Enterpreneurship notes ME 5 sem BE RGPV

RGPV ,BE ME V SEM- 501 – Entrepreneurship and Management Concepts
Compiled By - Dr Ilyas Khan ,
Vidhyapeeth Inst of Sc and Technology,Bhopal.
AU/IP/ME/TX/CM- 501 – Entrepreneurship and Management Concepts
Unit-I: System Concepts: Types, definition & characteristics; supra & subsystems, key
component; boundary & interface complexity; feedback (pull) & feed forward (push) controls,
open flexible-adaptive system, computer as closed system, law of requisite variety; system
coupling, stresses and entropy; functional & cross functional system; Steven Alter’s nine
element work system model and its comparison with IPO (input-processing-output) model,
structure and performance of work systems leading to customer delight.
Unit-II: Management: Importance, definition and functions; schools of theories, knowledge
driven learning organization and e-business; environment, uncertainty and adaptability;
corporate culture, difficulties and levels of planning, BCG matrix, SWOT analysis, steps in
decision making, structured and unstructured decision; dimensions of organizations,
size/specialization, behavior formalization, authority centralization, departmentalization, spam
and line of control, technology and Minzberg organization typology, line, staff & matrix
organization, coordination by task force, business process reengineering and process of change
management, HR planning placement and training, MIS; attitudes and personality trait, overlap
and differences between leader & manager, leadership grid, motivation, Maslow’s need
hierarchy and Herzberg two factor theory, expectation theory, learning process, team work and
stress management.
Unit-III: Marketing: Importance, definition, core concepts of need want and demand, exchange
& relationships, product value, cost and satisfaction (goods and services ) marketing
environment; selling, marketing and societal marketing concepts; four P’s, product, price,
placement, promotion; consumer, business and industrial market, market targeting,
advertising, publicity, CRM and market research.
Finance: Nature and scope, forms of business ownerships, balance sheet, profit and loss
account, fund flow and cash flow statements, breakeven point (BEP) and financial ratio analysis,
pay-back period, NPV and capital budgeting.
Unit-IV: Productivity and Operations: Productivity, standard of living and happiness, types of
productivity, operations (goods and services) Vs project management, production processes
and layouts, steps in method improvement, time measurement, rating and various allowances;
standard time and its utility, predetermined motion and time method, product and process
specification, TQM, cost of quality, introduction to lean manufacturing (JIT), QFD, TPM & six
sigma quality.

Unit V: Entrepreneurship : Definition and concepts, characteristics, comparison with manager,
classification, theories of entrepreneur, socio, economic, cultural and psychological;
entrepreneur traits and behavior, roles in economic growth, employment, social stability,
export promotion and indigenization, creating a venture, opportunity analysis competitive and
technical factors, sources of funds, entrepreneur development program.

UNIT I
System: A system is an orderly grouping of interdependent components linked together
according to a plan to achieve a specific objective.
The study of system concepts has three basic implications:
1. A system must be designed to achieve a predetermined objective.
2. Interrelationships and interdependence must exist among the components.
3. The objectives of the organization as a whole have a higher priority than the objectives of its
subsystems.
Characteristics of a system:
1. Organization: It implies structure and order. It is the arrangement of components that helps
to achieve objectives.
2. Interaction: It refers to the manner in which each component functions with other
components of the system.
3. Interdependence: It means that parts of the organization or computer system depend on one
another. They are coordinated and linked together according to a plan. One subsystem depends
on the output of another subsystem for proper functioning.
4. Integration: It refers to the holism of systems. It is concerned with how a system is tied
together.
5. Central Objective: A system should have a central objective. Objectives may be real or stated.
Although a stated objective may be the real objective, it is not uncommon for an organization
to state one objective and operate to achieve another. The important point is that users must
know the central objective of a computer application early in the analysis for a successful
design and conversion.
Elements of a System:
1. Outputs and inputs: A major objective of a system is to produce an output that has value to
its user. In order to get a good output, inputs to system must be appropriate. It is important to
point out here that determining the output is a first step in specifying the nature, amount and
regularity of the input needed to operate a system.
2. Processors: It is the element of a system that involves the actual transformation of input into
output. It is the operational component of a system. Processors may modify the input totally or
2 partially, depending on the specifications of the output. In some cases, input is also modified
to enable the processor to handle the transformation.
3. Control: The control elements guide the system. It is the decision-making subsystem that
controls the pattern of activities governing input, processing, and output.
4. Feedback: Feedback measures output against a standard in some form of cybernetic
procedure that includes communication and control. Feedback may be positive or negative,
routine or informational. Positive feedback reinforces the performance of the system. It is
routine in nature. Negative feedback generally provides the controller with information for
action.

5. Environment: The environment is the “supra-system” within which an organization operates.
It is the source of external elements that impinge on the system. In fact, it often determines
how a system must function.
6. Boundaries and Interfaces: A system should be defined by its boundaries- the limits that
identify its components, processes, and interrelationships when it interfaces with another
system.
Types of System
1. Physical or Abstract Systems: Physical systems are tangible entities that may be static or
dynamic in operation. Abstract systems are conceptual or nonphysical entities. They may be
formulas of relationships among sets of variables or models – the abstract conceptualization of
physical situations.
2. Open or Closed Systems: An open system has many interfaces with its environment. It
permits interaction across its boundaries; it receives inputs from and delivers outputs to the
outside. A closed system is isolated from environment influences.
3. Man-made Information Systems: An information system is the basis for interaction between
the user and the analyst. It provides instructions, commands, and feedback. It determines the
nature of relationships among decision makers. From this basis, an information system may be
defined as a set of devices, procedures, and operating systems designed around user-based
criteria to produce information and communicate it to the user for planning, control and
performance
Features of Systems Approach:
(i) A system consists of interacting elements. It is set of inter-related and inter-dependent parts
arranged in a manner that produces a unified whole.
(ii) The various sub-systems should be studied in their inter-relationships rather, than in
isolation from each other.
(iii) An organisational system has a boundary that determines which parts are internal and
which are external.
(iv) A system does not exist in a vacuum. It receives information, material and energy from
other systems as inputs. These inputs undergo a transformation process within a system and
leave the system as output to other systems.
(v) An organisation is a dynamic system as it is responsive to its environment. It is vulnerable to
change in its environment.
Sub-Systems
Parts of a system are sub-systems. A complex system is divided into various sub-systems which
help in easy development & management of the complex system.

Supra System
A system of higher order in relation to some systems or subsystems of lower order.
Typically, the smaller units comprising a system are called subsystems or components, and the
larger unit enclosing a system is called a suprasystem or environment.
Boundary

The boundary is the separation between the system and environment. The actual point at
which the system meets its environment is called an 'interface'. It is often the case that the
boundary is not sharply defined and that boundaries are conceptual rather than existing in
nature.
Interface Complexity
The concept of complexity is originated from systems theory. It could be defined as "a quality of
an object with many interwoven elements, aspects, details, or attributes that make the whole
object difficult to understand in a collective sense . Thus, complexity is an inherent property of
systems. Basic observations of complex systems tend to lead us to consider that the more
elements they are composed of, the more complex they are
There are two main types of system complexity:
1. Internal complexity: It refers to the structural complexity of the system. It is a function
of the quantity of elements, the quantity of interactions, and the intensity (or strength)
of these interactions.
2. External complexity: It refers to the system/environment interface complexity. It is a
function of the quantity of interactions between the system and its environment, the
intensity of these interactions, and the probability expected functions are performed.
FEEDBACK AND FEED FORWARD
Feedback and feed forward are two types of control schemes for systems that react
automatically to changing environmental dynamics. Feedback and feed forward controls may
coexist in the same system, but the two designs function in very different ways.
feedback system
A feedback system measures a value and reacts to changes in that value. For instance, your
thermostat measures the ambient temperature in your home, and if the temperature falls
below its minimum setting, the thermostat activates the furnace to warm your home back to

