01. Management is necessary for making our life or any task or venture we
undertake, including any industrial, business or service activity, successful.
02. The term ‘Management’ could be referring to the persons running an
organisation collectively, who are responsible for decision making.
03. The three components of management refer to their organising skills, their
skills as an entrepreneur and getting the best out of their team members.
04. The skills for organising would obviously include the traditional skills,
principles and the techniques of management which have evolved over a period
of time and are continuously evolving.
05. Henri Fayol, widely acknowledged as the founder of modem management
methods, was an early management writer who was instrumental in contributing
immensely to ‘formal organisation theory’.
06. The theory propounded by Henri Fayol included the six types of organisational
activities, which also included management. It also explained the various functions
and principles of management.
07. Frederick Winslow Taylor, introduced methods to improve the industrial
efficiency.
08. Taylor’s book ‘The Principles of Scientific Management’, published in the year
1911, is the most influential management book of the twentieth century.
09. Scientific management, also known as ‘Taylorism’, is a management theory
which was used for analysing and synthesizing workflows with the main objective
of improvement of economic efficiency and labour productivity.
10. Peter Drucker, the famous Management Guru, in his book Management: tasks,
responsibilities, practices.
11. Management is not common sense alone but a discipline, a culture and an art
and science at the same time.
12. Management represents people, and their achievements or failures denote
the effectiveness of management or mismanagement of the organisation’s affairs.
13. Productivity is very important in any business organisation, and there is a
continuous demand on the people at the helm of affairs to increase productivity
for increasing profits to meet the expectations of the stakeholders and the society.
14. The process of management involves multiple actions performed in a series to
achieve the objectives of the business enterprise.
15. The process of management can be classified as a social process as it involves
relationships and co-operation between people and their team effort.
16. The complexity of management has laid down the foundation of breaking
down each activity into various parts or sub-activities so that we can understand
the complete significance of each activity. This is the reason for division of
management tasks into different elements: planning, organising, staffing,
directing and controlling.
16. A manager is responsible for planning, for directing and leading the workers
and other staff, and for monitoring and controlling performances at work, through
proper governance and risk management.
17. The System School of Management thought was propounded by Daniel Katz,
an American Psychologist, and Ludwig Von Bertalanffy, an Australian Biologist.
They advocated the concept of management being an open system, which is
required to interact with the environment constantly for getting resources, which
are both valuable and limited.
18. The main objective of the research undertaken by the systems school was to
understand the external environment and conditions faced by an organisation
and finding ways of handling such conditions.
19. The open system approach is important because of the interaction between an
organisation and the outside forces and the outside influence impacting the
actions taken by the organisation.
20. The Contingency School of Management thought was an offshoot of the
scientific, behavioural and systems approaches to management, and stated that
there cannot be a unique way of managing an organisation and which can be
labelled as the best way to manage or lead a business.
21. The best or the optimal way shall always depend or be contingent on the
internal and external environment. In other words, there cannot be a standard
solution to various business situations faced by the management. Each leader
might deal with the same situation in different ways, depending on his/her
leadership style.
22. The contingency school of management thought is criticised for being reactive
and for failure to be proactive and for not providing some standard principles and
procedures to be applied in specific situations.
This approach can turn out to be expensive in terms of money and time and
development of a proper theory of management principles becomes almost
impossible.
23. The Contemporary School of Management theory continues to advance
because of constant evolution of business practices and management techniques,
especially in the wake of technological advancements.
24. Total Quality Management focuses on the management of an organisation for
delivering high quality goods and services to its customers. The approach
originated in Japan after the Second World War.
25. The four main elements of Total Quality Management approach are:
a) Employee involvement:
b) Customer focus:
c) Standardisation:
d) Continuous Monitoring:
26. Deming, Juran and Crosby were three main contributors to the Total Quality
Management approach.
27. William Edwards Deming considered the quality of people more important
than the quality of products and accorded greater importance to how efficiently
the management planned, implemented and improved the projects.
28. William Edwards Deming laid down the fourteen principles of Total Quality
Management:
29. Learning Organisation may be defined as an organisation where all the
employees take part in identifying and solving the problems which it faces, and
which permits the organisation to continuously enhance its capacity to grow and
learn, so as to achieve the organisational goals.
30. A Learning Organisation shall be organised from the angle of problem-
solving and not from the perspective of efficiency and shall have a structure which
is based on teamwork, employees who are empowered and shall have an open
information system.
31. The major contributor to Learning Organisation school of thought is Peter
Senge, has defined Learning Organisations in his book, The Fifth Discipline: The
Art & Practice of Learning Organization.
32. The five disciplines of a Learning Organisation are:
1. Personal Master
2. Shared vision
3. Mental Models
4. Team learning
5. Systems Thinking
33. A Learning Organisation is important because:
a) It always tries to find improved and innovative ways of doing things and
staying ahead of the competition.
b) The effectiveness and efficiency of a learning organisation is very high.
c) A learning organisation has higher productivity and output.
d) A learning organisation helps in enhancing the image of the company.
