MEI Notes ATME, Mysore
MEI Notes ATME, Mysore
Notes of Lesson
Objectives
To provide quality education and groom top-notch professionals, entrepreneurs
and leaders for different fields of engineering, technology and management.
To open a Training-R & D-Design-Consultancy cell in each department,
gradually introduce doctoral and postdoctoral programs, encourage basic &
applied research in areas of social relevance, and develop the institute as a
center of excellence.
To develop academic, professional and financial alliances with the industry as
well as the academia at national and transnational levels.
To develop academic, professional and financial alliances with the industry as
well as the academia at national and transnational levels.
To cultivate strong community relationships and involve the students and the
staff in local community service.
To constantly enhance the value of the educational inputs with the participation
of students, faculty, parents and industry.
Vision
Development of academically excellent, culturally vibrant, socially responsible
and globally competent human resources.
Mission
To keep pace with advancements in knowledge and make the students
competitive and capable at the global level.
To create an environment for the students to acquire the right physical,
intellectual, emotional and moral foundations and shine as torch bearers of
tomorrow's society.
To strive to attain ever-higher benchmarks of educational excellence.
3. Provide effective and efficient real time solutions using acquired knowledge in
various domains.
Module -2:
Directing and controlling- meaning and nature of directing, leadership styles, motivation
Theories, Communication- Meaning and importance, Coordinationmeaning and importance,
Controlling- meaning, steps in controlling, methods of establishing control.
Module – 3:`
Entrepreneur – meaning of entrepreneur, characteristics of entrepreneurs, classification and types
of entrepreneurs, various stages in entrepreneurial process, role of entrepreneurs in economic
development, entrepreneurship in India and barriers to entrepreneurship. Identification of
business opportunities, market feasibility study, technical feasibility study, financial feasibility
study and social feasibility study.
Module-4:
Preparation of project and ERP - meaning of project, project identification, project selection,
project report, need and significance of project report, contents, formulation, guidelines by
planning commission for project report, Enterprise Resource Planning: Meaning and Importance-
ERP and Functional areas of Management – Marketing / Sales- Supply Chain Management –
Finance and Accounting – Human Resources – Types of reports and methods of report
generation
Module-5:
Micro and Small Enterprises: Definition of micro and small enterprises, characteristics and
advantages of micro and small enterprises, steps in establishing micro and small enterprises,
Government of India indusial policy 2007 on micro and small enterprises, case study
(Microsoft), Case study(Captain G R Gopinath),case study (N R Narayana Murthy & Infosys),
Institutional support: MSME-DI, NSIC, SIDBI, KIADB, KSSIDC, TECSOK, KSFC, DIC and
District level single window agency, Introduction to IPR.
List of Text Books
1. Principles of Management -P. C. Tripathi, P. N. Reddy; Tata McGraw Hill, 4th / 6th Edition,
2010.
2.Dynamics of Entrepreneurial Development & Management -Vasant Desai Himalaya
Publishing House.
3. Entrepreneurship Development -Small Business Enterprises -Poornima M Charantimath
Pearson
Education – 2006.
4. Management and Entrepreneurship - Kanishka Bedi- Oxford University Press-2017
List of Reference Books
1. Management Fundamentals -Concepts, Application, Skill Development Robert Lusier –
Thomson.
2. Entrepreneurship Development -S S Khanka -S Chand & Co.
3. Management -Stephen Robbins -Pearson Education /PHI -17th Edition, 2003
List of URLs, Text Books, Notes, Multimedia Content, etc
1. https://www.tutorialspoint.com
2. http://www.cse.iitm.ac.in/~vplab/courses/comp_org.html
1. Define management, organization, entrepreneur, planning, staffing,
Course ERP and outline their importance in entrepreneurship
Outcomes 2. Utilize the resources available effectively through ERP
3. Make use of IPRs and institutional support in entrepreneurship
Internal Assessment Marks: 20 (3 Session Tests are conducted during the semester and
marks allotted based on average of best performances).
MODULE 1
INTRODUCTION
1.0 Meaning
1.7 Importance
Characteristics of management
Intangible (not measurable and cannot be seen) but its presence can be felt by efforts in
the production sales and revenues.
3) a group activity and it involves getting things done with and through others
4) Is goal oriented and all actions of management are directed at achieving specific goals.
5)is science as well art and emerging now as a profession
1.2.1 Planning :
Planning is the functions that determines in advance what should be done .It is looking
ahead and preparing for the future.It is a process of deciding the business objectives and
chanting out the methods of attaining those objectives. Planning is a function which is
performed by managers at all levels top middle and supervisory.
1.2.2 Organizing :
To Organize a business is to provide it with everything useful to its functioning
:Personnel,Raw materials ,tools,capital.All this may be divided into two main sections,the
human organization and material organization.Once the managers have established
objectives and developed plans to achieve them,they can design and develop human
organization that will be able to carry out those plans successfully. Staffing is an example
for human organization.
1.2.3 Directing:
After the plans have been made and the organization has been established and staffed ,the
next step is to move towards its defined objectives.This function can be called by various
names “leading”, “Directing”, “Motivating”, “actuating”. But what ever the name used to
identify it ,in carrying out this function the manager explains to his people what they have
to do and helps them to do it to the best of their ability.
1.2.4 Controlling :
The manager ensures that performance occurs in conformity with the plan adapted ,the
instructions issued and the principles established.This is the controlling function of the
management,it involves three elements.
a)Establishing standards of performance
b)Measuring current performance and comparing it against the established standards
c)Taking actions to correct any performance that does not meet these standards.
1.2.5 Innovating :
It is necessary for an organization to grow bigger.But it is necessary that it constantly
grows better.This makes innovation an important function of a manager.Innovation means
creating new ideas which is to improve the product,process and practice.
The management is a must for every organization which encompasses for profit as
well as nonprofit organizations, government as well as non government organizations,
and service as well as manufacturing organizations.
In any organization, there are three levels of management the first-line, middle
and top level managers.
Monitor: must perpetually scan his environment for information interrogate his liaison
nad subordinates to get any solicited information useful for the organization.
Disseminator: manager passes the privileged information directly to the subordinates who
otherwise would not have access to it. Spokesman: may require to spend a part of the
time in representing the organization before various outside groups having some stake in
the organization such as government officials, labour unions, financial institutions.
Decisional roles:
(i)Entrepreneur: in this role the manager proactively looks out for innovation to improve
the organization by means of means creating new ideas, development of new products or
services or finding new uses for the old ones. (ii)Disturbance handler: must act like a
firefighter to seek solutions to various unanticipated problems (iii)Resource allocator:
must divide work and delegate authority among his subordinates. (iv)Negotiator: must
spend considerable time in negotiations. Example: the foreman negotiating with the
workers for the grievance problems.
1.4.2 Managerial skills:
The manager is required to posses three major skills: Conceptual skill which deals with
ideas, human relations skill which deals with people and technical skill which deals with
things.
(i) Conceptual skill: deals with the ability of manager to take a broad and farsighted view
of organization and its future, ability to think in abstract ability to analyze the forces
working in a particular situation.
(ii) Technical skill: are managers understanding of the nature of the job that people under
him have to perform. Refers to the person’s knowledge and proficiency in any type of
process or technique.
(iii) Human relations skill: is the ability to interact effectively with people at all levels and
the manager sufficient ability to
to recognize the feelings and sentiments of others.
to judge the possible reactions to and the outcomes of various courses of action he
amy undertake
to examine his own concepts and values which may enable to more useful
attitudes and about himself. Skill mix of a manager with the change in his level:
o Top level: technical skill becomes less important
o Middle management: human relations skill become more important.
o Supervisory skill: technical skill becomes more important.
1.4.3 Management and administration:
Management Administration
1) Management involves doing which 1)Administration involves thinking
is a lower level function concerned which is a top level function which
with the execution and direction of centers around the determination of
policies and operations. No two plans, policies and objectives of a
separate personnel are required. Each business enterprise.
manager performs both activities and 2) Administration is a term used in the
spends part of his time in administering governance of non-business institutions
and part of his time managing. 2) (such as government, army etc). In
1)Systematic means orderly and unbiased attempt to gain knowledge must be with the
personal or other prejudgment Inquiry being empirical means that it is not an armchair
speculation or priory approach.
2)the scientific information so collected as raw data must be finally ordered and analyzed
with the statistical tools which makes the results
3) Communicable and intelligible which also permits repletion of the study and the
results in the sense that what is discovered is added to which has been found before which
helps us to learn from past mistakes and obtain guides for the future.
To analyze whether management is a science: Management is not like the exact or
natural science such as physics, chemistry etc which are called exact sciences which
makes it possible to study any one of many of the factors affecting a phenomenon
individually by making the other factors inoperative for that moment of time by
examining the effects of heat on the density of air by holding other factors constant in the
laboratory for example but where as in management it is not possible to study in
management as it involves the study of amn and multiplicity of factors affecting him in
which involves the study of monitory incentives on workers’ productivity . Which means
that findings are not accurate and dependable as those of physical sciences and therefore,
a management can be put in the category of a behavioral science. Management are not
culture bound because even though the different cultures may give rise to different
management practices, techoques or theory concepts and principles reamin the same
which laed to the conclusion that manafement did not differ from country to country
which is true even in the field of natural sciences.
Management as Art.
but it cannot replace his managerial skills and qualities which has to be applied and
practiced which makes us to consider manager as an art. Like the art of a musician or the
art of a painter who uses his own skill and does not copy the skills of others Thus we may
conclude that management involves both the elements those of an art and those of science
where in certain aspects of management make it as a science, certain others which
involves the application of skill makes it an art.
Management is a profession:
Characteristics of a profession:
1)existence of organized and systematic knowledge 2) formalized methods of acquiring
training and experience. 3)existence of an association with the professionalization as a
goal 4)existence of an ethical code to regulate the behavior of the members of the
profession 5) Charging of fees based on service.
Management:
1)Does not have fixed norms of managerial behavior 2)no uniform of code of conduct or
licensing of managers 3)entry of managerial jobs are not restricted to to individuals with a
special academic degree only and hence management cannot be called a profession.
Classical approach
1.5.1 Scientific management:
Fredric Winslow(1856-1915) is considered as the father of Scientific management
Exerted a great influence on the development of the management through his experiment
and writings. Conducted as a series of experiments in three companies Midvale steel,
Simonds Rolling machine and Bethlehem Steel while serving as a chief engineer of
Midvale steel company for a period of 26 years.
2) Differential payment: new payment plan called the differential piece work was
introduced which was linked incentives with production. under this plan a worker
received low piece rate if he produced the standard number of pieces and high rate if he
surpassed the standard which would motivate the workers to increase production
3) Drastic reorganization and supervision: introduced two new concepts separation of
planning and doing and functional foremanship. Taylor suggested that the work should be
planned by the foreman and not by the worker and there should be as foreman as there are
special functions involved in doing a job and each of these foreman should give orders to
the worker on his specialty.
4) Scientific recruitment and training: Taylor emphasized the need for scientific selection
and development of the worker. He says that management should develop and train every
worker to bring out his best facilities and enable him to do a higher, more interesting and
more profitable class of work than he has done in past.
5) Intimate and friendly cooperation between the management and the workers: Taylor
argued that both the management and the workers both should try to increase production
rather than quarrel over profits which would increase the profits to such an extent that
labour and management would no longer have to compete for them and should sow
common interest in increasing productivity.
Limitations:
(1)Taylors belief that economic incentives are strong enough to motivate workers for
increased production proved wrong as there are other needs such as security, social needs,
or egoistic needs rather than financial needs
(2) Taylors time and motion study is not accepted as entirely scientific as there is no best
way of doing the same job by two individuals as they may not have same rhythm,
attention and learning speed
(3) Separation of planning and doing the greater specialization inherent in the system
tends to reduce the need for skill and greater monotony of work.