the appropriate temperature. The thermostat measures the temperature, but it also feeds that
value back into its control scheme to maintain the temperature
Feed Forward
A feed forward system may measure a number of secondary variables in addition to the
primary one. For example, a feed forward thermostat might measure external as well as
internal temperatures, and it might sense whether doors and windows are open or closed. If
the system senses that it is cold outside and someone opens a window, the system will
proactively turn on the furnace in an attempt to prevent the temperature in the house from
falling. Instead of waiting for the temperature to change at the thermostat, the system
anticipates the effect of the open window and attempts to counteract the heat loss. Another
example of a feed forward system is a video card that increases fan speed in response to
intense graphics activity in an attempt to dissipate heat before the temperature actually begins
to climb.
ADVANTAGES:
Feedback-based systems have the advantage of being simple. The system measures a variable,
and uses that variable to make decisions.
Feed forward systems, on the other hand, have the ability to anticipate changes in the
measured variable, working proactively instead of reactively. The more secondary factors the
system measures, the more accurately it can work against these changes.
DISADVANTAGES:
Feedback systems can be somewhat inaccurate. A thermostat does a good job of maintaining
approximate temperatures, but the actual ambient temperature fluctuates to some degree as
the furnace switches on and off in response to the thermostat's signals. Unexpected variables,
such as a window or door left open, can make it difficult for the system to keep up.
Likewise, feed forward systems are only as good as the information with which the system has
to work. The system cannot consider an unmeasured variable when making its decisions, and
these blind spots can cause control to break down. This is why many designs couple feed
forward logic with a feedback system, providing a backup level of control.
Adaptive System
Flexible system that improves its performance (or chances of survival) by monitoring and
adjusting its own configuration and operations in response to feedback from its environment.
An adaptive system is a set of interacting or interdependent entities, real or abstract, forming
an integrated whole that together are able to respond to environmental changes or changes in
the interacting parts. Feedback loops represent a key feature of adaptive systems, such
as ecosystems and individual organisms; or in the human world, communities, organizations,
and families.

LAW OF REQUISITE VERIETY
The term Variety was introduced by W. Ross Ashby to denote the count of the total number of
states of a system. The condition for dynamic stability under perturbation (or input) was
described by his Law of Requisite Variety.
Thus, if the order of occurrence is ignored, the collection
c, b, c, a, c, c, a, b, c, b, b, a
which contains twelve elements, contains only three distinct elements- a, b, c. Such a set will be
said to have a variety of three elements.
Ashby’s Law ( LAW OF REQUISITE VERIETY ) implies that the degree of control of a system is
proportional to the amount of information available. This means you need an appropriate
amount of information to control any system, whatever it is.
This is a simple idea, though it is difficult to explain.
Variety?
Variety is another way of thinking about information. It describes the number of potential
states of a system – any system. If you recognise all the possible states, you have complete
knowledge of the behaviour. Uncertainty occurs when you do not know all the possible states.
As Ashby put it, variety is a concept inseparable from that of ‘information’.
Requisite Variety?
Requisite means necessary or required. So requisite variety implies that you need a certain
amount of information for some purpose.
If you have complete knowledge of a system, it is possible to control it. However if the system
has some hidden properties your information is incomplete and there is uncertainty about the
behaviour. To have full control you need to have full knowledge of the system and its
behaviour.
COUPLING
Coupling is the act of joining two things together. In software development, coupling refers to
the degree to which system components are dependant upon each other. For instance, in a
tightly-coupled architecture, each component and its associated components must be present
in order for code to be executed or compiled. In a loosely-coupled architecture, components
can remain autonomous and allow middleware software to manage communication between
them. In a decoupled architecture, the components can operate completely separately and
independently.

STRESS:
Meaning : Force transmitted by systems’ supra-system
Effect : Causes system to change
Purpose : To enable supra system to better achieve its goals
Each level of system trying to accommodate stress – may impose stress on its sub-system and
so on
Form/type of stress
 A change in Goal set
 Change in desired achievement level
For example :
RBI Directive to all member Banks to implement RTGS/cheque truncation
Each Bank’s top management passes it on:
Clearing department to modify / upgrade its clearing system
Clearing cell passes it on:
EDP department to develop new software to suit RTGS
Impact of Stress on a system:
The impact of stress varies depending on whether a system reacts or does not react to stress.
Impact of stress on the system Adapt to accommodate Be inert/pathological Stress & hence
survive to stress & ultimately decay Structural Process Change Change
ENTROPY
The word entropy is sometimes confused with energy. Although they are related quantities,
they are distinct.
Energy measures the capability of an object or system to do work.
Entropy, on the other hand, is a measure of the "disorder" of a system. What "disorder refers to
is really the number of different microscopic states a system can be in, given that the system has
a particular fixed composition, volume, energy, pressure, and temperature. By "microscopic
states", we mean the exact states of all the molecules making up the system.
The measure of the level of disorder in a closed but changing system, a system in which energy
can only be transferred in one direction from an ordered state to a disordered state. Higher the
entropy, higher the disorder and lower the availability of the system's energy to do useful work.
Although the concept of entropy originated in thermodynamics (as the 2nd law) and statistical
mechanics, it has found applications in a myriad of subjects such as communications,

economics, information science and technology
Cross Functional Systems
Cross Functional Information Systems are systems that support a variety of different processes
and functions within an organization. These systems integrate information from different parts
of the organization, and are therefore not limited by organizational boundaries like divisions,
centers, and offices.
STEVEN ALTER’S NINE ELEMENT WORK SYSTEM MODEL
The work system framework is a useful basis for describing and analyzing an IT-reliant work
system in an organization because its nine elements are part of a basic understanding of a work
system. The framework outlines a work system’s form, function, and environment. It
emphasizes business rather than IT concerns. It covers situations that might or might not have a
tightly defined business process and might or might not be IT-intensive. Of the nine elements in
the work system framework:
 Processes and activities, participants, information, and technologies are viewed as
completely within the work system.
 Customers and products/services may be partially inside and partially outside because
customers often participate in the processes and activities within the work system and
because products/services take shape within the work system.
 Environment, infrastructure, and strategies are viewed as largely outside the work
system even though they have direct and indirect effects within the work system.
This slightly updated version of the work system framework replaces “products and services”
with “products/services” and “work practices” with “processes and activities.”

The definitions of the 9 elements of a work system are as follows:
Processes and activities include everything that happens within the work system. The term
processes and activities is used instead of the term business process because many work
systems do not contain highly structured business processes involving a prescribed sequence of
steps, each of which is triggered in a pre-defined manner. Rather, the sequence and details of
work in some work systems depend on the skills, experience, and judgment of the work system
participants. In effect, “business process” is but one of a number of different perspectives for
analyzing the activities within a work system. Other perspectives with their own valuable
concepts and terminology include decision-making, communication, coordination, control, and
information processing.
Participants are people who perform the work. Some may use computers and IT extensively,
whereas others may use little or no technology. When analyzing a work system the more
encompassing role of work system participant is more important than the more limited role of
technology user (whether or not particular participants happen to be technology users).
Customers are participants in many work systems, e.g., (e.g., patients in a medical exam,
students in an educational setting, and clients in a consulting engagement).
Information includes codified and non-codified information that is used, created, captured,
transmitted, stored, retrieved, manipulated, updated, displayed, and/or deleted by processes
and activities. Typical informational entities include orders, invoices, warranties, schedules,
income statements, reservations, medical histories, resumes, job descriptions, and job offers.
The distinction between data and information is not important for understanding a work
system since the only data/ information that is mentioned is information that is created, used
or processed by the work system. Information within a work system includes information that is
processed by computers and other information that is never computerized, such as the content
of conversations, verbal commitments, and other unrecorded information/ knowledge that
work system participants use as they perform processes and activities within the work system.
Technologies include tools (such as cell phones, projectors, spreadsheet software, and
automobiles) and automated services (i.e., hardware/software configurations that perform
totally automated activities). This distinction is crucial as work systems are decomposed during
analysis and design activities into successively smaller subsystems, some of which are totally
automated.
Product/services consist of information, physical things, social products such as
agreements, intangibles such as entertainment or peace of mind, and/or actions produced by a
work system for the benefit and use of its customers. The term “product/service” is used
because the controversial distinction between products and services in marketing and service
science is not important for WST even though product-like vs. service-like is the basis of a
series of valuable design dimensions for characterizing and designing the things that a work
system produces.
Customers are recipients of a work system’s product/ services for purposes other than
performing work activities within the work system. Since work systems exist to produce
product/services for their customers, an analysis of a work system should consider who the
customers are, what they want, and how they use whatever the work system produces.
External customers are work system customers who are the enterprise’s customers, whereas

