Introduction to management 1

•MANAGEMENT IS ANCIENT
•MANAGEMENT NEEDED WHEN GROUP ACTIVITY IS
TO BE ORGANIZED TO ACHIEVE COMMON
OBJECTIVES.
•-MANAGEMENT IS MUST WHEN AVAILABLE
RESOURSES ARE SCARCE AS IN BUSINESS
•- EFFICIENT MANAGEMENT HELPS ACHIEVING
OBJECTIVES BY EFFICIENT UTILIZATION SCARCE
RESOURCES.
•- MANAGEMENT IS UNIVERSAL.
•-SLOW RATE OF ECONOMOMIC DEVELOPMENT OF
COUNTRY DUE TO POOR MANAGEMENT.

 MARY PARKER FOLLET – THE ART OF GETTING THINGS DONE THROUGH
OTHER PEOPLE.
 KIMBALL AND KIMBALL – IT IS DEFINED AS ART OF APPLYING THE ECONOMIC
PRINCIPLES THAT UNDERLINE THE CONTROL OF MEN AND MATERIALS IN
THE ENTERPRISE UNDER CONSIDERATION.
 KEITH AND GUBELLINE – IT IS A FORCE THAT INTEGRATES MEN AND
PHYSICAL PLANT INTO AN EFFECTIVE OPERATING UNIT.
 MANAGEMENT IS SOCIAL PROCESS INVOLVING COORDINATION OF HUMAN
AND MATERIAL RESOURSES THROUGH THE FUNCTIONS OF
PLANNING,ORGANIZING,STAFFING,LEADING AND CONTROLLING IN ORDER
TO ACCOMPLISH STATED OBJECTIVES.
 FIVE PARTS OF MANAGEMENT AS A PROCESS
 - THE COORDINATION OF RESOURSES.
 - THE PERFORMANCE OF MANAGERIAL FUNCTIONS AS A MEANS OF
ACHIEVING COORDINATION.
 - ESTABLISHING THE PURPOSE OR OBJECTIVE OF MANAGEMENT PROCESS.
 - MANAGEMENT IS A SOCIAL PROCESS.
 - ITS CYCLICAL IN NATURE.

 Basic Resources(Inputs) Stated objective
 Planning Directing
Transformation process
Organizing Controlling
Fundamental Management functions
INPUTS
MEN
MATERIALS
MACHINE
MONEY
RESOURSES
GOALS
OUTPUT

 -MANAGEMENT IS A PURPOSEFUL ACTIVITY
 - IT IS AN EFFICIENT MANAGEMENT OF ECONOMIC
RESOURSES.
 - MANAGEMENT IS A DISTINCT PROCESS.
 - MANAGEMENT IS UNIVERSAL.
 - IS A TEAM OF MANAGERS AND SYSTEM OF AUTHORITY.
 - COORDINATION IS A SOUL OF MANAGEMENT.
 - MANAGEMENT IS DYNAMIC
 - MANAGEMENT IS DECISION MAKING
 - MANAGEMENT IS A PROFESSION.

 -FEW DO NOT FIND ANY DIFFERENCE BETWEEN MANAGEMENT AND
ADMINISTRATION
 - FEW MAINTAINS MANAGEMENT IS A WIDER TERM WHICH INCLUDES
ADMINISTRATION.
 - THREE HAVE THEIR INDIVIDUAL DOMAINS.
 - ADMINISTRATION DETERMINES THE OBJECTIVES AND POLICIES OF THE
ENTERPRISE.
 - MANAGEMENT CARRIES out policies TO ACHIEVE OBJECTIVES.
 -STRUCTURING OF ENTERPRISE THROUGH ORGANIZATION.

 Primary task of managers is getting things done from others.
 Hence wide variation in authorities and responsibilities
 This gives levels of management
 Total management requires many skills an talent
 Thus job of manager is divided and subdivided giving level of
management
 All levels have different duties,responsibilities,rights and
authorities.
 Commoly found levels are
 - Top management
 - Middle management
 - Lowest management.

Level Details Represented by
Top Management -Highest level
-Policy making level
-Overall management of organization
-Define objectives,policies,strtegies
Board of directors
Managing directors
Chief Executives
General Manager
Secretary
Middle order
Management
-Central place in heirchy
-Execution of policies
-Answerable to top management
-Plan,guide,supervise,coordinate,control
Finance Manager
Materials Manager
Department Heads
Superintendents
Lower Management -under the control of middle level management
-Plan,guide,supervise,coordinate,control
-take orders from middle order management
and explains them at operating level
- Responsibility of getting work done.
Foreman
Supervisor

 Ability to assure smooth functioning of team
 Ability to deal with complex situation
 Higher the level higher the authority and
responsibility, hence different manager skills
at different level
 Skills needed for successful manager are
 Technical skills,Conceptual skills-decision
making and organizaion skills,Human relation
skills-comminucation skills,motivating
skills,leadership skills

 Refers to knowledge of specific fields
 More important at lower levels
 Lack of technical knowledge is not respected
at shop floor level
 necessity of technical skills at higher level is
not so important
 There is inverse relation between technical
and conceptual skills
 Any management is a combination of
technical skills,human relations and
conceptual skills.

