Management and Entrepreneurship for IT industry
MODULE 1
INTRODUCTION
Topics covered:
Management-Meaning, nature and characteristics of management, scope and
functional areas of management, goals of management, levels of management,
brief overview of evolution of management.
Planning-nature, importance, types of plans, steps in planning.
Organizing-nature and purpose, types of organization.
Definition of management:
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.
It is systematic way of doing things. A manager is one who contributes to the
organizational goals indirectly by directing the efforts others by not performing the
task by himself.
A person who is not a manager makes his contribution to the organizations goals
directing by performing the task himself.
Four management activities included in this process are: Planning, organizing,
actuating and controlling.
Planning: means thinking of their actions in advance.
Organizing: means that managers coordinate human and material resources of the
organization.
Actuating: means that managers motivate and direct subordinates.
Controlling: means that mangers attempt to ensure that there is no deviation from
the norm or plan.
The definition involves the act of achieving the organizations objectives.
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A manager also uses people and other resources such as finance equipment to
achieve their goals.
Description on Management Activities:
Planning is a function that determines in advance what should be done which is
looking ahead and preparing for the future
It is a process of determining the objectives and charting out the methods of
attaining those objectives.
It is determination of what, where and how it is to be done and how the results are
to be evaluated.
It is done for the organization as a whole but every division, department or subunit
of the organisation.
It is a function which is performed by the managers at all levels-top (which may be
aslong as five years), middle (shorter may be week) and supervisory.
Organizing and staffing is a function which may be divided into two main
sections namely the human organization and material organization.
Once the plans have been developed and the objectives established they must
design and develop a human organization to carry out plans successfully.
It may defined as a structure which results from identifying and grouping work,
defining and delegating responsibility and authority and establishing the
relationships.
Staffing is also considered an important function in building the human
organization involves building the right person for the right job.
Fixes responsibility for a manager to find the right person for the right job and
ensures enough manpower for the various positions needed for the organization
which involves selection and training of future managers and suitable system of
compensation.
Different objectives require different kinds of organizations.
Directing is the next step after planning, organizing and staffing Involves three
sub- functions namely communication leadership and motivation.
Communication is the process of passing information from one person to another
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Leadership is the process of guiding and influencing the work of his subordinates
by the manager.
Motivation is the arousing the desire in the minds of the workers to give their best
to their enterprise.
To pull out the weight effectively, to be loyal to their enterprise and carry out the
task effectively.
Has two types of motivation financial and nonfinancial
Financial: takes the form of salary, bonus, profit-sharing etc.
Nonfinancial: takes the form of job security, opportunity of advancement
recognition praise etc.
Controlling is a function which ensures everything occurs in conformity with
plans adopted and involves three elements:
1. establishing the standards of performance
2. Measuring current performance and comparing it against the established
standards.
3. taking action to correct any performance that does not meet the standards,
management process:
Nature of management:
1. All the managers carry out the managerial functions of planning, organizing,
staffing
leading and controlling
2. management applies to any kind of organization
3. applies to managers at all organizational levels
4. the aim of the managers is same create the surplus
5. managing is concerned with productivity, which implies effectiveness and
efficiency.
Characteristics of management:
Management is
1. Intangible (not measurable and cannot be seen) but its presence can be felt by
efforts in the production sales and revenues.
2. universal and it is applicable to all sizes and forms of organizations
3. a group activity and it involves getting things done with and through others
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4. Is goal oriented and all actions of management are directed at achieving
specific goals.
5. is science as well art and emerging now as a profession
6. is multidisciplinary and it has contributions from psychology, sociology,
anthropology.
Scope of the management:
The management is a must for every organization which encompasses for profit as
well as non-profit organizations, government as well as non- government
organizations, and service as well as manufacturing organizations.
It is in fact difficult to find an area of activity where management is not applicable.
Management is not only limited to business enterprises for profits but also to the for
non-profit organizations like educational institutions, health care organizations,
financial organizations, stores management for keeping their cost of the operation at
the optimal levels Government organizations like municipal corporations, water
supply departments, electricity boards in providing best possible services to the
public Non-government agencies like environmental agencies benefit from
management in achieving their social objectives in cost effective manner.
Manufacturing organizations extensively use management to increase production
to enhance the quality of the products manufactured and similarly
Service organizations benefit from management in providing an exemplary
service experience to the customers.
Roles of a manager:
I) Interpersonal roles:
(i)Figure head: performs duties of ceremonial nature such as greeting the touring
dignitaries, attending the wedding of an employee etc.
(ii)Leader: every manager must motivate and encourage their employees, try to
reconcile their individual needs with the goals of the organization.
