Technological Innovation

Management And
Entrepreneurship
Course Code - 21EC61

Module 1

17-May-2024 1
 Management

17-May-2024 2
Importance of Management
• Management is a critical element in the economic growth of a country.
By bringing together the factors (men, money, material, machines),
management enables a country to experience a substantial level of
economic development.
• Management is essential in all organized efforts, be it a business
activity or any other activity. Principles of management are used in
educational, social, military & government.
• Management is the dynamic, life-giving element in every organization.
It coordinates current organizational activities and plans future ones.

“ The central core of our national as well as personal activities, and the
way we manage ourselves and our institutions reflects with alarming
clarity what we and our society will become” - Claude S George
17-May-2024 3
 Definition of Management
• “Art of getting things done through people”- Mary Parker Follett
A manager is one who contributes to the organization’s goals indirectly by
directing the efforts of others- not by performing the task himself.
Weakness –
1. Use of word “ART”. Art deals with the application of knowledge but
management is not merely application of knowledge but also acquisition
of knowledge.
2. Missing Component - “FUNCTIONS OF MANAGER”

17-May-2024 4
• Management is a process “Consisting of planning, organising,
actuating & controlling, performed to determine & accomplish the
objectives by the use of people & resources” – George R. Terry
Planning means that managers think of their actions in advance, that are
usually based on some method, plan or logic, rather than on a hunch.
Organizing means that managers coordinate the human and material
resources of the organization.
Actuating means that managers motivate and direct subordinates.
Controlling means that managers attempt to ensure that there is no
deviation from the norm or plan.

17-May-2024 5
 Management Functions or the Process of
Management
• Newman and Summer recognize only 4 functions – organizing, planning,
leading & controlling
• Henri Fayol identifies 5 functions – planning, organizing, commanding,
coordinating & controlling
• Luther Gulick states 7 such functions under ‘POSDCORB’ - planning,
organizing, staffing, directing, coordinating, reporting & budgeting
• Warren Haynes and Joseph Massie classify management functions – decision-
making, organizing, staffing, directing & controlling
• Koontz and O’ Donnell divides these functions – planning, organizing, staffing,
directing & controlling

17-May-2024 6
• PLANNING – The process of deciding the
business objectives & charting out the methods
of attaining those objectives. It determines
“what” should be done, “how & where” it is to
be done, “who” is to do it, “how” results are to
be evaluated
• ORGANISING – To organize a business means
to provide personnel, raw materials, tools,
capital for its functioning which may fall into
human organization & material organization.
“the structure which results from identifying &
grouping work, defining & delegating
responsibility & authority & establishing
relationships” – Allen
17-May-2024 7
Staffing is an important function in human organization. It finds the
right person for each job & to make certain that there is enough
manpower available to fill various positions in the organization.
• DIRECTING – Could also be called as
leading/directing/motivating/actuating. It means defined objectives
which means the manager explains what the people have to do in
better way. Its sub-functions are communication, leadership,
motivation.
Communication is the processing of passing information &
understanding from one person to another.
Leadership is the process by which a manager guides & influences the
work of the subordinates.
Motivation means arousing desire in the minds of workers to give their
best to the enterprise.
17-May-2024 8
• CONTROLLING – Manager ensures that performance occurs in
conformity with the plans adopted, the instructions issued & principles
established. The controlling functions involve:
1. Establishing standards of performance.
2. Measuring current performance & comparing it against the
established standards
3. Taking action to correct any performance that does not meet those
standards
• INNOVATING – It means creating new ideas which may improve a
product, process or practice.
• REPRESENTING - Representing on behalf of the organisation to the
outside world.
17-May-2024 9
Levels of Management
• Although all managers perform the same functions there are 3 levels.
1. First-line (lower) management group is made up of foremen &
supervisors, men & women who are only one step above the rank.
2. Middle management, a vast & diverse group that includes sales
managers, plant managers, personnel managers etc.
3. Top management consists of board chairman, company presidents,
executive vice-presidents i.e. man who coordinate all the specialities
& make policies for the company.