 Skills needed to guide organization towards
its objective
 Skills includes interpreting organization as a
whole and its relation with the environment
 Critical at higher level of management
 Decision making is one of conceptual skills
 Ability of a person to make timely decisions
 Organization skills include identifying
suitable persons for the jobs.
 Conceptual skills not so important at lower
level of management.

 Skills concerned with dealing with persons
 Ability to work with others
 Understanding peoples behavior and makes
his own behavior understandable to them.
 Communication skills is ability to
communicate information effectively
 Motivating skills inspires people to do what
manager wants to do.
 Motivation may be positive or negative
 Leadership skills is to lead people working
under him.

 Physical
 Mental Ability
 Morale
 Educational
 Technical
 Experience

 Objectives are end results
 Define scope and guide managerial actions
 Managerial objectives should be clearly
defined ,attainable and linked to overall
organization goal.
 Managerial objectives are classified as
general objectives and specific objectives
 General objectives are general in nature like
motivating, capital flow,social objectives like
fair wages etc.
 Specific objectives are specific in nature like
customer base expansion, product
diversification etc.

 HANDICRAFT CEMENT
 FACTORY SYSTEM
 STAGES OF EVOLUTION OF MANAGEMENT
 THE CLASSICAL THEORY OF MANAGEMENT
1)BUREAUCRACY
2)SCINTIFIC MANAGEMENT
3)ADMINISTRATIVE MANAGEMENT
-NEO-CLASSICAL THEORY
1)HUMAN RELATIONS
2)BEHAVIOURAL SCIENCE APPROACH
- MODERN MANAGEMENT THEORY
1)TECHNICAL AND QUANTITATIVE SCIENCES
2)SYSTEM APPROACH
3)CONTINGENCY APPROACH

 MAX WEBER DEVELOPED THIS MODEL
 CONSIDERED MOST EFFICIENT FORM OF
ORGANIZATION
 HIERCHY OF AUTHORITY
 CLEAR CUT DIVISION OF WORK
 SYSTEM OF RULES,REGULATIONS AND
PROCEDURES
 IMPERSONAL
 SELECTION BASED ON COMPETENCE
 LEGAL AUTHORITY AND POWER

 SCIENTIFIC METHODS TO MANAGERIAL
PROBLEMS BY F W TAYLOR
 ART OF KNOWING EXACTLY WHAT IS TO BE
DONE AND BEST WAY OF DOING IT
 BEST USE OF PRODUCTION RESOURSES
 RIGHT MAN FOR RIGHT JOB THROUGH
SCIENTIFIC SELECTION AND TRAINING OF
EMPLOYEES

 DEVELOPMENT OF SCIENCE FOR EACH ELEMENT OF WORK
 SCIENTIFIC SELECTION,PLACEMENT AND TRAINING OF WORKERS
 DIVISION OF WORK
 STANDARDIZATION OF METHODS,PROCEDURES,TOOLS AND
EQUIPMENTS
 USE OF TIME AND MOTION STUDY
 DIFFERENTIAL WAGE SYSTEM
 COOOPERATION BETWEEN LABOUR AND MANAGEMENT
 PRINCIPLE OF MANAGEMENT BY EXCEPTION.

 INITIATED BY H FAYOL
 SHELDON,MOONEY,SIMON,BARNARD FOLLOWERS
OF FAYOL AND CONTRIBUTED TO THE
DEVELOPMENT OF THEORY
 FAYOL ESTABLISHED PATTERN OF MANAGEMENT
AND PYRAMIDAL FORM OF ORGANIZATION.
 ESTABLISHED THAT TECHNICAL KNOWLEDGE IS
DOMINATING AT LOWER LEVEL AND MANAGERIAL
ABILITY AT HIGHER LEVEL.
 HE ANALYZED MANAGEMENT PROCESS AND
DIVIDED ACTIVITIES OF INDUSTRY IN SIX GROUPS.
1)Technical activities 2)Commercial activities
3)Financial activities 4)Security 5)Accounting
6)Managerial

 FAYOL WROTE BOOK - GENERAL AND INDUSTRIAL
MANAGEMENT AND ELABORATED PRINCIPLES OF
MANAGEMENT
 1)DIVISION OF WORK
 2)AUTHORITY AND RESPONSIBILITY
 3)DISCIPLINE
 4)UNITY OF COMMAND
 5)UNITY OF DIRECTION
 6)EMPHASIS ON SUBORDINATION OF PERSONAL INTEREST TO
GENERAL OR COMMON INTEREST
 7)ADEQUAITE REMUNERATION TO PERSONNEL
 8)CENTRALIZATION
 9)SCALAR CHAIN OR LINE OF AUTHORITY
 10)ORDER
 11)EQUITY
 12)STABILITY OF WORKERS
 13)INITIATIVE
 14)ESPIRIT DE CORPS

 Functions performed by manager and its
sequence is management process
 It’s a methodology of getting things done
 Process involves determination of objectives,
putting them in action and achieving them
 Management process involves
 Planning
 Organizing
 Actuating
 Controlling

 Taylor is founder of scientific management
 Laid foundation of modern scientific management
between 1880 and 1890
 Worked as apprentice machinist and turner in Cramp
Shipyard and then joined Midvale steel works as
machine shop worker
 Became Chief Engineer in company in 1884
 Obtained Masters in Engineering from Stevens
Institute
 Then he joined Bethlehem Steel Company
 During his role as machinist and turner, he saw much
disorder and wastage of resources, workers not
working to fullest extent, management no idea about
capacity of workers and was not interested to know.
 Taylor tried system where interests of management
and workers can be equalized.

