Department of Electronics and Communication Engineering

Course: Technological Innovation Management and Entrepreneurship

Course Code: BEC501

Course Objectives:
This course will enable students to:
 Understand basic skills of Management
 Understand the need for Entrepreneurs and their skills
 Identify the Management functions and social responsibilities
 Understand economic development, creativity and Innovation
 Understand the ideation process, creation of business model, feasibility study and sources of funding
Technological Innovation Management and Entrepreneurship BEC501

Moduel-1

Management

 Nature and Functions of Management – Importance

 Definition
 Management Functions
 Levels of Management
 Roles of Manager
 Managerial Skills
 Management & Administration
 Management as a Science, Art & Profession

Planning

 Planning-Nature
 Importance
 Types, Steps and Limitations of Planning
 Decision Making – Meaning
 Types and Steps in Decision Making

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1.1 INTRODUCTION

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. Being a new discipline it has drawn concepts and
principles from a number of disciplines such as Sociology, Economics, Psychology, Statistics,
Anthropology and so on. The contributors from each of these groups have viewed management
differently. For example economists have treated management as ‗a factor of production‘; Sociologists
treated it as ‗a group of persons‘. Hence, taking all these view points, it becomes difficult to define
management in a comprehensive way and no definition of management has been universally accepted

1.2 OBJECTIVES

This module enables students to examine the meaning, importance and nature of management.
Understand the difference between management and administration. Describe the roles of a manager.
Describe the nature and importance of planning. Present the various types of plans. Explain steps in
planning and strategic planning process. Identify limitations of planning. Define the meaning of a
decision and describe the various types of decision. Present the steps in rational decision making
Process.

1.3 NATURE AND FUNCTIONS OF MANAGEMENT – IMPORTANCE

a. Management is a critical element in the economic growth of a country:

By bringing together four factors of production (men, money, material and machines),
management enables a country to experience a substantial level of economic development. A
Country with enough Capital, manpower and other natural resources can still be poor if it does not
have competent managers to combine and co-ordinate these resources.

b. Management is essential in all organized efforts, be it a business activity or any other

activity:

Management is not only just used for managing business organizations; they are applied to
various organizations such as educational, social, military and government. Thus management is
the same process in all forms of organization.

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c. Management is the dynamic , life-giving element in every organization:

Management co-ordinates current organizational activities and plans future ones. It arbitrates
disputes and provide leadership. It adapts the organization to its environment and often shapes the
environment to make it more suitable to the organization.

―Without management, a country‘s resource of production remain resources and never become
production‖- Peter drucker.

1.4 DEFINITION

No definition of management is been universally accepted . Definitions suggested by some of the

management experts are presented below:

―Management is the art of getting things done through the people‖-Mary parker follett.

―Management is conduct of affairs of business, moving towards its objective through a continuous
process of improvement of optimization of resources‖- Henri fayol.

―Management is knowing exactly what you want men to do and then seeing that they do it in the best
and cheapest ways‖-F.W Taylor.

―Management may be defined as the art of securing maximum effort ,so as to secure maximum
prosperity, peace and happiness for both employer and employee and give the public the best possible
service‖-John [Link].

1.5 MANAGEMENT FUNCTIONS

There are five essential and well accepted functions of management they are:

a. Planning.

b. Organizing.

c. Staffing.

d. Directing (leading).

e. Controlling.

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a. Planning:

 Planning is the function that determines in advance what should be done.

 It is a process of deciding the business objectives and charting out the methods of attaining those
objectives.

 Planning is done not only for the organization but for every division, department or sub-unit of
the organization.

 Thus planning is a function that is performed by managers at all levels –top level, middle level
and supervisory.

 Plans made by top level management may cover as long as five or ten years.

 Plans made by middle level may cover for shorter period.

 For ex: two hours meeting to take place in a week.

b. Organising:

 To organize a business is to provide them personnel (employees), raw materials, tools, capital
etc…

 This is divided into two organization human organization and material organization.