17-May-2024 10
Roles of Manager

INTERPERSONAL ROLES INFORMATIONAL ROLES DECISIONAL ROLES

ENTREPRENEUR
FIGUREHEAD MONITOR

DISTURBANCE
HANDLER
LEADER DISSEMINATOR
RESOURCE
ALLOCATOR

LIASION SPOKESMAN
NEGOTIATOR

17-May-2024 11
Interpersonal Roles
• Figurehead – Every manager has to perform ceremonial duties like greeting
the touring dignitaries, attending weddings, to launch an important customer
• Leader – Every manager must motivate & encourage his employees.
• Liaison – Every manager must cultivate contacts outside his verical chain of
command to collect information useful for the organization
Informationl Roles
• Monitor – The manager has to scan his environment for information,
interrogate his liaison contacts & his subordinates, receive unsolicited info as
a result of the personal network
• Disseminator – The manager passes some of his privileged info directly to his
subordinates who would otherwise have no access
17-May-2024 12
• Spokesman – The manager also needs to spend part of his time in
representing the organization to various outside group, who are the
stakeholders in the organization. He speaks on financial performance,
assures customer group, & abiding by govt. law
Decisional Roles
• Entrepreneur – The manager does not merely adapt to his surrounding
situation but proactively looks out for innovation to make things happen.
• Disturbance Handler – The manager seek solutions of various
unanticipated problems.
• Resource Allocator – The manager must divide work & delegate
authority among his subordinates.
• Negotiator - The manager at all levels has to spend considerable time in
negotiations.
17-May-2024 13
 Managerial Skills

• Conceptual skill - ability to manage to take a broad & farsighted view of the organization,
ability to think in abstract, to analyse the forces working in a situation, creative &
innovative ability & to access the environment & changes taking place in it.
• Technical skill – understanding the nature of job that people under him have to perform.
Also requires knowledge & proficiency in the type of process & technique.
• Human relations skill – ability to interact effectively with people at all levels. It requires:
1. Ability to recognize the feeling & sentiments of others
2. Ability to judge the possible reactions to, & outcomes of various courses & actions
undertaken.
3. Ability to examine his own concept & values which may enable him to develop correct
attitude
17-May-2024 14
 Management & Administration
• According to Sheldon, Spriegal, Milward
administration involves “thinking” which
determines plan, policies, objectives of a
business.
• Management involves “doing”. It is
concerned with the execution & direction of
policies & operations.
• Management includes administration. It
includes planning, organizing, directing, &
controlling. Administration is a branch of
management & includes planning &
controlling.
17-May-2024 15
• Functions of management
1. Administrative management
2. Operative management
• According to Peter Drucker, governance of non-business institutions are
called administration while governance of business enterprises is called
management.
• Economic performance becomes the chief dimension of management in
case of business enterprise but in governing non-business institutions
economic consequences of decisions are secondary for the administration.

17-May-2024 16
 Management as a Science
• We can call a discipline scientific if its –
1. Methods of inquiry are systematic & empirical
2. Information can be ordered & analysed
3. Results are cumulative & communicable
• Being systematic means being orderly & unbiased. All scientific
information collected first as raw data is finally ordered & analysed
with the help of statistical tools, thus making it communicable &
intelligible.
• Management is not like exact or natural science (like physics or
chemistry) but where we have to study man & a multiplicity of factors
affecting him.
• 17-May-2024
Management can be categorised as behavioural science. 17
Management as a Art
• Art is concerned with the understanding of how a particular work can
be accomplished.
• Management in this sense is more an art. It is the art of getting things
done through others in dynamic & mostly non-repetitive situations.
• The manager has to constantly analyse the existing situation,
determine the objectives, seek alternatives, implement, coordinate,
control & evaluate information, make decisions.
• Knowledge of management theory & principles is a valuable aid & kit
of the manager but it cannot replace his other managerial skills &
qualities. This knowledge has to be applied & practiced by the
manager.
17-May-2024 18
 Management as a Profession
• Management is partly an art & partly a science. The characteristics of a
profession –
1. Existence of an organized & systematic knowledge
2. Formalised methods of acquiring training & experience
3. Existence of an association with professionalization as its goal
4. Existence of an ethical code to regulate the behavior of the members of the
profession
5. Charging of fees based on service, but with due regard for the priority of
service over the desire for monetary reward
• Management cannot be called a profession as it does not have fixed norms
of managerial behavior. There is no uniform code of conduct or licensing of
managers. Further the entry of managerial jobs is not restricted to
individuals
17-May-2024
with special academic degree. 19
 Planning

