NATURE OF MANAGEMENT Basic Concepts of Management Elements Of Management Levels Of Management & Their Respective Functions.

ions. Management External Environment The Social Responsibility of Manager. Professionalism in Management.

Origin of the word Management Manager- Italian word- maneggiare Mesnagement (later menagement )- French word Additional Key Concepts Managers are the people responsible for supervising the use of an organizations resources to meet its goals. Resources are organizational assets and include: People, Machinery, Raw materials, Information, skills, Financial capital.

DEFINITION OF MANAGEMENT Henry Fayol says, To manage is to forecast and plan, to organise, to direct, to co-ordinate and to control. F. W. Tailor, Management is an art of knowing what you want to do and then seeing that it is done in the best and the cheapest way.

Management Management is a process of working with and through others to achieve organizational objectives in a changing environment. Central to this process is the effective and efficient use of limited resources. Efficiency versus Effectiveness

Efficiency:
Operating in such a way that resources are not wasted

Effectiveness:

Effectiveness comes from taking the time to stop and evaluate, rather than running faster and faster

Do things right Do right things

ELEMENTS OF MANAGEMENT Man Machine Money Material Method IMPORTANCE OF MANAGEMENT Effective utilization of resources

 Development of resources Stability in the society Incorporating innovations Integrating interest groups FEATURES OF MANAGEMENT Management is Universal: applicable in all the areas. Management has an existence of objectives Management is a unifying area: reconciles individual goal with organizational goal. Management is a social process: it is by the people, through and for the people. Management is organised. Management is intangible:is an unseen or invisible force. Management is situational:different ways of doing things. Management is an art as well as science:contains theoretical and practical knowledge.

NATURE OF MANAGEMENT PROCESS -Levels of Management

KINDS OF MANAGERS BY LEVEL Top management: consists of board of directors and chief executives. Broadly it performs the following functions: To analyze and interpret changes in management To establish long term corporate plans To formulate and approve master budget and departmental budgets. To design broad organization structure Intermediate management: comprises of departmental and divisional heads e.g. marketing manager. Its broad functions include: Accountable for the performance of his division He coordinates and controls the activities of all personnel working in different branches or sections of his particular department. Lower level management: consists of supervisors,foremen,sales officers. Its functions include: Planning day to day production within the goals laid down To assign jobs to workers Ordering an instructing

 Advising and assisting workers by explaining work procedures.

FUNDAMENTAL MANAGEMENT SKILLS Technical Skills necessary to accomplish or understand the specific kind of work being done in an organization.

Interpersonal The ability to communicate with, understand, and motivate both individuals and groups.

Conceptual The managers ability to think in the abstract and to see the big picture. To perceive how all the parts fit together.

Managerial Roles Described by Mintzberg. A role is a set of specific tasks a person performs because of the position they hold.

Roles are directed inside as well as outside the organization. There are 3 broad role categories: 1. Interpersonal 2. Informational 3. Decisional Interpersonal Roles Roles managers assume to coordinate and interact with employees and provide direction to the organization. Figurehead role: symbolizes the organization and what it is trying to achieve.

Leader role: train, counsel, mentor and encourage high employee performance. Liaison role: link and coordinate people inside and outside the organization to help achieve goals.

Informational Roles Associated with the tasks needed to obtain and transmit information for management of the organization. Monitor role: analyzes information from both the internal and external environment. Disseminator role: manager transmits information to influence attitudes and behavior of employees. Spokesperson role: use of information to positively influence the way people in and out of the organization respond to it.

Decisional Roles Associated with the methods managers use to plan strategy and utilize resources to achieve goals. Entrepreneur role: deciding upon new projects or programs to initiate and invest. Disturbance handler role: assume responsibility for handling an unexpected event or crisis. Resource allocator role: assign resources between functions and divisions, set budgets of lower managers. Negotiator role: seeks to negotiate solutions between other managers, unions, customers, or shareholders.

SOCIAL RESPONSIBILITY OF MANAGER DefinitionSocial responsibilities refer to the businessmans decisions and actions taken for reasons atleast partially beyond the firms direct economic or technical interest. Impact of the decision of business on the society SHAREHOLDERS EMPLOYEES

 CUSTOMERS CREDITORS AND SUPPLIERS SOCIETY GOVERNMENT SHAREHOLDERS: Interest Use of the capital Good returns on capital (dividend and increase in stock Information value)

EMPLOYEES: Treat workers as the main pillars of the organization Promote cooperation between employees and employers Harmonious and healthy working atmosphere Provide fair wages Other benefits to motivate them

CUSTOMERS: Charging reasonable prices Standardized and quality product Easy availability of goods and services Abstaining from unethical practices Refraining from deceiving customers

SOCIETY: Using its technical expertise to solve local problems Setting socially desirable standards of living Providing basic amenities, healthcare and education facility

Establishing development programs for the benefit of economically weaker sections of the society Playing an important role in civic affairs

GOVERNMENT: Be law-abiding Pay taxes and other dues fully, timely and honestly Not bribe government servants Not try to use political influence in its favour McDonald $15-20 million for Ronald McDonald House Charity Tata group Colgate - educating kids HUL - CRY IBM- donated computers

PROFESSION Profession means an occupation by which the intelligence and the efforts for the purpose of providing skilled service or advice to others for an agreed amount. MANAGEMENT A PROFESSION 1. Existence of organized and systematic knowledge 2. Formalized methods of acquiring training 3. Existence of professional association 4. Existence of ethical code of conduct 5. Service motive Foundation of A Profession Experience Education Training

FREDERICK WINSLOW TAYLOR Father of Modern Management In 1895- proposed a Piece Rate System: Observe & Analyze set the standard for job (use Time and Motion studies) Pay workers for meeting/exceeding standard Pay individual worker not everyone, or group/department, or the job = pay according to individual value to business

What Adam Smith had done for markets, Taylor does for the firm place wealth creation squarely on the individual worker who is managed, rewarded for effort. Biography: Wealthy Philadelphia Quaker family. Worked in hydraulics factory as laborer/foreman/chief engineer At 25 earned college degree in engineering At 35- consultant: introduced functional foreman, production planning, differential pay= cut costs/increased production) 1905 wrote Shop Management 1909-14: Lecturer at Harvard Management consultant US Navy and Army 1911- Wrote Scientific Management Soldiering people dont always try/work hard. WHY? If we work hard and complete the job no more work next day; fewer workers needed! SO what is the amount of time needed to do the job? How should it be performed One Best Way What is the standard?

F.W. TAYLOR AND SCIENTIFIC MANAGEMENT Scientific Management The systematic study of the relationships between people and tasks for the purpose of redesigning the work process to increase efficiency. Four Principles of Scientific Management 1) Study the way workers perform their tasks, gather all the informal job knowledge that workers possess and experiment with ways of improving how tasks are performed Time-and-motion study

2) Codify the new methods of performing tasks into written rules and standard operating procedures 3) Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures 4) Establish a fair or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level

Problems with Scientific Management Managers frequently implemented only the increased output side of Taylors plan. Workers did not share in the increased output.

Specialized jobs became very boring, dull. Workers ended up distrusting the Scientific Management method.

Workers could purposely under-perform. Management responded with increased use of machines and conveyors belts.

FAYOLS PRINCIPLES OF MANAGEMENT Division of Labor: allows for job specialization. Jobs can have too much specialization leading to poor quality and worker dissatisfaction.