(4)Advances in methods and better tools and machines eliminated some workers who
found it difficult to get other jobs and caused resentment among them.
1)Division of work: In the management process produces more and better work with the
same effort as the various functions of management like planning, organizing, directing
and controlling cannot be performed efficiently by a single proprietor or by a group of
directors which must be entrusted to specialists in related fields.
2) Authority and responsibility: Implies that the manager should have the right to give
orders and power to exact obedience and the manager also may exercise formal authority
and also personal power.
Formal authority is derived from the official position and personal power is the result of
Intelligence, experience, moral worth, ability to lead, past service etc. Responsibility is
closely related to authority and an individual who is willing to exercise authority must
also be prepared to bear responsibility to perforators etc. the work in the manner desired.
3) Discipline: Absolutely essential for smooth running of the business and discipline
means the obedience of authority, observance of rules of rules of service and norms of
performance, respect for agreements, sincere efforts of completing the given job, respect
for superiors. Best means of maintaining discipline are (a)good supervisors at levels
(b)clear and fair agreements between the employees and the Employer.
4) Unity of command: This principle requires that each employee should receive
instructions about a particular work from one superior only if reported to more than one
superior would result in confusion and conflict of instructions.
5) Unity of direction: Means that there should be complete identity between individual
and organizational goals on the one hand and between the departmental goals on the other
hand and both should not pull in different directions.
7) Remuneration: Remuneration paid to the personnel of the firm should be fair and
should be based on general business conditions such as cost of living, productivity of the
concerned employees and the capacity of the firm to pay and the fair remuneration
increases workers efficiency and morale and fosters good relations between them and
management.
11) Equity: Means equality of fair treatment which results from a combination of
kindness and justice and employees expect management to be equally just to everybody
which requires managers to be free from all prejudices, personal likes or dislikes.
13) Initiative: Means freedom to think out and execute a plan which when provided to
the employees leads to innovation which is the landmark of technological progress.
Initiative is one of the keenest satisfactions for an intelligent man to experience and hence
mangers are required to give sufficient scope to show their initiative.
14) Esprit de corps: Means team spirit which should be created b y the management
among the employees and is possible only when all the employees pull together as a team
and there is scope for realizing the objectives of the concern and there should be harmony
and unity among the staff which is a great source of strength to the undertaking which
could be achieved through avoiding divide and rule motto and use of verbal
communication and written communication to remove misunderstandings.
Contributions and limitations of administrative management:
Contributions:
1) Fayols principles met with wide spread acceptance among writers on management and
among managers and managers themselves.
2) Drawing inspiration from Fayol a new school of thought known as the Management
Process School came into existence.
Limitations:
1)Fayols principle of specialization lead to the following dysfunctional consequences:
(a) Leads to the formation of small work groups with norms and goals with each
individual carrying out his own assigned part without bothering about the overall purpose
of the organization as a whole.
(b) Results in the dissatisfaction amongst workers as it does not provide them the
opportunity to use all their abilities.
(c) Results in the dissatisfaction amongst workers as it does not provide them the
opportunity to use all their abilities.
2) one of the findings un Fayols principles is that there is nothing in Fayols writings to
indicate which is the proper one to apply like for example the principle of unity of
command and the principle of unity of specialization or division of labour cannot be
followed simultaneously. In this way many of these principles are full of contradictions
and dilemmas.
3) Fayols principles are based on a few case studies only and have not been tested
empirically and whenever tested have fallen like autumn leaves.
4) These principles are often stated as unconditional statements of what should be done in
all circumstances when what is needed are conditional principles of management.
5.the principles of Fayol such as the principles specialization, chain of command, unity
of direction and span of control result in the mechanistic organizational structures which
are insensitive to employees Social and psychological needs.
6.these principles are based on the assumption that the organization are closed systems
but in reality organizations are open systems and hence the rigid structures so created do
not work well under stable conditions.
1.5.4 Bureaucracy
(ii) Tradition oriented: all managerial positions are handed down from generation to
generation and who are you rather than what you can do becomes the primary function.
(iii) Bureaucratic oriented: is based on the persons demonstrated ability to hold the
position and no person can claim particular position either because of his loyalty to the
leader or because the position has been traditionally held by members of his family and
the people earn positions because they are presumed to be best capable of filling them.
1)insistence on following standard rules: There should not governed by the personnel
preferences of the employer but it should be governed by the standard rules which
provides equality in the treatment of subordinates and continuity and predictability of
action.
2) Systematic division of work: increases production by improving efficiency and saving
time in changing over from one job to another.
3) Principle of hierarchy followed: each lower officer is under the control and supervision
of a higher one.
4) Not necessary for the individual to have knowledge of and training in the application
of rules: These form the basis on which legitimacy is granted to his authority.
5) Administrative acts, decisions and rules are recorded in writing: makes the
organization independent of people besides making peoples understanding more accurate.
6) There is rational personnel administration: people are selected on the basis of their
credentials and merit and are paid according to their option in their hierarchy, promotions
are made systematically and there is on winning peoples loyalty and commitment.
Example: a doctor in the emergency spends precious time in filling various forms before
helping the accident victim.
2)buck passing: In situations where there are no rules, employees are afraid of taking
decisions independently and may be punished for wrong decisions and therefore either
shift decisions to there or postpone them which results in the increase of office work and
leads to Parkinson’s disease.
3) Categorization of queries: Probable queries coming from outside are generally
classified in advance into a few broad categories and answer for each category are
prepared in advance. On receiving the query the employees job is to simply determine its
category and tick the reply applicable to that category
4) Displacement of goals: Very common phenomena in bureaucratic organization and
takes place when an organization substitutes for its legitimate goals some other goal
which it was not created ,for which resources were not allocated to it and which it is not
known to serve. Can occur in several ways:
(a) occurs when the leaders try to devote to preserve the organization itself rather than its
intial purpose and when several interest groups try to use the organizational goals to serve
their own golas.
(b) occurs when the employees try to internalize the rules and the goals are totally
forgotten which is called professional automation. Example: praising the librarian for neat
and orderly look of the library and not for increase in the number of book borrowers.
Praising the factory worker for his regular attendance and not for the quality of his
performance.
(c) Secondary goals of an organization subordinating its primary goals so that latter are
not served effectively. Example: university initiating certain social or extra-curricular
activities to attract students to classes and universities consuming greater time and
resources in conducting the same rather than teaching a course.
(d)sectional interests developing among the heads of sub-units of the organization which
may lead to forget the organizational goals.
5)No right of appeal: The clients the bureaucratic organization feel dissatisfied because
they have no right of appeal
6) Neglect of informal groups: Forms informal groups which play an important role in the
organization which has lead to the development of group dynamics which are ignored by
the bureaucratic organization.
7)Rigid structure: precise description of roles and over conformity of rules make
bureaucratic structures rigid which work well in stable environments but do not work well
in today’s organizational flexible structures which require constant mentoring, collection
of information and changing of job descriptions and roles of the employees.
8) Inability to satisfy the needs of the mature individuals: A mature individual wants
independence, initiative, self-control, opportunity to use his all skills and information to
plan his future which is not provided as the hierarchy and control features work against
this organization.
Illumination Experiments:
Was considered to be the first phase of study Productivity was correlated with
illumination, tested, experiments were done on a group of workers and the productivity
was measured at various levels of illumination for the first time and two groups were
formed and set up in different buildings for the second time this time one group called the
control group worked under the constant level of illumination and the other group called
the test group called worked changing levels of illumination. Results: When post-
productivity of two groups were compared, it was found that illumination affected
production only marginally.
Relay assembly test room:
Was considered to be the second phase of study In this phase, the object of study being
broadened, along with the impact of illumination on production, other factors such as the
length of the working day, frequency and duration of rest pauses and other physical
conditions were taken into consideration. A group of six women workers, who were
friendly with each other, were selected for the experiment, were told about the
experiment, were made to work in a informal atmosphere with the supervisor researcher
in a separate room who acted as a friend, philosopher and guide. Several variations were
made in the working conditions during the study, to find the most ideal combination for
production. Results: the researchers found that the production group had no realtion with
the working conditins which went on increasing and stabilized at a high level even when
all the improvements were taken away and the poor pre-test conditions were reintroduced
and something else was responsible for this. (a)feeling of importance among girls as
result of participation in the research and the attention they got (b)warm informality
,tension-free interpersonal and social relations amongst small groups and relative freedom
from strict supervision and rules lead to these results (c)high group cohesion among girls
3.
Interviewing programme
The knowledge about the informal group processes which were accidentally acquired in
the second phase made researchers design the third phase. They wanted to know about the
basic factors responsible for human behavior at work Method used to know the basic
factors: More than 20000 workers were interviewed. Questions were asked relating to the
type of supervision, working conditions, living conditions and so on.
Indirect questions were asked to the workers and the workers were free to talk about their
favorite topics related to their work environment. Results: the study revealed that the
workers social relations inside the organization had an unmistakable influence on their
attitudes and behavior and about the all-pervasive nature of informal groups on their
culture and the production norms which the members were forced to obey.
Bank wiring observation room: Can be considered as the fourth phases of
experimentation.
Involved in-depth observation of 14 men making terminal banks of telephone wiring
assemblies, to determine banks of telephone wiring assemblies, to determine the effect of
informal group norms and formal economic incentives on productivity.
Results
Study revealed that group evolved its own production norms for each individual worker
which were much lower than the those set by the management and the workers would
produce that much and no more thereby defeating the incentive system This artificial
restriction of production saved workers from a possible cut in their piece rates and
protected weaker and slower workers from being reprimanded or thrown out of jobs.
Class of workers-production rate Called foolish-was more than the group norm were
isolated, harasses or punished by the group in the several ways and were called rate
busters. Those who were too slow were nicknamed as chisellers. Those who complained
to the supervisor against their coworkers were called squealers.
Conclusion
The experience of the Hawthorne experiments had a profound impact on the luminaries of
the human relations movement. Came to realize the important role played by informal
groups in the working of an organization.
Limitations:
1) is swing in the opposite direction and is as much s incomplete as the scientific
management and administrative management. The human relations writers saw only the
human variable as critical factor
Believed that the realistic model of human motivation as complex because people react
differently for the same situation or react the same way to different situations and no two
people are exactly alike.
system cannot be accurately perceived without understanding all its parts. Each part bears
a relation of interdependence to every other part which rather than dealing separately with
the various parts of the organization as a whole. The above concept facilitates more
effective diagnosis of complex situations and increases the likelihood of appropriate
managerial functions
3)a system can be either open or closed: Open system is one which interacts with its
environment and closed system is one which is independent of the environment. All
living systems are actually dependent on the external environment for information,
material and energy. They enter the system from the environment as inputs and leave the
system as outputs and therefore they are rightly conceived as open systems. Inputs of a
business organization: raw materials, power, finance, equipment, human effort,
technology, information about market, new products, government policies and the
changes these inputs into output of goods, services and satisfaction and the transformation
process is known as throughput. The transformation process can be categorized as
follows: Physical(as in manufacturing) Location(as in transportation Exchange(as in
retailing) Storage(as in warehousing) Physiological(as in telecommunications) The output
of a system is always more than the combined output of its parts which is called synergy.
Which in organizational terms means that as separate departments within organization
cooperate and interact they become more productive if they acted in isolation. One
important mechanism of a system which enables to exercise control over its operations
is feedback as shown in the figure.
4)Every system has a boundary: boundaries can be clearly observed and therefore more
precisely defined in the case of physical and bilological systems than in case of social
systems. For example: we can define the physical boundaries of the human body or a plot
of land very precisely but it is difficult to define the boundary of an orgainisation and
they do not have clearly observable boundaries.
Concept of a boundary:
1) Helps a system in determining whether it ends and the other system begins.
