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Course Title: Industrial Management, and Entrepreneurship, , CHAPTER TITLE: Introduction, , Management, , to, , CONTENTS, 1., 2., 3., 4., , Meaning and concept of Management, Functions of Management, Principles of Management, Case Studies, , Prepared By:Nabadeep Borah, Part Time Lecturer, Lakhimpur Polytechnic
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DEFINITIONS, ―Management is the process of designing and maintaining an environment in which, individuals, working together in groups, efficiently accomplish selected aims.‖, Harold Koontz and Heinz Weihrich, ―Management is defined as t he process of planning, organising, actuating and, controlling an organisation‘s operations in order to achieve coordination of the, human and material resources essential in the effective and efficient attainment of, objectives.‖, Robert L. Trewelly and M. Gene Newport, , ―Management is the process of working with and through others to effectively, achieve organisational objectives by efficiently using limited resources in the, changing environment.‖, Kreitner, , ―Management is a process of getting things done with the aim of achieving goals, effectively and efficiently.‖, Peter Drucker, , CONCEPTManagement is a very popular term and has been used extensively for all types of, activities and mainly for taking charge of different activities in any enterprise., People in organisations are performing diverse tasks but they are all working, towards the same goal. Management aims at guiding their efforts towards achieving, a common objective — a goal. Thus, management has to see that tasks are
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completed and goals are achieved (i.e., effectiveness) with the least amount of, resources at a minimum cost (i.e.,efficiency).Management, has therefore, been, defined as a process of getting things done with the aim of achieving goals, effectively and efficiently. We need to analyse this definition. There are certain, terms which require elaboration. These are (a) process, (b)effectively, and (c), efficiently. Process in the definition means the primary functions or activities that, management performs to get things done. These functions are planning, organizing ,, staffing, directing and controlling., Being effective or doing work effectively basically means finishing the given task., Effectiveness in management is concerned with doing the right task, completing, activities and achieving goals. In other words, it is concerned with the end result., But it is not enough to just complete the tasks. There is another aspect also, i.e.,, being efficient or as we say doing work efficiently. Efficiency means doing the task, correctly and with minimum cost. There is a kind of cost-benefit analysis involved, and the relationship between inputs and outputs. If by using less resources (i.e., the, inputs) more benefits are derived (i.e., the outputs) then efficiency has increased., Efficiency is also increased when for the same benefit or outputs, fewer resources, are used and less costs are incurred. Input resources are money, materials,, equipment and persons required to do a particular task. Obviously, management is, concerned with the efficient use of these resources, because they reduce costs and, ultimately lead to higher profits., , FUNCTIONS OF MANAGEMENT, 1. PLANNING: Planning is the function of determining in advance what, is to be done and who is to do it. This implies setting goals in advance, and developing a way of achieving them efficiently and effectively., 2. ORGANISING: Organising is the management function of assigning, duties, grouping tasks, establishing authority and allocating resources, required to carryout a specific plan. Once a specific plan has been, established for the accomplishment of an organizational goal, the, organising function examines the activities and resources required, to implement the plan. It determines what activities and resources arerequired. It, decides who will do a particular task, where it will be done ,and when it will be
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done. Organising involves the grouping of the required tasks into manageable, departments or work units and the establishment of authority and reporting, relationships within the organisational hierarchy. Proper organisational techniques, help in the accomplishment of work and promote both the efficiency of operations, and the effectiveness of results. Different kinds of business require different, structures according to the nature of work., 3. STAFFING: Staffing simply stated, is finding the right people for the, right job. A very important aspect of management is to make sure that, the right people with the right qualifications are available at the right, places and times to accomplish the goals of the organization. This is also, known as the human resource function and it involves activities such as, recruitment, selection, placement and training of personnel., 4. DIRECTING: Directing involves leading, influencing and motivating, employees to perform the tasks assigned to them. This requires, establishing an atmosphere that encourages employees to do their best., Motivation and leadership are two key components of direction., Directing also involves communicating effectively as well as, supervising employees at work. Motivating workers means simply, creating an environment that makes them want to work. Leadership is, influencing others to do what the leader wants them to do. A good, manager directs through praise and criticism in such a way that it brings, out the best in the employee., 5. CONTROLLING: Controlling is the management function of, monitoring organizational performance towards the attainment of, organisational goals. The task of controlling involves establishing, standards of performance, measuring current performance, comparing, this with established standards and taking corrective action where any, deviation is found. Here management must determine what activities and, outputs are critical to success, how and where they can be measured and, who should have the authority to take corrective action., PRINCIPLES OF MANAGEMENT
