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BACHELOR OF COMPUTER APPLICATIONS SEMESTER-II INTRODUCTION TO MANAGEMENT & LEADERSHIP BCA1 1 CU IDOL SELF LEARNING MATERIAL (SLM)

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CHANDIGARH UNIVERSITY Institute of Distance and Online Learning Course Development Committee Prof. (Dr.) R.S.Bawa Pro Chancellor, Chandigarh University, Gharuan, Punjab Advisors Prof. (Dr.) Bharat Bhushan, Director – IGNOU Prof. (Dr.) Majulika Srivastava, Director – CIQA, IGNOU Programme Coordinators & Editing Team Master of Business Administration (MBA) Bachelor of Business Administration (BBA) Coordinator – Dr. Rupali Arora Coordinator – Dr. Simran Jewandah Master of Computer Applications (MCA) Bachelor of Computer Applications (BCA) Coordinator – Dr. Raju Kumar Coordinator – Dr. Manisha Malhotra Master of Commerce (M.Com.) Bachelor of Commerce (B.Com.) Coordinator – Dr. Aman Jindal Coordinator – Dr. Minakshi Garg Master of Arts (Psychology) Bachelor of Science (Travel &Tourism Management) Coordinator – Dr. Samerjeet Kaur Coordinator – Dr. Shikha Sharma Master of Arts (English) Bachelor of Arts (General) Coordinator – Dr. Ashita Chadha Coordinator – Ms. Neeraj Gohlan Academic and Administrative Management Prof. (Dr.) R. M. Bhagat Prof. (Dr.) S.S. Sehgal Executive Director – Sciences Registrar Prof. (Dr.) Manaswini Acharya Prof. (Dr.) Gurpreet Singh Executive Director – Liberal Arts Director – IDOL © No part of this publication should be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise without the prior written permission of the authors and the publisher. SLM SPECIALLY PREPARED FOR CU IDOL STUDENTS Printed and Published by: TeamLease Edtech Limited www.teamleaseedtech.com CONTACT NO:- 01133002345 For: CHANDIGARH UNIVERSITY 3 Institute of DistanCcUe IaDnOdLOSEnLliFnLeELAeRaNrInNiGngMATERIAL (SLM)

First Published in 2020 All rights reserved. No Part of this book may be reproduced or transmitted, in any form or by any means, without permission in writing from Chandigarh University. Any person who does any unauthorized act in relation to this book may be liable to criminal prosecution and civil claims for damages. This book is meant for educational and learning purpose. The authors of the book has/have taken all reasonable care to ensure that the contents of the book do not violate any existing copyright or other intellectual property rights of any person in any manner whatsoever. In the event the Authors has/ have been unable to track any source and if any copyright has been inadvertently infringed, please notify the publisher in writing for corrective action. 4 CU IDOL SELF LEARNING MATERIAL (SLM)

CONTENT Unit -1 Introduction to Management.....................................................................................5 Unit 2: Strategic Management.............................................................................................. 29 Unit 3: Leadership Foundation and Theories ..................................................................... 42 Unit 4: Group Dynamics and Teams.................................................................................... 65 Unit 5: MBTI: Myers Brigg Type Indicator ....................................................................... 92 Unit 6: Organizing People, Project and Process ............................................................... 108 Unit 7: Control ..................................................................................................................... 123 5 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT -1 INTRODUCTION TO MANAGEMENT 6 Structure Learning Objectives Introduction Meaning Of Management Definition Concept Of Management Management: A Process: Management: A Group Management: A Discipline Management-An Activity Nature Of Management Scope of Management Characteristics Of Management Importance Of Management Management Functions Management As Science Management As An Art Management As A Profession History And Streams Of Management General Environment Macroeconomic Forces CU IDOL SELF LEARNING MATERIAL (SLM)

Demographic Forces Sociocultural Forces Technological Forces International Forces Technology Environment Differences Between Management & Administration Summary Keywords Learning Activity Unit End Questions Reference LEARNING OBJECTIVES After studying this unit, you will be able: • Explain the Concept of Management, nature and scope • Discuss the importance of management, characteristics, History • State the general environment and technological environment of management INTRODUCTION Management is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. Since organizations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system. This view opens the opportunity to manage oneself, a pre-requisite to attempting to manage others. Management functions include: Planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. 7 CU IDOL SELF LEARNING MATERIAL (SLM)

There are several different resource types within management. Resourcing encompasses the deployment and manipulation of: • Human resources • Financial resources • Technological resources • Natural resources MEANING OF MANAGEMENT Every human being has several needs &desires which can be satisfied only by working & living together in organized groups & institutions. In this way the people satisfy their economic & social needs. As a result there are several types of group’s e.g. Family, school, government and business firm etc. Such groups achieve their goals by working in controlled & coordinated manner. Management involves coordinating and overseeing the most activities of others so that their activities are completed effectively & efficiently. The 21st century economy has become knowledge based and is performance driven. It is driven by innovations & technology & organizations have to transform themselves to serve new customer expectations. The manager of today must integrate management skills with new approaches that emphasize the human touch, enhance flexibility & involves employees. Management is needed in all types of organization, at all levels of organization, in all organization work areas throughout the world. DEFINITION According to Harold Koontz \"Management is the art of getting things done through others and with formally organized groups.\" According to George R. Terry ''Management Is a distinct process consisting of planning, organizing, actuating and controlling; utilizing in each both science and art, and followed in order to accomplish pre-determined objectives.\" According to Massie & Douglas “Management is the process by which co-operative group directs actions towards common goals.\" Henri Fayol (1841-1925) stated: \"to manage is to forecast and to plan, to organize, to command, to co-ordinate and to control.\" Fredmund Malik (1944- ) defines management as \"the transformation of resources into utility\". Management is included as one of the factors of production – along with machines, materials 8 CU IDOL SELF LEARNING MATERIAL (SLM)

and money. Ghislain Deslandes defines management as \"a vulnerable force, under pressure to achieve results and endowed with the triple power of constraint, imitation and imagination, operating on subjective, interpersonal, institutional and environmental levels\". Peter Drucker (1909–2005) saw the basic task of management as twofold: marketing and innovation. Nevertheless, innovation is also linked to marketing (product innovation is a central strategic marketing issue). Peter Drucker identifies marketing as a key essence for business success, but management and marketing are generally understood as two different branches of business administration knowledge. CONCEPT OF MANAGEMENT The word ‘management’ can be styled as—Management (i.e., manage-men- tactfully). Why manage men tactfully? This is with a view to getting the things done through others. Traditionally, management means “managing men tactfully to get the things done through others”. But the modern approach to management is much broader in scope than the traditional one. It involves all kinds of activities which determine the objectives of the organization. It creates an environment for the achievement of these objectives with the help of various functions. Thus, the modern concept of management is goal oriented and it creates an internal environment for attaining the goals efficiently. The term management is also used as a process, as a group, as a discipline and as an activity. Management: A Process: Management is considered as a process which includes all the activities—starting from the setting up of objectives of a business enterprise to the taking up of steps which ensure the attainment of these objectives. The management process comprises all functions which transform resources such as men, materials, money, machines, methods, marketing and management into products and services to satisfy the consumers’ needs. These resources as a whole are termed as 7 M’s. The functions performed during the process of transformation of resources (i.e., 7 M’s into products and services) are known as management functions. Thus the management process comprises of functions such as planning, organising, staffing, directing and controlling. Management: A Group 9 CU IDOL SELF LEARNING MATERIAL (SLM)

Management as a group refers to those who carry the activities of management. So, the management consists of all those persons who are managing the affairs of the business enterprise. Therefore, the term management represents the group of people i.e., from chairman to supervisor, because they are concerned with getting things done through others. Now-a-days, the contribution of the proprietors/ owners in management of an enterprise has decreased considerably. They are not in position to handle the different resources themselves as per the modern requirements. For this purpose they have to employ qualified and trained managers who are entrusted with the resources (such as men, materials, money etc.) for achieving the objectives of the enterprise. In a company form of organization, the shareholders who are the real owners are scattered throughout the country, and the company is managed by number of persons employed by it. Thus, managing a business enterprise has become a group activity and ail those who are performing managerial duties are termed as management. The word ‘management’ also connotes as top management viz. Chief Executive or Chairman of Board, Board of Directors, Managing Director etc. because the real decision making authority lies with the top management. For the outsiders, the term ‘management’ is referred to as the top management as they deal with day to day business of sale, purchase or other matters. Management: A Discipline Management has been developed as a fully-fledged discipline (as a subject of study) in the due course of time. The knowledge of management is being developed by number of scholars and it is being formally taught to the students of management. It includes the specialized functional courses viz.: Financial Management, Personnel Management, Marketing Management etc. Thus, the management has grown as a separate discipline of study. MANAGEMENT: AN ACTIVITY The functional aspect of management is to organize the human and the material resources to achieve the objectives of the enterprise. In this process, the managers have to perform many activities. These activities are: 10 CU IDOL SELF LEARNING MATERIAL (SLM)

