Technological Innovation Management & Entrepreneurship

Module 1
Management
Definition of management:

Management is a function of guidance and leadership control of efforts of a group or

individuals in order to achieve goals/objectives of an organization.

Simplest definition is that it is defined as “the art of getting things done through people”.

Management can also be defined as “The process consisting of planning, organizing,

actuating, and controlling performed to determine and accomplish the use of people and
resources”.

Management is systematic way of doing things. Putting together 4Ms- Money, Men,
Material, and Machines together is management.

Management is the life giving element of an organization. Management is the creative

process which integrates and utilizes various available resources effectively and efficiently
to accomplish the goal of an organization. The person who is responsible to develop the
ideas to plan and to get things done through the workers is titled as Manager.

The manager is one who contributes to the organizational goals indirectly by directing
efforts by others not performing the task by himself.

A person who is makes his contribution to the organizational goals directly by performing
the task by himself is the worker.

Before the industrial revolution, there were no manufacturing industries. There were few
individuals who were carrying out the production of the commodities. This was mostly
family oriented and head of the family was managing the business. During the later half of
18 th century, industrial revolution had started and factory systems had evolved. Then on,
management became necessary.

Meaning:

Managing is one of the most important activities of human life. To accomplish aims that
could not be achieved individually, people started forming groups. Managing has become
essential to ensure the coordination of individual efforts. Management applies to all kinds
of organizations and to managers at all organizational levels. Principles of management are
now used not only for managing business but in all walks of life viz., government, military,
social and educational institutions. Essentially, management is same process in all forms of
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organization. But it may vary widely in its complexity with size and level of organization.
Management is the life giving element of any organization. Definitions suggested by some
of the management experts are presented below:

Henri Fayol: "Management is conduct of affairs of business, moving towards its objective
through a continuous process of improvement and optimization of resources".

Koontz: "Management is the process of designing and maintaining an environment in

which individuals, working together in groups, efficiently accomplish selected aims".

Mary Parker Follett: "Management is the art of getting things done through people".

George R. Terry: "Management is a process consisting of planning, organizing, actuating

and controlling, performed to determine and accomplish the objectives by use of people
and resources".

ILO: "Management is the complex of continuously coordinated activity by means of which

any undertaking administration/public or private service conducts its business".

Lawrence A. Appley: "Management is guiding human and physical resources into a

dynamic, hard hitting organization until that attains its objectives to the satisfaction of
those served and with a high degree of morale and sense of attainment on the part of those
rendering the service".
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The need of management are given below.

1. Optimum utilisation of resources,

2. Expansion and diversification,

3. Reduction of employers absenteeism and turnover,

4. Utilises the benefits of science and technology,

5. Encourages initiative and innovation,

6. Minimises wastages,

7. Team work, 8. Motivation,

9. Reduction in labour turnover,

10. Higher efficiency,

11. Improves the quality of life of the workers,

12. Cordial industrial relations,

13. Corporate image,

14. Promotes national development,

15. It helps society

Importance of management are discussed below.

