Management and Entrepreneurship PDF

# Management and Entrepreneurship Presented By: Prakhyath Rai Asst. Professor, Dept. of ISE, SCEM, Mangaluru-575007 ## Management - Management - Planning - Organizing and Staffing - Directing and Controlling ## Entrepreneurship - Entrepreneur - Small Scale Industry - Institutional Support - P...

# Management and Entrepreneurship Presented By: Prakhyath Rai Asst. Professor, Dept. of ISE, SCEM, Mangaluru-575007 ## Management - Management - Planning - Organizing and Staffing - Directing and Controlling ## Entrepreneurship - Entrepreneur - Small Scale Industry - Institutional Support - Preparation of Project ## Unit 1: Management - Introduction - Meaning-Nature and characteristics of Management - Management as a science and art - Roles of Management - Development of Management thought - Early Management approaches - Modern Management approaches. ## Why Management? An image of a tree with roots and branches is shown. The roots represent: Project, idea, management, team, team, market. The branches represent: Profit, sales, innovation, goals, customer, competition, business plan, strategy. ## What is Management? ## Few Definitions of Management - Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. - "Management is the art of getting things done through others."- Mary Parker Follet. - “Management is knowing exactly what you want to do and then seeing that they do it the best and cheapest ways." - F W Taylor. ## Nature and Characteristics of Management **Management is Universal Process** - Applied in all types of institutions - social, religious, political, military, commercial, bureaucratic etc. - Every organization whose aim is to achieve its goals through group efforts, needs planning, coordination, direction, and control - Management **Management is a goal-oriented** - Management is directed towards achieving effectiveness and efficiency. { Effectiveness is nothing but the actual achievement of specific organizational goals while Efficiency is the attainment of those goals with an optimal use of resources. } **Management is a social process** - Management basically deals with managing human beings and their emotions, talents, attitudes, culture, ethos, education etc. - Management includes retaining, developing, and motivating people at work, as well as taking care of their satisfaction as social beings. **Management is a coordinating force** - Orderly arrangement of activities to avoid duplication and overlapping. - Integrates human and physical resources. **Management is intangible** - Management cannot be touched and felt. - It does not have physical presence (It is an unseen force). **Management is multi-disciplinary** - Management has received rich contribution from various disciplines like psychology, sociology, anthropology etc. - Management is about creating synergy (Synergy means “the whole is greater than the sum of its parts”). **Management is dynamic** - Management is an on-going process, it continues to operate as long as there is organized action for the achievement of group goals. **Management is a creative activity** - Management provides creative ideas and new imagination **Management is decision making** - Management of an organization continuously takes decisions which decides the fate of the organization. **Management is a profession** - Individuals can be trained and turned to become a management professional. ## Scope of Management **Management as an Economic Resource** - Five M's of Management; Money, Man, Material, Machinery, Methods **Management as a class or Elite** - Managers constitute a class of professionals who are elite all over the world. - A manager is a person who has people working under him, and that could be in any part of the activity. **Management as a System of Authority** - According to Herbison and Myer, - Rule making and rule enforcing body - Web of relationships - Mangers enjoy more authority than people working under them. - Top management defines objectives and provides directions. - Middle management interprets and explains the policies framed by the top management. - Lower management is concerned with routine activities. ## Scope of Management in Various areas of work (or) Functional areas of management - **Production / Operations Management** - Operations Management includes work analysis, planning, scheduling, routing, quality control, inventory control, and work study. - **Financial Management** - It includes economic forecasting, cost accounting, budgeting, insurance, and financial statistics. - **Personnel Management or HR Development** - Personnel management takes care of recruitment, placement, training, transfer, promotion, safety, health, welfare, services etc., of the employees. - **Marketing Management** - It is the process of getting the right product to the right place in the right quantity at the right price and at the right time. - **Maintenance Management** - Maintenance refers to actions carried out to replace, repair, or service all the components in a manufacturing plant so that it continues to operate at a required level for a specified time. - Direction and organization of resources in order to keep the buildings, equipment's, and other service facilities in the working condition. - **Materials Management and purchasing** - 3 Inputs to organizations - Men, Machines, and Materials - Material Management - Planning, directing, controlling, and coordinating all activities which are i/p to the manufacturing process. - Purchasing and Procurement - 5 R's { of the Right Quality, in the Right Quantity, from the Right Source, at the Right Prices, and at the Right Time } - **Transport Management** - Transportation of raw materials as well as finished goods - Includes studies on - transportation by rail, road, air, and water, packing and warehousing etc., - Actions to reduce transportation costs. - **Systems Management** - Modular decomposition of projects, delegate duties, track status periodically, communicate with clients, integrate modules, test the s/w, and be responsible for meeting the deadline for project