Principles Of Management

Promoting Innovation: The Entrepreneurial Role

An innovation is a new idea applied to imitating or improving a process, product, or service. The process of innovation is closely allied with the entrepreneurial role in organizations, particularly since that role relates to discovering and exploiting new opportunities. In fact, innovative activities in organizations, especially major ones, have frequently been refereed to as entrepreneurship within organization. More recently, individuals who engage in entrepreneurial roles inside organization are often called entrepreneurs. The term is used to differentiate innovators working inside existing organizations from individuals who innovate by creating new organizations. Encouraging innovation in organizations takes special effort. Furthermore, successful innovations are rarely the product of only one person work. Rather, the innovative process usually involves individuals at various level who fulfill three different types of entrepreneurial roles :

Idea Champion

An idea champion is an individual who generates a new idea or believes in the value of a new idea and supports it in the face of numerous potential obstacles. We often thin of such individuals as entrepreneurs, inventors, creative individuals, or risk takers. They are usually individuals at lower levels in the organization who recognize a problem and help develop a solution.


A sponsor is an individual, usually a middle manager, who recognizes the organizational significance of an idea, helps obtain the necessary funding for development of the innovation, and facilitates its actual implementation. Sponsors tend to be middle manager because their higher-lever position in the organization makes it more feasible for them to provide the strong backing necessary for the survival of innovations.


An ORCHESTRATOR is a high-level manager who articulates the need for innovation, provides funding for innovating activates, creates incentives for middle managers to sponsor new ideas, and protects idea people. Because innovations often constitute a challenge to the current ways of doing things, they are frequently resisted by those who are comfortable with or have a particular stake in the status quo. An ORCHESTRATOR maintains the balance of power so that new ideas have a chance to be tested in the face of possible negative reactions. By filling the role of orchestrator, top managers encourage innovation.

Without all three roles, major innovations are much less likely to occur. The development of the VHS videocassette recorder at JVC illustrates the importance of entrepreneurial, or innovative, roles at the various levels of the organization.

Ultimately, the indirect intervention of Matsushita as an orchestrator became crucial. These three types of entrepreneurial roles constitute another vertical difference among managers.

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Horizontal Dimension : Responsibility Areas

In addition to their vertical differences, managerial jobs differ on a horizontal dimension that relates to the nature of the responsibility area involved. In horizontal differentiation, there are three major types of managerial jobs : Functional, General, and Project.

Functional Managers

General managers are managers who have responsibility for a whole organization or a substantial subunit that includes most of the common specialized areas. In other words, a general manager presides over a number of functional areas. General managers have a variety of titles, such as division manager and president, depending on the circumstances. A small company will usually have only one general manager, who is the head of the entire organization. Depending on how it is organized, a large company may have several general managers (in addition to the chief executive officer) each of whom usually presides over a major division.

Project Managers

Project managers are managers who have responsibility for coordinating efforts involving individuals in several different organizational units who are all working on a particular project. Because the individuals report not only to the managers in their specific work units but also to their project manager, project managers usually must have extremely strong interpersonal skills to keep things moving smoothly. Project managers are frequently used in aerospace and other high-technology firms to coordinate projects, such as airplane or computer project development. They are also used in some consumer oriented companies to launch or stay on top of market development for specific products. Such as cookies or margarine.

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Nature or characteristics of planning

There is a number feature or characteristics of planing that indicate towards its nature. These may be outlined as follows;

  1. Goal-oriented.

Planing is goal-orient in the sense that plans are prepared and implemented to achieve certain object.

  1. Basic to all managerial functions.

Planing is a function that is foundation of management process. Planing logically precedes all other functions of management, such as organization, staffing, etc. Because without plan there is nothing to control. Every managerial action has to be properly planned.

  1. Pervasive.

Planing is a function of all managers, although the nature and extent of planing will vary with their authority and level in the organization hierarchy. Managers at higher levels spend more time and effort on planing than do lower manager.

