LIND DAY points out to the importance of computer in dozen alternative investment schemes, together with the costs and expected return from each, is simulating each alternative investment schemes is simulating each alternative so that his board of directors can judge their relative merits. But the new

19 mathematical tool, together with high-speed computers, extend tremendously the capabilities of simulation processes.

20 CHAPTER # 5 COMPUTER AND CONTROLLING Computer have completely revolutionized the management control functions. It has greater significance regarding of control of any activity/event/function/process/system Computer can quickly signal out of control condition brings about faster awareness of problem thereafter. The computer further more programmed analysis may be carried out by the computer to present recommended courses of action to managers. Triggered control reports, based on the principle of exception may be prepared only when actual performance varies from planned standards. Managers are thus relieved more important personal and environmental matters. Computer-based techniques such as PERT&CPM may permit more effective control of business resources. Computer system make it possible to centralize authority and control previously delegated lower echelon, because of time, distance and farmiliarity factors. (However it's based on managerial philosophy & judgement not a requirement. Not on computer usage) Internal control and auditing techniques will generally have to be revised to accommodate computer systems. CONTROLLING Unlike planning, which looks to the future, control function looks at the past and present. It is follow up to planning; it is the check on past and current performance to see if planned goals are achieved. Control function comprises following steps: SETTING STANDARDS Proper control requires that managers establish pre-determined goals. The setting of realistic standards requires quality information, which is only possible computer. MEASURING ACTUAL PERFORMANCE In this connection, timely and accurate performance is essential to control. COMPRISING ACTUAL PERFORMANCE WITH STANDARDS. Comparison information is action-oriented. Computers can provide this information to managers to make decisions for correction or future course of action. TAKING APPROPRIATE CONTROL ACTION If performance is under control, the managers decision may be to do nothing. However, if performance is not unto the standard, it may be because the standard is unrealistic. Therefore replaning may be necessary to revise the standard. For this purpose current, precise, correct relevant quality information is needed, which is only available readily via computer use and application. The information out put of the computer can help the manager carryout this procedure in many ways. First of all, creation of more realistic and sound standards. Computer simulation can help managers in setting goals by showing them the effects of various alternative decisions when certain conditions are assumed and computer-based net work models such as PERT &CPM can improve planning (and therefore control) by forcing managers to identify all project activities that must be performed.

21 Computer processing system can also help managers control by gathering, classifying, calculating, and summarizing actual performance date promptly and accurately. Once performance data are read into computer. It is possible for the machines to compare the actual performance with the computer so, that it signals when pre-determined decision should be carried out. For example, a program may specify that when the inventory of a certain basic part falls below a given level am out put messages signals the need to re-order and indicates the reorder quantity. By thus relieving thus manager of many routine operational control tasks, the computer frees him to devote more time to Planning future moves Leading the all-important human resources of the organization such as man-machines relationship. In other words, makes it possible for manager to concentrate more of attention on the heuristic area intellectual work an area in which he is far superior to the machine. INTERNAL CONTROL Internal control is the total of all the control arrangement adopted within an organization to Check on and maintain the accuracy of business data. Safe guards the company assets against fraud and other irregularities. Promoted operating efficiency and Encourage compliance with existing company policies and procedures. NEED FOR INTERNAL COTROL Data processing activities may be centralized as result of computer usage, while in non-computer system these are typically separated into several departments. For example in a customer order, credit approval may come from one location control of the inventory of ordered items may reside in another department customer billing may be handled by third department and receipt of payment for items shipped may in fourth location. Such a division of data processing activities makes it difficult for fraud to go undetected since several people firm different departments are involved. The use of computer system result in a reduction of internal control. It is now a great realization among mangers that the employee oriented control of manual systems should be replaced with system-oriented controls, in the form of computer programs. However, the separation of activities within the computer department can help maintain the integrity of the system-oriented controls. One important control principle is that there should be an orgal separation between those knowledgeable employees who design and prepare the new systems and those who prepare the in put data and operate the equipment. (Analysists and Programmers + equipment operators) Business information systems undergo periodic examinations or audits. By internal auditor and external auditors during the course of examination attention is turned reported procedure and policies and are being followed. The audit trail begins with the recording of transaction winds through the processing steps and ends with the production of out put reports and records. . Input data online date Input date Central Processing unit SEE PAGE #45

