vtusolution.in MANAGEMENT AND ENTREPRENEURSHIP [15ES51] Prepared By :- Aachal Bassi Associate Professor EEE, SMVIT

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1 MANAGEMENT AND ENTREPRENEURSHIP [15ES51] Prepared By :- Aachal Bassi Associate Professor EEE, SMVIT

2 Definition of management

3 It is very difficult to give a precise definition of the term management. Different management authors have viewed management from their own angles moreover, during the evolutionary process of management different thinkers laid emphasis on different expects. For example, F.W. Taylor emphasized engineering aspects, Elton Mayo laid emphasis on human relations aspects, E.F.L, Brech, George R. Terry emphasis on, decision making aspect, Ralph Davis stresses leadership aspect and some other like Barry Richman etc. emphasized integration or coordination aspect

4 Management is the art of getting things done through others and with formally organised groups. Harold koontz

5 Management is the art of knowing what you want to do and then seeing that they do it in the best and the cheapest manner. F.W. Taylor

6 Management is a distinct process consisting of planning, organising, actuating and controlling; utilising in each both science and arts, and followed in order to accomplish pre-determined objective. George R.Terry

7 Management is a multipurpose organ that manage a business and manages managers and manages workers and work. Peter Drucker

8 Management is to forecast, to plan, to organize, to command, to coordinate and control activities of others. Henri Fayol

9 Management is the art of getting things done through people. M.P. Follett

10 Good management, or scientific management, achieves a social objective with the best use of human and material energy and time, and with satisfaction for the participants and the public. Mary Cushing Nile

11 Management is defined as the process by which a cooperative group directs action towards common goals. Joseph Massie

12 Management is a social and technical process which utilizes, resources, influences, human action and facilitates changes in order to accomplish organizational goals. Theo Haimann& William Scott

13 Traditional View Point Modern View Point Art of getting things done by other Process of planning, organizing, staffing, directing and controlling activities of others Mobilizing and utilizing physical and human resources for achieving organizational goal. Prime mover of organization making it functional and productive Process of creating conductive and proper internal environment in the organization Process of coping with changing external environment by relating strengths and weakness of organization with it

14 Conclusion Management simply means a specific process of planning, organizing, staffing directing and controlling the efforts of the people who are engaged in activities in business organization in order to attain predetermined objective of such organizations.

15 Importance of Management Improves relations Encourages team work Encourage innovations Motivates employee Optimum use of resources

16 7 Main functions of management Planning Organizing Controlling Innovating Directing Representing Staffing

17 Levels of Management TOP LEVEL MIDDLE LEVEL LOWER LEVEL

18 Organizational or Business Functions Management function Planning Organizing Directing Controlling Innovating Representing Production Sales Finance Personnel

19 Roles of Senior Manager: According to Mintzberg, a senior manager should be regarded as playing the following roles Interpersonal Roles Figure head Leader Liaison Informational Roles Monitor Disseminator Spokesperson Decisional Roles Enterpreneur Disturbance Handler Resource allocator Negotiator

20 Managerial Skills:is a challenging job. It requires certain skills to accomplish such a challenge. Thus, essential skills which every manager needs for doing a better management are called asmanagerial Skills. Conceptual Skill Technical Skill Human relations skill

21 Note: Skill: This an individuals ability to translate knowledge into action.

22 DEVELOPMENT OF MANAGEMENT THOUGHT CONTENTS Classical Approaches to Management- Bureaucratic, Scientific, Administrative Approach. Modern Approaches- Quantitative, Systems, Contingency. Neo Classical Approach- Human relation, Behavioral approach

23 INTRODUCTION Management is as old as human civilization. Management concepts and principles developed after the Industrial Revolution. Various contributors to Management Theories, Concepts & Principles. Management is an evolutionary concept. Each of the schools of management thought are based on somewhat different assumptions about human beings and the organizations for which they work. Each thought of school have come up with their own theories or concepts. They are based on various assumptions and differences/ disagreements do occur.

24 A. EARLY CLASSICAL APPROACH Scientific Management- F. W. Taylor Administrative Management- Henry Fayol Bureaucratic Management- Max Weber HUMAN RELATIONS Approach-Elton Mayo

25 SCIENTIFIC MANAGEMENT: focuses on the one best way to do a job. ADMINISTRATIVE MANAGEMENT: focuses on the manager & basic managerial functions. BUREAUCRATIC MANAGEMENT: focuses on the guidelines for structuring with formalization of rules, procedures and a clear division of labor.

