LECTURE NOTE

SUBJECT – PRINCIPLES OF MANAGEMENT

SEMESTER: 6TH

LECTURE NO.1 Concept of Management

CONCEPT

As the world moves rapidly into the 'technologically-advanced' 21st century, the rudimentary term of 'management' plays an ever-present key role in the lives of all people. This paper defines management as the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims. The paper shows that the nature of management is quintessentially the process, deriving from Henri Fayol's theories, of planning, organizing, leading and controlling the organisation through the use of available resources to achieve organizational goals.

Defination

Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives efficiently and effectively.

Management comprises planning, organizing, Directing, Staffing, Controlling

LECTURE NO.2 Management as an Art or Science

Management as a scienceManagement as a science, it has systematized body of knowledge, concept and principles. Management deals different problems and issues by using quantitative models and decision making techniques and issues by using quantitative models and decision making techniques to arrive at right decisions. As a science management contains concepts, hypothesis, theories,

experimentation all verified and tested accordingly to clarify about cause and effect relationship between many facts or events occurred. →management is systematic body of knowledge with theories, concepts, principles, experiments and functions which are systematically and logically analyzed →the theories related to management are applicable and used in all types of organization irrespective of size, type, capital and so on. However, the usage and method may vary according to the situation of organization and time. →all the managerial knowledge and practices are developed through various observations and experiments which are researched and experiment based →tests of management theories are applied in situational and judgmental cases which help in prediction of future events. →management is not a pure science but a social science →management relates itself to cause and effect relationship. Results of modern management are acceptable to all employees. Good and efficient management system enhances the purity in organization.

LECTURE NO.3

Management as an art

Management includes the activities of planning, organizing, direction, decision making, regulating and integration of all resources which requires special skill and art. According to Mary Parker,” management is an art of getting things done through others. Management enables a manager to get thongs done through employees.” →management performs non programmed and non routine work using creativity and innovations →management accomplishes any job within time and budget to achieve organizational goals with ease. →managers apply their interest, ability and skills for solving contemporary issues through decisions which ignite their creativity. They can use their skills in field of job performance, solving exceptional issues, forming objectives etc. →managers must posses practical knowledge not only theoretical acquired from experiences which helps in working according to situation .

LECTURE NO.4 THE PROCESS OF MANAGEMENTPlanning In this function it establishes goals and objectives to pursue during a future period. The planning function spans all levels of management. Top managers are involved in strategic planning that sets board, long-range goals for an organization.

Organizing In this function it typically follows planning and reflects how the organization tries to accomplish its goals and objectives. In relation to the structure of a company, organizing involves the assignment of tasks, the grouping of tasks into departments and the allocation of resources to departments.

Coordinating

In this function coordinating refers to management activities related to achieving an efficient use of resources to attain the organization's goals and objectives.

Staffing

In this function staffing refers to the fundamental cycle of human resources activities, determining human resource needs, and recruiting, selecting, hiring, training, and developing staff members.Directing

In this function directing is also referred to as leading, it involves influencing division, departments, and individual staff members to accomplish the organization's goals and objectives.

Controlling

In this function manager performing the controlling management function translate organizational goals and objectives into performance standards for divisions, department and individual position. organizing

LECTURE NO.5 Managerial Skills

The managerial skill are the quality of the manager which are found in the managers. The work need of the different organization and business requires the different skills in the managers in order to handle the business environment and to

make it successful in the market. So there are different types of skills which the managers need in order to exercise the skills in the person in the different people. So managers have to deal with the lot of problem which requires special skills of the mangers in order to solve them. So when the manager counters a problem then they require some special skills in order to deal with the specific problems.

A mark of a good leader is to be able to provide consistent motivation to his team encouraging them to attain excellence and quality in their performance. A good leader is always looking for ways to improve production and standards. Here are six management skills you can develop as a leader in working to create a quality effective team

LECTURE NO.6 Good Managers are Born, not MadeThe key to a successful organization is said to lie within a good manager. It is in fact the effectiveness of this manager and the qualities that they possess that are vital to the development and preservation of an efficient management system within a corporation. The question remains however, as to whether or not these good managers are born, if they possess qualities that will mould them into fantastic leaders of the future. Or are they made? Is it possible to develop and acquire the necessary skills to become the good manager a successful organization needs?

It should first be acknowledged that leaders and managers are often referred to assuming they are the exact same thing however, there are some differences that need to be clarified. There is often some confusion due to the fact that it is particularly difficult to define a manager because a universally accepted definition does not exist. “a manager is one who contributes to the organisation's goals indirectly by directing the efforts of others-not by performing the task himself”.

Therefore the query still remains as to whether a good manager can be made; it may just be that a good manager must also be required to possess good leadership skills.

There are surely many corporations that still value the theory that: Good managers are born not made, however the common organizational failures that can be detected within many individual companies suggest that this theory is in fact flawed. “An organization's conscious effort to provide its managers (and potential managers) with opportunities to learn, grow, and change, in hopes of producing over the long term a cadre of managers with the skills necessary to function effectively in that organization.”

The definition above supports the notion that management development should be seen specific to a particular organization. This is due to the fact that each organization is unique and should aim to develop individuals into effective managers within the context of the particular organization. In addition, the entire idea behind management development is the fact that employees are granted the opportunity to learn, grow and improve. Therefore when you refer this back to the ability to further develop ones skills, it assists managers in “learning how to learn.”

LECTURE NO.7 Management is concerned with Ideas, Things and People

Management involves judicious deployment of resources for the achievement of certain goals. It is concerned with ideas, things and people in the following ways:

Management of ideas: Management of ideas is very crucial for economic and social development. It is the job of management to generate, organise and articulate creative ideas and transform them into operating results.

These ideas relate to new products, new markets, and improvements in existing products and markets. Management of ideas is very relevant in the context of rapidly changing technologies, consumer preferences, product market configurations, social values and government involvement in business. Management of ideas involves intellectual, creative and innovative processes.

Ideas provide the basic inputs and inspiration in the management process. Decision making process involves conversion of ideas and information into action. Ideas help management in ensuring the survival and growth of organizations. Management theory is the major source of ideas for management practice.

Thus, management of ideas has three main implications: (a) it requires a practical philosophy of management to regard management as a distinct and scientific approach, (b) it involves the planning phase of management, (c) it requires innovation and creativity. Implies generating of new ideas and innovation means transforming ideas into viable realities and utilities.

Management of things:

Management of things refers to the mobilization, allocation and deployment of materials, machinery, technology and other facilities to convert ideas into results and performance.

It is the conversion of resources into outputs efficiently and effectively that determines the success of management. Ideas will remain ideas unless they are converted into results through the conversion process.

Management of people:

Management of people refers to the procurement, development, maintenance and integration of human beings working in the organization. It is the most important task of a manager because without people no manager can manage ideas and things.

In the early stages of the evolution of management people were treated as part of things. But after the House Thorne Experiments it has been realized that people are the most critical factor in management.

Since then there has been growing concern for people inside the organization as employees and outside the organization as customers, investors, suppliers and the general public.

Management must understand and fulfill the needs, aspirations and values of people. Management is the direction of men, not of things.Thus, management may be defined as the process of converting ideas into results by getting things done through people in an organized setting.

 

LECTURE NO.8 How a Manager Induces Workers to Put in Their Best

Hiring a new member of your team can be time-consuming and costly – so you want them to settle in and start working productively as soon as possible. After all, if you had spent time sourcing and choosing an expensive new piece of machinery, you wouldn't just leave it in its box when it was delivered, and hope it would just start being productive! The solution is a well-thought out induction process that helps ensure that new hires feel comfortable in their new job and start working effectively as soon as possible.

Traditionally, employee induction was looked at as the time needed to fill out personnel records, show new employees the washrooms, introduce them to a few coworkers, and wish them well. If they met with anyone other than an HR representative, they were doing well. That doesn't work anymore. New team members expect, and

deserve, more Common Complaints...

The most frequent complaints new people have about their induction experiences are that they are overwhelmed, are bored, or are left to sink or swim on their own. The result is often a confused new employee who takes a long time to become productive, or becomes frustrated and quickly leaves the organization.

An effective, carefully-planned orientation or on-boarding program will not only teach technical skills, but it will educate new team members about corporate values, the company's history, and provide valuable information about "who is who" in the organization. Organizations that have good induction programs get new people up to speed faster, have better alignment between what new people do and what the organization needs them to do, have happier employees, and have lower staff turnover rates.

When you know the "why" of employee induction, it is much easier to design an effective program that will welcome new employees with sincerity. When you take the time and make the effort to deliver an effective induction you also convey the message that you are committed to employee development and to providing the training and resources needed to do a great job from the Day 1. Here are some "hows" for doing just that.

Tips for New Employee Induction

Planning

Consider key orientation planning questions before implementing or revamping a current program. Important questions to ask are:

What does the new employee need to know about this work environment to feel comfortable and confident?

What impression do you want new employees to have on their first day?

What policies and procedures should new employees learn about on the first day or the first month? This vital information must be included in the orientation process.

How can new employees be introduced to their coworkers without feeling overwhelmed and intimidated?

What special things (desk, work area, equipment, special instructions) can you provide to make new employees feel comfortable, welcome, and secure?

How can you ensure that the new employee's supervisor is available to assist him or her on the first day; and provides enough time and attention to let him or her know that he or she is valued an important addition to the work team?

Ask for feedback from recent hires. Find out how they perceived the orientation process and make changes based on those recommendations.

Tip:

Once you have a list of areas to cover, divide them up according to when they should be covered in the induction process: before the new hire starts, on Day 1, in Week 1, or in the first month.

One of the most important things that you may need to do before Day 1 is to get the new hire to complete a Training Needs Analysis document. This allows you to arrange training in advance and book it into the new person's schedule when they start. Doing this will reduce their anxiety about unfamiliar systems (usually IT, but also procedures and licenses to use certain equipment). And by being able to schedule training earlier, you'll have them up to speed and productive sooner.

Tip:

One of the main points of an effective induction program is to give the new member of your team a great first impression of your company. This begins as soon as the offer letter of employment is sent. Make sure your letter sets out the expectations of the job and provides an open avenue of communication before the employee's first day.

Execution

Once you have a good idea of the purpose of your program and what you want to cover, then you begin the design process. Here are some ideas for orientation:

Before they start

Make sure the new employee's work area is ready and comfortable.

Make sure key co-workers know the employee is starting and encourage them to come to say "hello" before orientation begins.

Name cards on top of your computer monitors can help new people learn names in their own time. They are particularly useful if you all sit in an open plan office. Make one for the new starter too!

Assign a mentor or partner to show the new person around and make introductions. A mentor need not deliver all – or even any – of the training, but will be there to guide the new starter to training sessions.

On Day 1

Cover off all the essentials: forms, computer access, ID cards, parking, office supplies, etc. Don't do this all at once, though. Intersperse these housekeeping activities with other parts of the induction process that require greater levels of concentration.

Start with the basics. Don't overwhelm the employee and don't cram everything they need to know into a one-hour session. People become productive sooner if they are firmly grounded in the basic knowledge they need to understand their job. Focus on the why, when, where, and how of the position before handing them any assignments or project.

Provide an orientation packet that includes samples of forms as well as the job description.

Give the new starter a checklist of what they should have been told or shown by the end of Day 1, the end of Week 1 and by the end of their first month, and who is responsible for covering this with them (HR, supervisor or mentor). This will help reduce their anxiety about "unknown unknowns".

