UNIT -1 INTRODUCTION TO MANAGEMENT

A-Introduction to ManagementINTRODUCTION:- Management is a universal phenomenon. It is a very popular and widely used term. All organizations - business, political, cultural or social are involved in management because it is the management which helps and directs the various efforts towards a definite purpose. According to Harold Koontz, Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals and can co-operate towards attainment of group goals. According to F.W. Taylor, Management is an art of knowing what to do, when to do and see that it is done in the best and cheapest way. Management is a purposive activity. It is something that directs group efforts towards the attainment of certain pre - determined goals. It is the process of working with and through others to effectively achieve the goals of the organization, by efficiently using limited resources in the changing world. Of course, these goals may vary from one enterprise to another. E.g.: For one enterprise it may be launching of new products by conducting market surveys and for other it may be profit maximization by minimizing cost.

Management involves creating an internal environment: - It is the management which puts into use the various factors of production. Therefore, it is the responsibility of management to create such conditions which are conducive to maximum efforts so that people are able to perform their task efficiently and effectively. It includes ensuring availability of raw materials, determination of wages and salaries, formulation of rules & regulations etc.Therefore, we can say that good management includes both being effective and efficient. Being effective means doing the appropriate task i.e., fitting the square pegs in square holes and round pegs in round holes. Being efficient means doing the task correctly, at least possible cost with minimum wastage of resources.

DEFINATIONS:-1) According to Harold Koontz- "Management is the art of getting things done through and with people in formally organized groups."2) According to Henri Fayol- "To manage is to forecast and to plan, to organise, to command, to co-ordinate and to control."3) According to Peter Drucker- "Management is a multi-purpose organ that manages business and manages managers and manages workers and work."4) According to Mary Parker Follet- "Management is the art of getting things done through people.NATURE OF MANAGEMENT:-Management is an activity concerned with guiding human and physical resources such that organizational goals can be achieved. Nature of management can be highlighted as: -1. Management is Goal-Oriented: The success of any management activity is assessed by its achievement of the predetermined goals or objective. Management is a purposeful activity. It is a tool which helps use of human & physical resources to fulfill the pre-determined goals. For example, the goal of an enterprise is maximum consumer satisfaction by producing quality goods and at reasonable prices. This can be achieved by employing efficient persons and making better use of scarce resources.2. Management integrates Human, Physical and Financial Resources: In an organization, human beings work with non-human resources like machines. Materials, financial assets, buildings etc. Management integrates human efforts to those resources. It brings harmony among the human, physical and financial resources.3. Management is Continuous: Management is an ongoing process. It involves continuous handling of problems and issues. It is concerned with identifying the problem and taking appropriate steps to solve it. E.g. the target of a company is maximum production. For achieving this target various policies have to be framed but this is not the end. Marketing and Advertising is also to be done. For this policies have to be again framed. Hence this is an ongoing process.4. Management is all Pervasive: Management is required in all types of organizations whether it is political, social, cultural or business because it helps and directs various efforts towards a definite purpose. Thus clubs, hospitals, political parties, colleges, hospitals, business firms all require management. Whenever more than one person is engaged in working for a common goal, management is necessary. Whether it is a small business firm which may be engaged in trading or a large firm like Tata Iron & Steel, management is required everywhere irrespective of size or type of activity.5. Management is a Group Activity: Management is very much less concerned with individuals efforts. It is more concerned with groups. It involves the use of group effort to achieve predetermined goal of management of ABC & Co. is good refers to a group of persons managing the enterprise.OBJECTIVES OF MANAGEMENT:-1. Getting Maximum Results with Minimum Efforts - The main objective of management is to secure maximum outputs with minimum efforts & resources. Management is basically concerned with thinking & utilizing human, material & financial resources in such a manner that would result in best combination. This combination results in reduction of various costs.2. Increasing the Efficiency of factors of Production - Through proper utilization of various factors of production, their efficiency can be increased to a great extent which can be obtained by reducing spoilage, wastages and breakage of all kinds, this in turn leads to saving of time, effort and money which is essential for the growth & prosperity of the enterprise.3. Maximum Prosperity for Employer & Employees - Management ensures smooth and coordinated functioning of the enterprise. This in turn helps in providing maximum benefits to the employee in the shape of good working condition, suitable wage system, incentive plans on the one hand and higher profits to the employer on the other hand.4. Human betterment & Social Justice - Management serves as a tool for the upliftment as well as betterment of the society. Through increased productivity & employment, management ensures better standards of living for the society. It provides justice through its uniform policies.IMPORTANCE OF MANAGEMENT:-1. It helps in Achieving Group Goals - It arranges the factors of production, assembles and organizes the resources, integrates the resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals.2. Optimum Utilization of Resources - Management utilizes all the physical & human resources productively. This leads to efficacy in management. Management provides maximum utilization of scarce resources by selecting its best possible alternate use in industry from out of various uses. It makes use of experts, professional and these services leads to use of their skills, knowledge, and proper utilization and avoids wastage. If employees and machines are producing its maximum there is no under employment of any resources.3.Reduces Costs - It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum output. Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost reduction.4. Establishes Sound Organization - No overlapping of efforts (smooth and coordinated functions). To establish sound organizational structure is one of the objective of management which is in tune with objective of organization and for fulfillment of this, it establishes effective authority & responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors & who are subordinates. Management fills up various positions with right persons, having right skills, training and qualification. All jobs should be cleared to everyone.5. Establishes Equilibrium - It enables the organization to survive in changing environment. It keeps in touch with the changing environment. With the change is external environment, the initial co-ordination of organization must be changed. So it adapts organization to changing demand of market / changing needs of societies. It is responsible for growth and survival of organization.6. Essentials for Prosperity of Society - Efficient management leads to better economical production which helps in turn to increase the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It increases the profit which is beneficial to business and society will get maximum output at minimum cost by creating employment opportunities which generate income in hands. Organization comes with new products and researches beneficial for society.FUNCTIONS OF MANAGEMENT:-Management has been described as a social process involving responsibility for economical & effective planning and regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and every manager irrespective of his level or status.Different experts have classified functions of management. According to George & Jerry, There are four fundamental functions of management i.e. planning, organizing, actuating and controlling.According to Henry Fayol, To manage is to forecast and plan, to organize, to command & to control. Whereas Luther Gullick has given a keyword POSDCORB where P stand for planning, O for Organization, S for Staffing, D for Directing, Co for Co-ordination , R for Reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ & ODONNEL i.e -Planning, Organizing, Staffing, Directing and Controlling.For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others.