internal customers are work system customers who are employed by the enterprise, such as
customers of a payroll work system.
Environment includes the relevant organizational, cultural, competitive, technical, regulatory,
and demographic environment within which the work system operates, and that affects the
work system’s effectiveness and efficiency. Organizational aspects of the environment include
stakeholders, policies and procedures, and organizational history and politics, all of which are
relevant to the operational efficiency and effectiveness of many work systems. Factors in a
work system’s environment may have direct or indirect impacts on its performance results,
aspiration levels, goals, and requirements for change. Analysis, design, evaluation, and/or
research efforts that ignore important factors in the environment may overlook issues that
degrade work system performance or even cause system failure.
Infrastructure includes relevant human, informational, and technical resources that are used by
the work system but are managed outside of it and are shared with other work systems. From
an organizational viewpoint rather than a purely technical viewpoint, infrastructure includes
human infrastructure, informational infrastructure, and technical infrastructure, all of which
can be essential to a work system’s operation.
Strategies that are relevant to a work system include enterprise strategy, department strategy,
and work system strategy. In general, strategies at the three levels should be in alignment, and
work system strategies should support department and enterprise strategies. Unfortunately,
strategies at any of the three levels may not be articulated or may be inconsistent with reality
or with beliefs and understandings of important stakeholders.
input-process-output
The input-process-output formulation is perhaps the best-known aspect of systems theory. It
asserts that a system transforms inputs into outputs. The conventional manner of displaying
inputs, processes, and outputs is shown below. To illustrate: In a shop where custom cabinets
are made you can identify production inputs such as wood, hardware, stain, and other items
that are discernible in the end product. Working in such a shop includes activities such as
sawing, planning, joining, drilling, squaring, gluing, staining, and sanding. The outputs are
finished cabinets.
Input -> Process -> Outpput
CUSTOMER DELIGHT
Customer delight is surprising a customer by exceeding his or her expectations and thus
creating a positive emotional reaction. This emotional reaction leads to word of mouth.
Customer delight directly affects sales and profitability of a company as it helps to distinguish
the company and its products and services from the competition.[1][2]
In the past customer
satisfaction has been seen as a key performance indicator. Customer satisfaction measures the
extent to which the expectations of a customer are met (compared to expectations being
exceeded). However, it has been discovered that mere customer satisfaction does not
create brand loyalty nor does it encourage positive word of mouth.

Customer delight can be created by the product itself, by accompanied standard services and
by interaction with people at the front line. The interaction is the greatest source of
opportunities to create delight as it can be personalized and tailored to the specific needs and
wishes of the customer
There are three objectives when implementing Customer Delight:
1. make customers loyal. As described by Sewell,[6]
that finding new customers costs 4 to 9
times more time and money than reselling to an existing client. It is thus commercially
intelligent to retain as many clients as possible.[7]
2. have customers that are more profitable. Average delighted customers spend more with
less hassle. As can be seen with the list of Van Setten,[8]
when all other elements are
correct, clients accord less importance to price (as long as their perception of price
remains reasonable).
3. have clients talk positively about your product, brand or shop, the so-called word of
mouth. In a world of informed customers, 92% of customers consider word of mouth as
the most reliable source of information

Unit II
Management definition
According to Harold Koontz , Management is the art of getting things done through and with
people in formally organised groups."
According to Henri Fayol, "To manage is to forecast and to plan, to organise, to command, to
co-ordinate and to control."
According to Peter Drucker, "Management is a multi-purpose organ that manages business and
manages managers and manages workers and work."
According to Theo Heimann, management has three different meanings, viz.,
1. Management as a Noun : refers to a Group of Managers.
2. Management as a Process : refers to the Functions of Management i.e. Planning,
Organising, Directing, Controlling, etc.
3. Management as a Discipline : refers to the Subject of Management.
The nature, main characteristics or features of management:
1. Continuous and never ending process.
2. Getting things done through people.
3. Result oriented science and art.
4. Multidisciplinary in nature.
5. A group and not an individual activity.
6. Follows established principles or rules.
7. Aided but not replaced by computers.
8. Situational in nature.
9. Need not be an ownership.
10. Both an art and science.
11. Management is all pervasive.
12. Management is intangible.
13. Uses a professional approach in work.

14. Dynamic in nature.
Why Is Management Important?
All organizations rely upon group efforts to achieve goals. And whenever two or more people
are required to work together, management is necessary. According to the U.S. Bureau of
Labor Statistics, management positions are projected to continue to grow by an average of 7%
percent. If that is not enough reason to become a believer in management, maybe the reasons
below will:
 Accomplish goals – It is possible to accomplish goals without management, but it would
be extremely difficult. With proper management, an organization is allowed to plan and
balance their resources in such a way that every task is completed. This does not only
relate to businesses, but it also applies to our lives.
 Be more efficient – There are only so many hours in a work day, so it beneficial to make
the most of it. The last thing a company wants its employees to do is to waste time.
With good time management skills, companies are able to get as much work done as
possible with the time given to them.
 Make better decisions – The choices a business makes can make the difference between
being successful to being a complete disaster. Therefore, making rational decisions is
vital for a company if they want to do well. With good time management, they will have
more time to weigh out the positives from the negatives in their decision making.
 Earn more profit – When all of the other benefits mentioned above are met, it will
usually equal to an increase of profit for the company. The most successful and
profitable businesses in the world attribute a lot of it to their management skills
Five Functions of Management
There are more functions of management than the ones listed below, but these are considered
the most important. Learning how to balance each of these is the key to effective management
within a company. If you are focused too much on one function as opposed to another, the
imbalance can impact both the employees and management.
Planning
This is the core function of management because it is the foundation of the other four areas.
Planning involves mapping out exactly how to achieve a specific goal. As a manager, he or she
will need to map out detailed actions; what to do, when to do it and how it should be done.
Think of it as bridging a gap for where we currently are and where we want to be. For example,
if the company’s goal is to earn profit, the manager needs to determine the steps necessary to
achieve that goal. This can include spending more on advertising, hiring more experienced
employees, cutting costs, or improving the products being sold.
Planning is always an going process. There will be times when external factors will affect the
company both positively and negatively. This in turn may alter the original planning process in
reaching certain goals. This is known as strategic planning. Depending on the exact scope of an

organization, the strategic planning process can look ahead as far as ten years or more. The
findings are usually collected in a strategic planning document.
Organizing
Immediately after planning, the manager needs to organize the team according to plan. This
involves organizing all of the company’s resources to implement a course of action and
determining the organizational structure of the group. And in order to do this correctly,
management will need to evaluate the different divisions of departments and the staff to figure
out the best way to accomplish the tasks needed to reach their goals.
This function is also known to be the backbone of management. Without organization, a
company will have no structure and their day-to-day operation of business will most likely
collapse. If management is disorganized, it can trickle down to the employees because they will
lose confidence in their leaders.
Staffing
The purpose of staffing is to control all recruitment and personnel needs of the organization.
After management decides what needs they have, they may decide to hire more employees in a
certain department. It is also responsible for training and development, promotions, transfers,
and firing. A lot of times management and the human recourse department will work together
because their roles are similar in this case.
The importance of this function has grown lately, mostly because of the increasing size of
businesses and the advancement of technology. A good example of this is the IT department.
The size of the IT department in a company ten years ago is nothing compared to what it is now
because of the dependence we have on computers and servers. Without the staffing function,
a business will certainly fail because there will not be an experienced, sufficient amount of
employees within each department.
Directing
Supervision, motivation, leadership, and communication are all involved in the directing
function. Management needs to be able to oversee and influence the behavior of the staff and
achieve the company’s goals, whether that means assisting or motivating them. When morale
is high within a company, it usually has a significant impact on job performance and efficiency.
Incentive programs and rewards are a great way for a business to keep its employees happy
and motivated.
However, the most important aspect of directing is having good communication. This means
building positive interpersonal relationships, effective problem solving and evaluating one
another. Most directing takes place in in meetings and other meeting sessions with the
department leaders to ensure that everyone is on the same page. Poor communication will
lead to poor execution in an organization,
Controlling
The last function of management deals with monitoring the company’s progress and ensuring
that all of the other functions are operating efficiently. Since this is the last stage, there are
bound to be some irregularities and complexity within the organization. This in turn can lead to
certain situations and problems arising that are disrupting the company’s goals. Given is the

stage where all the final data is gathered, it is the management’s job to take corrective action,
even where there is the slightest deviance between actual and predictable results.
MAJOR CLASSIFICATION OF MANAGEMENT APPROACHES
1.CLASSICAL APPROACH
 Forms the foundation for the field of management
 The schools for management thoughts are:
 Scientific Management
 Administrative Theory
 Bureaucratic Management
1. SCIENTIFIC MANAGEMENT-F.W. TAYLOR
• Piece rate incentive system
• Time and motion study
• Gantt scheduling chart-Henry Laurence Gantt
2. ADMINISTRATIVE THEORY- HENRY FAYOL
• Technical
• Commercial
• Financial
• Security

• Accounting Managerial
3. BUREAUCRATIC MANAGEMENT- MAX WEBER
• Work specialization and division of labor
• Abstract rules and regulations
• Impersonality of managers
• Hierarchy of organization structure
Scientific Management
 It is defined as “that kind of management which conducts a business or affairs by
standards established, by facts or truths gained through systematic observation,
experiment, or reasoning.”
 Major contributors:
 Frederick Winslow Taylor
 Frank and Lillian Gillbreth
 Henry L.Gantt
 Frederick Winslow Taylor is known as “Father of scientific management”(1878) Two
major managerial practices:
1. Piece-rate incentive system
2. Time-and-motion study
 Frank and Lillian Gillbreth . Motion study involves finding out the best sequence and
minimum number of motions needed to complete a task. Explore new ways for
eliminating unnecessary motions and reducing work fatigue.
 HENRY L.GANTT(1861-1919, Well known for Task – and - bonus system -The Gantt
chart,,If the worker completed the work fast, i.e., in less than the standard time, he
received a bonus. It is a Simple chart that compares actual and planned performances
 Limitations of Scientific Management
1. Do not focus on the management of an organization from a manager’s point of
view.
2. People were “rational” and were motivated primarily by the desire for material
gain.
3. It also ignored the human desire for job satisfaction.
Administrative Theory
It focused on principles that could be used by managers to coordinate the internal
activities of organizations.