 Once managers have established objectives, they must design and develop human organization
that is required to carry out the plans successfully.

c. Staffing:

 Staffing is considered as an important function in building human organization.

 In Staffing, manager attempts to find the right person for each job.

 Manager recruits enough manpower to fill the various positions needed in the organization.

 Staffing involves the selection and training of future managers and suitable system of
compensation.

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d. 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 –communication, leadership and motivation.

 Communication 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 sub-
ordinates.

 Motivation means arousing desire in the minds of employees of an organization to perform

their best.

 There are two kinds of motivation: Financial and Non-financial. Financial motivation is in
the form of salary, bonus, profit sharing rewards etc

 Non-financial motivation is job security, promotions, praise, felicitation etc

e. Controlling:

 Controlling is measuring and correcting if activities of sub-ordinates to make sure that the
work is going on as per the plans.

 These involve these elements: Establishing standards of performance. Measuring

performance and comparing with established standards. Taking corrective action to meet the
set standards.

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1.6 LEVELS OF MANAGEMENT

The three levels of management that are commonly found in an organization are as shown in Figure1.1.

Figure 1.1: Levels of management

TOP MANAGEMENT: Top management consist of chairman, directors, company presidents, vice
presidents CEO‘s. Functions are:
 They determine goals of organization
 Establish policies
 Monitoring performances
 Judging the results.
MIDDLE MANAGEMENT: It is a vast & diverse group that includes finance manager, sales
manager, marketing manager, personal manager departmental heads etc. Functions are:
 To plan details of all operations.
 To co-ordinate between various departments
 Development of manpower for the organization by imparting training.
LOWER MANAGEMENT: It includes foreman & supervisors. They are basically one step above the
workers. Functions are:
 To act as link between management & the workers.
 Supervision of workers & their work.

 Arrangement of materials & tools etc. for production.

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1.7 ROLES OF MANAGER

According to Mintzberg, manager should be regarded as playing the following 10 different roles:

1. Inter personal roles: Figurehead, Leader, Liaison.

2. Informational roles: Monitor, Discminator, Spokesperson

[Link] roles: Enterpreneur, Distrbance handler, Resource Allocater & Negotiator

i) INTERPERSONAL ROLES

FIGUREHEAD:-In this role, every manager will perform some duties of ceremonial nature. Such as
greeting and touring dignitaries, attending wedding of an employee, taking important customer to lunch
& so on.

LEADER:-As a leader, every manager must motivate & encourage his employees. He shoukd reconcile
the needs with the goals of the organization.

LIASION:-In this role, every manager must cultivate contacts with outside people and collect useful
information for the well being of the organization.

ii) INFORMATIONAL ROLES:

MONITOR:-As monitor, manager has to solicits & receives information from various sources on
matters concering his organization. Keeps all channel open for information.

DISSEMINATOR: -The manager passes some of his privileged information directly to his key
subordinates, who has no access otherwise.

SPOKESPERSON: -As a manager, he should spend part of his time in representing his organization
before various outside groups. Eg: share holders, govt. bodies, press media etc.

iii) DECISIONAL ROLES:

ENTREPRENEUR:-As an entrepreneur, a manager initiates projects to improve the organization,

encourages new ideas and innovations, brings in changes & manages it looks for sources.

DISTURBANCE HANDLER:-A manager handles all kinds of disturbances that occur within the

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organization & find solutions to problems such as worker strikes, major accidents, customers going
bankrupt, suppliers not delivering to schedule etc.

RESOURCE ALLOCATOR:-Here manager decides how all the organizations get distributed among
various divisions or employees and allocates to required areas.

NEGOTIATOR: -Manager need to negotiate on important matters concerning the organization. Eg:
negotiating trade unions, politicians, client, suppliers etc.

1.8 MANAGERIAL SKILLS

Manager should possess 3 major skills:

TOP MANAGEMENT—CONCEPTUAL SKILL

MIDDLE MANAGEMENT—HUMAN RELATION SKILL

SUPERVISORY LEVEL—TECHNICAL SKILLS

The skill is an individual‘s ability to perform physical or mental tasks with a specified outcome.