Authority and Responsibility - Both formal and informal authority resulting from special expertise. Unity of Command - Employees should have only one boss. Line of Authority - A clear chain of command from top to bottom of the firm. Centralization - The degree to which authority rests at the top of the organization. Unity of Direction - A single plan of action to guide the organization. Equity - The provision of justice and the fair and impartial treatment of all employees. Order - The arrangement of employees where they will be of the most value to the organization and to provide career opportunities. Initiative - The fostering (development) of creativity and innovation by encouraging employees to act on their own. Discipline - Obedient, applied, respectful employees are necessary for the organization to function. Remuneration of Personnel - An equitable uniform payment system that motivates contributes to organizational success. Stability of Tenure of Personnel - Long-term employment is important for the development of skills that improve the organizations performance. Subordination of Individual Interest to the Common Interest - The interest of the organization takes precedence over that of the individual employee. Esprit de corps - Comradeship (Company, friendship), shared enthusiasm foster (shared) devotion to the common cause (organization). THE HAWTHORNE STUDIES: NEW DIRECTION The Hawthorne Experiments were a series of studies into worker productivity performed at the Cicero plant beginning in 1924 and ceasing in 1932, initially conducted by the National Research Council and later by Western Electric and Harvard University

Illumination Studies, 1924 -1927: Does Use of Electric Lights Increase Productivity? Hypothesis: Increased illumination is correlated with higher productivity. Finding: No relationshipHawthorne effect or "halo effect Researcheraffects outcome (bias) 2nd Hawthorne Experiment Relay Assembly Test Room Experiments, 1927-1929 Harvard research team set up experiment with 5 females from Relay Assembly area to test impact of incentives and work conditions on worker fatigue There is no conclusive evidence that these affected fatigue or productivity.Productivity and workersatisfaction increase whenconditions are improvedand made worse. 3rd Hawthorne Experiment Mica-Splitting Test group, 1928 1930 Relationship between work conditions and productivity, by maintaining a piece-rate incentive system and varying work conditions Productivity increased by about 15% and researchers concluded that productivity was affected by non-pay considerations Conclusion: social dynamics were the basisof worker performance. Hawthorne Interviews Plant-wide Interview program, 1928-1931 1. Western Electric implemented a plant-widesurvey of employees to record their concerns and grievances. From 1928 to 1930, 21,000 employees were interviewed. 2. Data supported the research conclusion that work improved when supervisors began to pay attention to employees, that work takes place in a social context in which work and non-work considerations are important, norms and groups matter to workers. Hawthorne: Final Experiment Bank Wiring Observation group, 1931-1932 The final test studying 14 male workers in the Bank Wiring factory to study the dynamics of the group when incentive pay was introduced.

There was no effect. Why?

Work group established a work norm a sharedexpectation about how much work should beperformed in a day and stuck to it, regardless ofpay. The conclusion: informal groups operate in the work environment to manage behavior. Hawthorne Experiments Importance Changed perspective in management from Taylors engineering approach to a social sciences approach, leading to "Human Relations" approach and, later, "Organization Behavior" approach: Engineering approach subordinated to social sciences Managers = leaders, motivators, communicators At one time major contributors to Management theory worked on Hawthorne experiments. Elton Mayo - Human Relations approach (to 1950s). Mayos viewslead to the construction of manageras a leader.

MANAGEMENT FUNCTIONS OR PROCESS OF MANAGEMENT Planning Organization Staffing Directing Decision Making Controlling Coordination Motivating Innovation Representation

The traditional classification of management functions

Planning

Organizing

Controlling

Directing

Management ment Functions

Function 1: Planning Develop Strategies for Success. Set Goalsand Objectives Develop Action Plans Function 2: Organizing Employee Activities Facilities and Equipment Decision Making Supervision Resource Distribution

Function 3: Directing Implementing Plans Motivating People

Function 4: Controlling Monitoring Progress Resetting the Course Correcting Deviations

FUNCTIONS OF MANAGEMENT VERSUS LEADERSHIP

Planning

Decision Making

Directing

Controlling

WHAT SKILLS DO MANAGERS NEED? (KATZ 1955)

Organizing

Staffing

Too often managers over-rely on interpersonal skills. However, careers in management depend heavily on the managers technical skills and especially on the managers conceptual skills. PLANNING DEFINITION Planning involves selecting mission and objectives and the actions to achieve them; it requires decision-making that is, choosing from alternative courses of action. Heinz and Koontz

A plan is a trap laid to capture. -Allen Planning is the process of bridging the gap between where we are and where we want to be in the future. Thinking before doing is planning. Nature Of Planning

Characteristics Of Planning Goal- oriented An intellectual or Rational process A primary function Pervasive (Strong/Single minded, Determined, Persistent) Forward looking A perpetual (unending) process An integrated process Involves choice

Planning Process

 Management produces Order and Management

Leaders

nt produces Order and Consistency ent Order and Consistency

Leadership produces Change and

p Motivat

produces Change and Movement Change and Movement

Conceptual skills

Technica

skills Speci

skills l skills Logical reasoning Sensi

Interpers

Types of Planning Plans based on organizational levels

Making Planning Effective Linked to long-term objectives Direction for action Consistent Feasible Simplicity Flexible

ORGANIZING

 Organizing is a function in which the synchronization and combination of human, physical and financial resources takes place. All the three resources are important to get results. DEFINITION According to Chester Barnard, Organizing is a function by which the concern is able to define the role positions, the jobs related and the co- ordination between authority and responsibility. Hence, a manager always has to organize in order to get results. Organizing is a technical function; it means establishing authority and responsibility relationships, and formal structure and reporting relationships. Organizing focuses on grouping activities and resources in a logical manner, including the division of work and job design, work methods and processes, coordination among units, and the use of information and feedback systems. Organizingis establishing the internal organizational structure of the organization. The focus is on division, coordination, and control of tasks and the flow of information within the organization. It is in this function that managers distribute authority to job holders. Organizing establishes relationships between activity and authority.

Importance Specialization Well defined jobs Clarifies authority Co- ordination Effective administration Growth and Diversification Sense of security Scope for new changes The various steps involved in this process Determination of Objectives

 Enumeration (list) of Objectives Classification of Activities Assignment of Duties Delegation of Authority Determination of Objectives It is the first step in building up an organization. Organization is always related to certain objectives. Determination of objectives will consist in deciding as to why the proposed organization is to be set up Enumeration (List) of ObjectivesThe first step in organizing group effort is the division of the total job into essential activities. Each job should be properly classified and grouped. For example, the work of an industrial concern may be divided into the following major functions production, financing, personnel, sales, purchase, etc. Classification of Activities Activities according to similarities and common purposes and functions and taking the human and material resources into account. Then, closely related and similar activities are grouped into divisions and departments and the departmental activities are further divided into sections. Assignment of Duties Here, specific job assignments are made to different subordinates for ensuring a certainty of work performance. Each individual should be given a specific job to do according to his ability and made responsible for that. Delegation of Authority Authority without responsibility is a dangerous thing and similarly responsibility without authority is an empty vessel. Everybody should clearly know to whom he is accountable; corresponding to the responsibility authority is delegated to the subordinates for enabling them to show work performance. ORGANISATION Introduction

 Organization involves division of work among people whose efforts must be coordinate to achieve specific objectives Definition OfOrganisation McFerland has defined organization as, "an identifiable group of people contributing their efforts towards the attainment of goals". Mooney and Railey, "Organization is the form of every human association for the attainment of a common purpose. OrganisationAs A Process Organization is the process of establishing relationship among the members of the enterprise. The relationships are created in terms of authority and responsibility. Principles OfOrganisation Consideration of unity of objectives Specialization Co-ordination Clear unbroken line of Authority Responsibility Efficiency Delegation Unity of Command: Span of Management: Communication Flexibility Organisation Structure An organization structure shows the authority and responsibility relationships between the various positions in the organization by showing who reports to whom. Organization involves establishing an appropriate structure for the goal seeking activities. It is an established pattern of relationship among the components of the organization.

Formal And Informal Organisation Formal Organization: -"a system of consciously coordinated activities or forces of two or more persons. It refers to the structure of well-defined jobs, each bearing a definite measure of authority, responsibility and accountability." Characteristic Features of formal organization Laid down by the top management Formal organization prescribes the relationships Concentrates on the jobs to be performed Individuals are fitted into jobs Is bound by rules, regulations and procedures. authority, responsibility and accountability of each level are clearly defined. division of labor and specialization to achieve efficiency in operations. coordination proceeds according to the prescribed pattern. Advantages of formal organization on the jobs to be performed. everybody responsible for a given task. bound by rules, regulations and procedures. people of the organization to work together Disadvantages or criticisms of formal organization does not consider the goals of the individuals. bound by rigid rules, regulations and procedures. This makes the achievement of goals difficult. Informal Organization an informal organization is an organization which is not established by any formal authority, but arises from the personal and social relations of the people. Characteristics features of informal organization

 It is unplanned Reflects human relationships. It is not based on rules, Informal organizations are based on common taste, problem, language, Benefits of Informal organization It is more effective. Many things which cannot be achieved through formal organization can be achieved It provides social satisfaction to group members. Job satisfaction. The best means of employee communication. It serves as an agency for social control of human behavior. Differences Between Formal and Informal Organization Formal Organization: Formal organization is established with the explicit aim of achieving well-defined goals. The social and psychological needs and interests of members of the organizationget little attention. In formal organization, much emphasis is placed on efficiency, discipline, conformity, consistency and control. The roles and relationships of people in formal organization are impersonally defined Is bound together by authority relationships among members.

