Management information systems

Management Information Systems (MIS) is the key factor to facilitate and attain efficient
decision making in an organization. This research explores the extent to which management
information systems implemented to make successful decisions at two selected financial
organizations. The research examined whether the selected financial institutions of Bahrain
vary as to the use of Management Information Systems leadership of decision making for
strategic and tactical planning purposes. The research adapted the quantitative research
design to examine two research hypotheses. A total of 190 forms were equally distributed to
those who are working at different management levels at the selected organizations. The
results of the research showed that MIS was primarily used to enhance strategic planning in
both financial institutions. The regression analysis revealed that Tactical planning is found to
have no effect on Decision Making, while Strategic planning has a clear effect on the
Decision Making Effectiveness in both organizations.

INTRODUCTION

Currently, organizations are in the race for enhancing their capability in order to survive in
the competitions of the new century global market. Therefore, organizations are attempting to
advance their agility level by improving the decision making process to be more efficient and
highly effective to meet the successive fluctuations of the market. In an effort to achieve this,
many modern organizations, either mid or large sized, have concerned with a cycle of
progressive investments in and adopted new management information systems components.
During last decade, a high percentage of financial organizations frequently used Management
Information Systems to facilitate the provision of services; and that the speed of the adoption
is expected to grow further as the technology expands.

Information is an arrangement of people, data, process, and information technology that

interact to collect, process, store and provide as output the information needed to support an
organization, which indicates that information system is an arrangement of groups, data,
processes and technology that act together to accumulate, process, store and provide
information output needed to enhance and speed up the process of decision making. In a
Bank's information system, there is always a potential crisis which makes the bank endure an
insufficiency; thus, an advanced information system supported by a superior mechanism
control is required to make certain that an information system has achieved the required
processes. Information is essential for the endurance of a financial organization in the global
and competitive market.

The nature of globalization and competitiveness in the market stress on the importance of
developing an organization capability through better enhancing MIS.

Accordingly, the stored information must then be recalled and distributed for the use of an
organization leadership and top management as well as mid-level managers to take effective
long term (strategic) and short term (Tactical) decision-making. MIS is deemed to be a
system which provides organizations top management and, even lower level management,
with appropriate information based on data from both internal and external sources, to allow
them to make effective and timely decisions that best achieve their organization goals and
satisfy stakeholder requirements.

The conception of information catches the attention of different professionals from different
fields such as computer science, economics, business and management, political science,
statistics, communication and information studies (Newman 2001). However, the question is
"what type of information"? How Information management can play an essential role in the
decision making process? How can the coordination between different departments (internal
and/or external) and sharing information at the real time accelerate and enhance the process
of decision making and avoid decision making errors?

This paper focuses on how information management is needed to generate proper planning
and then decisions at both strategic and tactical levels in the two selected financial
organizations.

The process of dealing with the financial institutions was tainted by a lot of sensitivity,
because of the refusal of those institutions to reveal their decision-making mechanism due to
their Disclosure Rules. So we decided to call the first selected institutions case one and case
two referring to the second selected organizations.

Significant Research

Few authors have explored that the critical information required by midlevel and strategic
level management is efficiently provided by MIS. A small amount of research has deliberated
that the limitations and deficiencies in the process of management information system
performance are the main reason for diminishing the efficiency of decision-making process in
the organization.

The questions related to what extent the managing of these information systems assists
different decisions at different management levels and the type of responsibility of the
financial institution's senior and tactical management in enhancing the management
information has been raised with low empirically investigation and examination.

The purpose of the research

The purpose of this research is to explore the extent to which management information
systems are used to make effective decisions of long and short term planning in two financial
organizations at the Kingdom of Bahrain. The study will examine whether the government
financial institution and the Private financial institution differ as to the use of management
information systems for leadership decision makes in short and long term planning.

In order to improve the financial organizational capability and enhance its level of
competition in the market, financial organizations should understand the dimensions of the
Information Management, and clearly define and develop the resources in case of human,
technological, and internal operations, among others,, and manage them well across the
organizational boundaries. However, establishing the link between Information System
Management, planning and decision making is, at best, tricky. However, conversely, there are
many literatures approving the positive impacts of Information Technology expenses on
business value.