 Developed principle of breaking a task(job)
 Was involved in exploring causes of inefficiency and
labour difficulties
 Evolved certain principles of investigating work on
scientific basis, selecting the best worker for task
and training him to develop desired skills,
cooperation between management and workers,
equal division of work..led to Scientific Management.
 Another concept is A Fair Day’s Task –undertook
fatigue studies and time necessary to complete task.
 Taylor preffered planning a work a day in advance,
giving definite work to complete in a given time using
told method.
 Developed functional foremanship
 Attention towards TIME AND MOTION STUDY and
established work standards.
 DIFFERENTIAL WAGE SYSTEM

 SCIENCE,NOT RULE OF THUMB
 HARMONY NOT DISCORD
 COOPERATION NOT INDIVIDUALISM
 MAXIMUM OUTPUT INSTEAD OF LIMITED
OUTPUT
 THE DEVELOPMENT OF EACH WORKER TO HIS
GREATEST EFFICIENCY AND PROSPERITY

 Analyze work scientifically
 Provide specific guidelines for worker
performance
 Develop one best way of doing job
 Select best workers to perform tasks
 Train and develop each worker in the most
efficient method for doing the job
 Divide work so that equal share for workmen and
management to as to achieve highest efficiency
 Achieve support from workmen with good
service conditions.
 No role of workers in planning,organising and
controlling
 Management should plan, organize and control
task performance.

 Thinking before doing
 Preparation before action
 To decide what,where,when,who,why and
how about a activity
 Sets objectives,different courses of
action,evaluates each course of
action,decides best course.
 Planning tries to identify difficulties in
advance and offers solution to them.
 Planning prevents confusion in activities to
be carried out.
 Planning also includes forecasting

 Planning involves visualizing future course of
action
 Involves thinking and analyzing information
 Concerned with determination of objectives
and goals
 Development of alternative course of action
 Involves decision making
 Objective is to achieve better results
 Continuous and integrated process

 Planning helps in effective forecasting
 Planning provides certainty in activities
 Planning provides performance standards
 Planning provides direction to the
organization
 Helps the organization to get in tune with
environment
 Provides economy to the management
 Helpful in preparing budget
 Need of planning arises from constant change
 Planning directed towards efficiency

 Determination of objectives
 Forecasting to assist planning
1)Establish planning premises and constraints
2)Internal premises
3)External premises
 Decide planning period
 Collection, classification and processing of
information
 Deciding alternative courses of action
 Evaluation of alternative
 Selection of best plan
 Subsidiary plan to aid master plan
 Controlling plans

 Maximization utilization of resources
 Minimization of unproductive work
 Reduces uncertainty
 Basis of managerial action
 Basis of control
 Avoid bottlenecks in production
 Planning encourages innovation and
creativity
 It improves motivation
 Facilitates effective delegation of authority
 Planning gives competitive edge to
enterprise

 Limitations of forecast
 Costly affair
 Influence of external factor
 Resistance to change
 Rigidity and inflexibility
Can be overcome by
- setting realistic and achievable goals
- communicate assumptions to all
- encourage participation in planning
- proper coordination between long term and
short term plans
- encourage creativity
- pay attention to resource availability of
organization

 Goals
 Objectives
 Policies
 Rules
 Procedure
 Programmes
 Schedule
 Budget

 Analysis of past and present situations
 Technique of anticipation
 May be done with any type of activity in an
organization
 Begins with sales forecast, followed by
production forecast and forecast about
probable costs, finance, purchase, profit.
 No future plans without forecasting events
and its relationships
 Planning starts assuming different future
from the past and enterprise always willing
to take advantage of this difference.
 Forecasting should take changes in premises
into consideration.

 It is estimation of probable future trend
 Analysis of past and present cicumstances
 Scientific and systematic techniques are used
 Anticipates changes to bring accuracy and
exactness in decisions
 Mathematical and statistical techniques
provide solid base
 Relates present circumstances with past

 Important in planning
 Accuracy in managerial decisions
 Facilitates control
 Formulating future policies
 Coordination is developed
 Helps in preparing budgets
 Sales forecasts
 Contributes to business success

 Objectives, plans ready then to carry these we need
organization
 Organizing deals with establishing organization
 It’s a coordination of men, material, money and machines
with minimum cost for maximum output
 Establishes relationship between people, work and
resourses
 Organizing involves division of work among people and its
coordination.
 Organization is always to achieve specific objectives and
implement predetermined strategies.

 Organization as a system as influence and gets
influenced by environment
 Receives inputs from society in form of
men,material,machinery,information,financeetc
 It is converted into output as goal and services
required by consumers.
 Working of one part of system is dependent on
working of other part of system.
 Changes of environment affect the performance of
system
 The feedback of information like orders, customer
complaints and results are utilized for corrective
action.
 The system is coordinated by managerial subsystem
creating,planning,organizing,motivating etc.