Informal Organization: Informal organization springs on its own. Its goals are ill defined andIntangible. Is characterized by a generalized sort of power relationships.

 In informal organization the relationships among people are interpersonal. Is characterized by relative freedom, spontaneity, homeliness and warmth. The socio psychological needs, interests and aspirations of members get priority.

Organisational Structures Why Have a Structure? All businesses have to organise what they do A clear structure makes it easier to see which part of the business does what There are many ways to structure a business Some Key Terms Flat or tall structure Span of control Chain of command Hierarchy Delegation Empowerment (Authority) Ways to Structure a Business By Function: arranging the business according to what each section or department does By Product or Activity: organising according to the different products made By Area: geographical or regional structure By Customer: where different customer groups have different needs By Process: where products have to go through stages as they are made What are the advantages/disadvantages of different types of business structure? Pros and Cons of Different Structures

 This depends on the business type, size and structure used Lets look at a functional structure:

Analyzing Current Status opportunities T2 Planning Required Desired status Statusurrent Status Establishing objectives

Gap

Functional Structure

Reviewing the plans

Organisation By Product/Activity

An Example of Organisation by Product/Activity

Formulating of of Choice of Evaluation of ormulatingIdentifi hoice of valuation of rmulating of dentific mulating of oice of aluation of entifica
Dimensions

Coverage of activities Importance of contents Time period inv Approach adop Degree of Formalization

Organisation By Area Hewlett-Packards Headquarters Worldwide

Marketing

Type o
Accounts Personnel

ype of

Other Organisational Structures By Customer:Similar effects to structuring by product By Process:Similar to structuring by function

ORGANISATIONAL STRUCTURES Flat Structure Organisation In contrast to a tall organisation, a flat organisation will have relatively few layers or just one layer of management. This means that the Chain of Command from top to bottom is short and the span of control is wide. Due to the small number of management layers, flat organisations are often small organisations. Flat Structure

Advantages of flat Organisations More/Greater communication between management and workers Better team sprit Less bureaucracy and easier decision making. Fewer levels of management which includes benefits such as lower costs as managers are generally paid more than worker. Disadvantages of flat Organisations Workers may have more than one manager/boss. May limit/hinder the growth of the organisation. Structure limited to small organisations such as partnerships, co-operatives and some private limited companies.

 Function of each department/person could be blurred and merge into the job roles of others. Tall Structure Organisation In its simplest form a tall organisation has many levels of management and supervision. There is a long chain of command running from the top of the organisationeg Chief Executive down to the bottom of the organisationeg shop floor worker. Tall Structure

Advantages of tall Organisations There is a narrow span of control ie each manager has a small number of employees under their control. This means that employees can be closely supervised There is a clear management structure The function of each layer will be clear and distinct. There will be clear lines of responsibility and control.

 Clear progression and promotion ladder Disadvantages of tall OrganisationsThe freedom and responsibility of employees (subordinates) is restricted Decision making could be slowed down as approval may be needed by each of the layers of authority. Communication has to take place through many layers of management. High management costs because managers are generally paid more than subordinates. Each layer will tend to pay its managers more money than the layer below it. Matrix (or project-based) organisations A Matrix structure organisation contains teams of people created from various sections of the business. These teams will be created for the purposes of a specific project and will be led by a project manager. Often the team will only exist for the duration of the project and matrix structures are usually deployed to develop new products and services. Advantages of matrix Individuals can be chosen according to the needs of the project. The use of a project team which is dynamic and able to view problems in a different way as specialists have been brought together in a new environment. Project managers are directly responsible for completing the project within a specific deadline and budget. Disadvantages A conflict of loyalty between line managers and project managers over the allocation of resources. If teams have a lot of independence can be difficult to monitor. Costs can be increased if more managers (ie project managers) are created through the use of project teams

Matrix Structure

IMPORTANCE OF ORGANISATION Facilitates Administration Facilitates Growth and Diversification Provides for Optimum use of Technological Improvements Encourages Human use of Human Beings Stimulates Creativity Facilitates stability of the organisation Reduces Employee Turnover Reduces Duplication of Activities Fosters Coordination Facilitates Administration A properly designed and balanced organization facilitates both management and operation of the enterprise. It increases management's efficiency and

promptness, avoids delay and duplication of work and motivates the employee to perform their job efficiently. Facilitates Growth and Diversification The organization structure should provide for expansion and diversification of the enterprise otherwise, the enterprise will find itself in a serious administrative crisis. Provides for Optimum use of Technological Improvements A sound organization structure facilitates the optimum use of technological improvements like computer systems etc. Encourages Human use of Human Beings A sound organization provides for efficient selection, training and development of staff, job rotation and job enlargement. The organization structure can profoundly affect the people of the company. Proper organization facilitates the intensive use of human capital. Stimulates Creativityorganization provides sufficient freedom to the managers and encourages their initiative, independent thinking and creativity. Facilitates stability of the organization By ensuring delegation of authority, two-way communication, co-operation, effectiveleadership, employee morale and flexibility to adjust to changes in the conditions, a soundorganization facilitates stability of the organization. Reduces Employee Turnover Organization increases employee satisfaction, ensures better relations between the management and the workers, and thereby reduces employee turnover. Reduces Duplication of Activities Organisation avoids delay and duplication of activities and consequent confusion by ensuring well-defined responsibilities and authority. Fosters Coordination By providing the framework for holding together the various functions in an orderlypattern, organization fosters co-ordination.

ORGANISATION CHARTS AND MANUALS Organization chart: The pattern of network of relations between the various positions in an organization as well as between the persons who hold those positions is referred to as "Organization chart". In the word of J Batty, "An organization chart is a diagrammatic representation of the framework or structure of an organization." The organization chart has the following characteristics: It is a diagrammatical presentation l It shows principal lines of authority in the organization It shows the interplay of various functions and relationships l It indicates the channels of communication. Advantages of Organization Chart It gives a clear picture of the organization structure. It shows at a glance the lines of authority and responsibility. to avoid misunderstanding of jurisdictional problems outsiders can easily know the persons whom they have to approach in connection with their work. to avoid overlapping and duplication of authority and secure unity of command. what extra training is required for promotion to a higher position. Types of Organization Chart An organization chart can be drawn in different forms. They are: Top-to-down chart or vertical chart Left-to-right chart or Horizontal chart Circular chart.

Top-to-down chart or vertical chart: Most organizations use this type of chart which presents the different levels of organization in the form of a pyramid with senior executive at the top of the chart and successive levels of management depicted vertically below that Left-to-right or Horizontal Chart: Horizontal charts which read from left to right areoccasionally used. The pyramid lies horizontally instead of standing in the vertical position.The line of command proceeds horizontally from left to right showing top level at the left and each successive level extending to the right. Circular Chart: In this chart, top positions are located in the centre of the concentric circle. Positions of successive echelons extend in all directions outward from the centre. Positions of equal status lie at the same distance from the centre on the same concentric circle

MEANING OF ORGANIZATION MANUAL An organization may prepare a Manual or Management Guide. Manual sets down in the form of a book or booklet all the details of the organization. Good organization manual has the following contents. 1.Nature of the enterprise 2. Objectives of the enterprise 3. Policies of the management 4. Job Descriptions 5. Duties and responsibilities of various personnel 6. Instructions relating to the performance of standard as well as non-standard jobs.

Types of Manuals Policy Manuals:

 Operations Manual: Organization Manual: Departmental Practice Manual: Rules and Regulations Manual: Policy Manuals: It describes the overall limitations within which activities are to take place and thus reveals the broad courses of managerial action likely to take place under certain conditions. Operations Manual: It is prepared to inform the employees of established methods, procedures and standards of doing the various kinds of work. Departmental Practice Manual: It deals in detail with the internal policies,organization and procedures of one department. Organization Manual: It explains the organization, the duties and responsibilities of various departments, and their respective sub-divisions. Rules and Regulations Manual: It gives information about the operating rulesand employment regulations. It is a handbook of employment rules. Advantages of Manuals 1. It contains in writing all-important decisions relating to internal organization of theenterprise. 2. It avoids conflicts and overlapping of authority. 3. It enables new employees to know the various procedure and practice in the shortest possible time. 4. It enables quick decisions. 5. It contains rules and regulations which employees must follow. Disadvantages of Manual

 1. The preparation of manual is costly and time consuming and process. 2. Manuals leave little scope of individual's initiative and direction. 3. Manuals bring rigidity to the organization. 4. Manuals may put on record those relationships which no one would like to see exposed. Staffing Staffing is filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating and compensating are the specific activities included in the function. Staffing success is having the "right person" in a position, rather than simply filling a position.