CONCEPTUAL SKILL: It is the ability of a manager to conceptualise the environment, the

organization & his own job, so that he can set appropriate goals. For his organization, for himself & his
team this skill seems or increase in importance as manager moves up to higher positions of
responsibility in the organization.

TECHNICAL SKILL: It is manager understands of the nature of job that people under him have to
perform. It refers to person‘s knowledge and proficiency in any type of process or technique. This skill
is important at lower levels of management. As manager moves to higher positions, the conceptual
component becomes more important & technical component becomes less important.

HUMAN RELATIONS SKILL: It is the ability to interact effectively with people at all levels. This skill
helps manager. To judge the possible reactions to & outcomes of various course of action he may
undertake to recognize the feelings & sentiments of others. To examine his own concepts & values, this
will enable manager to develop more useful attitudes about him. This skill is important to managers at
all levels. At top level technical skill becomes least important.

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1.9 MANAGEMENTAND ADMINISTRATION

Administration involves ―thinking‖. It is a top level function which centres on the determination of
plans, policies and objectives of a business enterprise. Management involves ―doing‖. It is a lower level
function which is concerned with the execution and direction of policies and operations. Figure 1.2
shows that, at top level more time is spent in administrative activity and as one moves down in the
organization more time is spent in managerial activity.

Upper level management is called administrative management and lower level management is known as
operative management.

Figure1.2: Time spent in administration and managerial functions at different levels.

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The difference between administration and management are listed below.

CHARACTERISTIC ADMINISTRATION MANAGEMENT

[Link] function Planning ,organizing & staffing Leading, motivating &

controlling

[Link] Acts as owner Acts as an agency

[Link] Requires good Requires good

administrative skills Technical skills

[Link] in the Top level Lower level

Organisation

[Link] Managing Managers ,supervisor ,

Directing owner ,CEO Foreman etc…

Etc…

[Link] Makes the policies, Implements the plans

Objectives and And policies

Goals to be

Achieved

[Link] No direct involvement Directly involves in

In production or the execution of plans

Services and achieving goals

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1.10 MANAGEMENT AS A SCIENCE, ART & PROFESSION

Management as Science:
 Hall marks of a science are not the test tube or the lab coat.
 Instead, they are implicit in the method of inquiry used for gathering the data.
 The discipline is said to be scientific of its,
1. Methods of inquiry are systematic and empirical.
2. Information can be ordered and analysed; and
3. Results are cumulative and communicable.
 Being systematic means being orderly and embiased.
 All scientific information collected first as raw data is finally ordered and analysed with the help
of statistical tools.
 Now data becomes Communicable and Intelligible.
 Science is also cumulative in that which is discovered is added to that which has been found
before.
Therefore, we can say management is also a science.
 Science is used to denote two types of systematic knowledge – natural or exact and behavioural
or inexact.
Therefore, Management is not like the exact or natural sciences [ such as physics or chemistry ].
 In management one has to study man and a multiplicity of factors affecting him.
For example:- It is not possible to study the effect of monetary incentives on a worker‘s
productivity , because this affect will be mixed with and inseperable from other effects such as
leadership style of the workers supervisor , workers need hierarchy , the pressure of his co-
workers etc…..
 Therefore, our findings are not going to be accurate and dependable as those of physical science.
They are going to tell us about tendencies and probabilities only.
Therefore, we place management in the category of a behavioural science.