 Complexity of industry
 Growing competition
 Optimum utilization recourses
 Fixation of responsibility and authority
 Reduced labour problem
 Coordination and directing efforts
 Facilitates administration
 Stimulates creativity

 Determination of objectives, strategies,
plans and policies
 Determination of activities
 Separation and grouping of activities
 Delegation of authority
 Delegation of responsibility
 To establish interrelationships
 Providing physical facilities and proper
environment
 Preparation of organization chart

 Consideration of unity of objectives
 Principle of specialization
 Principle of authority
 Principle of coordination
 Principle of unity of command
 Principle of span of control
 Principle of exception
 Principle of flexibility
 Principle of simplicity
 Principle of responsibility
 Principle of balance
 Principle of continuity
 The scalar principle
 Principle of parity between authority and responsibility
 Principle of efficiency
 Principle of communication

 Formal organization is established deliberately and in
planned way
 Utilizes individual to carry specific work to meet goal
 Always governed by rules , regulations, procedures
for working
 Chain of command through authority and
communication
 Informal organization come into existence
automatically
 Comes from personal and social relationships
 Informal organizations not based on rules,regulations,
procedures
 Informal organizations take care of social needs
 Social structure to meet personal need
 Informal organizations brings cohesiveness in
organization.

 Depends on size of organization, nature of
product manufactured and complexity of
problems
 Common types are
1) Line organization
2)Functional organization
3)Line and staff organization
4) Committee organization

 Line of authority flows directly from top to
bottom and responsibility from bottom to top
 Business activities are divided into three
groups viz;Finance,production,sales
 Each of these department is subdivided into
self-contained departments
 Each department head had absolute control
over department and dept is self supporting
unit
 His responsibility clearly defined

. General
Manager
Sales
Manager
Production
Superintendent
Accounts
Officer
Salesman
Foreman
Machine
shop
Foreman
Foundry
Foreman
Assembly
shop
Workers Workers workers

 Simplicity
 Clear cut authority and responsibility
 Strong in discipline
 Unity of command
 Quick decisions
 Rapid communications
 Coordination
 Development of all-round executive
 flexible

 Undue reliance
 Personal limitations
 Overload of work
 Dictatorial way
 Duplication of work
 Unsuitable for large concerns
 General interest of enterprise may be
overlooked
 Scope of favourism
 Wastage of materials and man hours

 F W Taylor suggested functional organization
as it was difficult to have all-round person at
middle level
 Instead of a foreman there are eight
functional foreman, four on shop floor and
four in office
 All foreman responsible for a function
 Route clerk,instruction clerk,time and cost
clerk,disciplinarian,Gang boss,Speed
boss,Repair boss,Inspector,

 Specialized foreman
 Use of specialist advice
 Relieves line executives of specialized
decisions
 Reduces accidents,wastage of material,man
and machine hours
 Need of alround executives reduced
 Quality work

 Coordination of eight foreman difficult
 Problem of responsibility as worker is
responsible to eight foreman
 Confused worker
 More complex industrial relation
 No initiative from workers allowed
 No allround development of knowledge for
executive

 Line organization gradually developed to line
and staff organization
 As industry grew, line executives could not
perform some specialized tasks like R and D,
planning,distribution,legal,public relations.
 Line executives have control over
subordinates whereas specialists (staff
executives) relieve line executives of
specialized tasks.
 The acceptance of recommendations from
specialists remain in hand of line executive.

Secretary Legal advisor
Accounts Sales Manager
Personnel Manager Purchase Engineer
Industrial ENGINEER
Design Engineer Stores Officer
Foreman Foreman Foreman Foreman
W O R K E R S
BOD
GM
WM
SUPER A SUPER B

 Expert advice from specialist staff
 Line executives are able to devote more attention towards production
 Less wastage of of material,man and machine hours
 Quality of product improved
 No confusion as in functional organization
 Possess advantages of line and staff organization
Disadvantages
 high salaries of executives
 May infringe upon rights and responsibilities of line organization
 Functions must be clear
 To much dependence on specialists

 Group of people who work collectively,discuss,decide and
recommend solutions to problem
 Consists of men convergent with a subject
 Work very well in large complex organizations having
multifaceted problems
 Ideas put forward by several persons are pooled and offered for
criticism
 No of persons in a committee should be 5-10
 Responsibilities,authority,objectives and duties should be clearly
defined.
 Agenda of the committee should be prepared and communicated
to members at least a week before
 Problems taken care by individual should not be included in
agenda
 Committee meeting should begin and end at fix timing
 Problem related subject matter should be discussed
 Recommendations of the committee should be published and
circulated to concerned persons
 A committee must be dissolved after its purpose is over.

 A standing or permanent committee
 A temporary committee
 THE COMMITTEE IN CONTROL
 COORDINATION AND DISCUSSION COMMITTEE
 The Advisory committee
 THE EDUCATIONAL COMMITTEE

 Committees are better as two minds are better than one
 Committees coordinates the effort of departments
 Special value in policy determination and rounding out plans
 Reduces workload of management
 Good for brain storming
 Secures cooperation of various personnel
 Committee used to fill vacant positions
 Committees used to train young executives and to give them a
keener insight into operation of business
 Limitations
 Week for committee, day for individual
 Time consuming
 Exit route for executives
 No individual responsibility
 Decisions are compromised many times.