Directing Directingis influencing people's behavior through motivation, communication, group dynamics, leadership and discipline. The purpose of directing is to channel the behavior of all personnel to accomplish the organization's mission and objectives while simultaneously helping them accomplish their own career objectives.

One important category of directing Motivation covers up ability and skill deficiencies in employees. The most effective motivation for employees comes from within each employee self-motivation. Highly motivated people perform better than unmotivated people.

Controlling Controlling - The final function of management Controlling is a five-step process of establishing performance standards based on the firm's objectives, measuring and reporting actual performance, comparing the two, and taking corrective or preventive action as necessary. The basic purpose of controlling is to determine how successful the planning function has been.

OBJECTIVES Objectives are the goals, aims or purposes that organizations wish to achieve over varying periods of time. Objective is a term commonly used to indicate the end point of a management program. Types of Objectives

Organizational Hierarchy

Board of Directors and Top Level Managers

Socio-economic purpose

Mission In all Key Areas Middle-Level Managers Divisional Objectives Departmental Objectives

Lower-Level Managers

Department and Unit Objectives for Subordinates Performance goal Development goals

Nature Of Objectives Hierarchy of Objectives The process of formulating objectives and the organizational hierarchy A network of objectives Multiplicity of objectives

Advantages of objectives

Unified planning Individual motivation Co-ordination Control Basis for Decentralization

MANAGEMENT BY OBJECTIVES Peter Drucker in his 1954 book 'The Practice of Management'. The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employees actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.

Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. THE GILBRETHS 1. Break up and analyze every individual action necessary to perform a particular task into each of its component actions 2. Find better ways to perform each component action 3. Reorganize each of the component actions so that the action as a whole could be performed more efficiently-at less cost in time and effort Administrative Management Theory Administrative Management The study of how to create an organizational structure that leads to high efficiency and effectiveness.

Max Weber Developed the principles of bureaucracy as a formal system of organization and administration designed to ensure efficiency and effectiveness.

Webers Principles of Bureaucracy 1) A managers formal authority derives from the position he holds in the organization. 2) People should occupy positions because of their performance, not because of their social standing or personal contacts.

3) The extent of each positions formal authority and task responsibilities and its relationship to other positions should be clearly specified. 4) Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them. 5) Managers must create a well-defined system of rules, standard operating procedures, and norms so they can effectively control behavior .

RULES, SOPS AND NORMS Rules Formal written instructions that specify actions to be taken under different circumstances to achieve specific goals Standard Operating Procedures (SOPs) Specific sets of written instructions about how to perform a certain aspect of a task Norms Unwritten, informal codes of conduct that prescribe how people should act in particular situations FAYOLS PRINCIPLES OF MANAGEMENT Division of Labor: allows for job specialization. - Jobs can have too much specialization leading to poor quality and worker dissatisfaction. Authority and Responsibility - Both formal and informal authority resulting from special expertise. Unity of CommandEsprit de corps - Comradeship, shared enthusiasm foster devotion to the common cause (organization). Behavioral Management Theory Behavioral Management

 The study of how managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals. Mary Parker Follett Concerned that Taylor ignored the human side of the organization Suggested workers help in analyzing their jobs If workers have relevant knowledge of the task, then they should control the task Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932. The Hawthorne StudiesWorker productivity was measured at various levels of light illumination. Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased. Human Relations Implications Hawthorne effect workers attitudes toward their managers affect the level of workers performance Human relations movement advocates that supervisors be behaviorally trained to manage subordinates in ways that elicit their cooperation and increase their productivity Implications Behavior of managers and workers in the work setting is as important in explaining the level of performance as the technical aspects of the task Demonstrated the importance of understanding how the feelings, thoughts, and behavior of work-group members and managers affect performance Theory X and Theory YDouglas McGregor proposed the two different sets of assumptions about workers. Theory X assumes the average worker is lazy, dislikes work and will do as little as possible. Workers have little ambition and wish to avoid responsibility

 Managers must closely supervise and control through reward and punishment. Theory Y assumes workers are not lazy, want to do a good job and the job itself will determine if the worker likes the work. Managers should allow workers greater latitude (liberty), and create an organization to stimulate the workers. Theory X vs. Theory Y

Management Science TheoryContemporary approach to management that focuses on the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services. Quantitative management utilizes linear and nonlinear programming, modeling, simulation, queuing theory and chaos theory. Operations management techniques used to analyze any aspect of the organizations production system. Total Quality Management (TQM) focuses on analyzing input, conversion, and output activities to increase product quality. Management Information Systems (MIS) provides information vital for effective decision making.

Organizational Environment The set of forces and conditions that operate beyond an organizations boundaries but affect a managers ability to acquire and utilize resources The Open-Systems View Employees should have only one boss.

Line of Authority - A clear chain of command from top to bottom of the firm. Centralization - The degree to which authority rests at the top of the organization. Unity of Direction - A single plan of action to guide the organization. Equity - The provision of justice and the fair and impartial treatment of all employees. Order - The arrangement of employees where they will be of the most value to the organization and to provide career opportunities. Initiative - The fostering of creativity and innovation by encouraging employees to act on their own. Discipline - Obedient, applied, respectful employees are necessary for the organization to function. Remuneration of Personnel - An equitable uniform payment system that motivates contributes to organizational success. Stability of Tenure of Personnel - Long-term employment is important for the development of skills that improve the organizations performance. Subordination of Individual Interest to the Common Interest - The interest of the organization takes precedence over that of the individual employee. Esprit de corps - Comradeship, shared enthusiasm foster devotion to the common cause (organization). Behavioral Management Theory Behavioral Management The study of how managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals.

Mary Parker Follett Concerned that Taylor ignored the human side of the organization Suggested workers help in analyzing their jobs If workers have relevant knowledge of the task, then they should control the task

Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932. The Hawthorne Studies Worker productivity was measured at various levels of light illumination. Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased.

Human relations movement advocates that supervisors be behaviorally trained to manage subordinates in ways that elicit their cooperation and increase their productivity Implications Behavior of managers and workers in the work setting is as important in explaining the level of performance as the technical aspects of the task Demonstrated the importance of understanding how the feelings, thoughts, and behavior of work-group members and managers affect performance Theory X and Theory Y Douglas McGregor proposed the two different sets of assumptions about workers. Theory X assumes the average worker is lazy, dislikes work and will do as little as possible. Workers have little ambition and wish to avoid responsibility Managers must closely supervise and control through reward and punishment.

Theory Y assumes workers are not lazy, want to do a good job and the job itself will determine if the worker likes the work.

Managers should allow workers greater latitude (liberty), and create an organization to stimulate the workers.

Theory X vs. Theory Y

Management Science Theory Contemporary approach to management that focuses on the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services. Quantitative management utilizes linear and nonlinear programming, modeling, simulation, queuing theory and chaos theory. Operations management techniques used to analyze any aspect of the organizations production system. Total Quality Management (TQM) focuses on analyzing input, conversion, and output activities to increase product quality. Management Information Systems (MIS) provides information vital for effective decision making.

Organizational Environment The set of forces and conditions that operate beyond an organizations boundaries but affect a managers ability to acquire and utilize resources

The Open-Systems View Open System A system that takes resources for its external environment and transforms them into goods and services that are then sent back to that environment where they are bought by customers.

Inputs: the acquisition of external resources to produce goods and services Conversion: transforms the inputs into outputs of finished goods and services. Output: the release of finished goods and services to its external environment.

Closed System

 A self-contained system that is not affected by changes in its external environment. Likely to experience entropy and lose its ability to control itself Systems Synergy the performance gains that result from the combined actions of individuals and departments Possible only in an organized system

Contingency Theory There is no one best way to organize The idea that the organizational structures and control systems manager choose depend onare contingent oncharacteristics of the external environment in which the organization operates.

Type of Structure Mechanistic Structure

Authority is centralized at the top. Emphasis is on strict discipline and order Employees are closely monitored and managed. Can be very efficient in a stable environment.