1. PlanningIt is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. According to KOONTZ, Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from where we are & where we want to be. A plan is a future course of actions. It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

2. OrganizingIt is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnels. To organize a business involves determining & providing human and non-human resources to the organizational structure. Organizing as a process involves: Identification of activities. Classification of grouping of activities. Assignment of duties. Delegation of authority and creation of responsibility. Coordinating authority and responsibility relationships. 3. StaffingIt is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. According to Kootz & ODonell, Managerial function of staffing involves manning the organization structure through proper and effective selection; appraisal & development of personnel to fill the roles designed un the structure. Staffing involves: Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place). Recruitment, selection & placement. Training & development. Remuneration. Performance appraisal. Promotions & transfer.4. DirectingIt is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. Direction has following elements: Supervision Motivation Leadership Communication Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers.Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.Leadership- may be defined as a process by which manager guides and influences the work of subordinates in desired direction.Communications- is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.5. ControllingIt implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. According to Theo Haimann, Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation. According to Koontz & ODonell Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished. Therefore controlling has following steps:k. Establishment of standard performance. l. Measurement of actual performance. m. Comparison of actual performance with the standards and finding out deviation if any. n. Corrective action. 14 PRINCIPLES OF MANAGEMENT:-A principle refers to a fundamental truth. It establishes cause and effect relationship between two or more variables under given situation. They serve as a guide to thought & actions. Therefore, management principles are the statements of fundamental truth based on logic which provides guidelines for managerial decision making and actions. These principles are derived: -a. On the basis of observation and analysis i.e. practical experience of managers.b. By conducting experimental studies.There are 14 Principles of Management described by Henri Fayol.

1. Division of Labora. Henry Fayol has stressed on the specialization of jobs. b. He recommended that work of all kinds must be divided & subdivided and allotted to various persons according to their expertise in a particular area. c. Subdivision of work makes it simpler and results in efficiency. d. It also helps the individual in acquiring speed, accuracy in his performance. e. Specialization leads to efficiency & economy in spheres of business.

2. Party of Authority & Responsibilitya. Authority & responsibility are co-existing. b. If authority is given to a person, he should also be made responsible. c. In a same way, if anyone is made responsible for any job, he should also have concerned authority. d. Authority refers to the right of superiors to get exactness from their sub-ordinates whereas responsibility means obligation for the performance of the job assigned. e. There should be a balance between the two i.e. they must go hand in hand. f. Authority without responsibility leads to irresponsible behavior whereas responsibility without authority makes the person ineffective. 3. Principle of One Bossa. A sub-ordinate should receive orders and be accountable to one and only one boss at a time. b. In other words, a sub-ordinate should not receive instructions from more than one person because -It undermines authority-Weakens discipline-Divides loyalty-Creates confusion-Delays and chaos-Escaping responsibilities-Duplication of work-Overlapping of effortsc. Therefore, dual sub-ordination should be avoided unless and until it is absolutely essential. d. Unity of command provides the enterprise a disciplined, stable & orderly existence. e. It creates harmonious relationship between superiors and sub-ordinates.

4. Unity of Directiona. Fayol advocates one head one plan which means that there should be one plan for a group of activities having similar objectives. b. Related activities should be grouped together. There should be one plan of action for them and they should be under the charge of a particular manager. c. According to this principle, efforts of all the members of the organization should be directed towards common goal. d. Without unity of direction, unity of action cannot be achieved. e. In fact, unity of command is not possible without unity of direction. BasisUnity of commandUnity of direction

MeaningIt implies that a sub-ordinate should receive orders & instructions from only one boss.It means one head, one plan for a group of activities having similar objectives.

NatureIt is related to the functioning of personnels.It is related to the functioning of departments, or organization as a whole.

NecessityIt is necessary for fixing responsibility of each subordinates.It is necessary for sound organization.

AdvantageIt avoids conflicts, confusion & chaos.It avoids duplication of efforts and wastage of resources.

ResultIt leads to better superior sub-ordinate relationship.It leads to smooth running of the enterprise.

Therefore it is obvious that they are different from each other but they are dependent on each other i.e. unity of direction is a pre-requisite for unity of command. But it does not automatically come from the unity of direction.5. Equitya. Equity means combination of fairness, kindness & justice. b. The employees should be treated with kindness & equity if devotion is expected of them. c. It implies that managers should be fair and impartial while dealing with the subordinates. d. They should give similar treatment to people of similar position. e. They should not discriminate with respect to age, caste, sex, religion, relation etc. f. Equity is essential to create and maintain cordial relations between the managers and sub-ordinate. g. But equity does not mean total absence of harshness. h. Fayol was of opinion that, at times force and harshness might become necessary for the sake of equity. 6. Ordera. This principle is concerned with proper & systematic arrangement of things and people. b. Arrangement of things is called material order and placement of people is called social order. c. Material order- There should be safe, appropriate and specific place for every article and every place to be effectively used for specific activity and commodity. d. Social order- Selection and appointment of most suitable person on the suitable job. There should be a specific place for everyone and everyone should have a specific place so that they can easily be contacted whenever need arises. 7. Disciplinea. According to Fayol, Discipline means sincerity, obedience, respect of authority & observance of rules and regulations of the enterprise. b. This principle applies that subordinate should respect their superiors and obey their order. c. It is an important requisite for smooth running of the enterprise. d. Discipline is not only required on path of subordinates but also on the part of management. e. Discipline can be enforced if - -There are good superiors at all levels. -There are clear & fair agreements with workers. -Sanctions (punishments) are judiciously applied. 8. Initiativea. Workers should be encouraged to take initiative in the work assigned to them. b. It means eagerness to initiate actions without being asked to do so. c. Fayol advised that management should provide opportunity to its employees to suggest ideas, experiences& new method of work. d. It helps in developing an atmosphere of trust and understanding. e. People then enjoy working in the organization because it adds to their zeal and energy. f. To suggest improvement in formulation & implementation of place. g. They can be encouraged with the help of monetary & non-monetary incentives. 9. Fair Remunerationa. The quantum and method of remuneration to be paid to the workers should be fair, reasonable, satisfactory & rewarding of the efforts. b. As far as possible it should accord satisfaction to both employer and the employees. c. Wages should be determined on the basis of cost of living, work assigned, financial position of the business, wage rate prevailing etc. d. Logical & appropriate wage rates and methods of their payment reduce tension & differences between workers & management creates harmonious relationship and pleasing atmosphere of work. e. Fayol also recommended provision of other benefits such as free education, medical & residential facilities to workers.

10. Stability of Tenurea. Fayol emphasized that employees should not be moved frequently from one job position to another i.e. the period of service in a job should be fixed. b. Therefore employees should be appointed after keeping in view principles of recruitment & selection but once they are appointed their services should be served. c. According to Fayol. Time is required for an employee to get used to a new work & succeed to doing it well but if he is removed before that he will not be able to render worthwhile services. d. As a result, the time, effort and money spent on training the worker will go waste. e. Stability of job creates team spirit and a sense of belongingness among workers which ultimately increase the quality as well as quantity of work. 11. Scalar Chaina. Fayol defines scalar chain as The chain of superiors ranging from the ultimate authority to the lowest. b. Every orders, instructions, messages, requests, explanation etc. has to pass through Scalar chain. c. But, for the sake of convenience & urgency, this path can be cut shirt and this short cut is known as Gang Plank. d. A Gang Plank is a temporary arrangement between two different points to facilitate quick & easy communication as explained below:

In the figure given, if D has to communicate with G he will first send the communication upwards with the help of C, B to A and then downwards with the help of E and F to G which will take quite some time and by that time, it may not be worth therefore a gang plank has been developed between the two.e. Gang Plank clarifies that management principles are not rigid rather they are very flexible. They can be moulded and modified as per the requirements of situations

12. Sub-Ordination of Individual Interest to General Interesta. An organization is much bigger than the individual it constitutes therefore interest of the undertaking should prevail in all circumstances. b. As far as possible, reconciliation should be achieved between individual and group interests. c. But in case of conflict, individual must sacrifice for bigger interests. d. In order to achieve this attitude, it is essential that - -Employees should be honest & sincere. -Proper & regular supervision of work. -Reconciliation of mutual differences and clashes by mutual agreement. For example, for change of location of plant, for change of profit sharing ratio, etc. 13. Espirit De Corps (can be achieved through unity of command)e. It refers to team spirit i.e. harmony in the work groups and mutual understanding among the members. f. Spirit De Corps inspires workers to work harder. g. Fayol cautioned the managers against dividing the employees into competing groups because it might damage the moral of the workers and interest of the undertaking in the long run. h. To inculcate Espirit De Corps following steps should be undertaken - There should be proper co-ordination of work at all levels Subordinates should be encouraged to develop informal relations among themselves. Efforts should be made to create enthusiasm and keenness among subordinates so that they can work to the maximum ability. Efficient employees should be rewarded and those who are not up to the mark should be given a chance to improve their performance. Subordinates should be made conscious of that whatever they are doing is of great importance to the business & society. i. He also cautioned against the more use of Britain communication to the subordinates i.e. face to face communication should be developed. The managers should infuse team spirit & belongingness. There should be no place for misunderstanding. People then enjoy working in the organization & offer their best towards the organization. 14. Centralization & De-Centralizationj. Centralization means concentration of authority at the top level. In other words, centralization is a situation in which top management retains most of the decision making authority. k. Decentralization means disposal of decision making authority to all the levels of the organization. In other words, sharing authority downwards is decentralization. l. According to Fayol, Degree of centralization or decentralization depends on no. of factors like size of business, experience of superiors, dependability & ability of subordinates etc. m. Anything which increases the role of subordinate is decentralization & anything which decreases it is centralization. n. Fayol suggested that absolute centralization or decentralization is not feasible. An organization should strike to achieve a lot between the two.

B-Recent Trends in Management Knowledge ManagementKnowledge Management, (KM) is a concept and a term that arose approximately two decades ago, roughly in 1990. Quite simply one might say that it means organizing an organization's information and knowledge holistically, but that sounds a bit wooly, and surprisingly enough, even though it sounds overbroad, it is not the whole picture. Very early on in the KM movement, Davenport (1994) offered the still widely quoted definition:"Knowledge management is the process of capturing, distributing, and effectively using knowledge."This definition has the virtue of being simple, stark, and to the point. A few years later, the Gartner Group created another second definition of KM, which is perhaps the most frequently cited one (Duhon, 1998):"Knowledge management is a discipline that promotes an integrated approach to identifying, capturing, evaluating, retrieving, and sharing all of an enterprise's information assets. These assets may include databases, documents, policies, procedures, and previously un-captured expertise and experience in individual workers."Both definitions share a very organizational, a very corporate orientation. KM, historically at least, is primarily about managing the knowledge of and in organizations.The operational origin of KM, as the term is understood today, arose within the consulting community and from there the principles of KM were rather rapidly spread by the consulting organizations to other disciplines. The consulting firms quickly realized the potential of the Intranet flavor of the Internet for linking together their own geographically dispersed and knowledge-based organizations. Once having gained expertise in how to take advantage of intranets to connect across their organizations and to share and manage information and knowledge, they then understood that the expertise they had gained was a product that could be sold to other organizations. A new product of course needed a name, and the name chosen, or at least arrived at, was Knowledge Management. The timing was propitious, as the enthusiasm for intellectual capital in the 1980s, had primed the pump for the recognition of information and knowledge as essential assets for any organization.Perhaps the most central thrust in KM is to capture and make available, so it can be used by others in the organization, the information and knowledge that is in people's heads as it were, and that has never been explicitly set down.What is still probably the best graphic to try to set forth what KM is constituted of, is the graphic developed by IBM for the use of their KM consultants, based on the distinction between collecting stuff (content) and connecting people, presented here with minor modifications (the marvelous C, E, and H mnemonics are entirely IBM's):COLLECTING (STUFF) &CODIFICATIONCONNECTING (PEOPLE) &PERSONALIZATION

DIRECTED INFORMATION & KNOWLEDGE SEARCHEXPLOIT Databases, external & internal Content Architecture Information Service Support (training required) data mining best practices / lessons learned/after action analysis(HARVEST) community & learning directories, "yellow pages" (expertise locators) findings & facilitating tools, groupware response teams(HARNESS)

SERENDIPITY & BROWSINGEXPLORE Cultural support current awareness profiles and databases selection of items for alerting purposes / push data mining best practices(HUNTING) Cultural support spaces - libraries & lounges (literal & virtual), cultural support, groupware travel & meeting attendance(HYPOTHESIZE)