2) Divides those elements that are a part of a system from those that are a part of its
environment
3) Enables a system to protect its transformation process from the vagaries of its
environment. Contributions of systems approach: A problem here is studied both at the
level of the subsystem (micro level) and the total system (macro level). Application of
this approach results in the requirement that executives in addition to having the skills in
their own functional areas should have enough knowledge of other areas also who should
be generalists also. Contingency approach: Is the second approach which tries to
integrate the various schools of management thought. There is no best way of doing
things under all conditions Methods and techniques are highly effective in one situation
may not work in other situations and results differ because the situations differ.
The task of a manger is to try to identify which technique will in a particular best
contribute to the attainment of the management goals and managers have therefore to
select the situational sensitivity and practical selectivity. Contingency views are
applicable in designing organizational structure, in deciding the degree of
Planning :
Planning is the beginning of the process management
A manager must plan before he can possibly organize, staff, direct or control. Because
planning sets all other functions into action, it can be seen as the most basic function of
management. Without planning other functions become mere activity.
Corollary
A plan must be flexible. By flexibility of a plan is mean its ability to change direction to
adapt to changing situations without undue cost. It needs to possess a built in flexibility in
at least major areas technology, market, finance, personal and organization. Flexibility in
technology means the mechanical ability of a company to change and vary its product-
mix according to changing needs of its customers. Flexibility in market means the
company’s ability to obtain additional funds on favorable terms whenever there is need
for them. Flexibility in personnel means the company’s ability o shift individuals from
one job to another. Flexibility in organization means the company’s ability t shift
individuals from one job to another. Flexibility in organization means the company’s
ability to change the organization structure. Flexibility is possible only within the limits.
it is almost invariably true that it involves extra cost. Sometimes it may e so expensive
that it benefits may not be worth the cost. People may develop patterns of the thought that
are resistant to change. Sometimes people may develop patterns f thoughts that are
resistant to change. Sometimes already established and procedures may become so deeply
ingrained in the organization that changing them may become difficult. In most cases
irretrievable costs already incurred in fixed assets, training, advertising may block
flexibility. Planning is all pervasive function. In other words, planning is important to all
managers regardless of their level in the organization. There are however some
differences in involvement by managers at different levels. One major difference
concerns the time period covered. Top level managers are generally months to five years
later, or even after that. Lower level managers are more concerned with planning
activities for the day, week or month .first line supervisors, for example plan the work
activities for their people for the day. They are not responsible for predicting sales levels
and ordering materials to produce Products six months in the future. A second major
difference concerns the time spent on planning. Top managers generally spend more time
on planning. They are concerned with establishing objectives And developing plans to
meet those o bjectives. Lower level managers are more involved in executing these plans.
If a manager does not make any provision for the replacement of plant and machinery, the
problems he will have to face after ten years can well be imagined. The manager has a
feeling of being in control if he has anticipated some of the possible consequences and
has planned for them. It is like going out with an umbrella in cloudy weather. It is
through planning that the manger relates the uncertainties and possibilities of tomorrow to
the facts of today and yesterday.
1.7.4 Facilitates control: In planning, the manager sets goals and develops plans and to
accomplish these goals. These goals and plans then become standards against which
performance can be measured. The function of control is to ensure that activities conform
to the plans. Thus control can be exercised only if there are plans.
1.7.5 Trains executives: Planning is also an excellent means for training executives.
They become involved in the activities of the organization and the plans arouse their
interest in the multifarious aspects of planning.
Forms of planning:
Planning can take many forms and styles in practice. Planning can be
comprehensive or limited in scope. There are organizations that plan to the last
detail. Others rest content, simply broad targets for the next financial period.
Planning may be done by an army of experts using sophisticated forecasting
techniques. Or it may be done in a seat of the pants manner, by a number of
executives, sharing their judgments over a cup of coffee. Planning may begin at
the top with top executives deciding on targets and passing them down for
implementation or it may begin at the bottom with the lowest sections formulating
their targets and sending them up for evaluation and coordination. Planning may
be done participitavely with many members of the organization chipping in with
their ideas and judgments or it may done in the elitist manner by a few executives
or technocrats.
Thus there are many forms and styles of planning, and planning practices are
likely to vary from organization to organization. One useful way of classifying
them is to distinguish between strategic planning and tactical planning.
About Strategic planning involves deciding what the major goals of the entire
organization will be and what policies will guide the organization in its pursuit of
these goals and depends on the data collecteif the d outside the organization such
as market analysis, estimates of costs, technological developments and so on and
if the data being mostly imprecise make strategic planning less certain.
About Tactical planning involves deciding specifically how the resources of the
organization will be used to help the organization achieve these strategic goals. for
example if the organization has prepared a ten-year strategic plan which envisages
a profit rate of 25% on capital employed in the tenth year, it also necessary to
prepare a more detailed tactical plan for the next year, with a specific target of
10% on the capital employed.
i)Objectives
ii)Strategies
1.8.1 Objectives:
Are the goals of the organization which the management wishes the organization to
achieve. These are the end points or pole-star towards which all business activities like
organizing, staffing, directing and controlling are directed. Only after having defined
these end points the can determine the kind of organization the kind of personnel and
their qualifications, the kind of motivation, supervision and direction and the control
techniques which he must employ to reach these points. Objectives are the specific targets
to be reached by an organization. They are the translation of the organization’s mission
into concrete terms against which the results can be measured. Example:1)university
decision to admit a certain number of students or the hospitals decision to admit a certain
number of indoor patients.
Characteristics of the objectives
1)Objectives are multiple in number : Implies that every business enterprise has a
package of objectives set out in various key areas. There are eight key areas in which
objectives of performance and results are set which are (i)market standing (ii)innovation
(iii)productivity(iv)physical and financial resources(v)profitability (vi)Manager
(ii) They act as motivators for individuals and departments of an enterprise imbuing their
activities with a sense of purpose.ult in undesirable com
(iii) They eliminate haphazard action which may result in undesirable consequences.
(iv) Facilitate coordinated behavior of various groups which otherwise may pull in
different directions.
(v) Function as a basis for managerial control by serving as standards against which
actual performance can be measured.
(vi)They facilitate better management of the enterprise by providing a basis for leading,
guiding, directing and controlling the activities of people of various departments.
(vii)Lessen misunderstanding and other conflict and facilitate communication among
people by minimizing jurisdictional disputes.
(viii) Provide legitimacy to organizations activities.
1.8.2 Strategies
A corporate strategy is a plan which takes these factors into account and provides optimal
match between the firm and the environment. Two important activities are involved in
strategy formulation
(i)environmental appraisal (ii)corporate appraisal.
(i) environmental appraisal:
(1)Political and legal factors: An analysis of the relevant environment results in the
identification of threats and opportunities. Key environment factors which need to b e
studied are (a)stability of the government and its political philosophy. (b)taxation and
industrial licensing laws (c)monitory and fiscal policies (d) Restrictions on capital
movement, repatriation of capital, state trading etc.
(2)economic factors (a)level of economic development and distribution of income (b)
Trend in prices, exchange rates, balance of payments. (c) Supply of labour, raw, material,
capital etc.
(3)competitive factors: (a)identification of principle competitors (b)analysis of their
performance and programmers in major areas (c)antimonopoly laws and rules of
competition (d)protection of patents, trademarks, brand names and other industrial
property rights
(4)social and cultural factors: (a)literacy levels of population (b)religious and social
characteristics (c)extent and rate urbanization (d)rate of social change
(ii)Corporate appraisal: Involves the analysis of company’s strengths and weaknesses. A
company’s strength may lie in outstanding leadership, excellent product design, low-cost
manufacturing skill, efficient distribution, efficient customer service, personal
relationship with customers, efficient transportation and logistics, effective sales
promotion, high turnover of inventories and capital etc. The company must plan to exploit
these strengths to the maximum. Similarly it may suffer from a number of weaknesses.
Standing plans:
1.8.3 Policies: A policy is a general guideline for decision making which sets up
boundaries around decisions including those that cannot be made and shutting out those
that cannot. A policy can be considered as a verbal, written or implied overall guide
setting up boundaries that supply the general limits and the direction in which ,managerial
action takes place Policies suggest how to do the work. They do not dictate terms to
subordinates and provide only a framework within which the decisions must be made by
the management in different spheres.
Example:
1)Recruitment policy of a company is to recruit meritorious people through the
employment exchange
2) Distribution policy of a fertilizer company is farmer oriented. Policies and objectives
guide thinking and action, but with a difference. Objectives are end points of planning
while policies channelize decisions to these ends.
Advantages of policies:
1) Policies ensure uniformity of action in respect of matters at various organizational
points which make actions more predictable.
2) Policies speed up decisions at lower levels because subordinates need not consult their
superiors frequently.
3)makes it easier for the superior to delegate more and more authority to the his
subordinates without being unduly concerned because he knows that whatever decision
the subordinates make will be within the boundaries of the policies.
4) Policies give a practical shape to the objectives by elaborating and directing the way in
which the predetermined objectives are to be attained.
1.8.4 Types of policies:
Can be classified on the basis of sources, functions or organizational levels
1)Classification on the basis of sources: three types originated, appealed, implied and
imposed policies
(a) Originated policies: Are usually established formally and deliberately by top managers
for the purpose of guiding of actions of their subordinates and also their own. These
policies are set out in print and embodied in manual.
(b) Appealed policies: Are those which arise from the appeal made by a subordinate to
his superior regarding the manner of handling a given situation and comes into existence
because of the appeal made by the subordinate to the supervisor.
(c) Implied policies: are also policies which are stated neither in writing nor verbally.
Such policies are called implied policies. Only by watching the actual behavior of the
various superiors in specific situations can the presence of implied policy is ascertained.
(d) Externally imposed policies: are the policies which are imposed on the business by
external agencies such as government trade associations, and trade unions. Example:
policy dictated by the government law.
For example: Sales function may have policies relating to market. Production function:
may policies relating to the method of production, output, inventory, research. Finance
function: may have policies relating to capital structure, working capital, internal
financing etc. Personal function: may have policies relating to recruitment, training,
working activities, welfare activities etc. 3.classification on the basis of organizational
level: on this basis range from major company policies through major departmental
policies to minor or derivative polices applicable to the smallest element of organization.
Guidelines for effective policy making:
(1) as far as possible should be stated in writing and should be clearly understood by
those who are supposed to implement them.
(2) Should reflect the objectives of the organization, define appropriate methods and
action.
(3) The top managers and the subordinates should participate in the formulation of
policies for successful implementation of the policies.
(4) Should strike a reasonable balance between the stability and flexibility. Conditions
change and policies must change accordingly. The degree of stability should also prevail
to achieve the sense of direction
(5) Different policies should not pull in different directions and s one should support one
another and they must be internally consistent.
(6) Should not detrimental to the interest of the society and must confirm to the canons of
ethical behavior which prevail in society.
(7)must be comprehensive to cover as many contingencies as possible (8)Should be
periodically reviewed in order to see whether they are to be modified, changed or
completely abandoned and new ones put in their place.
1.8.5 Procedures
Policies are carried out by means of more detailed guidelines called procedures. A
procedure provides a detailed set of instructions for performing a sequence of actions
involved in doing a certain piece of work. The same steps are followed each time that
activity is performed.
For example: the procedure for purchasing raw material may be
(i)the requisition from the storekeeper to the purchasing department.
(ii) Calling tenders for purchase of materials.
(iii)placing orders with the suppliers who are selected
(iv)inspecting the materials purchased by the inspecting department and
(v) Making payment to the supplier of materials by the accounts department. Similarly,
the procedure for the recruitment of personnel may be
(i)inviting applications through advertisement (ii)screening the applications
(iii)conducting written test (iv)conducting interview for those who have passed the
written test and (v) Medical examination of those who are selected for the posts.
Procedures may also exist for conducting the meetings of directors and shareholders,
granting loans to employees, issuing raw materials from the stores department, granting
sick leaves to the employees, passing bills by the accounts department.
