UPSC Management Optional Paper 1

8/10/2019 UPSC Management Optional Paper 1

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UPSC MANAGEMENTT u e s d a y , J u l y 5 , 2 0 1 1

1. Managerial Function and Process - Topical NotesConcept and Foundat ions of Management

Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives usingavailable resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling anorganization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing encompasses the deploymentand manipulation of human resources, financial resources, technological resources, and natural resources.

While management has been present for millennia, several writers have created a background of works that assisted in modern management theories.

By about 1900 one finds managers trying to place their theories on what they regarded as a thoroughly scientific basis (see scientism for perceivedlimitations of this belief). Examples include Henry R. Towne's Science of management in the 1890s, Frederick Winslow Taylor's The Principles ofScientific Management (1911), Frank and Lillian Gilbreth's Applied motion study (1917), and Henry L. Gantt's charts (1910s). J. Duncan wrote the firstcollege management textbook in 1911. In 1912 Yoichi Ueno introduced Taylorism to Japan and became first management consultant of the "Japanese-management style". His son Ichiro Ueno pioneered Japanese quality assurance.

The first comprehensive theories of management appeared around 1920. The Harvard Business School invented the Master of BusinessAdministration degree (MBA) in 1921. People like Henri Fayol (18411925) and Alexander Church described the various branches of management andtheir inter-relationships. In the early 20th century, people like Ordway Tead (18911973), Walter Scott and J. Mooney applied the principles ofpsychology to management, while other writers, such as Elton Mayo (18801949), Mary Parker Follett (18681933), Chester Barnard (18861961),Max Weber (18641920), Rensis Likert (19031981), and Chris Argyris (1923 - ) approached the phenomenon of management from a sociologicalperspective.Peter Drucker (19092005) wrote one of the earliest books on applied management: Concept of the Corporation (published in 1946). It resulted fromAlfred Sloan (chairman of General Motors until 1956) commissioning a study of the organisation. Drucker went on to write 39 books, many in the samevein.

H. Dodge, Ronald Fisher (18901962), and Thornton C. Fry introduced statistical techniques into management-studies. In the 1940s, Patrick Blackettcombined these statistical theories with microeconomic theory and gave birth to the science of operations research. Operations research, sometimesknown as "management science" (but distinct from Taylor's scientific management), attempts to take a scientific approach to solving managementproblems, particularly in the areas of logistics and operations.

Some of the more recent developments include the Theory of Constraints, management by objectives, reengineering, Six Sigma and variousinformation-technology-driven theories such as agile software development, as well as group management theories such as Cog's Ladder.

As the general recognition of managers as a class solidified during the 20th century and gave perceived practitioners of the art/science of managementa certain amount of prestige, so the way opened for popularised systems of management ideas to peddle their wares. In this context many

management fads may have had more to do with pop psychology than with scientific theories of management.

Evolut ion of Management Thoughts

Taylor ism

Fundamentals of Scientific Management:Taylor argued that the principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximumprosperity for each employee. He also showed that maximum prosperity can exist only as the result of maximum product ivity. He argued that the mostimportant object of both the employee and the management should be the training and development of each individual in the establishment, so that hecan do the highest class of work for which his natural abilities fit him.Taylor was writing at a time when factories were creating big problems for the

management. Workmen were quite inefficient. According to Taylor, there were three reasons for the inefficiency. They were the:

1. Deceptive belief that a material increase in the output of each man or each machine in the trade would throw people out of work2. Defective management systems, which made it necessary for each workman to soldier, or work slowly to protect his own best interests3. Inefficient rule of thumb methods, which were almost universal in all trades, which cost much wasted effort

The Principles of Scientific Management:In this section, Taylor explained his principles of scientific management. Taylor's scientific management consisted of four principles:

1. Replace rule of thumb work methods with methods based on a scientific study of the tasks.2. Scientifically select and then train, teach, and develop the workman, whereas in the past the employee (or workmen) chose his own work andtrained himself as best he could.3. Provide "Detailed instruction and supervision of each worker in the performance of that worker's discrete task"
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4. Divide work nearly equally between managers and workers, so that the managers apply scientific management principles to planning the work andthe workers actually perform the tasks.

According to F. W. Taylor, the above combination of the initiative of the employee, coupled with the new types of work done by the management, thatmakes scientific management so much more efficient than the old plans.

Under the management of "initiative and incentive", the first three elements exist in many cases, but their importance is minor. However, under thescientific management, they form the very essence of the whole system.

According to Taylor, the summary of the fourth element is: Under the management of "initiative and incentive" practically the whole problem is "up tothe workman," while under scientific management fully one-half of the problem is "up to the management."

Fayolism

Fayol's work was one of the first comprehensive statements of a general theory of management.He proposed that there were six primary functions ofmanagement and 14 principles of management.