34. Several issues which are faced by the management include:
a) Which business model to adopt?
b) How to manage the information explosion?
c) How to manage the changes taking place every now and then?
d) How to face the threat of globalisation?
e) How to manage the impact of environmental sustainability?
35. Business models are based on the type of clients to be served, the product
offerings, the revenue earning model, ways of differentiating and sustaining
competitive advantages, and the manner in which products or services are
provided.
36. The management of a business entity shall be able to perform better if it
understands the business model followed by the organisation.
37. A business model covers the important operational characteristics and key
structural features of the business.
38. Some of the Business Models are
a) Solution Providing or Consulting Services Model
b) Profit Pyramid Model
c) Multi-component Systems Model
d) Advertisement Model
e) Switchboard Model
f) Time Model
g) Efficiency model
39. Under Solution Providing or Consulting Services Model, the business may
provide consulting services which help improve the client’s operations. IBM has
used this model.
40. Under Profit Pyramid Model, the customers are provided low-priced products
initially and gradually they are moved to expensive products, where the business
earns higher profits. General Motors followed this model.
41. Multi-component Systems Models have been used by companies like Gillette
and HP.
42. Advertisement Models offer the basic product free and make money through
advertising. YouTube, Google etc. are live examples.
43. Switchboard Model allows a firm to acts as an intermediary for connecting
multiple sellers with multiple buyers. eBay, Amazon, Flipkart are businesses which
have used this model successfully.
44. Time Model depends on how fast research and development happens. A
business which pioneers some new idea shall be successful initially, till other
competitors join the bandwagon.
45. A business following Efficiency model just waits for the market to mature with
standardisation of the product and enters with low-cost and low-margin products
with mass appeal. Southwest Airlines, Wal-Mart and Dell have been using this
model.
46. Blockbuster model is used by industries which are having the protection under
patent laws, like pharma and film industry, where profits depend on a few items
and are driven by star appeal.
47. Profit multiplier model involves developing concepts which may or may not be
profitable but are used for driving other products through synergy. The
management looks at the whole picture in such cases. For example, Walt Disney
used cartoon characters for developing theme parks, merchandise, and licensing
opportunities, which gave them huge profits.
48. Entrepreneurial model deals with offering specialized products or services to
clients which are not attractive to large competitors but have potential of fast
growth. There are so many cases today where big companies like Tata’s have
acquired smaller players with potential, e.g., IMG was acquired by Tata’s.
49. Under De Facto industry standard model free products may be offered at a
very low cost to increase the market share and for saturating the market to make
everybody talk about the product as a great brand and industry standard.
Subsequently, the users are offered high-end and high-margin products.
Microsoft indulged into this strategy.
50. Business models invariably involve the optimisation of profits by using
optimum product mix.
51. Economic growth must be inclusive to provide sustainable jobs and promote
equality.
52. Strategic management is defined as the process by which a firm manages the
formulation and implementation of its strategy.
53. The word strategy comes from the Greek word, strategos, meaning the
“General’s views”.
54. A Strategy combines explicit statements and implicit beliefs and
understandings in and around an organization about
Mission; • Vision; Clientele; Resources; • Present and Future
55. A strategy encompasses the pattern of organizational actions that have been
taken and those that are to be taken by an organization, in pursuing its objectives.
56. Strategy outlines the means by which a firm intends to create unique value for
customers and other important stakeholders.
57. Strategic Management involves those decisions and actions of the
management that determine the long-term performance of a business entity.
58. The various elements of strategic management include scanning of the
external and internal environment, formulation of long term strategic plans,
implementation of strategy and the evaluation and control process.
59. A plan is an arrangement, a pattern, a programme, or a scheme for a definite
purpose.
60. A plan is very concrete in nature and does not allow for deviation.
61. A plan provides a coherent framework from which to build and a sure
direction to follow, with intermittent milestones to pass, to reach an end goal.
62. A strategy is a blueprint, layout, design, or idea used to accomplish a specific
goal.
63. A strategy is very flexible and open for adaptation and change when needed.
64. Strategy is most useful when creativity, collaboration, and innovation are of
the utmost importance.
65. A strategy encourages openness and debate from every side of the equation.
66. A strategy embraces questions and out-of-the-box, effective answers.
67. A strategy allows for a natural flow of thought and continual momentum that
builds, till success is reached.
68. The strategy followed by a business entity can be equated with a master plan,
which contains details as to how the mission and business goals of the entity shall
be achieved.
69. The purpose of the strategy of the organization is maximizing the competitive
advantages and, at the same time, minimizing the competitive disadvantages.
70. A typical business entity normally considers three different types of strategies,
as under:
a) Corporate strategy
b) Business strategy
c) Functional strategy
71. Corporate strategy of a company covers the overall direction followed by the
company.
72. Corporate strategy would spell out the general attitude of the company
towards growing and managing its different business lines, products and services.
73. A corporate strategy may be classified under the three different categories of
stability, growth, and retrenchment.
