TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51): Module 1A

Module 1 a Management - Nature and Functions of Management

Importance of Management
• Management is a critical element in the economic growth of a country
• Management is essential in all organised efforts, be it a business or any other activity
• Management is the dynamic, life giving element in every organization.

Definition of management
• Management is a creative process, which utilizes available resources effectively and
efficiently to accomplish the goals of an organization.
• According to Mary Parker Follett “ Management is art of getting things done through
people”
• According to George R Terry “Management is process consisting of planning,
organizing, actuating and controlling, performed to determine and accomplish the
objectives by the use of people and resources”

Nature of Management

1. Multidisciplinary: Management is multidisciplinary because it includes

knowledge/information from various disciplines- economics, statistics, maths,
psychology, sociology, ecology, operations research, history, etc.
2. Management is dynamic: Management has framed certain principles, which are flexible
in nature and change with the changes in the environment in which an organization
exists.
3. Relative, Not Absolute Principles: Management principles are relative, not absolute,
and they should be applied according to the need of the organization.
4. Management: Science or Art: Management like other practices- whether medicine,
music composition, or even accountancy- is an art. It is know-how.

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5. Management as a Profession: Management has been regarded as a profession by many

while many have suggested that it has not achieved the status of a profession.
6. Management is Universal: Management is a universal phenomenon. Though universal
yet management principles are not universally applicable but are to be modified
according to the needs of the situation

Characteristics of Management

1. Management is a continuous process: The process of management consists of planning,

organizing, directing and controlling the resources to ensure that resources are used to the
best advantages of the organization. A single function alone cannot produce the desired
results.
2. Management is an art as well as science: Management is an art in the sense of
possessing managing skill by a person. Management is science because certain principles,
laws are developed which are applicable in place where group activities are coordinated.
3. Management aims at achieving predetermined objectives: All organizations have
objective that are laid down. Every managerial activity result in achievement of these
predetermined objectives.
4. Management is a factor of production: an enterprise produce goods or services using
like land, labor, capital, machines etc. these resources themselves cannot realize the
organizations goals. The goals are achieved when these are effectively coordinated by the
entrepreneur. In case of small enterprises an individual can do such type of job where as
in large enterprises the coordination job is done by management. Therefore, management
is a factor of production.
5. Management is decision making: Decision making is selecting the best among
alternative courses. Decision making is an important function of a manager. Whatever a
manager does, he does it by making decisions. The success or failure of an organization

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depends upon the quality of decision. A manager must make a right decision at right
time.
6. Universal application: The principles and concepts of management are applicable to
every type of industry. The practice of management is different from one organization to
another according to their nature.
7. Management is needed in all levels: The functions of management are common to all
levels of organization. The functions of planning, organizing, directing, controlling,
decision-making are performed by top level as well as manager.
8. Management aims at maximum profit: the resources are properly utilized to maximize
profit. Maximizing the profit is the economic function of a manager.
9. Dynamic: Management is not static. Over a period of time new principles, concepts and
techniques are developed and adopted by management, Management is changed
accordingly to the social change.
10. Management as a career: Today management is developed and adopted by
management. Management is changed accordingly to the social change.

Functions of Management

1. Planning
 It involves selecting mission and objective as well as the action to achieve what to
do, when to do and who will do it in order to achieve the goals.
 Both long term and short team plans are necessary to achieve goals.
 It is necessary for the management to adopt certain assumption or premises with
regard to external factor that serve as background for planning function.
 Planning is part of the activities of all managers.
2. Organizing
 Organizing is involves establishing an intentional structure of roles for people to fill
in an organization, formal organization may be portrayed by use an organization is
beneficial in terms of clarifying lines of command and eliminating gaps and overlaps
organization are structured based on product function geography customer and
project.