  1. Interdependent process.

Planing affects and is affected by the programs of different department in so programs constitute an integrated effort.

  1. Future-oriented.

Planing is forward looking and it prepares an enterprise for future.

  1. Forecasting integral to planing.

The essence of planing is forecasting. Plans are synthesis of various forecast.Thus, planing is inextricably(inseparably) bound up with planing.

  1. Continuous process.

Planing is an ongoing process. Old plans have to be prepared in case the environment undergoes a change. It shows the dynamic nature of planing.

  1. Intellectual process.

Planing is a mental or conceptual therefore involves rational decision making: requires imagination, foresight, and sound judgement: and involves thinking before doing_thinking on the basis of facts and information.

  1. Integrating process.

Planning is essential for the enterprise as a whole. Newman and others have drawn our attention towards this feature of planning, “without planning, an enterprise will soon disintegrate: the pattern of its action would be as random as that made by leaves scampering (running quickly in short steps )before an autumn wind, and its employees would be as confused as ants in an upturned anthill.” If there are no plans, action will be a random activity in the organization, instead there will be chaos.

  1. Planning and control are inseparable.

Unplanned action cannot be controlled without control, planned actions cannot be executed plans furnish standards of control In fact ,planning is meaningful without control and control is planning aimless without planning . is measuring rod of efficiency.

  1. Choice Among Alternative Courses Of Action.

The need for planning arises due to several ways available for an action If there is only one way out left there is no need for planning

  1. Flexible process .

the principle of navigational change (i.e, change according to change in environment) applies to planning In other words effective planning requires continual checking on events and forecasts ,and the redrawing of plans to maintain a course towards desired goals .thus plans have to be adaptable to changing circumstances

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Planning process :Steps in planning

The process of planning involves the following steps

  • Analysing environment. At the outset the internal and external environment is analyzed in order to identify company ;s strengths and weaknesses (in internal environment)and opportunities and threats (existing in the external environment) this is also known as SWOT (Strengths Weaknesses Opportunities and Threats ) analysis .

  • Establishing objectives or goals in the light of the environmental scanning (study)clear or probable opportunities that can be availed are identified in order to avail them objectives or goals are clearly defined in specific terms along with priorities in all the key areas of operations major problems associated with such objectives are also identified and defined ,so that there may be special emphasis on their planned solutions.

  • Seeking necessary Information :

All relevant data and facts are collected from internal and external sources such as Availability of supplies, physical and human recourses of the company , finance of disposal, relevant government policy etc then such collected information and factors are analyzed. These information can be used in two ways

  1. To make necessary modifications in objective and goals

  2. To take help them in premising assumption.

Establishing the planing premises

In order to develop consistent and coordinate plans ,it is necessary that planing is based upon carefully considered assumption and predictions

Identifying the alternative course of action.

After established the goals or objective and taking other related steps , feasible alternative programs or course of action are searched out . Impossible or highly difficult propositions are left out .

Evaluating the alternatives.

Problems consequences of each alternative course of action in terms of its pros and cons (eg Cost, benefits, risks etc) are assessed and then relative importance of each of them is found out by looking at their overall individual strengths and limitations especially in the light of present objective and the environment of the company.

Selecting the alternative or Course of action.

The alternative which appears to be most feasible and conducive to the accomplishment of company’s objective, is selecting the final plan of action as strategy.

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Preparing the Derivative plans

Derivative plans involve short rang operating plans that are useful in day-to-day operations these plans are developed through the

1 Schedules

2 Budgets

3 Programmes

4 Procedures

5 Methods

6 Rules & Polices etc.

These plans are prepared in different departments ,and their timings and sequence are also specified .

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Advantages benefits of Planning

  1. Provide a sense of direction.

Without planning manager would fail to make proper decisions , and hance there would be chaos ,not activity in the organisation. Planing desired decision making and efforts on guided path leading to the desired destination.