If you have a digital camera available, take photos of each team member, and other people too, and make up a sheet matching names to photos to give to new starters on their first day. Take a photo of the new starter on their first day, so you can update the sheet for the next person.

Provide a list of FAQs with a contact person/department, and phone number or extension. This should always include the number of the IT helpdesk!

Plan to take the new employee to lunch (or join him or her for lunch), and ask the supervisor and available coworkers to join you. There is nothing more uncomfortable than facing a lunchroom of strangers or slinking out for a solitary lunch on your first day.

By the end of Month 1

Keep it fun: consider incorporating some ice breaker   exercises at the start of the first group meeting after the new hire starts.

Give the new person some responsibility for his or her own orientation. Offer opportunities for self-directed learning under appropriate supervision.

Ensure that the mentor has scheduled ongoing meetings with the new starter up until the end of their first month to answer questions which they might prefer not to ask their line manager.

An effective induction program – or the lack of one – will make a significant difference in how quickly a new employee becomes productive and feels part of the team. Good orientation takes energy, time and commitment; however it usually pays off for the individual employee, the department, and the organization. Make sure your new employees feel that they are valued and that you want them to come back the next day, and the day after that, and the day after that.

Tip:

The quality of your induction process significantly affects the rate at which your company can grow. If you can quickly train people, and

keep hold of them once they're on board, you can grow your company quickly. If it takes a long time for people to become productive and you're continually losing key members of your team, you may find your business shrinking instead of growing. What's more, this will be an incredibly stressful, overworked time for those who are left!

 LECTURE NO.9 Levels and Types of Management

LEVELS OF   MANAGEMENT    1.Top level Management - The General Manager, Managing Director, Chief Executive, Board of Directors all belong to this category. Authority mainly lies with this level of management. The top level management generally performs planning and co- ordination function.

2. Middle level Management - The departmental heads and the branch heads belong to this category of management. The Middle level management is answerable to the top level management for functioning of their departments. The middle level management generally performs organizing and directing functions.

3. Lower level Management - The foremen, supervisors, superintendents, etc. all belong to this category of management. They generally have to personally oversee and direct the lower level employees. This level of management generally performs directing and controlling functions. They train and boost up the workers. They look after the problems and grievances of the workers and try to solve them.

Levels of Management

Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions.

The role of the top management can be summarized as follows –

Top management lays down the objectives and broad policies of

the enterprise.

It issues necessary instructions for preparation of department budgets, procedures, schedules etc.

   It prepares strategic plans & policies for the enterprise.

   It appoints the executive for middle level i.e. departmental managers.

   It controls & coordinates the activities of all the departments.

   It is also responsible for maintaining a contact with the outside world.

   It provides guidance and direction.

   The top management is also responsible towards the shareholders for the performance of the enterprise

Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. In small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and junior middle level management. Their role can be emphasized as -

   They execute the plans of the organization in accordance with the policies and directives of the top management.

   They make plans for the sub-units of the organization.

   They participate in employment & training of lower level management.

   They interpret and explain policies from top level management to lower level.

   They are responsible for coordinating the activities within the division or department.

   It also sends important reports and other important data to top

level management.

   They evaluate performance of junior managers.

   They are also responsible for inspiring lower level managers towards better performance.

Lower level

Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, “Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees”. In other words, they are concerned with direction and controlling function of management. Their activities include -Assigning of jobs and tasks to various workers.

They guide and instruct workers for day to day activities. They are responsible for the quality as well as quantity of

production. They are also entrusted with the responsibility of maintaining

good relation in the organization. They communicate workers problems, suggestions, and

recommendatory appeals etc. to the higher level and higher level goals and objectives to the workers.

They help to solve the grievances of the workers. They supervise & guide the sub-ordinates. They are responsible for providing training to the workers. They arrange necessary materials, machines, tools etc. for

getting the things done. They prepare periodical reports about the performance of

the workers. They ensure discipline in the enterprise. They motivate workers.

They are the image builders of the enterprise because they are in direct contact with the workers.

 LECTURE NO.10 Evolution of Management Thought

The real development of management thought began with the scientific management approach stated by Taylor, though some of the concepts have been developed by thinkers earlier to Taylor. Early management thoughts have come from the Roman Catholic Church, military organizations, the Cameraliasts, a group of German and Austrian public administrators and intellectuals from the sixteenth centuries. Their concepts of management were mostly related to the principles of specialization, selection of subordinates and their training and simplification of administrative procedures.

In the later period, contributions were made by Charles Babbage, James Watt and Robinson Boulton, Robert Owen, Towne and Simon.    Charles Babbage was professor of Mathematics at the Cambridge University and he suggested the use of accurate data obtained through rigid investigation in the management of an undertaking. James Watt Junior (1796-1848) and Robinson Boulton (1770-1842) used the management techniques such as market research and forecasting, production planning, planned machine layout, standardization of components and parts, elaborate statistical records, maintenance of control report, cost accounting data, provision of welfare of personnel etc. Robert Owen (1771-1858) managed a group of textile mills in Scotland and is well known as the promoter of co-operative and trade union movements in England. Henry S. Simon was one of those effective thinkers who advocated that in economic and social systems, the role of capital is constructive, creative and entrepreneurial other than of exploiting the resources for its own benefit.

The contributions of management thinkers started above were limited mostly to the field of developing the concept to make resources more effective at the shop floor levels. These contributions were made bit by bit and in a haphazard manner and have failed to stimulate management as a distinct discipline for further study. However, the various ideas started by them have created awareness about managerial problems. A stage was set by the end of the nineteenth century for making a systematic study of management and a beginning was made by Fredrick Taylor at the beginning of the present century whose thoughts came to be known as Scientific Management.

 

Scientific management:

F.W Taylor, Gilberth, Lillian Gilberth, Gantt and others have made tremendous contributions to the concept of scientific management. Of all these persons, Taylor’s contribution is the most significant and because of this, he is considered as the father of scientific management. We shall give here the contributions of Taylor and some others.   Fredrick Winslow Taylor (1865-1915) worked as a chief engineer in the Midvale Steel Works where he joined as a worker. Afterwards, he worked in the Bethlehem Steel Works and after retirement from his concern, he worked as a consultant.   Taylor, the founder of scientific management movement, states that the object of management should be to secure the maximum prosperity for each employer, coupled with the maximum prosperity of each employee. According to Taylor, scientific management, in its essence, consists of a certain philosophy which results in the combination of four great principles of management, viz., the development of true science, the scientific selection of workers, their scientific selection and development, intimate and friendly co-operation between the management and their workmen. When management of a business unit is based on a systematic study and analysis of various aspects of work involved with a view to find out the best way of doing things, we call it scientific management of business. Broadly speaking, scientific management is the art of knowing exactly what is to be done and the best way of doing it.

Taylor observed that inefficiency prevails in the organization because of three causes, viz., (a) workers feel that any increase in output would lead to unemployment, (b) defective systems of management and because of these, each worker restricts his output in order to safeguard his interests, and (c) inefficient rule of thumb efforts and wasting methods of work.  The elements of scientific management are: (a) determination of the task, (b) planning of industrial operations, (c) proper selection and training of workers, (d) improvement in methods of work, (e) modification of organization, and (f) mental revolution.  Determination of task or workload to each employee is on the basis of method study, routing, motion study, time study, fatigue study and differential piece- wage system. After setting the task to workers, the next step is to plan production, which requires the planning of industrial operations. This involves further considerations, viz., what work shall be done, how the work shall be done, where the work shall be done and when the work shall be

done. Proper selection and training of workers and also their correct placement have to be done by the management. Further, in order to make the workers complete the task as per the conditions set by the management, there is need for improvement in the methods of work. This involves standardization of tools and equipment, speed, conditions of work and materials. Taylor also suggested modification in the organization. This involves introduction of functional foremanship. According to this, the two functions of planning and doing are divided. He has also suggested eight functional foremen, viz., (a) route clerk, (b) instruction card clerk, (c) time and cost clerk, (d) gang boss, (e) speed boss, (f) repair boss, (g) inspector, and (h) shop disciplinarian.

For the success of scientific management, there should be a thorough change in the mental outlook of both the employees and the employer and their mutual hostility and suspicion should give place to co-operation and goodwill.

PROCESS MANAGEMENT (H. Fayol 1841-1925)

Around 1910, H.Fayol, a French engineer, initiated the administrative theory of management (process management) in Europe. Sheldon, Mooney and Railey, L.F .Urwick and L.Gulick also contributed a lot to the administrative theory of management. This theory is called process (functional) management and advocates of this theory belong to the process school of management.

In 1916, Fayol published his book “General and Industrial management” in French, of which later and English edition was brought out. Fayol identified management as a separate set of skills or functions performed by a supervisor in an organization. He clearly distinguished the difference between technical and managerial skills an emphasized that supervisor should be efficient in both. He stated that technical ability is more dominant at the lower level of management, whereas managerial ability is more important at the higher level of management. Fayol, in his famous book, stated fourteen management principles that can capture the entire flavor of the process management theory.  The fourteen principles of management are:   Subordination of individual interests to material interests, authority and responsibility, discipline, division of work, remuneration of personnel, centralization, scalar chain, equity, initiative, stability of tenure of personnel, unity of command, unity of direction and espirit

de corps. Fayol also stated that all operations in business organizations can be classified under six heads, viz., (a) technical production and manufacturing, (b) commercial (purchases and sales), (c) financial (financing and controlling of capital for its optimum use), (d) security (protection of property and persons), (e) accounting (stock-taking, balance sheet, costing and statistics), and (f) managerial (planning, organizing, communicating, co-coordinating and controlling).

BEHAVIORAL SCIENCE MOVEMENT:  The behavioral science approach through its research studies of individual behavior and motivation indicated that the relation between morale and productivity was oversimplified and there was no direct or deep connection between morale and productivity. Behavioral science experts made a further refinement of human relations movement and also covered a much wider scope in interpersonal roles and relationships.  The behavioral science movement which started after 1940 emphasized the importance of individuals and their interpersonal relationship, psychology of the individuals as related to personal needs and motivation and motivational potential in people. The important contributors to the behavioral science movement are A. Maslow, F.Hertzberg, V.Vroom and D.McGregor. While Maslow developed a need hierarchy to explain human behavior within an organization, Hertzberg and Vroom developed motivational models, which explained the causes of human behavior and motivation in business. Behavioral science movement has drawn heavily on the work of Maslow to explain human behavior and the dynamics of motivation process. McGregor developed his two theories, viz., Theory X and Y and also explained certain basic assumptions about the human element. The classical theory reflected almost all the aspects of Theory X while the behavioral approach theory of management reflected almost all the aspects of Theory Y.  ELEMENTS OF NEO-CLASSICAL THEORIES : This theory may be stated as follows. It may be noted here that the theories started by Taylor and Fayol are called by some writers as Classical theories while the theories sated by the human relations movement and the behavioral science movement are called neo- Classical theories. Henri Fayol, the father of principles of management, has classified managerial functions as follows:

a. Planning, including forecasting,

b. Organizing

c. Commanding

d. Coordinating, and

e. Controlling.

A brief description of the various functions of management is given in the next unit.

LECTURE NO.11 Managerial Environment

Innovation requires both a supportive wider environment in which a business can operate, and an encouraging environment for innovators within a business. Innovation can only flourish where there is a supportive legal, institutional, social and economic environment.  The laws and social mores must support business, uphold contracts, and there must be well-defined, exclusive, protected and tradable property rights.

