1. Define the following (12x1=12 Marks)

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2 IV/IV B.Tech (Regular) DEGREE EXAMINATION MARCH 2017 (Second Semester) Industrial Management and Entrepreneurship Development (CS/IT 421) SCHEME OF EVALUATION 1. Define the following (12x1=12 Marks) (a) Management: According to Harold Koontz, "Management is the art of getting things done through and with people in formally organized groups. (b) Joint stock company: Lord Justice Lindley explained the concept of the joint stock company form of organization as an association of many persons who contribute money or money s worth to a common stock and employ it for a common purpose. (c) Product life cycle Every product has a life of its own and goes through various stages. Although different products have different types of life cycles, the traditional product life cycle has four stages during their lifetime. Each stage is different and requires marketing strategies unique to the stage. (d) Partnership: According to Indian partnership act 1932 "partnership is an agreement between two or more persons who have agreed to share profits and losses of the business carried on by all or anyone of them acting upon all" (e) 4P s of Marketing A planned mix of the controllable elements of a product's marketing plan commonly termed as 4Ps are, Product Price Place Promotion (f) Working capital: It represents the amount of money utilized for financing day to day business operations. (g) Placement: Placement is a process of assigning a specific job to each of the selected candidates. (h) Training: Training is the process of enhancing the skills, capabilities and knowledge of employees for doing a particular job. (i) Entrepreneurship Entrepreneurship is the process of creating something new, with value, by devoting the necessary time and effort, assuming the accompanying financial, psychic,and social risks, and receiving the resulting rewards of monetary and personal satisfaction and independence. Page 2 of 15

3 (j) Process design It is the design of processes for desired physical and/or chemical transformation of materials. (k) Entrepreneurial development programme Entrepreneurial development programmes are designed to help an individual in strengthening his entrepreneurial motive and in acquiring skills and capabilities essential for playing his role effectively. (l) Inventory Inventory is a usable but idle resource having some future economic value. It is a physical resource that a firm holds in stock with the intent of selling it or transforming it into a more valuable state. UNIT-I 2. (1x12=12 Marks) SIGNIFICANCE OF MANAGEMENT (4) The significance of management in business activities is relatively greater. The inputs of labour, capital and raw material never become productive without the catalyst of management. It is now widely recognized that management is an important factor of growth of any country. The following points further highlight the significance of management : 1. Achievements of group goals. 2. Optimum utilization of resources 3. Minimisation of cost 4. Change and growth 5. Efficient and smooth running of business 6. Higher profits 7. Provide innovation 8. Social benefits 9. Useful for developing countries 10. Sound organization structure FUNCTIONS OF MANAGEMENT (8) 1.Planning 2.Organizing 3.Staffing 4.Leading/Directing 5.Controlling PLANNING It is the ongoing process of developing the business's mission and objectives and determining how they will be accomplished. Planning includes both the broadcast view of the organization, e.g. it's mission, and the narrowest, e.g. a tactic for accomplishing a specific goal. Planning refers to what is to be done, how it is to be done and when it is to be done. Page 3 of 15

4 Planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed, and indicating when they should be performed. Four steps in Planning are as follows:- Objective Method Timing Strategy Planning is supposed to be done at each and every level of an organization by each and every employee. It is basically forecasting the future course of action. It bridges gap between present and future, planning our vision and mission. Planning includes:- Designing procedures Policies Rules Programmes Budgets ORGANIZING Organizing is an essential function of management. It is the process of accumulating resources from different sources in order to work according to the plans laid out by the management. Organizing is accumulating physical, human and monetary resources. This assembling would depend on the objective set by an organization. Organizing can be thought of as assigning the tasks developed in the planning stages, to various individuals or groups within the organization. Organizing is to create a mechanism to put plans into action. The function of organizing contains following characteristics:- Structuring the functions Structuring duties Establishing authority -subordinate relationships Steps of Organization function:- Determination of activities of the enterprise in the line of its objectives Dividing the activities into appropriate groups Assignment of these activities to individuals Delegation of authority Fixing responsibilities Co-ordination of these activities and authority relation STAFFING It is function in which qualified people are appointed to different posts relating to their skills and strengths. The activities included in this function are recruiting, hiring, training, evaluating and compensating. Page 4 of 15