1. Optimum utilisation of resources

Management brings all the available resources together. All these available resources
are important for achieving the objective of the organization which are:  Men, 
Money,  Machines,  Methods,  Optimum (best)  Utilization (use)
2. Expansion and diversification
Management helps the organization to achieve its objectives efficiently, systematically,
easily and quickly. It helps the organization to face the cutthroat competition to grow,
expand and diversify.
3. Reduction of employers absenteeism and turnover
Management motivates people. It provides different incentives to the employees. This
includes positive, negative, monetary and non financial incentives. These incentives
increase the willingness and efficiency of the employees. This increases the
productivity and profitability of the organization. Management also develops team
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spirit and increases the efficiency within the organization. It in addition reduces labor
turnover and absenteeism.
4. Utilises the benefits of science and technology
Man has made rapid progress within the field of Science and Technology. Management
utilizes the benefits of this progress. It provides industries with the latest machines. It
provides the consumers with the newest products.
5. Encourages initiative and innovation
Management spurs initiative. This means it initiative the employees to make their own
plans and to execute these plans. It inspires the employees to give their suggestions.
Initiative gives satisfaction to the laborers and success to the organization.
Management in addition encourages innovation. It brings innovative ideas, modern
methods, latest techniques to the organization.
6. Minimises wastages
Management minimizes the wastages of human, waste materials and monetary
resources. Work is done through arrangement, proper manufacturing and Control.
Managers motivate subordinate to reduce wastages. Reduction in wastage's brings a
higher return to firm.
7. Team work
Management always builds a team spirit in the organization. The combine effort of
work and unity lead to the prosperity within the organization. Team work plays an
important part in the success of organization.
8. Motivation
Management motivates employees by sharing their profits by the mean of bonus. They
also give a good amount of incentives to the employees. This motivation zeal the
employee to work harder, which results in higher efficiency in production.
9. Reduction in labour turnover
Management helps to reduce labor turnover in the organization. Employee turnover
takes place when some employees leave the organization, and others join in their place.
Frequent labor turnover increases selection and training cost. Management creates a
sense of responsibility among the employees who brings down labor turnover.
10. Higher efficiency
Management always wants that his employees should produce higher efficiency.
Productivity is the relationship between returns and costs. Higher returns at minimum
investment then the organization is said to be more proficient.
11. Improves the quality of life of the workers
Management provides bonus and incentive to the employees for their work. It gives a
healthy work environment to the workers. It also provides medical and insurance
faculties to worker and their families. It provides a financial stability which helps in
boosting life of the workers.
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12. Cordial industrial relations

Management ensures industrial peace. It gives more importance to the ‘Human
Element’ in business. It applies positive motivation. All this improves the relations
between the employees and the employers.
13. Corporate image
Efficient and effective management maintains a good image and goodwill of
organization. This is because of quality of products and services offered by the
organization and also due to the social responsibility of organization towards society.
14. Promotes national development
Management is regarded as a key to the economic development of nation. It puts
resources to the optimum use. It leads to capital formation and tech advancement. It
generates handsome revenue for government. It increases national income and
standard of living of people. Thus, it leads to development across all sectors, and
significant growth throughout the nation.
15. It helps society
In management, profit is not only the objective of business. Today, the managers are
combining profit objective with social purposes. They are providing society with a
regular supply of good quality goods and services at reasonable prices. They are also
providing employment opportunities to people. They in addition pay high taxes to the
government. These taxes are used for improving nations. Nowadays, managers are
using part of their profits to build hospitals, schools, colleges, etc. for civilization. So it is
helping humanity in many ways.

Conslusion: The need and importance of Management are universally accepted. The
survival progress and success of an organization greatly depend on its management. There
is a wide gap between Europe and Asia. This gap is called the ‘Science and Technology Gap.’
Even so, in reality, it is the ‘Management Gap.’ Japan and Germany were totally destroyed in
the second world war but today these countries are highly developed. This is because these
countries are well managed. So, management is required in all aspects of life.

FUNCTIONS OF MANAGEMENT

Though many authors have defined several functions of management, there are five
essential and well accepted functions of management. They are:

> Planning.

> Organising.

> Staffing.

> Directing (leading) and

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> Controlling.

PLANNING: Planning is an executive function that is referred to as decision making. It

involves missions and objectives and the actions to achieve them. This requires decision
making, that is, choosing future courses of action from available alternatives. This involves
the following:

> Setting short and long term goals for organization.

> Selecting objectives, strategies and policies for accomplishing the planned goals.

> Deciding in advance what to do, how to do, who has to do, when to do and where to do.

> Planning bridges the gap from where we are now to where we want be in future.

ORGANIZING: Organizing is a part of management that involves in establishing an

intentional structure of roles for people to fill in an organization. To organize a business
well, it is required to provide all the useful things for its proper functioning. They are raw
materials, tools, capital and personnel. The purpose of an organization structure is to help
in creating an environment for human performance. This involves in:

> Determination of activities required to achieve goals.