1)Establishing verifiable goals or set of goals to be achieved: The first step in planning
is to determine the enterprise objectives which are often set up by the upper level or top
managers, usually after number of possible objectives have been carefully considered.
There are many types of objectives managers may select: desired sales volume or growth
rate, the development of a new product or service or even a more abstract goal such as
becoming more active in the community. The type of goal selected will depend on a
number of factors: the basic mission of the organization, the value its mangers hold and
the actual and the potential abilities of the organization.
2)Establishing planning premises: it is the second step in planning to establish planning
premises which is vital to the success of planning as they supply pertinent facts and
information relating to the future such as population trends, general economic conditions,
production costs and prices, probable competitive behavior, capital and material
availability and government control and so on.
Planning can be variously classified as under
4) Finding alternate courses of action: The fourth step of planning is to find the alternate
courses of action. Example: securing the technical knowhow by engaging a foreign
technician or by training staff abroad.
5)evaluating and selecting the alternate courses of action: After selecting the alternate
courses selection the best course or course of action with the help of quantitative
techniques and operations research.
6)developing the derivative plans: Once plan formulated, its broad goals must be
translated on day to day operations of organization Middle level managers must draw up
the appropriate plans, programmes and budgets for their sub-units which are described as
derivative plans.
7)measuring and controlling the process: Plan cannot be run without monitoring its
progress. The managers must check the progress of their plans.
Limitations of planning:
1) Planning is expensive and time consuming process. it involves significant amount
of money, energy and also risk without any assurance of the fulfillment of the
organizations objectives
2) Sometimes restricts the organization to the most rational and risk free
opportunities. Curbs the initiatives of the manager and forces him to operate within
the limits set by it and sometimes cause delay in decision making in case of
emergency.
3) Scope of planning is limited with rapidly changing situations.
4) Establishment of advance plans tends to make administration inflexible. Example:
business changes, change in government policy, may make the original plan lose its
value.
5) Another limiting factor in planning is the formulating of the accurate premises.
6) Planning may sometimes face peoples resistance to it.
Making plan effective: Guidelines for making the plan effective
1)Coordination: It is important that all plans fit together not only in terms of content
but also important plans fit together at proper time.
2) Communication: Every manager in the organization should have access to
complete information not only pertaining to his own area of planning but also others
area.
3) Participation: Participation of the subordinates with superiors is a key element in
making planning effective.
4) Proper climate: Top managers must establish proper climate for planning.
1.10 Organization
1)An organization basically consists of group of people who form the dynamic human
element of the organization
2) Organization helps in identifying the various tasks to be performed which are assigned
to the individuals to perform to achieve the common objectives or common purpose of the
organization.
7) Organization helps in the realization of the plans made by the managers 8)It helps in
nurturing and growing special skills and talents by the virtue of division of labour 9)it
facilities seamless communication
The purpose of any organization is to achieve goals for which it is formed which aims at
achieving common objectives through its group member efforts. The organizations exist
for different purpose and the efforts for organizational members are directed for the
achievement of this purpose. For example: For business organization the purpose is to
develop people and their skills for contributing towards the growth of the enterprise
through profits For nonprofit organization the purpose the objective would be to serve
the members of the committee in a productive manner
a) Business organization: are those organizations which are formed with the purpose of
earning profits the sole purpose being to earn surplus in the form of profits without which
they cannot survive and grow Example: Firms engaged in manufacturing, trading,
services etc.
b)Non -profit service organizations: are those organizations who do not have the motive
of making.
profits but to serve the people of the a specific community or a segment of a society.
Example: Rotary club, Lions club, Orphanages, Charitable hospitals etc.
Formal organizations :are officially formed with definite structure which describes
authority and responsibility, relationship and behavior of organizational members
Informal organization: do not have any official recognition and they are formed due to the
social interaction needs of the people resulting in different types of social networks.
Found in all formal organizations where people come together and form social groups for
various reasons like common interests, friendship or affiliation, satisfaction of emotional
needs
3) Span of control: As there is a limit to the number of persons that can be supervised
effectively by one boss, the span of control should be as far as possible, the minimum.
That means, an executive should be asked to supervise a reasonable number of
subordinates only.
4)Exception :As the executives at the higher levels have limited time, only exceptionally
complex problems should be referred and routine matters should be dealt with by the
subordinates at lower levels. This will enable the executives at higher levels to devote
time to more important and crucial issues.
5) Scalar Principle: This Principle is sometimes known as the “chain of command”. The
line of authority from the chief executive at the top to the first-line supervisor at the
bottom must be clearly defined.
6) Unity of command: Each subordinate should have only one superior whose command
he has to obey. Multiple-subordination must be avoided for it causes Uneasiness,
disorder, indiscipline and undermining of authority.
7) Delegation: Proper authority should be delegated at the lower levels oh manager of the
organization also. The authority delegated should be equal to responsibility
That is each manager should have enough authority to accomplish the task assigned to
him. Inadequate delegation often results into multiplication of staff and service activity..
8) Responsibility: The superior should be held responsible for the acts of his subordinates.
No superior should be allowed to avoid responsibility by delegating authority to his
subordinates
9) Authority: The authority is the tool by which a manager is able to accomplish the
desired objective. Hence, the authority of each manager must be clearly defined. Further,
the authority should be equal to responsibility.
10) Efficiency: The organization structure should enable the enterprise to function
efficiently and accomplish its objectives with the lowest possible cost.
11) Simplicity: The Organization structure should be as simple as possible and the
organization levels should as far as possible, be minimum. A large number of levels of
organization means difficulty of effective communication and coordination. Too many
committees and excessive procedures Also unduly complicate the structure.
13) Balance: There should be a reasonable balance in the size of various departments,
between centralization and decentralization, between the principle of span of control and
the short chain of command, and among all types of factors such as human, technical and
financial.
14) Unity of direction: There should be one objective and one plan for a group of
activities having the same objective. Unity of direction facilitates unification and
coordination of activities at various levels.
15) Personal Ability: As people constitute an organization, there is need for proper
selection, placement and training of staff. Further the organization structure must ensure
optimum use of human resources and encourage management development programmes.
16) Acceptability: The structure of the organization should be acceptable to the people
who constitute it.Two things generally happen if people oppose the structure: it is
modified gradually by the people, or it is used ineffectively.
1.11.1 Departmentalization
1) Functions: the most widely used base for departmentalization is function. Each major
function of the enterprise is grouped into a department. Example: finance and marketing
departments in a manufacturing company.
Advantages
1)It is a simple form of grouping activities for small organizations which manufacture
only a limited number of Products or render only a limited number of services.
Everybody in this form of organization understands and feels highly secure both in his
work and in relationships.
4) It ensures economy, there is only one department related to one function for the entire
function.
5) Manpower and Other resources of the company are effectively utilized by time-
sharing then across products or projects.
Drawbacks
1) It fosters sub-goal loyalties. It is difficult for anyone to understand the task of the
whole and to relate his own work to it. Each manager thinks only in terms of his own
departmental goals and does not think in terms of the company as a whole. Example: the
manufacturing department may concentrate on meeting cost standards and delivery dates,
and neglect quality control Result: the sales or marketing department may be flooded with
complaints lead to inter-departmental conflicts and disagreements, feuds,
misunderstandings etc.
2)Does not offer a good training ground for the overall development of manager who
gains expertise in handling problems of his particular department only
3) Unsuitable for organizations which are large in size, complexity or innovative scope.
4) In this form the customer needs evoke conflicting interpretations from each department
head like the story of twelve blind people and an elephant.
5)In this form the procedures are overly complicated, wasteful and time consuming
weakness called organizational arthritis develops where the structure is rigid and resists
adaptation.
6) It is difficult to judge whether the activities of a particular department are worth their
cost.
1.11.2 Products
Eminently suited for large organization manufacturing a variety of products. For each
major product a separate semi autonomous department is created and is put under the
charge of a manager who may also be responsible for producing profit of a given
magnitude. For each department, all the needed manufacturing, engineering, marketing,
manpower and other facilities are assembled. Product departmentalization is the logical
pattern to be followed when each product requires raw materials, manufacturing
technology and marketing methods that are markedly different from others from those
used by other products in the organization. Example: many companies like Hindustan
Lever, Richardson Hindustan and Johnson & Johnson have product based departments.
Advantages:
1) This form relieves top management from operating task responsibility and therefore
can concentrate on such centralized activities such as finance, R&D and control.
4) In this form natural team work develops as each worker sees that his contribution is
needed to make the whole product.
Drawbacks:
2) Extra expenditure is incurred in maintaining a sales force for each product line.
1.11.3 Customers
An enterprise may be divided into number of departments on the basis of the customers
that it services. Example: An electronics department may be divided into separate
departments for military, industrial and consumer customers.
Regions or territory
Advantages:
2) Provides each regional head an opportunity to adapt to his local situation and customer
need with speed and accuracy.
5)enables the organization to compare regional performances and invest more resources
in profitable regions and withdraw resources from unprofitable ones
Drawbacks:
1) Gives rise to duplication of various activities and many of the routine and service
functions carried out by the regional offices can be carried out centrally by the head office
very economically.
2) Many regional units may forget the overall interest of the total organization
1) Accidental occurrences when carried out from one shift to another affect the product of
the other shift also.
2) Workers working in the shift may incomplete work to workers of the following shift.
3)Difficult for the manager to correctly measure the performance of certain department
1.11.5 Committees
A committee is a group of people who have been formally assigned some task or some
problem for their decision and implementation Classification of committees: be broadly
classified into advisory committees and executive committees.
Advisory committees:
2) Only have a recommendation role and cannot enforce implementation of their advice
or recommendation. Examples of advisory committees formed in business enterprises:
works committees, sales committees, finance committees etc.
Executive committees:
2) Not only take decisions but also enforce decisions and thus perform a double role of
taking a decision nad ordering its execution. Example: Board of directors is an example
of an executive committee. Are also classified as standing committees or ad-hoc task
forces.
(ii) Ad-hoc committees: Have a short duration, dissolved after the task is over, or the
problem is solved and their members are chosen for their skills and experience.
Advantages:
1) People get an opportunity to better understand each other’s problems and move
towards organizational goals.
2) Provide a forum for the pooling of knowledge and experience of many persons of
different skills, ages and backgrounds which helps in improving the quality of decisions.
3) Provide an opportunity to many persons to participate decision-making process.
4) Are excellent means of transmitting information and ideas, both upward and downward
5) Contribute indirectly to their training and viewpoints.
6) Are impersonal inaction and hence their decisions are generally unbiased and are based
on facts and there is no fear of single individual taking a decision.
Weaknesses
1) Committees keep up minutes and waste hours by setting up a committee which takes a
longer time to get action than from an individual manager.
4) Members of the coordinating committees feel appointed to protect their interests of the
departments rather than finding appropriate solution to the problem.
6) Decisions are generally based on some compromise among ymembers which are not
best decisions which results in log rolling.
8) Chairman often changes, influence accumulate in the hands of some other person
which may result in domination and may bring about resistance from others.
Use of Authority
1) It enforces the obedience to norms: The subordinate who accepts the authority of the
superior is motivated to an extent that by the fear of sanctions against him.
2)secures expertise in making the decisions: Helps to enable the enforcement and
execution of expert advice given by the specialists in the organization.
Responsibility
2) The greater are the important decisions made at the lower levels.
4) The fewer are the people to be consulted at the lower level and lesser is the checking
required on the decisions made at the lower levels. Centralization and decentralization are
not absolute but relative. Absolute centralization is not possible except in one man
enterprise. Decentralization characteristics all organizations and there cannot be absolute
decentralization of authority .