From: Tom Short, Senior consultant, Knowledge Management, IBM Global ServicesAnother way to view and define KM is to describe KM as the movement to replicate the information environment known to be conducive to successful R&Drich, deep, and open communication and information accessand deploy it broadly across the firm. It is almost trite now to observe that we are in the post-industrial information age and that an increasingly large proportion of the working population consists of information workers. The role of the researcher, considered the quintessential information worker, has been studied in depth with a focus on identifying environmental aspects that lead to successful research (Koenig, 1990, 1992), and the strongest relationship by far is with information and knowledge access and communication. It is quite logical then to attempt to apply those same successful environmental aspects to knowledge workers at large, and that is what in fact KM attempts to do.Explicit, Implicit and Tacit KnowledgeIn the KM literature, knowledge is most commonly categorized as either explicit or tacit (that which is in people's heads). This characterization is however rather too simple, but a more important point, and a criticism, is that it is misleading. A much more nuanced and useful characterization is to describe knowledge as explicit, implicit, and tacit.Explicit: information or knowledge that is set out in tangible form.Implicit: information or knowledge that is not set out in tangible form but could be made explicit.Tacit: information or knowledge that one would have extreme difficulty operationally setting out in tangible form.The classic example in the KM literature of true "tacit" knowledge is Nonaka and Takeuchi's example of the kinesthetic knowledge that was necessary to design and engineer a home bread maker, knowledge that could only be gained or transferred by having engineers work alongside bread makers and learn the motions and the "feel" necessary to knead bread dough (Nonaka & Takeuchi, 1995).The danger of the explicit-tacit dichotomy is that by describing knowledge with only two categories, i.e., explicit, that which is set out in tangible form, and tacit, that which is within people, is that it then becomes easy to think overly simplistically in terms of explicit knowledge, which calls for "collecting" KM methodologies, and tacit knowledge, which calls for "connecting" KM methodologies, and to overlook the fact that, in many cases, what may be needed is to convert implicit tacit knowledge to explicit knowledge, for example the after action reports and debriefings described below.What does KM really consist of? What operationally constitutes KM?So what is involved in KM? The most obvious point is the making of the organization's data and information available to the members of the organization through portals and with the use of content management systems. Content Management, sometimes known as Enterprise Content Management, is the most immediate and obvious part of KM. For a wonderful graphic snapshot of the content management domain go to realstorygroup.com and look at their 2012 Content Technology Vendor Map.In addition to the obvious, however, there are three undertakings that are quintessentially KM, and those are the bases for most of what is described as KM.(1) Lessons Learned DatabasesLessons Learned databases are databases that attempt to capture and to make accessible knowledge that has been operationally obtained and typically would not have been captured in a fixed medium (to use copyright terminology). In the KM context, the emphasis is typically upon capturing knowledge embedded in persons and making it explicit. The lessons learned concept or practice is one that might be described as having been birthed by KM, as there is very little in the way of a direct antecedent. Early in the KM movement, the phrase typically used was "best practices," but that phrase was soon replaced with "lessons learned." The reasons were that "lessons learned" was a broader and more inclusive term and because "best practice" seemed too restrictive and could be interpreted as meaning there was only one best practice in a situation. What might be a best practice in North American culture might well not be a best practice in another culture. The major international consulting firms were very aware of this and led the movement to substitute the new term. "Best Practices" succeeded by "Lessons Learned" became the most common hallmark phrase of early KM development.Nothing of course is totally new and without something that can be viewed as a predecessor. One such possible antecedent was the World War II debriefing of pilots after a mission. The primary purpose was to gather military intelligence, but a clear secondary purpose was to identify lessons learned, though they were not so named, to pass on to other pilots and instructors. Similarly, the U. S. Navy Submarine Service, after an embarrassingly lengthy fiasco of torpedoes that failed to detonate properly and an even more embarrassing failure to follow up on sub captains' consistent torpedo failure reports, instituted a system of widely disseminated "Captain's Patrol Reports" with the intent of avoiding any such fiasco in the future. The Captain's Patrol Reports were very clearly designed to encourage analytical reporting, with reasoned analyses of the reasons for failure and success. It was emphasized that a key purpose of the report was to make recommendations about strategy for senior officers to mull over and about tactics for other skippers to take advantage of (McInerney and Koenig, 2011).The military has become an avid proponent of the lessons learned concept. The phrase the military uses is "After Action Reports." The concept is very simple: don't rely on someone to make a report. There will almost always be too many things immediately demanding that person's attention after an action. There should be a system whereby someone, typically someone in KM, is assigned the responsibility to debrief, separate the wheat from the chaff, create the report, and then ensure that the lessons learned are captured and disseminated.The concept is by no means limited to the military. Larry Prusak (2004) opines that in the corporate world the number one KM implementation failure is that so often the project team is disbanded and the team members reassigned before there is any debriefing or after-action report assembled. Organizations operating in a project team milieu need to pay very close attention to this issue and to set up an after- action procedure with clearly delineated responsibility for its implementation.A wonderfully instructive example of a "lesson learned" is recounted by KM consultant Mark Mazzie (2003). The story derives from his experience in the KM department at Wyeth Pharmaceuticals. Wyeth had recently introduced a new pharmaceutical agent primarily for pediatric use. They expected it to be a substantial success because, unlike its predecessors, it needed to be administered only once a day, which would make it much easier for the caregiver to ensure that the child followed the drug regimen. Sales of the drug started well, but soon turned disappointing. One sales rep (what the pharmaceutical industry used to call detail men), however, discovered, by chatting with her customers, the reason for the disappointing sales and discovered the solution. The problem was that kids objected strenuously to the taste of the drug, and caregivers were reporting to prescribing physicians that they couldn't get their kid to continue taking the drug. The solution was orange juice. A swig of orange juice quite effectively masked the offensive taste. If the sales rep illuminated the physician that the therapy should be conveyed to the caregiver as the pill and a glass of orange juice taken simultaneously first thing in the morning, then there was no dissatisfaction and sales were fine.The implementation of a lessons learned system is complex both politically and operationally. Many of the questions surrounding such a system are difficult to answer. Who is to decide what constitutes a worthwhile lesson learned? Are employees free to submit to the system un-vetted? Most successful lessons learned implementations have concluded that such a system needs to be monitored and that there needs to be a vetting and approval mechanism before items are mounted as lessons learned. How long do items stay in the system? Who decides when an item is no longer salient and timely? Most successful lessons learned systems have an active weeding or stratification process. Without a clearly designed process for weeding, the proportion of new and crisp items inevitably declines, the system begins to look stale and usage and utility falls. Deletion, of course, is not necessarily loss and destruction. Using stratification principles, items removed from the foreground can be archived and moved to the background but still made available.All these questions need to be carefully thought out and resolved, and the mechanisms designed and put in place before a lessons-learned system is launched. Inattention can easily lead to failure and the tarring of subsequent efforts(2) Expertise LocationIf knowledge resides in people, then one of the best ways to learn what an expert knows is to talk with that expert. Locating the right expert with the knowledge you need, though, can be a problem. The basic function of an expertise locator system is straightforward: it is to identify and locate those persons within an organization who have expertise in a particular area. Such systems were commonly known as "Yellow Page" systems in the early days of KM. In recent years, the term expertise locator or expertise location has replaced yellow pages as being rather more precise.There are now three areas which typically supply data for an expertise locator system, employee resumes, employee self-identification of areas of expertise, typically by being requested to fill out a form online, or by algorithmic analysis of electronic communications from and to the employee. The latter approach is typically based on email traffic but can include other social networking electronic communications such as Twitter and Facebook. Commercial packages to match queries with expertise are available. Most of them have load-balancing schemes so as not to overload any particular expert. Typically such systems rank the degree of presumed expertise and will shift a query down the expertise ranking when the higher choices appear to be becoming overloaded. Such systems also often have a feature by which the requester can flag the request as a priority, and the system will then try to match higher priority requests with higher presumed (calculated) expertise rank.