1. Communication: All the managers have to communicate with their superiors as well as subordinates either in writing or orally. 2. Decision Making: In an enterprise a manager has to take a number of decisions, such as recruitment of workers, selection actually, all the activities of the management are regulated by decision-making process. 3. Human Relations: Management involves the activities for getting the work done through others. Therefore, the managers maintain good relations with subordinates. The managers even develop social relation with their subordinates and look after their personal problems sympathetically. In this way, the managers motivate the people to work hard for achieving the objectives of the enterprise. Thus, the management is an activity which helps in developing the relations among human beings. Though used in different senses, the term management as a process is the most popular. Thus, management may be defined as the sum total of all those activities which are undertaken to plan, organize, direct and control the efforts of others to serve the interests of all. It involves the Coordination of human efforts and physical resources towards the achievement of organizational, individual and social objectives. NATURE OF MANAGEMENT Universality: It is a universal phenomenon in the sense that it is common and essential in all enterprises. The principles of management can be applied in all managed situations regardless of size, nature and locations of organization. Universality also implies that managerial skills are transferable and managers can be trained and developed. Purposeful: it is always aimed at achieving organization goals and purposes. The success of management is measured by the extent to which desired objectives are attained. The tasks of management are directed towards effectiveness and efficiency. Social Process: It involves managing people organized in work groups. It involves retaining, developing and motivating people at work as well as taking care of their satisfaction as social beings. 11 CU IDOL SELF LEARNING MATERIAL (SLM)

Coordinating Force: It coordinates the efforts of organizational members through elderly arrangement of inter-related activities to avoid duplication of efforts. Intangible: It is intangible. Its presence can be felt by outcomes of its efforts in the form of orderly, adequate, work output, employee satisfactions etc. Continuous Process: It is an ongoing process. The cycle of management continues as long as there is existence of organization. Composite Process: Management is a composite process made up of individual components. All the functions are performed by several components in orderly fashion. Creative Organ: Management creates synergy by producing results which are more than the sum of individual efforts of group members. It provides creative ideas, new imagination and vision to group efforts. 1.6.1 Scope of Management Management deals with clearly defined activities without which progress is not possible. It confines to concepts, principles, theory related to managerial functions. CHARACTERISTICS OF MANAGEMENT 1. Management is universal – The principles & techniques of management have universal application. They are not rigid. They can be modified & applied in different situations. 2. Management is goal oriented – The basic goal of management is to ensure efficiency &economy in the utilization of human, physical & financial resources. Managerial success is measured by the extent to which the objectives are achieved. Thus management is purposeful. 3. Management is an intangible force – Management is an unseen force which cannot be seen but its presence can be felt in the form of results, targets achieved according to plans, satisfied employees & orderliness in the organization. 4. Management is pervasive – Management is an essential element of every organized activity irrespective of the size or type of organization i.e. Government, business, sports, university or hospital. It is also prevalent in all the levels of the organization, and in all the departments. 5. Management is a continuous process – Management functions are continuous & never ending. These functions are simultaneously performed by all managers all the time i.e. planning, organizing, staffing, directing & controlling. 12 CU IDOL SELF LEARNING MATERIAL (SLM)

6. Management is a dynamic function – Management is a dynamic function as it has to adopt the changes according to the need of the environment & growth of the business. 7. Management is multi-dimensional – It is multidimensional as it involves management of work, people & operations. IMPORTANCE OF MANAGEMENT Management is universal and pervasive because of its significance such as: i. Providing managers with useful insight into reality: Management principles act as guidelines for the managers. These principles improve knowledge, ability and understanding of managers under various managerial situations. The effects of these principles help the managers to learn from their mistakes. These principles guide managers to take right decision at the right time. ii. Optimum utilization of resources: The management principles insist on planned activities and systematic organization of men and materials in the organization. Principles are designed to get maximum benefits from the human efforts and other resources. For example, scientific principles suggest to cut down the wasteful movements and setting up of standard time to complete a task. By saving time, energy and efforts activities can be made economical and result in maximum utilization of resources. iii. Scientific decisions: Managers have to take number of decisions every day. So they need to assess the resources of organizations very carefully so that the appropriate decision can be taken by using the available resources in best possible manner. The management principles enable the managers to approach various problems systematically and scientifically For example, Taylor’s principles always insisted on replacement of rule of thumb by scientific approach i.e., he suggested to conduct the time study to set up the standard time required to perform a job rather than leaving it at the discretion or will of manager. iv. Meeting changing environment requirement: Every businessman has to make changes in the organization according to changes taking place in the business environment. Management principles train the managers in implementing the changes in right direction and at right level in the organization. Although management principles are relative and general guidelines yet by modifying these principles 13 CU IDOL SELF LEARNING MATERIAL (SLM)

changes can be made in the organization. v. Effective administration: Administration is the function of top level management. In this function major plans and policies are formed. The management principles act as guidelines and base to form various administrative policies to have systematic working in the organization. Management principles make administration more effective by discouraging personal prejudices and biases. These principles insist on objectivity and scientific decisions. For example, principle of unity of command, scalar chain, and unity of direction leads to systematic and smooth functioning of the organization as unity of command avoids confusion of more bosses. Unity of direction unifies the efforts of all the employees in common direction and scalar chain results in systematic flow of information. So, all these principles definitely bring effective and efficient administration. vi. Fulfilling Social responsibilities: A business is creation of society and makes use of resources of society so it must do something for society also by performing some social responsibilities. Management principles not only act as guidelines for achieving organizational objectives but these principles also guide the managers to perform social responsibilities. For example, the principle of fair remuneration insists on adequate salary to employees and takes care of interest of employees also. vii. Management Training, Education and Research: The management principles stress on scientific judgments and logical thinking. As a result these principles act as base of doing research and development in management studies. As these principles provide organized body of knowledge to perform research work and generate more and more knowledge, they have provided new ideas, imagination and base for research and development. MANAGEMENT FUNCTIONS The primary functions of management include: i. Planning ii. Organizing iii. Staffing iv. Directing 14 CU IDOL SELF LEARNING MATERIAL (SLM)

v. Controlling Controlling function comprises of coordinating, reporting and budgeting. Based on this the functions of management can be coined the word “POSDCORB”, which represents seven functions of management. i. Planning: planning is a continuous and future oriented process which represents selecting the best course of action. An effective planning programmeis affected by both external and internal factors. The external factors include scarcity of resources (capital, material, human), economic changes, technical changes, political etc. whereas the internal factors includes changes in workforce, organization structure, diversification etc. ii. Organizing: organizing requires a formal structure of flow of authorities and direction in order to coordinate all the activities to achieve the prescribed objectives. Thus, the function of organizing concerned with: • Identifying the tasks that must be performed and grouping them whenever necessary • Assigning these tasks to the personnel and defining their authority and responsibility • Delegating the authority to the employees • Establishing a relationship between authority and responsibility • Coordinating these activities. iii. Staffing: It is a function of hiring and retaining a suitable workforce at managerial and non- managerial levels. The sub functions of staffing are recruiting, training, developing, compensating, appraising, maintaining, motivating etc. This function is most important and critical since the individuals differ in their intelligence, knowledge, skills, experience, physical condition, age, attitude etc. iv. Directing: It includes instructing and guiding the subordinates about the procedures and methods. It concerned with leadership, communication, motivation, supervision etc. v. Controlling: the function of control consists of those activities that are undertaken to ensure that the events do not deviate from the pre-arranged plans. Thus, controlling can be defined as the minimizing the gap between the expected and standard performance. The activities include to control are: • Establishing the standard performance. 15 CU IDOL SELF LEARNING MATERIAL (SLM)