Delegation Decentralization
1)is a process, which refers to the granting 1) is the end result of delegation and
of authority and the creation of dispersal of authority
responsibility between one individual to 2)the superior is relieved from his
another responsibility for the work decentralized
2)superior continues to be responsible for and the subordinate becomes liable for that
the work delegate to his subordinates 3)is optional and may or may not be
3)is vital and essential to the management practiced as a systematic policy.
process and only through delegation
subordinates can be involved in the
organization and management can get
things done
Advantages of decentralization
1) Reduces the problem of communication and red tape: As organization grows bigger it
takes long time for top managers to make decisions. Decentralization unclogs the
communication process and improves efficiency.
2)Permits quicker and better decision making: The employees being close to the work,
knowledgeable often make better and swift decisions than their superiors who are not in
touch with the specifics of the situation
3)Recognizes and capitalizes on the importance of the human element: Gives more
power, prestige and status and feel more motivated and satisfied in their jobs
4)Leads to a competitive climate within the organization: Where each division is made
into a distinct profit centre, its head is encouraged to to exercise initiative and
ingenuineity.
Advantages of centralization:
3)Decisions taken account the interests of the employees of the entire orgainisation
The process of recruiting, retaining, developing and nurturing the workforce is called
staffing Advantages of proper and efficient staffing.
1) It helps in discovering talented and competent workers and developing them to move
up the corporate ladder.
2) Ensures greater production by putting the right man in the right job.
4) Helps to prevent underutilization of personnel through over manning and the resultant
high labour cost and low profit margins.
1.12.2 Recruitment
It is defined as the process of identifying the sources for prospective candidates and to
stimulate them to apply for the jobs. Is also defined as the generating of the applications
or applicants for specific positions. Is defined as the process of attracting potential
employees to the company. The management should have a proper plan of recruitment
regarding the quantity and quality of personnel required and the time when it is needed.
Sources of requirement:
Can be broadly classified into two categories: internal and external Internal sources refer
to the present working force of the company. vacancies other than the at the lowest level
may be filled by the existing employees of the company.
1)Re-employing former employees: laid off employees or employees left due to personal
reasons may be reemployed who may require less training compared to the strangers of
the enterprise.
2) Friends and relatives of the present employees: personnel with a record of good
relationships may be encouraged to recommend their friends and relatives for
Appointment in the concern where they are employed.
3) Applicants at the gate: suitable unemployed employees who call at the gates of the
factories or companies are called are interviewed by the factory or company personnel
and those who are found suitable for the existing vacancies are selected.
4) College and technical institutes: many big companies remain in touch with the colleges
and technical institutions to recruit young and talented personnel.
6) Advertising the vacancy: can be done by advertising the vacancy in leading news
papers which may be used when the company requires services of persons possessing
certain special skills or when there is acute shortage of labour force.
7) Labour unions: persons are sometimes recommended for appointment by their labour
unions.
1.12.2 Selection:
Steps in the selection procedure: There are three steps in the selection procedure namely
job analysis, job description and job specification.
2)Job description: The results of the job analysis are set down in job descriptions for
production workers, clerical people and the first-line supervisors and managers also.
1)Application bank: Filling the application blank by the candidate is the first step in
which the applicant gives relevant personal data such as qualification, experience, firms
in which he has worked.
3) Employment tests: Are used for the further assessment of the candidate of his nature
and abilities certain tests are conducted by the company.
These are:
(i)Aptitude test: is used in finding out whether a candidate is suitable for clerical or a
mechanical job which helps in assessing before training as how well the candidate will
perform the job.
(ii)Interest test: is used to find out the type of work in which the candidate has an
interest.
(iii) Intelligent test: used to find out the candidates intelligence and candidates mental
alertness, reasoning ability, poor of understanding are judged.
(iv) Trade or performance achievement test: this test is used to measure the candidate’s
level of knowledge and skill in the particular trade or occupation in which all he will be
appointed, in case he is finally selected. in this test the candidate is asked to do a simple
operation of the proposed job. Example: A candidate for a driver may be asked to drive to
test his driving proficiency, a typist may be asked to type out some letters to find out his
speed and efficiency.
4) Checking references: used to know about the important personal details about the
candidate, his character, past history his background verified from the people mentioned
in the application after selection and found satisfactory at the interview.
(i) to check the physical fitness of the applicant for the job applied for
(ii)to protect the company against the unwarranted claims for compensation under certain
legislative enactments.
6) Final interview: This interview is conducted for those who are ultimately selected for
employment and the selected candidates are given an idea about their future projects
within the organization.
December 2010
4.Give any four concrete reasons for the paramount importance of the planning function.
5.Briefly explain the steps involved in planning.
6.Briefly explain the principles of organization.
7.write any four advantages of proper and efficient staffing.
8. Write short notes on following i) MBO ii)MBE iii) Span of Control
June 2010
1. Define management .What are the nature and charecteristics of management ?Explain
its functions.
2. Is management a science ,art or profession?Explain
3.What are the modern management approaches?Explain briefly the contigency approach
of management.
4.Briefly explain the types of planning
5.Explain hierarchy of plans
6.What are the advantages and disadvantages of line and staff organization?
7.Explain the following i)Types of departmentation ii)Principles of committess
8.what are MBO and MBE ?Explain
9.What is recruitment ?Explain Various sources of Recruitment.
2013
1. What is management? Consider management as operational process,Explain its various
sub process.
2. Explain required change in skill -Mix of a manager,with respect to his level in an
organization.
3.what are the features of Bureucratic administration?
4.Define planning .Compare stategic planning with tactical planning.
5.Explain major principles to be followed to develop sound and efficient organizational
structure.
6.what is span if management/span of control?what is significance of number of relations
between manager and subordinates in span of control?
7.What are different advantages of decentralization.
JUNE 2012
1.What is management?Explain the various roles of management
2.Explain the nature and characteristics of management
1.15 Outcome
Define management,Organization,entrepreneur,planning,staffing,ERP, and outline
their importance in entrepreneurship.
Utilize the Resources available effectively through ERP
Make use of IRPS and institutional support in Entrepreneurship.
MODULE 2
2.9 Outcome
2.1.1 Objective:
4. Explain the principles of management, organization and entrepreneur.
5. Discuss on planning, staffing, ERP and their importance
3. Infer the importance of intellectual property rights and relate the institutional
support
1) Harmony of objectives: The goals of its members must be in complete harmony with
the goals of an organization The manager must direct the subordinates in such a way that
they that they perceive their goals to be in harmony with enterprise objectives. For
Example the company’s profits may be associated with the employee’s gains by giving
additional bonus or promotion.
2) Unity of Command: The subordinates must receive orders and instructions from one
supervisor only the violation of which may lead to conflicting orders, divided loyalties
and decreased personal responsibility for results.
3) Direct supervision Every supervisor must Maintain face-to-face contact with his
subordinates which boosts the morale of the employees,increases their loyalty and
provides them with feedback on how well they are doing.
1) Traits approach
2) Behavioral approach
2.2.1 Trait
It is basically a character and deals with personal abilities and assumed to be God’s gift
and abilities Are identified as mental and physical energy, emotional stability,
knowledge of human relations, empathy, objectivity, personal motivation, communication
skills, teaching ability, social skills, technical competence, friendliness and affection,
integrity and faith, intelligence etc. Traits approaches – Trait theories argue that leaders
share a number of common personality traits and characteristics, and that leadership
emerges from these traits. Early trait theories promoted the idea that leadership is an
innate, instinctive quality that you either have or don't have. Now we have moved on
from this approach, and we're learning more about what we can
do as individuals to develop leadership qualities within ourselves and others. traits are
external behaviors that emerge from things going on within the leader's mind – and it's
these internal beliefs and processes that are important for effective leadership.
Behavioral theories focus on how leaders behave. Do they dictate what needs to be done
and expect cooperation? Or do they involve the team in decisions to encourage
acceptance and support.
In the 1930s, Kurt Lewin developed a leadership framework based on a leader's decision-
making behavior. Lewin argued that there are three types of leaders:
a. Autocratic leaders make decisions without consulting their teams. This is considered
appropriate when decisions genuinely need to be taken quickly, when there's no need for
input, and when team agreement isn't necessary for a successful outcome.
b. Democratic leaders allow the team to provide input before making a decision, although
the degree of input can vary from leader to leader. This type of style is important when
team agreement matters, but it can be quite difficult to manage when there are lots of
different perspectives and ideas.
c. Laissez-faire leaders don't interfere; they allow people within the team to make many
of the decisions. This works well when the team is highly capable and motivated, and
when it doesn't need close monitoring or supervision. However, this style can arise
because the leader is lazy or distracted, and, here, this approach can fail.
The realization that there isn't one correct type of leader led to theories that the best
leadership style is contingent on, or depends on, the situation. These theories try to
predict which leadership style is best in which circumstance.
When a decision is needed fast, which style is preferred? When the leader needs the full
support of the team, is there a better way to lead? Should a leader be more people oriented
or task oriented? These are all examples of questions that contingency leadership theories
try to address.
Fiedlers model
An unsatisfied need is the basis for the motivation process and the starting point and
begins the chain of events leading to behavior as shown in the figure below.
Begins with the person’s unsatisfied need at the lowest level-identification of the need
develops in the form of as goal which leads to the fulfillment of the need to achieve the
goal. These needs are arranged in the form of a ladder of five successive categories as
shown in the figure above.
(i)Physiological needs: Arise of the basic physiology of life like the need for food, water,
air, etc which must be at least satisfied partially for continued survival.
(ii)Security needs: Needs to feel free from economic threat and physical harm which
need protection from arbitrary lay-off and dismissal, disaster and avoidance of the
unexpected.
(iii)Egoistic needs: are the needs which relate to respect and prestige the need for
dominance for example. Can be classified as self-esteem and esteem from others. Self
esteem is the need for worthiness of oneself and the esteem is the necessity to think others
that he is worthy
(iv) Self-fulfillment needs: are the needs to realize ones potential that is realizing one’s
own capabilities to the fullest-for accomplishing what one is capable of to the fullest.
example a musician must make music etc. According to Maslow, people attempt satisfy
their physical needs first. as long as the needs are unsatisfied they dominate and after they
become reasonably satisfied and progress to the next level and so on.
Original study based on the research by Fredrick and Herzberg who interviewed 200
engineers and accountants and were asked about the good times and bad times they think
about their jobs. Out of these interviews two factors emerged called the
I Maintenance factors(Factor 1)
6) A fair salary
7) Job security
8) Personal life
10) Status
To build motivation different set of factors are necessary which are called motivators or
satisfiers.
II)Motivators or satisfiers(Factor 2)
3) These two group of factors are also known as intrinsic and extrinsic rewards.
(i)Need for affiliation (n Aff): Reflects desire to interact socially with people
Concerned about the quality of an important personal relationship
(ii) The need for power (n Pow): Person having high need for power tries to exercise the
power and authority Concerned with influencing others and winning arguments
(iii) the need for achievement(n Ach): has three distinct characteristics
(b) doing most things himself rather than getting them done by others and willing to take
personal responsibility for his success or failure and does not want to hold responsible for
it.
Works under conditions of free choice where an individual is motivated towards activity
which he is most capable of rendering and which he believes has the highest probability
of leading to his most preferred goal. The basic concepts of this theory are
1) First and second level outcomes: Job related goals before an individual such as
promotion, increase in salary, recognition, praise and so on are called second level
outcomes. Each second level outcome can be associated with a value called valence for
each individual. The valence can be positive, negative or zero Valence positive:
individual wants to attain promotion Valence negative: does not want to attain promotion
Valence zero: outcome towards which he is indifferent Second level outcomes can be
achieved in different ways: (i)promotion by leaving the organization , by absenting
himself to show dissatisfaction, by joining a pressure group, by attending a training
2) Instrumentality: All first level outcomes have equal probability of leading the
individual to the second level outcome The individual has subjective estimates of these
probabilities ranging from -1 to +1 which are called instrumentalities. -1 indicates a belief
that second level outcome is certain without the first level outcome 0 indicates a belief
that second level outcome is impossible without first level outcome 1 indicates a belief
that second level outcome is certain with first level outcome
3. Expectancy: is the probability estimate which joins the individual’s efforts to first
level outcome. Expectancy values are always positive ranging from 0 to 1.
