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Student’s Name (R. No.) : Ajay Datta (130770111014) Class : E.C. Semester : 3 Subject : Engineering Economics & Management (E. E. M.) Topic : Definition, nature & scope of management & administration & Skills, types & roles of a manager. Submitted to : Shruta Ma’am DEFINITIONS Management (noun): The responsibility for and control of a company or similar organization. Successful management could be described as the act of joining people together to accomplish desired goals and objectives using available resources efficiently and effectively. Administration (noun): 1. A group of people working to manage and control the operations of a business or organization; 2. The act or process of administering, especially regarding management. What is management? • A leadership role • Title and position of power • Task management • Disciplined/responsibility What is administration? • Academic • Government • A group of managers How is leadership a part of management and administration? • Not necessarily about being “in charge” – instead, being inspirational • • • • • • Motivational Innovative Open/inviting Lifelong learner Flexible/willing to change Risk taker Nature and Characteristics of Management : The salient features which highlight the nature of management are as follows: (i) Management is goal-oriented: Management is not an end in itself. It is a means to achieve certain goals. Management has no justification to exist without goals. Management goals are called group goals or organisational goals. The basic goal of management is to ensure efficiency and economy in the utilisation of human, physical and financial resources. The success of management is measured by the extent to which the established goals one achieved. Thus, management is purposeful. (ii) Management is universal: Management is an essential element of every organised activity irrespective of the size or type of activity. Wherever two or more persons are engaged in working for a common goal, management is necessary. All types of organisations, e.g., family, club, university, government, army, cricket team or business, require management. Thus, management is a pervasive activity. The fundamental principles of management are applicable in all areas of organised effort. Managers at all levels perform the same basic functions. (iii) Management is an Integrative Force: The essence of management lies in the coordination of individual efforts in to a team. Management reconciles the individual goals with organisational goals. As unifying force, management creates a whole that is more than the sum of individual parts. It integrates human and other resources. (iv) Management is a Social Process: Management is done by people, through people and for people. It is a social process because it is concerned with interpersonal relations. Human factor is the most important element in management. According to Appley, “Management is the development of people not the direction of things. A good manager is a leader not a boss. It is the pervasiveness of human element which gives management its special character as a social process”. (v) Management is multidisciplinary: Management has to deal with human behaviour under dynamic conditions. Therefore, it depends upon wide knowledge derived from several disciplines like engineering, sociology, psychology, economics, anthropology, etc. The vast body of knowledge in management draws heavily upon other fields of study. (vi) Management is a continuous Process: Management is a dynamic and an on-going process. The cycle of management continues to operate so long as there is organised action for the achievement of group goals. (vii) Management is Intangible: Management is an unseen or invisible force. It cannot be seen but its presence can be felt everywhere in the form of results. However, the managers who perform the functions of management are very much tangible and visible. (viii) Management is an Art as well as Science: It contains a systematic body of theoretical knowledge and it also involves the practical application of such knowledge. Management is also a discipline involving specialised training and an ethical code arising out of its social obligations. SCOPE OF MANAGEMENT: The field of management is very wide. The operational areas of business management may be classified into the following categories: (i) Production Management: Production management implies planning, organising, directing and controlling the production function so as to produce the right goods, in right quantity, at the right time and at the right cost. It includes the following activities: (a) designing the product (b) location and layout of plant and building (c) planning and control of factory operations (d) operation of purchase and storage of materials (e) repairs and maintenance (f) inventory cost and quality control (g) research and development etc. (ii) Marketing Management: Marketing management refers to the identification of consumers needs and supplying them the goods and services which can satisfy these wants. It involves the following activities: (a) marketing research to determine the needs and expectation of consumers (b) planning and developing suitable products (c) setting appropriate prices (d) selecting the right channel of distribution, and (e) promotional activities like advertising and salesmanship to communicate with the customers (iii) Financial Management: Financial management seeks to ensure the right amount and type of funds to business at the right time and at reasonable cost. It comprises the following activities: (a) estimating the volume of funds required for both long-term and short-term needs of business (b) selecting the appropriate source of funds (c) raising the required funds at the right time (d) ensuring proper utilisation and allocation of raised funds so as to maintain safety and liquidity of funds and the creditworthiness and profitability of business, and (e) administration of earnings Thus, financial management involves the planning, organising and controlling of the financial resources. (iv) Personnel Management: Personnel management involves planning, organising and controlling the procurement, development, compensation, maintenance and integration of human resources of an organisation. It consists of the following activities: (a) manpower planning (b) recruitments, (c) selection, (d) training (e) appraisal, (f) promotions MANAGERS: Managers – The people responsible for supervising the use of an organization’s resources to meet its goals ORGANIZATIONAL PERFORMANCE: A measure of how efficiently and effectively managers use available resources to satisfy customers and achieve organizational goals FOUR FUNCTIONS OF MANAGEMENT LEVELS OF MANAGEMENT: RELATIVE AMOUNT OF TIME THAT MANAGERS SPEND ON THE FOUR MANAGERIAL FUNCTIONS : MANAGERIAL SKILLS Conceptual skills Human skills The ability to analyze and diagnose a situation and distinguish between cause and effect. The ability to understand, alter, lead, and control the behavior of other individuals and groups. Technical skills Job-specific skills required to perform a particular type of work or occupation at a high level. SKILL TYPES NEEDED BUILDING BLOCKS OF COMPETITIVE ADVANTAGE : BUILDING COMPETITIVE ADVANTAGE Increasing efficiency Reduce the quantity of resources used to produce goods or services Increasing Quality Improve the skills and abilities of the workforce Introduce total quality management Increasing speed, flexibility, and innovation How fast a firm can bring new products to market How easily a firm can change or alter the way they perform their activities RESOURCES {ASSETS} 7 categories of resources: People Money Time Work Procedures Energy Materials Equipment Administrative Board of directors CEO Functional top excess Middle Level Execs First_Line Suupervisors Supervisors Management First Line TRAITS OF A MANAGER Best Traits Fair/just in decisions Trusting/trusted at the same time Caring & analytical in thought Empowering & capable/responsible Always punctual Worst Traits Deceitful Dishonest Shows favouritism Lazy Unorganized MANAGEMENT LEVELS AND TIME SPENT ON FUNCTIONS Plan. Top 28% Middle 18% Lower 15% Organ. Lead. 36% 22% 33% 36% 24% 51% Control. 14% 13% 10% MANAGEMENT SKILLS : Conceptual Skills : Cognitive ability to see the organization as a whole and the relationship among its parts Human Skills : Ability to work with and through other people and to work effectively as a group member Technical Skills : Understanding of and proficiency in the performance of specific tasks. WHAT IS IT LIKE TO BE A MANAGER? Managerial Activities - Long hours - Most time spent in oral communication - Characterized by variety, fragmentation, and brevity - Fast paced and require a high energy level to be successful Managers give up the right to: - Be one of the gang - Put your self-interest first - Ask others to do things you wouldn’t do - Vent your frustrations - Resist change