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A managerial principle is a broad and general guideline for decision making and, behaviour., NATURE OF PRINCIPLES OF MANAGEMENT(i), , Universal applicability: The principles of management are intended to, apply to all types of organisations, business as well as non-business,, small as well large, public sector as well as private sector, manufacturing, as well as the services sectors., , (ii), , General guidelines: The principles are guidelines to action but do not, provide readymade, straitjacket solutions to all managerial problems., This is so because real business situations are very complex and, dynamic and are a result of many factors., Formed by practice and experimentation: The, principles of, management are formed by experience and collective wisdom of, managers as well as experimentation., Flexible: The principles of management are not rigid prescriptions,, which have to be followed absolutely. They are flexible and can be, modified by the manager when the situation demands., , (iii), , (iv), , (v), , Contingent: The application of principles of management is contingent, or dependent up on the prevailing situation at a particular point of time.\, , IMPORTANCE OF PRINCIPLES OF MANAGEMENT, 1. Providing managers with useful insights into reality: These principles will, add to their knowledge, ability and understanding of managerial situations and, circumstances. It will also enable managers to learn from past mistakes and, conserve time by solving recurring problems quickly., 2. Optimum utilisation of resources and effective administration: Resources, both human and material available with the company are limited. They have to, be put to optimum use. By optimum use we mean that the resources should be, put to usein such a manner that they should give maximum benefit with, minimum cost.
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3. Scientific decisions: Decisions must be based on facts, thoughtful and, justifiable in terms of the intended purposes. They must be timely, realistic and, subject to measurement and evaluation., , 4. Meeting changing environment requirements: Although the principles are in, the nature of general guidelines but they are modified and as such help managers, to meet changing requirements of the environment., 5. Fulfilling social responsibility: The increased awareness of the public, forces, businesses especially limited companies to fulfill their social responsibilities., Principles of Scientific Management, In the earlier days of the Industrial Revolution, in the absence of an established, theory of factory organization, factory owners or managers relied on personal, judgment in attending to the problems they confronted in the course of managing, their work. This is what is referred to as ‗rule of thumb‘. Managing factories by rule, of thumb enabled them to handle the situations as they arose but suffered from the, limitation of a trial and error approach. For their experiences to be emulated, it was, important to know what works and why does it work. For this, there was a need to, follow an approach that was based on the method of science defining a problem,, developing alternative solutions, anticipating consequences, measuring progress and, drawing conclusions., F.W TAYLOR’ s SCIENTIFIC PRINCIPLES OF MANAGEMENT:, 1. Science not Rule of Thumb: Taylor believed that there was only one best, method to maximise efficiency. This method can be developed through study, and analysis. The method so developed should substitute ‗Rule of Thumb‘, throughout the organisation. Scientific method involved investigation of, traditional methods through work-study, unifying the best practices and, developing a standard method, which would be followed throughout the, organisation.
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2. Harmony, Not Discord: He emphasised that there should be complete, harmony between the management and workers. Both should realise that each, one is important. To achieve this state, Taylor called for complete mental, revolution on the part of both management and workers. It means that, management and workers should transform their thinking. In such a situation, even trade unions will not think of going on strike etc., 3. Cooperation, Not Individualism: There should be complete cooperation, between the labour and the management instead of individualism. This, principle is an extension of principle of Harmony not discord‘. Competition, should be replaced by cooperation. Both should realise that they need each, other., 4. Development of Each and Every Person to His or Her Greatest Efficiency, and Prosperity: Industrial efficiency depends to a large extent on personnel, competencies. As such, scientific management also stood for worker, development. Worker training was essential also to learn the ‗best method‘, developed as a consequence of the scientific approach., , FAYOL’s PRINCIPLES OF MANAGEMENT, The 14 principles of management given by Henry Fayol‘s are –, (i), , (ii), , Division of Work: Work is divided into small tasks/jobs. A trained, specialist who is competent is required to perform each job. Thus, division, of work leads to specialisation. According to Fayol,―The intent of division, of work is to produce more and better work for the same effort., Specialisation is the most efficient way to use human effort.‖, Authority and Responsibility: According to Fayol, ―Authority is the right, to give orders and obtain obedience, and responsibility is the corollary of, authority. The two types of authority are official authority, which is the, authority to command, and personal authority which is the authority of the, individual manager.‖ Authority is both formal and informal. Managers, require authority commensurate with their responsibility. There should be a, balance between authority and responsibility. An organization should build