74. Business strategy would normally be prepared at the level of the business unit
or at the level of product or service and it normally highlights the improvement in
the specific industry or market ranking of the business entity’s products or
services produced or delivered by that business unit.
75. A business strategy could be competitive or cooperatives.
76. Under a competitive strategy, a company might try to differentiate its services.
77. A cooperative strategy may form an alliance with other companies to extend
its reach to global markets and get a competitive advantage.
78. Functional strategy refers to the approach adopted by functional areas for
achieving the objectives of the business unit and the company by maximizing the
productivity of available resources.
79. Functional strategy involves the development and fostering a distinctive
capability to create a competitive advantage.
80. In practice, a business entity may use all the three types of strategies (
Corporate strategy; Business strategy and Functional strategy ) at the same time.
81. Strategic Management has the following four basic elements:
The context (Environmental Scanning)
Strategy Implementation
Strategy Formulation
Strategy Evaluation & Control
82. The Context (Environmental Scanning) refers to monitoring, evaluation and
dissemination of information received from the internal and external
environments. The information is provided to the key people in the organisation
with the overall objective of identifying both internal as well as external strategic
factors, which can impact the future of the organisation.
83. SWOT Analysis is one of the easiest ways of conducting environment scanning.
84. The acronym SWOT refers the Strengths, Weaknesses, Opportunities, and
Threats, applicable to a specific organisation.
85. Strengths and Weaknesses form part of the internal environment of an
organisation and could cover the organisation structure, the resources available to
an organisation and the overall organisational culture.
86. The core competencies of an organisation depend on its strengths.
87. The internal environment can usually be controlled by the top management in
the short run.
88. The Opportunities and Threats form part of external factors and are generally
outside the ambit of the top management’s short-term control. These factors
could be general, as well as specific factors. The general factors generally impact
the entire economy or an industry whereas the specific factors might impact a
specific industry or an organisation.
89. The internal and external environmental factors form the context within which
an organisation exists.
90. Strategy Formulation requires, on the basis of information gathered from
situation analysis, to set strategic direction through business mission and vision
statements, and establish strategic objectives to reach there, and generate,
evaluate and select corporate, business and functional strategies to pursue.
91. Creating vision is the essential act of leadership.
92. The vision must relate to the expectations of its customers, while being grand
enough and imaginative enough to fuel the employees’ spirit.
93. The vision gives the organization its energy.
94. The vision usually requires a “leap of faith” and an “act of courage”.
95. A vision is an optimistic, inspiring picture that brings with it the responsibility
to make it happen.
96. A vision is a dream of greatness!
97. Vision is a simple statement or understanding of what the firm will be in the
future.
98. A vision is forward looking and identifies the desired long-term status.
99. A vision statement should answer the basic question, “What do we want to
become?”
100. A clear vision provides the foundation for developing a comprehensive
mission statement.
101. Ideally, vision statement should be short, preferably one sentence.
102. The mission statement is usually depicted as the starting point in the
strategic planning process.
103. The mission statement spells out the underlying motivation for being in
business in the first place - the contribution to society that the firm aspires to
make.
104. A mission statement is called a statement of purpose, a statement of
philosophy, a statement of beliefs, a statement of business principles, or a
statement “defining our business,”.
105. A mission statement reveals what an organization wants to be and whom it
wants to serve.
106. Organizational mission statements should include ten components:
customers, products or services, markets, technology, concern for survival, growth
and profitability, philosophy, self-concept, concern for public image, and concern
for employees.
107. Successful strategies are dependent on effective implementation.
108. Strategy implementation is the fine art of detailing: what all is to be done,
when various tasks are to be performed, where are they to be performed, how
they are to be performed and who will perform.
109. Strategy implementation is the process of executing the strategy – of taking
the actions that put the strategy into effect and ensure that organizational
decisions are consistent with it.
110. While strategy formulation is the process of deciding what to do, strategy
implementation is the process of performing all the activities necessary to do
what has been formulated.
111. Strategy evaluation is a logical step to obtain feedback from strategy’s
performance and taking corrective actions, if needed, in the light of constant
external and internal changes. Strategy evaluation is needed because success
today does not guarantee success tomorrow.
112. Phases of Strategic Management – A business entity normally develops its
strategy in the following four phases –
Basic Budgetary Planning
Forecast-based Planning
Externally Oriented (Strategic) Planning
Strategic Management
113. The three most important benefits of strategic management are as under:
a) The management gets a clearer sense of strategic vision of the business
entity.
b) Management is able to clearly focus on strategically important issues,
faced by the entity.
c) The dynamic environment can be better understood by management.
114. strategic management is crucial for the success of an organisation in the
long-term and may mark the difference between a successful and an unsuccessful
organisation.
115. Management is the process of creating an environment which helps
individuals, who work in groups, to achieve business goals established by the
various stakeholders. T
116. The process of Management involves planning, organising, staffing, directing
and controlling.
117. The various management approaches and thoughts include the Classical
Basics of Management or Traditional School, the Neoclassical or Behavioural
School, the Quantitative School or Management Science, the System School, the
Contingency School and the Contemporary School.