Within the wider business environment (national or international) is the local environment.  Globalization has emphasized not eliminated local contextual and institutional differences.  The earth is not flat and personal interactions in local places still drive innovation.  Most people you regularly text or email live close by and are personally known to you.  Patent citations have a strong home bias.  Venture capitalists prefer to be no more than a twenty minute drive from their clients.

Proximity and interaction between bright people drives much innovation and suggests it will flourish in densely populated cities where people interact closely. Cities allow rich labour markets to emerge (though spatial mismatches can occur in a city between housing location, public transport availability, and where the jobs are).  Rich labour markets are specialized and enable more precise

matching between people and jobs, and people and potential marriage partners.  They also make it possible for specialist professional couples to pursue their own careers while living in the same place.

Innovation feeds off the interaction between people, and one innovation can spark a seed that draws other people and their innovations.  Associated with this, innovation often involves clustering and “Matthew Effects” – “to he who has will be given even more”. This differs across fields.  Biotechnology, electronics and IT involves strong clustering effects while natural resource-based and some capital-intensive innovation and productivity less so.

Go ahead cities generate “Matthew Effects” and agglomeration and these depend on a city’s wealth-generating not its wealth-consuming capacity.  If you build a productive company “making things” then a Warehouse will follow, not the other way round.  Service businesses grow and in turn attract other service businesses drawn to where both customers and competition for them are.

Bright innovative people like to live in nice places with interesting people and creative offerings and so urban life quality matters.  In earlier times, less educated people moved to where the jobs were while the better educated had deeper roots and were less mobile.  Now it is better educated people who move and the poorly educated remain.  The more innovative, prosperous cities with good life quality will therefore attract the more motivated and able.

Vibrant cities generate positive externalities because one person’s productivity and innovation boosts others’.  In contrast to cities, unemployed people who stay in towns such as Tokoroa and

Kawarau rather than go to where the jobs are create negative externalities because remaining in places with high unemployment reduces the job chances of other unemployed.

Innovation depends on human capital and therefore requires a strong education system.  No city can be a powerhouse of innovation unless it has a strong university and vocational training system.  Innovation can be fostered with “public space” discourse, where academics and others engage with the public and industry in an open, non-proprietary way, and share and seed ideas and learning from others.  Associated with this, teaching-linked research instills new knowledge in graduates who then apply that learning in the economy and society.

A supportive external business environment needs to be complemented by a fostering internal environment within a business.  A tight focus is needed not only on innovation but how it fits within an organization’s overall strategy and product mix.  A business must ask whether its strategy supports innovation.  If so, it must systematically be seeking and resourcing opportunities, and must use a disciplined process for converting ideas into practical applications.

Innovation strategy needs to balance innovation versus continuity, and core capabilities versus new skills developed for tomorrow.  It needs to balance defining new fields versus playing in existing ones.  Important strategic questions to ask are:

is the organization configured to systematically seek opportunities?

Does it have in place a process for converting ideas into practical applications?

Has it the financial, managerial and human resources

needed for innovation?

Is it prepared to make the structural changes often required for innovation?

A potential innovation can flow from an existing organizational strategy, structure and product mix and can also be a trigger for change.  It may motivate reductions in products offered and doing fewer things a lot better.   It can involve simplicity, with an in-depth understanding of what underlies product functionality and appeal and eliminating superfluities.  This will be influenced by the kinds of markets served.  Some companies can be configured to respond to demand, others to produce and to then try and sell.

Product-based companies often lack the ability to build capabilities and apply resources to processes.  Businesses may need to decide whether they are foxes that know a lot of things, or hedgehogs who know just one big thing.  Some businesses can focus on one tightly-defined sliver market and service it with multiple technologies.  Others may have one core technology they use to service multiple markets.  Often a technology-based business will create a platform technology, however sooner or later it will need to “chase the vertical”.

Important in innovation strategy is consolidation and follow-through, continuous improvement, exiting from static and declining markets and constantly striving to do better and create new markets.  Imitators often do better than the original innovators because they free-ride on those who came before and do better than them.

As businesses become larger they become inflexible and slower to grasp new opportunities.  It is important to address this within an organization through spin-offs, “skunk works” or other structural arrangements.  For policy makers and regulators it is important to maintain a business environment that encourages the emergence

of new players and fosters creative destruction.  This creates a virtuous circle where the wider business environment must support the emergence of new businesses, sustain their growth, and also allow new players to emerge who may replace incumbents.

What of the future environment needed for innovation?  This of course is difficult to answer without thinking through how innovation itself might change.  Innovation is an endless frontier, and leading parts of that frontier will be web-facilitated technology and trade.  Global access to information and therefore sources of innovation will increasingly be open sourced.  The web does overcome some of the tyranny of distance that New Zealand is subject to.  It allows you to sell to the whole world on day one, but the world has to notice.  It makes it easier to create a brand but difficult to monetize it.  It makes it possible to be a born global business, but only if you have something different to offer to the globe.

IT and the web are widening the “surface area” that businesses share with external customers, reducing transaction costs, and this is impacting on capital productivity.  On-line retailing such as Trade-me, a “sharing economy,” and customer to seller direct interactions can increase the utilization rates and therefore the productivity of capital assets people own – from surfboards to houses.  On-line and sharing economy tools see people market on-line the use of such assets as homes, tools, sports equipment and thereby lift asset utilization without middlemen and with minimum transaction costs.  These assets are under-used and if they are sitting in the garage gathering dust they are dead assets.  These dead assets become live assets only through low cost and person to person sale or rent mediated on line.

Linking a green philosophy to IT suddenly creates potential for rich and highly specialized markets to emerge without alienation, abstraction, geographic or social distance.  On the face of it a “green” philosophy is naïve and parochial.  It erodes global

specialization of labour and our identity as one humanity where we all depend on each other regardless of our national or other identities.

However, a close-knit green mindset is built on known personal relationships between people and can create specialization and therefore productivity gains within that community.  It favours small businesses which lack scale economies but may be tightly and productively specialized, each within geographically constrained relationship markets.

Web-facilitated labour market tools such as Freelancer can help thicken and enrich formerly thin and poor labour markets and accelerate matching between what is wanted and what can be offered. It makes possible engagement of people whose skills were unrecognized, hidden or discouraged and it makes those skills productive.

It makes it possible for geographically constrained markets to have greater internal diversity, richness and specialization.  It may also transcend geographic constraints through relationship-based markets that connect strangers across continents and where the blogosphere, email romances and IT-trade interrelate.

For example, a business such as River stone Kitchen north of Oamaru is based on a network of specialized farm suppliers whose identity is reflected in a farm to plate way and whose specialized products can start to achieve some scale through this, while eliminating both some of the middlemen and some of the abstraction that otherwise occurs between consumers and suppliers.

Future technological innovators may make their mark through biotechnology, cloud computing, nanotechnology, energy storage to deal with intermittency constraints in renewable energy, 3D-

facilitated manufacturing, mass adoption of electric vehicles or new materials such as grapheme and in a host of unpredictable ways.

Some transformative technologies may concentrate wealth and power; others may diffuse or democratize it.   Technological advances may make distributed electricity generation more economic, while 3D-facilitated manufacturing (and globalization more generally), rather than creating a flat world, has made niche local markets more possible and more innovative.  It has made artisanal production top end rather than quaint and hobby-like and may restore more economic power to smaller scale businesses.

Web-facilitated digital technology such as 3D printing reduces or eliminates scale economies.  It is capital light and makes different forms of small scale investment possible.  This also means local ownership can endure over time and this can decentralize business asset ownership.  Given a world price for internationally traded raw materials and minimal labour cost components it allows competition on creativity and on those factors such as environmental quality that can attract and retain innovative people.

A challenge for New Zealand innovators is that 3D printers are additive rather than subtractive and yet many of our industries take a raw material such as wood and take bits away, in the same way Michelangelo uncovered a statue within a block of marble.  Can New Zealand innovators rethink how 3D-facilitated manufacturing can be applied to core New Zealand industries?

However, it is impossible to forecast in detail the external and internal business environment needed for future innovation.  What is however certain is the need for a wider environment.  This environment needs to support innovation and the ever-emerging formal rules of the game and market and non-market institutions needed to favour new players over incumbents and help innovation

continue as an endless frontier.

LECTURE NO.12 The process of Management-Planning, Organizing, Directing, Staffing, Controlling

THE PROCESS OF MANAGEMENT

Planning In this function it establishes goals and objectives to pursue during a future period. The planning function spans all levels of management. Top managers are involved in strategic planning that sets board, long-range goals for an organization.

Organizing

In this function it typically follows planning and reflects how the organization tries to accomplish its goals and objectives. In relation to the structure of a company, organizing involves the assignment of tasks, the grouping of tasks into departments and the allocation of resources to departments.

Coordinating

In this function coordinating refers to management activities related to achieving an efficient use of resources to attain the organization's goals and objectives.

Staffing

In this function staffing refers to the fundamental cycle of human resources activities, determining human resource needs, and recruiting, selecting, hiring, training, and developing staff members.

Directing

In this function directing is also referred to as leading, it involves influencing division, departments, and individual staff members to accomplish the organization's goals and objectives.

Controlling

In this function manager performing the controlling management function translate organizational goals and objectives into performance standards for divisions, department and individual position. organizing

LECTURE NO.13 Modern Concept of Marketing

The basic/core concept on which marketing is based on is explained below 

 Need, Wants and Demand: Marketing begins with human needs and wants. Needs are feelings of deprivation of some

Satisfaction. People need food, air, water, shelter to survive. Wants are desire for satisfies of needs. Wants which are backed by the purchasing power become demand 

 Products (Goods, Services and Ideas): A product is anything that can be offered to satisfy a need or want. A product may consist of three components- physical goods, services and ideas. 

 Value, Cost and Satisfaction: Value means the customer's estimate of the product's overall capacity to satisfy his/her needs. Cost is the price which a customer pays the products. Satisfaction is inner felling. 

 Exchange and Transaction: Exchange is the process of obtaining a desired product from someone by offering something in return. Exchange leads to transactions. 

 Relationship and Networks: Relationship marketing refers to the process of building long-term satisfying relationship with customer, distributors and suppliers.

 Marketing Environment: Marketing environments are divided into two parts. Internal environment includes customer, suppliers, managements, employees, productions, etc. On the other hand external environment includes sociocultural environment, political, technological, economic environment, etc. 

 Competition: Completion may come in many forms. A firm always competes with the existing player. Threat of potential competitor is also taken in consideration. Substitute product is also a competitor

to firm.

Supply Chain: Supply chain is a longer channel includes backward and forward logistic. It stretches from raw materials to delivery of finished goods to the ultimate consumer. Capturing higher value of supply chain gives firm competitive advantage over competitor firms.

 

Evolution of Marketing Concept

Old concept of marketing was to make goods available so that people who had needs can buy. But as human needs changes and many players offering same goods, the concept changes from making available to satisfying needs.

The core concept of marketing “exchange process “have stated since human civilization   and it has transforms through many phases into modern marketing management today.

Exchange oriented Stages:  After the stages of nomads people started to settle on the banks of rivers and engaged in agriculture and other economic activities. Then the problem of deficit and surplus in production came into existence. In order to have smooth exchanges “Barter System” came into existence. This is the starting point of marketing activities.