> Grouping these activities into department.

> Assigning such groups of activities to managers.

> Forming delegation of authority.

> Making provisions for coordination of activities.

STAFFING: Staffing is considered as an important function which makes provision for man
power to fill different positions. It involves in building the human organization by filling,
and keep filling the staff. This is done by identifying workforce requirements, taking
inventory of people available, recruiting new staff, selecting, placing, promoting, apprising,
planning their career, training the staff to accomplish their tasks effectively and efficiently.
This involves in:

> Finding the right person for right job.

> Selecting the personnel.

> Placement, training and developing new skills required for present and future jobs.

> Creating new positions.

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> Apprising the staff and planning their growth and promotions etc.

DIRECTING: After planning, organizing and staffing, the next important function of
management is directing or leading the people towards the defined objectives. Directing
involves three sub-functions namely communication, leadership and motivation.
Communication is the process of passing information and understanding from one person
to another. Leadership is the process by which a manager guides and influences the work
of his subordinates. Motivation means arousing desire in the minds of employees of an
organization to perform their best. If properly motivated, the employees will put their best
efforts with dedication, loyalty and carry out the assigned task effectively. There are two
types of motivations viz., financial and non-financial. Financial motivations are in the form
of salary, bonus, profit-sharing, rewards etc. The common non-financial motivations are job
security, promotions, recognition, praise, felicitation etc.

CONTROLLING: Controlling is measuring and correcting of activities of subordinates to

make sure that the work is going on as per the plans. It measures performance against
goals and plans, shows where short falls or deviations exist and takes necessary corrective
actions to achieve the goals. Controlling generally relates to the measurement of
achievement. This involves three elements. > Establishing standards of performance. >
Measuring performance and comparing with established standards. > Taking necessary
corrective action to meet the set standards. With accomplishment of this function, the
"Management Cyele" is said to be complete.
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ROLES OF MANAGER

Manager in any organization plays variety of roles responding to a particular situation. The
three important roles played by a manager are Interpersonal roles, Decision roles and
Informational roles.

(i) Interpersonal roles: These includes figurehead, leader and liaison roles: In
figurehead role, the manager will perform some duties that are casual and informal
ones like, receiving and greeting visiting dignitaries, attending to social functions of
employees, entertaining customers by offering parties and lunches etc. As a leader,
managers motivate, direct and encourage his subordinates. He also reconciles the
needs with the goals of the organization. In the role of liaison, the manager works
like a liaison officer between top management and the subordinate staff. He also
develops contacts with outside people and collects useful information for the well
being of the organization.
(ii) Decision roles: There are four decision roles played by a manager. They are
resource provider, arbitrator, entrepreneur and negotiator. As a resource allocator,
the manager divides the work, provides required resources and facilities to
carryout the allocated work and delegates required authority among his
subordinates. He decides who has to do what and who gets what. As a arbitrator, a
manager works like a problem solver. He finds solutions of various un-anticipated
problems both within and outside the organization. As an entrepreneur, a manager
continuously looks for new ideas and tries to improve the organization by going
along with changing work environment. He also acts as a negotiator negotiates with
the employees and tries to resolve any internal problems like trade agreements,
strikes and grievances of employees.
(iii) Information roles: A manager plays as monitor, spokesman and disseminator. A
manager monitors his environment and collects information through his personal
contacts with colleagues and subordinates. As a spokesman, he communicates the
information/goals of organization to his staff, and the progress of work to his
superiors. He also communicates the performance of company to shareholders and
the rules and responsibilities to his subordinates. As a disseminator, the manager
passes some of the information directly to his subordinates and to his bosses.

LEVELS OF MANAGEMENT

Although all managers perform almost the same functions of management - planning,
organizing, directing and controlling, there are levels among them. These are top
management, middle management and first line or supervisors.
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The top management consists of Chairman, Directors, Company Presidents, Vice-

Presidents, CEO's. These are the people who make policies for the company, set goals and
targets. They should possess conceptual and design skills.