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safeguards against abuse of managerial power. At the same time a manager, should have necessary authority to carry out his responsibility., (iii) Discipline: Discipline is the obedience to organisational rules and, employment agreement which are necessary for the working of the, organisation. According to Fayol, discipline requires good superiors at all, levels, clear and fair agreements and judicious application of penalties., (iv) Unity of Command: According to Fayol there should be one and only one, boss for every individual employee. If an employee gets orders from two, superiors at the same time the principle of unity of command is violated ., (v) Unity of Direction: All the units of an organisation should be moving, towards the same objectives through coordinated and focussed efforts., Each group of activities having the same objective must have one head and, one plan. This ensures unity of action and coordination., (vi) Subordination of Individual Interest to General Interest: The interests, of an organization should take priority over the interests of any one, individual employee according to Fayol. Every worker has some individual, interest for working in a company. The company has got its own, objectives., (vii) Remuneration of Employees: The overall pay and compensation should, be fair to both employees and the organisation. The employees should be, paid fair wages, which should give them at least a reasonable standard of, living. At the same time it should be within the paying capacity of the, company., (viii) Centralisation and Decentralisation: The concentration of decisionmaking authority is called centralisation whereas its dispersal among more, than one person is known as decentralisation. There should be a balance, among the two., (ix) Scalar Chain: An organization consists of superiors and subordinates. The, formal lines of authority from highest to lowest ranks are known as scalar, chain. According to Fayol, ―Organisations should have a chain of authority, and communication that runs from top to bottom and should be followed by, managers and the subordinates.‖, (x), , Order: According to Fayol,―People and materials must bein suitable, places at appropriatetime for maximum efficiency.‖
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(xi) Equity: According to Fayol. This principle emphasizes kindliness and, justice in the behaviour of managers towards workers. This will ensure, loyalty and devotion., (xii) Stability of Personnel: ―Employee turnover should be minimized to, maintain organizational efficiency‖., (xiii) Initative: Workers should be encouraged to develop and carryout their, plans for improvements according to Fayol. Initiative means taking the first, step with self-motivation. It is thinking out and executing the plan. It is one, of the traits of an intelligent person. Initiative should be encouraged., (xiv) Espirit De Corps: Management should promote a team spirit of unity and, harmony among employees, according to Fayol. Management should, promote teamwork especially in large organisations because otherwise, objectives would be difficult to realise. It will also result in a loss of, coordination., , Case Studies
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The Management Mantra from GE, Jack Welch was appointed CEO of GE in 1981. At that time the firm had a market, capitalisation of $13 billion. In 2000 when he stepped down the firm‘s turnover had, increased multifold to $500 billion. What was the secret of Welch‘s success? He, has laid down the following pointers for managers to be successful:, Create a vision and then ignite your organisation to make this vision a reality., Get people so passionate about what they are doing that they cannot wait to execute, this plan. Have great energy, competitive spirit and the ability to spark excitement, and achieve results. Search for leaders who have the same qualities., Focus on strategic issues. Your job is to understand the vital issues within each of, your businesses. Recognise the talent needed to win in those markets., Focus on the main issue . Your job is to see the big picture. Don‘t manage every, detail. Don‘t get caught up in the minute details, but instead inspire others to, execute some of your vision. Surround yourself with great people and trust them to, do their job and contribute their best to the organisation., Involve everyone and welcome great ideas from everywhere. Anyone can be a, leader, just so long as they contribute, and the most meaningful way for anyone to, contribute is to come up with a good idea. Business is all about getting the best, ideas from everyone. New ideas are the lifeblood of the organisation, the fuel that, makes it run. ―The hero is the person with a new idea.‖ There is simply nothing, more important to an organisation than expressing ideas and creating a vision., Lead by example. To spark others to perform, you must lead by example. Jack, Welch‘s mastery of the four E‘s of leadership – Energy, Energise, Edge, and, Execution – was always in evidence. ―He had great energy, sparked others, had, incredible competitive spirit, and had a record of execution that was second to none., This is a key of the Welch phenomenon. Had he been lacking in any of the traits he, espoused, he would not have commanded such acclaim.‖, , Source: www.ge.co.in, , ITC EMPOWERING RURAL INDIA