 INVOLVES FILLING THE POSITIONS IN ORGANIZATION
STRUCTURE BY APPOINTING COMPETENT AND QUALIFIED
PERSON FOR THE JOB
 INVOLVES RECRUITMENT,SELECTION,PLACEMENT,TRAINING,
DEVELOPMENT, REMUNERATION, EVALUATION OF
PERFORMANCE
 BOARD OF DIRECTORS SELECT CHIEF EXECUTIVE,WHICH
SELECTS HEAD OF DEPARTMENTS WHICH IN TURN SELECT,
TRAIN AND APPRAISE ASSISTANTS.
 MUST TAKE IN TO ACCOUNT TECHNICAL AND OPEARTIONAL
COMPETENCE,ALSO SOCIOLOGICAL AND PSYCOLOGICAL
STRUCTURE OF WORK FORCE.

 MANAGERIAL DECISIONS PUT INTO ACTION THROUGH
EFFECTIVE DIRECTION
 DIRECTION STARTS WHEN MANAGER ISSUES DIRECTIONS
ABOUT WORK TO SUBORDINATES
 INVOLVES MOTIVATING,GUIDING AND SUPERVISING THE
ACTIVITIES OF SUBORDINATES TOWARDS COMPANY
OBJECTIVES
 LARGELY DIVERSE EFFORTS ARE COORDINATED,GUIDED AND
DIRECTED TOWARDS GOAL
 DIFFICULT TASK AS MANPOWER RESOURSES ARE DIFFICULT
TO MANAGE,HENCE NEED DYNAMIC LEADERSHIP
 CONSISTS OF ISSUEING OEDER AND INSTRUCTION,GUIDANCE
AND TRAINING OF SUBORDINATES AND THEIR SUPERVISION
 DIRECTION ARE TO BE GIVEN AND ALSO TO BE OBEYED
 DIRECTIONS MUST BE IN WRITING


 INSPIRING PEOPLE TO INTENSIFY THEIR DESIRE
AND WILLINGNESS TO PERFORM THEIR DUTIES
EFFECTIVELY AND COOPERATE FOR THE
ACHIEVEMNT OBJECTIVES
 MENTAL PREPARATION OF AN INDIVIDUAL TO DO
JOB
 MOTIVATION AND LEADERSHIP KEYS TO
SUCCESSFUL MANAGEMENT OF COMPANY
 DEMOCRATIC LEADERSHIP RELIES ON MOTIVATION
OF EMPLOYEE THROUGH FINANCIAL AND NON
FINANCIAL INCENTIVES
 FIRST THING OF MOTIVATION IS A PERSON WANTS
TO EXIST AND SURVIVE,HE NEEDS BASIS
NECESSITIES OF LIFE LIKE FOOD, CLOTH,SHELTER
ETC
 SECOND THING IS DESIRE TO ACHIEVE GOAL FOR
SATISFACTION OR BLISS

 INTERNAL MOTIVATION AND EXTERNAL
MOTIVATION
 INNER URGE IS INTERNAL MOTIVATION- NO
OUTSIDE COMPULSION,INTERESTS,EMOTIONAL
ATTACHMENT,FIGHTING SPIRIT
 EX PATRIOT SACRIFICES LIFE FOR
MOTHERLAND,SCIENTIST DOING RESEARCH WORK
 EXTERNAL MOTIVATION MEANS MATERIAL BENEFIT
LIKE ATTRACTIVE
SALARY,BONUS,PRAISE,PUNISHMENT,FEAR OF
LOSS OF JOB.
 MOTIVATION ORIGINATES ACTION
 MOTIVATION DIRECTS ACTIVITIES TOWARDS GOAL
 IT HELPS TO CONTINUE THE ACTIVITIES TILL THE
GOAL IS ACHIEVED.

 AROUSE DESIRE OF WORK
 APPROPRIATE USE OF FACTORS OF PRODUCTION
 REDUCTION IN LABOUR TURNOVER
 INCREASE IN PRODUCTION AND PRODUCTIVITY
 BASIS OF COOPERATION
ESSENTIALS
- GOOD WAGES
- GOOD FINACIAL INCENTIVE SCHEME
- HUMAN RELATIONS
- GOOD WORKING CONDITIONS
- JOB SATISFACTION

 Means setting standards, measuring actual
performance and taking corrective step
 Measures performance against goals and plans,
measures deviations
 Helps identify personnel responsible for deviations to
take necessary steps to improve performance
 Controlling ensures activity is being carried out in
planned away.
 Orders may be misinterpreted
 Control helps manager to check and coordinate
activities of subordinates
 Any variation in actual performance and planned
goals will lead to corrective action
 Controlling is continuous process as it involves
measuring actual results of operation with standards

 Setting standards
- Should be meaningful and measurable
- Output,quality,costs,production targets,time
standards,sales quotas
 Checking and reporting performance
- prior approval by executive to allow the work to proceed
as planned
- Personnel observation by the executive
- Checking the unexpected
 Taking corrective action
- Comparison of actual performance with planned
- Deviations identified

 Physical control
- Seeks to control quality and quantity
 Financial control
- These controls are expressed in monetary terms like cost
of unit of production,material cost,indirect expenses
 Budgetary control
- budgetary allotments for future determined and compared
actually.