5 For achieving an objective, the company needs to appoint individuals for various positions in order to complete that objective. The purpose of staffing is to control all recruitment and personnel needs of the organization. After management decides what they needs have, they may decide to hire more employees in a certain department. It is also responsible for training and development, promotions, transfers, and firing. A lot of times management and the human resource department will work together because their roles are similar in this case. LEADING/DIRECTING Directing is a function that comes after staffing of the organization, it is the function in which the management is supposed to lead, direct to a specific goal and motivate the employees for the achievement of any objective, big or small. The manager in this function, is supposed to direct or lead appointed individuals and explain them how is their appointed jobs to be done. Supervision, motivation, leadership, and communication are all involved in the directing function. Management needs to be able to oversee and influence the behavior of the staff and achieve the company s goals, whether that means assisting or motivating them. When morale is high within a company, it usually has a significant impact on job performance and efficiency. Incentive programs and rewards are a great way for a business to keep its employees happy and motivated. CONTROLLING It is a function in which the performance of the organization is measured and then evaluated after which the standard observed is determined to be either good or bad, which then in turn leads to taking preventive and corrective measures. In this function the manager is supposed to explain the job essentials to the individuals and guide them in achieving their goals. Controlling involves:- Measurement of accomplishment against standards Analyzing reasons and deviations Responsibility Fixation Taking corrective measures Controlling is the following roles played by the manager:- Gather information that measures performance Compare present performance to pre-established performance norms. Determine the next action plan and modifications for meeting the desired performance parameters. (OR) Page 5 of 15

6 3. Sole Proprietorship (4) The sole proprietorship is the simplest, oldest and natural form of business organization. Sole means one. Sole proprietorship implies that there is only one trader who is the owner of the business. It is a one-man form of organization wherein the trader assumes all the risk of ownership carrying out the business with his own capital, skill and intelligence. He is the boss for himself. He has total operational freedom. He is the owner, Manager and controller. He has total freedom and flexibility. Full control lies with him. He can take his own decisions. He can choose or drop a particular product or business based on its merits. He need not discuss this with anybody. He is responsible for himself. Examples: Restaurants, Supermarkets, pan shops, medical shops, hosiery shops etc. Salient features of sole proprietorship firm (8) It is easy to start a business under this form and also easy to close. He introduces his own capital. Sometimes, he may borrow, if necessary. He enjoys all the profits and in case of loss, he alone suffers. He has unlimited liability which implies that his liability extends to his personal properties in case of loss. He has a high degree of flexibility to shift from one business to the other. Business secrets can be guarded well. There is no continuity. The business comes to a close with the death, illness or insanity of the sole trader. Unless, the legal heirs show interest to continue the business, the business cannot be restored. He has total operational freedom. He is the owner, manager and controller. He can be directly in touch with the customers. He can take decisions very fast and implement them promptly. Rates of tax, for example, income tax and so on are comparatively very low. 4. UNIT-II (1x12=12 Marks) Economic order quantity (EOQ) (4) EOQ is the order quantity that minimizes the total holding costs and ordering costs. EOQ is Size of the order which gives maximum economy in purchasing any material and ultimately contributes towards maintaining the materials at the optimum level and at the minimum cost. The amount of inventory to be ordered at one time for purposes of minimizing annual inventory cost. Page 6 of 15

7 Ordering cost (4) Ordering cost is associated with ordering a batch or a lot of items. It does not depend on the number of items ordered, but assigned to the entire batch, including transportation costs, receiving costs, and so on. It includes all the allied costs required to place a purchase order for an item like paperwork costs, stationary, postage/courier charge, processing payments, receiving and inspecting the material etc. Carrying/ holding costs (4) This cost is associated with keeping items in inventory for a period of time. It is typically charged as a percentage of rupees value per unit time. In practice, this cost typically range from 15% -30% per year. The carrying/ holding cost consists of three components: Cost of capital, Cost of storage and Costs of obsolescence/deterioration. The financial costs like taxes, insurance, storage, interest etc. (OR) 5. Types of Production system (12) Production systems can be classified as Job Shop, Batch, Mass and Flow production. Page 7 of 15

8 Job production Job production comprises of manufacturing one or few quantity of products designed and produced as per the specification of customers within prefixed time and cost. The distinguishing feature of this is low volume and high variety of products. A job shop comprises of general purpose machines arranged into different departments. Each job demands unique technological requirements, demands processing on machines in a certain sequence. Characteristics of Job production The Job-shop production system is followed when there is: 1. High variety of products and low volume. 2. Use of general purpose machines and facilities. 3. Highly skilled operators who can take up each job as a challenge because of uniqueness. 4. Large inventory of materials, tools, parts. 5. Detailed planning is essential for sequencing the requirements of each product, capacities for each work centre and order priorities. Batch production Batch production is defined by American Production and Inventory Control Society (APICS) as a form of manufacturing in which the job passes through the functional departments in lots or batches and each lot may have a different routing. It is characterized by the manufacture of limited number of products produced at regular intervals and stocked awaiting sales. Characteristics of Batch production Batch production system is used under the following circumstances: 1. When there is shorter production runs. 2. When plant and machinery are flexible. Page 8 of 15