Functions of management:1. forecasting2. planning3. organizing4. commanding5. coordinating6. controlling

Principles of Management:


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1. Division of work. This principle is the same as Adam Smith's 'division of labour'. Specialisation increases output by making employees more ef ficient.2.Authority. Managers must be able to give orders. Authority gives them this right. Note that responsibility arises wherever authority is exercised.3. Discipline. Employees must obey and respect the rules that govern the organisation. Good discipline is the result of effective leadership, a clearunderstanding between management and workers regarding the organisation's rules, and the judicious use of penalties for infractions of the rules.4. Unity of command. Every employee should receive orders from only one superior.5. Unity of direction. Each group of organisational activities that have the same objective should be directed by one manager using one plan.6. Subordination of individual interests to the general interest. The interests of any one employee or group of employees should not take precedenceover the interests of the organisation as a whole.7. Remuneration. Workers must be paid a fair wage for their services.8. Centralisation. Centralisation refers to the degree to which subordinates are involved in decision making. Whether decision making is centralised (tomanagement) or decentralised (to subordinates) is a question of proper proportion. The task is to find the optimum degree of centralisation for eachsituation.9. Scalar chain.The line of authority from top management to the lowest ranks represents the scalar chain. Communications should follow this chain.However, if following the chain creates delays, cross-communications can be allowed if agreed to by all parties and superiors are kept informed.10. Order.People and materials should be in the right place at the right time. 11. Equity.Managers should be kind and fair to their subordinates.12. Stability of tenure of personnel.High employee turnover is inefficient. Management should provide orderly personnel planning and ensure thatreplacements are available to fill vacancies.13. Initiative. Employees who are allowed to originate and carry out plans will exert high levels of effort.14. Esprit de corps.Promoting team spirit will build harmony and unity within the organisation.

Fayol's work has stood the test of time and has been shown to be relevant and appropriate to contemporary management. Many of todaysmanagement texts including Daft have reduced the six functions to four: (1) planning; (2) organizing; (3) leading; and (4) controlling. Daft's text isorganized around Fayol's four functions.

Managerial Function s


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Management operates through various functions, often classified as planning, organizing, staffing, leading/directing, controlling/monitoring andMotivation.

1. Planning: Deciding what needs to happen in the future (today, next week, next month, next year, over the next 5 years, etc. ) and generating plansfor action.

2. Organizing: (Implementation) making optimum use of the resources required to enable the successful carrying out of plans.3. Staffing: Job Analyzing, recruitment, and hiring individuals for appropriate jobs.4. Leading/Directing: Determining what needs to be done in a situation and getting people to do it.5. Controlling/Monitoring: Checking progress against plans.6. Motivation : Motivation is also a kind of basic function of management, because without motivation, employees cannot work effectively. If motivationdoesn't take place in an organization, then employees may not contribute to the other functions (which are usually set by top level management).

Planning,

Planningmeans looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity whichdetermines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action. It is rightly saidWell plan is half done. Therefore planning takes into consideration available & prospective human and physical resources of the organization so asto get effective co-ordination, contribution & perfect adjustment. It is the basic management function which includes formulation of one or more detailedplans to achieve optimum balance of needs or demands with the available resources.According to Urwick, Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather thanguesses. Planning is deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals.According to Koontz & ODonell, Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between wherewe are to, where we want to go. It makes possible things to occur which would not otherwise occur.

Steps in Planning Function


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Planning function of managementinvolves following steps:-

1. Establishment of objectivesa. Planning requires a systematic approach.

b. Planning starts with the setting of goals and objectives to be achieved.

c. Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts.

d. Moreover objectives focus the attention of managers on the end results to be achieved.

e. As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in aclear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective.

f. As far as possible, objectives should be stated in quantitative terms. For example, Number of men working, wagesgiven, units produced, etc. But such an objective cannot be stated in quantitative terms like performance of quality controlmanager, effectiveness of personnel manager.

g. Such goals should be specified in qualitative terms.

h. Hence objectives should be practical, acceptable, workable and achievable.

2. Establishment of Planning Premisesa. Planning premises are the assumptions about the lively shape of events in future.

b. They serve as a basis of planning.

c. Establishment of planning premises is concerned with determining where one tends to deviate from the actual plansand causes of such deviations.

d. It is to find out what obstacles are there in the way of business during the course of operations.

e. Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent.

f. Planning premises may be internal or external. Internal includes capital investment policy, management labour

relations, philosophy of management, etc. Whereas external includes socio- economic, political and economical changes.

g. Internal premises are controllable whereas external are non- controllable.

3. Choice of alternative course of actiona. When forecast are available and premises are established, a number of alternative course of actions have to beconsidered.

b. For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resourcesavailable and requirements of the organization.

c. The merits, demerits as well as the consequences of each alternative must be examined before the choice is beingmade.

d. After objective and scientific evaluation, the best alternative is chosen.

e. The planners should take help of various quantitative techniques to judge the stability of an alternative.


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4. Formulation of derivative plansa. Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.

b. Secondary plans will flow from the basic plan. These are meant to support and expediate the achievement of basicplans.

c. These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profitmaximization is the main aim of the enterprise, derivative plans will include sales maximization, production maximization,and cost minimization.

d. Derivative plans indicate time schedule and sequence of accomplishing various tasks.