Organic Structure Authority is decentralized throughout the organization. Departments are encouraged to take a cross-departmental or functional perspective Works best when environment is unstable and rapidly changing

CONTROLLING Knootz and ODonnel, Controlling is the measurement of accomplishment against the standards and the correction of deviations to assure attainment of objectives according to plans. Standards Performance Deviations Controlling Evaluation of performance and the implementation of corrective actions to accomplish organizational objectives. Importance Of Controlling 1. Coping with uncertainty 2. Detecting irregularities 3. Identifying opportunities 4. Handling complex situations 5. Decentralizing authority 6. Decentralizing authority 7. Minimizing costs Steps of controlling 1. Establishing standards 2. Measuring performance 3. Comparison of actual with standards 4. Taking corrective actions Requirements of effective controlling Controls should reflect plans, positions and structures (suitability). Timely and forward looking.

They should be objective and comprehensive (understandable). They should be cost effective. Identify only major expectations. Flexibility Motivational (employee centered ). Should provide adequate and complete information. Should not lead to less attention to other aspects

Types of control Feedforward control (future oriented) Concurrent control (steering control) Feedback control (past oriented) New Techniques PERT CPM HRA

Old Techniques Budgeting * Standard costing Responsibility centres* Financial statements Ratio analysis* Break- even analysis Audits Reports Rules and observations

BUDGETING Sales Selling and distribution cost Production Production cost Capital expenditure Cash Master (summary of all functional budgets)

Ratio analysis Liquidity ratios Leverage ratios Activity ratios Profitability ratios

Responsibility Centers Standard cost Discretionary expenses Revenue Profit Investment

Relationship between planning and controlling Use of IT in controlling Concept Of International Management Reasons For Some International Contemporary Issues Globalization & Global Business Practices.

REASONS 1. enhancing market

2. Huge profits 3. Getting products for home market 4. Satisfying managements desire 5. Protecting domestic market 6. Acquiring technology 7. Diversifying geographically

STAFFING Staffing involves manning the organization structure through proper and effective selection, appraisal and development of the personnel to fill the roles assigned to the employers/workforce. Staffing is filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating and compensating are the specific activities included in the function. Staffing success is having the "right person" in a position, rather than simply filling a position. According to Theo Haimann, Staffing pertains to recruitment, selection, development and compensation of subordinates.

STAFFING Staffinginvolves a set of activitiesaimedatattracting and selectingindividuals for positions in awaythatwillfacilitate the achievement of organizational goals. The two basic steps of staffing are recruitment and selection.

NATURE of Staffing An important managerialfunction A continuousactivity The basis of staffingfunctionis efficient management of personnels Helps in placing right men at the right job It isperformed by all managers Carried out in all types of organization Staffing PROCESSManpower requirements Recruitment Selection Orientation and Placement Training and Development Remuneration

Performance Evaluation Promotion and Transfer

Manpower Planning Manpower Planning which is also called as Human Resource Planning consists of putting right number of people, right kind of people at the right place, right time, doing the right things for which they are suited for the achievement of goals of the organization.

Procedure Analyzing the current manpower inventory Making future manpower forecasts Developing employment programs Design training programs

Analyzing the current manpower inventory Type of organization Number of departments Number and quantity of such departments Employees in these work units Manpower forecasting techniques commonly employed Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi technique Trend Analysis: Manpower needs can be projected through extrapolation (projecting past trends), indexation (using base year as basis), and statistical analysis (central tendency measure) Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch or in a division. Work Force Analysis: Whenever production and time period has to be analyzed, due allowances have to be made for getting net manpower requirements.

 Other methods: Several Mathematical models, with the aid of computers are used to forecast manpower needs, like budget and planning analysis, regression, new venture analysis. Developing employment programs Once the current inventory is compared with future forecasts, the employment programs can be framed and developed accordingly, which will include recruitment, selection procedures and placement plans.

Design training programs These will be based upon extent of diversification, expansion plans, development programs, etc. Training programs depend upon the extent of improvement in technology and advancement to take place. It is also done to improve upon the skills, capabilities, knowledge of the workers.

Importance of Manpower Planning Key to managerial functions Efficient utilization Motivation Better human relations Higher productivity

Types of Recruitment Internal Recruitment External Recruitment

3 Internal Sources Transfers Promotions (through Internal Job Postings) Re-employment of ex-employees

External Recruitment Employment at Factory Level

Advertisement Employment Exchanges Employment Agencies Educational Institutions Recommendations Labour Contractors

Employee Selection Process Right Men Right Job

Organizational Requirements = Skills & Qualifications Effective Matching impact Effective Selection

Organization Quality Performance of Employees

Results of Effective Selection Quality Performance of Employees Less Absenteeism Save Time & Money Employee Turnover

Selection Proper screening of candidates Tested Choosing the best candidate with o Best abilities o Skills o Knowledge for the required job

Selection Vs Recruitment Recruitment - Positive process - Motivates more of candidates to apply for the job o Creates a pool of applicants. o Just sourcing of data Selection - Negative process - Inappropriate candidates - Rejected here Recruitment precedes Selection

Employee selection Process Preliminary Interviews Application blanks Written Tests Employment Interviews Medical examination Appointment Letter

Preliminary Interviews Used to eliminate those candidates who do not meet the minimum eligibility criteria Skills, academic and family background, competencies and interests of the candidate are examined during preliminary interview Less formalized & planned than the final interviews. Candidates are given a brief up about the company & the job profile; Also examined how much the candidate knows about the company Preliminary interviews are also called screening interviews.

Application blanks Candidates who clear the preliminary interview are required to fill application blank

Contains data record of the candidates such as details about age, qualifications, reason for leaving previous job, experience, etc.

Written Tests Written tests conducted Aptitude test Intelligence test Reasoning test Personality test, etc. Tests are used to objectively assess the potential candidate (Not to be biased)

Employment Interviews Interaction between the interviewer and the potential candidate Used to find whether the candidate is best suited for the required job or not Consume time and money both Competencies of the candidate cannot be judged May be biased at times Should be conducted properly No distractions should be there in room Should be an honest communication between candidate and interviewer.

Medical examination Medical tests conducted to ensure physical fitness of the potential employee Will decrease chances of employee absenteeism

Appointment Letter A reference check is made about the candidate selected and then finally he is appointed by giving a formal appointment letter.

PERFORMANCE APPRAISAL Performance Performance appraisal refers to the degree of accomplishment of the tasks that make up an employee job often confused with effort which refers to energy expanded performance is measured in terms of results.

Appraisal Appraisal is a process of evaluation the performance or contribution of a company own people, especially workers, executives or managers towards the objectives and goals of the company.

Performance appraisal is a method of evaluating the behavior of employees in the work spot, normally including both the qualitative and quantitative aspects of job performance. Performance here refers to the degree of accomplish of the task that make up an individual job. Performance Appraisal is a process of obtaining analysis and recording information about the relative worth of an employee. Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development.

Performance Appraisal Definition:

It is the systematic evaluation of the individual with regard to his or her performance on the job & his potential for development. Systematic Ways of Doing PA The supervisors measure the pay of employees and compare it with targets and plans. The supervisor analyses the factors behind work performances of employees. The employers are in position to guide the employees for a better performance.

Objectives of PA Salary increase Promotion Training & development Feedback Pressure on employees

Features of Performance Appraisal Performance Appraisal is the systematic description of an employees job relevant strengths and weaknesses The basic purpose is to find out how well the employee is performing the job and establish a plan of improvement Appraisal is arranged periodically according to a defined plan Performance appraisal is a continuous process of every large organization Performance appraisal is not job evolution it refers to how well someone is doing the assigned job .Job evolution determine how much a job is worth to the organization and there what range of pay should be assigned to the job

Objectives of Performance Appraisal To maintain records in order to determine compensation packages, wage structure, salaries raises, etc. To identify the strengths and weaknesses of employees to place right men on right job. To maintain and assess the potential present in a person for further growth and development. To provide a feedback to employees regarding their performance and related status. It serves as a basis for influencing working habits of the employees. To review and retain the promotional and other training programs. To reduce grievances of the employees

Advantages of Performance Appraisal Promotion Compensation Employees Development Communication Motivation

Performance Evaluation In order to keep a track or record of the behavior, attitudes as well as opinions of the workers towards their jobs. For this regular assessment is done to evaluate and supervise different work units in a concern. It is basically concerning to know the development cycle and growth patterns of the employees in a concern.