9 3. When plant and machinery set up is used for the production of item in a batch and change of set up is required for processing the next batch. 4. When manufacturing lead time and cost are lower as compared to job order production. Mass production Manufacture of discrete parts or assemblies using a continuous process are called mass production. This production system is justified by very large volume of production. The machines are arranged in a line or product layout. Product and process standardization exists and all outputs follow the same path. Characteristics of Mass production Mass production is used under the following circumstances: 1. Standardization of product and process sequence. 2. Dedicated special purpose machines having higher production capacities and output rates. 3. Large volume of products. 4. Shorter cycle time of production. 5. Lower in process inventory. 6. Perfectly balanced production lines. 7. Flow of materials, components and parts is continuous and without any back tracking. 8. Production planning and control is easy. 9. Material handling can be completely automatic. Flow production Flow production is characterized by the manufacture of a single product. The flexibility of such plants is almost zero as only one type of product can be produced in the plant. Examples are refineries, petrol, kerosene, and diesel oil. Production facilities are arranged as per the sequence of production operations from the first operations to the finished product. The items are made to flow through the sequence of operations through material handling devices such as conveyors, transfer devices, etc. Characteristics of Flow production 1. Dedicated plant and equipment with zero flexibility. 2. Material handling is fully automated. 3. Process follows a predetermined sequence of operations. 4. Component materials cannot be readily identified with final product. 5. Planning and scheduling is a routine action. 6. Special purpose machines and equipments are used 7. Semi skilled workmen and skilled technicians are required 8. Supervision in this type of production is high. 9. The whole plant is like one large machine where materials are entered at the one end. Page 9 of 15

10 UNIT-III 6. Human resources planning (2) It is a pre-determined course of action. Planning is determination of personnel programs and changes in advance that will contribute to the organizational goals. It consists of putting the right number of people, the right kind of people at the right place, at the right time, doing the right things for which they are suited for the achievement of goals of the organization. Man power planning for an organization involves various stages as explained below. (10) Recruitment Two Types of Recruitment Internal Recruitment is a recruitment which takes place within the organization. Internal sources of recruitment are readily available to an organization. Internal recruitment sources are primarily: Transfers Promotions (through Internal Job Postings) Re-employment of ex-employees External Recruitment External sources of recruitment have to be solicited from outside the organization. Some external recruitment sources are : Advertisement Employment Agencies Educational Institutions Labor Contractors Selection The process of assessing candidates and appointing a post holder Applicants short listed most suitable candidates selected Selection process varies according to organisation It is the process of putting right men on the right job. It is a procedure of matching organizational requirements with the skills and qualifications of people. Page 10 of 15

11 Effective selection can be done only when there is effective matching. By selecting best candidate for the required job, the organization will get quality performance of employees. Methods of Selection Interview most common method Psychometric testing assessing the personality of the applicants will they fit in? Aptitude testing assessing the skills of applicants In-tray exercise activity based around what the applicant will be doing, e.g. writing a letter to a disgruntled customer Presentation looking for different skills as well as the ideas of the candidate Placement Placement is a process of assigning a specific job to each of the selected candidates. An actual posting of an employee to the specific job with rank & responsibilities attached to it. It involves assigning a specific rank and responsibility to an individual. It implies matching the requirements of a job with the qualifications of the candidate s skills, abilities, potentials, capacities and their expectations towards the organization. (OR) 7. Performance appraisal (2) According to Heyel, the performance appraisal is the process of evaluating the performance and competencies of an employee in term of the requirements of the job for which he is employed, for the purpose of administration including placement, selection for promotions, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from action affecting all members equally. Performance appraisal may also be defined as a process that involves, (i) Setting work standard; (ii) Assessing the employees actual performance relative to these standards; and Page 11 of 15

12 (iii) Providing feedback to employee with the aim of motivating that person to eliminate performance deficiencies or to continue to perform above par. Performance appraisal process (10) The performance appraisal process generally involves the following steps: Establish performance standards Communicate performance expectations to the employees Measure actual performance Compare actual performance with standards Discuss the appraisal with employee If necessary, initiate corrective action The appraisal process begins with the establishment of performance standards. At the time of designing a job and formulating a job description, performance standard are usually developed for the positions. These standards should be clear and not vague and objective enough to be understood and measured. Once performance standards are established, it is necessary to communicate these expectations. It should not be the part of the employees job to guess that what is expected of them. Unfortunately, too many jobs have vague standards. The problem is compounded when these standards are not communicated to the employees. It is important to note that communication is a two-way street. Mere transference of information from manager to the subordinate regarding expectations is not communication. Communication only takes place when the transference of information has taken place and has been received and understood by the subordinate. Therefore, feedback is necessary from the subordinate to the manager. Satisfactory feedback ensures that the information communicated by manager has been received and understood in the way it was desired. The third step in the appraisal process is the measurement of performance. To determine what actual performance is, it is necessary to acquire information about it. We should be concerned with how we measure and what we measure. To measure actual performance frequently, managers use four common source of information: personal observations, statistical reports, oral reports and written reports. Each has its own strength and weaknesses. However, a combination of them increases both the number of input sources and possibility of receiving reliable information. The fourth step in the appraisal process is the comparison of actual performance with standards. The attempt in this step is to note deviations between standard performance and actual performance so that we can proceed to the next phase of the appraisal process the discussion of the appraisal with the employee. One of the most challenging tasks facing managers is to present an accurate appraisal to the subordinate and then have the subordinate accept the appraisal in the right spirit. Appraising performance touches on one of the most emotionally charged activities - the assessment of another individual s contribution and ability. The impression that subordinates receive about their assessment has a strong impact on their self-esteem and Page 12 of 15