Production oriented Stages (1760-1830): This stage came with the dawn of industrial revolution which started during 1760. The concept behind this stage was if you can offer products with reasonable price and quality, nothing can prevent you from selling and making profits. Here producer gave more emphasis on their production not on the customer requirements.

Sales oriented Stage: Technological development, improving living standard, development in communication and transportation lead people to believe that they can demand more quality goods from the producers than they were offering. Producers started realizing consumers will normally not buy enough unless approached with a substantial selling and promotional efforts. Under this concept the greater emphasis was on increasing the

sales than on customer satisfaction

Marketing oriented Stages: As the consumer demand and producer’s supply came into equal positions, the producers were forced to rethink over the selling concept and thus it leads to introduction of marketing concepts. Moreover, intense competition in the market made producers realize that products could not be sold without having a strong understanding of consumer needs and preferences.

Consumer oriented Stage: This stage have totally opposite view than the other stages above. Here producers started producing products keeping in mind the requirement of the customer. Production process are adjusted and re-adjusted in order keep align with ever changing needs of customers. Competition becomes a keen factor here.

Management oriented Stages: This is the present stage of the evolution of marketing concept. Consumer marketing became an accepted marketing philosophy. Today marketing is the most crucial in business planning and decision-making.

 LECTURE NO.14 The Functional Classification of Marketing

During the first half of this century, the administrators and managers were purely production oriented and the field of functions of marketing was completely neglected. As the saying goes troubles and difficulties are no mans concern, they slowly began to understand identify and analyze the importance of marketing functions during the fifties when they faced the problems of excess production.   Hence those who have understood the concept of marketing function and practiced accordingly survived and others were slowly edged out of the field of marketing. Developing countries particularly countries like India have to concentrate a little more in this field so that they can avoid simultaneously the problems of scarcity and excess productions

The word marketing was a recent addition to the industrial vocabulary. At initial stages of its development it just referred to buying and selling activities at market place. As the days pass on after the world war two the very concept was adapted to include

very many factors and functions come under its meaning. During the forties and fifties of this century managers and administrators were purely production oriented and the field and functions of marketing was in no mans thinking.   But when they faced the problems of excess production during the fifties they slowly began to understand, identify and analyze the term marketing and its functions. So those who have understood the concept very well and practiced accordingly survived and others were slowly being eased out of the field. All the more the developing countries like India to concentrate a bit more in this field so that they can avoid problems of scarcity and excess production simultaneously.

After the production the goods have to pass through multi-various activities, before it reaches the ultimate consumer. Some of the activities are general and others are special.

More than the distribution of the goods, products and services, marketing in its ambit includes the analysis of the feedback information’s form the consumers and users. This feedback information is used to after the existing decisions and policies. So that the organizational goals can say that marketing start and ends with the consumer. By condensing the above said information we can define marketing function. As an act operation or service which the original product and the ultimate consumer are linked together.

In brief marketing is involved in all activities of economic nature. From the economics point of view it creates time, place, and possession utilities. Even though most of the functions are performed by the so called and intermediaries, this does not reduce or lesson the importance of such functions in any way. These varied functions are grouped under three types of process.

They are

(a)Concentration (b)Equalization  (c) Dispersion

Concentration

Under this process, goods and products are collected together at a central point to facilitate further action upon them. It is concerned with gathering, collecting and concern rating raw materials, partly

finished goods and finished products etc at central points. This concentration to a certain extent embraces various other functions also such as assembling, storage, financing, grading, and standardizationrisktakingetc. Equalization

According to Clark, equalization consists of the adjustment of the supply to the demand on the basis of the time and quality. This sort of adjustment can be done through storage and transportation in market centers

Dispersion

It refers to the allotment of the raw materials to the producer and the final products to the consumers in lots of small and big sizes suitable for their consumption.

Classification of Marketing Functions

There is consensus regarding the functional area of marketing. It varies from 5 to 36 and Rayan has even identified 120 different kinds of marketing functions in the marketing journey of the products and articles.

(A) If we accept the marketing concept as stated in previous lesson we must agree to the simple proposition that supply in the functions of demand and therefore subservient to it, here demand is the limiting and key factor. So a better understanding of the demand will make clear about the various functions of marketing. Bates and Parkinson divide it into four aspects. They are

1.Analysisandforecastingi.e.,marketingresearch 2.Productdevelopmentanddesign 3.Influencingthedemanddesign,advertisingetc 4. Service distribution after sales, service etc.

The success in marketing of a firm depends upon the co-ordination of these ingredients in such a way as to create a suitable mix to the particular situation in hand.

 

 

LECTURE NO.15 Generally, the market is classified on the basis of:

1. Place,2. Time and3. Competition.

On the basis of Place, the market is classified into:

1. Local Market or Regional Market.2. National Market or Countrywide Market.3. International Market or Global Market.

On the basis of Time, the market is classified into:

1. Very Short Period Market.2. Short Period Market.3. Long Period Market.4. Very Long Period Market.

On the basis of Competition, the market is classified into:

1. Perfectly Competitive Market Structure.2. Imperfectly Competitive Market Structure.

Both these market structures widely differ from each other in respect of their features, price, etc. Under imperfect competition, there are different forms of markets like monopoly, duopoly, oligopoly and monopolistic competition.

1. A monopoly has only one or a single (mono) seller.2. Duopoly has two (duo) sellers.3. Oligopoly has little or fewer (oligo) number of sellers.4. Monopolistic competition has many or several numbers of sellers

LECTURE NO.16 Functions of a Marketing Management

Nature and Function of Marketing   If you ask different people what marketing is, the chances are that you would get different definitions. Marketing is, after all, such a vast field.  Marketing deals with products. A product can be a good, service or an idea. Marketers thus need to be very careful when

approaching to customer. 

 Following are the features of modern marketing which marketer should know very well 

 Consumer Focused: Marketing is consumer dependent. What goods a producer produces he should keep in mind the customer needs and wants. Business exists in order to fulfill customer demands. 

 System: Marketing is a system consisting of several inter-depending activities. These activities are sales, demand forecasting, market research, production, etc. 

 Goal: Like any other business activity, marketing seeks to achieve some useful result. The ultimate goal of the marketing is to generate profits through satisfying customer needs and demands. 

 Exchange: Marketing activities involves exchange process. Exchange may be of goods and services, exchange of information, idea, feedback or it may be transactions.  

 Multi-disciplinary: Marketing is inter-disciplinary in nature. It has borrowed heavily from economics, statistics, law, sociology, etc. 

Process: It comprises a series of function which are inter-related. It is a dynamic process because it keeps on adjusting to the changes in the sense that it is concerned with human needs.

LECTURE NO.17 Marketing Mix

Marketing Mix

All the variables in the Marketing Mix are all the variables that can be controlled. They can all be controlled to achieve all the objectives of the company and earn as much money as possible to the company to make profit and increase Allstars stock price.

The marketing mix is made up of product, pricing, promoting and place of distribution. 

Product

Product mix is a combination of products manufactured or traded by the same business house to reinforce their presence in the

market, increase market share and increase the turnover for more profitability. Normally the product mix is within the synergy of other products for a medium size organization. However large groups of Industries may have diversified products within core competency. Larsen & Toubro Ltd, Godrej, Reliance in India are some of the examples.

Price

Pricing of any product is a very tricky thing. Because price has to go up or down according to inflation. But price also has to go up or down according to the price change is competitors and how much demand there is for the product in the market.

All round’s price has steadily gone up over the last ten years. The price went up according to inflation and the prices of our competition. All-round is the product that sells the most and the price has always been competitive enough but too high to the point when people choose to purchase another product. At the same time the price is not too low to the point where people think its “cheap”.  We have gradually reduced discount schedule because the awareness of the product has gone up over the ten years the product has been in the market.

Place

The distribution channel is the same for all three All-star products. Money is allocated to every channel according to data obtained for from our market research. We allocate the money according distribution based on retail sales. In most years we sold the most drugs trough mass merchandisers and grocery stores.

Promotion

The promotion and advertising for the three products is probably the most important aspect of the marketing mix because its promotion and advertising that makes people aware of the product and what it can do for them.

Advertising and promotion allowance spent on All round was the lowest this year. We even decided to change the advertising agency to LLC because we felt like there is enough awareness and the product was selling well without too much advertising. People

just need to be reminded of the benefits of the product so that is why we spend so much money on reminder advertising.

    

LECTURE NO.18 Fundamental Needs of Customers

Early yesterday morning, I used the time I had waiting for an inter-island flight to purge old documents from the hard drive of my laptop. I came across a lesson plan I had done with my retail team a few years back on customer service, detailing what we noticed to be the six basic needs of guests visiting our stores. I found the lesson plan was definitely worth keeping, a terrific review on service basics. It was also a reality check, that when it comes to customer service we tend to make things much more difficult than they have to be. Bells and whistles lose their sheen when the basics aren’t covered well first.

This list may read pretty basic to you too. However can you imagine how thrilled we’d all be if this was the customer service we always received?

The Six Basic Needs of Customers

1.Friendliness Friendliness is the most basic of all customers needs, usually associated with being greeted graciously and with warmth. We all want to be acknowledged and welcomed by someone who sincerely is glad to see us. A customer shouldn’t feel they are an intrusion on the service provider’s work day!

2.Understandingandempathy Customers need to feel that the service person understands and appreciates their circumstances and feelings without criticism or judgment. Customers have simple expectations that we who serve them can put ourselves in their shoes, understanding what it is they came to us for in the first place.

3.Fairness  We all need to feel we are being treated fairly. Customers get very annoyed and defensive when they feel they are subject to any class distinctions. No one wants to be treated as if they fall into a certain category, left wondering if “the grass is greener on the other

side” and if they only received second best.

4.Control  Control represents the customers’ need to feel they have an impact on the way things turn out. Our ability to meet this need for them comes from our own willingness to say “yes” much more than we say “no.” Customers don’t care about policies and rules; they want to deal with us in all our reasonableness.

5.Optionsandalternatives Customers need to feel that other avenues are available to getting what they want accomplished. They realize that they may be charting virgin territory, and they depend on us to be “in the know” and provide them with the “inside scoop.” They get pretty upset when they feel they have spun their wheels getting something done, and we knew all along a better way, but never made the suggestion.

6.Information “Tell me, show me – everything!” Customers need to be educated and informed about our products and services, and they don’t want us leaving anything out! They don’t want to waste precious time doing homework on their own – they look to us to be their walking, talking, information central.

 

LECTURE NO.19 The Role of Distribution channels in Marketing

The distribution channel

It is defined as a chain of intermediaries; each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-user.

Channels

A number of alternate 'channels' of distribution may be available:

Distributor, who sells to retailers,

Retailer (also called dealer or reseller), who sells to end customers

Advertisement typically used for consumption goods

Distribution channels may not be restricted to physical products alone. They may be just as important for moving a service from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc.

If we mention in a single sentence the distribution channel is nothing but it is a process of transfer the products or services from Producer to Customer or end user.

There have also been some innovations in the distribution of services. For example, there has been an increase in franchising and in rental services - the latter offering anything from televisions through tools. There has also been some evidence of service integration, with services linking together, particularly in the travel and tourism sectors. For example, links now exist between airlines, hotels and car rental services. In addition, there has been a significant increase in retail outlets for the service sector. Outlets such as estate agencies and building society offices are crowding out traditional grocers from major shopping areas.

