Management and Entrepreneurship : Management and Entrepreneurship, RVCE 1 Management and Entrepreneurship Subject Code:07HSS51 Chapter – 1 Management : Management and Entrepreneurship, RVCE 2 Chapter – 1 Management Agenda : Management and Entrepreneurship, RVCE 3 Agenda What is Management?
Nature & Scope of Management
Management Vs Administration
Managerial roles, functions & skills
Development of Management thought
Early management approaches
Modern management approaches Objectives : Management and Entrepreneurship, RVCE 4 Objectives To expose the students to a number of important concepts of management
To throw light on the complex set of roles performed by the managers
To understand the skills required to perform various management roles
To provide an overview of several influential approaches that have shaped managerial thinking during the past century. Meaning : Management and Entrepreneurship, RVCE 5 Meaning “Management is the art of getting things done through and with the people in formally organised groups”…..Koontz H. “Management is the process of planning, organising, actuating and controlling to determine and accomplish the objectives by the use of people and resources”…..Terry G. Nature & Characteristics of Management : Management and Entrepreneurship, RVCE 6 Nature & Characteristics of Management Critical element in the economic growth of the country.
Essential in all organized effort, be it a business or any other activity.
Dynamic and life giving element in every organization.
A process, discipline, activity.
Intangible, goal oriented & universal. Scope of Management : Management and Entrepreneurship, RVCE 7 Scope of Management The scope is very wide.
According to Herbison & Myers, it refers to three distinct ideas.
i) as an economic resource
ii) as a system of authority
iii) as a class or elite. Importance of Management : Management and Entrepreneurship, RVCE 8 Importance of Management Optimum use of resources
Effective leadership and motivation
Establishes sound industrial relations
Achievement of goals
Change and growth
Improve standard of living. Functions of Management : Management and Entrepreneurship, RVCE 9 Functions of Management No consensus on the classification
No similar terminology amongst the experts
Newman & Summer:
Organizing, planning, leading & controlling
Planning, organizing, commanding, coordinating & controlling Functions of Management : Management and Entrepreneurship, RVCE 10 Functions of Management Luther Gullick: POSDCORB
P : planning
O : organizing
S : staffing
D : directing
R : reporting
B : budgeting Functions of Management : Management and Entrepreneurship, RVCE 11 Functions of Management Planning
The process of establishing goals and a suitable course of action for achieving those goals. Functions of Management : Management and Entrepreneurship, RVCE 12 Functions of Management Organizing
The process of engaging two or more people in working together in a structured way to achieve a specific goal or set of goals. Functions of Management : Management and Entrepreneurship, RVCE 13 Functions of Management Staffing
Selecting and training the individuals for specific job functions & charging them with the associated responsibilities. Functions of Management : Management and Entrepreneurship, RVCE 14 Functions of Management Directing
It is the process of influencing and motivating employees to perform essential tasks in a n organization. Functions of Management : Management and Entrepreneurship, RVCE 15 Functions of Management CO: coordinating
The integration of the activities of the separate parts of an organization to accomplish organizational goals. Functions of Management : Management and Entrepreneurship, RVCE 16 Functions of Management Reporting
Process of executives keeping the superiors and subordinates informed about what is going on through records, research and inspection. Functions of Management : Management and Entrepreneurship, RVCE 17 Functions of Management Budgeting
Formal quantitative statement of resources allocated for planned activities over stipulated periods of time. Functional areas of Management : Management and Entrepreneurship, RVCE 18 Functional areas of Management Production
Research & Development
Materials Management :Science or Art ? : Management and Entrepreneurship, RVCE 19 Management :Science or Art ? Elements of Science
Systematic body of knowledge
Scientific inquiry and Observation
Universal truths Elements of Art
Application of Knowledge
Doing things creatively
Perfection through practice Management as Science : Management and Entrepreneurship, RVCE 20 Management as Science Distinct discipline
Offers principles & guidelines
An inexact science
Scientific & systematic. Management as Art : Management and Entrepreneurship, RVCE 21 Management as Art Uses the practical knowledge acquired in tackling problems.
Combines human & nonhuman resources in a creative way to achieve results.
