This paper begins by drawing a distinction between an "efficiency"> approach to the design of an information system and an "effectiveness" or decision-oriented approach, arguing for the latter. The argument leads to the development of a taxonomy of information systems based on the aspects of the decision-making process which are incorporated within the information system itself and those which are left for the management role to perform. Four classes of information systems are thereby specifieddatabank, predictive, decision-making and action-taking. Illustrations from the insurance field are given for each. Since the underlying assumptions of an information system are critical, a fifth system-the systemic information system-is proposed for exposing and examining assumptions. To be worthy of its name, a management information system must supply the basic information needed by managers for making decisions. The more closely the information provided is attuned to the decision-maker's needs, the better the decisions that will be made. This means that the designer of an information system must carefully analyze both the decision processes as well as existing information flows. For, in a management information system, the two are essentially inseparable. Unfortunately, the approach used most frequently by designers of insurance information systems has been to concentrate on making the existing system more efficient by studying existing forms, files, reports, and procedures and then determining ways in which they might be simplified, expanded, integrated (autoRichard 0. Mason, Ph.D., is Acting Associate Professor of Information Systems in U.C.L.A. Alfred E. Hofflander, Ph.D., C.L.U., C.P.C.U., is Associate Professor and Chairman of the Department of Management in U.C.L.A. This paper was presented at the 1971 Annual Meeting of A.R.I.A. mated), and improved.' Sometimes useful and economical results can be realized from this kind of study; but they are generally in the area of increased efficiency of data flows or reduction in clerical staff,2 not in improved quality of decisions made. By way of contrast, the decision-oriented approach begins with the identification of the organization's managers and the decisions they must make. Using this approach, the designer3 starts by examining the action alternatives available to the manager and the criteria for choosing from among them. Management information requirements are then specified by determining the kinds of predictions, forecasts, inferences, and measurements re1 For example, see George E. Helehanty, "Computers and Organization Structure in Life Insurance Firms," (Myers, ed.), The Impact of Computers on Management (Cambridge, Massachusetts: M.I.T. Press, 1968).