Middle management is essentially a vast and diverse group that include finance manager,
sales manager, marketing manager, personnel manager, departmental heads etc.

The lower level managers are the supervisors and foremen. They are basically one step
above the workers The various levels and skilled required at different management levels
are shown below.

MANAGERIAL SKILLS

To be a successful manager, you’ll have to master a number of skills. To get an entry-level

position, you’ll have to be technically competent at the tasks you’re asked to perform. To
advance, you’ll need to develop strong interpersonal and conceptual skills. The relative
importance of different skills varies from job to job and organization to organization, but to
some extent, you’ll need them all to forge a managerial career. Throughout your career,
you’ll also be expected to communicate ideas clearly, use your time efficiently, and reach
sound decisions

Technical Skills

You’ll probably be hired for your first job based on your technical skills—the ones you
need to perform specific tasks—and you’ll use them extensively during your early career.
If your college major is accounting, you’ll use what you’ve learned to prepare financial
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statements. If you have a marketing degree and you join an ad agency, you’ll use what you
know about promotion to prepare ad campaigns. Technical skills will come in handy when
you move up to a first-line managerial job and oversee the task performance of
subordinates. Technical skills, though developed through job training and work
experience, are generally acquired during the course of your formal education.

Interpersonal Skills

As you move up the corporate ladder, you’ll find that you can’t do everything yourself:
you’ll have to rely on other people to help you achieve the goals for which you’re
responsible. That’s why interpersonal skills—the ability to get along with and motivate
other people—are critical for managers in midlevel positions. These managers play a
pivotal role because they report to toplevel managers while overseeing the activities of
first-line managers. Thus, they need strong working relationships with individuals at all
levels and in all areas. More than most other managers, they must use “people skills” to
foster teamwork, build trust, manage conflict, and encourage improvement.

Conceptual Skills

Managers at the top, who are responsible for deciding what’s good for the organization
from the broadest perspective, rely on conceptual skills—the ability to reason abstractly
and analyze complex situations. Senior executives are often called on to “think outside the
box”—to arrive at creative solutions to complex, sometimes ambiguous problems. They
need both strong analytical abilities and strong creative talents.

Communication Skills

Effective communication skills are crucial to just about everyone. At all levels of an
organization, you’ll often be judged on your ability to communicate, both orally and in
writing. Whether you’re talking informally or making a formal presentation, you must
express yourself clearly and briefly. Talking too loudly, confused, and using poor grammar
reduce your ability to influence others, as does poor written communication. Confusing
and error-riddled documents, and they will reflect poorly on you.

Time-Management Skills

Managers face multiple demands on their time, and their days are usually filled with
interruptions. Ironically, some technologies that were supposed to save time, such as
voicemail and e-mail, have actually increased workloads. Unless you develop certain time-
management skills, you risk reaching the end of the day feeling that you’ve worked a lot
but accomplished little.
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Decision-Making Skills

Every manager is expected to make decisions, whether alone or as part of a team. Drawing
on your decision-making skills is often a process in which you must define a problem,
analyze possible solutions, and select the best outcome

MANAGEMENT AND ADMINISTRATION

There is lack of concurrence among management writers over the meaning and use of the
words management and administration. One group of management writers feels that
administration involves "thinking".

It is a top level function that centers around the preparation of plans, rules, policies and
objectives of an organization. Where as management involves "doing" and is a lower level
function, concerning with execution and direction of policies and operations. Hence,
administration is more important at lower levels.

Another group of management writers feels management as comprehensive general term

that includes administration. Management is regarded as comprehensive general function
covering entire process of planning, organizing, directing and controlling.

Administration is regarded as a branch of management that comprises of two functions -

planning and controlling. According to them, the function of management is divided into
two categories - the upper level management usually called as administrative management
and the lower level management which is termed as operative management.