5. Securing Co-operationa. After the plans have been determined, it is necessary rather advisable to take subordinates or those who have toimplement these plans into confidence.

b. The purposes behind taking them into confidence are :-

i. Subordinates may feel motivated since they are involved in decision making process.

ii. The organization may be able to get valuable suggestions and improvement in formulation as well asimplementation of plans.

iii. Also the employees will be more interested in the execution of these plans.

6. Follow up/Appraisal of plansa. After choosing a particular course of action, it is put into action.

b. After the selected plan is implemented, it is important to appraise its effectiveness.

c. This is done on the basis of feedback or information received from departments or persons concerned.

d. This enables the management to correct deviations or modify the plan.

e. This step establishes a link between planning and controlling function.

f. The follow up must go side by side the implementation of plans so that in the light of observations made, futureplans can be made more realistic.


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Organizing,

Organizingis the function of management which follows planning. It is a function inwhich the synchronization and combination of human, physical and financial resourcestakes place. All the three resources are important to get results. Therefore,organizational function helps in achievement of results which in fact is important for thefunctioning of a concern. According to Chester Barnard, Organizing is a function by

which the concern is able to define the role positions, the jobs related and the co-ordination between authority and responsibility. Hence, a manager always has toorganize in order to get results.

A manager performs organizing function with the help of following steps:-1. Identification of activities -All the activities which have to be performedin a concern have to be identified first. For example, preparation of accounts,making sales, record keeping, quality control, inventory control, etc. All theseactivities have to be grouped and classified into units.


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2. Departmentally organizing the activities -In this step, the manager tries to combine and group similar and related activitiesinto units or departments. This organization of dividing the whole concern into independent units and departments is calleddepartmentation.

3. Classifying the authority -Once the departments are made, the manager likes to classify the powers and its extent to themanagers. This activity of giving a rank in order to the managerial positions is called hierarchy. The top management is into formulationof policies, the middle level management into departmental supervision and lower level management into supervision of foremen. Theclarification of authority help in bringing efficiency in the running of a concern. This helps in achieving efficiency in the running of aconcern. This helps in avoiding wastage of time, money, effort, in avoidance of duplication or overlapping of efforts and this helps inbringing smoothness in a concerns working.

4. Co-ordination between authority and responsibility -Relationships are established among various groups to enable smoothinteraction toward the achievment of the organizational goal. Each individual is made aware of his authority and he/she knows whomthey have to take orders from and to whom they are accountable and to whom they have to report. A clear organizational structure isdrawn and all the employees are made aware of it.

Contro l l ing;

What is Controlling?

Controlling consists of verifying whether everything occurs in confirmities with the plans adopted, instructions issued and principles established.Controlling ensures that there is effecti ve and efficient utilization of organizational resources so as to achieve the planned goals. Controlling measuresthe deviation of actual performance from the standard performance, discovers the causes of such deviations and helps in taking corrective actions According to Brech, Controlling is a systematic exercise which is called as a process of checking actual performance againstthe standards or planswith a view to ensure adequate progress and also recording such experience as is gained as a contribution to possible future needs.

According to Donnell, Just as a navigator continually takes reading to ensure whether he is relative to a planned action, so should a business managercontinually take reading to assure himself that his enterprise is on right course.Controlling has got two basic purposes

1. It facilitates co-ordination

2. It helps in planning

Features of Controlling Function

Following are the characteristics of controlling function of management-1. Controlling is an end function-A function which comes once the performances are made in confirmities with plans.

2. Controlling is a pervasive function-which means it is performed by managers at all levels and in all type of concerns.

3. Controlling is forward looking-because effective control is not possible without past being controlled. Controlling always lookto future so that follow-up can be made whenever required.

4. Controlling is a dynamic process-since controlling requires taking reviewal methods, changes have to be made whereverpossible.


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5. Controlling is related with planning-Planning and Controlling are two inseperable functions of management. Withoutplanning, controlling is a meaningless exercise and without controlling, planning is useless. Planning presupposes controlling andcontrolling succeeds planning.

Decision making;

Definition of Decision Making

According to the Oxford Advanced Learners Dictionary the term decision making means - the process of deciding about something important,especially in a group of people or in an organization.Trewatha & Newport defines decision making process as follows:, Decision-making involves the selection of a course of action from among twoor more possible alternatives in order to arrive at a solution for a given problem.As evidenced by the foregone definitions, decision making process is a consultative affair done by a comity of professionals to drive better functioningof any organization. Thereby, it is a continuous and dynamic activity that pervades all other activities pertaining to the organization. Since it is anongoing activity, decision making process plays vital importance in the functioning of an organization. Since intellectual minds are involved in theprocess of decision making, it requires solid scientific knowledge coupled with skills and experience in addition to mental m aturity.

Further, decision making process can be regarded as check and balance system that keeps the organisation growing both in vertical andlinear directions. It means that decision making process seeks a goal. The goals are pre-set business objectives, company missions and its vision. Toachieve these goals, company may face lot of obstacles in administrative, operational, marketing wings and operational domains. Such problems aresorted out through comprehensive decision making process. No decision comes as end in itself, since in may evolve new problems to solve. When oneproblem is solved another arises and so on, such that decision making process, as said earlier, is a continuous and dynamic.