Henri Fayol (1841-1925) Fourteen principles:
1. Division of work
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Subordination of the individual interest to the general interest
7. Remuneration
8. Centralization:
9. Scalar chain
10. Order
11. Equity
12. Stability
13. Initiative
14. Espirit de corps (team spirit)
Bureaucratic Management
Given by Weber (1864-1920)
Characteristics of Weber’s ideal Bureaucracy:
1. Work specification and division of labor
2. Abstract rules and regulations:
3. Impersonality of managers:
4. Hierarchy of organization structure
Limitations of Bureaucratic Management and Administrative Theory
 Not universally applicable to today’s complex organizations.
 Fayol’s principles like that of specialization were frequently in conflict with the principle
of unity of command.
 Principle characteristic of bureaucracy changes in the global environment.
 Classical theorists ignored the problems of leadership, motivation, power or information
relations.
2.BEHAVIORAL APPROACH
The behavioral approach to management emphasized individual attitudes and behaviors and
group processes, and recognized the significance of behavioral process in the workplace.
HAWTHORNE STUDIES
• Illumination studies
• Relay assembly room study

• Bank wiring room study
Contributions of Behavioral Thinkers to Management Thought
Mary Parker Follet (1868-1933)
 Power, according to Follet, was the ability to influence and bring about a change.
 Concept of integration, which involves finding a solution acceptable to all group
members
Elton Mayo (1868-1933)
Abraham Maslow
His theory rested on these assumptions.
 Physiological needs;
 Safety or security needs
 Belongingness or social needs;
 Esteem or status needs
 Self actualization or self-fulfillment needs.
Douglas Mcgregor

Chris Argyris
 Maturity – immaturity theory
• People progress from a stage of immaturity and dependence to a state of maturity and
independence.
• Model I and Model II organization analysis.
1. Model I organization are manipulative
2. Model II organization are open to learning
3.QUANTITATIVE APPROACH
 It includes the application of statistics, optimization models, information models and
computer simulations. More specifically, this approach focuses on achieving
organizational effectiveness.
 Three main branches:
 Management Science
 Operations Management and
 Management Information Systems.
Management Science
 It stresses the use of mathematical models and statistical methods for decision-making.
 Another name is the Operations Research.
Operations Management
It deals with the effective management of the production process and the timely delivery of an
organization’s products and services
Management Information Systems
Management information systems focuses on designing and implementing computer-based
information systems for business organizations.
4.MODERN APPROACHES TO MANAGEMENT
 Systems Theory
 Contingency Theory

Systems Theory
Contingency Theory
Managers’ use of other view points to solve problems
• External environment
• Technology
• Individuals
LEVELS OF PLANNING
In management theory, it is usual to consider that there are three basic levels of planning,
though in practice there may be more than three levels of management and to an extent, there
will be some overlapping of planning operations. The theree levels of planning are discussed
below:
1. Top level planning: also known as overall or strategic planning, top level planning is
done by the top management, i.e., board of directors or governing body. It encompasses
the long-range objectives and policies or organisation and is concerned with corporate
results rather than sectional objectives. Top level planning is entirely long-range and
inextricably linked with long-term objectives. It might be called the ‘what’ of planning.
2. Second level planning: also known as tactical planning, it is done by middle level
managers or departmental heads. It is concerned with ‘how’ of planning. It deals with
development of resources to the best advantage. It is concerned mainly, not exclusively,
with long-range planning, but its nature is such that the time spans are usually shorter than
those of strategic planning. This is because its attentions are usually devoted to the step-by-
step attainment of the organisation’s main objective. It is, in fact, oriented to functions and
departments rather than to the organisation as a whole.
3. Third level planning: also known as operational or activity planning, it is the concern of
departmental managers and supervisors. It is confined to putting into effect the tactical or

departmental plans. It is usually for a short-term and may be revised quite often to be in
tune with the tactical planning.
PLANNING TYPES
There are three main types of plans that a manager will use in his or her pursuit of company
goals, which include operational, tactical and strategic.
Strategic plansare designed with the entire organization in mind and begin with an
organization's mission. Top-level managers, such as CEOs or presidents, will design and execute
strategic plans to paint a picture of the desired future and long-term goals of the organization.
Essentially, strategic plans look ahead to where the organization wants to be in three, five, even
ten years. Strategic plans, provided by top-level managers, serve as the framework for lower-
level planning.
Tactical plans support strategic plans by translating them into specific plans relevant to a
distinct area of the organization. Tactical plans are concerned with the responsibility and
functionality of lower-level departments to fulfill their parts of the strategic plan.
Operational plans sit at the bottom of the totem pole; they are the plans that are made by
frontline, or low-level, managers. All operational plans are focused on the specific procedures
and processes that occur within the lowest levels of the organization. Managers must plan the
routine tasks of the department using a high level of detail.
BCG-matrix
“The growth–share matrix (BCG-matrix, Boston matrix, Boston Consulting Group analysis,
portfolio diagram) is a chart that was created by Bruce D. Henderson for the Boston Consulting
Group in 1970 to help corporations to analyze their business units, that is, their product lines.
This helps the company allocate resources and is used as an analytical tool in brand marketing,
product management, strategic management, and portfolio analysis. Analysis of market
performance by firms using its principles has recently called its usefulness into question”

SWOT Analysis
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for
identifying both the Opportunities open to you and the Threats you face.
How to Use the Tool
Originated by Albert S Humphrey in the 1960s, the tool is as useful now as it was then. You can
use it in two ways – as a simple icebreaker helping people get together to "kick off" strategy
formulation, or in a more sophisticated way as a serious strategy tool.
Strengths
 What advantages does your organization have?
 What do you do better than anyone else?
 What unique or lowest-cost resources can you draw upon that others can't?
 What do people in your market see as your strengths?
 What factors mean that you "get the sale"?
 What is your organization's Unique Selling Proposition (USP)?
Weaknesses

 What could you improve?
 What should you avoid?
 What are people in your market likely to see as weaknesses?
 What factors lose you sales?
Opportunities
 What good opportunities can you spot?
 What interesting trends are you aware of?
Useful opportunities can come from such things as:
 Changes in technology and markets on both a broad and narrow scale.
 Changes in government policy related to your field.
 Changes in social patterns, population profiles, lifestyle changes, and so on.
 Local events.
Threats
 What obstacles do you face?
 What are your competitors doing?
 Are quality standards or specifications for your job, products or services changing?
 Is changing technology threatening your position?
 Do you have bad debt or cash-flow problems?
 Could any of your weaknesses seriously threaten your business?
Example
A start-up small consultancy business might draw up the following SWOT Analysis:
Strengths
 We are able to respond very quickly as we have no red tape, and no need for higher
management approval.
 We are able to give really good customer care, as the current small amount of work
means we have plenty of time to devote to customers.
 Our lead consultant has strong reputation in the market.
 We can change direction quickly if we find that our marketing is not working.
 We have low overheads, so we can offer good value to customers.
Weaknesses
 Our company has little market presence or reputation.
 We have a small staff, with a shallow skills base in many areas.
 We are vulnerable to vital staff being sick, and leaving.
 Our cash flow will be unreliable in the early stages.
Opportunities
 Our business sector is expanding, with many future opportunities for success.
 Local government wants to encourage local businesses.
 Our competitors may be slow to adopt new technologies.
Threats
 Developments in technology may change this market beyond our ability to adapt.
 A small change in the focus of a large competitor might wipe out any market position
we achieve.