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Management as an art:
 In ‗science‘ one learns ―why‖ of a phenomenon under ‗art‘ one learns the ‖how‖ of it.
 Art is thus concerned with the understanding of how a particular work can be accomplished.
 Management in this sense is more an art ―It is the art of getting things done through others in
dynamic and mostly non-repetitive situations‖.
 Whether it is factory or a farm or a domestic kitchen , the resources of men machine and money
have to be coordinated against several constraints to
 The manager has to constantly analyze the existing situation determine the objectives , seek
alternatives , implement, co-ordinate control and evaluate information and make decisions.
 A theoretical body of lessons and principles which manager has learnt should be put in his
special problem . He should have that skill or art .
 The knowledge has to be applied and practiced by that manager. Just as the medical or legal
practitioners practice their respective science.
Therefore, in this sense management is an art.
Therefore, we conclude management involves both elements those of a science and an art. While
certain aspects of management make it a science, certain others which involve application of
skill make it an art.
Management as a profession:

 A Profession is calling that, requires specialized knowledge and often long intensive academic
preparation.
 The essential features of profession are:
 Well defined body language.
 Restricted entry.
 Service motive.
 Code of conduct.
 Representative professional association

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1.11 PLANNING: PLANNING-NATURE

―Planning is deciding in advance what is to be done. It includes the selection of objectives, policies,
procedures and programes from alternatives.‖ -M. L. Harley

―Planning is decision making in anticipation.‖ -R.L. Ackoff.

NATURE OR FEATURES OR CHARACTERISTICS OF PLANNING:

Planning is the beginning of the process of management.

1. Planning is an intellectual process:

 It requires managers to think before acting.

 It is thinking in advance.

 It is by planning managers of organization decides what is to be done, when it is to be done,

how it is to be done and who is to do it.

2. Planning is decision making:

 Decision making is an integral part of planning.

 It is a process of choosing among alternatives. For ex:- planning for their organization,
managers must decide which goal to pursue. shall we manufacture all parts internally or buy
some from outside?‖

 Managers must decide how they will allocate their resources to attain their goals.

c) Planning is a continuous process:

 Manager should constantly watch the progress of his plans.

 He should constantly monitor the conditions, both within and outside the organization to
determine if changes are required in his plans.

 Manager should be right than being consistent. It is called ― principle of navigational change.‖

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d) Planning must be flexible:

 Planning must not be rigid.

 Flexibility of planning means its ability to change direction to adapt to changing situations.

 Planning should possess a built –in flexibility in atleast 5 major areas.

 1) Technology 2) Market 3) Finance 4) personnel 5) organization

e) Planning is all pervasive:

 Planning is important to all managers regardless of their level in the organization. i.e from CEO
to first time supervisor.

 Top level managers are concerned with longer time periods ( six months to five years later).

 Lower level managers are concerned with planning activities for the day, week or month.

1.12 IMPORTANCE AND PURPOSE OF PLANNING PROCESS.

Without planning business decisions would become random, ad hoc choices.

Four concrete reasons for the importance of planning function are as follows:-

1) Minimizes risk of uncertainty.

2) Leads to success.

3) Focuses attention on the organization‘s goals.

4) Facilitates control and trains executives.

1) Planning minimizes risk and uncertainty:-

 Organizations have to function and survive in an environment that is changing too fast.

 In such situations, planning based on hard facts and and data help managers to minimize risk
and uncertainties.

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2) Planning leads to success:-

 Planning leads to success by doing beyond mere adaptation to market fluctuations.

 With the help of a sound plan, management can act proactively, and not simply react.

3) Planning focuses attention on the organizations and goals:-

 Planning helps the manager to focus attention on the organization‘s goals and activities.

 This makes easier to co-ordinate the resources of the organization more economically.

 Planning helps manager to think in advance and orderly sequence of steps for realization of
organization‘s goals and to avoid needless overlapping of activities.

4) Planning facilitates control:-

 The function of control is to ensure that the activities confirm the plans.

 Without proper control planning is a wasteful exercise.

5) Planning trains executives.

 Planning is also an excellent means for training executives.

 Then executives become involved in the activities of the organization.

6). Planning ensures co-ordination:-

 Planning helps to establish coordinated efforts from different divisions, departments and
people.

 When all the members of the organization become aware of goals and the routes taken to
achieve them, there is better co ordination.

7). Planning encourages innovation and creativity:-

 In order to overcome weakness and ward off threats, managers are compelled to be creative,
innovative all the time.

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 This will help managers to remain competitive at all times.