A lot of time is consumed while decisions are taken. In a management setting, decision cannot be taken abruptly. It should follow the steps such as1. Defining the problem

2. Gathering information and collecting data

3. Developing and weighing the options

4. Choosing best possible option

5. Plan and execute

6. Take follow up action

Since decision making process follows the above sequential steps, a lot of t ime is spent in this process. This is the case with every decision taken tosolve management and administrative problems in a business setting. Though the whole process is time consuming, the result of such process in aprofessional organization is magnanimous.

Decision making under uncertainty

Managers in contemporary organizations are confronted with uncertainty and ambiguity in their everyday lives. Not only do they have to contend withrapidly changing trends and fluid situations, the data they get from the ground or f rom market research becomes redundant with no time. This hasgiven rise to confusion and chaos in the way organizations approach the future. This situation can be remedied by the use of scenario based decision-making where the managers draw up possible scenarios that the company might have to contend with in the short term, medium term, and longerterm.


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By drawing up scenarios that consist of simulations of the best-case situation and the worst-case situation, the managers would be betterable to take the right decision when the situation manifests itself. The point here is that looking into the future is impossible except for oraclesand clairvoyants. Hence, some sort of grip on the future must be firmed up by planning for all possibilities.

Over the last couple of years, global businesses had to contend with multiple economic shocks starting with the bankruptcy of the investment bank,Lehmann Brothers that nearly brought down the global financial system. Next, the Eurozone crisis erupted that threatened to bring entire governmentsto their knees. Now, we have the specter of diminishing resources and runaway inflation. In this context, it becomes important for managers to draw upscenarios that would happen with a certain degree of probability. For instance, it would be better for managers to think of the eventuality of Greeceleaving the Eurozone and then planning for it accordingly. For managers in sectors that do not have exposure to financial instruments in a major way(after all, which sector is immune from financial shocks?), they can simulate models and scenarios where a war in the Middle East is predicted andthen base their strategies accordingly.

The point here is that when there is so much uncertainty, it becomes tough to anticipate events. Hence, by drawing up scenarios that simulate theworst and the best as well, decisions can be taken that would derive advantage to the organizations. When one adds complexity to the uncertainty andambiguity that pervades the current world, one is even more muddied and muddled to take decisions. For this, managing the present, it is a challengeand hence many organizations leave future forecasts to consultants and management experts. However, this need not be the case and in-houseexpertise can be developed to deal with emerging scenarios.

A case in point is NASSCOM (the Apex body of IT and ITES companies in India) that has been advising IT companies in India to plan for the downturnand the possible aftershocks from the Eurozone crisis and the upcoming fiscal cliff in the United States. NASSCOM has also been asking ITcompanies to draw up scenarios for these events that if not planned for have the potential to blow up on everyones face. Unfortunately, manyorganizations are rushing into the future without any thought or idea on how they would deal with Black Swan events. A Black Swan event is a lowprobability but high impact event that can surprise people with its occurrence.

Role of Manager,

A manager wears many hats. Not only is a manager a team leader, but he or she is also a planner, organizer, cheerleader, coach, problem solver, anddecision maker all rolled into one. And these are just a few of a manager's roles.

In addition, managers' schedules are usually jam-packed. Whether they're busy with employee meetings, unexpected problems, or strategy sessions,managers often find little spare time on their calendars. (And that doesn't even include responding to e-mail!)In his classic book, The Nature of Managerial Work, Henry Mintzberg describes a set of ten roles that a manager fills. These roles fall into threecategories:

Interpersonal: This role involves human interaction.

Informational: This role involves the sharing and analyzing of information.
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Decisional: This role involves decision making.

Tablecontains a more in-depth look at each category of roles that help managers carry out all five functions described in the preceding Functions ofManagers section.

TABLE 1 Mintzberg's Set of Ten Roles

Category Role Activity

Informational Monitor Seek and receive information; scan periodicals andreports; maintain personal contact with stakeholders.

Disseminator Forward information to organization members viamemos, reports, and phone calls.

Spokesperson Transmit information to outsiders via reports, memos,and speeches.

Interpersonal Figurehead Perform ceremonial and symbolic duties, such asgreeting visitors and signing legal documents.

Leader Direct and motivate subordinates; counsel andcommunicate with subordinates.

Liaison Maintain information links both inside and outsideorganization via mail, phone calls, and meetings.
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Decisional Entrepreneur Initiate improvement projects; identify new ideas anddelegate idea responsibility to others.

Disturbancehandler

Take corrective action during disputes or crises;resolve conflicts among subordinates; adapt toenvironments.

Resourceallocator

Decide who gets resources; prepare budgets; setschedules and determine priorities.

Negotiator Represent department during negotiations of unioncontracts, sales, purchases, and budgets.