A personalized activity
Constant practice leads to good management Management: Science as well as Art : Management and Entrepreneurship, RVCE 22 Management: Science as well as Art Art of management is as old as civilization.
Science of management is young and developing
Both are complementary & mutually supportive Management: Science as well as Art : Management and Entrepreneurship, RVCE 23 Management: Science as well as Art According to Peter Drucker:
“Every organization has the same resources to work with. It is the quality of management that spells the difference between success and failure”.
Ability to solve problems requires sound knowledge & constant practice Management as a Profession : Management and Entrepreneurship, RVCE 24 Management as a Profession Essential features of profession:
Well defined body of knowledge
Formal education and training
Service above self
Ethical code of conduct Management as a Profession : Management and Entrepreneurship, RVCE 25 Management as a Profession Management has well defined body of knowledge, tools and techniques, research & consultancy
Acquiring management education through formal training is possible
No representative body unlike for doctors, lawyers, etc
No universal code of conduct. Management as a Profession : Management and Entrepreneurship, RVCE 26 Management as a Profession No regulatory body and code of conduct leads to neglection of service motto.
Not a recognized profession ,but moving in that direction .
Some initiatives are: separation of ownership from management, state regulation of business activities, proliferation of management institutions, etc. Management & Administration : Management and Entrepreneurship, RVCE 27 Management & Administration Controversy over the meaning of the terms Management and Administration.
Three schools of Thought- administration is broader than management, administration is part of management, management and administration are identical.
American School of thought: Administrators think, managers act; administration is a top level activity, management is a lower level function. Proponents-Ordway Tead, Oliver Sheldon, W.Spriegel. Management & Administration : Management and Entrepreneurship, RVCE 28 Management & Administration English School of thought: Management is rule making and rule enforcing body, Administration is just an implementing agency. Proponents- E.F.L.Brech, Henry Fayol, Kimball and Kimball.
Newman, Harold Koontz, McFarland , Ernst Dale maintain that management and administration are identical. Roles of Management : Management and Entrepreneurship, RVCE 29 Roles of Management Management roles refers to specific categories of managerial behavior.
Mintzberg identifies ten management roles grouped under three major heads namely
interpersonal roles( roles that involve people and other duties that are ceremonial and symbolic in nature),
informational roles( roles that involve receiving , collecting and disseminating information)
decisional roles( roles that revolve around making choices). Roles of Management : Management and Entrepreneurship, RVCE 30 Roles of Management Interpersonal roles include: Figure head, Leader, Liaison
Informational roles include: Monitor, Disseminator, Spokesperson
Decisional roles include Entrepreneur, Disturbance handler, Resource allocator, Negotiator Roles of Management : Management and Entrepreneurship, RVCE 31 Roles of Management According to Robert Katz, the following skills are required for managers job:
Technical skills( knowledge and proficiency in a specialized field),
Human skills( ability to work well with other people individually and in a group),
Conceptual skills( ability to think and to conceptualize about abstract and complex situations). Levels of Management : Management and Entrepreneurship, RVCE 32 Levels of Management Three levels exist in Management –
first line managers( responsible for the overall direction and operations of an organization),
middle managers( translate the broad strategies into specific goals for implementation)
top line managers( responsible for the production of goods and services). Levels of Management : Management and Entrepreneurship, RVCE 33 Levels of Management First line managers: foremen, white collar supervisors, Section heads.
Second line managers : Functional heads and immediate subordinates.
Top line managers : CEO, President, Chairman, MD, COO, CIO . Relative Skills Needed for Effective Performance at different levels of Management : Management and Entrepreneurship, RVCE 34 Relative Skills Needed for Effective Performance at different levels of Management CONCEPTUAL HUMAN TECHNICAL Top Management Middle Management First-line Management Development of Management thought : Management and Entrepreneurship, RVCE 35 Development of Management thought Key Management Theories – An Overview : Management and Entrepreneurship, RVCE 36 Key Management Theories – An Overview 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 Labour Shortage “Muckrakers” begn exposes of business (1902) World War I
(1914-1918) The Great Depression Begins Deming lectures on quality in Japan Apple Corp. Formed (1977) Baldrige Award initiated (1987) In search of Excellence becomes bestseller (Mid-1980s) World War II
(1941-1945) Protest Movemenets (1960s to early 1970s) IBM PC Introduced (1981) AT & T divestiture takes effect (Jan 1, 1984) Scientific Management School Classical Organizational Theory School The Behavioral School Management Science The System Approach The Contingency Approach Dynamic Engagement Approach Source: Management by Stoner Development of Management thought : Management and Entrepreneurship, RVCE 37 Development of Management thought Management is as old as human civilization. Ex: Egyptian pyramids, Great Wall of China.