Organizations that do not have formal Information sharing practices will fail to leverage their
managers' intellectual capital for business innovation and growth. MIS enables the exchange
of experiences, which transfers the required information to the management levels to sustain
competitive advantage since it affects the decision making to improve the quality of services
provided. Therefore, that it is imperative that these organizations continuously motivate their
employees to share valuable information so that their intellectual capital can be leveraged.

Management Information System will give the banking management a new dimension in
managing its knowledge and help in carrying out and maximizing the management's
initiatives in harmonizing the appropriate strategies in the short and long planning.
MIS is indispensable in the area of decision-making as it can monitor by itself the instability
in a system, verify a course of action and take action to keep the system in control.
Literatures also suggested that non-programmed decisions are relevant as they provide
support by supplying information to the search, the analysis, the evaluation and the choice
and implementation process of decision making.

From the literatures presented, we can easily perceive that the importance of the role of both
middle and top management to maintain a consistent approach to develop, use, and evaluate
MIS systems within the institution. To financial institutions, MIS is used at various levels by
top-management, middle and even by the operational staff as a support for decision making
that aims to meet strategic goals and strategic objectives.

The above literatures also explore the importance of MIS in providing decision makers with
facts, which consequently support and enhance the entire decision-making process.
Furthermore, at the most senior level, MIS and DSS supply the data and required information
to assist the board of directors and management levels to make an accurate and on time
strategic decisions.

METHODOLOGY

The current study attempts to explain the relationship between various factors. Due to the
nature of the current study and its hypothesis, the primary research purpose of the current
study is, thus, explanatory. Explanatory (or causal) explains the complexity of the interrelated
variables identified that were posited in the hypothesis and research

By developing several hypotheses, the study thus adapt the quantitative research design to
better test those hypotheses. Quantitative research uses survey as the main instrument to
collect data.

Research questions and hypotheses

To achieve the purpose of the current study, the following research questions have been
formulated:

1. To what extent is MIS being utilized to support Strategic planning for decisions in
Bahrain's financial organizations?
2. To what extent is MIS being utilized to support Tactical planning for decisions in Bahrain's
financial organizations?

Survey Instrument

The participants were asked to indicate their perception on a Likert scales (1-5) with response
ranging from "strongly disagree" to "strongly agree". The collected data were analysed based
on correlation and regression analyses using the statistical package for social sciences
(SPSS).

The questionnaire we prepared for this paper was divided into 2 sections. The first section
concentrates on the general profile of the respondent including his/her age group, education
level and profession and income group. In the second section we were interested in gathering
information about the importance of MIS and its use in Case one and Case two of financial
institutions in Bahrain. The respondents were provided with a list of questions related to the
following factors;

• The important of MIS in supporting Tactical planning and consequently enhancing

the decision-making process

• The important of MIS in supporting Strategic planning and consequently enhancing

the decision-making process

• The effectiveness of a bank's decision making process

Using a personal relationship, the questionnaire has been discussed with various levels of
bank management and a pilot study has been conducted amongst low-level members of the
bank's staff. This improved the questionnaire, which has been used for the research presented
in this study.

Population and Data collection

The population for the study is the top management (strategic), mid-level management
(tactical) and normal staff in Case one (government financial institution) and Case two
(private financial institution). This population is deemed to be fully aware of the MIS use at
the bank level.
A total of 190 forms were distributed equally (each bank with 95 survey forms). 12% for case
one and 14% for case two are having management positions. In a convenience sample, the
managers and bank staff were randomly approached.

The distribution took place for a three-week period in early March, 2010. The survey was
designed in English language. The research tested the time to fill the survey and it took
approximately 5-8 minutes to be completed.

The questionnaire we prepared and used had been pre-tested initially with few people (5
users) working in different sectors to ensure consistency, clarity and relevance to the Bahraini
case. Minor changes (related to the questions content, wording, and sequence) were requested
by those people, which we implemented before carrying out the final copy.

Data Analysis

The current study used SPSS (Statistical Package for Social Science), software V.19 to
analyse the data obtained from the survey. The current study use ANOVA to see if there are
any differences between Case one and Case two when using MIS for supporting decision
making processes. Moreover, the simple Regression was implemented to test the hypothesis
and the linkages between dependent and independent variables.