As a result of their analysis, the consultancy may decide to specialize in rapid response, good
value services to local businesses and local government.
DECISION MAKING
Decision Making is the process of choosing the best alternative for reaching objectives.
Managers make decisions affecting the organization daily and communicate those decisions to
other organizational members.
Some decisions affect a large number of organization members, cost a great deal of money to
Carry out, or have a long term effect on the organization. Such significant decisions can have a
major impact, not only on the management systems itself, but on the career of the manager
who makes them.
Other decisions are fairly insignificant, affecting only a small member of organization members,
costing little to carry out, and producing only a short term effect on the organization.
TYPES OF DECISIONS:
PROGRAMMED DECISIONS:
Programmed decisions are routine and repetitive, and the organization typically develops
specific ways to handle them. A programmed decision might involve determining how products
will be arranged on the shelves of a supermarket. For this kind of routine, repetitive problem,
standard arrangement decisions are typically made according to established management
guidelines.
NON PROGRAMMED DECISIONS:
Non programmed decisions are typically one shot decisions that are usually less structured than
programmed decision.
Difference between structured and non structured decision
Structured decision depends on policies, rules and defined procedures, whereas nonstructured
is depend on intuition and undefiened procedures.
Structured decision are used for problems which are frequent, repetitive, routine and much
certainty whereas nonstructured for novel, unstructured and much uncertainty.
5 ELEMENTS OF THE DECISION SITUATION:

1. The Decision Makers
2. Goals to be served
3. Relevant Alternatives
4. Ordering of Alternatives
5. Choice of Alternatives
DECISION MAKING PROCESS:
Decision making steps this model depicts are as follows:
1. Identify an existing problem
2. List possible alternatives for solving the problem
3. Select the most beneficial of these alternatives.
4. Implement the selected alternative.
5. Gather feedback to find out if the implemented alternative is solving the identified
problem.
DIMENSIONS OF ORGANIZATIONS
When we think about a house, we usually take certain features into consideration, e.g., how
many rooms it has, the color of its walls, slope of its roof, etc. A person can consider the
following dimensions when analyzing an organization.
Structural Dimensions
Contextual Dimensions
Structural dimensions:
Centralization -the extent to which functions are dispersed in the organization, either in terms
of integration with other functions or geographically
Formalization - regarding the extent of policies and procedures in the organization
Hierarchy - regarding the extent and configuration of levels in the structure
Routinization - regarding the extent that organizational processes are standardized
Specialization - regarding the extent to which activities are refined
Training - regrading the extent of activities to equip organization members with knowledge and
skills to carry out their roles

Contextual Dimensions
Culture - the values and beliefs shared by all (note that culture is often discerned by examining
norms or observable behaviors in the workplace)
Environment - the nature of external influences and activities in the political, technical, social
and economic arenas
Goals - unique overall priorities and desired end-states of the organization
Size - number of people and resources and their span in the organization
Technology - the often unique activities needed to reach organizational goals, including nature
of activities, specialization, type of equipment/facilities needed, etc.
BEHAVIOR FORMALIZATION
Formalization is the strict organizational structure and set of rules and regulations that
determine relationships within the organization. Formalization aims at the establishment of
highly formal relationships between the leader and followers based on their professional
relations. Formalization does not admit the establishment of close personal relationships,
including friendly relations, between the leader and followers. Formalization is a bureaucratic
process, in a way, because leaders set clear, concise rules, which the organization and followers
have to respect.
ORGANIZATIONAL STRUCTURE
two types of organizational structure can be seen, which are centralized and
decentralized. Centralization of authority means the power of planning and decision making
are exclusively in the hands of top management while in the case of Decentralization, the
powers for the same has been disseminated by the top management to the middle or low-level
management
COMPARISON CENTRALIZATION and DECENTRALIZATION
The retention of powers and authority with respect to planning and decisions, with the top
management, is known as Centralization.
The dissemination of authority, responsibility and accountability to the various management
levels, is known as decentralization.
Communication Flow Vertical in Centralization , in decentralization it is Open and Free

Decision Making Slow in Centralization and Comparatively faster in decentralization.
Advantage in Centralization Proper coordination and Leadership , in decentralization Sharing
of burden and responsibility .
Power of decision making Lies with the top management in Centralization . Multiple persons
have the power of decision making in deCentralization .
Centralization is Best suited forSmall sized organization , deCentralization for Large sized
organization
DEPARTMENTALIZATION
Departmentalization is defined as “the process of grouping jobs according to some logical
arrangement, Departmentalization involves dividing an organization into different
departments, which perform tasks according to the departments' specializations in the
organization. Departmentalization as a means of structuring an organization can be found in
both public and private organizations
Types
Functional, divisional, territory based, matrix structure

span and line of control
Span of control is the term now used more commonly in business management,
particularly human resource management. Span of control refers to the number of
subordinates a supervisor has.
span of control depends upon various factors, such as:
1. Nature of an organization
2. Nature of job
3. Skills and competencies of manager
4. Employees skills and abilities
5. The kind of interaction that takes happens between superiors and subordinates, etc
MINZBERG ORGANIZATION TYPOLOGY,
Henry Mintzberg is a renowned management theorist who developed a list of five basic
organizational types. He identified the various organizations as a result of their blend of
strategy, environmental forces and the organizational structure. The five organizational types
are entrepreneurial, machine, professional, divisional and innovative.
According to Henry Mintzberg, most organizations can be divided into 5 basic parts. Here is a
diagram:

At the bottom of the organization is the operating core. These are the people that do the basic
work of producing the products or delivering the services. In the simplest organizations, the
operators are largely self-sufficient, coordinating through mutual adjustment. In those
organizations, there is almost nothing but operating core.
As the organization grows, the need for direct supervision increases. This results in the
development of a strategic apex, which in the simplest case is just a single manager. The apex is
charged with ensuring that the organization executes its mission. They are responsible to the
owners, government agencies, unions, communities, etc.
As the organization grows even larger, one manager can't handle all the workers, and so there
are multiple managers of workers, plus a manager to manage the managers. This creates
a middle line which transmits authority from the top to the bottom.
In Frederick Taylor's view, it was a primary responsibility of the managers to figure out how
work should be done by the workers. However, as organizations become larger, they typically
develop a separate group of people -- analysts -- who take on the job of figuring out what the
company's technology should be and what the company's procedures should be. These analysts
form the technostructure of the organization. The technostructure's mission is to effect
coordination through standardization. For example, the industrial engineers standardize work

processes; the strategic planners standardize outputs; and the personnel trainers and recruiters
standardize skills.
Finally, the organization adds other administrative units that provide services to itself, such as a
cafeteria, mailroom, legal counsel, public relations, etc. These are called the support staff.
The apex, middle line, and operating core are known collectively as line positions.
In contrast, the technostructure and support staff are known collectively as staff positions.
Originally, the meaning of these terms was that line positions had formal authority to make
decisions, while staff positions did not: they advised those who did.
line, staff & matrix organization
LINE ORGANIZATION
Line organisation is the simplest and the oldest type of organisation. It is also known as scalar
organisation or military type of organisation. In the words of J.M. Lundy, “It is characterized by
direct lines of authority flowing from the top to the bottom of the organizational hierarchy and
lines of responsibility flowing in an opposite but equally direct manner.”
STAFF ORGANIZATION
An organisation where staff departments have authority over line personnel in narrow areas of
specialization is known as functional authority organization

LINE AND STAFF ORGANISATION
The line and staff organisation is an improvement over the above mentioned two systemsviz,
line organisation and functional organisation. The line organisation concentrates too much on
control whereas the functional system divides the control too much.
The need was, therefore, for a system that will ensure a proper balance between the two. The
need has been fulfilled by line and staff organisation. The system like line organisation also
owes its birth to army.
The commanders in the field who are line officers are assisted by the staff that helps them in
formulating strategies and plans by supplying valuable information. Similarly in organisation,
line officers get the advice of the staff which is very helpful in carrying on the task in an efficient
manner. However, staff’s role is advisory in nature. Line officers are usually assisted by staff
officers in effectively solving various business problems.