According to Peter Drucker, the basic difference between management and administration
lies in use of these terms in different fields. According to him, managing of business
enterprises is called management and managing non business organizations is called
administration. Hence financial performance plays key role in management. But in
managing non business organizations like educational institutions, government offices,
military etc., administration is more priority than financial decisions.

Administration is the function in industry concerned with determination of the corporate

policy, the coordination of finance, production and distribution, the settlement of compass
of the organization under the ultimate control of the executives".

"Management is the function in industry concerned with the execution of polity within the
limits setup by the administration and the employment of the organization for the
particular objects set before it". (Oliver Sheldon)

"Administration is primarily the process and the agency used to establish the object or
purpose which an undertaking and its staff are to achieve, secondarily, administration has
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to plan and stabilize the broad lines of principles which will govern action. These broad
lines are in turn called policies. Management is the process and the agency through which
the execution of policy is planned and supervised". (G.E. Milward)

"Administration is that phase of business enterprise that concerns with overall

determination of institutional objectives and the policies necessary to be followed in
achieving those objectives. Administration predetermines the specific goals and lays down
the broad areas within which those goals are to be attained. Administration is a
determinative function, management on the other hand is an executive function - which is
primarily concerned with the carrying out of the broad policies laid down by the
administration. (William R. Spriegal)

Thus administration is a "thinking" function and management is a "doing" function.

According this concept, managers get salary and administration staff get dividends.

Administration determines the policies upon which the enterprise is to be conducted

while the function of management is to carry out the policies that are laid down by the
administrative group.
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MANAGEMENT AS A SCIENCE, ART OR PROFESSION

Managing, like any other practice - whether medicine, music composition, engineering,
accounting or even cricket - is an art. It is a know-how. It is doing things in the light of the
realities of a situation. Under 'art' one normally learns the "how" of a phenomenon. It is the
art of getting things done through others in dynamic and mostly non-repetitive situations.

Science is an organized knowledge. A discipline can be called scientific if its methods of

inquiry are systematic and practical, information can be accumulated and analysed and
results are commutative and communicable. The essential feature of any science is the
application of scientific methods to the development of knowledge. Being systematic
means being orderly and unbiased. All the scientific information collected first as raw data
is finally arranged in order and analysed with the help of statistical tools. Science is also
cumulative in that what is discovered is added to that which has been found before. We
learn from past mistakes and go in right direction in future. On the basis of the above
discussions of science, it can be accepted that management is also a science.

It is seen that management is partly an art and partly a science. Management does not
possess the characteristics of a profession. A profession is expected to have organized and
systematic knowledge, formalized methods of acquiring training and experience, ethical
code to regulate the behavior of the members of the profession, charging of fees based on
service etc. Unlike medicine and law, the management does not have any fixed norms of
managerial behavior. There is no uniform code of conduct or licensing of managers.
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Lawyers and doctors take up profession after obtaining a valid academic qualification
where as a manager job is not restricted to individuals with a special academic degree
only. Based on this, it can be concluded that management is not a profession. However, the
present trend is towards the professionalisation of management.

Nowadays, it has become essential to acquire management degrees or training in

management to be called as good manager. There is increased demand for qualified
managers with M.B.A degree after graduation. This gave scope for establishment of large
number of business schools in India. Managing a business is no longer just a matter of a
family or institution. In this contest, one should remember Peter Drucker's opinion on
management. "A degree in management does not by itself make an individual a
professional manager any more than does a degree in philosophy make an individual a
philosopher". By insisting on holding a degree, we are over emphasizing knowledge and
completely over looking skill. This leads to loosing of good and skilled managers who do
not have required degree. There have been good examples of efficient managers without
any professional managerial degree. Some of them are, Ford of Ford Motors, Bill Gates of
Microsoft, Jemshedji Tata, Birla, Dhiru Bhai Ambani of Reliance group etc. But nowadays,
management has become a profession than art or science