During 1400’s: Venetian business enterprises and their management practices
During 1776: Adam Smith described the advantages of division of labor and specialization.
Beginning of 18th century: Industrial Revolution resulted in the advent of machine power , mass production and efficient transportation. Development of Management thought : Management and Entrepreneurship, RVCE 38 Development of Management thought Evolution of management thought can be studied in two broad categories:
Early management approaches (Scientific management, administrative management theory and human relations movement)
Modern management approaches (behavioral, quantitative, systems and contingency approaches) . Scientific Management : Management and Entrepreneurship, RVCE 39 Scientific Management Fredrick W.Taylor (1856-1915) – father of scientific management
An approach that emphasizes the scientific study of work in order to improve worker efficiency.
Contributions by Taylor: Scientific task planning, Time and Motion study, Standardization, Differential Payment , functional foremanship. Scientific Management : Management and Entrepreneurship, RVCE 40 Scientific Management Basics of Scientific Management
( 4 principles)
Each task must be scientifically designed so that it can replace the old, rule of thumb methods.
Workers must be scientifically selected and trained so that they can be more productive .
Bring the scientifically designed jobs and workers together so that there will be a match between them.
Division of labor and cooperation between management & workers. Scientific Management : Management and Entrepreneurship, RVCE 41 Scientific Management Taylor summed up his approach in these words:
Science, not rule of thumb
Harmony, not discord
Cooperation , not individualism
Maximum output in place of restricted output
Development of each man to his greatest efficiency
Equitable division of work Scientific Management : Management and Entrepreneurship, RVCE 42 Scientific Management Limitations:
Unrealistic Administrative Management Theory : Management and Entrepreneurship, RVCE 43 Administrative Management Theory Henry Fayol(1841-1925) developed this theory.
Focuses on principles that can be used by managers to coordinate the internal activities of organizations.
Explains the process of managing an organization from the top managerial perspective.
Five functions to be performed by managers: planning, organizing, Commanding, Coordination, Controlling. Administrative Management Theory : Management and Entrepreneurship, RVCE 44 Administrative Management Theory Managers should apply 14 principles at the operational level:
Division of work
Authority and Responsibility
Unity of Command
Unity of direction
Subordination of individual interest to the common good Administrative Management Theory : Management and Entrepreneurship, RVCE 45 Administrative Management Theory Remuneration of Personnel
Stability of tenure
Espirit de Corps Administrative Management Theory : Management and Entrepreneurship, RVCE 46 Administrative Management Theory Limitations:
Lack of empirical evidence
Neglect of human factors
Historical significance Human Relations Theory : Management and Entrepreneurship, RVCE 47 Human Relations Theory Elton Mayo(1880-1949) contributed to this theory.
It is a movement in management thinking and practice that emphasized satisfaction of employees’ basic needs as the key to increased worker productivity.
Compensated the deficiencies in scientific management and administrative management.
Gained popularity after studies of human behavior at work situations during 1924-33. Human Relations Theory : Management and Entrepreneurship, RVCE 48 Human Relations Theory Hawthorne Studies: A group of studies conducted at the Hawthorne plant of Western Electric company whose results ultimately led to the human relations view of management.
Illumination Experiment: Test group Vs Control group, Illumination Vs Productivity. Human Relations Theory : Management and Entrepreneurship, RVCE 49 Human Relations Theory Hawthorne Effect: The possibility that individuals singled out for a study may improve their performance simply because of the added attention they receive from the researchers, rather than because of any specific factors being tested.
Bank wiring Experiment: Group norms influencing individual behavior Vs Economic incentives. Human Relations Theory : Management and Entrepreneurship, RVCE 50 Human Relations Theory Key Concepts:
The individual-not only motivated by economic factors but also by social & psychological factors.