Managerial skil ls ;

Not everyone can be a manager. Certain skills,or abilities to translate knowledge into action that results in desired performance, are required to helpother employees become more productive. These skills fall under the following categories:

Technical:This skill requires the ability to use a special proficiency or expertise to perform particular tasks. Accountants, engineers, marketresearchers, and computer scientists, as examples, possess technical skills. Managers acquire these skills initially through formal education andthen further develop them through training and job experience. Technical skills are most important at lower levels of management.

Human:This skill demonstrates the ability to work well in cooperation with others. Human skills emerge in the workplace as a spirit of t rust,enthusiasm, and genuine involvement in interpersonal relationships. A manager with good human skills has a high degree of self-awareness and acapacity to understand or empathize with the feelings of others. Some managers are naturally born with great human sk ills, while others improvetheir skills through classes or experience. No matter how human skills are acquired, they're critical for all managers because of the highlyinterpersonal nature of managerial work.

Conceptual:This skill calls for the ability to think analytically. Analytical skills enable managers to break down problems into smaller parts,to see the relations among the parts, and to recognize the implications of any one problem for others. As managers assume ever-higherresponsibilities in organizations, they must deal with more ambiguous problems that have long-term consequences. Again, managers may acquirethese skills initially through formal education and then further develop them by training and job experience. The higher the management level, themore important conceptual skills become.

Although all three categories contain skills essential for managers, their relative importance tends to vary by level of managerial responsibility.

Business and management educators are increasingly interested in helping people acquire technical, human, and conceptual skills, and developspecific competencies, or specialized skills, that contribute to high performance in a management job. Following are some of the skills and personalcharacteristics that the American Assembly of Collegiate Schools of Business (AACSB) is urging business schools to help their students develop.

Leadershipability to influence others to perform tasks

Self-objectivityability to evaluate yourself realistically

Analytic thinkingability to interpret and explain patterns in information

Behavioral flexibilityability to modify personal behavior to react objectively rather than subjectively to accomplish organizational goals

Oral communicationability to express ideas clearly in words

Written communicationability to express ideas clearly in writing


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Personal impactability to create a good impression and instill confidence

Resistance to stressability to perform under stressful condition

Entrepreneurship ;

Entrepreneurship is the act and art of being anentrepreneuror "one who undertakesinnovations, finance and business acumen in an effort totransform innovations into economic goods". This may result in neworganizationsor may be part of revitalizing matureorganizationsin response to aperceived opportunity. The most obvious form of entrepreneurship is that of starting newbusinesses(referred asStartup Company); however, in recentyears, the term has been extended to include social and political forms of entrepreneurial activity. When entrepreneurship is describing activities withina firm or large organization it is referred to as intra-preneurship and may include corporate venturing, when large entities spin-off organizations.

It has been recognized worldwide that the key to any business success and survival today is: Driving Growth through Innovation

In order to achieve this, the need for an entrepreneurial business culture has become the key competitive advantage of any companysmall or large.

In order to implement this vision, the following has been formulated:

Entrepreneurship = Creativity + Innovation

In simple terms this means: how to create new ideas (Creativity) and how to implement them successfully (Innovation).

This formula is supported by the Timmons Model of the Entrepreneurship Process as shown below:
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Corporate Entrepreunership


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Yet for corporate entrepreneurship to thrive, it needs more. It requires the structure and culture. Assuming the right people are in place, leadershipmust provide divisional and business unit autonomy. How can you lead your organization to a climate of corporate entrepreneurship?

Like innovation, Definewhat entrepreneurship means. The phrase "Corporate Entrepreneurship" must mean the same thing organization-wide. Moreover, leadership must delineate objectives and point the way as part of its vision and mission.

Incubate and nurture. Corporate entrepreneurship doesn't flourish without guidance. It starts small - and grows through encouragement.Begin with small projects heavily supported by leadership. Those success stories should be heavily communicated as such. They then will becomethe lead project to pull the rest of the group or other entrepreneurial-minded teams along.

Create a reward system. Risk and reward, when properly aligned, can foster accountability. Rewards - whether in the form of praise fromimmediate managers, attention from leadership, or the chance to lead future projects or task forces - are powerful motivators. They also can helpsolidify the creation of stronger corporate entrepreneurs.

So look around your organization. Are you surrounded by employees - or entrepreneurs? The difference may be not only the way they think, but theyway they're being nurtured.

Social Entrepreunership

Social Entrepreneurship is the process that creates change, both economic and social, through leadership and the application of business practiceswhile maintaining the focus on the organizations mission.In developing countries, social entrepreneurship focuses on creating income opportunities for many people held in the grips of poverty. Withindeveloped nations, social entrepreneurship helps non-profit organizations explore income generating businesses that focus on the double bottom lineof both the financial and social returns on their investment.

Social entrepreneurship initiatives are usually introduced and lead by the social entrepreneur. These individuals will champion the project usually takinga holistic approach to the problem. They identify the sources (or bottlenecks) that prevent change within the society. These areas sometimes relate tothe basic welfare of the populations such as food, clothing, and shelter. However, they can take a community approach in areas like education, cleanwater, basic medical need, or major global concerns of global warming and the environment.