completion. - **Rural Management** - Rural resources and issues management { such as Water resource management, forest and forest product management, crop management, cattle management, rural man-power management }. - **Office Management** - Organized documentation of all activities. - Planning and controlling all office work including maintaining and keeping records. - Clerks, Cashier, Accountants, and Office Managers. ## Functions of Management - **Forecasting** - Forecasting in the estimation of future sales to effectively plan production activities. - **Planning** - Planning of all activities to achieve production & sales as per targets. - Planning is necessary to avoid difficulties that may arise in the future. - **Organizing** - Organizing in arranging money, material, machinery, men and selecting optimal methods of actual execution of work. - **Staffing** - Staffing involves recruitment, selection, training, and development of personnel required to run the organization. - **Directing and Motivating** - Directing and motivating the recruited employees so that they perform their duties effectively. - **Controlling** - Controlling the work of employees to ensure everything is proceeding as per plan. - **Co-ordinating** - Co-ordinating the efforts of all employees in all departments to move towards common goals. - **Communication** - Communication system should be efficient so as to avoid confusion & misunderstanding. - **Leadership** - Leadership qualities required in managers and supervision. - **Decision Making** - Decision making to be professional and result-oriented. ## Management as a Science, Art, and Profession ### Management as a Science: - Establishment of management principles scientifically. - Management is Social Science - As it deals with humans. - Management provides guidelines rather than absolute principles as in physics, chemistry, and biology. - Scientific inquiry and observation - Experimentation ### Management as a Art: - Use of Knowledge - Creativity - Personal touch - Constant Practice ### Management as a Profession: - Management is also considered as a profession - one can study, acquire skills and qualify to become a manager. - Like any profession, management has a systematic body of principles, techniques, and skills. ## Difference between Science and Art | Science | Art | |---|---| | Defines | Describes | | Proves | Feels | | Predicts | Guesses | | Objective | Subjective | | Measures | Opines | | Impresses | Expresses | | Advances by knowledge | Advances by practice | ## Characteristics of Profession Vs Management **Well-defined body of knowledge** - Profession have a systematic body of principles, techniques, and skill. - Management also has a systematic body of principles, techniques, and skill. **Formal Education and Training** - Individual can enter a profession only after acquiring specific knowledge and skill through formal education and training. - To enter into management also, an individual has to acquire appropriate knowledge and training. **Representative Body** - Profession have regulatory bodies and strict code of conduct. - Managers don't have a universal code of conduct and they also don’t have a common regulatory body to ensure standard practices. **Service Motto** - A professional has to have service as his motto and must safeguard the society from any risks. - Managers may not have such motto. Management conforms to most of the characteristics of a profession, and hence can be called as a profession. ## Management and Administration - Three Views: - Administration is broader than Management. - Management is broader than Administration. - Management and administration are identical. ### First View: Administration is broader than Management - Administration is Policy Making function. - Management is Policy realization function. - Administration is Largely determinative while Management is essentially executive. ### Difference Between Administration and Management | Administration | Management | |---|---| | Determining Objectives | Planning the work to meet the objectives given by administration | | Framing policies and principles | Executes the policies and programs | | Framework under which one has to work | Supervises and control execution of work | | Direction, guidance, and leadership and brings in resources | Coordinates all the resources and activities | | Comes first and Provides guidelines to the management and organization | Comes Second and derives strength and freedom from administration to plan and execute work | ### Second View: Management is broader than Administration - Management is a wider concept than administration. - Management is the rule making, rule enforcing, all encompassing body while administration implements and carries out the policies of the management. ### Third View: Administration and Management are identical - Hardly any distinction between the two, both administration and management do the same functions such as planning, organizing, commanding, coordination, and controlling. ## Role of Management **Interpersonal Roles** - Figure Head - Representing an organization - Leader - Encouraging and Motivating Employees - Liaison - Connecting outside world, develops external links **Informational Roles** - Monitor - Receives information from various sources on matters concerning organization - Disseminators - Transmitting information within the organization - Spokesman - Transmitting information outside the organization **Decision Roles** - Entrepreneur - Encouraging New Ideas - Disturbance handler - Conflict handler - Resource allocator - Negotiator - Managers has to negotiate in important matters concerning the organization ## Levels of Management - First line [Lowest] or Supervisory Management - Made-up of white collar supervisor - Middle line - Example: Sales Manager, Plant Manager, Personnel Manager, Department Heads. - Top Management - Consist of Board Chairman, Executives, MD's, Secretary ## Managerial Skills Type - Conceptual Skill - Ability to think in abstract, ability to analyze the forces working in a situation, creative, and