 Process by which instructions, ideas,thoughts or
information are shared by the persons in
organization
 Components are sender, message and receiver.
 Sender prepares message to be transmitted to
receiver
 Proper understanding by receiver must.
 Sender must know status of receipt of message
through feedback
 Purpose of communication is to feed information
to all for better job performance and active
cooperation
 Management function simplified through
communication

Creating
idea
Encoding
of
message
Transmission
of message
over a
channel
Receiving
by
receiver
Receiver
analyze,
interpret and
decode
Action or
behaviour
feedback

 Idea creation
 Encoding
 Transmission
 Receiving
 Decoding
 Action
 Feedback

 Verbal communication
- Message oral , orders, face to face to discussions, telephonic
talks,lectures,gatherings,conference
- Simple and more effective in emergency
 Written communication
- Always in writing, important when communicator and receiver are far off
- Permanent record, can be evidence
 Formal communication
- Always associated with position of communicator and receiver
- Mostly written
 Informal communication
- Communication free from all formalities
- Simple glance, smile, silence
- Communication about feeling, facts, rumors etc
 Upward communication
- Information from subordinates to superiors, report
 Downward communication
- Instructions and information from top executive to lower grade employee
 Horizontal communication
- Communication between same authority personnel in organization

 It must be clear in purpose and intention
 Participation
 Transmission
 Simple
 Cordial employer-employee relations
Importance of communication
 smooth and unrestricted running of
enterprise
 Quick decisions and implementation
 Proper planning and coordination
 Maximum productivity and minimum cost
 Morale building and democratic management

 Marketing is common in day to day life
 Vital to many business organizations
 Its ancient as was prevalent in those days
 Buts evolution as management discipline is of
recent origin

 Economic self sufficiency- small family units carrying work to satisfy
their needs,no exchange
 Barter system – few people more efficient leads to specialization, then
tribe turned specialized and got engaged in trade and entered into
bartering relationships with others for goods it did not produce
 Money system – no equal value of product in barter,difficulties of
storage,interested parties,so common medium of exchange in form of
money and thus pricing.
 Capitalism – early capitalists organized workers in productive unit and
sought markets to trade product,merchant class arise,need of consumers
not considered,marketing consists of search of customers and moving
goods from producer to consumer
 Industrial revolution – technology, new mode of transport and
communication brought changes in production,mass production
facilitation, products were available at low price, lot of competition,
necessitates proper marketing
 Emergence of marketing – size and character of markets changed after
world war, lots of services and products by mass scale enterprise, high
intensity of competition, lot of choices to customer, repeating of
customers preferred, product should be at convenient place and price

 Business activities that direct the flow of goods
and services from producer to consumer
 Process of getting right product to the right
place in the right quantity at right price and
right time.
 Marketing starts with identification of specific
need of customers and ends with its satisfaction.
 Marketing is exchange or transaction between
two parties.
 Exchange may be in terms of money or product
or services
 Marketing means maintaining these exchanges on
long term basis and to maintain long term
relationships.

Selling Marketing
Product enjoys supreme
importance
Customer enjoys unique
importance
Emphasis on company needs Emphasis on market customers
need
Company oriented selling efforts Market oriented selling efforts
Goods are already produced and
then sold at profit
Customer demand determines
production, supply is adjusted to
demand
Selling aims at short term
objective
Marketing aims at long term
objectives
Top priority is given to sales
volume rather than profits-
increasing sales
Top priority is given to profitable
volume of sales and market
share at fair prices and
reasonable risk

 The selling concept
 Marketing concept
Focus Means objectives
PRODUCTS
Something that
had to be sold to
customers
Selling and
promoting
Profits
through
sales
volume
PRODUCTS
To fulfill the customer
needs, something that is
bought by the customers
Integrated
marketing
mix
Profits through
customer
satisfaction

 Emphasis on customer needs and freedom of consumer to
chose
 Features of marketing
- Customer orientation – company must be consumer oriented,
customer boss, company should produce what customer wants not what
they can sell,must identify needs of customer, consumer research should
be carried out to study changing needs,should identify basic needs of
customer, market segments , colour, size and design of product
- Integrated marketing – purpose of company is to create customer,
department must identify themselves with need of customers,
coordination to identify effect of departments on customers
- Customer satisfaction – must be the objective ,it’s a buyers market
now, person must be satisfied with product, its performance and price

 Consumer needs, wants and desires receive
top consideration
 Greater attention is given to the product
planning and development
 Supply can be adjusted to changing demands
of quality, quantity, brand,model etc
 Interests of the enterprise and society can be
harmonized
 Give integrated view of business operations
 Marketing research is integral part of
marketing process.