(3) Communities of Practice (CoPs)CoPs are groups of individuals with shared interests that come together in person or virtually to tell stories, to share and discuss problems and opportunities, discuss best practices, and talk over lessons learned (Wenger, 1998; Wenger & Snyder, 1999). Communities of practice emphasize the social nature of learning within or across organizations. Conversations around the water cooler are often taken for granted, but in geographically distributed organizations the water cooler needs to become virtual. Similarly, organizations find that when workers give up a company office to work online from home or on the road, the natural knowledge sharing that occurs in social spaces must be replicated virtually. In the context of KM, CoPs are generally understood to mean electronically linked communities. Electronic linkage is not essential, of course, but since KM arose in the consulting community from the awareness of the potential of Intranets to link geographically dispersed organizations, this orientation is understandable and inevitable.The classic example of the deployment of CoPs is that of the World Bank. When James Wolfensohn became president in 1995, he focused on the World Bank's role in disseminating knowledge about development. To that end he encouraged the development of CoPs. A CoP might, for example, focus on road construction and maintenance in arid conditions, and the point would be to include not only participants from the World Bank and the country where the relevant project was being implemented, but also participants from elsewhere who had expertise in building roads in arid conditions, such as staff from the Australian Road Research Board and the Arizona Department of Transportation.The organization and maintenance of CoPs is not a simple or easy undertaking. As Durham (2004) points out, there are several key roles to be filled, which she describes as manager, moderator, and thought leader. They need not necessarily be three separate people, but in some cases they will need to be. For a CoP some questions that need to be thought about are: Who fills the various roles of: manager, moderator, and thought leader? How is the CoP managed? Are postings open or does someone vet or edit the postings? How the CoP is kept fresh and vital? When and how (under what rules) are items removed? How are those items archived? Who reviews the CoP for activity? Who looks for new members or suggests that the CoP may have outlived its usefulness?The Stages of Development of KMLooking at KM historically through the stages of its development tells us not only about the history of KM, but it also reveals a great deal about what constitutes KM.First Stage of KM: Information TechnologyThe initial stage of KM was driven primarily by IT, information technology. That first stage has been described using an equestrian metaphor as by the internet out of intellectual capital. The concept of intellectual capital provided the justification and the framework, the seed, and the availability of the internet provided the tool. As described above, the consulting community jumped at the new capabilities provided by the Internet, using it first for themselves, realizing that if they shared knowledge across their organization more effectively, then they could avoid reinventing the wheel, underbid their competitors, and make more profit. The first use of the term Knowledge Management in the new context appears to have been at McKinsey. They realized quickly that they had a compelling new product. Ernst and Young organized the first conference on KM in 1992 in Boston (Prusak, 1999). The salient point is that the first stage of KM was about how to deploy that new technology to accomplish more effective use of information and knowledge.The first stage might be described as the If only Texas Instruments knew what Texas Instruments knew stage, to revisit a much quoted aphorism. The hallmark phrase of Stage 1 was first best practices, to be replaced by the more politic lessons learned.Second Stage of KM: HR and Corporate CultureThe second stage of KM emerged when it became apparent that simply deploying new technology was not sufficient to effectively enable information and knowledge sharing. Human and cultural dimensions needed to be addressed. The second stage might be described as the If you build it they will come is a fallacy stagethe recognition that If you build it they will come is a recipe that can easily lead to quick and embarrassing failure if human factors are not sufficiently taken into account.It became clear that KM implementation would involve changes in the corporate culture, in many cases rather significant changes. Consider the case above of the new pediatric medicine and the discovery of the efficacy of adding orange juice to the recipe. Pharmaceutical sales reps are compensated primarily not by salary, but by bonuses based on sales results. What is in it for that sales rep to share her new discovery when the most likely result is that next year her bonus would be substantially reduced? The changes in corporate culture needed to facilitate and encourage information and knowledge sharing can be major and profound. KM therefore extends far beyond just structuring information and knowledge and making it more accessible.As this recognition unfolded, two major themes from the business literature were brought into the KM fold. The first was Senges work on the learning organization (Senge, Peter M., 1990 The Fifth Discipline: The Art and Practice of the Learning Organization.) The second was Nonakas work on tacit knowledge and how to discover and cultivate it (Nonaka, Ikujiro & Takeuchi, Hirotaka, 1995 The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation.) Both were not only about the human factors of KM implementation and use; they were also about knowledge creation as well as knowledge sharing and communication. The hallmark phrase of Stage 2 was communities of practice. A good marker of the shift from the first to the second stage of KM is that for the 1998 Conference Board conference on KM, there was for the first time a noticeable contingent of attendees from HR, human resources, departments, and by the next year, 1999, HR was the largest single group, displacing IT attendees from first place.Third Stage of KM: Taxonomy and Content ManagementThe third stage developed from the awareness of the importance of content, and in particular the awareness of the importance of the retrievability of content, and therefore of the importance of the arrangement, description, and structure of that content. Since a good alternative description for the second stage of KM is the its no good if they dont use it stage, then in that vein, perhaps the best description for the new third stage is the its no good if they try to use it but cant find it stage. Another bellwether is that TFPLs report of their October 2001 CKO (Chief Knowledge Officer) Summit reported that for the first time taxonomies emerged as a topic, and it emerged full blown as a major topic (TFPL, 2001 Knowledge Strategies Corporate Strategies.) The hallmark phrases emerging for the third stage are content management (or enterprise content management) and taxonomies.. At KMWorld 2000 a track on Content Management appeared for the first time, and by the 2001 KMWorld Conference, Content Management had become the dominant track. In 2006, KMWorld added a two-day workshop entitled Taxonomy Boot Camp, which still exists today. The hallmark terms for the third stage of KM are taxonomy and content.Other KM IssuesOne issue is the need to retain the knowledge of retirees. Of course the fact that the baby boomer bulge is now reaching retirement age is making this issue particularly salient. KM techniques are very relevant to this issue. One technique is the application of the lessons learned ideajust treat the retirees career as a long project that is coming to its end and create an after action report, a massive data dump. This idea seems obvious, but only in special cases is it likely to be very useful.Much more likely to be useful is to keep the retiree involved, maintain him or her in the CoPs and findable through expertise locater systems. The real utility is likely to be found not directly in the information that the retiree leaves behind, but in new knowledge created by the interaction of the retiree with current employees. The retiree says "it occurs to me that ..." and elicits a response something like yes, but here ..., a discussion unfolds, the retiree contributes some of the needed expertise, and a solution is generated. The solution arises not directly from the retirees knowledge but rather from the interaction.Another major development is the expansion of KM beyond the 20th century vision of KM as the organizations knowledge as described in the Gartner Group definition of KM. Increasingly KM is seen as ideally encompassing the whole bandwidth of information and knowledge likely to be useful to an organization, including knowledge external to the organizationknowledge emanating from vendors, suppliers, customers, etc., and knowledge originating in the scientific and scholarly community, the traditional domain of the library world. Looked at in this light, KM extends into environmental scanning and competitive intelligence.