(iii)Liaison: in this role, every manager must develop contacts outside the vertical
chain of command to collect information useful for the organization.
(II)Informational roles:
Monitor: must perpetually scan his environment for information interrogate his
liaison and subordinates to get any solicited information useful for the rganization.
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Disseminator: manager passes the privileged information directly to the
subordinates who otherwise would not have access to it.
Spokesman: may require spending a part of the time in representing the
organization before various outside groups having some stake in the organization
such as government officials, labour unions, and financial institutions.
(III) Decisional roles:
(i)Entrepreneur: in this role the manager proactively looks out for innovation to
improve the
organization by means of means creating new ideas, development of new products
or services
or finding new uses for the old ones.
(ii)Disturbance handle r: must act like a firefighter to seek solutions to various
unanticipated problems
(iii)Resource allocator: must divide work and delegate authority among his
subordinates.
(iv)Negotiator: must spend considerable time in negotiations.
Example: the foreman negotiating with the workers for the grievance problems
Goals of management:
1. Ensure that management’s work serves a higher purpose. Management, both
in theory and practice, must orient itself to the achievement of noble, socially
significant goals.
2. Fully embed the ideas of community and citizenship in management
systems. There’s a need for processes and practices that reflect the
interdependence of all stakeholder groups.
3. Reconstruct management’s philosophical foundations. To build organizations
that are more than merely efficient, we will need to draw lessons from such fields
as biology and theology, and from such concepts as democracies and markets.
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4. Eliminate the pathologies of formal hierarchy. There are advantages to
natural
hierarchies, where power flows up from the bottom and leaders emerge instead of
being appointed.
5. Reduce fear and increase trust. Mistrust and fear are toxic to innovation and
engagement and must be wrung out of tomorrow’s management systems.
6. Reinvent the means of control. To transcend the discipline-versus-freedom
trade-off, control systems will have to encourage control from within rather than
constraints from without.
7. Redefine the work of leadership. The notion of the leader as a heroic decision
maker is untenable. Leaders must be recast as social-systems architects who enable
innovation and collaboration.
8. Expand and exploit diversity. We must create a management system that
values diversity, disagreement, and divergence as much as conformance,
consensus, and cohesion.
9. Reinvent strategy-making as an emergent process. In a turbulent world,
strategy making must reflect the biological principles of variety, selection, and
retention.
10. De-structure and disaggregate the organization. To become more adaptable
and innovative, large entities must be disaggregated into smaller, more malleable
units.
11. Dramatically reduce the pull of the past. Existing management systems often
mindlessly reinforce the status quo. In the future, they must facilitate innovation
and change.
12. Share the work of setting direction. To engender commitment, the
responsibility for goal setting must be distributed through a process where share of
voice is a function of insight, not power.
13. Develop holistic performance measures. Existing performance metrics must
be recast,since they give inadequate attention to the critical human capabilities that
drive success in the creative economy.
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14. Stretch executive time frames and perspectives. Discover alternatives to
compensation and reward systems that encourage managers to sacrifice long-term
goals for short-term gains.
15. Create a democracy of information. Companies need holographic
information systems that equip every employee to act in the interests of the entire
enterprise.
16. Empower the renegades and disarm the reactionaries. Management systems
must give more power to employees whose emotional equity is invested in the
future rather than in the past.
17. Expand the scope of employee autonomy. Management systems must be
redesigned to facilitate grassroots initiatives and local experimentation.
18. Create internal markets for ideas, talent, and resources. Markets are better
than hierarchies at allocating resources, and companies’ resource allocation
processes need to reflect this fact.
19. Depoliticize decision-making. Decision processes must be free of positional
biases and should exploit the collective wisdom of the entire organization.
20. Better optimize trade-offs. Management systems tend to force either-or
choices. What’s needed are hybrid systems that subtly optimize key trade-offs.
21. Further unleash human imagination. Much is known about what engenders
human creativity. This knowledge must be better applied in the design of
management systems.
22. Enable communities of passion. To maximize employee engagement,
management systems must facilitate the formation of self-defining communities of
passion.
23. Retool management for an open world. Value-creating networks often
transcend the company’s boundaries and render traditional power-based
management tools ineffective. New management tools are needed for building
complex ecosystems.
24. Humanize the language and practice of business. Tomorrow’s management
systems must give as much credence to such timeless human ideals as beauty,
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justice and community as they do to the traditional goals of efficiency, advantage,
and profit.
25. Retrain managerial minds. Manag ers’ traditional deductive and analytical
skills must be complemented by conceptual and systems-thinking skills.