Equity is defined as the ratio between The individual’s job inputs (such as effort, skill,
experience, education and seniority) to the The job rewards (such as pay or promotion) it
is believed that the individuals motivation, performance and satisfaction will depend on
his on his or her subjective evaluation of his or her effort/reward ratio and the
effort/reward ratio of others in similar situations
The theory developed by researches done by B.F Skinner. The theory is believed and
based on the behavior of the past circumstances which they have learnt that the certain
behaviors associated with pleasant outcomes and certain other behaviors are associated
with unpleasant outcomes. Example: Obedience to authority leads to praise and
disobedience leads to punishment. The consequences that increase the frequency of a
behavior are positive reinforcement (praise or monitory rewards) or negative enforcement
(A manager requiring all subordinates to attend early morning meetings if the
performance falls below a certain desired level of the organization.
Negatives of the above theory proposed: Avoids concern for the inner motivation of
the individual. Skinners behavior modification theory is criticized for two reasons
(i) Overemphasis of extrinsic rewards ignores the fact that people are better motivated by
intrinsic rewards.
(ii) The theory is unethical no manager has a right to manipulate and control his
employees behavior life.
2.4 Communication
The importance of communication raised from the fact that earlier business was
considered only a technical and formal structure. But by Hawthorne’s experiments it was
realized that every organization requires structure is a social system involving the
interactions of the people working at different levels and proper communication is
required to the goals of the organization, organizations existence from the birth to
continuing.
2.5 Co-ordination
In directing: coordination is required to take effect of his particular action will have on
other departments and executives
the breakdown of the above occurs more rules, regulations are required to be framed to
take care of the breakdown
2) Planning: Ensures coordinated effort and targets of each department dovetail with the
targets of all other departments. example fixing the targets of the10000 units of additional
production and consequently the sales requires the coordination of the two departments
respectively to meet the demands and achieve the target.
4) Direct contact: used to solve the problems created at the lower levels which affects
the employees can be resolved by formal informal contacts to prevent overloading to top
executives.
5)Tas force: Temporary group made up of representatives from the same departments
facing problems and exists as long as the problems lasts and each participant returns to
normal tasks once the solution is reached
10) Liasaon departments: evolved to handle transactions and typically occurs between
the sales and production departments.
11)Workflow: is the sequence of steps by which the organization acquires inputs and
transforms them into outputs and exports these to the environment which is largely
shaped by the technological, economic and social considerations and helps them in
coordination.
1. Measuring Progress
2.Uncovering deviations.
There is a close link between planning and controlling the organizations operations. The
control process continually measures progress towards goals.Control consists in verifying
weather everything occurs in conformity with the plan adapted,instruction issued and
principle applied.
Mistakes ,Managers and their subordinates very often commit mistakes.Example wrong
parts are ordered ,wrong pricing decisions are made, problems are diagnosed incorrectly
and so on.
Controls are needed to indicate corrective actions.they may reveal for examples that plans
needed to be redrawn or goals need to be modified or there is need for reassisgnment or
classification of duties.
Controls are needed to transmit corrective action to the operation while it is progressing
so that the transformation subsystem modifies its inputs or its production plan to reduce
any discrepancy or error and keeps the output “on course”.
1. Establishing standards.
the first step in the control process is to establish the standard against which results can be
measured.Since the entire operation cannot be observed,each organization must develop
its own list of key result areas for which standard need to be established.
2. They should be accepted by the individuals involved. They must fit their expectations
and group habits.
The step in the control process is to measure the result and compare it with the
predetermined standards. One important point to be considered here is whether
measurement and comparison are to be done at various stages in the throughput process
or at the end.
After comparing the actual performance with prescribed standards and findings the
deviations, the next step that should be taken by the manager is to correct these
deviations. Corrective action should be taken without wasting time so that the normal
position can be restored.
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Control techniques are almost as diverse as the activities of business. The following are
three important ways in which they are classified:
(a) Past-oriented control techniques and future-oriented control techniques
(b) Market control techniques, bureaucratic control techniques and clan control
techniques
(c) Old control techniques and new control techniques
Past-oriented control techniques are also known as post-action controls. They measure
results after the work is completed—it is post-mortem. Examples of such controls are
most accounting records, inspection of goods and services and school grade reports.
These controls can be used to plan future steps before repeating the same operation.
They can also be used as a basis for rewarding, disciplining, training or promoting
individuals.
Future-oriented control techniques are also known as steering controls or feed-
forward controls. They measure results before the work is completed. They serve as
warning-posts principally to direct attention rather than to evaluate. Examples of such
controls are cash flow and funds flow analysis, network planning, etc. which enable
managers to keep a watch on an operation while it is progressing and to see that they
will have problems in such areas as cash or on-time delivery unless they take prior
action. Mail order companies, to cite another example, have found that the weight of
incoming mail gives an early indication of the volume of business. With this warning
of ups and downs in the volume of work, they are able to adjust work assignments in
order to reduce expenses or to make prompt deliveries of unusually large volumes.
The two types of control we have discussed above are not alternatives to each other.
Most organi- sations use both these types. With a future-oriented control (which
enables corrections to be made before the system output is effected) a manager would
still want to measure the final system output since nothing can be expected to work
perfectly enough to give the confidence that the final output will always be exactly as
is desired.
2.8.2 Market control techniques, bureaucratic control techniques and clan control
techniques
Market control techniques establish control by drawing comparisons of prices and
profits of previous years, or of other organisations. The prices which organisations
assign to their products or services are considered as an accurate reflection of the
effectiveness of their internal control.
Bureaucratic control techniques (such as rules, policies, hierarchy of authority,
operating budgets and periodical statistical reports), establish control by requiring
employees to comply with them.
Clan control techniques establish control by generating trust, tradition, commitment
and shared belief.
Although all three types may appear in an organisation yet each is best suited to a
particular type of organisation. Thus, market control techniques are best suited to
profit organisations operating in a competitive environment, bureaucratic control
techniques are best suited to non-profit organisations where prices and competitive
markets do not exist, and control techniques are best suited to matrix organisations and
small family-owned organisations, which should follow hundred per cent commit-
ment rule.
Old control techniques are those techniques which have been long used by
managers. Most of these techniques are financial or accounting-based directed toward
the control of money. New control techniques provide the kind of information that are
not readily available with the old techniques. As engineers are far ahead of managers in
their ability to measure what is going on, these techniques act as better future-oriented
devices directed toward the control of time.We give below a brief description of some
techniques under each category.
for one year. The personnel manager can compare his expenditures under various
heads with the budgeted provisions and with those of other companies. This enables
him to know whether he is spending high or low, whether he is getting his money’s
worth and whether he is in danger of losing his better men.
2. Sales budget It is a comprehensive sales programme and plan for developing sales.
It lays down the sales potential in terms of quantity, value, period, product, etc. Sales
forecasting is the basis for preparing this budget. A sales budget is prepared by the
sales manager with the assistance of salesmen and market research officers. The
factors to be considered for preparing sales budget are population trend, consumer’s
purchasing power, price trend of the product, nature of competition, past sales, extent
of advertising, etc.
3. Selling and distribution cost budget This budget lays down the cost of selling and
distribution of the product during the budget period. It includes advertising cost,
research and development cost, transport cost, etc. This budget is jointly prepared by
the sales manager, advertising manager and the distribution manager.
4. Production budget This budget is based on the sales budget. It lays down the
quantity of units to be produced during the budget period. The main purpose of this
budget is to maintain an optimum balance between sales, production and inventory
position of the firm. This budget is also known as the “output budget”.
5. Production cost budget This budget is based on the production budget. It lays down
the estimated cost of carrying out production plans.
Further, the production cost budget is subdivided into various sub-budgets like raw
materials budget, labour budget, production overhead budget, etc. The raw material
budget lays down the quantity of raw material required for production during the budget
period. This budget is prepared by the head of the manufacturing department. The
labour budget lays down the estimates of labour requirements neces- sary to carry out
estimated production during the budget period. It may include both direct and indirect
labour requirements. In some cases, indirect labour requirements may be shown in the
manufacturing expenses budget instead of in the labour budget. The production
overhead budget gives the estimates of all production overheads to be incurred during
the budget period. It breaks up the production overheads into three parts, viz., fixed,
variable, and semi-variable.
6. Capital expenditure budget This budget outlines specifically, capital expenditures
for plant, ma- chinery, equipment, inventories and other items. It also points out the
plans concerning investment, expansion, growth, improvements, replacements, etc.
7. Cash budget This budget gives the anticipated receipts and disbursements for the
budget period and shows the cash position arising from it. It indicates the requirement
of cash at various points of time and helps the management in planning and arranging
cash to meet the needs of the business concern. Thus, it ensures that the concern never
has any shortage of cash required. Cash budget helps the management in controlling
and coordinating the activities which involve receipt and payment of cash.
8. Master budget A master budget gives a summary of all the functional budgets and
shows how they affect the business as a whole. In other words, it is compiled from
various subsidiary or functional budgets. It provides detailed particulars regarding
production, sales, cash, fixed assets, etc. The need for a master budget containing a
summary of all the subsidiary budgets arises because business concerns are too large to
permit the detailed planning of all the aspects of the business in one budget.
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Advantages of budgetary control The following are some of the important advantages
of budgetary control:
1. The different functional budgets clearly indicate the limits for expenses and also the
results to be achieved in a given period. This helps the enterprise in having a
planned approach for its various activities. This also keeps everybody in the
enterprise alert and encourages the optimum use of its resources.
2. Budgets make it possible to coordinate the work of the entire organisation. In
devising budgets, managers take into account information provided by the sub-units
of their organisation. The interaction between managers and subordinates that takes
place during the budget development process helps define and integrate the
activities of all members in the organisation.
1. Budgets are mostly inflexible and rigid and do not respond to internal or external
environmental changes. In so far as they are in error, because of these
unmanageable changes, they lose their validity as a standard. A district sales
manager, for example, cannot be held accountable for a drop in sales if a truckers’
strike prevents delivery of merchandise to his customers.
2. Budgets are of little help in handling the here-and-now problems that supervisors
have. They are useful only in analysing the past and charting the future. They do
not “manage”, but merely serve as a tool to be used by management.
3. In a budgetary control programme people show anxiety to spend their current
budget to the hilt so that their budget for the next financial year is not reduced.
They show little concern to evaluate the result of their spending. In fact, all their
effort is directed at increasing the budget for the next year. ‘Performance’ in the
budget-based organisation means the ability to maintain or increase one’s budget.
4. A good manager is discouraged from taking initiative and undertaking activities
for which pro- vision has not been made in the budget, even though they are
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useful for the enterprise. On the other hand, a bad manager can hide his
inefficiency behind the budget which does not examine whether last year’s
expenditure was at all, necessary and whether there were more economical
alternatives to the expenditure that could yield the desired results.
Zero-base budgeting (ZBB) Under traditional budgeting, a manager starts with the
current level of operation as an established base instead of re-evaluating all
programmes. This type of budgeting, therefore, does not answer questions such as: Are
current programmes efficient and effective? What are the alternatives? Should current
programmes be eliminated or reduced in order to fund higher-priority new programmes
or to improve profits? This is not so under zero-base-budgeting which is done every
year from a scratch. A manager here, is required to evaluate each item’s worth to the
company, from the ground up, and justify every rupee spent in terms of current
corporate goals. It is, therefore, better to term it as “De nova budgeting” or budgeting
from the beginning.
Cost Accounting The cost of production determines the profit earned by an enterprise.