26 1.SCIENTIFIC MANAGEMENT- F.W. TAYLOR F.W. TAYLOR- Father of Scientific Mgmt. According to F.W. TAYLOR, scientific management is knowing exactly what you want men to do and seeing that they do it in the best and cheapest way. In 1898, Taylor joined Bethlehem Steel. Taylor was a mechanical engineer who sought to improve industrial efficiency. Working in the steel industry, Taylor had observed the phenomenon of workers' purposely operating well below their capacity. While serving as chief engineer of Midvale steel company, Taylor made several important contributions which are classified as:

27 Taylor s Principles of Scientific Mgmt Friendly cooperation between the management and Workers Scientific Recruitment and training Time and motion study Drastic Reorganization of supervision Differential Payement

28 Contributions Time and motion studies made us aware that tools and physical movements involved in a task can be made more efficient. Scientific selection of workers has made to recognize that without ability and training a person can not perform his job properly. Has encouraged managers to seek one best way of doing work.

29 Limitations to Scientific Mgmt Workers did not enjoy freedom of choice. Payment based on performance was not supported by Trade Unions, Discrimination. No bargaining for wages Planning & Controlling in the hands of managers. Lack of human approach Tended to regard workers as uninformed and ignored their ideas for suggestions His principles were mostly confined to production management.he ignored other functional areas of management like finance, marketing,personnel and accounting. Trade unionist criticized Taylor s principles as the means to exploit workers due to the reason that wages of the workers were not increased in direct proportion to the increase in productivity. Despite of all the criticism against the Taylor s Scientific management the techniques advocated by him were further refined by his followers like Henry Gantt, M. Gilbert. He had modified the Taylor s incentive system. introduced 50% bonus to those workers who could complete a day s work. He also built upon Owen s idea of rating an employee s work publically

30 Administrative management Henri Fayol (Istanbul, 29 July 1841 Paris, 19 November 1925) was a French mining engineer and director of mines who developed a general theory of business administration. He and his colleagues developed this theory independently of Scientific management. He was one of the most influential contributors to modern concepts of management.

31 He proposed that there were six primary functions of management and 14 principles of management. Functions of management proposed by Fayolwere Forecasting Planning Organizing Commanding Coordinating Monitoring

32 Fayol s Principles of Management Division of work. This principle is the same as Adam Smith's 'division of labour'. Specialization increases output by making employees more efficient. Authority and Responsibility. Managers must be able to give orders. Authority gives them this right..

33 Discipline. Employees must obey and respect the rules that govern the organization. Good discipline is the result of effective leadership, Clear understanding between management and workers regarding the organization's rules The judicious use of penalties for infractions of the rules. Unity of command. Every employee should receive orders from only one superior. Unity of direction. Each group of organizational activities that have the same objective should be directed by one manager using one plan.

34 Subordination of individual interests to the general interest. The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole. Remuneration. Workers must be paid a fair wage for their services. Centralization. Centralization refers to the degree to which subordinates are involved in decision making. Whether decision making is centralized (to management) or decentralized (to subordinates) is a question of proper proportion. The task is to find the optimum degree of centralization for each situation.

35 Scalar chain ( Hierarchy ) The line of authority from top management to the lowest ranks represents the scalar chain. Communications should follow this chain. However, if following the chain creates delays, cross-communications can be allowed if agreed by all parties and superiors are kept informed. Order. People and materials should be in the right place at the right time. Equity. Managers should be kind and fair to their subordinates.

36 Stability of tenure of personnel. High employee turnover is inefficient. Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies. Initiative. Employees should be allowed to originate and carry out plans. Esprit de corps. Promoting team spirit will build harmony and unity within the organization

37 Contributions His functions and principles on which they are based have general or universally acceptability. Management functions are not confined to business enterprises alone but are applicable to all organizations wherever group effort is involved.

38 Limitations / Criticism Fayols principle of division of work or specialisation produces following consequences It leads to the formation of small groups Results in dissatisfaction of workers It results in the increase in the overall cost

39 Fayols principle of unity of command and the principle of specialization or division of labour was not satisfactory. These principles are based on few case studies and have not been tested empirically. These principles are often stated as unconditional statements. Sometimes these principles are insenstive to employees These principles are based on asumptions.

40 C. Bureacracy/ Bureaucratic Administration Bureaucratic Management is an important school of classical management, emphasized the need for organizations to function on rational basis. The term bureaucracy (derived from the German buro, meaning office) referred to organizations that operated on a rational basis. During 1800 s, European Org. were managed on a personal, family-like basis. Max Weber was the main contributor to Bureaucratic Management.

41 German theorist and sociologist. Follower of General Administrative Theory proposed by Henry Fayol. Introduced most of the concepts on Bureaucratic Organizations. According to Weber, a bureaucracy is a highly structured, formalized & impersonal organization It is a formal organization structure with a set of rules & regulations

42 Important features of Bureaucratic Administration Insistence on following standard rules: Organization should not be governed by the personal preferences of the employer but it should be governed by standard rules. Systematic division of work : increases production by improving efficiency and saving time in changing over from one job to another. Principle of hierarchy is followed: Each lower officer is under the control and supervision of higher one. Knowledge and training in the application of rules: because these forms the basis on which legitimacy is granted to his authority. Administrative Acts,Decisions and rules are recorded in writing: This makes organization independent of people besides making people s understanding more accurate. Rational Personnel Administration: People are selected on the basis of their capabilites.