Input Data

Online Storage

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Input Data Input Data

Central Processing Unit Collected Input Data

Processed Output

23 CHAPTER # 6 CONCLUSIONS It is an undeniable fact that development in the rapidly changing world is unconceivable without modern sophisticated computer systems, and satate-of-the-art communication technology. For making vital decisions at strategic, tactical, and operational levels of management hierarachy, the manager/administrators in modern dynamic organizations are bound to move as closer as possible to computers and data banks for achieving desired information in shortest possible times without any delay otherwise, the organization would definitely lag behind, gradually spacing back in the race of competition and compatibility. Consequently, creeping to the point of no return. The emerging face of new computer-based management-information systems (CBMIS), accompained by explosive growth of communication technology has completely changed the modern business practices. Because, information technologies continue to shape not only the way the people work, but also the products that many businesses turnout and the manner in which many businesses compete. To day, largely through advances in computer and communication technologies, we living at a time many people call the information age . One major reason our era is so named is because most working people today, have jobs that is information intensive, based on information handling. The emphasis differs from earlier decades in which most job factories. It is also significant to note that by late 1960s,nearly half of the (GNP) and nearly half of the labor income in the US came from information related activities. Recently, incorporated with the electronic communication system, the phenomenon of on-line processing has expanded to the nation wide and global range of lucrativeness, in the shape of INTERNET, which is big source of information and communication, with 30 million consumers world wide, providing managers with every bit of information about almost everything. Generally, management positions are broken into three levels. UPPER LEVEL MANAGEMENT MIDDLE LEVEL MANAGEMENT. LOWER LEVEL MANAGEMENT. It is evident from experience that computer-bases-management-information-systems (CBMIS) play a vital role in assisting managers in decision making at these three echelons (strates) of management hierarchy. At UPPER LEVEL, managers are primarily responsible for plotting companys future moves. Their most important task is strategic planning-which is to make long-range plans/policies. Executive support systems (ESS) and executive information system (EIS) have been developed to satisfy the special information needs of these top-level managers. Whereas, MIDDLE LEVEL MANAGEMENT information requirement are satisfied by Management Reporting System (MRS) and Decision Support System (DSS). Because the manager at this level are involved with tactical planning-which is to determine the best way to get the job done and control. While the LOWER LEVEL MANAGEMENT is directly responsible for planning and controlling the activities of workers, so that their high level targets are met. They are assisted in their decisions by transaction processing systems (TPS) and Management Reporting Systems (MRS). There is a general agreement, that quality information could support good decisions, good decisions should lead to effective performance of managerial function, and effective functional performance of managerial functions and effective functional performance of managerial functions performance should lead to the attainment of organizations goals. It is not surprising therefore that the acquisition and use of computers may have important managerial implications. In the light of significant role the information can play it has become indispensable of top-executives to use computer-bases system for

24 planning activities. Already available techniques for efficient and effective planning and controlling such as PERT, CPM, Mathematical programming and simulation etc, have been further refined improved, reorganized and made result-oriented due to the blessing of these computer systems. Further more, computers have completely revolutionized the management control functions. It has greater significance regarding control of any activity/function/process/system. Computer can quickly signal out-of-control conditions, can compare actual performance with pre-determined standards, has made the centralization of authority a reality, and develop efficient and effective control. Today, computer are not restricted to only business but non-profit organizations such as government, educational institutions and hospitals are also as government educational institutions and hospital are also benefited from this marvel of the century. Computers have not only become part and parcel of every organization, but even the society as a whole. The new breed of managers cannot avoid the use of computers to gain a competitive edge over other competitors in the global business arena. Now days developed and underdeveloped nations are differentiated on the basis of either it use or not use computers. Under the circumstances, it has become indispensable for underdeveloped like Pakistan to not only achieve mastery over computers but to excel in this field, entering 21 st century as a proud and developed nation. In short, we can confidently reach the logical conclusions that computers literacy and its extensive use and application at all level of management hierarchy for rational decisions making in the areas of planning, organizing staffing and controlling is the need of the hour.

25 BIBLOGRAPHY Sanders, Donald H.computers in Society, 3rd Mc Grow Hill Book Company, 1981. Sanders, Donald/ Robbery, Computers today, 2nd McGraw HillBook Company, 1985. Charles Parker and Tomes Case Management Information System (Strategy and Action) 2nd: 1996. Sanders, Donald H. computers in Business, 3rd McGraw Hill Inc.1975. Banknote P. Lentos and Kathryn. P. Era Data communication for Business.1 st Times-Mirror College Publishing, 1987. Lawrence S.Oirlia Computers and information An introduction. MCGrawHill Company. 19986. Bahadar Shah and Allah Nawaz Data bases an expensive but indispensable Warehouse. Gomal University Journal of Research, accepted for publication, 1995. Bahadar Shah and Allah Mawaz, on line processing the crescendo of MIS? > Guar, accepted for Publications, 1995. Robert Stultifies & Mary Summer. Management information systems (the Managers View) IRWIN Homewood 60430/Bostan, 1989.

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27 Manogm,managment Managment

Dera ismail khan Gomal