17-May-2024 20
 Nature of Planning
• Planning is the beginning of the process of management as it sets all other
functions into action. Without planning other functions become mere
activity, producing nothing but chaos. This is called the principle of primacy
of planning.
• It is an intellectual process as managers need to think before acting.
• Decision making is an integral part of planning. It means as the process of
choosing among many alternatives.
• Planning is a continuous process as it constantly monitor the conditions, both
within & outside the organization to determine if changes are required in the
plan. This is called principle of navigational change.
• Planning is an all-pervasive function.
• As a corollary to the principle, a plan must be flexible.
17-May-2024 21
• By flexibility of a plan is meant its ability to change direction to adapt to changing
situations without undue cost.
• It needs to possess a built-in flexibility in at least 5 major areas – technology,
market, finance, personnel & organization.
Flexibility in technology means the mechanical ability of a company to change &
vary its product-mix according to the changing needs of its customers.
Flexibility in market means the company’s ability to shift its marketing
geographically.
Flexibility in finance means the company’s ability to obtain additional funds on
favorable terms whenever needed.
Flexibility in personnel means the company’s ability to shift individuals from one job
to another.
Flexibility in organization means the company’s ability to change its organization
structure.
17-May-2024 22
Importance of Planning
1. Minimises risk & Uncertainty – With increasing complex
organizations, intuition cannot be relied for decision making. A more
rational, fact-based procedure for making decisions, planning allows
managers & organizations to minimize risk & uncertainty.
2. Leads to Success – Planning does not guarantee success but “chance
favours the prepared mind”. It not only outperform the nonplanners
but also outperform their own past results. It leads to success by
doing beyond mere adaptation to market fluctuations.
3. Focuses Attention on the Organization’s Goals – The manager focus
their attention on the organization’s goals & activities. It thus
becomes easy to apply & coordinate resources of the organization
more economically.
17-May-2024 23
4. Facilities Control – The manager sets goals & develops plans which
become standards or benchmarks against which performance is
measured. Thus the function of control ensures that activities
conform to the plan.
5. Trains Executives – Planning is also an excellent means for training
executives. They become involved in the activities of the
organization, & the plans arouse their interest in multifarious aspects
of planning.

17-May-2024 24
Types of Planning

17-May-2024 25
1. Vision – Vision is the dream that an entrepreneur creates about the
direction that the business should pursue in future. It describes the
aspirations, beliefs, values & shapes the organization’s strategy.
2. Mission – Mission is the unique aim of an organization that sets it apart
from others. It describes the organization’s specialization – service,
product or client i.e. the scope of business.
3. Objectives – They are the goals or aims that the management wishes the
organization to achieve in pursuit of its mission.
Characteristics of Objectives
• Objectives are multiple in number – There are 8 key areas in which
objectives of performance & results have to be set which are market
standing, innovation, productivity, physical & financial resources,
profitability, manager performance & development, work performance,
attitude & public responsibility
17-May-2024 26
• Objectives are either tangible or intangible
• Objectives have a priority – At a given point in time, the accomplishment
of one objective is relatively more important than of others.
• Objectives are generally arranged in a hierarchy
• Objectives sometimes clash with each other
Requirements of sound objectives
• Objectives must be both clear & acceptable
• Objectives must support one another
• Objectives must be precise & measurable
• Objectives should be always remain valid

