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MANAGEMENT AND ENTREPRENEURSHIP

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PART - A UNIT - 1 MANAGEMENT

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Learning objectives
By the end of this chapter the student should be able to: Understand the meaning of management Explain the nature and characteristics of management Enumerate the scope of the management Differentiate management as art, science and profession Differentiate between management and administration Understand the different levels of management Explain development of various management thoughts
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INTRODUCTION

What is management ?
It is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims
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CHARACTERISTICS
1. It is a group activity

TEAM -

TOGETHER EACH ACHIEVE MORE

2. Goal oriented Goals must be set and achieved finally 3. A factor of production Coordinated other functions to achieve the best 4. Universal in character It is a philosophy
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5. Needed at all levels of the organisation 6. Distinct process Accomplishes stated goals 7. Social process manages both internal and external people 8. Dynamic function Ever changing as per requirement 9. Intangible Cannot be measured 10. System of authority A chain of authority and responsibility
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FUNCTIONS OF MANAGEMENT
Managerial knowledge is around five managerial functions 1. Planning 2. Organizing 3. Staffing 4. Leading or directing 5. Coordinating and controlling
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Planning
Process of look ahead It is the course of action Thinking before doing Guides other functions
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Organizing
Identify and classify work to be performed Assign work to people Delegate authority and fix responsibility Enables people to achieve the objectives
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Staffing
Manpower planning Recruitment, selection and training Placement of manpower Development, promotion, transfer and appraisal Employee remuneration
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Leading or directing
Showing the right direction It involves leadership, communication, motivation and supervision
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Coordinating and controlling

Provides unity of action Most essential for the success of other functions
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Science or art or profession?

What is an art ? Any art involves personal skills, practical knowledge, result oriented approach, regular practice and creativity. What is science ? Science establishes relationship between cause and effect, uses scientific methods, universal applicability, predicts future events, and continued observation. Science and art not exclusive, they are complementary.
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Management as science and art: As art: Management emphasizes on applying thoughts, skills, knowledge and efforts to achieve the goal It is also practiced like medical, sports, accountancy, law, etc. As science: It also emphasizes on end results, involves continued observation, etc. but it fails to predict human behaviour, does not depend on fundamental truths only, lacks certainty about results.
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Hence management is both science and art According to Teele, it is 20% science and 80% art Hence we can conclude that Management as practice is an art and the organised knowledge underlying the practice is a science.
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As a profession
Profession is a calling in which one professes to have acquired specialized knowledge, which is used in instructing, guiding and advising others. The profession should have 1. Body of specialized knowledge and techniques NV,MITE NV 2. Formalized methods of acquiring training and experience 3. Establishment of professional associations 4. Code of conduct 5. Priority of service over economic considerations

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Management as profession: Then and Now

Peter Drucker is of the view, no greater damage could be done to our economy or society than to attempt to professionalize management by limiting access to management to people with special academic degree. However the management is now backed by a systematic degree both at UG and PG levels Thus there is a transition from Peter Druckers view to present status 16
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Management versus Administration

Administration is the process of determination of aims for which the organisation exists Management is responsible for realizing these aims in reality Administration is above management Administration is concerned with formation while management is concerned with execution
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Role of management
According to Peter Drucker, Management is a dynamic life giving element in an organization in whose absence resource remain as resource instead of product The following are the roles of management; 1. Coordination of different factors NV,MITE NV 2. Achievement of objectives 3. Increasing productivity 4. Facing competition 5. Modern scientific and technical inventions 6. Exercising a positive influence 7. Adding to real value
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Levels of management
Top management - Board of directors, Chief executives, General Managers Middle management - Managers/heads of all departments, Supervisory management - accountant, Administrative officer, foreman Operating level management - labour class, assistants As the level increases the authority and responsibility increases 19
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Development of management thoughts

Early management thoughts - Scientific management - F.W.Taylor - Modern management theory - Henry Fayol - Behavioral sciences - Max Weber and Elton mayo - systems theory - Chestar Bernard Modern management thoughts
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Scientific management
F.W Taylor proposed this management thought He was the chief engineer in Midvale steel company Published the book, Scientific Management in 1911 Replaced rule of thumb with science. He increased the productivity by scientific methods of production. Divided the authority and responsibility Created more harmony among workers Improved the pay for workers He was supported by Henry Gantt, Frank and Lillian Gilberth. 21
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Operational management theory

Henry Fayol is the father of this school of thought Divided the industrial activities into six categories, viz. Technical, commercial, financial, security, accounting and managerial He proposed his theory in the form of 14 principles of management
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His 14 principles of management are; 1. Division of work 2. Authority and responsibility 3. Discipline 4. Unity of command 5. Unity of direction 6. Subordination of individuals interest to general interest 7. Remuneration to personnel V NV,MITE N 8. Centralisation 9. Scalar chain 10. Order 11. Equity 12. Stability of tenure 13. Initiative 14. Esprit de corps
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Behavioral sciences
Elton Mayo conducted the famous experiment at Howthorne plant of western electric company between 1924 and 1932 The study revealed the influence of social attitudes and relationships of work groups on performance In first phase (1924-27) - illumination experiments were conducted to study the effect of illumination of productivity In second phase (1927-28) - Vrelay assembly test room NV,MITE N experiments to study the effect of change in hours and other working conditions on productivity In third phase (1928-30) - mass interviewing programs to determine workers attitudes and sentiments In fourth phase (1930-32) - bank wiring observation room experiments to determine and analyze the social organization at work
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Implications of Howthorne studies

Social factors in output Group influence Conflicts Leadership Supervision Communication
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Bureaucracy
Max Weber advocated this theory Persons demonstrated ability decides the responsibility assigned to him
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Features of Bureaucracy
Insistence on following standard rules Systematic division of work Principle of hierarchy is followed Required to have knowledge and training of the application of rules All acts, decisions and rule are documented Personnel administration is rational
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Contributions and limitations

Helped to train people with heterogeneous backgrounds systematically But Weber himself started blaming the concept due to:
Over-conformity of rulesNV NV,MITE Back passing (Not encouraging initiative) Categorisation of queries Displacement of goals No real right to appeal Neglect of informal group Rigid structure Inability to satisfy needs of mature individuals
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Modern approaches
1. Quantitative Approach 2. Systems approach 3. Contingency approach
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Quantitative Approach
Also known as Management Science approach. Uses Quantitative tools and techniques Unemotional, reasoned, orderly approach of connecting means to ends Came to fore during WW II in US and UK Prominently known as Operations research Formulates the problem to get optimal answer by considering all constraints
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Systems approach
Provides an integrated approach Instead of emphasising on one aspect plans to combine all disciplines of the organization Advocated by Chestar Barnard, George Homans.
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Key concepts:
Prominence is given to concept of Holism to achieve synergy System is a set of interdependent parts A system can be either closed or open Open system interacts with its environment while the closed system is independent of the environment Organisation should be an open system Every system has a boundary
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Contingency Approach
This also attempts to integrate all Management thoughts No approach is universal and hence the approach should change as situations change. The task of the Manager is to develop a sort of situational sensitivity and practical selectivity
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