• Measuring performance and comparing with standard performance • Taking corrective actions. MANAGEMENT AS A SCIENCE Science is a systematic body of knowledge that represents the general facts which explains a phenomenon. It establishes cause and effect relationship between two or more variables and underlines the principles governing their relationship. Some of the basic characteristics which explain management as a science are: i. Universally acceptance principles: Scientific principles represent basic facts, which can be applied in all the situations, at any place and at any time. The principles of management such as unity of direction, division of labouretccan be applied universally. ii. Experimentation and observation: The fundamental principles of management were derived by conducting scientific experiments and through the observations. For example, the employees will be more satisfied when they receive fair remuneration. iii. Cause & Effect Relationship: Management explains the cause and effect relationship between the variables. For examples, lack of balance (cause) between authority & responsibility will leads to ineffectiveness (effect). iv. Test of validity & predictability: The principles of management can be tested for validity. i.e., the principle of unity of command, can be tested by using two employees, one with single superior and other with two superiors. Thus, management is a systematic body of knowledge but not pure science like physics, chemistry, biology etc. It is because it deals with human, who possesses different attitudes and behaviors and it is very difficult to predict such behaviors. Thus, management is known as social science. MANAGEMENT AS AN ART Art can be defined as the application of theoretical knowledge & skills to get desired results. The various characteristics of management as art include: A. Practical knowledge: An artist should have the practical knowledge related to the applications of theoretical principles. A person never become a manager just by getting the degree of management, he/she should have the knowledge to use the various principles and concepts of management according to the situation. 16 CU IDOL SELF LEARNING MATERIAL (SLM)

B. Personal skills: The effectiveness of management depends upon the personal skills of management that an individual possesses. C. Creative: A manager has to take business decisions in different situations, which may not occur earlier. For this he/she requires intelligence and imagination for effective coordination of human and non-human resources. Thus, an effective manager should be more creative. D. Perfection through practise: An artist should have the tendency of getting more perfection through their practise. A manager learns from trial and error method at the initial stage and the applications of management principles makes them perfect over their experience during their service. E. Goal oriented: The success of an artist depends upon their ability to achieve the desired goals. In the same manner, managers are also directed towards accomplishment of pre-defined goals. MANAGEMENT AS A PROFESSION The expansion and changes in the business world has created more demand for professionally qualified managers. As a result of this has developed management as a profession. A profession can be considered as an “occupation that requires specialized knowledge and intensive academic preparations to which entry is regulated by a representative body. The various characteristics of management to be as a professionare: i. Formal education & Training: The academic knowledge of management can be taught by many formal educational institutions. Law does not prescribe any qualification for a manager but in order to perform the activities more efficiently the managers should have basic knowledge in their respectiveareas. ii. Specialized knowledge: Managers require systematic knowledge of principles and techniques of management to solve the business problems. iii. Social obligations: Like other professions managers also have some responsibilities towards the various parties of society, which includes shareholders, customers, employees, public, government, law etc. Code of conduct: A professional has to abide by code of conduct which contains rules and regulations, norms of honesty, integrity and special ethics. In order to ensure self-disciplines among the members management associations has defined code of conduct. And has the right to take actions if any of the member violate the code of conduct. 17 CU IDOL SELF LEARNING MATERIAL (SLM)

HISTORY AND STREAMS OF MANAGEMENT Some see management as a late-modern (in the sense of late modernity) conceptualization. On those terms it cannot have a pre-modern history – only harbingers (such as stewards). Others, however, detect management-like thought among ancient Sumerian traders and the builders of the pyramids of ancient Egypt. Slave-owners through the centuries faced the problems of exploiting/motivating a dependent but sometimes unenthusiastic or recalcitrant workforce, but many pre-industrial enterprises, given their small scale, did not feel compelled to face the issues of management systematically. However, innovations such as the spread of Hindu numerals (5th to 15th centuries) and the codification of double-entry book-keeping (1494) provided tools for management assessment, planning and control. • An organization is more stable if members have the right to express their differences and solve their conflicts within it. • While one person can begin an organization, \"it is lasting when it is left in the care of many and when many desires to maintain it\". • A weak manager can follow a strong one, but not another weak one, and maintain authority. • A manager seeking to change an established organization \"should retain at least a shadow of the ancient customs\". With the changing workplaces of industrial revolutions in the 18th and 19th centuries, military theory and practice contributed approaches to managing the newly popular factories. Given the scale of most commercial operations and the lack of mechanized record-keeping and recording before the industrial revolution, it made sense for most owners of enterprises in those times to carry out management functions by and for themselves. But with growing size and complexity of organizations, a distinction between owners (individuals, industrial dynasties or groups of shareholders) and day-to-day managers (independent specialists in planning and control) gradually became more common. GENERAL ENVIRONMENT The general environment helps shape the task environment, thus determining the magnitude of the opportunities and threats confronting the organization. The general environment is remote and less easy to shape than the task environment, but it is no less important. An organization’s environment includes factors that it can readily affect as well as factors 18 CU IDOL SELF LEARNING MATERIAL (SLM)

that largely lay beyond its influence. The latter set of factors are said to exist within the general environment. Because the general environment often has a substantial influence on an organization’s level of success, executives must track trends and events as they evolve and try to anticipate the implications of these trends and events. PESTEL analysis is one important tool that executives can rely on to organize factors within the general environment and to identify how these factors influence industries and the firms within them. PESTEL is an anagram, meaning it is a word that created by using parts of other words. In particular, PESTEL reflects the names of the six segments of the general environment: (1) political, (2) economic, (3) social, (4) technological, (5) environmental, and (6) legal. Wise executives carefully examine each of these six segments to identify major opportunities and threats and then adjust their firms’ strategies accordingly (Table 3.1 “PESTEL”). Examining the general environment involves gaining an understanding of key factors and trends in broader society. PESTEL analysis is a popular framework for organizing these factors and trends and isolating how they influence industries and the firms within them. Below we describe each of the six dimensions associated with PESTEL analysis: political, economic, social, technological, environmental, and legal. POLITICAL AND LEGAL FORCES Political and legal forces are the result of changes in laws and regulations. Political processes shape a society’s laws, which constrain the activities of organizations and thus create both opportunities and threats. For example, throughout much of the industrialized world during the last 20 years there has been a strong trend toward deregulation of industries and the privatization of organizations once owned by the state. In the United States deregulation of the airline industry in 1979 allowed 29 new airlines to enter the industry between 1979 and 1993. The increase in passenger carrying capacity after deregulation led to excess capacity on many routes, intense competition, and fare wars. The interplay between political and legal forces and industry competitive forces is a two way process in which the government sets regulations that influence competitive structure, and firms in an industry often seek to influence the regulations that governments enact. For example, in 2002 the United States Steel Industry Association was a prime mover in persuading President Bush to impose a 30 percent tariff on imports of foreign steel into the United States. The purpose of the tariff was to protect American steelmakers from foreign competitors, thereby reducing the intensity of rivalry in the U.S. steel market. Industry-specific regulators are an important and often overlooked aspect of the general 19 CU IDOL SELF LEARNING MATERIAL (SLM)

environment of many firms. Industry-specific regulators are government agencies with responsibility for formulating, interpreting, and implementing rules specific to a particular industry. These rules shape competition in an industry; thus government regulators can have a profound impact on the intensity of competition in a firm’s task environment and on the opportunities and threats confronting its managers. Some important industry-specific regulators include the Federal Drug Administration (which has to approve all new drugs for marketing), the Federal Communications Commission (which licenses firms to offer communication services), and the Federal Aviation Author ity (which regulates the airline industry). For an example of the influence exerted by industry regulators, consider the Federal Communications Commission (FCC), which licenses companies to deliver communication services. In 1997 the FCC created a huge opportunity when it agreed to allow firms to offer satellite radio service. The FCC set up an auction, and the two highest bidders in the auction, Sirius and XM Radio, were granted exclusive licenses to offer satellite radio in the United States until 2012. By 2005 over 5 million people were subscribing to satellite radio services, and demand was growing rapidly. Although those licenses will probably be renewed, the FCC could transform this opportunity into a threat for XM Radio and Sirius if it decides to offer additional licenses in the future, thereby increasing the number of satellite radio providers and competitive intensity in the market. Note that this decision to license two satellite radio operators has been a threat to established terrestrial radio stations, which face new competition from satellite radio firms. Managers try to influence industry-specific regulators, lobbying both them and the politicians who oversee the regulators to get them to introduce legislation that is in the interests of the firm. When the FCC was considering whether to license spectrum to satellite radio providers, for example, established radio companies, who correctly saw satellite radio as a threat to their business, lobbied the FCC, arguing that it would be a mistake to allow satellite radio because that would lead to the demise of socially valuable local radio services. Fortunately for satellite radio firms, these efforts were not successful. Macroeconomic Forces Macroeconomic forces affect the general health and well-being of a national or the regional economy, which in turn affect the profitability of firms within that economy. Four important factors in the macroeconomic environment are the growth rate of the economy, interest rates, currency exchange rates, and inflation (or deflation) rates. Economic growth, because it leads 20 CU IDOL SELF LEARNING MATERIAL (SLM)