Sometimes new innovations are created to help address a critical need. These new products often address the Bottom of the Pyramid.This market is

the lowest tier. It is very large, but has little resources. Social Entrepreneurs will use business skills to commercialize the product, in much the samemanner as any other inventor. The difference is, they look for sustainability not Maximum Return on Investment. They may patent their product toprotect the integrity of their research and prevent others from making profits on their work. They might create new and interesting alliances with for-profit companies, Non-Governmental Organizations, and/or Non-profit Organizations. They may also lobby legislator to create new business entities tohelp them serve the mission. One such new business is the Low-Profit Limited Liability Company (L3C), consider a hybrid, combining funding sourcesof a nonprofit with the management of a for -profit.


16/23

Management of innovat ion ;

Innovation managementis the discipline ofmanagingprocesses ininnovation.It can be used to develop both product and organizational innovation.Without proper processes, it is not possible for R&D to be efficient; innovation management includes a set of tools that allow managers and engineers

to cooperate with a common understanding of goals and processes. The focus of innovation management is to allow the organization to respond to anexternal or internal opportunity, and use its creative efforts to introduce new ideas, processes or products.

Importantly, innovation management is not relegated to R&D; it involves workers at every level in contributing creatively to a company's development,manufacturing, and marketing. By utilizing appropriate innovation management tools, management can trigger and deploy the creative juices of thewhole work force towards the continuous development of a company.The process can be viewed as an evolutionary integration of organization,technology and market by iterating series of activities: search, select, implement and capture.

Innovation processes can either be pushed or pulled through development. A pushed process is based on existing or newly invented technology, thatthe organization has access to, and tries to find profitable applications to use this technology. A pulled process tries to find areas where customersneeds are not met, and then focus development efforts to find solutions to those needs. To succeed with either method, an understanding of both themarket and the technical problems are needed. By creating multi-functional development teams, containing both engineers and marketers, bothdimensions can be solved.

The lifetime (or product lifecycle) of new products is steadily getting shorter; increased competition therefore forces companies reduce thetime tomarket.Innovation managers must therefore decrease development time, without sacrificing quality or meeting the needs of the market.

Common tools includebrainstorming, virtual prototyping, product lifecycle management,idea management,TRIZ, Phasegate model, projectmanagement,product lineplanning andportfolio management.
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17/23

Managing in a global environment,

International managers face intense and constant challenges that require training and understanding of the foreign environment. Managing a businessin a foreign country requires managers to deal with a large variety of cultural and environmental differences. As a result, international managers mustcontinually monitor the political, legal, sociocultural, economic, and technological environments.

The political environment

The political environment can foster or hinder economic developments and direct investments. This environment is ever-changing. As examples, thepolitical and economic philosophies of a nation's leader may change overnight. The stability of a nation's government, which frequently rests on thesupport of the people, can be very volatile. Various citizen groups with vested interests can undermine investment operations and opportunities. Andlocal governments may view foreign firms suspiciously.Political considerations are seldom written down and often change rapidly. For example, to protest Iraq's invasion of Kuwait in 1990, many worldgovernments levied economic sanctions against the import of Iraqi oil. Political considerations affect international business daily as governmentsenact tariffs(taxes), quotas(annual limits), embargoes(blockages), and other types of restriction in response to political events.Businesses engaged in international trade must consider the relative instability of countries such as Iraq, South Africa, and Honduras. Political unrest incountries such as Peru, Haiti, Somalia, and the countries of the former Soviet Union may create hostile or even dangerous environments for foreignbusinesses. In Russia, for example, foreign managers often need to hire bodyguards; sixteen foreign businesspeople were murdered there in 1993.Civil war, as in Chechnya and Bosnia, may disrupt business activities and place lives in danger. And a sudden change in power can result in a regimethat is hostile to foreign investment; some businesses may be forced out of a country altogether. Whether they like it or not, companies are ofteninvolved directly or indirectly in international politics.

The technological environment

The technological environment contains the innovations, from robotics to cellular phones, that are rapidly occurring in all types of technology. Before acompany can expect to sell its product in another country, the technology of the two countries must be compatible.Companies that join forces with others will be able to quicken the pace of research and development while cutting the costs connected withutilizing the latest technology. Regardless of the kind of business a company is in, it must choose partners and locations that possess an availablework force to deal with the applicable technology. Many companies have chosen Mexico and Mexican partners because they provide a willing andcapable work force. GM's plant in Arizpe, Mexico, rivals its North American plants in quality.

Consumer safety in a global marketplace
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18/23

The United States leads the world in spending on research and development. As products and technology become more complex, the public needs toknow that they are safe. Thus, government agencies investigate and ban potentially unsafe products. In the United States, the Federal Food and DrugAdministration has set up complex regulations for testing new drugs. The Consumer Product Safety Commission sets safety standards for consumerproducts and penalizes companies that fail to meet them. Such regulations have resulted in much higher research costs and in longer times betweennew product ideas and their introduction. This is not always true in other countries.