MATRIX ORGANIZATION
It is a permanent organisation designed to achieve specific results by using teams of specialists
from different functional areas in the organization

COORDINATION
In every organization, different types of work are performed by various departments and work
groups and no single department or work group on its own can be expected to achieve the
goals of the organization as a whole. Hence, it becomes essential that the activities of different
departments and work groups of the organization are harmonized. This function of
management is known as ‘coordinating’ function
Coordination by task force
Temporary group of people formed to carry out a specific mission or project, or to solve a
problem that requires a multi-disciplinary approach.
A task force is a technique that can be used by the dietitian-manager to develop solutions for
specific, identified problems. Because employees are directly involved in the decision-making
process, better solutions--ones that are also more acceptable to the work group--result. To
implement a task force, management must plan the strategy: Select a facilitator, explain the
concept and problem to the work group, select task force participants, and make meeting
arrangements. The task force meetings should be structured to maximize efficiency and
productivity. The plan of action is developed by the task force members; all decisions are based
upon input from the work group. Successful implementation of the solutions is the
responsibility of the task force.

Task force members represent their departments and share information that enables
coordination.
BUSINESS PROCESS REENGINEERING (BPR)
The concept of business process reengineering (BPR) is to rethink and break down existing
business processes. This allows a company to reduce costs and improve productivity through
newer, more efficient processes. It is important to remember however, that though there are
instances where this is necessary, business process reengineering is not without its
disadvantages.
Hammer and Champy provide the following definitions: ¸
Reengineering is the fundamental rethinking and radical redesign of business processes to
achieve dramatic improvements in critical contemporary measures of performance such as
cost, quality, service and speed. ¸
Process is a structured, measured set of activities designed to produce a specified output for a
particular customer or market. It implies a strong emphasis on how work is done within an
organization. "
Business processes are characterized by three elements: the inputs, (data such customer
inquiries or materials), the processing of the data or materials (which usually go through several
stages and may necessary stops that turns out to be time and money consuming), and the
outcome (the delivery of the expected result). The problematic part of the process is
processing. Business process reengineering mainly intervenes in the processing part, which is
reengineered in order to become less time and money consuming.
In order to implement BPR to an enterprise the followings key actions need to take place: ·
 Selection of the strategic (added-value) processes for redesign.
 Simplify new processes - minimize steps - optimize efficiency -.(modeling).
 Organize a team of employees for each process and assign a role for process
coordinator.
 Organize the workflow - document transfer and control.
 Assign responsibilities and roles for each process.
 Automate processes using IT(Intranets, Extranets, Workflow Management)
 Train the process team to efficiently manage and operate the new process
 Introduce the redesigned process into the business organizational structure

CHANGE MANAGEMENT PROCESS
Business organizations change the way they operate and the services/products they offer.
There are new initiatives in organizations and the old ineffective practices are forced to leave.In
addition to that, technology is constantly changing and the business organizations need to par
with that as well.
Change Management (CM) refers to any approach to transitioning individuals, teams, and
organizations using methods intended to re-direct the use of resources, business process,
budget allocations, or other modes of operation that significantly reshape a company or
organization.
The change management process is the sequence of steps or activities that a change
management team or project leader follow to apply change management to a change in order
to drive individual transitions and ensure the project meets its intended outcomes.
Eight-Step Change Management Process / Kotter's change management approach.
Step 1: Urgency Creation
A change is only successful if the whole company really wants it. If you are planning to make a
change, then you need to make others want it. You can create urgency around what you want
to change and create hype.
This will make your idea well received when you start your initiative. Use statistics and visual
presentations to convey why the change should take place and how the company and
employees can be at advantage.
Step 2: Build a Team
If your convincing is strong, you will win a lot of people in favour of change. You can now build a
team to carry out the change from the people, who support you. Since changing is your idea,
make sure you lead the team.
Organize your team structure and assign responsibilities to the team members. Make them feel
that they are important within the team.
Step 3: Create a Vision
When a change takes place, having a vision is a must. The vision makes everything clear to
everyone. When you have a clear vision, your team members know why they are working on
the change initiative and rest of the staff know why your team is doing the change.
If you are facing difficulties coming up with a vision, read chapter one (Mission and Values) of
WINNING, by Jack Welch.
Step 4: Communication of Vision
Deriving the vision is not just enough for you to implement the change. You need to
communicate your vision across the company.
This communication should take place frequently and at important forums. Get the influential
people in the company to endorse your effort. Use every chance to communicate your vision;
this could be a board meeting or just talking over the lunch.

Step 5: Removing Obstacles
No change takes place without obstacles. Once you communicate your vision, you will only be
able to get the support of a fraction of the staff. Always, there are people, who resist the
change.
Sometimes, there are processes and procedures that resist the change too! Always watch out
for obstacles and remove them as soon as they appear. This will increase the morale of your
team as well the rest of the staff.
Step 6: Go for Quick Wins
Quick wins are the best way to keep the momentum going. By quick wins, your team will have a
great satisfaction and the company will immediately see the advantages of your change
initiative.
Every now and then, produce a quick win for different stakeholders, who get affected by the
change process. But always remember to keep the eye on the long-term goals as well.
Step 7: Let the Change Mature
Many change initiatives fail due to early declaration of victory. If you haven't implemented the
change 100% by the time you declare the victory, people will be dissatisfied when they see the
gaps.
Therefore, complete the change process 100% and let it be there for sometime. Let it have its
own time to get integrated to the people's lives and organizational processes before you say it
'over.'
Step 8: Integrate the Change
Use mechanisms to integrate the change into people's daily life and corporate culture. Have a
continuous monitoring mechanism in place in order to monitor whether every aspect of the
change taking place in the organization. When you see noncompliance, act immediately.
HR PLANNING
The process that links the human resource needs of an organization to its strategic plan to
ensure that staffing is sufficient, qualified, and competent enough to achieve the organization's
objectives .
It is a vital organizational element for maintaining a competitive advantage and reducing
employee turnover .
Following are the major steps involved in human resource planning:
1. Assessing Human Resources
The assessment of HR begins with environmental analysis, under which the external (PEST) and
internal (objectives, resources and structure) are analyzed to assess the currently available HR
inventory level. After the analysis of external and internal forces of the organization, it will be
easier for HR manager to find out the internal strengths as well as weakness of the organization
in one hand and opportunities and threats on the other. Moreover, it includes an inventory of

the workers and skills already available within the organization and a comprehensive job
analysis.
2. Demand Forecasting
HR forecasting is the process of estimating demand for and supply of HR in an organization.
Demand forecasting is a process of determining future needs for HR in terms of quantity and
quality. It is done to meet the future personnel requirements of the organization to achieve the
desired level of output. Future human resource need can be estimated with the help of the
organization's current human resource situation and analysis of organizational plans an
procedures. It will be necessary to perform a year-by-year analysis for every significant level
and type.
3. Supply Forecasting
Supply is another side of human resource assessment. It is concerned with the estimation of
supply of manpower given the analysis of current resource and future availability of human
resource in the organization. It estimates the future sources of HR that are likely to
be available from within an outside the organization. Internal source includes promotion,
transfer, job enlargement and enrichment, whereas external source includes recruitment of
fresh candidates who are capable of performing well in the organization.
4. Matching Demand And Supply
It is another step of human resource planning. It is concerned with bringing the forecast of
future demand and supply of HR.The matching process refers to bring demand and supply in an
equilibrium position so that shortages and over staffing position will be solved. In case of
shortages an organization has to hire more required number of employees. Conversely, in the
case of over staffing it has to reduce the level of existing employment. Hence, it is concluded
that this matching process gives knowledge about requirements and sources of HR.
5. Action Plan
It is the last phase of human resource planning which is concerned with surplus and shortages
of human resource. Under it, the HR plan is executed through the designation of different HR
activities. The major activities which are required to execute the HR plan are recruitment,
selection, placement, training and development, socialization etc. Finally, this step is followed
by control and evaluation of performance of HR to check whether the HR planning matches the
HR objectives and policies. This action plan should be updated according to change in time ans
conditions.
HR SELECTION
The HR selection process is the strategically planned procedural approach developed by human
resources professionals and implemented by organizations when recruiting, evaluating and
hiring new employees

The main selection process steps are:
1. Preliminary interview: the selection process generally starts with this step where the totally
unsuitable applicant is eliminated. Thus the organization is saved from the expenses of
processing the applicant through the remaining steps of selection. The candidates who pass this
step are only asked to fill the application form.
2. Receiving applications: after passing the preliminary interview the candidate is asked to fill
the standard application form. The application form generally consists the information about
the age, qualification, experience etc. of the candidate on the basis of which the interviewer
gets the idea about the candidate and this information also helps in formulating questions.
3. Screening of applications: after receiving the applications the screening committee screens
the applications. Only the candidates who qualify the criteria of the screening committee are
called for the interview. Usually the candidates selected for interview are four to six times than
the number of posts. Interview letter is sent to them or they are called telephonically.
4. Employment test: after getting the interview letter and before going to the interview there is
one more step and that is the employment tests. These tests are done to check the ability of
the candidate. These tests vary from organization to organization and change as per the need
of the particular job. these tests are intelligence tests, aptitude tests, trade tests, interest test,
personality tests etc. these tests must be designed properly otherwise they will not good
indicator of one knowledge.
5. Employment interview: the candidates who qualify the above tests are called for the
employment interview. This interview is done to get more information about the candidate, to
give him the actual picture of what is required from him, to check the communication skill of
the candidate etc. for senior position post; a panel is prepared who take the interview. At the
end of interview of each candidate the members of panel discuss about the candidate and give
him the grades.