innovative ability. - Technical Skill - Managers understanding of the nature of job that people under him have to perform. - Human Relation Skills - Ability to interact effectively with people at all levels. ## Managerial Skills at Different Management Levels An image shows a three-column table with the following information: - Column 1: First-Line Management - Conceptual, Human, Technical. - Column 2: Middle Management - Conceptual, Human, Technical. - Column 3: Top Management - Conceptual, Human, Technical. ## Development of Management Thought - Management in antiquity[ Ancient] - Early Management approaches (1750-1950) - Modern Management approaches (Post - 1950) ## Management in Antiquity - **Egypt** - Egyptians planned, organized and managed thousands of workers to build pyramids. - **China** - 'The Great Wall of China' is a proof of organization. - Sun Tzu - 'The Art of War' { Early Management Thoughts } - **India** - 'Artha Shastra' written by Kautilya deals with trade, commerce, law, and order, taxation, and revenue, war, and military strategies etc. - **Greece** - Greek philosopher Socrates defined management as skill separate from technical knowledge and experience. - **Rome** - The Roman Catholic Church was an organization with well-defined structure and hierarchy. - First managers evolved were in Rome where people were hand-picked and trained by the Roman Govt. to accomplish much of its work. ## Early Management Approaches - Effect of Industrial Revolution - Evolution of Scientific Management - Contribution of pioneers like - FW Taylor - Henri Fayol - Frank and Lilian Gilberth - Max Weber ### 1. Effect of Industrial Revolution - Prior to the industrial revolution era, ‘Cottage Industry Dominated’. - James Hargreaves - Spinning Jenny, 1770 { First Machine to Spin Yarn }. - Richard Arkwright - Water Frame, 1771. - Samuel Crompton - Mule, 1779. - Edmund Cartwright - Power Loon, 1785. - James Watt - Steam Engine. ### Essence of Industrial Revolution - Transfer of skill from worker to machine - Creation of Machine - Few Individuals took charge of a large group to manage and coordinate the efforts of group members - Industrial Management ### 2. Evolution of Scientific Management - Science, not rule of thumb. - Harmony, not discord. - Cooperation, not individualism. - Maximum output, not restricted output. - Specialization, not generalization. ## Evolution of Management - Early classical approaches - Scientific approach - Administrative management, and bureaucracy - Neo-classical approaches - Human relations movements and behavioral approach - Modern approaches - Represented By quantitative approach, systems approach, and contingency approach ## The Evolution of Management Theory A chart shows the evolution of management theory from 1890 to 2000, with the following theories and their timelines. - Scientific Management Theory (1890-1930) - Administrative Management Theory (1930-1950) - Behavioral Management Theory (1950-1970) - Management Science Theory (1970-1990) - Organizational Environment Theory (1990-2000) ## Contributions of F W Taylor (1856-1915) - Time-and-motion study - Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with ways of improving how tasks are performed. - Differential Payment - F.W. Taylor, the founder of the scientific management, evolved this system of payment as a wage. Under this system, there is no guarantee of minimum wages. Standard time, and standard work is determined on the basis of a time Study. - Drastic Recognition of Supervision; Separation of planning and doing - Work has to be planned by the foreman, and not by the worker. - Functional Foremanship - The worker has to select his tools, and decide the order in which the operations were to be performed. - Scientific Recruitment Training - Need for scientific selection, and development - Training every worker to bring out his best. - Intimate Friendly Cooperation between Management and Workers ## Frederick Taylor Scientific Management Concepts - The development of a true science of management so that the best method for performing each task could be determined. - The Scientific selection of workers so that each worker would be given responsibility for the task for which he or she was best suited. - The scientific education and development of workers. - Intimate friendly cooperation between management and labor ## Contribution of F W Taylor - Separation of Planning from Doing - Functional Organization - Workshop should be organized on the basis of workers Specialization (Specialization not Generalization) - Analysis of Jobs - Time Study – Breaking a job into elements and then studying the time required to complete each of these elements. - Careful Selection and Systematic Training - Differential Piece-Rate Plan - ‘More work, more Pay’ motto - More efficient workers got a higher wage rate and a less efficient worker got a lower wage. - Standardization of Tools and Equipment's Note: Taylor wrote two books, 'Shop Management (1903)' and 'Principles of Scientific Management (1911)'. ## Contribution of Henri Fayol - Henri Fayol is considered as the real Father of Modern Management Theory. - Henri Fayol published a book, 'General and Industrial Administration (1915)'. - He was a mining engineer in a coal mining company in France, and then became a manager. ## Contribution of Henri Fayol (1841-1925) - Division of Work: People work best when they specialize. - Authority and Responsibility: Managers have authority for work (Getting the work done through others) - Discipline: Good discipline is essential, and the responsibility of managers. - Unity of Command: Every employee should have one superior who is responsible for their work. - Unity of Direction: There should be one manager in charge of each group of organizational activities, and they should work to one plan. - Subordination of Individual Interest to General Interest: The interests of the organization as a whole come before the interests of employees. - Remunerations: Fair remunerations to be paid. - Centralization: Managers have to decide the degree of