to an expansion in customer expenditures, tends to produce a general easing of competitive pressures within an industry. This lets firms expand their operations and earn higher profits. Because economic decline (a recession) leads to a reduction in customer expenditures, it increases competitive pressures. Economic decline frequently causes price wars in mature industries whose products are commodity like and where buyers are powerful. The level of interest rates can determine demand for a firm’s products. Interest rates are important whenever customers routinely borrow money to finance their purchase of products. The most obvious example is the housing market, where mortgage rates directly affect demand. Interest rates also affect the sale of autos, appliances, and capital equipment, to give just a few examples. For firms in such industries, rising interest rates are a threat and falling rates an opportunity. Currency exchange rates define the value of different national currencies against each other. Movement in currency exchange rates has a direct impact on the demand for a firm’s products in the global marketplace. Between 2002 and 2004 the dollar fell in value against the euro, the currency used by many members of the European Union. The result was to make U.S. products cheaper in Europe. In general, a low or declining dollar reduces the threat from foreign competitors while creating opportunities for increased foreign sales. Conversely, a rising dollar can be a threat because it makes U.S. products more expensive, which can hurt sales. Price inflation can destabilize the economy, producing slower economic growth, higher interest rates, and volatile currency movements. If inflation keeps increasing, investment planning becomes hazardous. The key characteristic of inflation is that it makes the future less predictable. In an inflationary environment it may be impossible to predict with any accuracy the real value of returns that can be earned from a project five years hence. Such uncertainty makes firms less willing to invest. In turn, low investment depresses economic activity and ultimately pushes the economy into a slump. Thus high inflation is a threat to organizations. Demographic Forces Demographic forces are outcomes of changes in the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class. Like the other forces in the general environment, demographic forces present managers with opportunities and threats and can have major implications for an organization. Changes in the age distribution of a population represent an example of an important demographic force. 21 CU IDOL SELF LEARNING MATERIAL (SLM)

Currently most industrialized nations are experiencing the aging of their populations as a consequence of falling birth and death rates and the aging of the baby boom generation. In Germany the percentage of the population over age 65 is expected to rise from 15.4 percent in 1990 to 20.7 percent in 2010. Comparable figures for Canada are 11.4 and 14.4 percent; for Japan, 11.7 and 19.5 percent; and for the United States, 12.6 and 13.5 percent. The aging of the population is increasing opportunities for firms that cater to older people; the home health care and recreation industries are seeing an upswing in demand for their services. As the baby boom generation from the late 1940s to the early 1960s has aged, it has created a host of opportunities and threats. During the 1980s many baby boomers were getting married and creating a surge in demand for the appliances normally bought for first households. Companies such as Whirlpool Corporation and General Electric capitalized on the resulting demand for washing machines, dishwashers, dryers, and the like. In the 1990s many of these same baby boomers were starting to save for retirement, creating an inflow of money into mutual funds and a boom in the mutual fund industry. In the next 20 years many of these same baby boomers will retire, increasing demand for retirement communities. Sociocultural Forces Sociocultural forces refer to the way in which changing social mores and values affect an industry. Like the other forces discussed here, social change creates opportunities and threats. One major social movement of recent decades has been a trend toward greater health consciousness. Its impact has been immense. Firms that recognized the opportunities early have often reaped significant gains. PepsiCo was able to gain market share from its rival Coca-Cola by being the first to introduce diet cola and fruit-based soft drinks. At the same time the health trend has created a threat for many industries. The tobacco industry, for example, is in decline as a direct result of greater customer awareness of the health implications of smoking. Technological Forces Over the last century the pace of technological change has accelerated. This has unleashed a process that has been called a “perennial gale of creative destruction.” 19 Technological change can make established products obsolete overnight and simultaneously create a host of new product possibilities. Thus technological change is both creative and destructive—both an opportunity and a threat. One of the most important impacts of technological change is that it can affect the height of barriers to entry and therefore radically reshape industry structure. The pervasive Internet has 22 CU IDOL SELF LEARNING MATERIAL (SLM)

changed the competitive structure of many industries. It has lowered entry barriers and reduced customer switching costs, increasing the intensity of rivalry in many industries and lowering both prices and profits. 20 For example, the Internet has lowered barriers to entry into the news industry. Providers of financial news now have to compete for advertising dollars and customer attention with new Internet-based media organizations that sprang up during the 1990s such as TheStreet.com, the Motley Fool, and Yahoo’s financial section. The increase in rivalry has given advertisers more choices, enabling them to bargain down the prices they pay to media companies. Similarly, in the automobile industry, the ability of customers to comparison-shop for cars online and purchase cars online from a number of distributors such as Auto Nation has increased customers’ ability to find the best values. Customers’ increased bargaining power enables them to put downward pressure on car prices and squeeze profits out of the automobile industry. International Forces The last half century has witnessed enormous changes in the world economic system. We review these changes in detail in the next chapter when we discuss the global environment. For now the important points to note are that barriers to international trade and investment have tumbled, and an increasing number of countries are enjoying sustained economic growth. Economic growth in places like Brazil, China, and India is creating large new markets for goods and services, giving enterprises an opportunity to profit by entering these nations. Falling barriers to international trade and investment have also made it much easier to enter foreign nations. For example, 20 years ago it was almost impossible for a Western company to set up operations in China. Today Western and Japanese companies are investing over $50 billion a year in China. By the same token, however, falling barriers to international trade and investment have made it easier for foreign enterprises to enter the domestic markets of many firms (by lowering barriers to entry), thereby increasing the intensity of competition and lowering profitability. Because of these changes, many formerly isolated domestic markets have now become part of a much larger, more competitive global marketplace, creating myriad threats and opportunities for firms. TECHNOLOGY ENVIRONMENT 23 CU IDOL SELF LEARNING MATERIAL (SLM)

Technological environment refers to the state of science and technology in the country and related aspects such as rate of technological progress, institutional arrangements for development and application of new technology, etc. According to the well-known economist J.K. Galbraith, technology means, “systematic application of scientific or other organized knowledge to practical tasks”. Technology comprises of both machines (hard technology) and scientific thinking (soft technology) used to solve problems and promote progress. It consists of not only knowledge and methods required to carry on and improve production and distribution of goods and services but also entrepreneurial expertise and professional know how. Technology includes inventions and innovations. The main features of technological environment are as follows: • Technological environment is a component of macro or indirect action environment. • Technological environment changes very fast. • Technological environment affects the manner in which the resources of the economy are converted into output. • Technological environment is self-reinforcing. An invention in one place leads to a sequence of inventions in other places. DIFFERENCES BETWEEN MANAGEMENT & ADMINISTRATION The differences between management and administration can be very broad and hence one needs to pay close attention to details. Below are some of the differences you can expect: • Management consists of actions and plans whereby administration entails setting objectives and policies. • Management aims at managing not only people but also their work. Whereas Administration focuses on how best the resources of an organization can be utilized. • Administration typically has a role in all management decisions, whereas not all administrative decisions require the input of management. • Administration is focused on setting and creating policies and procedures. 24 CU IDOL SELF LEARNING MATERIAL (SLM)