  1. Offsets (balance ) future uncertainty and change.

Uncertainty and risk are inevitably associated with business and its operations. Through planing cannot eliminate these two element plans of nature and risk because they provide a better understanding of likely future events.

  1. Focuses attention on objective and results.

Organisation exists because people have common objective. Managers are charge of organisation for the purpose of attaining results .if attention are not focused on objective and results.

  1. Causes efficient operations.

Planing make things occur ,improves the competitive strength of the organisation, guides proper utilisation channels for resources and facilities integrates resources and efforts, aligns internal and external environment

  1. Provides the basis for decentralization

Decentralisation of authority signifies dispersal of decision making power to the lowest level in the organisation .Well-designed plans serve as guides to subordinates and reduce the risk involved in delegation of authority.

  1. Guides Rational decision making

Decisions are primarily future oriented .plans cover to the future activities without plans there is no sound basis for making future oriented decision

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Stratigies and Policies


The determination of the purpose and the basic long term objectives of an enterprise, and the adoption of course of action and allocation of resource necessary to achieve these aims .


General statements or understanding that guide thinking in decision making, the essence of policies is the existence of discretion , with in certain limits, in guiding decision making .

Both strategies and policies give direction to plans. They provide the framework for plans and serve as a basis for the development of tactics and other managerial activities .

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The Strategic Planing Process Steps


It includes

  • People

  • Capital

  • Managerial skills

  • Technical skills

  • Goals of claimants

  • Enterprise Profile :

It is the starting point for determining where the company is and where it should go.

  • Orientation Of Top Managers:

Orientation of top managers are important for formulating the strategy .

  • Purpose And Major Objectives :

It is the endpoint towards which the activities of the enterprise are directed .

  • External Environment :

The external environment is scanned for technological developments for products and services on the market, and for other factors necessary in determining the competitive situation of the enterprise .

  • Internal Environment :
    It should be audited and evaluated the firm’s resources, weaknesses and strengths .

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Internal Analysis

The internal analysis is a comprehensive evaluation of the internal environment’s potential strengths and weaknesses. Factors should be evaluated across the organization in areas such as:

  • Company culture

  • Company image

  • Organizational structure

  • Key staff

  • Access to natural resources

  • Position on the experience curve

  • Operational efficiency

  • Operational capacity

  • Brand awareness

  • Market share

  • Financial resources

  • Exclusive contracts

  • Patents and trade secrets

The SWOT analysis summarizes the internal factors of the firm as a list of strengths and weaknesses.

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SWOT Analysis

SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. It is applicable to either the corporate level or the business unit level and frequently appears in marketing plans. SWOT (sometimes referred to as TOWS) stands for Strengths, Weaknesses, Opportunities, and Threats. The SWOT framework was described in the late 1960’s by Edmund P. Learned, C. Roland Christiansen, Kenneth Andrews, and William D. Guth in Business Policy, Text and Cases (Homewood, IL: Irwin, 1969). The General Electric Growth Council used this form of analysis in the 1980’s. Because it concentrates on the issues that potentially have the most impact, the SWOT analysis is useful when a very limited amount of time is available to address a complex strategic situation.

The following diagram shows how a SWOT analysis fits into a strategic situation analysis.

Situation Analysis


Internal Analysis External Analysis

/ /

Strengths Weaknesses Opportunities Threats


SWOT Profile

The internal and external situation analysis can produce a large amount of information, much of which may not be highly relevant. The SWOT analysis can serve as an interpretative filter to reduce the information to a manageable quantity of key issues. The SWOT analysis classifies the internal aspects of the company as strengths or weaknesses and the external situational factors as opportunities or threats. Strengths can serve as a foundation for building a competitive advantage, and weaknesses may hinder it. By understanding these four aspects of its situation, a firm can better leverage its strengths, correct its

weaknesses, capitalize on golden opportunities, and deter potentially devastating threats.

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