Short notes: delegation, digitalisation, entrepreneurship, PERT and CPM

Any three of the four notes are to be attempted, at 6 marks each. A note on every topic is given so that the reader may choose.

(a) Delegation of authority that is effective

Meaning. Delegation of authority is the process by which a manager assigns part of his or her work to a subordinate, gives the subordinate the authority needed to do it, and creates an obligation (responsibility) to perform it. Its three elements are assignment of responsibility, grant of authority and creation of accountability. The delegating manager remains accountable to his or her own superior: authority can be delegated, accountability cannot.

Process. Decide the tasks to delegate and the results expected; choose a capable subordinate; assign the task and grant matching authority; create accountability; and set up a system of follow-up and control.

Principles of effective delegation.

• Clear communication of what is delegated, and adequate controls that check results without interfering.
• One boss: the subordinate reports to one superior.
• Decide at your own level: subordinates settle matters within their authority and refer only the rest upward.
• Authority to match the task: authority equal to the responsibility, and sufficient for the results expected.
• No escape from responsibility: the superior remains answerable for what has been delegated.

Barriers. On the manager's side: fear of losing control, lack of trust, the feeling that the manager can do it better himself, and poor ability to direct. On the subordinate's side: fear of criticism, lack of confidence or information, and no incentive for extra responsibility.

Benefits. Decisions are taken faster and closer to the work; subordinates gain skill and confidence and feel trusted; and the manager, freed of routine, has time for growth and planning.

Example. A branch manager lets the senior cashier approve cash withdrawals up to a set limit and review the daily cash balance, while the manager checks a weekly report: freeing time for customer development.

(b) Digitalisation and its role in contemporary management

Meaning. Digitalisation is the use of digital technologies, the internet, mobile devices, cloud computing, data analytics, artificial intelligence, automation and digital platforms, to change how an organisation operates, makes decisions and creates value for customers. It goes beyond converting paper records into digital form (digitisation): it reshapes business processes and business models.

Impact on business firms and on management.

• Planning and decision making: real-time data and analytics allow faster, evidence-based decisions and better forecasting.
• Organising: flatter, networked structures; remote and hybrid work; cross-location virtual teams.
• Directing: communication through collaboration tools and social media; new skills needed in leading remote teams.
• Controlling: dashboards and digital monitoring make control continuous rather than periodic.
• Marketing and customers: e-commerce, digital payments, personalised offers and direct customer feedback; the market widens to national and international customers.
• Operations: automation, digital supply chains and online procurement lower costs and errors.
• New business models: platforms, subscriptions and the gig economy; small firms can reach national and global markets.

Challenges. Cyber-security and data-privacy risks, and the need to build staff skills and overcome resistance to new ways of working. Beyond these, a firm has to weigh the cost of the technology, the effect of automation on jobs, its dependence on a reliable connection, and the gap between people who have access and skills and those who do not.

Example. A small textile retailer in a district town begins selling through its own app and online marketplaces, accepts digital payments, tracks stock in a cloud system and uses sales data to decide what to reorder: reaching customers in other states without opening new shops.

Conclusion. Digitalisation has become a central force reshaping management purposes, performance and rewards; firms that adopt it thoughtfully gain speed, reach and efficiency.

(c) Role of entrepreneurship in economic development

Meaning. Entrepreneurship is the process of identifying an opportunity, organising resources and bearing risk to create a new venture or a new product, service or method, for profit or for social benefit. As an activity it is systematic, purposeful and creative. The entrepreneur is the innovator and risk-taker who brings land, labour and capital together.

Role in economic development.

1. Capital formation: entrepreneurs mobilise savings and invest them in productive enterprises.
2. Employment: new ventures, especially small ones, create jobs and self-employment.
3. Innovation: new products, processes and business models raise productivity and drive growth, as newer enterprises replace older ones.
4. Balanced regional development: enterprises set up in backward areas spread income and infrastructure.
5. Increase in national income and per capita income through greater output.
6. Exports and foreign exchange: entrepreneurs find overseas markets and substitute imports.
7. Better standard of living: wider choice of goods and services at lower prices.
8. Economic independence: local enterprise reduces dependence on imports and on a few large firms.
9. Social change: entrepreneurship, including social entrepreneurship, solves social problems in health, education and the environment, and opens opportunities for women and disadvantaged groups.

Supporting environment. Access to finance, skills, infrastructure, simple regulation, and policies supporting start-ups and MSMEs encourage entrepreneurship.

Example. A rural woman entrepreneur starts a unit making millet-based snacks with a small bank loan, employs ten women from her village, buys millets from local farmers and sells in nearby towns: creating jobs, income and demand for local crops.

Conclusion. Entrepreneurs are the agents who turn resources and ideas into enterprises; their number and quality largely decide the pace of a country's economic development.

(d) PERT and CPM used in project management

Meaning. PERT (Programme Evaluation and Review Technique) and CPM (Critical Path Method) are network techniques for planning, scheduling and controlling projects made up of many interdependent activities. Both represent the project as a network diagram of activities and events, showing which activities must precede others. PERT is used where activity times are uncertain and draws on probability; CPM where times are fairly well known.

Steps. List all activities; establish their sequence and dependence; draw the network; estimate the time of each activity; find the critical path: the longest path through the network, which gives the minimum time to complete the project; compute slack (float) for non-critical activities; and monitor progress, giving priority to critical activities.

CPM. Activity times are known with fair certainty (one time estimate), as in construction or maintenance. CPM also considers the trade-off between time and cost: activities can be crashed (speeded up) at extra cost to shorten the project.

PERT. Used where activity times are uncertain, as in research and development. Each activity has three estimates, optimistic (o), most likely (m) and pessimistic (p), and the expected time is (o + 4m + p) ÷ 6. The probability of completing the project by a given date can be estimated.

Use in control. Managers know which activities cannot be delayed without delaying the whole project, where resources can be shifted from activities with slack, and how far the project is behind schedule.

Example. A college building a new auditorium finds that foundation work, structure and roofing lie on the critical path, while furniture purchase has three weeks of slack; supervision is concentrated on the critical activities.

Limitations. Time estimates may be unreliable, large networks are complex, and the techniques focus on time more than quality.