Aims of a performance appraisal Give employees feedback on performance Identify employee training needs Document criteria used to allocate organizational rewards Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, bonuses, etc. Provide the opportunity for organizational diagnosis and development Facilitate communication between employee and employer Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements. To improve performance through counseling, coaching and development.

Promotion and Transfer Promotion is said to be a non- monetary incentive in which the worker is shifted from a higher job demanding bigger responsibilities as well as shifting the workers and transferring them to different work units and branches of the same organization.

Process of Performance Appraisal-

Disadvantages Closed Advantages Specialisation

Chief Executive

Board of Directors

INTRODUCTION TO MARKETING Understanding Marketing Management Marketing is the human activity directed at satisfying human needs and wants through an exchange process Kotler 1980 Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others Kotler 1991 Another Definition of Marketing Marketing is the study of an organizations relationship with its customers. What is marketing? Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably The Chartered Institute of Marketing

The right product, in the right place, at the right time, and at the right price For an exchange to occur; There are at least two parties. Each party has something that might be of value to the other party. Each party is capable of communication and delivery. Each party is free to reject the exchange offer. Each party believes it is appropriate or desirable to deal with the other party WHAT IS MARKETED? Places Properties Organizations

 Information Ideas Goods Services Events Experiences Persons A total system of interacting business activities designed to plan ,price ,promote and distribute want satisfying products and services to present and potential buyers. -William j Stanton Art of selling surplus Discover needs & translate in product service Marketers create the needs or needs preexist Create and serve demand for these products & services Nature Of Marketing Marketing is both consumer & competitor oriented It starts with consumer and ends with consumers by satisfying their needs profitably Marketing is an integrated process which is based models Must deliver goods and services in exchange of money self-centered competitor oriented on strategies and

Customer oriented

Market driven

Scope Of Marketing Marketing is typically seen as task of creating promoting goods and services to consumers and business. Goods: food,commodities, clothing,housing,cars, Steel,cotton are the main stay of the economy.

NCAER 2002 Distribution population company penetration HUL 88% NIRMA 56% COLGATE 33% PARLE FOODS 31% SERVICES Almost 60 % of the contribution to India's GDP from service sector. PATA(pacific Asia travels association) reported tourists arrived India in 2009 This would increase to 5.9 million in 2010. jet airways-air Sahara- 46% market share Indian airlines 25%,air deccan-13% spice jet 6%, Kingfisher 8 % 5.5 million foreign house hold

Rural

72.22 %

Urban

27.78%

Airlines ,Hotels,Entertainment, Education,Financial,Consulting,Tourism

EXPERIENCES There is market for different experiences.Like spending a week at Jammu and Kashmir and experiencing the skiing or climbing Mount Everest. A jungle safari, water sports, a roller coaster ride. Walt Disney,Essel world,Ramoji film city, planet holllywood EVENTS Marketers Promote Time Based Events. There are professionals who plan ,work out details of an event and make it perfectly. Event management companies. Olympics,Twenty-20,Auto-Expo, It Exhibition, Major trade shows, sports events,artistic performances. PERSONS Celebrity branding has become a major business. Tom peters marketing guru has advised every person can brand himself.

PLACES Cities, states, regions, and whole nations, compete actively to attract tourists, industries, company headquarters, residents.

Place marketers include: economic dev. Planners, Real estate agents, banks and PR agencies

PROPERTIES Properties are intangible rights of ownership of either real property(real estate) or financial property (stocks and bonds).These are bought and sold and thus can be marketed. Investment companies and banks ,and insurance firms are involved in its marketing to both individual as well as institutions. Hiranandani, DSK, Soft Corner Marketing,LIC housing, ICICI, HDFC home loans ORGANIZATIONS Organizations actively work to build a strong and favorable brand image In the mind of their publics .We call it as corporate branding Heritage Assets and capabilities People Values and culture Corporate Performance INFORMATION Information can be produced and marketed by as a product. Schools, colleges, universities, Encyclopedias,C.Ds, internet, books

The production,packaging, and distribution are one of the society's major industries. IDEAS Products and services are platforms for delivering some idea or benefit.Marketers try hard to search for core need they try to satisfy.

MARKETING STRATEGY PLANNING If we want to know what a business is, we have to start with its purpose. And its purpose must lie outside the business itself. In fact, it must lie in society since a business enterprise is an organ of society. There is one valid definition of business purpose: to create a customer.*

Key Customer Markets Consumer markets Business markets International Markets/Global markets Nonprofit/Government markets Core Concepts Needs, wants, and demands Target markets, positioning, segmentation Offerings and brands Value and satisfaction Marketing channels Supply chain Competition Marketing environment Marketing planning Core Concepts of Marketing Exchange and Transactions Relationships and Networks Simple Marketing System

Imaging and Printing Group

HP Financial Services

HP

Structure of Flows

Personal Systems Group

Enterprise Systems Group

Decision making -taking corrective corrective actions

Discu

Hewlett

Ad

Commenting standards and Expec Disadvantages Expectations vantages standards and Comparing with

Webers Principles of Principles of Bureaucracy of Bureaucracy

Establishing Performance Standard Performance Standard Americas Houston, Europe, Middle East, East, Africa Hewlett Packard
Performance

Standard

Measuring actual Performance

Asia Pa Hong K

Advantages

Disadva

Customer Equity How Much Is A Customer Worth How does an organization create a customer? Identifying customer needs Designing goods and services that meet those needs Communicating information about those goods and services to prospective buyers Making the goods or services available at times and places that meet customers needs Pricing goods and services to reflect costs, competition, and customers ability to buy Providing for the necessary service and follow-up to ensure customer satisfaction after the purchase*

Evolving Views of Marketings Role

G Amitabh

Industr Communication Bacchan charges 3-7 crores

Money Information

(a collect of seller

Market (a collection

Services, money Services, Money money

Money

Money

Money

Company Orientations Towards the Marketplace Production Concept Product Concept Selling Concept Marketing Concept Consumers prefer products that, are widely available and inexpensive offer the most quality, performance, or innovative features

Consumers will buy products only if the company aggressively promotes/sells these products. Focuses on needs/ wants of target markets & delivering value better than competitors The Marketing Concept

HOW CUSTOMERS FORM EXPECTATIONS

Goods, services R

services

Good s, servi ces

Man ufac turer mar kets

Taxes, Taxes, goods goods

a. Marketi Taxes, equal fu

goods

Taxes

Evolution of Marketing Production Era Sales Era Marketing Concept Era Societal Era Production Orientation Focuses on internal capabilities of firm. Field of Dreams strategy

 If we build it, they will come Best used when competition is weak demand exceeds supply generic products competing solely on price Problem is that they dont understand wants/needs of marketplace. Sales Orientation People will buy more goods/services if aggressive sales techniques are used. High sales will result in high profits. Used with unsought products life insurance encyclopedias Problem is that they dont understand wants/needs of marketplace. I can sell everything, if I know how to sell it Marketing Orientation Marketing concept The social and economic justification for an organizations existence is the satisfaction of customer wants and needs, while meeting organizational objectives. Focusing on customer wants so the organization can distinguish its products from competitors . Integrating all the organizations activities, including promotion, to satisfy these wants. Achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly. Requires: Top management leadership A customer focus

 Competitor intelligence strengths weaknesses Interfunctional coordination to meet customer wants/needs and deliver superior values. Societal Marketing Orientation Organization exists not only to satisfy customer wants/needs and to meet organizational objectives, but also to preserve and enhance individuals and societys long-term best interests. Extends marketing concept to serve one more customer - society as a whole.

b. Marketing as a more important function

Differences between Sales & Marketing Orientations Production/Sales Focus Organizations needs Producing/Selling goods/services Everybody Profit through max. sales volume

 Intensive promotion Marketing Focus Customers needs Satisfying customer wants/needs Specific groups of people Profit through customer satisfaction Coordinated mktg. activities (4 ps) Marketing Philisophies Orientation Key Ideas

Production

Focus on efficiency of internal operations if we make it, they will buy it

Sales

Focus on aggressive sales techniques and believe that high sales result in high profits

Marketing

Focus on satisfying customer needs and wants while meeting objectives - if they will buy it, we will make it

Societal

Focus on satisfying customer needs and wants while enhancing individual and societal well-being. I.e.-mfg using recyclables

Relationship Marketing Forging long-term partnerships with customers and contributing to their success. Companies benefit from

repeat sales/referrals that lead to increases in sales, market share and profits, and

decreased costs - its less expensive to serve existing customers than attract new ones. Customers benefit from: stable relationships with suppliers (especially in business-to-business) greater value and satisfaction discounts, (frequent flyer programs, shopper clubs, etc.) Successful relationship marketers have: customer-oriented personnel effective training programs employees with authority to make decisions and solve problems teamwork

Marketing Mix and the Customer

Four Ps

Product Price Place Promotion Four Cs Customer solution Customer cost Convenience Communication The Four Cs & The Four Ps

Finance

Productio ction
Human resources Human n resources ces Marketing Productio

Finance c. Marketing as the as the major d. function The customer as the customer as the the controlling factor

Production

Marketing

Customer ustomer Human resources e. The customer as the function and market integrative func Human resources

Implications of marketing Who are our existing / potential customers? What are their current / future needs? How can we satisfy these needs? Can we offer a product/ service that the customer would value? Can we communicate with our customers? Can we deliver a competitive product of service? Why should customers buy from us?