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A quiet digital revolution is reshaping the lives of farmers in remote Indian villages., In these villages, farmers grow soyabeans, wheat and coffee in small plots of land,, as they have done for thousands of years. A typical village has no reliable electricity, and has antiquated telephone lines. The farmers are largely illiterate and have never, seen a computer. But farmers in these villages are conducting e-business through an, initiative called E-Choupal, created by ITC, one of India‘s largest consumer product, and agribusiness companies., ITC‘s E-Chaupal initiative is a fine example of a business organisation fulfilling, corporate social responsibility. The basic aim of the programme is to provide, farmers in rural India with the opportunity to make use of a direct marketing, channel eliminating multiple intermediation and wasteful handling and unnecessary, transaction costs. It is the single-largest information technology-based intervention, by a corporate entity in rural India, transforming the Indian farmer into a, progressive knowledge-seeking citizen, enriching him with knowledge and, elevating him to a new order of empowerment., E-Choupal delivers real-time information and customised knowledge to improve, the farmer‘s decision-making ability, thereby better aligning farm output to market, demands; securing better quality, productivity and improved price discovery. Given, the low levels of literacy in the rural sector, the role of the Choupal Sanchalak, the, lead farmer of the village, in facilitating physical interface between the computer, terminal and the farmers is central to the project. E-Choupal Smart Cards enable, farmer identification to provide customised information on the E-Choupal website., Online transactions are captured to reward farmers for volume and value of usage., The E-Chaupal initiative has found its way into the Harvard Business School as a, leading case study illustarating the use of modern technology by a leading business, house for the benefit of the rural poor., Source: Mohanbir Sawhney, McCormick Tribune Professor of, Technology, Kellogg School of Management, USA.
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Business Principles of Toyota Motor Corporation, Toyota follows certain well-defined business principles guiding, its functioning. These are:, 1. Honour the language and spirit of law of every nation and, undertake open and fair corporate activities to be a good, corporate citizen around the world., 2. Respect the culture and customs of every nation and, contribute to economic and social development through, corporate activities in local communities., 3. To provide clean and safe products and to enhance the, quality of life everywhere., 4. Create and develop advanced technologies and provide, outstanding products and services that fulfil the needs of, customers worldwide., 5. Foster a corporate culture that enhances individual creativity, and teamwork value, while honouring mutual trust and, respect between management and labour., 6. Pursue growth and harmony with global community through, innovative management., 7. Work with business partners in research and creativity to, achieve stable, long-term growth and mutual benefits and be, open to new partnerships. These principles, will guide the, company in its global vision 2010. This global vision envisages, continuous innovations in future, use of environment, friendly technologies, respecting and working with different, sections of society and establishing an interactive relationship, with society., Source: www.toyota.co.jp/en/enviornmental_rep/03
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Story of Dr. Kiran Mazumdar, The story of Dr. Kiran Mazumdar Shaw is very inspiring. She foresaw the tremendous, potential of biotechnology when no one dared to think about it. She started her own, company Biocon India in her garage with a meagre capital of Rs 10,000 in collaboration, with Biocon Biochemicals limited of Ireland., When she wanted to take loans no financial institution was willing to help her because of, three reasons: biotechnology was a new area of operation; her company lacked assets and, thirdly women entrepreneurs were a rarity at that time in 1978. She even faced problems, recruiting people. The initial operation of the company consisted of extracting an enzyme, from papaya., Now Biocon limited is an integrated biotechnology enterprise focused on the, development of biopharmaceuticals, custom research, clinical research and enzymes. It, delivers products and solutions to partners and customers in over 50 countries., According to the company‘s website, ―At Biocon our success has been our ability to, develop innovative technologies and products and to leverage them to adjacent domains., This unique ‗integrated innovation‘ approach has yielded a host of patented products and, technologies that have enabled multilevel relationships with our global clientele‖. It has two, subsidiary companies. The first one is Syngene International Private limited, which provides, chemistry and molecular based custom research services in early stage drug discovery and, development. The second subsidiary company is Clinigene International Private Limited,, which conducts longitudinal research in diabetes and offers a wide range of comprehensive, services in drug development and clinical trials. Biocon was the first biotechnology company, of India to receive ISO 9001 certification., Biocon Limited is what it is today due to adherence to the principles underlying good, management practices., Adapted from www.biocon.com and other sources