Entrepreneurship Development

EVOLUTION OF CONCEPT OF ENTREPRENEUR

The word entrepreneur is derived from French word Entreprendre which was used to designate an organizer of musical or other entertainments. Later in 16th century it was used for army leaders. It was extended to cover civil engineering activities such as construction in 17th century. But it was Richard Cantillon, an Irishman living in France who first used the term entrepreneur to refer to economic activities. According to Cantillon An entrepreneur is a person who buys factor services at certain prices with a view to selling its product at uncertain prices. Entrepreneur, according to Cantillon, an entrepreneur is a bearer of risk, which is non-insurable. SchumPeter gave a central position to the entrepreneur who believed that an entrepreneur was a dynamic agent of change; that an entrepreneur was a catalyst who transformed increasingly physical, natural and human resources into correspondingly production possibilities. Since then the term entrepreneur is used in various ways and various views.

CONCEPT OF ENTREPRENEUR As said above entrepreneur is used in various ways and various views. These views are broadly classified into three groups, namely risk bearer, organizer and innovator.Entrepreneur as risk bearer: Richard Cantilon defined entrepreneur as an agent who buys factors as production at certain prices in order to combine them into a product with a view to selling it at uncertain prices in future. He illustrated a former who pays contractual incomes, which are certain to land owners and laborers, and sells at prices that are uncertain. He includes merchants also who make certain payments in expectation of uncertain receipts. Hence both of them are risk-bearing agents of production. P.H. Knight described entrepreneur to be a specialized group of persons who bear uncertainty. Uncertainty is defined as risk, which cannot be insured against and is incalculable. He made distinction between certainty and risk. A risk can be reduced through the insurance principle, where the distribution of outcome in a group of instance is known, whereas uncertainty cannot be calculated.

Entrepreneur as an organizer: According to J Baptist Say an entrepreneur is one who combines the land of one, the labor of another and capital of yet another, and thus produces a product. By selling the product in the market, he pays interest on capital, rent on land and wages to laborers and what remains is his/her profit. Say made distinction between the role of capitalist as a financer and the entrepreneur as an organizer. This concept of entrepreneur is associated with the functions of coordination, organisation and supervision. Entrepreneur as an innovator: Joseph A SchumPeter in 1934 assigned a crucial role of innovation to the entrepreneur. He considered economic development as a dynamic change brought by entrepreneur by instituting new combinations of factors of production, i.e. innovations. The introduction of new combination according to him, may occur in any of the following forms. (a) Introduction of new product in the market. (b) Use of new method of production, which is not yet tested. (c) Opening of new market. (d) Discovery of new source of raw materials. (e) Bringing out of new form of organisation. SchumPeter also made distinction between inventor and innovator. An inventor is one who discovers new methods and new materials. An innovator utilizes inventions and discovers in order to make new combinations. Hence the concept of entrepreneur is associated with three elements riskbearing, organizing and innovating. Hence an entrepreneur can be defined as a person who tries to create something new, organizes production and undertakes risks and handles economic uncertainty involved in enterprise. Some more important definitions of entrepreneur1. According to F.A.Walker: Entrepreneur is one who is endowed with more than average capacities in the task of organizing and coordinating the factors of production, i.e. land, labour capital and enterprises.2. Marx regarded entrepreneur as social parasite. 3. According to Gilbraith: An entrepreneur must accept the challenge and should be willing hard to achieve something. 4. Peter F. Drucker defines an entrepreneur as one who always searches for change, responds to it and exploits it as an opportunity. Innovation is the basic tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service. 5. According to E.E.Hagen: An entrepreneur is an economic man who tries to maximize his profits by innovation, involve problem solving and gets satisfaction from using his capabilities on attacking problems. 6. According to Mark Casson: An entrepreneur is a person who specializes in taking judgmental decision about the coordination of scarce resources. 7. Frank Young defined entrepreneur as a change agent. 8. According to Max Weber: Entrepreneurs are a product of particular social condition in which they are brought up and it is the society which shapes individuals as entrepreneurs. 9. International Labour Organization (ILO) defines entrepreneurs as those people who have the ability to see and evaluate business opportunities, together with the necessary resources to take advantage of them and to initiate appropriate action to ensure success.10. Akhouri describes entrepreneur as a character who combines innovativeness, readiness to take risk, sensing opportunities, identifying and mobilizing potential resources, concern for excellence, and who is persistent in achieving the goal.

CHARACTERISTICS OF ENTREPRENEUR Entrepreneur is a person of telescopic faculty drive and talent who perceives business opportunities and promptly seizes them for exploitation. Entrepreneur needs to possess competencies to perform entrepreneur activities. Table 5.1 gives core competencies.

Table 5.1: Personal entrepreneurial characteristicsCore competenciesEntrepreneurial activities

1

InitiativeDoes things before asked for or forced to by events and acts to extend the business to new areas, products or services.

2Perceiving opportunitiesIdentifies business opportunities and mobilizes necessary resources to make good an opportunity.

3PersistenceTakes repeated or different actions to overcome obstacles.

4Information gatheringConsults experts for business and technical advice. Seeks information of client or suppliers needs. Personally undertakes market research and make use of personal contacts or information networks to obtain useful information.

5Concern for quality workStates desire to produce or sell a better quality product or service. Compares his performance favorably with that of others.

6Commitment to contractual obligationsMakes a personal sacrifice or expands extraordinary effort to complete a job, accepts full responsibility in completing a job contract on schedule, pitches in with workers or work in their place to get the job done and shows utmost concern to satisfy the customer.

7Efficiency orientationFinds ways and means to do things faster, better and economically

8PlanningVarious inter-related jobs are synchronized according to plan.

9Problem solvingConceives new ideas and finds innovative solutions.

10Self-confidenceMakes decisions on his own and sticks to it in spite of initial setbacks.

11ExperiencePossesses technical expertise in areas of business, finance, marketing, etc

12Self-criticalAware of personal limitations but tries to improve upon by learning from his past mistakes or experiences of others and is never complacent with success.

13PersuasionPersuades customers and financiers to patronize his business.

14Use of influence strategies.Develops business contacts, retains influential people as agents and restricts dissemination of information in his possession.

15AssertivenessInstructs, reprimands or disciplines for failing to perform.

16MonitoringDevelops a reporting system to ensure that work is completed and quality norms.

17CredibilityDemonstrates honesty in dealing with employees, suppliers and customers even if it means a loss of business.

18Concern for employee welfareExpresses concern for employees by responding promptly to their grievances.

19Impersonal relationshipPlaces long-term goodwill over short-term gain in a business relationship.

20Expansion of capital baseReinvests a greater portion of profits to expand capital of the firm.

21Building product imageConcerned about the image of his products among consumers and does everything possible to establish a niche for his products in the market.