There may be direct interview or indirect interview. The interview should be conducted in a
room free from the noise and disturbance only than the candidates will be able to speak freely
and frankly.
6. Checking references: before selecting the employ the prospective employee generally look
out for the referees given by the candidate. To check about the candidate’s past record,
reputation, police record etc.
7. Physical examination: The organizations generally prefer medical examination to be incurred
of the person to avoid time and expenditure spend on the medically unfit person. Sometimes
the organization may ask the candidate to get them examined from the medical expert.
8. Final selection: after all these steps the candidate is selected finally. He is appointed by
issuing appointment letter. Initially he is appointed on probation basis after finding his work
satisfactory he is appointed as permanent employee of the organization or otherwise he may
be terminated.
HR TRAINING
Training and development can be described as "an educational process which involves the
sharpening of skills, concepts, changing of attitude and gaining more knowledge to enhance the
performance of employees".
STEPs IN THE TRAINING PROCESS
a) Organizational Objectives and Strategies :
The first step in the training process is an organization in the assessment of its objectives and
strategies. What business are we in? At what level of quality do we wish to provide this product
or service? Where do we what to be in the future? Its only after answering these and other
related questions that the organization must assess the strength and weakness of its human
resources.
b) Needs Assessment :
Needs assessment diagnoses present problems and future challenge to be met through training
and development. Needs assessment occurs at two levels i.e. group level and individual level,
an individual obviously needs training when his or her performance falls short or standards that
is when there is performance deficiency. Inadequate in performance may be due to lack of skills
or knowledge or any other problem
c) Training and Development Objectives :
Once training needs are assessed, training and development goals must be established.
Without clearly-set goals, it is not possible to design a training and development programme
and after it has been implemented, there will be no way of measuring its effectiveness. Goals
must be tangible, verifying and measurable. This is easy where skilled training is involved.
d) Conducting Training Activities :
Where is the training going to be conducted and how?
 At the job itself.

 On site but not the job for example in a training room in the company.
 Off site such as a university, college classroom hotel, etc.
e) Designing training and development program :
Who are the trainees? Who are the trainers? What methods and techniques? What is the level
of training? What are the principles of learning? Where to conduct the program?
f) Implementation of the training programme :
Program implementation involves actions on the following lines :
 Deciding the location and organizing training and other facilities.
 Scheduling the training programme.
 Conducting the programme.
 Monitoring the progress of the trainees.
g) Evaluation of the Results :
he last stage in the training and development process is the evaluation of the results. Since
huge sums of money are spent on training and development, how far the programme has been
useful must be judge/determined. Evaluation helps determine the results of the training and
development programme.
MIS
An organized approach to the study of the information needs of an organization's management
at every level in making operational, tactical, and strategic decisions. Its objective is to design
and implement procedures, processes, and routines that provide suitably detailed reports in an
accurate, consistent, and timely manner.
In a management information system, modern, computerized systems continuously gather
relevant data, both from inside and outside an organization. This data is then processed,
integrated, and stored in a centralized database (or data warehouse) where it is constantly
updated and made available to all who have the authority to access it, in a form that suits their
purpose.
One of the important roles of an MIS is to provide the right information to the right person in
the right format at the right time.
kinds of Information Systems
Using the four level pyramid model above, we can now compare how the information systems
in our model differ from each other.
Transaction Processing Systems
Transaction Processing System are operational-level systems at the bottom of the pyramid.
They are usually operated directly by shop floor workers or front line staff, which provide the
key data required to support the management of operations. This data is usually obtained
through the automated or semi-automated tracking of low-level activities and basic
transactions.

Management Information Systems
For historical reasons, many of the different types of Information Systems found in commercial
organizations are referred to as "Management Information Systems". However, within our
pyramid model, Management Information Systems are management-level systems that are
used by middle managers to help ensure the smooth running of the organization in the short to
medium term. The highly structured information provided by these systems allows managers to
evaluate an organization's performance by comparing current with previous outputs.
Decision Support System
A Decision Support System can be seen as a knowledge based system, used by senior managers,
which facilitates the creation of knowledge and allow its integration into the organization.
These systems are often used to analyze existing structured information and allow managers to
project the potential effects of their decisions into the future. Such systems are usually
interactive and are used to solve ill structured problems. They offer access to databases,
analytical tools, allow "what if" simulations, and may support the exchange of information
within the organization.
CHARACTERISTICS OF A GOOD MANAGEMENT INFORMATION SYSTEM
Relevance
The information a manager receives from an MIS has to relate to the decisions the manager has
to make. An effective MIS takes data that originates in the areas of activity that concern the
manager at any given time, and organizes it into forms that are meaningful for making
decisions. If a manager has to make pricing decisions, for example, an MIS may take sales data
from the past five years, and display sales volume and profit projections for various pricing
scenarios.
Accuracy
A key measure of the effectiveness of an MIS is the accuracy and reliability of its information.
The accuracy of the data it uses and the calculations it applies determine the effectiveness of
the resulting information. The sources of the data determine whether the information is
reliable. Historical performance is often part of the input for an MIS, and also serves as a good
measure of the accuracy and reliability of its output.
Usefulness
The information a manager receives from an MIS may be relevant and accurate, but it is only
useful if it helps him with the particular decisions he has to make. For example, if a manager
has to make decisions on which employees to cut due to staff reductions, information on
resulting cost savings is relevant, but information on the performance of the employees in
question is more useful. The MIS has to make useful information easily accessible.
Timeliness
MIS output must be current. Management has to make decisions about the future of the
organization based on data from the present, even when evaluating trends. The more recent
the data, the more these decisions will reflect present reality and correctly anticipate their

effects on the company. When the collection and processing of data delays its availability, the
MIS must take into consideration its potential inaccuracies due to age and present the resulting
information accordingly, with possible ranges of error.
Completeness
An effective MIS presents all the most relevant and useful information for a particular decision.
If some information is not available due to missing data, it highlights the gaps and either
displays possible scenarios or presents possible consequences resulting from the missing data.
Management can either add the missing data or make the appropriate decisions aware of the
missing information. An incomplete or partial presentation of information can lead to decisions
that don't have the anticipated effects.
PERSONALITY TRAITS
What makes you who you are as a person? You probably have some idea of your own
personality type — are you bubbly or reserved, sensitive or thick-skinned? Psychologists who
try to tease out the science of who we are define personality as individual differences in the
way people tend to think, feel and behave.
There are many ways to measure personality, but psychologists have mostly given up on trying
to divide humanity neatly into types. Instead, they focus on personality traits.
The most widely accepted of these traits are the Big Five:
Openness
Openness is shorthand for "openness to experience." People who are high in openness enjoy
adventure. They're curious and appreciate art, imagination and new things.
Conscientiousness
People who are conscientious are organized and have a strong sense of duty.
Extraversion
Extraversion versus introversion is possibly the most recognizable personality trait of the Big
Five. The more of an extravert someone is, the more of a social butterfly they are
Agreeableness
Agreeableness measures the extent of a person's warmth and kindness. The more agreeable
someone is, the more likely they are to be trusting, helpful and compassionate.
Neuroticism
refers to worrying or being vulnerable.
Lead: to guide on a way especially by going in advance; to direct on a course or in a direction
Manage: to handle or direct with a degree of skill; to make and keep compliant T
1. Leadership is Synthesis, Management is Analysis : In general, analysis is defined as the
procedure by which we break down an intellectual or substantial whole into parts or
components. Synthesis is defined as the opposite procedure: to combine separate elements or
components in order to form a coherent whole.Every synthesis is built upon the results of a
preceding analysis, and every analysis requires a subsequent synthesis in order to verify and