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 TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51): Module 1A

 The matrix structure has evolves as a result of complex environment, market and
technology. It combines both function and projects
3. Staffing

 Staffing is planning, organization directing and controlling of procurement

development, compensation integration and maintenance of people for the purpose
of contributing to individual organization and social goals.
 They build an effective organization team require planning and control of human
resources.
 This process requires the performance of the function like job analysis human
resources planning recruitment selection, induction, placement, training executive
development, wages and salary administration leadership team work motivation,
grievances procedure disciplinary procedure etc. staffing function is also know as
human resource management.
4. Directing
The importance function of management at any level is directing the people by
motivating commanding, leading and activating them.
 The willing and effective co-operation of employees for the attainment of
organization goals is possible through direction.
 Tapping the maximum potentialities of the people is possible through motivation
and command.
 Thus direction is an important managerial function is securing employee’s
contribution.
5. Controlling
 Control in involves checking, verifying and comparing of actual performance with
the plans, identification of deviations, if any correcting of identified deviation.
 The actions and operation are adjusted to predetermined plans standard through
control.
 The purpose of control is to ensure the effective operation of an organization by
focusing on all resource – human, material, finance and machine.

 Other three functions of management which can’t be ignored are

 Coordinating - Coordination is the process of synchronising the diverse functions
of domains and securing unity of action.
 Leadership – It is the process by which a managers guides and influences the work
of his subordinates.
 Communication – It is the process of passing information from one person to
another for the purpose of creating understanding in as organization to accomplish
goals.

Levels of Management

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 Top management: Includes company presidents, vice presidents, and executive

presidents. Top level management determines goals and objectives. They perform
overall planning, organizing, staffing, directing, controlling. It integrates organization
with environment, balances interest groups and is responsible for overall results.
 Middle level management: Includes sales manager, plant managers, personnel
managers they establish programs for department and carries out functions for achieving
specific goals. The other functions of middle level management are training and
development of employees, integrating various parts of the department.
 Lower or front line management group: Includes foreman or white collar supervisors
also called supervisory management. They are concerned with efficiency in using
resources of the organization. A supervisor is an executor of policies and procedures
making a series with well-defined and specified premises.

Roles of Manager

1) Interpersonal Roles – This role is concerned with his interacting with people both
organizational members and outsiders. There are 3 types of interpersonal roles:
a. Figurehead roles – In this role manager has to perform duties of ceremonial nature
such as attending social functions of employees, taking an important customer to
lunch and so on.
b. Leader – Managers leader role involves leading the subordinates motivating and
encouraging them.
c. Liaison – in liaison role managers serves as a connecting link between his
organization and outsiders. Managers must cultivate contacts outside his vertical
chain to collect information useful for his organization.
2) Informational Roles
a. Monitor – managers continuously collects information about all the factors which
affects his activities. Such factors may be within or outside organization.
b. Disseminator – Managers possesses some of his privileged information to his
subordinates who otherwise not be in a position to collect it.
c. Spokesman – As a spokesperson manager represents his organization while
interacting with outsiders like customers, suppliers, financers, government and other
agencies of the society.
3) Decisional Roles: Decisional role involves choosing most appropriate alternative among
all so that organizational objectives are achieved in an efficient manner.
a. Entrepreneur – As an entrepreneur, manager assumes certain risks in terms of
outcome of an action. Manager constantly looks out for new ideas and seeks to
improve his unit by adopting it to dynamic environment
b. Disturbance Handler – manager works like a fire fighter contains forces and events
which disturb normal functioning of his organization. The forces and events may be
employee complaints and grievances, strikes, shortage of raw materials etc.

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c. Resource allocator – Must divide work and delegate authority among his
subordinates. He must decide who will get what.
d. Negotiator – In his role of negotiator, manager negotiates with various groups in the
organization. Such groups are employees, shareholders and other outside agencies.

Managerial Skills – another way of considering what managers do is to look at the skills or
competencies they need to achieve their goals. Three types of skills have been identified.
a. Conceptual Skills: Managers must have the mental ability to analyze and diagnose
complex situations. These tasks require conceptual skills. Decision making, for instance,
requires managers to identify the problems, develop alternative solutions to correct those
problems, evaluate those alternative solutions, and select the best one. After they have
selected a course of action, managers must be able to organize a plan of action and then
execute it.
Ability to
 Take a broad and farsighted view of the organization
 Select critical information from masses of data.
 To think in abstract
 To analyze diagnose complex situations
 Creative and innovative
 To assess the environment
 Integrate new ideas with exiting processes and innovate on the job.

b. Technical skills: encompass the ability to apply specialized knowledge or expertise.