8) Planning helps in decision making:-

 Managers in all levels in ana organization are continuously included in decision making in onr
way or the other.

 Planning helps in providing guidelines and thus facilitate decision making.

9).Planning improves morale:- (team spirit)

 Planning has a definite role to play in the success of an organization.

 Success leads to profit and profit leads to happy management.

 Because of the fact that employees have participated in the planning process, it will boost their
morale.

1.13 TYPES OF PLAN

VISION: This is the dream that an entrepreneur creates about the direction that his business should
pursue in future. Vision is an ongoing process. As the organisation proceeds, vision reshapes. A vision
should be brief, focused, clear & inspirational to the organisational employees. It should be linked to
customer's need & convey a general strategy for achieving the mission

Mission: is the unique aim of of an organisation that sets apart from others of its types. Mission decides
the scope of business [i.e products &services the organisation provides] mission is not revised every
now and then in response to every new turn in the economy it may change over time to take advantage
of new condition

OBJECTIVES: objectives are the goals or aims that the management wishes the organisation to
achieve in pursuit of its mission. It is the end points towards which all business activities like
organising, staffing, directing& controlling are directed

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CHRACTERISTICS OF OBJECTIVES:

 objectives are multiple in number

 objectives are either tangible or intangible

 objectives have a priority

 objectives are generally arranged in a hierarchy

 objectives may clash with each other

1. Objectives are multiple in number:

 all organisations usually have multiple objectives

 It is because of the many areas of business operations where organisations try to set their goals.
"peter ducker" says, there are 8 areas in which objectives to be set

(a) Market standing of the company

(b)innovation achieved by the company

(c) productivity in various parameters

(d) physical & financial resources

(e) profitability of business

(f) managerial performance & development

(g) worker performence and attitude

(h) fullfillment of public responsibility

2. Objectives are either tangible or intangible

 It is tangible ,which means they could be quantifiable ex: productivity, profitability... etc

 objectives are intangible which means they are qualitative in nature and cannot be quantified
for ex: workers morale, company image.... etc

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3. Objectives have a priority:

 At any point of time , accomplishment of one objectives is relatively more important than of
the others.

 The establishment of priorities is extremely important because in that resources of any

organisation must be allocated by rational means.

 At all time ,managers are confronted with alternative goals which must be evaluated and
ranked .ex: university vice chancellor must determine the relative importance of teaching,
resarch & extension goals

4. Objectives are generally arranged in hierarchy

 It means the top level objectives of an organisation break into next level of objectives which
again give rise to many more in the next level so on

 therefore objectives form a hierarchy from the top level to the lowest position in the
organizational structure

5. Objectives sometime clash with each other:

 The process of allocating objectives among various unit creates the problem of potential goal
conflict, where in achieving the goal of one unit may harm or fail other goals.

 ex: goal of production unit is to achieve low cost unit or price by producing in mass. Mass
production should not be of low quality. Because, it might conflict with the sales goal of
selling high quality product.

STRATEGIES: Is term originated in military, which connates a response to a competitive environment

this is commonly referred to as SWOT (strength,weakness,opportunities & threats) analysis. Two
important activities involved in strategy formulation are environmental appraisal & corporate appraisal.

ex: tata idea of marketing a car at a price of Rs.1 lakh is a stratergic [Link] make it ,resource required
,how and where to manufacture ,how to assemble ..etc are tactical plans.

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STRATERGIC PLANNING :

SINGLE USE PLANS:

They are developed to achieve a specific end after reaching that target ,that plan becomes useless. The
major types of plans are programmes and budgets

Programmes: they are precise plans or definite steps in proper sequence which need to be taken to
discharge a given task

Budgets: budgets are plans for a future period of time containing statements of expected results in
numerical terms i.e rupees ,man-hours, product -units & so on

STANDING PLANS:

They are designed for situations that often repeat. These plans are used again. There are 4 types of
standing plans :

(1) Policies

(2) Procedures

(3) Rules

(4) Methods

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 Policies: setting up boundaries that supply the general limits & direction in which managerial
action will take place - "terry"
 Procedures: are detailed guidelines that are used to carry out the policies.
 Rules: are, detailed & recorded instruction that a specific action must meet under the given
instruction. ex: reporting time to office ,lunch time ...etc
 Methods: method is a way in which one step of a procedure to be carried out.