Management however is more likely to deal with the broader functions of an organization and how tasks are executed. • Administrative functions typically are more defined, whereas how managers act and operate in an organization can differ person to person. • The management style of an organization can also changes with the removal or installation of a new Manager/Leader. Administrative policies or procedures however are slower to change and may remain in place for many generations of management. • The administrative functions of a business can often be guided or influenced by legislation or law. Whereas how a manager chooses to guide or lead their team is often a function of their experience and the company culture. • These are some of the core differences between management and administration. It is however common to find examples in different roles and industries where the two are more likely to overlap or co-exist. • However, by understanding the core differences and when you are expected to manage vs administer policies or procedures can help frame how you act and operate within your organization. SUMMARY • Theoretically both the terms are different but when put into practice the terms can be used interchangeably as all the levels of management are performing both administrative & functional activities. • Management (or managing) is the administration of an organization, whether it is a business, a not-for-profit organization, or government body. Management includes the activities of setting the strategy of an organization and coordinating the efforts of its employees (or of volunteers) to accomplish its objectives through the application of available resources, such as financial, natural, technological, and human resources. The term \"management\" may also refer to those people who manage an organization - managers. • Management is a set of principles relating to the functions of planning, organizing, directing and controlling, and the application of these principles in harnessing physical, financial, human, and informational resources efficiently and effectively to achieve organizational goals. • Many management thinkers have defined management in their own ways. For 25 CU IDOL SELF LEARNING MATERIAL (SLM)

example, Van Fleet and Peterson define management, ‘as a set of activities directed at the efficient and effective utilization of resources in the pursuit of one or more goals.’ • A leader has certain inherent qualities and traits which assist him in playing a directing role and wielding commanding influence which others. Leadership is an integral part of management and plays a vital role in managerial operations, while management is an integral component of technical as well as social processes. The practice of management is as old as human civilization. However, the study of management in a systematic and scientific way as a distinct body of knowledge is only of recent origin. • Management in some form or another is an integral part of living and is essential wherever human efforts are to be undertaken to achieve desired objectives. The basic ingredients of management are always at play, whether we manage our lives or our business. KEYWORDS • Management (or managing): is the administration of an organization, whether it is a business, a not-for-profit organization, or government body • Finance: is a term for matters regarding the management, creation, and study of money and investments. • Innovation: is commonly defined as the \"carrying out of new combinations” that include “the introduction of new goods, ... new methods of production, ... the opening of new markets, ... the conquest of new sources of supply ... • Human capital: is the stock of habits, knowledge, social and personality attributes (including creativity) embodied in the ability to perform labour so as to produce economic value. • Business: is the activity of making one's living or making money by producing or buying and selling products (such as goods and services). LEARNING OBJECTIVE 1. Briefly explain any five features of Management. ___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ ___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ __ 26 CU IDOL SELF LEARNING MATERIAL (SLM)

2. “Management is a series of continuous inter related functions with no pre-determined sequence.” Explain. ___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ ___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ __ UNIT END QUESTIONS A. Descriptive Questions 1. Identify and explain the basic characteristic of Management involved in the statement – “The Activities involved in managing and organization are common to all organizations whether economic, social or political”. 2. “Lack of proper management result in the wastage of time, money and efforts” in the light of this statement explain the importance of management. 3. Raman is working as “Plant Superintendent” in ABC Ltd. Name the managerial level at which he is working. State any four functions he will perform as “Plant Superintendent” in this company. 4. Rajat is working as “Regional Manager” in XYZ Ltd. Name the managerial level at which he is working. State any four functions he will perform as “Regional Manager” in this company. 5. Explain, how has the meaning of management evolved over time? 6. Differentiate between management and administration based on skills, influence and level of management. B. Multiple Choice Questions (Mcq’s) 1. Management is the......................................... of getting things done through others. a. Art b. Science c. Business d. None of these 27 CU IDOL SELF LEARNING MATERIAL (SLM)

2. Management is considered as ..........................................as it comprises of series of inter related functions which lead to achievement of organization goals. a. Activity b. Process c. Discipline d. Drive 3. Management is an......................................... force. a. Tangible b. Intangible c. Universal d. Disciplined 4.involves arranging and structuring work to accomplish the organization goals. a. Planning b. Organizing c. Staffing d. Levelling 5.Level of Management is directly concern with the control over 28 the performance of the operative employees. a. Top b. Middle c. Lower CU IDOL SELF LEARNING MATERIAL (SLM)

d. None of these Answers 1. a 2. b 3. b 4. b 5. c REFERENCE • Gerald A. C. (2015). Management Theory and Practice. UK: Cengage Learning EMEA Higher Education. • Chandan, J.S. (1987). Management Theory and Practice. New Delhi: Vikas Publications. • Sheldrake John (1966). Management Theory. New Delhi: Published Intl Thomson Business Press. • Northouse. G. Peter (2014). Introduction to Leadership: Concepts and Practice. New Delhi: Sage Publications. • Bolman. G. Lee (2013). Reframing Organizations: Artistry, Choice and Leadership. USA: John Wiley & Sons. • \"Oikonomikos. Oder Xenophon vom Haus-Wesen, aus der Griechischen- in die Teutsche Sprache übersetzet von Barthold Henrich Brockes, dem jüngern. Mit einer Vorrede S.T. Herrn Jo. Alb. Fabricii ... Nebst den wenigen Stücken, die aus der Lateinischen Uebersetzung Ciceronis noch übrig\". 1734. • \"Home: Oxford English Dictionary\". • Gomez-Mejia, Luis R.; David B. Balkin; Robert L. Cardy (2008). Management: People, Performance, Change, 3rd edition. New York: McGraw-Hill. p. 19. ISBN 978-0-07- 302743- 2. • Creel, 1974 pp. 4–5 Shen Pu-hai: A Chinese Political Philosopher of the Fourth Century B.C. • Griffin, Ricky W. CUSTOM Management: Principles and Practices, International Edition, 11th Edition. Cengage Learning UK, 08/2014 • Gomez-Mejia, Luis R.; David B. Balkin; Robert L. Cardy (2008). Management: People, Performance, Change (3 ed.). New York: McGraw-Hill. p. 20. ISBN 978-0-07-302743-2. 29 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 2: STRATEGIC MANAGEMENT 30 Structure Learning objective Introduction Definition Nature of strategy Strategic management techniques Stages of strategic management Strategy formulation The basic concept Components of Strategy Management Process of Strategy Management Importance of strategic management External and internal analysis PESTLE external analysis SWOT internal analysis Summary Keywords Learning activity Unit end questions Reference LEARNING OBJECTIVES CU IDOL SELF LEARNING MATERIAL (SLM)

After studying this unit, you will be able: • Discuss the concept and process of strategic management • Explain Analyze the organizational and environmental infrastructure within which strategic decisions are made; and • State Undertake exercises in strategically managing your organization and provide a long-term sustainability to the functions INTRODUCTION The term ‘strategic management’ is used to denote a branch of management that is concerned with the development of strategic vision, setting out objectives, formulating and implementing strategies and introducing corrective measures for the deviations (if any) to reach the organization’s strategic intent. It has two-fold objectives: To gain competitive advantage, with an aim of outperforming the competitors, to achieve dominance over the market. To act as a guide to the organization to help in surviving the changes in the business environment. Here, changes refer to changes in the internal environment, i.e. within the organization, introduced by the managers such as the change in business policies, procedures etc. and changes in the external environment as in changes in the government rules that can affect business, competitors move, change in customer’s tastes and preferences and so forth. DEFINITIONS In 1988, Henry Mintzberg described the many different definitions and perspectives on strategy reflected in both academic research and in practice. He examined the strategic process and concluded it was much more fluid and unpredictable than people had thought. Because of this, he could not point to one process that could be called strategic planning. Instead Mintzberg concludes that there are five types of strategies: Strategy as plan – a directed course of action to achieve an intended set of goals; similar to the strategic planning concept; Strategy as pattern – a consistent pattern of past behavior, with a strategy realized over time rather than planned or intended. Where the realized pattern was different from the intent, he referred to the strategy as emergent; Strategy as position – locating brands, products, or companies within the market, based on 31 CU IDOL SELF LEARNING MATERIAL (SLM)