Channel decisions

Channel strategy

Gravity & Gravity

Push and Pull strategy

Product (or service)

Cost

Consumer location

Managerial concerns

The channel decision is very important. In theory at least, there is

a form of trade-off: the cost of using intermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goods manufacturers could never justify the cost of selling direct to their consumers, except by mail order. Many suppliers seem to assume that once their product has been sold into the channel, into the beginning of the distribution chain, their job is finished. Yet that distribution chain is merely assuming a part of the supplier's responsibility; and, if they have any aspirations to be market-oriented, their job should really be extended to managing all the processes involved in that chain, until the product or service arrives with the end-user. This may involve a number of decisions on the part of the supplier:

Channel membership

Channel motivation

Monitoring and managing channels

LECTURE NO.20 Type of marketing channel

1. Intensive distribution - Where the majority of resellers stock the 'product' (with convenience products, for example, and particularly the brand leaders in consumer goods markets) price competition may be evident.

2. Selective distribution - This is the normal pattern (in both consumer and industrial markets) where 'suitable' resellers stock the product.

3. Exclusive distribution - Only specially selected resellers or authorized dealers (typically only one per geographical area) are allowed to sell the 'product'.

Channel motivation

It is difficult enough to motivate direct employees to provide the necessary sales and service support. Motivating the owners and employees of the independent organizations in a distribution chain requires even greater effort. There are many devices for achieving such motivation. Perhaps the most usual is `incentive': the supplier offers a better margin, to tempt the owners in the channel to push the product rather than its competitors; or compensation is offered to the distributors' sales personnel, so that they are tempted to

push the product. Dent defines this incentive as a Channel Value Proposition or business case, with which the supplier sells the channel member on the commercial merits of doing business together. He describes this as selling business models not products.

Monitoring and managing channels

In much the same way that the organization's own sales and distribution activities need to be monitored and managed, so will those of the distribution chain.

In practice, many organizations use a mix of different channels; in particular, they may complement a direct sales force, calling on the larger accounts, with agents, covering the smaller customers and prospects. these channels show marketing strategies of an organization. Effective management of distribution channel requires making and implementing decision in these areas.

 

Supply chain

A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to the end customer. In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable. Supply chains link value chains.

The Council of Supply Chain Management Professionals (CSCMP) defines Supply Chain Management as follows: “Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies. Supply Chain Management is an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. It includes all of the logistics

management activities noted above, as well as manufacturing operations, and it drives coordination of processes and activities with and across marketing, sales, product design, and finance and information technology.”

A typical supply chain begins with ecological and biological regulation of natural resources, followed by the human extraction of raw material, and includes several production links (e.g., component construction, assembly, and merging) before moving on to several layers of storage facilities of ever-decreasing size and ever more remote geographical locations, and finally reaching the consumer.

Many of the exchanges encountered in the supply chain will therefore be between different companies that will seek to maximize their revenue within their sphere of interest, but may have little or no knowledge or interest in the remaining players in the supply chain. More recently, the loosely coupled, self-organizing network of businesses that cooperates to provide product and service offerings has been called the Extended Enterprise.

Starting in the 1990s several companies chose to outsource the logistics aspect of supply chain management by partnering with a 3PL, Third-party logistics provider. Companies also outsource production to contract manufacturers

There are actually four common Supply Chain Models. Besides the two mentioned above, there are the American Productivity & Quality Center's (APQC) Process Classification Framework and the Supply Chain Best Practices Framework.

An unusual food supply chain operated by illiterate Dabbawalas in Mumbai is noted for being extremely reliable without using any computers or modern technology. It has been verified to be a six

A channel of distribution serves as the connecting link between the producer and consumers. It creates time and place utilities by bridging the gap between the time and place of production and those of consumption.

Channels of distribution increase the efficiency of marketing because the middlemen are specialized agencies of distribution. They help to reduce the cost of transactions and smoothen the flow

of goods and services.

Distribution agents facilitate search for buyers and sellers by keeping in touch with both. They are in direct touch with consumers and understand the needs and preferences of consumers. In the absence of middlemen producers may be required to keep larger stock of goods.

Marketing intermediaries play a vital role in the distribution of goods and services. These intermediates have wide contacts, expert knowledge and trade experience.

Therefore, they can achieve more efficient distribution than producers. Many producers do not have the financial resources and expertise required for direct distribution. Manufactures generally produce a large quantity of a limited variety of goods.

On the other hand, consumers generally desire only a limited quantity of a wide variety of goods. Marketing intermediaries bridge the discrepancy between the assortment of goods and services generated by the producer and assortment demanded by the consumers.

They smoothen the flow of goods and services. The role of intermediaries has become important due to increasingly wider markets and growing complexities of distribution.

A channel of distribution performs the work of moving goods and services from producers to consumers. It overcomes the place, time and possession gaps that separate producers from consumers. Marketing intermediaries perform following important functions.

i. Promotion:

Marketing intermediaries attract customers and persuade them to buy goods and services. These intermediaries undertake sales promotion activities through media and personal contacts.

ii. Negotiation:

Intermediaries or middlemen negotiate prices and other terms and conditions between buyer and seller. No sale can take place without an agreement on prices and other terms and conditions.

iii. Information:

Middlemen collect information about demand, competition, etc.,

from consumers and pass on to manufacturers. They also provide information to consumers about new products, changes in design, style, prices, etc., of existing products.

iv. Ordering:

Intermediaries collect small orders from consumers and on that basis place large orders with manufacturers.

v. Physical possession:

Middlemen take possession of goods from producers and pass on possession to consumers.

vi. Transfer of title:

Middlemen transfer ownership of goods from producers to consumers.

vii. Financing:

Intermediaries provide financial, assistances at different stages of the marketing channel. They buy goods in cash from producers and sell them to consumers on credit.

viii. Risk taking:

Intermediaries assume most of the risks involved in the distribution of goods. They relieve producers from these risks and enable them to concentrate on production.

LECTURE NO.21 Advertising

Advertising is a form of marketing communication used to persuade an audience to take or continue some action, usually with respect to a commercial offering, or political or ideological support.

In Latin, ad vertere means "to turn toward".The purpose of advertising may also be to reassure employees or shareholders that a company is viable or successful. Advertising messages are usually paid for by sponsors and viewed via various old media; including mass media such as newspaper, magazines, television advertisement, radio advertisement, outdoor advertising or direct mail; or new media such as blogs, websites or text messages.

Commercial advertisers often seek to generate increased consumption of their products or services through "branding", which

involves associating a product name or image with certain qualities in the minds of consumers. Non-commercial advertisers who spend money to advertise items other than a consumer product or service include political parties, interest groups, religious organizations and governmental agencies. Nonprofit organizations may rely on free modes of persuasion, such as a public service announcement (PSA).

Types of Advertisement

 

Virtually any medium can be used for advertising. Commercial advertising media can include wall paintings, billboards, street furniture components, printed flyers and rack cards, radio, cinema and television adverts, web banners, mobile telephone screens, shopping carts, web popups, skywriting, bus stop benches, human billboards and forehead advertising, magazines, newspapers, town criers, sides of buses, banners attached to or sides of airplanes ("logojets"), in-flight advertisements on seatback tray tables or overhead storage bins, taxicab doors, roof mounts and passenger screens, musical stage shows, subway platforms and trains, elastic bands on disposable diapers, doors of bathroom stalls, stickers on apples in supermarkets, shopping cart handles (grabertising), the opening section of streaming audio and video, posters, and the backs of event tickets and supermarket receipts. Any place an "identified" sponsor pays to deliver their message through a medium is advertising

Television advertising / Music in advertising

The television commercial is generally considered the most effective mass-market advertising format, as is reflected by the high prices television networks charge for commercial airtime during popular events. The annual Super Bowl football game in the United States is known as the most prominent advertising event on television. The average cost of a single thirty-second television spot during this game reached US$3.5 million in 2012. Virtual advertisements may be inserted into regular programming through computer graphics. It is typically inserted into otherwise blank backdrops ]or used to replace local billboards that are not relevant to the remote broadcast audience. More controversially, virtual billboards may be inserted into the background[41] where none exist in real-life. This technique

is especially used in televised sporting events. Virtual product placement is also possible.

Infomercials

An infomercial is a long-format television commercial, typically five minutes or longer. The word "infomercial" is a portmanteau of the words "information" and "commercial". The main objective in an infomercial is to create an impulse purchase, so that the target sees the presentation and then immediately buys the product through the advertised toll-free telephone number or website. Infomercials describe, display, and often demonstrate products and their features, and commonly have testimonials from customers and industry professionals

Radio advertising

Radio advertisements are broadcast as radio waves to the air from a transmitter to an antenna and a thus to a receiving device. Airtime is purchased from a station or network in exchange for airing the commercials. While radio has the limitation of being restricted to sound, proponents of radio advertising often cite this as an advantage. Radio is an expanding medium that can be found on air, and also online. According to Arbitral, radio has approximately 241.6 million weekly listeners, or more than 93 percent of the U.S. population.

Online advertising

Online advertising is a form of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to attract customers. Online ads are delivered by an ad server. Examples of online advertising include contextual ads that appear on search engine results pages, banner ads, in pay per click text ads, rich media ads, Social network advertising, online classified advertising, advertising networks and e-mail marketing, including e-mail spam.

Domain name advertising

Domain name advertising is most commonly done through pay per click search engines, however, advertisers often

lease space directly on domain names that generically describe their products.[34] When an Internet user visits a website by typing a domain name directly into their web browser, this is known as "direct navigation", or "type in" web traffic. Although many Internet users search for ideas and products using search engines and mobile phones, a large number of users around the world still use the address bar. They will type a keyword into the address bar such as "geraniums" and add ".com" to the end of it. Sometimes they will do the same with ".org" or a country-code Top Level Domain (TLD such as ".co.uk" for the United Kingdom or ".ca" for Canada). When Internet users type in a generic keyword and add .com or another top-level domain (TLD) ending, it produces a targeted sales lead.[Domain name advertising was originally developed by Oingo (later known as Applied Semantics), one of Google's early acquisitions

New media

Technological development and economic globalization favors the emergence of new communication channels and new techniques of commercial messaging.

Product placements

Covert advertising, is when a product or brand is embedded in entertainment and media. For example, in a film, the main character can use an item or other of a definite brand, as in the movie Minority Report, where Tom Cruise's character John Anderson owns a phone with the Nokia logo clearly written in the top corner, or his watch engraved with the Bulgaria logo. Another example of advertising in film is in I, Robot, where main character played by Will Smith mentions his Converse shoes several times, calling them "classics", because the film is set far in the future. I, Robot and Space balls also showcase futuristic cars with the Audi and Mercedes-Benz logos clearly displayed on the front of the vehicles. Cadillac chose to advertise in the movie The Matrix Reloaded, which as a result contained many scenes in which Cadillac

cars were used. Similarly, product placement for Omega Watches, Ford, VAIO, BMW and Aston Martin cars are featured in recent James Bond films, most notably Casino Royale. In "Fantastic Four: Rise of the Silver Surfer", the main transport vehicle shows a large Dodge logo on the front. Blade Runner includes some of the most obvious product placement; the whole film stops to show a Coca-Cola billboard.

Press advertising

Press advertising describes advertising in a printed medium such as a newspaper, magazine, or trade journal. This encompasses everything from media with a very broad readership base, such as a major national newspaper or magazine, to more narrowly targeted media such as local newspapers and trade journals on very specialized topics. A form of press advertising is classified advertising, which allows private individuals or companies to purchase a small, narrowly targeted ad for a low fee advertising a product or service. Another form of press advertising is the display ad, which is a larger ad (which can include art) that typically runs in an article section of a newspaper.