1.14 STEPS OF PLANNING

1. Establishing verifiable goals or set of goals to be achieved

2. Establishing planning premises

➡ Internal and external premises

➡ Tangible and intangible premises

➡ Controllable and non controllable premises

3. Deciding the planning period

4. Finding alternative courses of action

5. Evaluating and selecting a course of action

6. Developing derivative action plans

7. Establishing and developing action plan

8. Measuring and controlling the process

1. Establishing verifiable goals or set of goals to be achieved

 The first step in planning is to determine the enterprise objectives

 It is set by upper level or top level manager
 The type of goal selected will depend on a number of factors : the basic mission of the
organization, value its manager hold, and potential activities of the organization

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2. Establishing planning premises

It is second step in planning. It is to establish planning premises. i. e certain assumptions about future
on the basis of which the plans will be ultimately formulated. Planning premises can be classified into

a) Internal and external premises

b) Tangible and intangible premises

c) Controllable and non controllable premises

a) Internal and external premises:

Internal and external premises within the organization. some of the examples are policies, forecast,
investment, availability of equipment, funds flow. Etc external premises are outside the organization
they include government policies, technology changes, business environment, demand etc.

b) Tangible and intangible premises

Tangible are measurable premises.

Ex: population, investment and demand. Intangible premises are which cannot be quantitatively
measurable. Ex: business environment, economic conditions.

c) Controllable and non controllable premises:

Some of the premises are controllable like, technical man power, input technology, machinery etc.
Some other premises like strikes, non availability of raw materials, phase shifts are uncontrollable by
the organization

3) Deciding planning period

 Once upper level managers have selected basic long-term goals and planning premises, the next
task is to determine the period of the plan.

 In some stances plans are made for a Yea only while in other plans spans decides choice of
period are as follows a. Lead time in development and commercialization of new product . b.
Pay back period etc.

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4) Finding alternative courses of action:

 The fourth step in planning is to search and examine alternative courses of action. Ex: technical
know how may be taken by engaging or foreign technician or by training staff abroad.

5) Evaluating and selecting a course of action:

 Fifth step is to evaluate the alternative courses in the light and select the best of action .This is
done with the help of quantitative technique and Operating research

6) Developing derivative plans:

 Once the plan for the organization has been formulated, middle and lower level managers must
draw up the appropriate plans for their sub units.

 Derivative plans are plans that are required to support the basic plan

 In developing these derivative plans, lower level manager take steps similar to those taken by
upper level manager. Selecting realistic goals etc

7) Establishing and deploying action plans

 Managers may not know how to turn the derivative plans into action.

 Action plan identifies particular activities necessary for this purpose and specifies the who,
what, when and how of each action item

8) Measuring and controlling the progress:

 Without monitoring plan will get ruined.

 Hence process of controlling is critical part of any plan. Managers need to check the progress of
their plans.

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1.15 LIMITATIONS OF PLANNING

 Planning is an expensive and time consuming process. It includes money, energy and risk, but gives no
assurance of the fulfilment of organisation‘s objectives.

 Planning restricts the organisation to risk-free opportunities. Planning forces manager to operate within
the limits, planning cause delay in decision making.

 For industries producing fashionable articles or for industries engaged in a publication of textbooks,
working on a day-to-day basis is more economical than on a planned basis.

 Establishment of advance plans may make administration inflexible. When unforeseen changes in the
environment such as business recursion, crop failure take place then original plan loses its value and fresh
plan need to be done.

 There is difficulty in formulating accurate premises, because future cannot be known with accuracy.

 Planning May sometimes face people‘s resistance to do it.