 Buying – crucial for marketing team and customers,marketing
manager should know consumer habits, demand and buying
pattern
 Selling – created demand for product, product planning and
development, locating buyers,demand creation through salesman
or advertisement, terms of sale,sale contract
 Transporting – creation of place of utility,must be transported
to place of need
 Storage – storing without damage, maintaining raw material as
per production schedule, inventory
 Standardization and grading – maintaining uniform size and
quality standards throughout country, promotes uniformity and
quality of product, grading means separating products as per
established standards, basis of comparison of similar products,
mainly agricultural products
 Financing – value of good is expressed in money, financing
important in case of costly consumer goods.
 Marketing information – trends in
market,demand,supply,prices and other related information,to
reduce risk of loss in purchasing,pricing,forecasting etc

A B C
MARKETING FUNCTIONS
INVOLVING
OWNERSHIP
TRANSFER
1.BUYING
2.SELLING
INVOLVING
PHYSICAL
DISTRIBUTION
1.CHANNELS
2.TRANSPORT
3.STORAGE
FACILITATING( A AND B
FUNCTION)
1.STANDARDIZATION
AND GRADING
2.BRANDING
3.PACKAGING
4.SALESMANSHIP
5.ADVERTISING
6.SALES PROMOTION
7.RISK BEARING
8.MARKETING
RESEARCH
9.MARKETING AND
INTELLIGENCE
10.FINANCE

 Objectives,inputs,processing,output and feedback
 Objective is profit through customer satisfaction
 Output is sale of goods
 Input is marketing management
 Inputs are product,price,place and promotion

Feedback loop
Inputs
marketing
management
Processor,the
business
organization
Output,sale
of goods
The
controller
Objective,p
rofit/custo
mer
satisfatctio
n

 Environment indicates opportunities of product and
services, e.g., changing cultural values
 Environment present obstacles to marketing of
products and services e.g. Government policies,
competitioner
 Environment can be Microenvironment and macro
environment
 Microenvironment consists of suppliers, marketing
intermediaries, customers
 Macro-environment consist of demography, economic
development, technology,competitive
environment,political and legal environment,
sociocultiral environment

 Complete and unbeatable plan designed to attain marketing
objectives
 Objectives indicate what the firms want to achieve, strategy
provides design to achieve
 Strategy consists of selecting the target market(segment) and
marketing mix
 Purpose of marketing strategy is to serve target market
effectively and successfully.
 Market segments are grouping of consumers according to such
characteristics as income, age, degree of urbanization,
race,geographic location or education.
 Common methods of market segmentation geographic
segmentation,demographic segmentation,psychographic
segmentation,buyer behaviour segmentation and volume
segementation

 Set of controllable variables that a form can
use to influence buyers response within a
given marketing environment
 Always consists of controllable factors and in
tune with environment.
 For each market segment and environment
there will be specific and appropriate
marketing mix.
 Variation in environment will influence the
combination of marketing mix
 Four element of marketing mix are product
,price ,place and promotion.

 Product – thing which possess utility,product mix and
productline,design,quality,features,models,packaging
type,material,size,branding,warranty,service,presale
after sale
 Price – competitive fair prize, resonable profit,
pricing policies, levels of price, margin,discount
 Place- place of distribution add value, channels of
distribution, type of intermediaries, channel design,
location of outlets
 Promotion – activity to communicate with
customer, personnel selling –objectives , efforts ,
sales force, cost level, Advertising – media mix,
budgets, allocations and programmes, sales
promotional efforts- display ,contents, trade
promotions, publicity and public relations

 FIRM MAY PRODUCE A PRODUCT INITIALLY
 BUT MAY DECIDE TO PRODUCE SIMILAR OR DIFFERENT
TYPE OF PRODUCT
 DETERGENT MANUFACTURING COMPANY MAY PRODUCE
POWDER OR BAR
 THEN MAY MOVE FOR TOILET SOAPS,SHAMPOOS ETC
 PRODUCT MAY BE A SEASONAL PRODUCT
 ONE PRODUCT DANGEROUS FOR FIRM AS PRODUCT IS
GOING TO HAVE DECLINE STAGE.
 MULTI PRODUCT ENSURES EFFECTIVE UTILIZATION OF
RESOURCES
 PRODUCTION AND MARKETING COST DISTRIBUTED
BETWEEN PRODUCTS
 PROPER UTILIZATION OF MACHINES
 PRODUCT LINE AND PRODUCT MIX COMMON NOUNS
FOR DENOTING RANGE AND VARIETY OF PRODUCTS

 ENTIRE COLLECTION OF PRODUCTS OFFERED BY A
FIRM IS CALLED PRODUCT MIX
 A GROUP OF RELATED PRODUCTS WHICH SATISFY
THE COMMON NEED IS CALLED PRODUCT LINE
 THE LENGTH OF PRODUCT LINE DENOTES
NUMBER OF PRODUCTS IN LINE
 THE WIDTH OF PRODUCT MIX DENOTES THE
NUMBER OF PRODUCT LINES IN PRODUCT MIX.
 HIDUSTHAN LEVER, BATHING SOAP ONE PRODUCT
LINE,DETERGENTS CONSTITUTE ANOTHER,TOOTH
PASTE ANOTHER
 IN PRODUCT LINE OF SOAPS,LUX,LIFEBUOY,PEARS
ETC.AND FOR DETERGENTS SURF,RIN,WHEEL ETC
 THE PRODUCT LINE OF GODREJ INCLUDE TOILET
SOAPS,TYPE WRITERS,BEVERAGES,SHAVING
CREAM,HAIR DYE, ETC.

 Determination of methods and routes to bring
product in market
 Channel of distribution is the route taken by the
products as they move from producer to consumer
 Numbers of market intermediaries are used to take
products to user.
 Intermediaries are wholesalers, distributors,
stockists,retailers,brokers etc
 All these intermediaries constitute distribution
channel
 A marketing channel is a path traced in direct or
indirect transfer of product as it moves from
producers to ultimate consumers.