13 very important, on their subsequent performance. Of course conveying good news is considerably less difficult for both the manager and the subordinates than conveying the bad news that performance has been below expectations. In this context, the discussion of the appraisal can have negative as well as positive motivational consequences. This is reinforced, for example, when we recognize that statistically speaking, half of all employees are below average. The final step in the appraisal is the initiation of corrective action when necessary. Corrective action can be of two types. One is immediate and deals predominately with symptoms. The other is basic and deals with causes. Immediate correction action is often described as putting out fires, whereas basic corrective action gets to the source of deviation and seek to adjust the difference permanently. Coaching and counseling may be done or person may be deputed for formal training courses and decision making responsibilities and authority may be delegated to the subordinates. Attempt may also be needed to recommend for salary increased or promotions, if these decisions become plausible in light of the appraisal. UNIT-IV 8. Entrepreneur (4) A person, who takes responsibility for a business project, organizes the resources it requires, and assumes the risk it entails. An entrepreneur searches for change, responds to it and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into resource. Functions of an Entrepreneur (8) 1. He manages business and takes decisions 2. He studies the market and selects the business 3. He makes a selection of plant size 4. He selects plant site 5. He organizes sales and holds the customers 6. He promotes new inventions 7. He coordinates different factors of production 8. He arranges raw material, machinery and finance 9. He employs laborers 10. He deals with government departments such as sales tax, labour, electricity, exportimport, railways. 11. He decides pricing policies 12. He Distributes wages of labourers, interest to the capitalist. (OR) 9. Product Design (4) It is necessary to design the product before starting its manufacture. Page 13 of 15

14 When a product idea is conceived and then developed to the point at which it shows itself to be both technically and commercially viable, it is considered how the product should be made. Design is the conversion of knowledge and requirement into a form, convenient and suitable for use or manufacture. Product design deals with its form and function. Form implies the shape and appearance of the product while function is related to the working of the product. Stages in Product Design process (8) 1. Idea Development: A need is identified & a product idea to satisfy it is put together Someone thinks of a need and a product/service design to satisfy it: customers, marketing, engineering, competitors, benchmarking, reverse engineering 2. Product Screening: Initial ideas are evaluated for difficulty & likelihood of success Every business needs a formal/structured evaluation process: fit with facility and labor skills, size of market, contribution margin, break-even analysis, return on sales 3. Preliminary Design & Testing Market testing & prototype development Technical specifications are developed, prototypes built, testing starts 4. Final Design Product & service characteristics are set Final design based on test results, facility, equipment, material, & labor skills defined, suppliers identified. 1. Idea Development Existing & target customers Customer surveys & focus groups Benchmarking Studying best in class companies from your industry or others and comparing their practices & performance to your own Reverse engineering Disassembling a competitor s product & analyzing its design characteristics & how it was made Suppliers, employees and technical advances 2. Product Screening Operations: Are production requirements consistent with existing capacity? Are the necessary labor skills & raw materials available? Marketing: How large is the market niche? What is the long-term potential for the product? Finance: What is the expected return on investment? Page 14 of 15

15 3. Preliminary Design & Testing General performance characteristics are translated into technical specifications Prototypes are built & tested (maybe offered for sale on a small scale) Bugs are worked out & designs are refined 4. Final Design Specifications are set & then used to: Develop processing and service delivery instructions Guide equipment selection Outline jobs to be performed Negotiate contracts with suppliers and distributors. ****THE END**** Prepared by Approved by: Iftekhar Hussain.B B.E, M.B.A, M.Tech, MAMSI, MRPSI, MISTE, (PhD) Assistant Professor, Dept. of Mechanical Engg., Bapatla Engineering College, Bapatla , Guntur District, Andhra Pradesh, India E mail: iftekharhussainb@gmail.com Cell: S.Krugon, Asst. Prof., MED, BEC, Bapatla. Forwarded by: T.Nanchariah, HOD, MED, BEC, Bapatla Page 15 of 15