Billboard advertising

Billboards are large structures located in public places which display advertisements to passing pedestrians and motorists. Most often, they are located on main roads with a large amount of passing motor and pedestrian traffic; however, they can be placed in any location with large amounts of viewers, such as on mass transit vehicles and in stations, in shopping malls or office buildings, and in stadiums.

 

Mobile billboard advertising

Mobile billboards are generally vehicle mounted billboards or digital screens. These can be on dedicated vehicles built solely for carrying advertisements along routes preselected by clients, they can also be specially equipped cargo trucks

or, in some cases, large banners strewn from planes. The billboards are often lighted; some being backlit, and others employing spotlights. Some billboard displays are static, while others change; for example, continuously or periodically rotating among a set of advertisements. Mobile displays are used for various situations in metropolitan areas throughout the world, including: target advertising, one-day and long-term campaigns, conventions, sporting events, store openings and similar promotional events, and big advertisements from smaller companies.

In-store advertising

In-store advertising is any advertisement placed in a retail store. It includes placement of a product in visible locations in a store, such as at eye level, at the ends of aisles and near checkout counters (aka POP – point of purchase display), eye-catching displays promoting a specific product, and advertisements in such places as shopping carts and in-store video displays.

Coffee cup advertising

Coffee cup advertising is any advertisement placed upon a coffee cup that is distributed out of an office, café, or drive-through coffee shop. This form of advertising was first popularized in Australia, and has begun growing in popularity in the United States, India, and parts of the Middle East

Street advertising

This type of advertising first came to prominence in the UK by Street Advertising Services to create outdoor advertising on street furniture and pavements. Working with products such as Reverse Graffiti, air dancers and 3D pavement advertising, for getting brand messages out into public spaces

Sheltered outdoor advertising

tThis type of advertising combines outdoor with indoor advertisement by placing large mobile, structures (tents) in

public places on temporary bases. The large outer advertising space aims to exert a strong pull on the observer, the product is promoted indoors, where the creative decor can intensify the impression.[

Celebrity branding

This type of advertising focuses upon using celebrity power, fame, money, popularity to gain recognition for their products and promote specific stores or products. Advertisers often advertise their products, for example, when celebrities share their favorite products or wear clothes by specific brands or designers. Celebrities are often involved in advertising campaigns such as television or print adverts to advertise specific or general products. The use of celebrities to endorse a brand can have its downsides, however; one mistake by a celebrity can be detrimental to the public relations of a brand. For example, following his performance of eight gold medals at the 2008 Olympic Games in Beijing, China, swimmer Michael Phelps' contract with Kellogg’s was terminated, as Kellogg's did not want to associate with him after he was photographed smoking marijuana. Celebrities such as Britney Spears have advertised for multiple products including Pepsi, Candies from Kohl's, Twister, NASCAR, and Toyota.

customer-generated advertising

This involves getting customers to generate advertising through blogs, websites, wikis and forums, for some kind of payment.

Aerial advertising

Using aircraft, balloons or airships to create or display advertising media. Skywriting is a notable example.

 LECTURE NO.22 Marketing, Consumerism and Environmentalism

Marketing function is a major specialized activity performed in marketing. The word marketing was a recent addition to the ever increasing list of industrial and technical terms. After the Second World War, the concept of marketing was adopted to include very

many factors and specialized activities.

 

During the first half of this century, the administrators and managers were purely production oriented and the field of functions of marketing was completely neglected. As the saying goes troubles and difficulties are no mans concern, they slowly began to understand identify and analyze the importance of marketing functions during the fifties when they faced the problems of excess production.   Hence those who have understood the concept of marketing function and practiced accordingly survived and others were slowly edged out of the field of marketing. Developing countries particularly countries like India have to concentrate a little more in this field so that they can avoid simultaneously the problems of scarcity and excess productions

The word marketing was a recent addition to the industrial vocabulary. At initial stages of its development it just referred to buying and selling activities at market place. As the days pass on after the world war two the very concept was adapted to include very many factors and functions come under its meaning. During the forties and fifties of this century managers and administrators were purely production oriented and the field and functions of marketing was in no mans thinking.   But when they faced the problems of excess production during the fifties they slowly began to understand, identify and analyze the term marketing and its functions. So those who have understood the concept very well and practiced accordingly survived and others were slowly being eased out of the field. All the more the developing countries like India to concentrate a bit more in this field so that they can avoid problems of scarcity and excess production simultaneously.

After the production the goods have to pass through multi-various activities, before it reaches the ultimate consumer. Some of the activities are general and others are special.

More than the distribution of the goods, products and services, marketing in its ambit includes the analysis of the feedback information’s form the consumers and users. This feedback information is used to after the existing decisions and policies. So

that the organizational goals can say that marketing start and ends with the consumer. By condensing the above said information we can define marketing function. As an act operation or service which the original product and the ultimate consumer are linked together.

In brief marketing is involved in all activities of economic nature. From the economics point of view it creates time, place, and possession utilities. Even though most of the functions are performed by the so called and intermediaries, this does not reduce or lesson the importance of such functions in any way. These varied functions are grouped under three types of process.

They are

(a)Concentration (b)Equalizationand (c) Dispersion

Concentration

Under this process, goods and products are collected together at a central point to facilitate further action upon them. It is concerned with gathering, collecting and concern rating raw materials, partly finished goods and finished products etc at central points. This concentration to a certain extent embraces various other functions also such as assembling, storage, financing, grading, standardization,risktakingetc. Equalization

According to Clark, equalization consists of the adjustment of the supply to the demand on the basis of the time and quality. This sort of adjustment can be done through storage and transportation in market centers

Dispersion

It refers to the allotment of the raw materials to the producer and the final products to the consumers in lots of small and big sizes suitable for their consumption.

Consumerism is a social and economic order that is based on the systematic creation and fostering of a desire to purchase goods and services in ever greater amounts. The term is often associated with criticisms of consumption starting with Torstein Veblen or,

more recently by Enough’s. Veblen's subject of examination, the newly emergent middle class arising at the turn of the twentieth century, comes to full fruition by the end of the twentieth century through the process of globalization.

The term "consumerism" is also used to refer to the consumerist movement or consumer activism, which seeks to protect and inform consumers by requiring such practices as honest packaging and advertising, product guarantees, and improved safety standards In economics, consumerism refers to economic policies placing emphasis on consumption. The term "consumerism" was first used in 1915 to refer to "advocacy of the rights and interests of consumers

 Environmentalism is a broad philosophy and social movement regarding concerns for environmental conservation and improvement of the state of the environment. Environmentalism and environmental concerns are often represented by the color green. environmentalism, movement to protect the quality and continuity of life through conservation of natural resources, prevention of pollution, and control of land use. Organized environmentalism began with the conservation movement in the late 19th cent., which urged the establishment of state and national parks and forests, wildlife refuges, and national monuments intended to preserve noteworthy natural features.

Environmentalism denominates a social movement that seeks to influence the political process by lobbying, activism, and education in order to protect natural resources and ecosystems. An

environmentalist is a person who may speak out about our natural environment and the sustainable management of its resources through changes in public policy or individual behavior by supporting practices such as not being wasteful. In various ways (for example, grassroots activism and protests), environmentalists and environmental organizations seek to give natural world a stronger voice in human affairs.

 

LECTURE NO.23 Financial Functions

Functions of Financial Management

1. Estimation of capital requirements: A finance manager has to make estimation with regards to capital requirements of the company. This will depend upon expected costs and profits and future programmes and policies of a concern. Estimations have to be made in an adequate manner which increases earning capacity of enterprise.

2. Determination of capital composition: Once the estimation have been made, the capital structure have to be decided. This involves short- term and long- term debt equity analysis. This will depend upon the proportion of equity capital a company is possessing and additional funds which have to be raised from outside parties.

3. Choice of sources of funds: For additional funds to be procured, a company has many choices like-

a. Issue of shares and debentures b. Loans to be taken from banks and financial

institutions c. Public deposits to be drawn like in form of bonds.

Choice of factor will depend on relative merits and demerits of each source and period of financing.

4. Investment of funds: The finance manager has to decide to allocate funds into profitable ventures so that there is safety on investment and regular returns is possible.

5. Disposal of surplus: The net profits decisions have to be made by the finance manager. This can be done in two ways:

a. Dividend declaration - It includes identifying the rate of dividends and other benefits like bonus.

b. Retained profits - The volume has to be decided which will depend upon expansional, innovation, diversification plans of the company.

6. Management of cash: Finance manager has to make decisions with regards to cash management. Cash is required for many purposes like payment of wages and salaries, payment of electricity and water bills, payment to creditors, meeting current liabilities, maintenance of enough stock, purchase of raw materials, etc.

7. Financial controls: The finance manager has not only to plan, procure and utilize the funds but he also has to exercise control over finances. This can be done through many techniques like ratio analysis, financial forecasting,

cost and profit control, etc.

LECTURE NO.24 Concept of Financial Management

Financial Management is concerned with the acquisition, financing and management of assets with some overall goal in mind.

It is the process of planning decisions in order to maximize the owner's wealth.[1]

Financial management means the management and control of money and money related operations within a business.Companies have finance departments that are responsible for money and money related operations. The executive in charge of these departments is Chief Financial Officer (CFO).

It is concerned with the three important areas1. Acquisition or Investment Decision2. Financing Decision3. Asset Management Decision

1.  Acquisition   or   Investment   Decision:

It is the most important part of the organization's three major decisions when it is about value creation.It begins with a determination of the total amount of assets needed to be held by the organization.For Example,How much of the organization do total assets should be given to cashortoinventory?You must consider what will be the size of the firm i.e. the assets side or the left hand side in Balance Sheet.

2. Financing Decision It is concerned with the makeup of the right hand side of the balance sheet.On one side some organizations have relatively large amount of debt, and on the other side some organizations are almost debt free. It will be not an Ideal situation but on the other side a certain mix of financing can be thought of as best.In Organization's financing decision Dividend payout ratio is

viewed as an integral part.

3.Dividend   payout   Ratio

It determines the amount of earnings that can be retained in the organization.As a means of equity financing a balance is required between the values of the dividends paid to stockholders against the opportunity cost of retained earnings lost.

Once the financing mix has been decided, there is still one more thing required that how best to physically acquire the needed funds.

4. Asset Management Decision

Now after the assets have been acquired and appropriate financing provided, the next thing is how to manage these assets efficiently.It means that now financial manager should be more concerned with the management of current assets than with that of fixed assets.

LECTURE NO.25 Project Appraisal

Definition

Project appraisal is the structured process of assessing the viability of a project or proposal. It involves calculating the feasibility of the project before committing resources to it. It is a tool that company’s use for choosing the best project that would help them to attain their goal. Project appraisal often involves making comparison between various options and this done by making use of any decision technique or economic appraisal technique.

Project appraisal is a tool which is also used by companies to review the projects completed by it. This is done to know the effect of each project on the company. This means that the project appraisal is done to know, how much the company has invested on the project and in return how much it is gaining from it.

Process of project appraisal

The process of project appraisal consists of five steps and they are

– initial assessment, defining problem and long-list, consulting and short-list, developing options, and comparing and selecting project. The process of appraisal generally starts from the initial phase of the project. If the appraisal process starts from an early stage, then the company will be in a better position to decide how capital should be spend in the project and also it will help them to make the decision of not spending too much or stopping a project that is not economically viable.