17-May-2024 27
4. Strategies – It is a term originated in military, which connotes a response
to a competitive environment. It is not enough to build plans logically
from goals unless the plan take into account the environmental
opportunities & threats & organizational strengths & weaknesses
(SWOT)
• Environmental Appraisal – An analysis of the relevant environment results
in the identification of threats & opportunities
Political & legal factors
Economic factors
Competitive factors
Social & cultural factors

17-May-2024 28
• Corporate Appraisal – A company’s strength lies in its leadership,
excellent product design, low-cost manufacturing skill, efficient
distribution & customer service, personal relationship with customers,
efficient transport & logistics, sales promotion etc. which are called as
core competency.
Modes of strategy formulation
• Planning mode – being systematic & rational i.e. combining activities in a
way to deliver a unique mix of values.
• Entrepreneurial mode (also called inside-out mode) – a proactive bold plan
is drawn to seek new opportunities on the basic intuition.
• Adaptive mode (also called outside-in mode) – used to formulate
strategies for solving problems as they come.
17-May-2024 29
5. Operational Plan –
• Standing plans – designed for situations that recur often to justify a
standardized approach.
Policies – A general guideline for decision making. Policies ensure
uniformity of action which makes decision more predictable and speed up
the decisions at lower levels.
Classification on the basis of source – originated policies, appealed policies,
implied policies & externally imposed policies
Classification on the basis of functions – production, sales, finance,
personnel
Classification on the basis of organizational level – departmental policies,
minor or derivative policies
17-May-2024 30
Procedures – It provides a detailed set of instructions for performing a
sequence of actions involved in doing a certain work. It indicates a
standard way & high level of uniformity to perform a task.
Methods – A prescribed way to perform one step of a procedure to be
performed.
Rules – Detailed & recorded instructions that a specific action must or
must not be performed in a given situation.
• Single-use plans – These plans are developed to achieve a specific end &
when achieved the plan is dissolved.
Programmes – They are precise plans or definite steps in proper sequence
which need to be taken to discharge a given task.
Budgets – Budgets are plans for a future period of time containing
statements of expected results in numerical terms i.e. rupees, man-hour,
17-May-2024 31
product-unit
 Steps of Planning
1. Establishing Verifiable Goals /Set of Goals-Achieved – to set enterprise objectives
often set by upper level or top managers. There are many types of objectives like
desired sales volume or growth rate, development of new product or service,
becoming more active in the community.
2. Establishing Planning Premises – Certain assumptions about the future on the basis
of which the plan will be formulated. They supply pertinent facts & information such
as population trends, general economic conditions, production cost & price, capital
& material availability, govt. control.
• Internal & External premises – internal premises include sales forecasts, policies,
programmes, capital investment, skill of labour force. External factors include business
environment, factors which influence demand for the products of enterprise, factors
which affect the resources available.
• Tangible & Intangible premises – Tangible include population growth, industry
demand, capital, resources. Intangible include political stability, business & economic
environment, attitudes.
17-May-2024 32
• Controllable & Non-controllable premises – uncontrollable factors like strikes, natural
calamities, emergency. Controllable factors include advertising policy, skill of labour.
3. Deciding & Planning Period
• Lead time in development & commercialization of a new product
• Time required to recover capital investments or pay-back period
• Length of commitments already made
4. Finding Alternatives Courses of Action – Examine alternative courses of action.
5. Evaluating & Selecting a Course of Action – Having sought alternative courses, to
evaluate them & select the best course.
6. Developing Derivative Plans
7. Establishing & Deploying Action Plans – It identifies particular activities necessary
for the purpose & specifies who, what, when, where & how of each item.
8. Measuring & Controlling the Process – Managers need to check the progress so they
can take remedial action necessary to make the plan work or change original plan if
unrealistic
17-May-2024 33
Limitations of Planning
• Planning is an expensive & time consuming process.
• Planning restricts the organization to the most rational & risk-free
opportunities.
• Scope of planning is limited in case of organizations with rapidly
changing situation.
• Establishment of advance plans tends to make administration
inflexible.
• There is difficulty of formulating accurate premises.
• Planning may face people’s resistance to it.
**Planning is important for every business enterprise. Unplanned
business
17-May-2024
operations produce chaos & disorder. 34
Meaning of Decision Making
A decision means to choose between two or more alternatives, which
implies –
• When managers make decisions they are choosing – they are deciding
what to do on the basis of some conscious & deliberate logic or
judgement.
• Managers have alternatives available when they are making a decision.
It requires wisdom & experience to evaluate several alternatives &
select the best one.
• Managers have a purpose in mind when they make a decision.