The sociocultural environment

Cultural differences, which can be very subtle, are extremely important. An organization that enters the international marketplace on virtually any levelmust make learning the foreign country's cultural taboos and proper cultural practices a high priority. If a business fails to understand the culturalmethods of doing business, grave misunderstandings and a complete lack of trust may occur.Management differences also exist. In China, a harmonious environment is more important than day-to-day productivity. In Morocco, women canassume leadership roles, but they are usually more self-conscious than American women. In Pakistan, women are not often found in managementpositions, if they're in the workplace at all.In addition, the importance of work in employees' lives varies from country to country. For example, the Japanese feel that work is an important part oftheir lives. This belief in work, coupled with a strong group orientation, may explain the Japanese willingness to put up with things that workers in othercountries would find intolerable.Likewise, culture may impact what employees find motivating, as well as how they respond to rewards and punishments. For example, Americans tendto emphasize personal growth, accomplishment, and getting what you deserve for performance as the most important motivators. However, in Asiancultures, maintaining group solidarity and promoting group needs may be more important than rewarding individual achievements.Finally, language differences are particularly important, and international managers must remember that not all words translate clearly into otherlanguages. Many global companies have had difficulty crossing the language barrier, with results ranging from mild embarrassment to outright failure.For example, in regards to marketing, seemingly innocuous brand names and advertising phrases can take on unintended or hidden meanings whentranslated into other languages. Advertising themes often lose or gain something in translations. The English Coors beer slogan get loose with Coorscame out as get the runs with Coors in Spanish. Coca-Cola's English Coke adds life theme translated into Coke brings your ancestors back fromthe dead in Japanese. In Chinese, the English Kentucky Fried Chicken slogan finger-lickin' good came out as eat your fingers off.

Such classic boo-boos are soon discovered and corrected; they may result in little more than embarrassments for companies. Managers should keepin mind that countless other, more subtle blunders may go undetected and damage product performance in less obvious ways.

The economic environment

Managers must monitor currency, infrastructure, inflation, interest rates, wages, and taxation. In assessing the economic environment in foreigncountries, a business must pay particular attention to the following four areas:

Average income levels of the population.If the average income for the population is very low, no matter how desperately this populationneeds a product or service, there simply is not a market for it.

Tax structures.In some countries, foreign firms pay much higher tax rates than domestic competitors. These tax differences may be veryobvious or subtle, as in hidden registration fees.

Inflation rates.In the U.S., for example, inflation rates have been quite low and relatively stable for several years. In some countries,however, inflation rates of 30, 40, or even 100 percent per year are not uncommon. Inflation results in a general rise in the level of prices, andimpacts business in many ways. For example, in the mid-1970s, a shortage of crude oil led to numerous problems because petroleum productssupply most of the energy required to produce goods and services and to transport goods around the world. As the cost of petroleum productsincreased, a corresponding increase took place in the cost of goods and services. As a result, interest rates increased dramatically, causing bothbusinesses and consumers to reduce their borrowing. Business profits fell as consumers' purchasing power was eroded by inflation. High interestrates and unemployment reached alarmingly high levels.

Fluctuating exchange rates.The exchange rate,or the value of one country's currency in terms of another country's currency, isdetermined primarily by supply and demand for each country's goods and services. The government of a country can, however, cause thisexchange rate to change dramatically by causing high inflationby printing too much currency or by changing the value of the currency throughdevaluation. A foreign investor may sustain large losses if the value of the currency drops substantially.

When doing business abroad, businesspeople need to recognize that they cannot take for granted that other countries offer the same things as arefound in industrialized nations. A country's level of development is often determined in part by its infrastructure. The infrastructureis the physicalfacilities that support a country's economic activities, such as railroads, highways, ports, utilities and power plants, schools, hospitals, communicationsystems, and commercial distribution systems. When doing business in less developed countries, a business may need to compensate for rudimentarydistribution and communication systems.

The legal enviroment

The American federal government has put forth a number of laws that regulate the activities of U.S. firms engaged in international trade. However,once outside U.S. borders, American organizations are likely to find that the laws of the other nations differ from those of the U.S. Many legal rights thatAmericans take for granted do not exist in other countries; a U.S. firm doing business abroad must understand and obey the laws of the host country.In the U.S., the acceptance of bribes or payoffs is illegal; in other countries, the acceptance of bribes or payoffs may not be illegalthey may beconsidered a common business practice. In addition, some countries have copyright and patent laws that are less strict than those in the U.S., andsome countries fail to honor these laws. China, for example, has recently been threatened with severe trade sanctions because of a history of allowingAmerican goods to be copied or counterfeited there. As a result, businesses engaging in international trade may need to take extra steps to protecttheir products because local laws may be insufficient to protect them.
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19/23

Flexible Systems Management;

Flexible Systems Management is an emerging paradigm that relates with management of organizations placed in a chaotic business environment. Thebusiness environment has been changing over a period of time, which at times may be fairly turbulent and dramatic. This creates uncertainties anddynamics of high order. In order to cope with it, both for survival and growth in a competitive manner, business organizations have to look forinnovative strategies and mechanisms. The paradigm of flexible systems management (the focus of this Journal) is associatedwith multipleperspectives such as holistic management of organizational paradoxes with systemic flexibility; business agility infused by new information andcommunication technologies; innovation, strategic change and risk; andflexibility in various operations for achieving business excellence.

