Chap 3 some issues in managing employees

Q-1 What is creativity and innovation? Discuss importance creativity and innovation and also
discuss role of management in creativity and innovation

Creativity and Innovation is essential for any company and its growth. A distinction can be made
between creativity and innovation. Creativity means the ability and power to develop new ideas.
Innovation means the use of ideas. In many organizations this can be a new product, new service or
new way of doing things. Creativity is prime consideration for any company. So manager should select
creative people and encourage them for creativity by providing appropriate environment for it.
Creative thoughts always fruits of extensive efforts. Creativity is vital in decision making. The skill
that differentiate good decision maker is creativity. Creativity is useful in every stage of decision
making process such as developing alternatives, evaluation, etc. Innovation is concern with
implementation of idea. When idea put into practice then final output can be achieved. Without the
innovation creativity is useless.

Importance of creativity and innovation

 It helps managers to take various business decisions
 It develops imagination in managers and also devlop various alternatives to find solutions.
 With the help of creativity we can reach at final destination in business as per our expectation
 Creativity is beneficial for organization, entrepreneur and nation also
 Consumer get new and improve product due to creativity
 It helps to utilization of valuable resources
 Company is able to get advantage of latest machinery.
 It leads to improved competitive strength in market
 Organization can face dynamic business environment
 Company can increase market share.
 Creativity is helpful to maintain consumer satisfaction
 Improve goodwill in the society.

ROLE OF MANAGEMENT IN CREATIVITY AND INNOVATION:-

Creativity and innovation cannot enter in organization without the involvement of the
management. The organization should provide opportunity and the base to encourage creativity. The
management can play an efficient role by following ways:-

 They should accept the change and provide security to the people because change is
based on creativity and innovation.

 To encourage a new idea they should provide constant appreciation of innovation skills
which are fundamental for creativity.

PREPARED BY : PROF AJAY JAYSWAL

SHREE PATEL KELVANI MANDAL COLLEGE OF TECHNOLOGY
  They should permit more interactions continuously, interaction automatically promotes
creativity.

 They should be allowed to express their innovative ideas.

 Sometime manager have to tackle failures also. At that time they should provide moral
support and motivate them for improvement.

 Manager should provide clear objectives and freedom to achieve it. By it they can
promote creativity and innovation.

 They should provide required facilities to the people. Creativity and innovation can
enter when sufficient facilities are provided.

 They should offer proper rewards. Proper rewards policy is necessary to encourage
creativity and innovation.

 To encourage creativity there should be conducted seminars and workshops

which provides a platform to express creative views.
Q-2 DEFINE MANAGEMENT INFORMATION SYSTEM (MIS) AND WRITE
IMPORTANCE OF IT?

ANS. INTRODUCTION:-

A well designed information system is essential because it can give benefit to any organization.
Information is a life blood of an organization. Information can be defined as the knowledge
communicated by others or obtained from investigation or study. In control process manager
use information to know the quality.By it he can decide the degree of control. In this process
information plays a vital role.Actually, information is required at every step therefore
organization should design and use proper information system which provide necessary
information at proper time. Information is helpful to take a decision and action. The value of
information is determined by the quality of decision that is made. Timely information is very
useful. It is possible by proper information system.

DEFINITION:-

MIS is set off components that retrieve (collect), process, and store and distribute information
to support a decision making, control and co-ordination in organization.

IMPORTANCE OF MIS:-

In today’s dynamic and complex business environment need for information is increased.
Most of the business depends on information. Today computer based information is useful in

PREPARED BY : PROF AJAY JAYSWAL

SHREE PATEL KELVANI MANDAL COLLEGE OF TECHNOLOGY
 business. Now the use of computer is very common in business management. Computer based
networking is the latest technique or source of information. Many companies have developed
LAN for speedy availability of relevant information. The importance of MIS is given below.

(1) It is permanent set up that facilitate, collect, analyze and storage of necessary information.

(2) Improve decision making and higher performance can be gained.

(3) Speedy actions can be taken.

(4) The MIS helps to the top, middle and bottom level management for planning.

(5) MIS provide necessary information at proper time.

(6) Control and discipline can be maintained.

(7) Reduced cost and greater precision in information gathering.

(8) Improve public relation throughout the world.

(9) Speedy transaction and immediate implementation is possible by effective MIS.

(10) Better integration can achieve by availability of information at proper time.

(11) For the future growth proper information system is helpful.

(12) Speedy communication by help of proper information system.

Which are the stages or process of management information system?

1. To know the needs regarding information:

First, important question is why there is need of information.

The needs of information are related with the size of organisation, nature of business, financial
position, state government policies and several other factors.

There are two methods to judge the needs of the information. First, the users of the information may be
asked as to how much information they need to accomplish their task. Secondly, they should be asked
as to how they take the decision and then judge what information should be provided to them.