43 Contributions Bureaucracy can be viewed as the logical extensions when it becomes impossible for one person to fulfill all management functions This concept has enabled most modern large scale organizations which require functionally specialized staff to train and control the people.

44 Limitations/ Criticism Over conformity to rules: stick to rule policy is followed. Buck Passing: Dragging the work due t fear of violation of rules Trained Incapacity: specialized in one area can not deal with other area Displacement of goals: changing the motive of the company. Not very popular today Rigidity Strict Rules & Regulations No scope for creativity

45 Neo-classical Approches Human Relations Approach is treated as neoclassical as they do not reject classical concepts but try to improve them. Workers are not machines and managers should recognize them as social beings and treat them accordingly. This approach tried to overcome the drawbacks of Classical Management.

46 Elton Mayo- Father of the Human Relations Approach. He focused on human relations in an organization. He led the team which conducted a study at Western Electric Hawthorne Plant. Experiment was conducted in 4 phases at Hawthorne Plant. Also known as Hawthorne Experiments. Experiments were conducted between Many management thinkers and engineers were involved in conducting the experiments.

47 4 EXPERIMENTS/ STUDIES ILLUMINATION EXPERIMENTS ( ) RELAY ASSEBLY TEST ROOM EXPERIMENTS ( ) INTERVIEW PHASE ( ) BANK WIRING OBSERVATION ROOM EXPERIMENTS ( )

48 ELTON MAYO Western Electric Hawthorne Plant

49 1. Illumination experiment This was undertaken to find out how varying levels of illumination (amount of light at the workplace, a physical factor) affected the productivity. The hypothesis was that with higher illumination, productivity would increase. Something besides lighting influenced their performance.

50 2. Relay Assembly Room Test Room Experiments The experiment were designed to determine the effect of changes in various job conditions on group productivity as the illumination experiment could not establish relationship between intensity of illumination and production. For this purpose, the researchers set up a relay assembly test room.

51 The rest period was increased to five minutes but the frequency increased. The productivity slightly decreased and the girls complained that frequent rest intervals affected the rhythm of the work. The number of rest was reduced to two of ten minutes each, but in the morning, coffee or soup was served along with sandwich and in the evening, snack was provided. The productivity increased. Changes in working hours and workday were introduced such as cutting an hour off the end of the day and eliminating Saturday work. The girls were allowed leave at 4:30pm instead of the usual 5:00pm and later at 4:00pm. The productivity increased. Absenteeism decreased, morale increased and less supervision was required.

52 3. Interview phase During the course of experiments, about 20,000 interviews were conducted between 1928 and 1930 to determine employees attitudes towards company, supervision, insurance plans, promotions, and wages. FINDINGS A complain is not necessarily an objective recital of facts; it is a symptom of personal disturbance the cause of which may be deep seated. The position or status of a worker in the company is reference from which the work assigns meaning and value to the events, objects, and features of his environment such as hours of work, wages, etc. The social organization of the company represents a system of values from which the worker derives satisfaction or dissatisfaction according to the perception of his social status and expected social rewards. The social demands of the worker are influenced by social experience in groups both inside and outside the work plant.

53 4. Bank Wiring Observation Room Experiments: There experiments were carried on with a view to analyze the functioning of small group and its impact on individual behavior. Workers were paid on the basis of performance. Output was fairly constant, contrary to their expectation. Group encouraged neither too much nor too little work. Money was not a main incentive for them. Group acceptance appeared to be more important to the worker than money.

54 Contributions of Hawthorn experiments It laid the foundation for Human Relations Movement. The Group is the key factor in job performance. Workplace culture sets its own production standards. Fatigue is the main factor affecting output.

55 Criticism/ limitations The Hawthorne researchers did not give sufficient attention to the attitudes that people bring with them to workplace. The Hawthorne plant was not a typical plant because it was a thoroughly unpleasant place to work. Therefore, the results could not be valid for others. The findings & conclusions reached were questionable. Relationship made between the satisfaction of workers and productivity was too simple.

56 BehaviouralApproach Mature version Human Relations theory. Mary Follet, Abraham Maslow and others contributed to it. How managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organization goals. Favor participation in the establishment, evaluation of standards of performance. Makes an effort to make managers more sensitive to their employee needs.

