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MANAGEMENT ANDENTREPRENEURSHIP [15ES51]

Prepared By :-

Aachal BassiAssociate ProfessorEEE, SMVIT

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Vtusolution.in - Vtu Notes, question Paper, books, Internship, Final Year Projects and many exciting offers for students

Definition of management

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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

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Harold koontz

“Management is the art of getting things done through others and with formally organised groups.”

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F.W. Taylor

“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.”

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George R.Terry

“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.”

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Peter Drucker

“Management is a multipurpose organ

that manage a business and manages

managers and manages workers and

work.”

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Henri Fayol

“Management is to forecast, to plan, to organize, to command, to coordinate

and control activities of others.”

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M.P. Follett

“Management is the art of getting things

done through people.”

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Mary Cushing Nile

“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.”

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Joseph Massie

“Management is defined as the process by which a cooperative group directs action towards common goals.”

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“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

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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

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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.

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� Importance of Management

� Improves relations

� Encourages team work

� Encourage innovations

� Motivates employee

� Optimum use of resources

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� 7 Main functions of management

Planning

Controlling

Organizing

Directing

Innovating

Representing

Staffing

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� Levels of Management

TOP LEVEL

MIDDLE LEVEL

LOWER LEVEL

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� Organizational or Business Functions

Managementfunction

Production Sales Finance Personnel

Planning

Organizing

Directing

Controlling

Innovating

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� 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

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� 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 as Managerial Skills.

� Conceptual Skill

� Technical Skill

� Human relations skill

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

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� 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

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� 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

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A. EARLY CLASSICAL APPROACH

Scientific Management-F. W. Taylor

Administrative Management- Henry Fayol

Bureaucratic Management- Max Weber

HUMAN RELATIONS Approach-Elton Mayovtuso

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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.

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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 belowtheir capacity.

� While serving as chief engineer of Midvale steelcompany, Taylor made several important contributions which are classified as:

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Taylor’s Principles of Scientific Mgmt

Time and motion study

Differential Payement

Drastic Reorganization of supervision

Scientific Recruitment and training

Friendly cooperation between the management and Workers

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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.

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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

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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 .vtu

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� He proposed that there were six primary functions of management and 14 principles of management.

� Functions of management proposed by Fayol were ◦ Forecasting

◦ Planning

◦ Organizing

◦ Commanding

◦ Coordinating

◦ Monitoring

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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..

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� 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.vtu

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� 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

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� 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.

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� 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

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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.

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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

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� 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.

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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.

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� 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

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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.

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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.

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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

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Neo-classical Approches

� Human Relations Approach is treated as neo-

classical 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.

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� 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 1924-1933.

Many management thinkers and engineers were

involved in conducting the experiments.

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4 EXPERIMENTS/ STUDIES

ILLUMINATION EXPERIMENTS

(1924-27)

RELAY ASSEBLY TEST

ROOM EXPERIMENTS

(1927-28)

INTERVIEW PHASE

(1928-30)

BANK WIRING OBSERVATION

ROOM EXPERIMENTS

(1931-32)

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ELTON MAYO Western Electric Hawthorne Plant

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� 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.

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� 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.

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� The rest period was increased to five minutes but thefrequency increased. The productivity slightly decreasedand the girls complained that frequent rest intervalsaffected the rhythm of the work.

� The number of rest was reduced to two of ten minuteseach, but in the morning, coffee or soup was served alongwith sandwich and in the evening, snack was provided.The productivity increased.

� Changes in working hours and workday were introducedsuch as cutting an hour off the end of the day andeliminating Saturday work. The girls were allowed leaveat 4:30pm instead of the usual 5:00pm and later at4:00pm. The productivity increased. Absenteeismdecreased, morale increased and less supervision wasrequired.

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� 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.

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� 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.

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� 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.

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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.

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Behavioural Approach� 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.

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� Contribution of Behavioral Theory

� advocates situational approach

� Builds confidence among employees

� A conducive environment is created

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Modern ApproachesModern :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.

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� 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.

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� A system is a set of interdependent parts:

The Four Parts of a System

Inputs

The people, money,

information, equipment,

and materials required to

produce and

organization’s goods or

services

Outputs

The products, services,

profits, losses,

employee satisfaction

or discontent, and the

like that are produced

by the organizationTransformational

Processes

The organization’s

capabilities in

management and

technology that are

applied to converting

inputs to outputs

Feedback

Information about the

reaction of the environment

to the outputs that affect the

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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.

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Open System continually interacts with its

environment

Closed System has little interaction with its

environment; it receives very little feedback from the

outside

SystemInput Output

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� 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

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

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SYSTEMCulture

Technology

Government Economy

Geography

Demography

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“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

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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.

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Types of planningVission

Mission

Objectives

Strategies

Operational Plans

For Non-repetitive activitiesSingle use plan (programmsand budgets)

For repetitive activitiesStanding

plans(policies,procedures,

methods,rules

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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

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Mission

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

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Objective

� Objectives are goals or target which one wishes to

achieve.

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� 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.

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Strategic Tactical

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

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

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Types of Plans

• Single-use plan: Objectives, Policies, Strategies,

Procedures, Methods, Rules

• Standing plans: Programmes, schedules, Projects

,Budgets

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We must plan for the

future, because people

who stay in the present

will remain in the past.

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Module -2

ORGANISATION

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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.

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� 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.

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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.

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� 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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Importance of Organizing

� 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

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