Types of project appraisal

Appraisal of projects can be done by many ways, but the most common of them are financial and economic appraisal. In case of financial project appraisal, the company reviews the cost of the project and the expected revenues that will be generated by the project. This type of appraisal helps the company to prevent overspending on a project. It also helps in finding certain areas where alterations can be done for generating higher revenues. Under economic appraisal, the company mainly focuses on the total benefit of the project and less on the costs spent on the project. Other than these two types of appraisal, there are also other types of project appraisal which include technical appraisal, management or organizational appraisal and marketing and commercial appraisal.

LECTURE NO.26 Tools of Financial decisions making

A key objective of using accounting tools is to enable sound decision making on the basis of tangible and consistent information available through one or more of five main accounting tools: Financial Statements, Financial Ratios,   Forecasting, Investment Analysis and Management Accounting. 

o Financial Statements - The most common accounting tool used for business decisions are financial statements made up of the income statement, balance sheet and statement of cash flows.  The workshop demonstrates how these financial  statements can provide business owners with specific information

about revenues, expenses, assets, liabilities and positive or negative cash-flow functions. The review of such information can identify for management where resources are being applied, their inventor carrying costs, the debt profile and the levels of profitability.  The course also provides insight into how financial statements can be used to help business owners develop budgets for planning future expenditures.

o Financial Ratios - provide for a more in-depth analysis of the company’s financial statements.  The course shows how useful financial ratios extract information from the financial statements and other complimentary sources to develop indicators that can provide insights into the strengths and weaknesses of the company. For example financial ratios measure the company’s ability to pay short-term liabilities, the use of assets to generate revenues, long-term cash-flow sustainability and the amount of leverage used to finance business resources. These indicators may also be compared to a leading competitor or an industry standard to determine how well the company operates compared with other businesses.  

o Forecasting - simple effective forecasting tools are presented based upon internal and external analysis methods used to determine the potential production output or sales of the company’s products or services. Internal forecasting determines the amount of economic resources that small businesses need to produce the highest amount of output at the lowest production cost. External forecasting uses basic economic analysis to determine at what price point consumers will be most willing to purchase the maximum amount of goods.

o Investment Analysis -the course provides an introduction to the use of accounting to conduct investment analyses. Investment analysis may be applied to new business opportunities that will maximize the company’s profitability, or selecting equity securities to generate passive income streams, or securing debt financing for business funding.  

o Management Accounting - the course explores how management accounting, an internal business function, is used to allocate business costs to goods or services produced by a company.  Management accounts, properly interpreted, can be used to ensure that all

production costs are recouped on the sale of goods or services in the economic marketplace.  Other important topics covered include break-even analyses, cost-volume-profit reports and other financial information to determine the minimum amount of money a company must generate to pay for fixed and variable expenses.

LECTURE NO.27 Overview of Working Capital.

Working capital (abbreviated WC) is a financial metric which represents operating liquidity available to a business, organization or other entity, including governmental entity. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Gross working capital equals to current assets. Working capital is calculated as current assets minus current liabilities.[1] If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit.

A company can be endowed with assets and profitability but short of liquidity if its assets cannot readily be converted into cash. Positive working capital is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short-term debt and upcoming operational expenses. The management of working capital involves managing inventories, accounts receivable and payable, and cash.

Working capital is the difference between the current assets and the current liabilities. It is the amount invested by the promoters on the current assets of the organization.

The basic calculation of the working capital is done on the basis of the gross current assets of the firm.

working capital = current assets - current liabilities

Current assets and current liabilities include three accounts which are of special importance. These accounts represent the areas of the business where managers have the most direct impact:

accounts receivable (current asset) inventory (current assets), and accounts payable (current liability)

The current portion of debt (payable within 12 months) is critical,

because it represents a short-term claim to current assets and is often secured by long term assets. Common types of short-term debt are bank loans and lines of credit.

An increase in net working capital indicates that the business has either increased current assets (that it has increased its receivables or other current assets) or has decreased current liabilities—for example has paid off some short-term creditors, or a combination of both.

Working capital cycle

Definition

The working capital cycle (WCC) is the amount of time it takes to turn the net current assets and current liabilities into cash. The longer the cycle is, the longer a business is tying up capital in its working capital without earning a return on it. Therefore, companies strive to reduce their working capital cycle by collecting receivables quicker or sometimes stretching accounts payable.

Meaning

A positive working capital cycle balances incoming and outgoing payments to minimize net working capital and maximize free cash flow. For example, a company that pays its suppliers in 30 days but takes 60 days to collect its receivables has a working capital cycle of 30 days. This 30 day cycle usually needs to be funded through a bank operating line, and the interest on this financing is a carrying cost that reduces the company's profitability. Growing businesses require cash, and being able to free up cash by shortening the working capital cycle is the most inexpensive way to grow. Sophisticated buyers review closely a target's working capital cycle because it provides them with an idea of the management's effectiveness at managing their balance sheet and generating free cash flow.

Decisions relating to working capital and short term financing are referred to as working capital management. These involve managing the relationship between a firm's short-term assets and its short-term liabilities. The goal of working capital management is to ensure that the firm is able to continue its operations and that it has sufficient cash flow to satisfy both maturing short-term debt and

upcoming operational expenses.

A managerial accounting strategy focusing on maintaining efficient levels of both components of working capital, current assets and current liabilities, in respect to each other. Working capital management ensures a company has sufficient cash flow in order to meet its short-term debt obligations and operating expenses.

Decision criteria

By definition, working capital management entails short-term decisions—generally, relating to the next one-year period—which are "reversible". These decisions are therefore not taken on the same basis as capital-investment decisions (NPV or related, as above); rather, they will be based on cash flows, or profitability, or both.

One measure of cash flow is provided by the cash conversion cycle—the net number of days from the outlay of cash for raw material to receiving payment from the customer. As a management tool, this metric makes explicit the inter-relatedness of decisions relating to inventories, accounts receivable and payable, and cash. Because this number effectively corresponds to the time that the firm's cash is tied up in operations and unavailable for other activities, management generally aims at a low net count.

In this context, the most useful measure of profitability is return on capital (ROC). The result is shown as a percentage, determined by dividing relevant income for the 12 months by capital employed; return on equity (ROE) shows this result for the firm's shareholders. Firm value is enhanced when, and if, the return on capital, which results from working-capital management, exceeds the cost of capital, which results from capital investment decisions as above. ROC measures are therefore useful as a management tool, in that they link short-term policy with long-term decision making. See economic value added (EVA).

Credit policy of the firm: Another factor affecting working capital management is credit policy of the firm. It includes buying of raw material and selling of finished goods either in

cash or on credit. This affects the cash conversion cycle.

Management of working capital

Guided by the above criteria, management will use a combination of policies and techniques for the management of working capital. The policies aim at managing the current assets (generally cash and cash equivalents, inventories and debtors) and the short term financing, such that cash flows and returns are acceptable.

Cash management. Identify the cash balance which allows for the business to meet day to day expenses, but reduces cash holding costs.

Inventory management. Identify the level of inventory which allows for uninterrupted production but reduces the investment in raw materials—and minimizes reordering costs—and hence increases cash flow. Besides this, the lead times in production should be lowered to reduce Work in Process (WIP) and similarly, the Finished Goods should be kept on as low level as possible to avoid over production—see Supply chain management; Just In Time (JIT); Economic order quantity (EOQ); Economic quantity

Debtors management. Identify the appropriate credit policy, i.e. credit terms which will attract customers, such that any impact on cash flows and the cash conversion cycle will be offset by increased revenue and hence Return on Capital (or vice versa); see Discounts and allowances.

Short term financing. Identify the appropriate source of financing, given the cash conversion cycle: the inventory is ideally financed by credit granted by the supplier; however, it may be necessary to utilize a bank loan (or overdraft), or to "convert debtors to cash" through "factoring

LECTURE NO.28 HRM Function of Management

Human Resource Management (HRM) is all about balancing the

organization’s people and processes to best achieve the goals and the strategies of the organization, as well as the goals and the needs of employees. The main role an HR manager has to fulfill is integrating business operations and strategies across a wide array of culture, products, and ideas, while effectively delegating work among human resource specialists and line management.

Apart from being concerned with local issues of employees, HR must also consider these five basic functions and effects of workforce diversity, legal restriction, performance management, training and professional development of the organization.

1. Recruitment

A great deal of attention and resources is required to attract, hire and retain an experienced, committed and well-motivated workforce. This is perhaps one of the most basic HR functions. There are several elements to this task such as developing a job description, advertising the job postings, screening applicants, conducting interviews, making offers and negotiating salaries and benefits. Companies that value their people put a serious amount of investment in recruiting and staffing services. As the right set of talented employees can not only raise the companies profile but also help it achieve profitability and keep it running effectively and successfully.

2. Training and Development

The HR department is responsible for providing on-the-job as well as refresher training for all employees (newly hired and existing) alike. This is the second most important function and lack of training opportunities only increases frustration levels among employees. So, training systems must be streamlined across all locations in order to make communication and sharing of resources a convenient task. Measurement and monitoring is another vital aspect of training in order to foster adoption of their new skills.

3. Professional Development

Effective HR departments allow and encourage the employees with opportunities for growth, leadership training and education, which in turn contribute to the success of the company. Sponsoring for career advancement seminars, training, corporate social responsibilities and trade shows will make employees feel important and cared for by the team and organization.

4. Benefits and Compensation

A company is more likely to be successful, if it adapts new ways of providing benefits to employees. Some non-traditional benefits that can attract and retain new skilled employees are:

Flexible working hours or workdays, Extended vacation time, Paternity leave or childcare Medical/dental insurance, Corporate gym membership discounts Continuing education/skills development Award & recognition programs

5. Ensuring Legal Compliance

Compliance with labor, tax and employment laws is a vital part of safeguarding the organization’s continued existence. HR has to be aware of all the mandate laws and policies regarding employment practices, working conditions, tax allowances, required working hours, overtime, break times, minimum wage, and discrimination policies as noncompliance can affect productivity and ultimately, profitability of the company

LECTURE NO.29 Human Resource Management and Human Resource Development

Human Resource Management is a process of bringing people and organizations together so thatthe goals of each are met. The various features of HRM include:• It is pervasive in nature as it is present in all enterprises.• Its focus is on results rather than on rules.• It tries to help employees develop their potential fully.• It encourages employees to give their best to the organization.• It is all about people at work, both as individuals and groups.• It tries to put people on assigned jobs in order to produce good results.• It helps an organization meet its goals in the future by providing for competent and wellmotivatedEmployees.• It tries to build and maintain cordial relations between people working at various levels inthe organization.• It is a multidisciplinary activity, utilizing knowledge and inputs

drawn from psychology,Economics, etc. Human Resource Management: ScopeThe scope of HRM is very wide:• Personnel aspect-This is concerned with manpower planning, recruitment, selection,placement, transfer, promotion, training and development, layoff and retrenchment,Remuneration, incentives, productivity etc.• Welfare aspect-It deals with working conditions and amenities such as canteens,crèches, rest and lunch rooms, housing, transport, medical assistance, education, healthand safety, recreation facilities, etc.• Industrial relations aspect-This covers union-management relations, joint consultation,collective bargaining, grievance and disciplinary procedures, settlement of disputes, etc.