57 Contribution of Behavioral Theory advocates situational approach Builds confidence among employees A conducive environment is created

58 Modern Approaches Modern : Relating to the present or recent times. Characterized by or using the most up-to-date techniques, equipment, etc. Management : The process of managing: administer and regulate (resources under one s control). Theory (pl. Theories) : 1. A supposition or a system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained. 2. A set of principles on which an activity is based.

59 System Approach An organization is a system consisting four subsystems namely task, structure, people, and environment. The subsystems are interconnected and interdependent one another. Maintaining the balance. An organization is an open adaptive system which continuously interacts with its environment. Management regulates and modifies the system to optimize performance. An organization is more than just the aggregate of various parts. This is called synergy. Focus on the system.

60 A system is a set of interdependent parts: Inputs The people, money, information, equipment, and materials required to produce and organization s goods or services Transformational Processes The organization s capabilities in management and technology that are applied to converting inputs to outputs The Four Parts of a System Outputs The products, services, profits, losses, employee satisfaction or discontent, and the like that are produced by the organization Feedback Information about the reaction of the environment to the outputs that affect the inputs

61 Quantitative Approach Management = decision-making. Organization = decision-making unit. Organizational efficiency depends upon the quality of managerial decisions. A problem is expressed in the form of a quantitative or mathematical model. The different variables in management can be quantified and expressed in the form of an equation.

62 Open System continually interacts with its environment Closed System has little interaction with its environment; it receives very little feedback from the outside Input System Feedback Output

63 Contingency approach The Primary value of the contingency approach is that it stresses that there are no simplistic or universal rules for managers to follow

64 The Contingency Viewpoint emphasizes that a manager s approach should vary according to that is, be contingent on the individual and the environmental situation

65 Culture Technology Government SYSTEM Economy Geography Demography

66 PLANNING Planning is deciding in advance what is to be done, when where, how and by whom it is to be done. Planning bridges the gap from where we are to where we want to go. It includes the selection of objectives, policies, procedures and programmes from among alternatives

67 Importance of Planning To determine new opportunities To anticipate and avoid future problems To develop effective courses of action (strategies and tactics) To comprehend the uncertainties and risks with various options. To set standards It forms the bridge between present and furture.

68 Types of planning For Nonrepetitive activities Single use plan (programms and budgets) Vission Mission Objectives Strategies Operational Plans For repetitive activities Standing plans(policies, procedures, methods,rules

69 Vision A vision should be brief,clear, focused and inspirational to an organisation. Ti should be linked to customers needs and convey a general strategy for achieving the mission

70 Mission Its an organizations specialization in some area- service,product or client which decides the organization scope of business.

71 Objective Objectives are goals or target which one wishes to achieve.

72 Strategies Strategic plans define the action steps by which the organization intends to achieve its goals. Strategic goals are broad goals of where the organization wants to be in the future. These goals pertain to the whole organization. Tactical PlansTactical plans are plans to help the organization execute its strategic goals and to accomplish a specific part of the company s strategy. Tactical Goals define the outcomes of that major divisions and departments must achieve in order for the organization to reach its goals.

73 Strategic Ensure long-term effectiveness and growth Length: Usually two or more years Plans are done every one to three years Primarily done by top management Tactical It is used as a means to implement strategic plans. Length: Short-term Plans are done every six months to a year Primarily done by employees up to middle management

74 Types of Plans Single-use plan: Objectives, Policies, Strategies, Procedures, Methods, Rules Standing plans: Programmes, schedules, Projects,Budgets

75 procedures

76 We must plan for the future, because people who stay in the present will remain in the past.

77 Module -2 ORGANISATION

78 Intoduction According to: Amitai Etizioni an organization is a social unit or human grouping deliberately structured for the purpose of attaining specific goals Sehein as the rational coordination of the activities of a number of people for the achievement of some common explicit purpose or goal, through division of labor and function and, through hierarchy of authority and responsibility.

79 Allen the process of identifying and grouping of the work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing their objectives Sherwood is the pattern of ways in which large number of people are engaged in a complexity of tasks, relate themselves to each other in the conscious, systematic establishment and accomplishment of mutually agreed purpose.

80 Conclusion Corporations, armies,schools, hospitals, churches, prisons etc all are organizations.but tribes, ethnic and friendship groups and families are not organization because they do not involve any significant amount of conscious planning, coordination or deliberate structuring.

81 The term Organisation is derived from the word Organism which means a structure of body divided into parts that are held together by a fabric of relationship as one organic whole. Organisation can be defined as a group of people working together to create a surplus. An organisation structure is the design of positions, arrangement of positions and relationship of positions in an organisation. In this sense, organisation structure refers to the network of relationships among individuals and positions in an organisation.

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83 Plan implementation Assignment of authority, responsibility, and accountability Division of work Coordinates diverse organizational tasks Establish relationship among individuals, groups and departments Establish formal lines of authority Allocation and deployment of organizational resources Importance of Organizing

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