1.16 DECISION MAKING – MEANING

Definition: A decision is a choice between two or more alternatives. This implies three things,

1. When manager make decision they are choosing.

2. Managers have alternatives when they are making decision. [Evaluate several alternatives and select
the best one].

3. Managers have a purpose in mind when they are making a decision.

1.17 TYPES OF DECISION MAKING

 Programmed and non-programmed decision.

 Major or minor decision.
 Routine and strategic decision.
 Individual and group decision.
 Simple and complex decision.

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Programmed and non-programmed decision

 Programmed decisions are those that are made in accordance with some policy, rule or
procedure and they do not have to be handled each time they occur. They are repetitive routine.
Example: determining salary payment to employs who have been ill.

 Non programmed decisions are natural and non repetitive. If a problem has not arisen before
then it must be handled by a non-programmed decision. Example: What to do about a failing
product line, how community relations should be improved etc...

 In programmed decision, each manager is guided by some set of rules and policies. Therefore it
is not possible for two different managers to arrive at different solution.

 In case of non programmed decisions, each manager will be his own personal beliefs, attitudes
and value judgment to bear on decision process. Therefore two different managers can arrive at
two different solutions.

Major or minor decision

Degree of futurity of decision

 How long a decision in future will commit the company? .A decision which has long range impact
like replacement of men by machinery must be rated as major decision.
 How to store raw materials may be taken as minor decision.
Impact of the decision on other functional areas
 If a decision affects only one function then it is a minor decision else it is a major decision.
Qualitative factors that enter the decision
 A decision which involves certain subjective factors is an important decision
 Example: Subjective factors are basic principles of conduct, ethical values etc
Recurrence of decision
 Decisions which are rare considered as major decisions and decisions which occur very often is
minor decision.
Routine and strategic decisions
 Routine and tactical or housekeeping decisions are those which are supportive. They relate to the
present.

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 Their purpose is to achieve as high degree of efficiency possible in companies ongoing activities
Example: providing Air conditioning (ac), better lighting etc. Lowering price of product, changing the
product line are strategic decisions.

Individual and group decisions

 Decision may be taken as either by an individual or by a group. Individual decisions are taken
where problem is of routine nature
 Important and strategic decisions may result in some change in organisation is a group decision

1.18 STEPS IN DECISION MAKING

There are seven steps in decision making

• Recognizing the problem.

• Deciding Priorities among problems

• Diagnosing the problem.

• Developing alternative solutions or course of action.

• Measuring and comparing sequences of alternative solutions

• Converting the decision into effective action

• Follow-up

Recognizing the Problem:

It is the first step in decision making. A problem exists:

 When there is deviation from past experience.

 When there is deviation from plan

 When other people bring problems to the manager.

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Deciding Priorities among problem:

Manager should identify the problem which

 He can solve

 His subordinates can solve.

 Are to be referred to the higher officers.

Diagnosis problem

 Manager should follow systems approach in diagnosing a problem.

 He should make a thorough study of all sides of a problem along with organisation before
arriving at a solution.

Development of Alternate Solution

 After diagnosis next step is to find alternate solutions.

 Alternates do exist. In the absence of past history of alternate solutions, managers should find
alternatives of his own.

Measuring and comparing Sequences

This comparison involves comparing a quality and acceptability of these alternatives.

Decision implementation:

This requires the communications of the decisions to the concerned employees in clear and simple
terms.

Follow up:

In final step, the action should be continuously followed up to ensure whether the decision is achieving
its purpose.

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1.19 OUTCOMES:

Students will now be able to define the meaning of management, describe various types of plan and
Explain the planning and decision making Process.

RECOMMENDED QUESTIONS:

1. Define management and explain how management is an art, science, and profession.

2. What is an objective? Explain its characteristics?

3. Explain managerial skills.

4. Define planning. List the limitations of planning

5. What is management?Explain the nature of management.

6. Explain steps in decision making.

7. Explain importance of management.

8. Explain the roles of a manager.

9. Explain principles of organizing.

10. What is policy? Write the differences between policy and procedure.

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