Finance

Successful marketing requires Profitable Offensive (rather than defensive) Integrated (Incorporated) Strategic (is future orientated) Effective (gets results) Marketing management process Analysis/Audit - where are we now? Objectives - where do we want to be? Strategies - which way is best? Tactics - how do we get there? Implementation - Getting there Control - Ensuring arrival Marketing Environment All the factors and forces influencing the companys ability to transact business effectively with its target market Includes: Microenvironment - forces close to the company that affect its ability to serve its customers. Macroenvironment - larger societal forces that affect the whole microenvironment

Production

Compan Customer The Profit y Fin Marketing eting Effort Concept

Marketing

Huma resour s Total

Customer Satisfaction

All the actors and forces influencing the companys ability to transact business effectively with its target market UNCONTROLLABLE FACTORS AFFECTING MARKETING DECISIONS

The Companys The Companys Microenvironment Companys Internal Environment- functional areas such as top management, finance, and manufacturing, etc. Customers - five types of markets that purchase a companys goods and services. Competitors - those who serve a target market with similar products and services. Public - any group that perceives itself having an interest in a companys ability to achieve its objectives.

Suppliers - provide the resources needed to produce goods and services. Marketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers. Demographic - monitors population in terms of age, sex, race, occupation, location and other statistics. Economic - factors that affect consumer buying power and patterns.

Natural - natural resources needed as inputs by marketers or that are affected by marketing activities. Political/legal Monopolies legislation Environmental protection laws Taxation policy Employment laws Government policy Legislation Economic Factors Inflation Employment Disposable income Business cycles Energy availability and cost Socio-cultural factors Demographics Distribution of income Social mobility Lifestyle changes Consumerism Levels of education Technological New discoveries and innovations Speed of technology transfer

 Rates of obsolescence Internet Information technology

Marketing Plan Market Analysis Company Analysis Determining the Goals Determining the Strategies Determining the Tactics Control Market Analysis Customer Analysis Segmentation Motivation

 Unmet Needs Competitor Analysis Who are our competitors (Rivals)? What advantages do they have? What are their goals? What are their strategies? What are their organizational structures? What are their strengths and weaknesses? Market Analysis Structural Analysis Industrial analysis Actual and potential size of the industry Growth of the industry Cost structure of the industry Distribution structure of the industry Changes in the industry Company Analysis SWOT analysis Strengths (internal) Weaknesses (internal) Opportunities (external) Threats (external)

ORGANISATIONAL STRUCTURES Why Have a Structure? All businesses have to organise what they do A clear structure makes it easier to see which part of the business does what There are many ways to structure a business Some Key Terms Flat or tall structure Span of control Chain of command Hierarchy Delegation Empowerment (Authority) Ways to Structure a Business By Function: arranging the business according to what each section or department does By Product or Activity: organising according to the different products made By Area: geographical or regional structure By Customer: where different customer groups have different needs By Process: where products have to go through stages as they are made What are the advantages/disadvantages of different types of business structure? Pros and Cons of Different Structures This depends on the business type, size and structure used

 Lets look at a functional structure:

Functional Structure Advantages

Cust omer

Word of Mouth Personal of Mouth nal

Specialisation each department focuses on its own work Accountability someone is responsible for the section Clarity know your and others roles Disadvantages Closed communication could lead to lack of focus Departments can become resistant to change Coordination may take too long Gap between top and bottom

Organisation by Product/Activity

Price

Soci
Advantages

Con

Marketing Company ing

Organisation by Product/Activity

Clear focus on market segment helps meet customers needs Positive competition between divisions Better control as each division can act as separate profit centre

Disadvantages Duplication of functions (e.g. different sales force for each division) Negative effects of competition Lack of central control over each separate division Organisation by Area Hewlett-Packards Headquarters Worldwide

Communication nication Promotion Place Customer romotion mer Advantages

Serve local needs better Positive competition More effective communication between firm and local customers Disadvantages Conflict between local and central management Duplication of resources and functions Other Organisational Structures By Customer: Similar effects to structuring by product By Process: Similar to structuring by function Organisational Structures Flat Structure Organisation In contrast to a tall organisation, a flat organisation will have relatively few layers or just one layer of management. This means that the Chain of Command from top to bottom is short and the span of control is wide. Due to the small number of management layers, flat organisations are often small organisations. Flat Structure

Advantages of flat Organisations More/Greater communication between management and workers Better team sprit Less bureaucracy and easier decision making. Fewer levels of management which includes benefits such as lower costs as managers are generally paid more than worker. Disadvantages of flat Organisations Workers may have more than one manager/boss. May limit/hinder the growth of the organisation. Structure limited to small organisations such as partnerships, cooperatives and some private limited companies. Function of each department/person could be blurred and merge into the job roles of others. Tall Structure Organisation In its simplest form a tall organisation has many levels of management and supervision. There is a long chain of command running from the top of the organisation eg Chief Executive down to the bottom of the organisation eg shop floor worker.

Advantages of tall Organisations There is a narrow span of control ie each manager has a small number of employees under their control. This means that employees can be closely supervised There is a clear management structure The function of each layer will be clear and distinct. There will be clear lines of responsibility and control. Clear progression and promotion ladder Disadvantages of tall Organisations The freedom and responsibility of employees (subordinates) is restricted Decision making could be slowed down as approval may be needed by each of the layers of authority. Communication has to take place through many layers of management.

 High management costs because managers are generally paid more than subordinates. Each layer will tend to pay its managers more money than the layer below it. Matrix ( or project-based) organisations A Matrix structure organisation contains teams of people created from various sections of the business. These teams will be created for the purposes of a specific project and will be led by a project manager. Often the team will only exist for the duration of the project and matrix structures are usually deployed to develop new products and services. Advantages of matrixIndividuals can be chosen according to the needs of the project. The use of a project team which is dynamic and able to view problems in a different way as specialists have been brought together in a new environment. Project managers are directly responsible for completing the project within a specific deadline and budget. DisadvantagesA conflict of loyalty between line managers and project managers over the allocation of resources. If teams have a lot of independence can be difficult to monitor. Costs can be increased if more managers (ie project managers) are created through the use of project teams

THE MARKETING RESEARCH Uses of Marketing Research

Convenienc ce

Key Point To practice marketing; to implement the marketing concepts; to implement marketing strategy, managers must make decisions. Many decisions require additional information and marketing research is needed in order to supply that information. We need Marketing Research to: Make the right decisions to Implement marketing Practice the marketing concept and

 Make the right decisions to select the right marketing strategy Research Objective Precise Detailed Clear Operational The Iceberg Principle

What is Marketing Research? (Burns and Bush Definition) Marketing research is the process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem. What is Marketing Research? AMA definition Marketing research: the function that links the consumer, customer, and public to the marketer through information information used to identify

and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve the understanding of marketing as a process. Market Research vs. Marketing Research Market research: the systematic gathering, recording, and analyzing of data with respect to a particular market, where market refers to a specific group in a specific geographic area. What is the purpose of Marketing Research? To link the consumer to the marketer by providing information that can be used in making marketing decisions What are the uses of Marketing Research? Identify marketing opportunities and problems Generate, refine, and evaluate potential marketing actions Monitor marketing performance Improve marketing as a process Classifying Marketing Research Studies Identifying marketing opportunities and problems Market-demand determination Market segments identification Marketing audits SWOT analysis A marketing plan outlines the specific actions you intend to carry out to interest potential customers and clients in your product and/or service and persuade them to buy the product and/or services you offer. For successful business marketing, you need to develop a proper business marketing plan, and then gauge its performance for your business growth. There are many things that your business marketing plan needs to address and these points may include some of the following: -What are your business marketing goals? -What is your target audience?