the conceptual framework of consumers or other stakeholders; a strategy determined primarily by factors outside the firm; Strategy as ploy – a specific maneuver intended to outwit a competitor; and Strategy as perspective – executing strategy based on a \"theory of the business\" or natural extension of the mindset or ideological perspective of the organization. In 1998, Mintzberg developed these five types of management strategy into 10 “schools of thought” and grouped them into three categories. The first group is normative. It consists of the schools of informal design and conception, the formal planning, and analytical positioning. The second group, consisting of six schools, is more concerned with how strategic management is actually done, rather than prescribing optimal plans or positions. The six schools are entrepreneurial, visionary, cognitive, learning/adaptive/emergent, negotiation, corporate culture and business environment. The third and final group consists of one school, the configuration or transformation school, a hybrid of the other schools organized into stages, organizational life cycles, or “episodes”. Michael Porter defined strategy in 1980 as the \"...broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals\" and the \"...combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there.\" He continued that: \"The essence of formulating competitive strategy is relating a company to its environment.\" Some complexity theorists define strategy as the unfolding of the internal and external aspects of the organization that results in actions in a socio-economic context. NATURE OF STRATEGY In 1985, Professor Ellen Earle-Chaffee summarized what she thought were the main elements of strategic management theory where consensus generally existed as of the 1970s, writing that strategic management: • Involves adapting the organization to its business environment; • Is fluid and complex. Change creates novel combinations of circumstances requiring unstructured non-repetitive responses; • Affects the entire organization by providing direction; • Involves both strategy formulation processes and also implementation of the content of the strategy; 32 CU IDOL SELF LEARNING MATERIAL (SLM)

• May be planned (intended) and unplanned (emergent); • Is done at several levels: overall corporate strategy, and individual business strategies; and • Involves both conceptual and analytical thought processes. Chaffee further wrote that research up to that point covered three models of strategy, which were not mutually exclusive: Linear strategy: A planned determination of goals, initiatives, and allocation of resources, along the lines of the Chandler definition above. This is most consistent with strategic planning approaches and may have a long planning horizon. The strategist \"deals with\" the environment but it is not the central concern. Adaptive strategy: In this model, the organization's goals and activities are primarily concerned with adaptation to the environment, analogous to a biological organism. The need for continuous adaption reduces or eliminates the planning window. There is more focus on means (resource mobilization to address the environment) rather than ends (goals). Strategy is less centralized than in the linear model. Interpretive strategy: A more recent and less developed model than the linear and adaptive models, interpretive strategy is concerned with \"orienting metaphors constructed for the purpose of conceptualizing and guiding individual attitudes or organizational participants.\" The aim of interpretive strategy is legitimacy or credibility in the mind of stakeholders. It places emphasis on symbols and language to influence the minds of customers, rather than the physical product of the organization STRATEGIC MANAGEMENT TECHNIQUES Strategic management techniques can be viewed in two major ways. The first is the bottom- up or collaborative processes. Using this approach, the employees initiate a proposal, which they subsequently submit to their managers, or their superiors, who put the idea further up in the establishment. These proposals may be assessed based on financial criteria and other concrete economic terms such as cost-benefit evaluation and returns on investment. The second is the top-down approach, which is more common than any other method. Here, the chief executive officer and his team decide on the overall direction, which the organization should go. STAGES OF STRATEGIC MANAGEMENT The strategic-management process consists of three stages: strategy formulation, strategy 33 CU IDOL SELF LEARNING MATERIAL (SLM)

implementation, and strategy evaluation. 2.5.1 Strategy formulation Strategy formulation means defining the strategy in a very clear and simple word. Strategy formulation means stating the outline and the features of a strategy. It simply means preparing the action plan. It includes developing a vision and mission, identifying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long- term objectives, generating alternative strategies, and choosing particular strategies to pursue. Strategy-formulation issues include deciding what new businesses to enter, what businesses to abandon, how to allocate resources, whether to expand operations or diversify, whether to enter international markets, whether to merge or form a joint venture, and how to avoid a hostile takeover. Because no organization has unlimited resources, strategists must decide which alternative strategies will benefit the firm most. Strategy-formulation decisions commit an organization to specific products, markets, resources, and technologies over an extended period of time. Strategies determine long-term competitive advantages. For better or worse, strategic decisions have major multifunctional consequences and enduring effects on an organization. Top managers have the best perspective to understand fully the ramifications of strategy- formulation decisions; they have the authority to commit the resources necessary for implementation. Strategy implementation requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed. Strategy implementation includes developing a strategy-supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and utilizing information systems, and linking employee compensation to organizational performance. Strategy implementation often is called the “action stage” of strategic management. Implementing strategy means mobilizing employees and managers to put formulated strategies into action. Often considered to be the most difficult stage in strategic management, strategy implementation requires personal discipline, commitment, and sacrifice. Successful strategy implementation hinges upon managers’ ability to motivate employees, which is more an art than a science. Strategies formulated but not implemented serve no useful purpose. Interpersonal skills are especially critical for successful strategy implementation. Strategy- implementation activities affect all employees and managers in an organization. 34 CU IDOL SELF LEARNING MATERIAL (SLM)

Every division and department must decide on answers to questions, such as “What must we do to implement our part of the organization’s strategy?” and “How best can we get the job done?” The challenge of implementation is to stimulate managers and employees throughout an organization to work with pride and enthusiasm toward achieving stated objectives. Strategy making requires person with vision while strategy implementation requires a person with administrative ability. Strategy evaluation is the final stage in strategic management. Managers desperately need to know when particular strategies are not working well; strategy evaluation is the primary means for obtaining this information. All strategies are subject to future modification because external and internal factors are constantly changing. Three fundamental strategy-evaluation activities are (1) reviewing external and internal factors that are the bases for current strategies, (2) measuring performance, and (3) taking corrective actions. Strategy evaluation is needed because success today is no guarantee of success tomorrow! Success always creates new and different problems; complacent organizations experience demise. THE BASIC CONCEPT • Components of Strategy Management • Process of Strategy Management The basic concept of strategic management consists of a continuous process of planning, monitoring, analyzing and assessing everything that is necessary for an organization to meet its goals and objectives. In simple words, it is a management technique used to prepare the organization for the unforeseeable future. Strategy management helps create a vision for an organization that helps to identify both predictable as well as unpredictable contingencies. It involves formulating and implementing appropriate strategies so the organization can attain sustainable competitive advantage. Components of Strategy Management Strategic Intent Strategic Intent of an organization clarifies the purpose of its existence and why it will continue to exist. It helps paint a picture of what an organization should immediately do to achieve the company’s vision. Mission Mission component of strategy management states the role by which an organization intends to serve its stakeholders. It describes why an organization is operating that helps provide a 35 CU IDOL SELF LEARNING MATERIAL (SLM)

framework within which the strategies to achieve its goals are formulated. Vision The visual component of strategy management helps identify where the organization intends to be in the future. It describes the stakeholder dreams and aspirations for the organization. Goals and Objectives Goals help specify in particular what must be done in order to attain an organization’s mission or vision. Goals make the mission component of strategy management more prominent. Process of Strategy Management The strategic management process includes 7 steps: Setting the Goal – The first and foremost stage in the process of strategic management requires the organization to set the short term and long term goals it wants to achieve. Initial Assessment – The second stages says to gathers as much data and information as possible to help state the mission and vision of the organization. Situation Analysis – It refers to the process of collecting, scrutinizing and providing information for strategic purposes. It helps in analyzing the internal and external environment that is influencing an organization. Strategy Formulation – Strategy formulation is the process of deciding the best course of action to be taken in order to achieve the goals and objectives of the organization. Strategy Implementation – Executing the formulated strategy in such a way that it successfully creates a competitive advantage for the company. In simple words, putting the chosen plan into action. Strategy Monitoring – Strategy Monitoring involves the key evaluation strategies like taking into account the internal and external factors that are the root of the present strategies and measuring the team performance. SWOT Analysis – It helps in determining the Strengths, Weaknesses, Opportunities and Threats (SWOT) of an organization and taking remedial/corrective courses of actions to fight these weaknesses and threats. IMPORTANCE OF STRATEGIC MANAGEMENT 36 CU IDOL SELF LEARNING MATERIAL (SLM)