In view of this fact, modem management has given much importance to cost
accounting and cost control. Standard costing is one of the techniques of cost control
and it is being increasingly used by modem business.
concerns for the purpose of cost reduction and cost control. The objective of standard
costing is the same as that of budgetary control. The system involves a comparison of
the actuals with the standards and the discrepancy is called variance. The various
steps involved in standard costing are:
the same price which it would have paid to an outsider seller. This is a good method
because under it the true profitability of a department as an independent unit is
revealed. The only limitation of this method is that very often market prices are not
available for the semi-finished output of one department which the receiving
department is using as an input.
4. Negotiated Prices In certain special circumstances, transfer prices may be fixed on
the basis of negotiations between departmental heads.
A profit centre resembles a business in miniature. Like a separate company, it has an
income statement that shows revenue, expense, and the difference between them, which
is profit. The income statement for a profit centre, therefore, is a basic management
control document which motivates the manager to reduce all controllable expenses in
order to increase the profit for his profit centre.
Financial Statements and Ratio Analysis The Trading Profit and Loss Account and the
Balance Sheet of a company are the usual financial statements which are prepared ex
post (in retrospect) to indicate what financial events occurred since the last statements.
Depending on the company, the period covered by a financial statement could be the
previous year, the previous quarter, or the previous month. The usefulness of these
statements for applying control measures is limited by the fact that they cover only past
events. However, they can provide managers with useful information about trends.
Managers can also use these statements to compare their organisations with other
organisations and can thus evaluate their own performance. In addition, they are used
by people outside the organisation to evaluate the organisation’s strengths, weaknesses
and potential.
Ratio analysis seeks to extract information from a financial statement in a way that
The training cost per employee or the average travelling expenditure per trip or the
number of personnel staff per 100 people in the total company population are examples
of ratios which throw light on the efficiency of personnel department.
The ratio analysis comparisons can be made in one of two ways: (a) comparisons
over a time period—the present ratio compared with the same organisation’s ratio in
the past; and (b) comparison with other similar organisations or with the industry as a
whole. The first type of comparison will indicate how the organisation’s performance
or condition has changed; the second type will suggest how well the organisation is
doing relative to its competitors.
Return on investment Also known as the Du Pont system of financial analysis this
ratio is expressed by the following formula:
with a high percentage of profits to sales but with low capital turnover.
Break-even Analysis Break-even analysis is another control device used in business
firms. It involves the use of a chart to depict the overall volume of sales necessary to
cover costs. It is that point at which the cost and revenue of the enterprise are exactly
equal. In other words, it is that point where the enterprise neither earns a profit nor
incurs a loss.
Figure 18.2 depicts a simple break-even chart for a single product of a company. The
horizontal axis in this figure identifies units of sales. The vertical axis identifies both
costs and revenues. We can easily know from this figure that Rs 10,000 is the total
revenue and Rs 23.000 (approximately) are the
70 —
Rev
50
(thousands of rupees)
Revenues and costs
COS
30 Variable costs
Break-even point
(Loss)
20 ’
Fixed costs
total costs associated with a sales volume of 1,000 units. Threrefore, at a sales volume
of 1,000 units we should expect an overall loss of Rs 13,000. Similarly, at a sales
volume of 4,500 units we should expect an overall profit of Rs 10,000 (Rs 45,000 in
revenue minus Rs 35,000 in costs). Our break-even point lies at a sales volume of
3,000 units. At this point revenue exactly covers the cost.
Break-even analysis can be used both as an aid in decision-making and as a control
device. The specific areas where break-even analysis can help in decision-making
include
1. identifying the minimum sales volume necessary to prevent a loss;
2. identifying the minimum sales volume necessary to meet established profit
objectives;
3. providing information helpful in making decisions on the effect of raising or
lowering prices; and
4. providing data helpful in decisions to drop or add product lines.
2. Sales Management
(i) Actual sales compared with budgeted sales to measure performance by
(a) products;
(b) territories;
(c) individual salesmen; and
(d) customer.
(ii) Standard profit and loss by products
(a) for fixing selling prices; and
(b) to concentrate sales on most profitable products.
(iii) Selling expenses in relation to budget and sales value, analysed by
(a) products;
(b) territories;
(c) individual salesmen; and
(d) customers.
(iv) Bad debts and accounts which are slow and difficult in collection.
(v) Status reports on new or doubtful customers.
3. Production Management
To buyer: Price variations on purchases analysed by commodities.
To Foreman
up. How accurate the information needs to be will vary with the situation. But, in
general, information of higher quality that does not add materially to a manager’s
decision-making capability is not worth the added cost.
Information Timeliness The information provided by a report must suggest action in
time for that ac- tion to be taken. Just when information is considered timely, however,
will depend on the situation. For example, reports destined for top-level managers to
monitor progress on long-range objectives may be considered timely if they arrive at
quarterly intervals. The cost of making them available weekly would not be justified,
since long-range plans are neither reviewed nor modified at such frequent intervals.
However, middle and lower level managers responsible for ongoing operations and
activities may need a weekly or even daily report on machine downtime if delays are to
be minimised. The quality control managers must get a daily or weekly report on all
customer rejections. On a monthly or quarterly basis, such information would merely
be ancient history and would be of no value to the manager.
Timeliness may also be determined by company policy or by events rather than by
the calendar. In- formation on inventory, for example, is provided to the manager
responsible for recording only when a previously established minimum level for the
inventory is being approached. Requiring inventory on a cal- endar basis—such as every
week—when inventory levels for most items are well above their record point would
usually not be worth the added cost, since action would not be implied by the
information.
Information Quantity and Relevance A report that provides too little information can
be ineffective, because it may lead managers to make wrong or late decisions that
worsen problems instead of solv- ing them. Conversely, a report that provides
managers too much information can also prove ineffec- tive because that may not
isolate what they need from a flood of irrelevant facts and figures. A good report
should fill or evaluate information so that only the most relevant information is
supplied to the appropriate manager. In addition, a good report should condense
information, so that what is relevant may be absorbed in a short period of time.
Gantt Chart Figure 18.3 is a sample Gantt chart, sometimes referred to as a bar chart,
employed to plan and track jobs on the shop floors. The chart is named after Henry C.
Gantt. The example indicates that job A is behind schedule, job B is ahead of schedule
and job C has been completed, after a delayed start for equipment maintenance. Note
that whether the job is ahead of schedule or behind schedule is based on where it stands
compared to where we are now. In Fig. 18.3 we are the end of Wednesday and job A
should have been completed. Job B has already had some of Thursday’s work
completed. This information can be used to schedule overtime and to shift workers
from one job to another.
Standing Orders, Rules, Limitations Standing orders, rules and limitations are also
control techniques used by the management. The manager who authorises his
subordinates to make certain decisions or delegates some of his powers, lays down the
limits for them. Limits may be decided on the basis of the nature of work and status of
the subordinate. Standing orders are issued by the management and they
Start of an activity
Job Monday Tuesday Wednesday Thursday Friday
End of an activity Activity time
Schedule allowed
Actual work progress
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Point in time where chart is
reviewed
X
Time set aside for non production
activities e.g.
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Gantt Chart
are to be observed by the subordinates. They may be concerned with the rules,
regulations, discipline, procedures, conditions, timings, etc.
Personal Observation A manager can also exercise fruitful control over his
subordinates by observing them while they are engaged in work. Personal observation
helps the manager not only in knowing the workers’ attitude towards work but also in
correcting their work and methods, if necessary. Moreover, when the worker knows
that he is being observed by his superior, he will be alert and will not waste his time.
But in some cases he may also resent being observed and may develop resistance. In
any case, this method is very costly and cannot work in large concerns.
Steps involved in developing the netrrork Both under PERT and CPM, the purpose is
to divide the project into a number of operations and then to draw a picture of the order
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in which and of the time when these operations should be started and completed. This
picture is known as the Project Graph or Arrow Diagram. The following steps are
involved in drawing this diagram:
1. The first step is to break down the whole project into a number of clearly
identifiable activities and events. An activity is the actual performance of a task.
Each activity requires some time and resources for its completion. The
commencement or completion of an activity is called an event. An event is that
particular instant of time at which some specific part of a plan has been achieved.
An event does not signify any expenditure of time or resources. Any two events
are always joined by some activity. The preceding event is called the “tail event”
and the following is called the “head event”.
2. Once the list of various activities is ready, we have to examine each activity in
relation to the other activity and ask ourselves the following questions:
(i) What other activity/activities must be completed before this activity can start
(prece- dence)?
(ii) What other activity/activities can be done while this activity is being done
(concurrence)?
(iii) What activity/activities cannot start until after this activity is done
(subsequence)?
3. The next step is to draw the diagram portraying the precedence, concurrence and
subsequence of all activities and events. On this diagram, all activities are shown
by arrows and all events are shown by circles. The diagram also tells us the time
required for the completion of each activity. In CPM diagrams, a single time
estimate is written against each activity. In PERT, however, each activity is
assigned three-time estimates (optimistic, most likely, and pessimistic), plus a
fourth which is based on the other three. The optimistic time is the shortest time
the activity should take if everything goes well and no mishaps occur. The
pessimistic time is the longest time the activity could conceivably take when
everything that could go normally wrong goes wrong, barring outright
catastrophe. Most likely time is the time the activity should take under normal
circumstances. Generally the three time estimates for each activity are combined
into a weighted average, called expected activity time. This is written below the
other three estimates.
4. Finally, the critical path is determined. The critical path is the longest path
through the network in terms of the amount of time the entire project will take. It
indicates a series of activities which must be done in sequence and which will take
longer than the other sequences of jobs that can go along simultaneously. It is
critical because the time spent on the activities that lie along this path must be
shortened if the total time of project is to be
shortend. For example, if in a project three
activities A, B and C are to be completed, of
which activities A and B (requiring six days
and three days, respectively) can
simultaneously be
carried out but activity C (requiring
If A takes six days, and B three days, the shortest elapsed time to reach event l when
activity C can start would be six days. Thus there is no point in spending money to
expedite activity B but there may be a good reason for expediting A if the total time is
to be shortened.
Module 3
ENTERPRENEURSHIP
” An Entrepreneur is one who always searches for changes responds to it and exploits. It
is an opportunity”- Peter.
According to joseph,
1. Action oriented.
2. Determination and commitment
3. Creativeness
4. Accept responsibilities
5. Self confident
6. Bath thinker, planner, worker
7. Future vision, intelligent
Qualities of Entrepreneur :
1. Success and achievement
2. Risk bearer
3. Opportunity explorer
4. Planner
5. Stress takers
6. Facing uncertainties
7. Independent
8. Flexible
9. Self confident
10. Motivator
FUNCTIONS OF ENTREPRENUERSHIP
PRIMARY FUNCTION OTHER FUNCTIONS FUNCTION
IMPORTANT FOR
DEVELOPING
COUNTRIES
Planning. Diversion of management of
Organizing. productions. resources.
Decision making Expansion of the Dealing with public.
Management enterprise. Engineering.
Innovation Maintaining New product
Risk bearing employer and development
Leading employee Parallel
Controlling relationship. opportunities
Solving labour Marketing
problems. Management
Interaction with Customer relation.
outside agensies
the entrepreneur has been broadly classified according to business, professional skills,
motivation, growth and stages of development.
c) According to motivation
1. Pure entrepreneurs
2. Induced entrepreneurs
3. Motivated entrepreneurs
4. Spontaneous entrepreneurs
i) Other types
1. Professional and non professional entrepreneurs
2. Modern entrepreneurs
3. Traditional entrepreneurs
4. Skilled entrepreneurs
5. Unskilled entrepreneurs
6. Forced entrepreneurs
7. Inherited entrepreneurs
8. National and international entrepreneurs
a) Business entrepreneur: they are individual who conceives for a new idea for a new
product or service lending to new business he deals with product development,
marketing, sales.
b) Trading entrepreneur: Trading entrepreneur is one who undertake trading
activities and not concerned with manufacturing work whose only aim is trading.
c) Industrial entrepreneur : Industrial entrepreneur is generally a manufacturer who
understands the potential needs of a customer and a product or service to meet
marketing needs.
d) Cooperate entrepreneurs :demonstrates his innovative skills in organizing and
managing cooperative undertakings.
e) Agricultural entrepreneurs: undertakes agricultural activities such as raising crops,
marketing the crops, fertilizing and other inputs of agriculture. The cover broad
spectrum of agriculture and its related ideas.