-Deciding business marketing system

SWOT Analysis A basic marketing plan begins with SWOT analysis about your company and the SWOT should be : A summary of the key elements in your business Brief, concise and interesting, without being too abbreviated Focused on the real issues facing your company Action-oriented, so that positive proposals can be envisaged Strengths- You can bank upon these. Weaknesses- Definitely need to be corrected Opportunities- Help you in setting the target where you want to reach. Threats- Make necessary contingency plan to combat threats which would automatically become a part of the marketing plan.

Classifying Marketing Research Studies Generating, refining, and evaluating potential marketing actions

 Proposed marketing-mix evaluation testing New-product prototype testing Advertising pretestingsee Insight Express AdInsight ad pretesting Monitoring marketing performance Image analysisbank image analysis Tracking studies...sales, market shares of all brands in our category Customer satisfaction studies Improving marketing as a process The purpose of these studies is to expand knowledge (basic research) of marketing as a process rather than to solve a specific problem facing a companyHow does background music affect perceptions of productsHow preshopping information affects product returnsUnderstanding cultural differences in consumer impatienceall in Journal of Marketing. Identifying Target Market Identifying Market Characteristics Measurement of Marketing Potential Competitors Analysis Sales Analysis Identify and forecast Business Trends Sales Forecasting New Product/Service Acceptance and Potential Long Range Forecasting of Marketing Mix Variables Pricing Strategies and Studies How to collect certain information about your customers, market and competitors. This information tells you about your potential market, prices, trends, competition, target customer, its preferences, income, habits, accessibility, convenient time

and plans. This information should be accurate, and reliable to help you make the right business decision. Step One : Defining the Purpose or Objectives Ask people what they think of the product or service and collect some background demographics & attitudes of these individuals. How much potential customers would be willing to pay for the product or service. Where potential customers would prefer to purchase the product or service. Where the customer would expect to hear about or learn about such a product or service. Step Two: Gathering Data from Secondary Sources Data that already exists i.e information from Trade magazines Libraries Government Agencies Universities Internet The entrepreneur should exhaust all possible secondary data sources, observation, and networking before beginning any more costly primary data research. Step Three: Gathering Information from Primary Sources Information that is new is Primary data and involves data collection procedures like Observation Networking Interviewing Focus Groups

 Experimentation Data collection is done with the help of Data Instruments like Questionnaire. FOCUS Groups: They are more informal method of gathering in-depth information. A focus group is a sample of 10-12 potential customers who are invited to participate in a discussion relating to the Entrepreneurs research objectives.

Step Four: Analyzing & Interpreting the results The results should be evaluated and interpreted in response to the research objectives. The data can then be cross tabulated to give better insights and interpretations regarding the segmentation of the market. Input into a Marketing Information System

Place

Economic Product

and Technological Environment

Price

Competitive Promotion Environment

Political and Demographic and Legal Environment

Resources and Economic Objectives of the Firm

Marketing Information Systems Gather data from inside and outside the organization Process and store the data Make information available to everyone in the organization Allow employees to request additional information from the system Informal vs. Formal Marketing Research The Marketing Research Process The Research Question(s): What is the likely acceptance of this product among females? How might the packaging be changed to improve the product?

 Which radio station do you listen to the most? Do you like the color scheme being used in our new packaging materials? Types of Data secondary data primary data qualitative data -

quantitative data -

Sources of Data Primary Data Internet Mail Surveys Telephone Surveys Personal Interview

Secondary Data Databases Government Periodicals Trade Journals Trade Associations

Data Collection Methods experimentation observation survey

 qualitative research: Comparison of Four Survey Methods Alternative Sample Designs

Social

Natural

Company Natural Technological Political Cultural

Public Customers Intermediaries Suppliers Competitors

Marketing Research Analyse Complexity of Buying Behaviour

Economic

Technologic

Polit

Competitive

Understanding Consumer Characteristics

CHARACTERISTICS Innovators 2-3% 12-15% PERSONAL Social, Income, Occupation, Education, Housing, Early Adopters

External Environmental Factors

Early Majority 33% Late Majority 34% Laggards 12-15%

Family Influence, Time orientation

PSYCHOLOGICAL Nature of needs, Perceptions, Self-concept, Aspiration Groups, Reference Groups

Changing Priorities Stage Priorities Major Purchases

Fledging : Teens & early 20s

Self,Socialising, Education

Appearance Products, Clothing, Automobiles, Recreation, Hobbies, Travel Furniture & Furnishing, Entertainment, Savings

Courting :20s

Self & Other, Pair bonding,Career

Nest Building:20s &early 30s

Babies & Career

Home, Garden,,Baby Care products, insurnce

Full Nest 30-50s

Children, Career, Midlife crisis

Children Food, clothing, education, transportation, life counseling Furniture, Entertainment, Travel, Hobbies, Luxury Automobiles, Investments Health care , Diet, Security, Comfort, TV, Books, Long distance telephone services

Empty Nest 50-70

Self & others, relaxation

Sole survivor 70-90

Self, health,loneliness

Analyse Target Market

Marketing Strategy to be Based on WHO MAKES THE BUYING DECISIONS DECIDER INFLUENCER BUYER USER GATE KEEPER Characteristics of a Marketing Plan Should provide a strategy for accomplishing company goals and missions Should be based on facts and valid assumptions Should provide for continuity so that future plans can be built on it for long-term goals Should be simple and short Should be flexible i.e. should provide scope for inclusion of what if scenarios Should specify performance criteria that will be monitored and controlled

Marketing Plan- The Algorithm Defining the Business Situation Describe the past and present business achievements of the new venture. Defining the Target market Market Segmentation- Dividing a market into definable and measurable groups for the purpose of targeting market strategy. Market Segmentation- The process of segmenting & targeting the market should process in the following way Decide what general market or industry you wish to pursue Divide the market into smaller groups based on Characteristics of the customer Geographic Demographic Psychographic Buying situation Desired benefits (e.g. Product features) Usage (e.g. frequency of usage) Buying conditions (e.g. time available & product purpose) Awareness of buying intention (e.g. familiarity of product & willingness to buy) Select segment or segments to Target Develop a marketing plan integrating product, price, distribution & promotion (together called THE MARKETING MIX) Considering the Strengths and Weaknesses The SWOT analysis which was discussed earlier. Establishing Goals & Objectives Asking oneself Where do we want to go? in terms of Market share, profits, sales, market penetration, new products launching

etc. All such goals n objectives should be quantifiable and could be measured for control purposes. Defining Marketing Strategy Outline all the activities needed to meet the ventures business plan goals & objectives. The 5-Ps In the marketing plan, you should endeavor to follow best practice to maximize your competitive advantage in each of the following key areas: Product packaging, the brand name, warranty, image, service, delivery time, features, style etc. Price Pricing of a product or service has to be done very carefully considering numerous things like quality, prospective demand, margins, competitors prices, discounts, market segmentation etc.. Promotion The promotion plan itself a mini-marketing plan. Advertising is an effective as well as an expensive way & has to be taken care of. The procedure to be followed includes : Set specific campaign objectives (building sales, market share) Decide your strategy (budget, media choice, geographical profile) Target the Audience (market segment, demographic profile) Decide the advertising content (specific product/service benefits to highlight) Decide the execution and style

Place (Distribution Plan)- The distribution plan must match the other elements of the Marketing MIX to maintain the differentiation and focus of the Company. If your product is of highest quality, with price & promotion to match, it must be available in the major quality stores. The choice of distribution channel, therefore can make an important contribution to both your company differentiation & to reaching your target group of customers. People The final ingredient in the marketing plan jigsaw must be quality salespeople who can consistently maintain your marketing differentiation.

A well remunerated & motivated staff will act as enthusiastic sales promoters and act as eyes and ears of the company in the competitive market place. Coordination of the planning process Designating responsibility for implementation Budgeting the Marketing Strategy Implementation of the Market Plan Monitoring Progress of Market Actions Lack of a real plan (particularly regarding goals & objectives) Inadequate situational analysis There is no point in deciding where you want to go if you do not know where you are? and where you have been? Lack of Goal Clarity and Unrealistic Goals This generally happens due to lack of understanding of the situation. Unexpected competitive moves, product deficiencies, Delay in Getting Finance, and acts of God.