• It guides the company to move in a specific direction. It defines organization’s goals and fixes realistic objectives, which are in alignment with the company’s vision. • It assists the firm in becoming proactive, rather than reactive, to make it analyses the actions of the competitors and take necessary steps to compete in the market, instead of becoming spectators. • It acts as a foundation for all key decisions of the firm. • It attempts to prepare the organization for future challenges and play the role of pioneer in exploring opportunities and also helps in identifying ways to reach those opportunities. • It ensures the long-term survival of the firm while coping with competition and surviving the dynamic environment. • It assists in the development of core competencies and competitive advantage that helps in the business survival and growth. The basic purpose of strategic management is to gain sustained-strategic competitiveness of the firm. It is possible by developing and implementing such strategies that create value for the company. It focuses on assessing the opportunities and threats, keeping in mind firm’s strengths and weaknesses and developing strategies for its survival, growth and expansion. EXTERNAL AND INTERNAL ANALYSIS Understanding the environment your business operates in is a key part of planning, and will allow you to discern the threats and opportunities associated with your area of business. An external analysis looks at the wider business environment that affects your business. An internal analysis looks at factors within your business such as your strengths and weaknesses. Examining your internal and external analyses together gives you a complete picture of your current situation and the steps you can take to plan your marketing. PESTLE external analysis A PESTLE analysis helps you to identify the main external opportunities and threats in your market: • Political changes such as trade agreements between countries 37 CU IDOL SELF LEARNING MATERIAL (SLM)

• Economic factors such as interest rates, exchange rates and consumer confidence • Social factors such as changing attitudes and lifestyles, and the ageing population • Technological factors such as new materials and growing use of the internet • Environmental factors such as environmental law and impact on the environment • Legal factors such as new and existing legislation SWOT internal analysis You also need to understand your own internal strengths and weaknesses. A SWOT analysis combines external and internal analysis to summarise your Strengths, Weaknesses, Opportunities and Threats. For example, a new business may note the following: • Strength: enthusiastic employees or a unique product • Weakness: no existing customer base and limited finances • Opportunity: potential customers with problem the product solves, interested investors • Threat: competition from established businesses with a bigger budget You need to look for opportunities that play to your strengths. You also need to decide what to do about threats to your business and how you can overcome important weaknesses. For example, your SWOT analysis might help you identify the most promising customers to target. You might decide to look at ways of using the internet to reach customers. And you might start to investigate ways of raising additional investment to overcome your financial weakness. SUMMARY • The term ‘strategic management’ is used to denote a branch of management that is concerned with the development of strategic vision, setting out objectives, formulating and implementing strategies and introducing corrective measures for the deviations (if any) to reach the organization’s strategic intent. • Strategic management techniques can be viewed in two major ways. The first is the bottom-up or collaborative processes. Using this approach, the employees initiate a 38 CU IDOL SELF LEARNING MATERIAL (SLM)

proposal, which they subsequently submit to their managers, or their superiors, who put the idea further up in the establishment. • Strategic management is dynamic. It involves a complex pattern of actions and reactions. It is partially planned and partially unplanned. Because the environment is constantly changing, effective strategic management requires a continuous flow of new theories suitable for the new circumstances. The problem with most theories is that they solve yesterday’s problems. Gary Hamel (2000), laments that strategies converge because the more successful ones get imitated by others who do not understand that the strategic process involves designing a custom strategy for the specifics of each situation. Ten Schools of thought have emerged in the area of strategic planning. Strategies are formulated both in public as well as private sectors. But there is variance in the environment in which they are formulated. Strategic management process is quite comprehensive comprising assessment planning, implementation and evaluation. • Strategic management is the ongoing planning, monitoring, analysis and assessment of all necessities an organization needs to meet its goals and objectives. Changes in business environments will require organizations to constantly assess their strategies for success. • The strategic management process helps organizations take stock of their present situation, chalk out strategies, deploy them and analyze the effectiveness of the implemented management strategies. Strategic management strategies consist of five basic strategies and can differ in implementation depending on the surrounding environment. Strategic management applies both to on-premise and mobile platforms. KEYWORDS • Gap Analysis: this brings out the gap or difference between projected outcomes and the desired or needed outcomes arising out of any activity. This could be at times in terms of profits or revenues also. • Institutional Pluralism: It is a situation, wherein multiple institutions ranging from government, private sector, community groups, political parties, NGOs, function pursuing various strategies to achieve the objectives of development. It is the combination of all the efforts that contributes to development. • Intellectual Capital: It is the collective knowledge, experience, skills, competencies and abilities. 39 CU IDOL SELF LEARNING MATERIAL (SLM)

• Knowledge Worker: A member of an organization who makes use of knowledge of all varieties in performance of activities. • Learning Organization: The increasing pace of change on all fronts is making organizations integrate the process of learning from work and give importance to innovation. Learning organization is one that learns and encourages learning among the people. LEARNING ACTIVITY 1. Go through any business magazine, or journal and collect material on strategic planning management processes being brought about in the corporate sector. ___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ ___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ __ 2. Visit any public sector enterprise and enquire about strategic planning activity in the organization ___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ ___ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ __ UNIT END QUESTIONS A. Descriptive Questions 1. Explain the term Strategic management? 2. Define strategic management. 3. Explain why strategic management is important? What is the nature and scope of strategic management? 4. Explain the concept of Strategic management. 5. Explain the external and internal factor of strategic management. 6. Illustrate the process of strategic management? B. Multiple Choice Questions 1. This is most consistent with strategic planning approaches and may have a long planning horizon. The strategist \"deals with\" the environment but it is not the central concern. 40 CU IDOL SELF LEARNING MATERIAL (SLM)

a. Linear strategy b. Adaptive strategy c. Integrative strategy d. Interpretive strategy 2. Pestle is a …….. a. External analysis b. Internal analysis c. Social Analysis d. Technological analysis 3. The basic concept of …………… consists of a continuous process of planning, monitoring, analyzing and assessing everything that is necessary for an organization to meet its goals and objectives. a. strategic management b. HR management c. Finance management d. None of these 4. The first and foremost stage in the process of strategic management requires the organization to set the short term and long term goals it wants to achieve. a. Setting goals b. Setting idea plan c. Initial Assessment d. Situation analysis 41 CU IDOL SELF LEARNING MATERIAL (SLM)

5. Broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals\" and the a. Michael porter b. Adam smith c. Paul Rorger d. None of these Answers 1. a 2. a 3. a 4. a 5. a REFERENCE • Gerald A. C. (2015). Management Theory and Practice. UK: Cengage Learning EMEA Higher Education. • Chandan, J.S. (1987). Management Theory and Practice. New Delhi: Vikas Publications. • Sheldrake John (1966). Management Theory. New Delhi: Published Intl Thomson Business Press. • Northouse.G. Peter (2014). Introduction to Leadership: Concepts and Practice. New Delhi: Sage Publications. • Bolman. G. Lee (2013). Reframing Organizations: Artistry, Choice and Leadership. USA: John Wiley & Sons • Change of Direction”. Public Money and Management, April-June. • Sadler, P, 2004, Strategic Management, Kogan Page, New Delhi. • Selznick P., 1957, Leadership in Administration: A Sociological Interpretation, Row, Peterson, Evanston II • Toffler, A, 1970 Future Shock, Bantom Books, New York. • Toffler, A, 1980, The Third Wave, Bantom Books, New York. 42 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 3: LEADERSHIP FOUNDATION AND 43 THEORIES Structure Learning objective Introduction Concept of leadership Leadership types Factor influencing leadership style Leadership qualities and characteristics Styles of leadership Choosing the best leadership style Leadership theories The Trait Theory of Leadership No Guarantee The Behavioral Theory of Leadership The Functional Theory of Leadership The Transformational Theory of Leadership The Transactional Theory of Leadership The Environmental Theory of Leadership Situational Contingency Theories Summary Keywords Learning activity CU IDOL SELF LEARNING MATERIAL (SLM)