FUNCTIONS OF AN ENTREPRENEUR An Entrepreneur has to perform a number of functions right from the generation of idea up to the establishment of an enterprise. He also has to perform functions for successful running of his enterprise. Entrepreneur has to perceive business opportunities and mobilize resources like man, money, machines, materials and methods. The following are the main functions of an Entrepreneur. 1. Idea generation: The first and the most important function of an Entrepreneur is idea generation. Idea generation implies product selection and project identification. Idea generation is possible through vision, insight, keen observation, education, experience and exposure. This needs scanning of business environment and market survey. 2. Determination of business objectives: Entrepreneur has to state and lay down the business objectives. Objectives should be spelt out in clear terms. The Entrepreneur must be clear about the nature and type of business, i.e. whether manufacturing concern or service oriented unit or a trading business so that he can very well carry on the venture in accordance with the objectives determined by him. 3. Rising of funds: All the activities of the business depend upon the finance and hence fund rising is an important function of an Entrepreneur. An Entrepreneur can raise the fund from internal source as well as external source. He should be aware of different sources of funds. He should also have complete knowledge of government sponsored schemes such as PMRY, SASY, REAP etc. in which he can get government assistance in the form of seed capital, fixed and working capital for his business. 4. Procurement of machines and materials: Another important function of an Entrepreneur is to procure raw materials and machines. Entrepreneur has to identify cheap and regular sources of raw materials which will help him to reduce the cost of production and face competition boldly. While procuring machineries he should specify the technical details and the capacity. He should consider the warranty, after sales service facilities etc before procuring machineries. 5. Market research: Market research is the systematic collection of data regarding the product which the Entrepreneur wants to manufacture. Entrepreneur has to undertake market research persistently to know the details of the intending product, i.e. the demand for the product, size of the market/customers, the supply of the product, competition, the price of the product etc. 6. Determining form of enterprise: Entrepreneur has to determine form of enterprise depending upon the nature of the product, volume of investment etc. The forms of ownership are sole proprietorship, partnership, Joint Stock 102 // Management and Entrepreneurship Company, co-operative society etc. Determination of ownership right is essential on the part of the entrepreneur to acquire legal title to assets. 7. Recruitment of manpower: To carry out this function an Entrepreneur has to perform the following activities. (a) Estimating man power requirement for short term and long term. (b) Laying down the selection procedure. (c) Designing scheme of compensation. (d) Laying down the service rules. (e) Designing mechanism for training and development. 8. Implementation of the project: Entrepreneur has to develop schedule and action plan for the implementation of the project. The project must be implemented in a time bound manner. All the activities from the conception stage to the commissioning stage are to be accomplished by him in accordance with the implementation schedule to avoid cost and time overrun. He has to organize various resources and coordinate various activities. This implementation of the project is an important function of the Entrepreneur. All the above functions of the Entrepreneur can precisely be put into three categories of innovation, risk bearing, and organizing and managing functions.

AGENCIES OF GOVERNMENT FOR SSI The ministry of small scale industries is the administrative ministry in the Government of India for all matters relating to small scale and village industries which designs and implements policies and programmes for promotion and growth of small industries. The Department of small-scale industries was created in 1991, in the Ministry of Industry to exclusively formulate the policy framework for promoting and developing small-scale industries in the country. It initiates appropriate policy measures, programmes and schemes for promotion of SSI. The policy measures include setting up of a network of institutions to render assistance and to provide a comprehensive range of services and common facilities for SSIs. The range of services cover consultancy in techno-economic and managerial aspects, training, testing facilities, and marketing assistance through the agencies created for the specified functions. These activities are supported by a host of other central/state government departments, promotional agencies, autonomous institutions, non-government organizations and so on. The implementation of policies, programmes and schemes for providing infrastructure and support services to small enterprises is undertaken through its attached office, namely Small Industries Development Organization (SIDO), Khadi Village and Industry Commission (KVIC) and Coir Board, National Small Industry Corporation (NSIC) and The institutional network can be broadly classified as under and is shown in fig. 6.2. (1) Central level institutions/agencies (2) State level institutions/agencies (3) Other agencies

NATURE AND TYPES OF SUPPORTS Policy Support (1) The investment limit for the tiny sector will continue to be Rs. 25 lakh. (2) The investment limit for the SSI sector will continue to be at Rs. 1 crore. (3) The ministry of SSI and ARI will bring out a specific list of hi-tech and exportoriented industries which would require the investment limit to be raised upto Rs. 5 crore to admit suitable technology upgradation and to enable them to maintain their competitive edge. (4) The Limited Partnership Act will be drafted quickly and enacted. Attempt will be made to bring the bill before the next session of parliament. Fiscal Support To improve the competitiveness of small-scale sector the exemption for excise duty Limit rose from Rs. 50 lakhs to Rs. 1 crore.(1) The composite loans limit rose from Rs. 10 lakh to Rs. 25. lakh.(2) The Small-Scale Service and Business (Industry Related) Enterprises (SSSBES) with a maximum investment of Rs. 10 lakhs will qualify for priority lending.(3) In the National Equity Fund Scheme, the project cost limit will be raised from Rs 25 lakh to Rs 50 lakh. The soft loan limit will be retained it 25 percent of the project cost subject to a maximum of Rs. 10 lakh per project. Assistance under the NEF will be provided at a service charge of 5 percent per annum.4) The eligibility limit for coverage under the recently launched (August, 2000) Credit Guarantee Scheme has been revised to Rs. 25 lakh from the present limit of Rs. 10 lakh.(5) The Department of Economic Affairs will appoint a Task Force to suggest revitalization/restructuring of the State Finance Corporations.(6) The Nayak Committees recommendations regarding provision of 20 percent of the projected turnover as working capital is being recommended to the financial institutions and banks.Infrastructure Support (1) The Integrated Infrastructure Development (IID) Scheme will progressively cover all areas in the country with 50 percent reservation for rural areas. (2) Regarding upgrading Industrial Estates which are languishing, the Ministry of SSI and ARI will draw up a detailed scheme for the consideration of the planning commission. (3) A plan scheme for cluster Development will be drawn up. (4) The Funds available under the non-lapsable pool for the North-East will be used for Industrial Infrastructure Development, setting up of incubation centers, for cluster Development and for setting up of IIDs in the North-East including Sikkim. Technological Support and Quality Improvement (1) Capital subsidy of 12 percent for investment in technology in selected sectors. An Inter-ministerial committee of Experts will be set up to define the scope of technology upgradation and sectorial priorities. (2) To encourage Total Quality Management, the scheme of granting Rs. 75,000/- to each unit for opting ISO-9000 Certification will continue for the next six years i.e., till the end of the 10th plan. (3) Setting up of incubation centers in Sunrise Industries will be supported.(4) The TBSE set up by SIDBI will be strengthened so that it functions effectively as a Technology Bank. It will be properly networked with NSIC, SIDO (SENET programme) and APCTT. (5) SIDO, SIDBI and NSIC will jointly prepare a compendium of available technologies for the R & D institutions in India and Abroad and circulate it among industry associations for the dissemination of the latest technology related information.(6) Commercial banks are being requested to develop schemes to encourage investment in technology upgradation and harmonize the same with SIDBI. (7) One-time capital grant of 50 percent will be given to Small-Scale Associations which wish to develop and operate Testing Laboratories, provided they are of international standard. Marketing Support (1) SIDO will have a Market Development Assistance (MDA) programme, similar to one obtaining in the Ministry of Commerce and Industry. It will be a plan scheme. (2) The vendor Development Programme, Buyer-Seller meets and Exhibitions will take place more often and at dispersed locations. Informational Support (1) General information. (2) Technical/Marketing expertise in specific areas. (3) Technical and financial expertise. (4) Implementation assistance for turn-key projects. Incentives and Subsidies (1) Export-import subsidies. (2) Interest free loans. (3) Subsidy for R & D work. (4) Capital investment subsidy. (5) Transport subsidy. (6) Interest subsidy. (7) Subsidy for power generation. (8) Exemption from property tax. (9) Incentives for NRI. (10) Exemption from income tax. (11) Sales tax exemptions. (12) Price preference to SSIs. (13) Subsidy/assistance for technical consultancy. (14) Exemptions from stamp duty. (15) Provisional for seed capital. (16) Allotment of controlled or subsidized raw materials. (17) Subsidy for cost of market study/feasibility study or reports.Other Types of Support (1) Streamlining Rules and Regulations. (2) Entrepreneurship development training. (3) Rehabilitation of sick units.