Social responsibil i ty and managerial ethics;

Corporate Social Responsibility (CSR) has been defined in various ways by scholars, authors and institutions, but one of the more ideal definitions hasbeen provided by the World Business Council for Sustainable Development, which says "Corporate Social Responsibility is the continuing commitmentby business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well asof the local community and society at large."

CSR is not only about doing Philanthropic activities but is now growing to become an integral part of the Strategy of the company. These days all thestakeholders including Employees, Stockholders, Consumers, Suppliers, Distributors, Community, Environment expect a higher degree ofaccountability from businesses. There fore the way a company goes on carrying its business and other activities and how it is perceived by the variousstakeholders has become paramount for the company.

In the past few years, India has been registering the 2nd highest growth levels year on year globally. To make this growth sustainable, India needs aninclusive growth strategy, considering the large social inequality/divide existing in the country. With corporate being the drivers of growth of our country,they realize that they need to play a substantial part in this inclusive growth. Government of India has already made it mandatory for Public SectorUnits to spend certain % of profit on CSR.


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Process and c ustomer or ientat ion;

A group of actions taken by a business to support its sales and service staff in considering client needs and satisfaction their major priorities. Businessstrategies that tend to reflect a customer orientation might include: developing a quality product appreciate by consumers; responding promptly andrespectfully to consumer complaints and queries; and dealing sensitively with community issues.

The following six features and concepts are key to understanding social marketing and have been incorporated into the 'customer triangle' modelbelow:

Customer or consumer orientation: A strong 'customer' orientation with importance attached to understanding where the customer isstarting from, their knowledge, attitudes and beliefs, along with the social context in which they live and work


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Behaviour and behavioural goals: A clear focus on understanding existing behaviour and key influences upon it, alongside developingclear behavioural goals. These can be divided into actionable and measurable steps or stages, phased over time

'Intervention mix' and 'marketing mix': Using a mix of different methods to achieve a particular behavioural goal. When used at thestrategic level this is commonly referred to as the 'intervention mix', and when used operationally it is described as the 'marketing mix'

Audience segmentation: Clarity of audience focus using audience segmentation to target effectively

'Exchange' : Use of the 'exchange' concept - understanding what is being expected of people, and the real cost to them

'Competition': Use of the 'competition' concept - understanding factors that impact on people and that compete for their attention and time

Managerial process es on direct and indirect value chain.

Using Porter's Value Chain

To identify and understand your company's value chain, follow these steps.

Step 1Identify subactivities for each primary activity.For each primary activity, determine which specific subactivities create value. There are three different types of subactivities:

Direct activitiescreate value by themselves. For example, in a book publisher's marketing and sales activity, direct subactivities includemaking sales calls to bookstores, advertising, and selling online.

Indirect activitiesallow direct activities to run smoothly. For the book publisher's sales and marketing activity, indirect subactivities includemanaging the sales force and keeping customer records.

Quality assuranceactivities ensure that direct and indirect activities meet the necessary standards. For the book publisher's sales andmarketing activity, this might include proofreading and editing advertisements.

Step 2Identify subactivities for each support activity.For each of the Human Resource Management, Technology Development and Procurement support activities, determine the subactivities that createvalue within each primary activity. For example, consider how human resource management adds value to inbound logistics, operations, outboundlogistics, and so on. As in Step 1, look for direct, indirect, and quality assurance subactivities.Then identify the various value-creating subactivities in your company's infrastructure. These will generally be cross-functional in nature, rather thanspecific to each primary activity. Again, look for direct, indirect, and quality assurance activities.

Step 3Identify links.Find the connections between all of the value activities you've identified. This will take time, but the links are key to increasing competitive advantagefrom the value chain framework. For example, there's a link between developing the sales force (an HR investment) and sales volumes. There'sanother link between order turnaround times, and service phone calls from frustrated customers waiting for deliveries.

Step 4Look for Opportunities to Increase Value.Review each of the subactivities and links that you've identified, and think about how you can change or enhance it to maximize the value you offer tocustomers (customers of support activities can internal as well as external).

Topics:Delegation; Decision Making under certainty and uncertainty; Management styles; Leadership vs management; Stakeholders; Stakeholdersnetwork; Family management; Delegation of authority and accountability; Management by Objectives; Corporate Responsibility; Chief


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Executive; Management Control; Responsibility Centers; Situational Leadership; Social Responsibility; Trends in Management concepts;Innovation; Planning vs Controlling; Managerial Decisions; Management of Risk; Management Techniques; Management Fads; Fayolism;

Posted byBonnie Deb Barma at 6:06 AMEmail ThisBlogThis!Share to TwitterShare to FacebookShare to PinterestLabels: Managerial Function and Process,Topical Notes

2 comments:1.

Elita HanggiriNovember 16, 2013 at 12:51 PM

It's help me lots! thanks

Reply

2.

Pradip SinghiSeptember 6, 2014 at 1:09 AM

kudos to your efforts. many thanks :)

Reply

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UPSC Management Optional Paper 1