According to technology:
According to Motivation
According to growth
Growth of enterprise may be termed as low, medium, high and super growth. The
development of a new venture leads to a chance of growth. They are those who take
up industry with substantial growth prospects. On the other hand growth
entrepreneurs shows enormous performance in any venture they take up.
Others
1. Identification of an opportunity
2. Evaluation of the opportunity
3. Preparation of the business plan
4. Determination and organizing the resources
5. Management of enterprise
The role of entrepreneur in economic development involves just increasing the output of
the product and income of the product. It involves in initiating and change in the structure
of business and society. this change give way to growth and higher output that leads to
profit. Innovation plays important role in economic growth of both product and service.
The new capital created expands the capacity of growth and increases the output of man’s
side.
Entrepreneur bridges the gap between science and market. It brings new product and
services in the market. Entrepreneur plays a vital role in economic growth and creating
employment in people.
1. Lack of capital
2. Lack of technical knowledge
3. Economic business cycles
4. Non availability of raw materials and resources
5. Government resources
6. No idea about technology
7. Unstable and unpredictable material
8. Globalization and entry of foreign goods
9. Risks
3. 7 Entrepreneurship in India
Past: in the past the business community was involved in trade and commerce. The
community was known as vaishyas or vanias.
Present: there is tremendous growth of industry and services over last 60 years. some of
the not worthy highly talented entrepreneurs in India are Tata, Adithya Birla.
Business opportunities can be obtained from different sources. For this one has to
evaluate following areas and understand the gap between demand and supply
3.11 Financial feasibility study [write detailed explanation for sub headings]
i. Location
ii. Social problem
iii. pollution
iv. other problem
Module 4
4.1 Preparation of the Project
4.1.6 Contents
4.1.7 Formulation
4.3.1 Marketing
4.3.2 Sales
Definition
-World Bank
-Harrison
-Jillinger
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Project identification is selection of data compiling and analyzing. Utilizing the existing
resources and facilities without any change in business is known as additive opportunity.
The opportunities involving new ideas that cause some change in the existing
structure are known as Complimentary opportunities.
1. Observation
It is very important source of project idea. It includes observation on product and service
with the available raw materials or skills to produce good products.
4. Government sources
They also provide useful information that helps in identification of new project
ideas.
a. Customer needs
b. Emergency trends
c. Government policy
d. Ideas
e. Trade fairs
f. Observation of market
g. Competators products
h. Idea by friends and relatives
It starts from where project identification ends. One of the well known tool SWOT is used
for analyzing.
1. Technology
2. Equipment
3. Investment size
4. Location
5. Marketing
4.1.6 Contents
1. General information
2. Parameters
3. Location
8. Production process
9. Raw material
11. Products
12. Market
4.1.7 Formulation
It involves step by step investigation and development of project.
1. General information
a. Biodata of parameter
b. Industry profile
2. Project description
a. site
b. Physical infrastructure
Availability of infrastructure like raw materials and skilled labours are included.
c. Utilities
d. Pollution control
e. Communication system
f. Transport facilities
3. Market potential
As a part of social responsibility any damage to the society and the cost to control
the damage like pollution control,etc are to be mentioned.
8. Project implementation
1. General information
3. Project description
4. Marketing plan
6.Operational Analysis
Cost for commercial production are called operationalcost.Cost for raw materials
fuels,salary ets are to be included
7. Financial Analysis
8. Economic Analysis
9. Miscallaneous Aspects
Depending upon the nature and size of operation of particular project and relevant
information may be included.
2. Information system
Fig 4.2
Enterprise resource planning As shown in Fig 4.2 gives a real time view for core
business process such as production , order processing and inventory management it
maintains common database management system
Enterprise resource planning tracks business resource such as raw material and
commitment made by business such as purchase orders, no matter which department
has entered the data into system
• Manufacturing
• Logistics
• Distribution
• Accounting
• Finance
• Human resources
Customer relationship
Accounting
Finance
Order processing
Cash Management
Inventory Control
Accounts receivable Investment management
payment and ledger
Capital and financial budgeting
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As shown in the figure is concerned with planning promotion and sales also
development of new product
• Interactive marketing
Use mobile computing and internet technologies for sales , support and management
• Other systems
• Interactive marketing
Uses internet , intranet and extranet which establish 2 way transaction between
customer and business
• The goal is to use those networks and make customers as partner in business
Customers actively engage in all the process using technologies like chat, discussion
groups ,web forms , emails , instant messaging etc
Life cycle
Supply chain management helps company get right product to right place at right
time.
Main goals of SCM is to create fast , efficient ,low cost network of business
relationship is also called supply chain which is also called value chain . The fig
above explain the business process of supply chain life cycle
Human resources:
• Recruitment, selection
• Job placement
• Performance appraisals
• Employee benefits
4.3.5 Accounting
2.Development of employee
Most HR's supports recruitment ,selection, placement, beneficiary development , safety ,security
etc
4.3.5 Finance
Computer based financial management as shown in the figure supports business managers and
professionals, They support:
4.3.6 Reports
The research report has a very important role to play in the entire research process.it is a
concrete proof for the study that was undertaken.It is the one way communication by the
researcher to the reader.
The research report documents all the steps followed right from framing the
research question to the interpretation of the findings.
Each step also includes details on how and why that step was conducted.The
justification for choosing one technique over the other.
It also serves to authenticate the quality of the work carried out and establishes the
strength of the findings.
The report gives a clear direction in terms of the implication of the results for the
decision maker.
There are two types of reports
Brief report
Working papers or basic reports
they are written for recording the process carried out in terms of scope and
framework of the study, the methodology followed and the instrument designed,
The results and findings could also be recorded.
Survey reports
It might or might not have an academic orientation. The focus here is to present
findings in easy to comprehend format that includes figures and tables.
Detailed reports
These are more formal and could be academic ,Technical or business report
Technical reports :These are major documents and would include all elements of
the basic reports ,as well as the interpretations and conclusions ,as related to the
obtained results.
Business reports : These reports include conclusions as understood by the business
manager.
Preliminary Section
Title Page
Letter of Authorization
Executive Summary
Acknowledgement
Table of Contents
Methodology Section
Research design
Sampling design
Data analysis
Finding section
Results
Interpretation of results
Conclusion section
Conclusion and
recommendation
Appendices
Glossary of terms
Bibliography
Module 5
5.1 Micro and Small Enterprises:
5.2 Definition of micro and small enterprises.
5.3 characteristics and advantages of micro and small enterprises.
5.4 steps in establishing micro and small enterprises,
5.5 Government of India indusial policy 2007 on micro and small
enterprises, case study (Microsoft), Case study(Captain G R
Gopinath),case study (N R Narayana Murthy & Infosys),
Institutional support:
5.6 MSME-DI.
5.7 NSIC.
5.8 SIDBI
5.9 KIADB
5.10 KSSIDC
5.11 TECSOK
5.12 KSFC
5.13 DIC and District level single window agency
Module 5
5.1 Micro and Small Enterprises:
5.2 Definition of micro and small enterprises.
5.3 characteristics and advantages of micro and small enterprises.
5.4 steps in establishing micro and small enterprises,
Advantages of SSI:
1. Privacy
2. Profits
3. Decision making
Disadvantages :
1. Lack of Finance
2. Lack of Liability
3. Lack of Continuity
4. Limited scope of expansion
5.5 MSME-DI.
5.6 NSIC.
National Small Industries Corporation LTD this is one of the oldest
agencies set by the central government 1955.
Nature of support
Wide ranging industrial inputs.
Objectives
(i)To promote ,aid and foster the growth of SSI in the country with a focus
on commercial aspects.
(ii)To enable the small scale Industries to gain competitive advantage and
to contribute effectively to the development of the economy.
(iii)To evolve special schemes to meet the needs if handicapped,Scheduled
castes and Schedule tribes .
Functions
(iv)To import and distribute scarce and rare raw meterials among actual
users in the small scale sectors.
(vii)To develop prototype of machines and equipment and pass on the know
how to SSI.
5.7 SIDBI
Small Industries Development Bank of India ,It was established in 1990 under the act
of Indian Parliament as a principal financial Institution.
Nature of support
Financial services and other support services.
Objectives
(i) To promote ,finance and develop small scale sector in India.
(ii) To Coordinate the functions of other institutes engaged in similar activities.
(iii) To finance industrial infrastructure projects
Functions
New projects
Expansion of projects
Modernization of projects
(ii)To initiate steps for technological up gradation and modernization of existing units.
(iv)To provide channels for marketing SSI products in India and Abroad.
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5.8 KSSIDC
Karnataka state small scale Industries Development Corporation
Nature of support
Infrastructure and industrial inputs.
Objectives
(i)To assist small scale industries in the procurement of raw meterials.
(ii)To take up any activity aimed at rapid development of small scale industry
Functions
(iv) To establish and manage industrial estates.
(v) To procure and distribute scarce and rare raw materials to various SSI
(vi) To provide assistance towads marketing of products from various SSIS
(vii) To Organize national level and international level exhibition and
facilitate exchange of information
(viii) To Supply machinery under hire purchase scheme
(ix) To provide guidance to SSI entrepreneurship
(x) To provide Technical library facility to help entrepreneurs in their work.
(xi) To provide Laboratory.
5.9 KIADB
Karnataka Industrial area development board.This is a statutory body established in
1966 by government of Karnataka.
Objectives
Functions
5.10 TECSOK
Technical Consultancy Services of Karnataka,It was established in 1976 by the
government of Karnataka.It is located in basava bhavan basaveshwara circle
,Bangalore.
Nature of support
Multi disciplinary technical ,industrial and management consultancy.
Objectives
(i) To provide reliable consultancy support for entrepreneurs to startup self
employment ventures in Karnataka.
(ii)To provide consultancy services to the various departments and agencies of state
and central governments.
Functions
(i)To identify investment opportunities which are location-specific.
(ii)To assist entrepreneurs in obtaining stationary and procedural clearances.
(iii)To carry out feasibility studies and environmental impact studies.
(iv)To assist preparation of detailed project reports as per investment norms and
financial norm.
(v)To carry out market survey and research specific to industry needs.
(vi)To assist in project implementation and extend turn key assistance.
(vii)To help in reorganization and restructuring of employees
(viii)To diagnose sick units and suggest rehabilitation measures.
5.11 KSFC
Functions
(i)To provide long term finance to small and ,medium sized industrial units organized
on different ownership basis such as proprietorship,partnership,cooperative,public or
private.
(iii)To take over Sick SSI Units and auction them to entrepreneurs willing to rebuild.
(ii) To act as Single window Agency to help entrepreneur with all the information
under one roof.
(iii) To serve as an integrated administrative framework at the distinct level for
industrial development.
Functions
(i) Surveys :To carry out surveys to assess the potential of a district with respect
toindustrial development taking into account availability of raw
material,manpower,infrastructure demand for a product .This survey provides
a basis for advising budding entrepreneurs.
(ii) Action plan: To prepare an action plan for industrial development of the
district
(iii) Appraisal : To appraise various investment proposals received from
entrepreneurs
(iv) Guidance:To guide entrepreneurs in selecting appropriate machinery and
equipment
(v) Marketing:To assist entrepreneurs in marketing their products and assess the
possibility of export promotions
5.13 Introduction to IPR.
Intellectual property rights: Explain topics
(i) Patents
(ii) Trade secrets
(iii) Trade marks