PLANNING:
Meaning of Planning:
Planning is an intellectual process which requires manager to think before acting.
It is thinking in advance. it is planning that managers of organization decide what
is tobe done, when it is to be done, how it is to be done, and ho w has to do it.
Decision making is an integral part of [Link] is the process of choosing among
alternatives. Obviously, decision making will occur at many points in the planning
process.
Planning is a continuous process like a navigator constantly checks where his ship
ingoing in the vast ocean, a manger must constantly watch his plans must
constantly monitor the conditions, both within and outside the organization to
determine if changes are required in his plans.
Importance of planning
1)Minimizes risk and uncertainty
By providing a more rational, fact-based procedure for making decisions,
planning allows managers and organizations to minimize risk and uncertainty.
Planning does not deal with future decisions, but in futurity of present decisions.
2)Leads to success:
Planning does not guarantee success but studies have shown that, often things
being equal, companies which plan not only outperform the non-planners but also
their past results.
This may be because when a businessman’s actions are not random arising as mere
reaction to the market place
Planning leads to success by doing beyond mere adaption to market fluctuations.
With the help of a sound plan, management can act proactively and not simply
react. It involves to attempt to shape the environment on the belief that business is
not just the creation of environment but its creator as well.
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3) Focus attention on the organizations goals:
Planning helps the manger to focus attention on the organizations goals and
activities.
This makes it easier to apply and coordinate the resources of the organization more
economically.
The whole organization is forced to embrace identical goals and collaborate in
achieving them.
It enables the manager to chalk out in advance an orderly sequence of steps for the
realization of organizations goals and to avoid needless overlapping of activities.
4) Facilitates control:
In planning, the manager sets goals and develops plans and to accomplish these
goals.
These goals and plans then become standards against which performance can be
measured.
5) Trains executives:
Planning is also an excellent means for training executives.
They become involved in the activities of the organization and the plans arouse
their interest in the multifarious aspects of planning.
Forms of planning:
There are many forms and styles of planning, and planning practices are likely to
vary from organization to organization.
One useful way of classifying them is to distinguish between strategic planning
and tactical planning.
About Strategic planning involves deciding what the major goals of the entire
organization will be and what policies will guide the organization in its pursuit of
these goals and depends on the data collect in the outside the organization such as
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market analysis, estimates of costs, technological developments and so on a nd if
the data being mostly imprecise make strategic planning less certain.
About Tactical planning involves deciding specifically how the resources of the
organization will be used to help the organization achieve these strategic goals. for
example if the organization has prepared a ten- year strategic plan which envisages
a profit rate of 25% on capital employed in the tenth year, it also necessary to
prepare a more detailed tactical plan for the next year, with a specific target of 10%
on the capital employed.
Types of plans:
Plans are arranged in a hierarchy within the organization
At the top of this hierarchy stand objectives.
Objectives are the broad ends of the organization which are achieved by means of
strategies.
Strategies in their turn are carried out by means of the two major groups of plans.
Single use plans and standing plans.
Single use plans are developed to achieve a specific end and when the end is
reached the plan is dissolved.
The two major types of plans are single use plans are programmers and budgets.
Standing
plans on the other hand are designed for situations that recur often to justify the
standardized approach.
Single use plans are developed to achieve a specific end and when the end is
reached the plan is dissolved.
The two major types of plans are single use plans are programmers and budgets.
Standing plans on the other hand are designed for situations that recur often to
justify the standardized approach.
For example, it would be inefficient for a bank to develop a single use plan for
processing a loan application for each new client.
instead it uses one standing plan that anticipates in advance whether to approve or
turn down the request based on the information furnished, credit rating, etc. the
major types of plans are policies, procedures methods and rules.
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ORGANIZING: An organization can be defined as a social unit or human
grouping deliberately structured for the purpose of attaining specific goals.
An organization can also be defined as the process of identifying and grouping of
the work to be performed, defining and delegating responsibility and authority and
establishing relationships for the purpose of enabling people to work most
effectively together in the accomplishment of their objectives.
Nature of organization:
An organization basically consists of group of people who form the dynamic
human element of the
Organization
Organization helps in identifying the various tasks to be performed which are
assigned to the
individuals to perform to achieve the common objectives or common purpose of
the organization.
It ensures to achieve coordination amongst the people working in various
departments of the organization and ensures integrated efforts to achieve
organizational objectives or goals.
It delegates authority to the managers with commensurate responsibility and
accountability for the
discharge of their duties and also amongst different hierarchical levels in an
organization.
It also aides in achieving financial, physical material and human resources.
Organizations are part of the larger environment and hence they are influenced by
the external environment.