correct its results. A leader request his managers to provide him with status, issues and other
vital statistics for each of the managed sub-division. The leader than puts all the data on the
table and then tries to synthesis them into a fundamental statement followed by a direction or
vision for the entire set of problems. Then he hands over his vision to each manager who then
tries to analyze the divisions status with leader's vision and then formulates plans to address
them. In a nutshell, synthesis involves working with abstract concepts while analysis deals with
details.
2. Leadership has long-term impact, management has short-term goals: Leader's decisions
impact the future of the organization, they bring vision, they motivate the organization towards
a goal. The effect of their vision can only be measured over substantial period, they can either
make or break an organization. Manager's role is more about managing day-to-day activities,
supervising subordinate staff, get the tasks completed, measure and report on performance
and reward. Hence their effectiveness can impact how the organization performs in a quarter,
half or whole year.
3. Leadership is an intention of climbing to next level, management is the process of
efficiently executing the plan: This is certainly the most fundamental difference. The creative
energy of defining the next big thing itself is inspirational for the organization, it brings meaning
to the work of employees. Management on the other hand is more focused on getting the work
done efficiently, although in reality it may loose the efficiency part. Hence management is more
about creating several processes and tracking the progress of various functions across the
organization.
A CEO of an organization has more of a leadership task to provide vision to the company and
plan to achieve it, while a project manager’s leadership rarely goes beyond determining what
the next project should be. Leadership within the organization also depends upon ‘ how much it
allows for leadership in a particular role'.
Differences
Leadership Management
Create a vision Concentrate on doing things efficiently
Leaders have followers Managers have subordinates
Leaders are inspirational and charismatic Managers are productive and effective
Manage the changes, external or internal . Manage the complexity of tasks and the
organization structure
Leaders empower followers Managers control subordinates
People are lead Projects are manged
Align the organization to the vision . Organize teams, allocate resources, build &
execute plans to achieve the objectives
Synthesis, put together all the issues and solve
them holistically ( bottom-up approach)
Analyzes the issues by breaking them into
smaller problems and then solve each of them

(top-down approach)
LEADERSHIP GRID
Managerial Grid, a popular framework for thinking about a leader's "task versus person"
orientation.
Also known as the Managerial Grid, or Leadership Grid, it was developed in the early 1960s by
management theorists Robert Blake and Jane Mouton. It plots a manager's or leader's degree
of task-centeredness versus her person-centeredness, and identifies five different combinations
of the two and the leadership styles they produce.
Understanding the Model
The Blake Mouton Managerial Grid is based on two behavioral dimensions:
 Concern for People: this is the degree to which a leader considers team members' needs,
interests and areas of personal development when deciding how best to accomplish a task.
 Concern for Results: this is the degree to which a leader emphasizes concrete objectives,
organizational efficiency and high productivity when deciding how best to accomplish a task.
Blake and Mouton defined five leadership styles based on these, as illustrated in the diagram
below.
Figure - The Blake Mouton Managerial Grid.
Let's take a look at each quadrant in
detail.
Impoverished Management – Low
Results/Low People
The Impoverished or "indifferent"
manager is mostly ineffective. With a low
regard for creating systems that get the
job done, and with little interest in
creating a satisfying or motivating team
environment , his results are inevitably

disorganization, dissatisfaction and disharmony.
Produce-or-Perish Management – High Results/Low People
Also known as "authoritarian" or "authority-compliance" managers, people in this category
believe that their team members are simply a means to an end. The team's needs are always
secondary to its productivity.
This type of manager is autocratic, has strict work rules, policies and procedures, and can view
punishment as an effective way of motivating team members. This approach can drive
impressive production results at first, but low team morale and motivation will ultimately affect
people's performance, and this type of leader will struggle to retain high performers.
She probably adheres to the Theory X approach to motivation, which assumes that employees
are naturally unmotivated and dislike working. A manager who believes people are self-
motivated and happy to work is said to follow Theory Y. You can learn more about these
theories in our article, Theory X and Theory Y .
Middle-of-the-Road Management – Medium Results/Medium People
A Middle-of-the-Road or "status quo" manager tries to balance results and people, but this
strategy is not as effective as it may sound. Through continual compromise, he fails to inspire
high performance and also fails to meet people's needs fully. The result is that his team will
likely deliver only mediocre performance.
Country Club Management – High People/Low Results
The Country Club or "accommodating" style of manager is most concerned about her team
members' needs and feelings. She assumes that, as long as they are happy and secure, they
will work hard.
What tends to be the result is a work environment that is very relaxed and fun, but where
productivity suffers because there is a lack of direction and control.
Team Management – High Production/High People
According to the Blake Mouton model, Team management is the most effective leadership
style. It reflects a leader who is passionate about his work and who does the best he can for the
people he works with.

Team or "sound" managers commit to their organization's goals and mission, motivate the
people who report to them, and work hard to get people to stretch themselves to deliver great
results. But, at the same time, they're inspiring figures who look after their teams. Someone led
by a Team manager feels respected and empowered, and is committed to achieving her goals.
Team managers prioritize both the organization's production needs and their people's needs.
They do this by making sure that their team members understand the organization's
purpose , and by involving them in determining production needs.
When people are committed to, and have a stake in, the organization's success, their needs and
production needs coincide. This creates an environment based on trust and respect, which
leads to high satisfaction, motivation and excellent results. Team managers likely adopt the
Theory Y approach to motivation, as we mentioned above.
Step One: Identify Your Managerial Style
 List five or six recent situations where you were the leader.
 For each situation, place yourself on the grid according to where you believe you fit.
 Use our self-assessment leadership quiz to help you spot your traits.
Step Two: Identify Areas Where You Can Improve and Develop Your Leadership Skills
 Look at your current approach. Are you settling for "Middle-of-the-Road" because it's easier
than reaching for more? Think about whether your style suits the situation you are in.
 If you feel that you are too task-oriented, then you can try to involve your team members
in creative problem solving , improve how you communicate with them, or work on
your mentoring skills. Or, if you tend to focus too much on people, it may mean becoming
clearer about scheduling and monitoring project progress , or improving your decision
making .
 Continually monitor your performance and watch for situations where you slip back into bad
old habits.
Step Three: Put the Grid in Context
The Team management style is often the most effective approach, but there are situations that
call for more attention to one area than the other. For example, if your company is in the
middle of a merger or some other significant change, then it can be acceptable to place a higher
emphasis on people than on production, to guide them and reassure them through a

potentially difficult time. Likewise, when faced with an emergency, an economic hardship, or a
physical risk, concerns about people may be put to one side, for the short term at least, to
achieve good results and efficiency.
MOTIVATION:
The term motivation is derived from the word ‘motive”. The word ‘motive’ as a noun means an
objective, as a verb this word means moving into action. Therefore, motives are forces which
induce people to act in a way, so as to ensure the fulfillment of a particular human need at a
time. Behind every human action there is a motive. Therefore, management must provide
motives to people to make them work for the organization.
Motivation may be defined as a planned managerial process, which stimulates people to work
to the best of their capabilities, by providing them with motives, which are based on their
unfulfilled needs.
“Motivation means a process of stimulating people to action to accomplish desired goods.” —
William G. Scott
“Motivation is the process of attempting to influence others to do your will through the
possibility of gain or reward.” — Flippo
Motivation is, in fact, pressing the right button to get the desired human behaviour.
Motivation is no doubt an essential ingredient of any Organisation. It is the psychological
technique which really executes the plans and policies through the efforts of others.
Features of the concept of motivation:
1. Motivation is a personal and internal feeling:
Motivation is a psychological phenomenon which generates within an individual.
2. Motivation is need based:
If there are no needs of an individual, the process of motivation fails. It is a behavioural concept
that directs human behaviour towards certain goals.
3. Motivation is a continuous process:
Because human wants are unlimited, therefore motivation is an ongoing process.
4. Motivation may be positive or negative:
A positive motivation promotes incentives to people while a negative motivation threatens the
enforcement of disincentives.
5. Motivation is a planned process:
People differ in their approach, to respond to the process of motivation; as no two individuals
could be motivated in an exactly similar manner. Accordingly, motivation is a psychological
concept and a complex process.
6. Motivation is different from job satisfaction:
MASLOW’S NEED HIERARCHY AND HERZBERG TWO FACTOR THEORY OF MOTIVATION
Need Approaches:
- Maslow’s Hierarchy of Needs
- Alderfer’s ERG Theory
- Herzberg’s Two Factor Theory

- McClelland’s Learned Needs Theory
MASLOW’S HIERARCHY OF NEEDS
– Developed by Abraham Maslow.
– Lower-order and higher-order needs affect workplace behavior and attitudes.
– Lower-order needs:
– Physiological, safety, and social needs.
– Desires for physical and social well being.
– Higher-order needs:
– Esteem and self-actualization needs
– Desire for psychological growth and development.
Deficit principle
A satisfied need is not a motivator of behavior.
Progression principle
A need at one level does not become activated until the next lower-level need is satisfied

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