when you think of the skills of professionals such as civil engineers or oral surgeons, you
typically focus on the technical skills they have learned through extensive formal
education.
Ability to
 To apply specialized knowledge or expertise.
 Evaluate the quality of work turned out
 Teach new hands
 Direct all subordinates in the work group
C. Human skills: Ability to understand, communicate with, motivate, and support other
people, both individually and in groups, defines human skills.
 Recognize the feelings and sentiments of others.
 Diversity skills: To work with people with different cultures.
 Network within and outside the organization.
 Work in teams – cooperation and commitment.
 To judge the possible reactions
 To examine his own concepts and values which may enable him to develop more
useful attitude about himself

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Managerial Effectiveness : Manager’s performance can be measured in terms of two concepts

1. Efficiency – ability of manager to do something correctly ie at lowest possible cost or

cost acceptable to the competitive environment
2. Effectiveness – ability of a manager to do correct thing i.e achieve high levels of value.
eg: if a car manufacturer can provide the customer a better car without changing the
price, the value has gone up. If he can give the customer a better car at lower price, the
value goes way up.
Maximizing efficiency and effectiveness at same time often creates conflict between the
two goals.
We must remember that no amount of efficiency on the part of a manager can
compensate for his lack of effectiveness. He needs both, although efficiency is
important, effectiveness is critical.

Management & Administration

The term administration and management are used synonymously. Some writers urge that
running
According to Sheldon, Spriegal, Milward
 Administration involves “Thinking” – it is a top level function which centres around the
determination of plans, policies and objectives of a business enterprise.
 Management involves “Doing” – it is a low level function. Management deals with
execution and direction of policies and operations
 Each manager performs both activities and spends part of his time administrating and part
of his time managing. As shown in below figure at the top level more time is spent in
administrative activity and as one moves down in the organisation more time is spent in
management activity

According to E.F.L. Brech

Management is divided into
• Administrative management – upper level management
• Operative management – lower level management
According to Peter Drucker
• Non Business institutions (Government, army, church) uses the term administration
• Business enterprises uses the term management

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 TECHNOLOGICAL INNOVATION MANAGEMENT AND ENTREPRENEURSHIP (18ES51): Module 1A

Management - Art or Science

1) Management as a Science – science is a systematized body of knowledge. We call
discipline scientific if it is:
a) Methods of enquiry are systematic and empirical.
b) Information can be ordered and analysed and
c) Results are cumulative and communicable.
• ‘Systematic’ means being orderly and unbiased. Moreover, enquiry must be and not merely an
armchair speculation. Scientific information collected and raw form is finally ordered and
analyzed with statistical tools. It is communicable which permits reputation of study. When
study is replicated then the second try produces the results similar to the original. Science is
also cumulative in that what is discovered is added prove that which is been found before. We
build upon the base that has been left by the others. Science denotes two types of systematic
knowledge: Natural or exact and behavioral or inexact. In exact or natural science constant,
where has in behavioral or an exact science. In management we have to study man and
number of factors affecting him. For example, we cannot study the effect of monetary
incentives on workers’ productivity, because in addition to monetary incentives other
inseparable factors like leadership styles, workers need hierarchy and leadership styles will
also have simultaneous effect on productivity. At the most we may get only rough idea of the
relationship between monetary incentives and productivity. Therefore, management is in the
category of behavioral science.

2) Management as an ART: Management is art of getting things done through others in

dynamic situations. A manager has to coordinate various resources against several constraints
to achieve predetermines objectives in the most efficient manner. Manger has to constantly
analyze the existing situation, determine objectives, seek alternatives, implement, and control
and make decision. The theoretical lessons on principles, concepts and techniques learnt by a
manager in classroom is not enough to get the aimed results unless he possess the skills of
applying such principles to the problems. The knowledge has to be applied and practices. It is
like the art of musician or painter who achieves the desired results with his own skill which
comes by practice.

3) Management as a Profession : according to McFarland “profession” possesses the

following characteristics:
1) Existence of an organized knowledge.
2) Formalized method of acquiring training and expertise.
3) Existence of professional association
4) Existence of an ethical code to regulate the behavior.
5) Charging of fees based on service with due regard to social interest.

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SJCIT, ECE Dept 9