RESULTS AND ANALYSIS

This section presents the factor analysis test. Then, the results of correlation analysis of the
three variables (Strategic planning, Tactical Planning, and The Effectiveness of Decision-
making) are discussed. Finally, the results of the paper are discussed in accordance with the
research objectives and hypothesis of the study.

Correlation Tests

Correlation analysis was incorporated to describe the strength and direction of the linear
relationship between the two independent variables and the dependent variable (Pallant,
2001). Effectiveness of the bank's decision-making processes, which are the dependent
variables considered to be the bank's succession in management building and facility,
financial aspects and staff issues. Previous studies underpinned the importance of conducting
correlation tests before the regression testing, the correlation between variables thus
necessary.

Regression

For further analysis, a Linear Regression analysis was conducted to examine the extent to
which the independent variables (Strategic planning and Tactical Planning) influence the
succession Effectiveness of the bank's decision making (dependent variable). The
independent variables were regressed across organizational outcomes.

DISCUSSION

The current study intended to measure the implementation and the use of MIS in two banks in
the Kingdom of Bahrain. Two different planning activities have been identified to measure
the banks implementation and use of MIS, these activities are: Strategic planning and Tactical
Planning. Correlation analysis was incorporated to describe the strength and direction of the
linear relationship between the two independent variables and the dependent variable.

The results of the descriptive statistics reveal that MIS was primarily used to enhance
Strategic planning (long term) in the bank. The study also revealed that MIS is the least
implemented in the Tactical planning (short term).

Correlation test thus implemented investigate the relationship between the two variables. The
result reveals that the two variables in this study are correlated with the effectiveness of the
decision-making process in the banks. As for Cohen (1992), the result revealed that the
Strategic planning is medium correlated with the effectiveness of the decision making process
in the bank, while Tactical planning indicates small correlation with the effectiveness of the
decision making process in the bank.

Moreover, the results of regression indicated that the variance in the Effectiveness of the
bank's decision making process is explained by only one variable, the Strategic planning,
while Tactical Planning found not to affect the Effectiveness of the bank's decision making
process.

CONCLUSION
Management Information Systems is of paramount importance to reach effective decisions in
an organization. The literatures presented in this study explained the significant role of MIS
in the decision-making process enhancing in an organization. MIS is deemed to be an
integrated user-machine system that provides information to support operations, management
and decision-making functions at various levels of an organization. Organizations are aware
that MIS is a special-purpose system useful for management objectives. The study has
highlighted that MIS should be accessible in supplying appropriate and high quality of
information from its generation to its users. To MIS, to be vital and effective, a carefully
conceived, designed and executed database should exist to communicate the adaptive
decisions.

In short, the results of the descriptive statistics revealed that MIS primarily used to enhance
Strategic planning in the banks. The study also revealed that MIS is the least implemented in
the Tactical planning. Correlation analysis was incorporated to describe the strength and
direction of the linear relationship between the two study variables.

RECOMMENDATIONS

Based on the findings of this study, MIS was not very adequately implemented for decision
making on Strategic planning and Tactical Planning in Bahrain banks. Although there are
differences in the use of MIS for decision-making processes, the results revealed that the
effectiveness of decision making is similar to the Case two. It is therefore recommended that
the MIS units should be adequately maintained to ensure the free flow of information and
adequate use of MIS in decision making in Strategic and Tactical Planning. The study also
recommends that a proper orientation should be conducted in order to help managers at all
levels as to ensure proper and adequate use of MIS facilities in generating and disseminating
information for better decisions in the banks.

The organization management does not always recognize the information needed, while the
information professionals often do not comprehend and are aware of management in order to
produce relevant information for the managers they serve. To be successful, an MIS should
be designed and operated related to organizations, management and technical factors. The
study encourages the organizations' top management to participate in enhancing MIS and
make an effective contribution to system design.
Finally, we believe that to enhance MIS, banks or any organization that use MIS to enhance
its decision making processes should develop effective communication channels between
management and information professionals. Good communications then facilitates the task of
developing relevant and appropriate information systems. It is no simple checklist to
automatically produce the perfect MIS. Organization thus would be aware that what is
required is an awareness and understanding of key principles and functions in which the
design, implementation and operation of MIS are the results of rational decisions rather than
haphazard development without considering the real organizational needs.