involvement of subordinates in decision-taking, depending on the task. - Scalar Chain: (Hierarchy of Authority for Communication) Communications should be from top-down unless this causes delays when a form of cross-communications can be agreed by all involved. - Order: People and materials should be in the right place at the right time. - Equity: Managers should be kind, and fair to their subordinates. - Stability of tenure of personnel: There should be stability in employee turnover and replacements. - Initiative: Employees who are allowed to originate and carry out plans will exert high levels of effort. - Team spirit (Esprit de Corps): Managers should promote team spirit in order to create harmony and unity in the organization. ## Contribution of F B Gilbreth - Evolving the principles of Motion Economy. - He proposed Motion study concept. - Introduced process chart in 1921 which gives the overall picture of an activity. - He Identifies Therbligs - the fundamental motions involved in doing an activity. - Developed micro motion study and Simo; Simultaneous Motion chart. - Invented Micro Chronometer, Cycle graph, Chrono cycle graph, and flow diagram. - Carried out studies on fatigue and its elimination. ## What is Motion study? - Motion study is formal engineering analysis of motions that are performed to accomplish work. The motion or movements of limbs of a worker play a major part in the fabrication or the manufacture of products. By carefully observing a worker while he is doing an operation, a number of movements made by him which appear to be unnecessary and unproductive can be identified, and eliminated. - The purpose of motion study is to design as improved method which eliminates unnecessary motions and employs human efforts more productively. In doing so, the principles of motion economy prove to be very helpful. ## What is Work study? - Work study is a term used to embrace the techniques of method study, and work measurement, which are employed to ensure the best possible use of human and material resources in carrying out a specified activity. - Work study is a generic term for those techniques, particularly ‘method study’ and ‘work measurement’, which are used in the examination of human work in all its contexts and which lead systematically to the investigation of all factors which affect the efficiency and the economy of the situation being renewed, in order to effect improvement. ## Contributions of Max Weber - Max Weber - German Sociologist - Father of Bureaucracy - Categories of organizations: - Leader Oriented - no delegation of management activities, employees serve as loyal subjects of a leader. - Tradition Oriented - Managerial positions are handled down from generation to generation. - Bureauocratic - delegation of management responsibilities based on individuals ability to hold the position. ## Features of Bureaucratic Administration - Insistence on following standard rules. - Systematic division of work - Principle of hierarchy - Individuals should have knowledge and training in the application rules. - Administrative acts, decisions, and rules are recorded in writing. - Rational Personnel Administration – Merit based selection, and are paid according to hierarchy. ## Dysfunctional Consequences of Bureaucracy - Over-conformity to rules - Buck-passing ("stick to rule") - independency of decision making - Categorization of queries in advance - Displacement of goals - No real right of appeal – client feel dissatisfied. - Neglect of informal groups - group dynamics - Right structure - Inability to satisfy the needs of mature individuals ## Modern Management Approaches - Quantitative Approach to Management - Behavioral or Human Relations Approach to Management - Systems Approach to Management - Contingency or Situational Approach to Management ## Quantitative Approach to Management - Expressed in terms of mathematical symbols/statistics and relationships. - Criteria - Costs, revenues, return on investment, break-even point etc. - Areas of a quantitative approach: - Operation Research - Engineering Economy - Operation Management - Management Information Systems (MIS) etc. ## Behavioral Approach to Management An image of a pyramid shows the following hierarchy of needs: - Physiological - Safety - Love/belonging - Esteem - Self-actualization - Applies the knowledge of behavioral science, psychology, sociology, anthropology etc., to manage people. ## Systems Approach to Management - System: "a purposeful collection of people, objects, and procedures for operating within an environment to achieve a pre-determined objective” - System Comprises of: - Input - Conversion process - Feedback System - Goals, and Plans ## Contingency Approach to Management - The contingency approach to management emerged from the real-life experience of managers who found that no single approach worked consistently in every situation. - Contingency approach advocates that managerial actions and organizational design must be appropriate to the given situation and a particular action is valid only under certain conditions. - There is no one best approach to management, and it all depends on the situation. ## Thank You *** The document attached appears to be a presentation about management, and entrepreneurship. The presentation is a summary of concepts, definitions, and examples about the two topics, it includes detailed descriptions that go back in time to the time of ancient Egypt, the Greeks, and a detailed history including the evolution of management, as a science, and the history of the industrial revolution. The presentation focuses on the work of several important individuals associated with management such as Frederick Taylor, Henri Fayol, and Max Weber. Several charts and diagrams are used in the presentation, they emphasize the different levels of management, different types of organizational structures, the hierarchy of needs, and the evolution of management theory overtime. The information provided in this presentation is of a comprehensive nature, providing historical background and important examples.