The work group-workers find satisfaction in the member ship of social groups.
Work environment-to be conducive for both organizational and personal growth.
The leader-should provide participative climate. Slide 51: Management and Entrepreneurship, RVCE 51 The Human Relations Movement Pyramid Human Relations Theory : Management and Entrepreneurship, RVCE 52 Human Relations Theory Criticisms:
Philosophy preaches collaboration not competition-cow psychology
Concerned only with operative employees
Over concern on happiness – productivity link
Not a scientifically designed experiment. Behavioral Approach : Management and Entrepreneurship, RVCE 53 Behavioral Approach Developed as a natural evolution to Hawthorne Experiments.
Hawthorne studies stressed on emotional elements to explain human behavior and performance.
Behavioral approach emphasizes on scientific research as the basis for developing theories about human behavior in the organizations that can be used to develop practical guidelines for managers. Behavioral Approach : Management and Entrepreneurship, RVCE 54 Behavioral Approach Contributors: Abraham Maslow, Chris Argyris,etc
Also called as Human Resources approach.
Individual motivation, group behavior
Foundation to HRM
Positive reinforcement Behavioral Approach : Management and Entrepreneurship, RVCE 55 Behavioral Approach Limitations:
Self actualizing view
Compatibility of individual & organization
Discounted the non human aspects of organization
Best of managing is humanizing organizations Quantitative Approach : Management and Entrepreneurship, RVCE 56 Quantitative Approach Features
Offers quantitative aids to decision making, develops quantitative tools to assist in providing products and services.
Managerial Choices depend on criteria such as costs, revenues, ROI, etc
Emphasis on computers and their assistance in decision making alternatives.
Promotes holistic view of factors influencing decision making Quantitative Approach : Management and Entrepreneurship, RVCE 57 Quantitative Approach Eliminates subjective thinking in decision making
Minimizes bias in decision making
Aids in objective rational decision making.
All variables influencing decision can’t be identified.
Less importance to human relationships
Decision quality depends on the data inputted to the computer. Systems Approach : Management and Entrepreneurship, RVCE 58 Systems Approach Integrated approach to management problem solving and decision making
Advocates: Chester Barnard, George Homans
Key Concepts of this approach:
System is a set of interdependent parts
Concept of holism
System can be open or closed
System has a boundary Systems Approach : Management and Entrepreneurship, RVCE 59 Systems Approach Tries to solve problems by diagnosing them with in a frame work of inputs, transformation processes, outputs and feed back
Good balance between the needs of various functional parts of the enterprise and goals of the firm as a whole.
Conceptual frame work to understand organization is too abstract.
Does not identify situational differences and factors Slide 60: Management and Entrepreneurship, RVCE 60 Contingency Approach : Management and Entrepreneurship, RVCE 61 Contingency Approach Also termed as Situational approach
Based on the premise that situations dictate managerial action
Advocates: Selznic, Woodward, James Thompson
Appropriate managerial action depends on the particular parameters of the situation
Spells out the relationship of the organization to its environment
Concerned with structural adaptations of organizations to its task environment. Contingency Approach : Management and Entrepreneurship, RVCE 62 Contingency Approach More pragmatic and action oriented. Integrates theory and practice in a systems framework
Advocates the managers to develop skills for situational analysis
Paucity of literature & Complex
Defies empirical testing
Not holistic in nature References : Management and Entrepreneurship, RVCE 63 References Principles of Management-P C Tripathi, P N Reddy; 3rd Edn.,TMH
Management-Stephen Robbins; 8th Edn.,PHI
Management-VSP Rao, V H Krishna; Excel
Essentials of Management-Koontz,Weihrich;5th Edn.,TMH
Management – James A F Stoner, R Edward Freeman, Daniel R Gilbert;6th Edn., PHI
Principles of management: a modern approach-Henry Albers, 4th Edn,,John Wiley & sons
Fundamentals of management-Donnelly, Gibson,Ivancevich ,10th Edn,.Irwin Mc Graw Web References : Management and Entrepreneurship, RVCE 64 Web References www.12manage.com
www.harehall.co.uk Question Bank : Management and Entrepreneurship, RVCE 65 Question Bank Case Study : Management and Entrepreneurship, RVCE 66 Case Study