 Helps in production function
 Matching demand and supply
 Provide distribution efficiency to demand
and supply
 Channels provide salesmanship
 Channels help merchandise the product
 Financing the producer
 Routinisation of sales

 Every business need finances
 Needed to take advantage of any opportunity
 Management includes anticipation of financial
needs, acquiring resources, and allocating funds
in business
 Growth, profitability and survival depends on
efficient management of finances
 Deals with procurement of funds needed by the
enterprise on most favorable terms in light of its
objective.
 It deals with how corporation obtains funds and
how its uses them.
 It refers to application of skills in manipulation,
use and control of funds.
 Financial management deals with executive
finance functions and routine finance functions

 Executive financial functions
- determining financial needs, capitalization
decisions
- determining capital structure and sources of
funds
- investment decision(Allocating funds)
- management of fixed asset
- working capital management
- control over financial activities, standard
costing, budgetory control, financial
analysis, break even analysis
- management of earning

 Control on cash
 Custody and safeguard of documents
 Record keeping
 Management reporting etc

 The money invested in business to yield income
is capital
 Used to purchase fixed asset,raw material,wages
of workers,selling and distribution
expenses,maintenance etc
 Production without capital is not possible
 Productivity of modern economy due to
extensive use of capital.
 economic development due to capital
investment
 Creation of employment opportunities due to
capital
 If population grows faster than increase in
capital it will result in unemployment.
 Capital classified into fixed capital and working
capital.

 Day to expenditure in business
 Inventories like raw material,work in
progress,finished goods,stores and spares
 Debtors which include bills receivable,sundry
debtors
 Also include cash and bank balances
 Advances to supplier of raw material
 Working capital may be net or gross.
 It ensures smooth and efficient business
operations.
 The magnitude of sales of business affects profit
 The sales can not be converted into cash
immediately,involves time lag.

 Correct assessment is extremely important to run
business
 Excessive working capital may lead to unnecessary
accumulation of inventories resulting in inventory
mishandling,wastage,obsolescence,theft etc
 It will lead to low returns
 Low efficiency of management.
 Low control over inventories
 It results in defective credit policy and slack
collection period
 Inadequate funds may result in losing profitable
projects
 Difficult to implement operating plans and achieve
profit objectives.
 Man and machine may remain idle due to lack of
working capital

 Difficulty in meeting day to day commitments
 Loss of reputation due failure in commitments
 No saving due to bulk purchase
 Cycle time gives guideline to decide working capital
 Stocking of finished goods
 Length of period of manufacture
 Turn over of inventories
 Terms of purchase and sale
 Volume of business
 Seasonal variations
 Importance of labour
 Business cycle
 Banking facilities.
 Nature of business

 PROCESS OF DETERMINING AMOUNT OF CAPITAL
 ALSO DECISION ABOUT FNANCIAL STRUCTURE OF COMPANY
 CRUCIAL AS CAPITAL REQUIREMENT DEPENDS ON MANY UNCERTAIN
FACTORS AND UNFORESEEN CONTIGENSIES
 AMOUNT OF CAPITAL RISED THROUGH
SHARES,BONDS,DEBENTURES,DEBT REPRESENTS CAPITAL
 TWO METHODS GENERALLY USED FOR CAPITALISATION THE COST
METHOD,THE EARNING METHOD
 IN COST METHOD TOTAL CAPITAL IS ESTIMATED BY AGGREGATING
THE COST OF FIXED ASSETS,PERMANENT WORKING
CAPITAL,PRELIMINARY EXPENSES,OTHER ORGANIZATION
EXPENSES,POSSIBLE INITIAL LOSSES ETC.
 THE EARNING METHOD TAKES INTO ACCOUNT THE EXPECTED
EARNINGS AND THE FAIR RATE OF RETURN
 Total capitalization – expected earning/rate of return * 100

 Earning not adequate enough to yield a fair return on
the amount of stock and shares and bonds issued
 Actual profits are inadequate to pay dividends and
interests at proper rate.
 May occur when amount of shares, debentures issued
is much in excess of actual requirements and rate of
profit.
 Over capitalization may be due to overestimation of
earning capacity,promotion with inflated
assets,defective depreciation policy,excessive
taxation policy,
 Overcapitalized company cant pay good dividends
 Reduced share value
 Loss of income to shareholders
 Wastage of country's resources
 No good wages
 Poor reputation in public

 Total cost includes cost of material,cost of
labour and expenses
 Cost of material includes cost of direct
material and indirect material
 Cost of labour includes direct labour and
indirect labour
 Expenses include direct expenses and
indirect expenses also called overhead costs
 Overheads are classified into four
groups,factory expenses,administrative
expenses,selling expenses and distribution
expenses

 Prime cost is also called direct cost.it
includes cost of direct labour,cost of direct
material and direct expenses.
 Factory cost also called as works cost is sum
of prime cost and factory expenses.
 Manufacturing cost is the sum of factory cost
and administrative expenses
 Total cost consist of factory cost,selling
expenses and distribution expenses
 Selling price is total cost and profit.

Introduction to management 1

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Introduction to management 1