Six SigmaSix Sigma is simply a method of efficiently solving a problem. Using Six Sigma reduces the amount of defective products manufactured or services provided, resulting in increased revenue and greater customer satisfaction.What exactly does Six Sigma mean? Six Sigma is named after a statistical concept where a process only produces 3.4 defects per million opportunities (DPMO). Six Sigma can therefore be also thought of as a goal, where processes not only encounter less defects, but do so consistently (low variability). Basically, Six Sigma reduces variation, so products or services can be delivered as expected reliably.

TOTAL QUALITY MANAGEMENT

Total Quality Management: What Is It? The management choice of the nineties is more than a program; it is a commitment to a new way of life, personally, professionally, and as a world citizen. Without that commitment, it becomes another management fad and a waste of time and money. Total Quality Management (TQM) is the optimisation and integration of all the functions and processes of a business in order to provide for excited customers through a process of continuous improvement. The 1990's is the decade of Globalisation. In order for companies to be competitive in this environment they have seen the imperative need for Quality. However through the decades leading to the 90's there have been many "gurus" who have explicitly underlined the need for Total Quality Management Systems in companies, but due to many factors these ideas have either gone unheeded, or been buzz word for a short time. It is possible that Total Quality Management (TQM), is once again a buzz word and a marketing tool, but nevertheless it is a tool that is being extensively used in the 90's to help companies gain and maintain a competitive edge over their rivals. A Disciplined Approach for Management and Employees to Manage Quality A Methodology for Problem Solving and Continuous Process Improvement Apply to All Employees in everything is done Everyone has a Customer - Both Internal and External Quality Defined is Conformance to Customer Requirements

Objectives of TQM: Process improvement Defect prevention Priority of effort Developing cause-effect relationships Measuring system capacity Developing improvement checklist and check forms Helping teams make better decisions Developing operational definitions Separating trivial from significant needs Observing behaviour changes over a period of time

TQM revolves around: Commitment by Senior Management and all employees Effective strategy, vision, mission and goals Customer/ Supplier relationships Communication Tools and techniques for improvement Team work Systems to facilitate improvement and most of all TRUST

The quality system should apply to and interact with all activities of the organisation. It begins with the identification of requirements and ends with their satisfaction, at every transaction interface. The quality system must be a practical working document. Look for a document that is well fingered in use. A useful guide in the operation of any process is:

1. No process without data collection 2. No data collection without analysis 3. No analysis without decisions 4. No decisions without actions (which can include doing nothing) This discipline is built into any good quality system primarily through the audit and review systems. The overriding requirement is that the systems must reflect the established practices of the organisation, improved where necessary to bring them into line with current and future requirements. In implementing a quality system the established national standards such as the BS7850 series can serve as a useful guide and framework. A systematic, functional, quality model like TQM should be genuinely explored and exploited. Continuous improvements are probably the most powerful concept to guide management through the achievements of TQM Continuous improvements are based on systematic, incremental and habitual improvements of processes rather than on breakthroughs and innovative advances. The process concentrates on elimination of waste and non-value-added activities through collective and continuous involvement of all employees. This systematic approach to quality management requires the following components:

Planning the processes and inputs Providing inputs Operating the processes Evaluating the outputs Examining the performances of the processes Modifying the processes and their inputs.

TQM Tools

Quality Improvement Teams These are small groups of employees who work on solving specific problems related to quality and productivity, often with stated targets for improvement. Quality improvement teams are proving to be highly successful at tracking down the causes of poor quality as well as taking remedial action.

Benchmarking This is the process of identifying the best practices and approaches by comparing productivity in specific areas within ones' own company to other organisations both within and outside the industry. Statistical process control This is a statistical technique that uses periodic random samples taken during actual production to determine whether acceptable quality levels are being met or whether production should be stopped in order to take remedial action. Because most processes produce some variation, statistical process control uses statistical tests to determine when variations fall outside a narrow range around the acceptable quality level. The emphasis when using SPC is on defect prevention rather than trying to inspect the quality into the product.

COMMITMENT In order for the Eye on the Future Model to be a success, each member in an organisation must be committed to the change process. It cannot be viewed as the new flavour of the month, but should rather be regarded as an exciting life changing process. Too often peoples' enthusiasm wanes when they realise that the change process in an organisation is not likely to occur overnight People need to pledge their support to objectively analysing their job functions and procedures, and seeking new innovative ways to improve them. If necessary inspirational speakers should be employed to enthuse staff to a new attitude of commitment. Once again, people are led by example. If it appears that management is not committed to the change process, this is the attitude the people will develop. However, if commitment is perceived to be the attitude of management, then the people are most likely to follow.

TRAINING Training must be a part of the organisations succession planning. In today's business environment any training which is less than visionary will not help the organisation meet its' future goals and objectives. Training objectives must be supportive of the company's vision and mission. In order to identify training, the employees must be involved. System deficiencies including non-conformance reports, customer complaints and job performance appraisals will highlight the most urgent areas for development. Training programmes must be devised and implemented to help bridge the gap identified previously. The results of the training must be evaluated to ensure that effective improvement has been achieved and that employees are competent to use the skills acquired. Management must promote the need for continuous training, as it will facilitate the following: 1. Employees will be more confident and motivated in their work 2. Reduce staff turnover 3. Reduce errors 4. Improve productivity 5. Improve the organisation competitiveness. Training must help each individual in the organisation to maintain a growing knowledge of their business environment. It must be implemented to each individual, from the directors to the cleaners.

TQM Leaders: Deming TQM L14 point plan for Western management: 14 point plan for Western management: 1. Constancy of purpose 2. The new philosophy 3. Cease mass inspection 4. End lowest price purchasing5. Constantly improve systems 6. Train everyone 7. Institute leadership 8. Drive out fear 9. Break down barriers 10. Eliminate exhortations11. Eliminate targets 12. Permit pride of workmanship 13. Encourage education 14. Top managements commitmentTQM Leaders: Crosby 14-step process: step process: 1. Management commitment 2. Quality improvement team 3. Quality measurement 4. Cost of quality 5. Quality awareness6. Corrective action 7. Zero defects8. Training9. Zero defects day10. Goal setting 11. Error cause removal12. Recognition 13. Quality councils14. Do it over againTQM IMPLEMENTATION: Begins with Management Commitment Leadership is essential during every phase of the implementation process and particularly at the start Senior Management should develop an implementation plan Timing of the implementation process is very important Formation of Quality Council Active involvement of Middle Managers and First Line Supervisors is essential Early discussions with the Union is a must Communicate TQM to the entire organization Training on quality awareness and problem solving Customer, Employee and Supplier surveys must be conducted to benchmark The council establishes the project teams and work groups and monitors their progress

INDUSTRIAL MANAGEMENT & ENGINEERING ECONOMICS

BY-PROF. S.G.NAGHATE (CHH. SHAHU COLLEGE OF ENGINEERING)