Unit end questions Reference LEARNING OBJECTIVES After studying this unit, you will be able: • Define leadership styles • Discuss leadership qualities and characteristic • Explain leadership types • Examine the styles of leadership INTRODUCTION Leadership can be defined as one’s ability to influence and motivate others to bring the best out in them. It focuses on encouraging individuals to add more to the overall effectiveness of an organization. Leadership is often defined as a process wherein an individual, influences and encourages others to achieve the organizational objectives and directs the organization so that it becomes more coherent and cohesive to work. Moreover, a person who can bring out the change is the one who possesses the ability to be a leader. A good leader is the one who always looks out after others before himself and is proactive. Proactive refers to a leader’s tendency of being three steps ahead of others, thinking of all the possibilities of a scenario. Leadership is all about developing people, in turn helping them to reach their maximum potential. In the simplest of terms, Leadership is an art of motivating the people to help achieve a common goal. Talking of few Leadership qualities an effective leader should possess are: – Commitment towards the tasks and duties allocated, Ability to communicate well, taking the ownership of the tasks; Honesty and Integrity, Ability to take the right decisions and that too at the right time; Creativity and Innovation and lastly but the most important one the ability to inspire others. In the words of Mary Parker Follet “Leadership is not defined by the exercise of power but 44 CU IDOL SELF LEARNING MATERIAL (SLM)

by the capacity to increase the sense of power among those led,” Understanding the difference between Leadership and Management • Management and leadership skills are quite often regarded as one and the same to many businesses. The two activities are not synonymous with each other. • Highlighting the difference between the two terms Leaders have people follow them whereas Managers have people work for them. • A manager emphasizes on planning and coordinating the different tasks to be performed with an organization whereas Leader focuses on inspiring and motivating people. • Management process can potentially aim at providing Leadership whereas the different leadership activities contribute at managing. There exists a profound difference between management and leadership and both play a vital role in an organization. CONCEPT OF LEADERSHIP Leadership has been defined in many ways. While defining leadership, it is being viewed from the focus of group processes, personality perspective, behavioral traits, power relationship, transformational process and skills perspective. Though leadership is defined in various ways with different perspectives, the components of leadership have certain common characteristics. They area: (i) leadership is a process; (ii) leadership involves influence; (iii) leadership occurs in a group context and (iv) leadership involves goal attainment. Thus leadership is defined a process, whereby an individual influences a group of individuals to achieve a common goal. The above discussion makes it clear that the leadership is a process not a trait or characteristics of the leaders but a transactional event that takes place between the leader and the led. It affects both the leader and the led in the process of interaction. It is not a one-way event, but it is an interactive event. Leadership revolves influence and it is concerned with the way the leader affects his or her followers. Influence is the sine quo none of leadership. Without the influence, leadership does not exist. It takes place in groups. Leadership involves in influencing the group to achieve the common goals. Understanding of the leadership is always in the context of the level of the followers and their relationship with the leaders. Both leaders and the followers are involved together irl the leadership process. The leaders are in the task of taking initiatives and by which they link themselves with the stakeholders. While analyzing the concept leadership in the backdrop of the above given definition and 45 CU IDOL SELF LEARNING MATERIAL (SLM)

explanation issues have to be seen from the perspective of both the leaders and the followers or the stakeholders. Though, we talk about leadership as a process one cannot ignore the argument that leadership as a trait. The scholars who deal with leadership from the perspective of traits argue that certain individuals have certain special, unique, innate, inborn qualities that really make them leaders. These qualities differentiate them from other ordinary persons or individuals. Figure 3.1 CONCEPT OF LEADERSHIP Leadership defined by process suggests that leadership is a phenomenon that exists in the context and makes leadership available to everyone and it is to be learned. There are other arguments concerned with leadership. Leadership assigned is differentiated with leadership emergent. Some handle powers because they are being positioned and whereas others they influence over their group members not because of their positions but because of the personal traits and characteristics. For leadership, power is the. key element and central concept which has got its capability to influence others. Powers are of two types. They are personal and positional. Personal power is the capacity of the leader to influence over others Positional power is the powers a person derives from a particular office legitimately. Leadership is equated with management. Leadership handles, people, institutions and works for achieving the targeted goals as management. Many of the functions of leadership are similar to the functions of management. Yet, for the present work, we consciously take the argument and definition of leadership as process coupled with traits and assignment as the rural local body leaders are elected to position with certain earmarked responsibilities to be discharged by them. While discharging responsibilities, they have to be in constant interaction with' the people with an objective of 46 CU IDOL SELF LEARNING MATERIAL (SLM)

involving them for collective decision making. Yet the elected leaders have certa in key characteristics and traits which influence the whole process of development and democratic decision making. While seeing the concept leadership, it is necessary to understand the context and situation in which it works. India being a society with hierarchical division based on caste, and class, highly patriarchic in nature, agriculture being the primary occupation of 60 percent of the population, the concept leadership has to be viewed both from the perspective of the systems created for governance at grassroots and the practices evolved over a period of time for maintaining social relationship at the community level. Leadership has been studied through different theories namely contingency theory, path-goal theory and exchange theory with different approaches namely trait approach, skill approach, style approach and situational approach, In the new context, transformational leadership, team leadership, women leadership and leadership ethics are also important. With the above stated approaches, theories and styles leadership at the grassroots can be studied and seen. LEADERSHIP TYPES Leadership style is the pattern of behaviour that a leader exhibits, in influencing his/her subordinates towards the goals of an organization. Leadership style change from group to group and also from situation to situation. When a group lacks the sense of direction or purpose, directive style can be adopted by a leader, and when groups are clear of the organizational goals and objectives and perform well, non-directive styles can be adopted by a leader. The study of leadership style has been in vogue right from 1930s, when researches were conducted on the leadership theories. When the traits and behaviours of leaders were explored, the classification that was arrived at was „task oriented‟ and „employee oriented‟ leaders. Such classification further was expanded by the scholars in later years, which got extended as different styles of leadership. In this unit, effort has been made to explore the different types and styles of leadership. But before we get into the leadership styles that exist, it is critical to understand the factors that influence the leadership styles. FACTORS INFLUENCING LEADERSHIP STYLE The behavioral pattern, exhibited by a leader is influenced by various factors. Some of the factors that influence the leadership styles are as follows (D'Souza, 1987): (i) Personality of the Leader: The very personality of the leader has its impact on the style of leadership that he/she adopts. The value system that a leader follows influences him/her in adopting a certain style. The leadership style also gets influenced by the amount of 47 CU IDOL SELF LEARNING MATERIAL (SLM)

trust that a leader has on his/her employees. The inclination that a leader has towards a directive style or team-building style also influences the leadership style. Further, the personality displayed by a leader in uncertain situations also decides the style of leadership to be adopted by him/her. (ii) Personality of Group Members: The kind of personality exhibited by the followers in an organization, also help in deciding the style to be adopted. For instance, if employees in an organization prefer high need for independence, show readiness to assume responsibility, display interest in problem solving and decision making, then leaders permit greater freedom. (iii) Nature of Task: The nature of task performed in an organization, plays a greater role in determining the leadership style. If the nature of task to be performed in an organization is quite critical and the time is too short in taking decisions, autocratic styles may be used by leaders, whereas in handling simple task with no pressures of time, the leader might adopt a participative style. (iv) Nature of the Environment: The structure of the organization may determine the kind of leadership to be adopted. For instance some organizations may put a heavy emphasis on the leader’s abilities to work effectively with people. At other times, the social, economic and political pressures that an organization faces prompt certain style of leadership to be followed. A successful leader is sensitive to the influences in various situations and they are in a position to determine the right style of leadership to be followed in handling various situations. LEADERSHIP QUALITIES AND CHARACTERICTICS The basic qualities that a leader should possess, in influencing her/his people towards organizational goals, acts as a benchmark in accepting her/his leadership and conferring leadership upon a leader. In general, a leader needs to exhibit qualities or behaviour that followers find credible, useful and appropriate. Some of the scholars, in fact enumerate a list of leadership qualities. According to Chester Barnard, six qualities are essential for a leader and such qualities, as per his order of importance include (Fadia&Fadia, 2006): • Vitality and Endurance • Decisiveness • Persuasiveness • Stability in Behaviour 48 CU IDOL SELF LEARNING MATERIAL (SLM)

• Intellectual Ability; and • Knowledge The leadership qualities as suggested by Millet include: • Good health • Sense of mission • Interest in other people • Intelligence • Integrity • Persuasiveness • Judgement • Loyalty Terry’s list of leadership qualities includes (Fadia&Fadia, 2006): • Energy • Emotional stability • Knowledge of human relations • Empathy • Objectivity • Personal motivation • Communicative skills • Teaching ability • Social skill; and • Technical Competence In crux, a leader must display „proper behaviour‟, be considerate and human-hearted, respect the face and dignity of the subordinates and lead through moral character. When such 49 CU IDOL SELF LEARNING MATERIAL (SLM)