2. To explain the objectives of MIS:

The second step is to clearly define the objectives. Just monitoring to increase the efficiency is not
sufficient. Objective should be clear in terms of what one will do with the information received by

PREPARED BY : PROF AJAY JAYSWAL

SHREE PATEL KELVANI MANDAL COLLEGE OF TECHNOLOGY
him. The size of the objectives is related with the planning, management control and continuous flow
of information.

3. To determine the sources of information:

After estimating the need of information and clearly defining the objectives. The third step in
installation of MIS is to determine the sources of information. There are several sources. The internal
sources of are accounts, files, statistical papers etc. and external sources are commercial and
government publications. Information can also be collected by personal interviews and personal
inspections.

4. To set the method of collection can classification of information:

After determining the sources of information, the method of collection is determine.It is decided what
will be the source of information, frequency, quantity and time of information? After collection how it
will be classified? Where computers are used the statistical information is feed into them, for which an
outline is prepared?

5. Method of giving information:

The next step is to determine the method of giving information. It is decided as to who the information
is to be given, how many copies are to be prepared, when and what will be its frequency and in which
form it is to be given. They can be communicated by reports, charts, statements or even orally.

6. Cost profit analysis:

Finally, the cost to be incurred in information system should be assessed and the benefit should be
estimated. The cost of information system includes the cost of its implementation, practicing it and its
evaluation. These costs should be compared with the cost present system of giving information.

7. Evaluation:
Three to six months after implementation of management information system, it should be evaluated,
so that, it can be judged whether the cost incurred in its implementation is less than the benefits
derived from it and, also if it satisfies the needs of the persons using it. If it is not satisfactory, steps
should be taken to make to more effective and useful.

What is management by exception? Discuss advantages and disadvantages.

Management by exception is the method in which your management gives attention on important
matters and less important matters are solved by middle level managers. Here management gives
attention if results represent substantial differences from the budgeted or expected amount. For

PREPARED BY : PROF AJAY JAYSWAL

SHREE PATEL KELVANI MANDAL COLLEGE OF TECHNOLOGY
 example, the company controller may be required to notify management of those expenses that are the
greater of $10,000 or 20% higher than expected.

The purpose of the management by exception concept is to only bother management with the most
important variances from the planned direction or results of the business. Managers will presumably
spend more time attending to and correcting these larger variances.

The concept can be fine-tuned, so that smaller variances are brought to the attention of lower-level
managers, while a massive variance is reported straight to senior management.

Advantages of Management by Exception

There are several valid reasons for using this technique. They are:

(1) It saves the time and energy of senior executives and enables them to concentrate on more
important problems and issues.
(2) It even provides the key to automation, for ordinary, routine matters can be handled by middle level
managers while cases of exceptional (important)matters solved by management.
(3) It facilitates the engagement of specialised staff for high-routine jobs.
(4) It reduces the frequency of decision making.
(5) It leads to the identification of critical problem areas.
(6) It stimulates communication.
(7) it increase control.
(8) by this authority can be delegated effectively.
(9) it is also one tool of performance appraisal because here objectives are analysed and provides
motivation to employees working in the organization.
(10) it suggest the efficient use of data and knowledge
Disadvantages of Management by Exception

There are several issues with the management by exception concept, which are:

 This concept is based on the existence of a budget against which actual results are compared. If the
budget was not well formulated, there may be a large number of variances, many of which are
irrelevant, and which will waste the time of anyone investigating them.
 The concept requires the use of financial analysts who prepare variance summaries and present this
information to management. Thus, an extra layer of corporate overhead is required to make the concept
function properly. Also, an incompetent analyst might not recognize a potentially serious issue, and
will not bring it to the attention of management.

PREPARED BY : PROF AJAY JAYSWAL

SHREE PATEL KELVANI MANDAL COLLEGE OF TECHNOLOGY
Discuss the process of management by exception.

 Set norms or standard

The first and most important phase is setting objectives. Here we determine the requirements of the
business and end users. Without properly determining what needs to be achieved, it's nearly impossible
to execute the other phases effectively. You must understand user objectives, so your plans and
activities support them.

Scanning situation
In the scanning phase we are checking present internal and external environment. Objectives should be
set by considering internal and external environment. being a manger he has to more concentrate on
external environment because it is uncontrollable and we cannot change.

Phase 3: Execution
In the execution phase, we actually perform the steps that were planned .

Phase 4: Measurement
In this phase, we procure relevant data regarding the execution of the plan. Many different measures
can be use to measure the performance. By measurement we can get information. With the help of
measurement we can get the idea of variation of problem. If performance deviates appreciably from
standard the matter has to be brought to the attention of the superior officer

Phase 5: Control
If performance is less than standard, he has to take corrective measures and even punish
those responsible for the shortfall.In this phase, you can verify whether the measurements meet
your objectives. Controlling is necessary because without it performance cannot be evaluate we cannot
finfd mistakes in this process management can put actions on those area which are critical.

PREPARED BY : PROF AJAY JAYSWAL

SHREE PATEL KELVANI MANDAL COLLEGE OF TECHNOLOGY