Organization helps in the realization of the plans made by the managers
It helps in nurturing and growing special skills and talents by the virtue of
division of labor.
It facilities seamless communication.
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Purpose of an organization:
The purpose of any organization is to achieve goals for which it is formed which
aims at achieving common objectives through its group member efforts.
The organizations exist for different purpose and the efforts for organizational
members are directed for the achievement of this purpose.
For example:
For business organization the purpose is to develop people and their skills for
contributing towards the growth of the enterprise through profits
For nonprofit organization the purpose the objective would be to serve the
members of the committee in a productive manner.
Types of organization:
a) Business organization: are those organizations which are formed with the
purpose of earning profits the sole purpose being to earn surplus in the form of
profits without which they cannot survive and grow
Example: Firms engaged in manufacturing, trading, services etc
b) Non -profit service organizations: are those organizations that do not have the
motive of making profits but to serve the people of the specific community or a
segment of a society. Example: Rotary club, Lions club,Orphanages, Charitable
hospitals etc.
Staffing is the managerial function of recruitment, selection, training, developing,
promotion and compensation of personnel.
Staffing may be defined as the process of hiring and developing the required
personnel to fill in the various positions in the organization.
It involves estimating the number and type of personnel required. It involves
estimating the number and type of personnel required, recruiting and developing
them, maintaining and improving their competence and performance.
Staffing is the process of identifying, assessing, placing, developing and evaluating
individuals at work.
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RECRUITMENT AND SELECTION Recruiting involves attracting candidate to
fill the positions in the organization structure.
Before recruiting, the requirement of positions must be cleared identified. It makes
easier to recruit the candidates from the outside.
Enterprises with a favorable public image find it easier to attract qualified
candidates.
Definitions – 1. Mc Fariand, The term recruitment applies to the process of
attracting potential employees of the company.
2. Flippo, “Recruitment is the process of searching prospective employees and
stimulating them to apply for the jobs in the organization.”
Thus recruitment may be considered as a positive action as it involves attracting
the people towards organization.
Need of recruitment: The need of recruitment may arise due to following
situations:
1. Vacancies due to transfer, promotion, retirement, permanent disability or death
of worker.
2. Creation of vacancies due to expansion, diversification or growth Methods and
sources of recruitment
According to ‘Dunn and Stephens’ recruitment methods can be classified into three
categories : 1) Direct Methods 2) Indirect Methods 3) Third Party Methods
1) Direct Methods include travelling visitors to educational and professional
institutions, employee’s contacts with public and manned exhibits and waiting
lists.
2) Indirect Methods include advertising in newspaper radio, in trade and
professional journals, technical journals, brochures etc.
3) Third Party Methods includes the use of commercial and private employment
agencies, state agencies, placement offices of the colleges and universities, and
professional association recruiting firms.
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PROCESS OF SELECTION
Selection means the taking up the different workers by various acts from the
application forms invited through different sources of internal and externals.
According to Dale Yoder, “Selection is the process in which candidates by
employment are divided into two classes those who are to be offered employment
and those who are not.”
Selection Procedure : Selection of workers is regarded as a policy matter. Every
enterprise has its own policy for recruitment.
The following procedure is adopted.
1) Receiving and screening the application : After receiving the applications have
to be screened.
In this process the applications of candidates without the requisite qualification are
rejected.
2) Sending the Blank application form : After preparing the list of candidates
suitable for job, blank application forms will be sent to the candidates. In this
application form information should be given about the name and address of the
candidate, educational qualification, experience, salary expected etc.
3) Preliminary Interview : The interviewer has to decide whether the applicant is
fit for job or not. By this interview the appearance, attitudes, behavior of the
candidate can be known easily.
4) Administering Tests : Different types of test may be undertaken. Tests are
conducted for the knowledge of personal behaviour, efficiency of work and
interest.
Generally, following types of tests are conducted. i) Achievement Test ii) Aptitude
test iii) Trade Test iv) Interest Test v) Intelligence Test etc.
5) Checking References on Investigation of Previous History : Applicants are
generally asked to give names of at least two persons to whom the firm may make
a reference.
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6) Interviewing : Interview is the most important step in the selection procedure. In
interview, the intimation given in the application form is checked.
helps in finding out the physical appearance and mental alertness of the candidate
and whether he possesses the required qualities. Interviews may be of various
kinds these are
1) Direct Interview
2) Indirect Interview
3) Patterned Interview
4) Stress interview
5) Systematic in – depth interview
6) Board of panel interview
7) Group interview
7) Final Selection : On the basic of results of previous interview the candidate is
informed whether he/she is selected for the said post or not.
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