17-May-2024 35
 Types & Steps of Decision Making
• Programmed & Non Programmed Decisions – Programmed Decisions
those that are made in accordance with some policy rules, procedure. It is
repetitive routine & easiest for managers. Non Programmed Decisions are
novel & non- repetitive.
• Major & Minor Decisions
Degree of futurity of decision
Impact of the decision on other functional areas
Qualitative factors that enter the decision
Recurrence of decisions

17-May-2024 36
• Routine & Strategic Decisions – Routine, tactical or housekeeping
decisions are those which are supportive of, rather than central to the
company’s operation.
• Individual & Group Decisions - Individual decisions are taken where
problem is of routine nature, where analysis of variable is simple &
definite procedures to deal with the problem already exists. Strategic
decisions which may result into some change in the organization are
generally taken by group.
Increased acceptance by those affected
Easier coordination, communication
More information processed
2 approaches to group decision making alternative to conventional
interacting or discussion group.
17-May-2024 37
Nominal Group technique – In this technique
1. Members first silently & independently generate ideas on a problem in writing.
2. Then present the ideas to the group without discussion. The ideas are summarized &
written on a black board.
3. The recorded ideas are discussed for the purpose of clarification & evaluation.
4. Finally each member silently gives his independent rating about various ideas
through voting.
Delphi technique – In this technique
1. The group consists of people who are physically dispersed & are anonymous to one
another.
2. Then they send their opinion on the topic based on the questionnaire.
3. Their responses are summerised into feedback report & sent back again with second
questionnaire.
4. Thus the group receives new information & there is no influence of group pressure or
17-May-2024 38
dominating individuals.
• Simple & Complex decisions
Decisions in which problem is simple & outcome has high degree of
certainty also called mechanistic or routine decisions.
Decisions in which problem is simple & outcome has low degree of
certainty also called judgemental decisions.
Decisions in which problem is complex but outcome has high degree of
certainty also called analytical decisions.
Decisions in which problem is complex but outcome has low degree of
certainty also called adaptive decisions.

17-May-2024 39
Steps of Decision Making

1. Recognizing problems
2. Deciding priorities among the problems
3. Diagnosing the problems
4. Developing alternative solutions or courses of action
5. Measuring & comparing consequences of alternative solutions
6. Converting the decision into effective action
7. Follow up
17-May-2024 40
• Recognizing problems
When there is a deviation from past experience
When there is a deviation from the plan
When other people bring problems to the manager
When competitors outperform the manager’s organization
• Deciding priorities among the problems – Some problems need to be
passed to subordinates or referred upward or can be deferred.
• Diagnosing the problems – problems should be correctly diagnosed.
Sometimes some symptoms may be misleading.
• Developing alternative solutions or courses of action – Every problem has
an alternative solution. There may seem only one way of doing a thing
which may probably be wrong.
17-May-2024 41
• Creative & Innovation – To be creative & to be “innovative” is one &the
same thing. Innovation is successfully bringing into use an invention. A
person’s creativity is his divergent thinking.

17-May-2024 42