HRD

Human Resource Development in the organization context is a process by which the employeesof an organization are helped, in a continuous and planned way, to:• Acquire or sharpen capabilities required to perform various functions associated withtheir present or expected future roles.• Develop their general capabilities as individuals and discover and exploit their own innerpotentials for their own and/or organizational development purpose.• Develop an organizational culture in which supervisor-subordinate relationships,teamwork, and collaborations among sub-units are strong and contribute to theprofessional well being, motivation, and pride of employees.This definition of HRD is limited to the organizational context. In the context of a state or nationit would differ. HRD is a process, not merely a set of mechanisms and techniques. Themechanisms and techniques such as performance appraisal, counseling, training, andorganization development interventions are used initiate, facilitate, and promote this process in acontinues way. Because the process has no limit, the mechanisms may need to be examinedperiodically to see whether they are promoting or hindering the

process. Organizations canfacilitate this process of development by planning for it, by allocating organizational resourcesfor the purpose, and by exemplifying an HRD philosophy that values human beings andpromotes their development.

HRD STRATEGIES

HRD Strategies “ HRD Strategies are a plan that defines how the human resources would beutilized through the use of an integrated array of training, organizational development and careerdevelopment efforts to achieve individual, organizational objectives.”Major HRD Strategies• Communications Strategy: In today’s changing scenario, it is essential to educate andtrain employees about the change.• Accountability And Ownership Strategy: Employee’s accountability and ownershipleads to higher productivity and customer acceleration.• Quality Strategy: Quality needs to be fostered in the employees through training anddevelopment.• Cost Reduction Strategy: Every employee’s contribution in savings is crucial as smallcontributions from each employee can be pooled by organizations to save substantialsavings at the end of a given period and enhance its competitive strategy.• Entrepreneurship Strategy: Every employee needs to be an independent entrepreneur,who can generate ideas and bring them to reality by using the existing resources andSupport of the org to create innovative and creative products and services.• Culture Building strategy: Organization valuing its employees have a sustainablecompetitive edge over competitors because employees are highly charged, motivated andcommitment to the organizationSystematic Training Strategy: The planning and organization of formal on-job trainingand off-job training leads to improving vital employee characteristics, build and sustain appropriate work culture and

brings in more professionalism in action.• Learning Strategy: Continuous development and learning environments promote self development of employees, of self and by self.

LECTURE NO.30 Importance of HRMThe main purpose of human resource management is to accomplish the organizational goals. Therefore, the resources are mobilized to achieve such goals. Some importance and objectives of human resource management are as follows:

1. Effective Utilization Of ResourcesHuman resource management ensures the effective utilization of resources. HRM teaches how to utilize human and non-human resources so that the goals can be achieved. Organization aiming to utilize their resources efficiently invites the HR department to formulate required objectives and policies.

2. Organizational StructureOrganizational structure defines the working relationship between employees and management. It defines and assigns the task for each employee working in the organization. The task is to be performed within the given constraints. It also defines positions, rights and duties, accountability and responsibility, and other working relationships. The human resource management system provides required information to timely and accurately. Hence, human resource management helps to maintain organizational structure.

3. Development Of Human ResourcesHuman resource management provides favorable environment for employees so that people working in organization can work creatively. This ultimately helps them to develop their creative

knowledge, ability and skill. To develop personality of employees, human resource management organizes training and development campaigns  which provides an opportunity for employees to enhance their caliber to work.

4. Respect For Human BeingsAnother importance of human resource management is to provide a respectful environment for each employee. Human resource management provides with required means and facilitates employee along with an appropriate respect because the dominating tendency develops that will result organizational crisis. Hence, all of them should get proper respect at work. Human resource management focuses on developing good working relationships among workers and managers in organization. So, good human resource management system helps for respecting the employees.

5. Goal HarmonyHuman resource management bridges the gap between individual goal and organizational goal-thereby resulting into a good harmony. If goal difference occurs, the employees will not be willing to perform well. Hence, a proper match between individual goal and organizational goal should be there in order to utilize organizational resources effectively and efficiently.

6. Employee SatisfactionHuman resource management provides a series of facilities and opportunities to employees for their career development. This leads to job satisfaction and commitment. When the employees are provided with every kind of facilities and opportunities, they will be satisfied with their work performance.

7. Employee Discipline And Moral

Human resource management tries to promote employee discipline and moral through performance based incentives. It creates a healthy and friendly working environment through appropriate work design and assignment of jobs.

8. Organizational ProductivityHuman resource management focuses on achieving higher production and most effective utilization of available resources. This leads to an enhancement in organizational goals and objectives.

LECTURE NO.31 Overview of Job Analysis, Job Description, Job Specification, Labour Turnover

Job Analysis:

In simple terms, job analysis may be understood as a process of collecting information about a job. The process of job analysis results in two sets of data:

i) Job description and

ii) Job specification.

These data are recorded separately for references.

Let us summarise the concept of Job Analysis:

A few definitions on job analysis are quoted below

1. Job analysis is the process of studying and collecting information relating to the operations and responsibilities of a specific job. The immediate products of this analysis are job descriptions and job specifications.

2. Job analysis is a systematic exploration of the activities within a job. It is a basic technical procedure, one that is used to define the duties, responsibilities and accountabilities of a job.

3. A job is a collection of tasks that can be performed by a single

employee to contribute to the production of some products or service provided by the organization. Each job has certain ability recruitments (as well as certain rewards) associated with it. Job analysis is the process used to identity these requirements.

Specifically, job analysis involves the following steps:

1. Collecting and recording job information

2. Checking the job information for accuracy.

3. Writing job description based on the information

4. Using the information to determine the skills, abilities and knowledge that are required on the job.

5. Updating the information from time to time.

Job Analysis, A process of obtaining all pertaining job facts is classified into two i.e. Job Description and Job specification

Job Description is an important document, which is basically descriptive in nature and contains a statement of job Analysis. It provides both organizational information’s (like location in structure, authority etc) and functional information (what the work is).

It gives information about the scope of job activities, major responsibilities and positioning of the job in the organization. This information gives the worker, analyst, and supervisor with a clear idea of what the worker must do to meet the demand of the job.

Who can better describe the characteristics of good job description?

Earnest Dale has developed the following hints for writing a good job description: –

1) The job description should indicate the scope and nature of the work including all-important relationships.

2) The job description should be clear regarding the work of the position, duties etc.

3) More specific words should be selected to show:-

a) The kind of work

b) The degree of complexity

c) The degree of skill required

d) The extent to which problems are standardized

e) The extent of worker’s responsibility for each phase of the work

So we can conclude by saying that Job description provide the information about the type of job and not jobholders.

USES OF JOB DESCRIPTION: –

Now we will see why job description is necessary in an organization,

There are several uses of job description, like

• Preliminary drafts can be used as a basis for productive group discussion, particularly if the process starts at the executive level.

• It helps in the development of job specification.

• It acts as a too during the orientation of new employees, to learn duties & responsibilities. It can act as a basic document used in developing performance standards.

Contents of Job Description:

Following are the main content of a job description it usually consist of following details or data.,

Job Description: A statement containing items such as

• Job title / Job identification / organization position

• Location

• Job summary

• Duties

• Machines, tools and equipment

• Materials and forms used

• Supervision given or received

• Working conditions

• Hazards

Job identification or Organization Position: – This includes the job title, alternative title, department, division and plant and code number of the job. The job title identifies and designates the job properly. The department, division etc., indicate the name of the department where it is situated and the location give the name of the place.

Job Summary: – This serves two important purposes. First is it gives additional identification information when a job title is not adequate; and secondly it gives a summary about that particular job.

Job duties and responsibilities: – This gives a total listing of duties together with some indication of the frequency of occurrence or percentage of time devoted to each major duty. These two are regarded as the “Hear of the Job”.

Relation to other jobs: – This gives the particular person to locate job in the organization by indicating the job immediately below or above in the job hierarchy.

Supervision: – This will give an idea the number of person to be supervised along with their job titles and the extent of supervision.

Machine: – These will also gives information about the tool, machines and equipment to be used.

Working Conditions: – It gives us information about the environment in which a jobholder must work.

Hazards: – It gives us the nature of risks of life and limb, their possibilities of occurrence etc.

Job Specification:

Job Specification translates the job description into terms of the human qualifications, which are required for performance of a job. They are intended to serve as a guide in hiring and job evaluation.

Job specification is a written statement of qualifications, traits, physical and mental characteristics that an individual must possess to perform the job duties and discharge responsibilities effectively.

In this, job specification usually developed with the co-operation of personnel department and various supervisors in the whole organization.

Job Specification Information: –

The first step in the programme of job specification is to prepare a list of all jobs in the company and where they are located. The second step is to secure and write up information about each of the jobs in a company. Usually, this information about each of the jobs in a company. Usually this information includes:

1. Physical specifications: – Physical specifications include the physical qualifications or physical capacities that vary from job to job. Physical qualifications or capacities

2. Include physical features like height, weight, chest, vision, hearing, ability to lift weight, ability to carry weight, health, age, capacity to use or operate machines, tools, equipment etc.

3. Mental specifications: – Mental specifications include ability to perform, arithmetical calculations, to interpret data, information blue prints, to read electrical circuits, ability to plan, reading abilities, scientific abilities, judgment, ability to concentrate, ability to handle variable factors, general intelligence, memory etc.

4. Emotional and social specifications: – Emotional and social specifications are more important for the post of managers, supervisors, foremen etc. These include emotional stability, flexibility, social adaptability in human relationships, personal appearance including dress, posture etc.

5. Behavioral Specifications: – Behavioral specifications play an important role in selecting the candidates for higher-level jobs in the organizational hierarchy. This specification seeks to describe the acts of managers rather than the traits that cause the acts. These

specifications include judgments, research, creativity, teaching ability, maturity trial of conciliation, self-reliance, dominance etc.

LECTURE NO.32 Manpower Planning, Recruitment, Selection, Induction

Recruitment refers to the process of screening, and selecting qualified people for a job at anorganization or firm, or for a vacancy in a volunteer-based some components of the recruitmentprocess, mid- and large-size organizations and companies often retain professional recruiters oroutsource some of the process to recruitment agencies.Recruiting refers to the process of attracting potential job applicants from the available laborforce. Every organization must be able to attract a sufficient number of the job candidates whohave the abilities and aptitudes needed to help the organization to achieve its objectives. Aneffective employee selection procedure is limited by the effectiveness of recruiting process.Outstanding job candidates cannot be selected if they are not included in the applicant pool. Therecruitment process also interacts with other personnel functions, especially performanceevaluation compensation training and development and employee relations. Recruiting istypically a human resource function.In planning recruiting activities, an organization needs to know how many applicants must berecruited. Since some applicants may not be satisfactory an others may not accept the job offers,an organization must recruit more applicants than it expects to hire. Yield Ratios helpOrganizations decide how many employees to recruit for each job opening. These ratios expressthe relationship between the numbers of people at one step of the recruitment process relative tothe number of people who will move to the next step.

SOURCE OF RECRUITMENTBasically organizations are available by the two main sources of recruitment which are:• Internal Recruitment• External Recruitment

Vacancies in upper level management can be filled either by hiring people from outside theorganization or by promoting lower level mangers. Both strategies have advantages anddisadvantages. We will consider both internal and external recruitment sources in detail:Internal Recruiting Sources: When job vacancies exist, the first place that an organizationshould look for placement is within itself. An organization’s present employees generally feelthat they deserve opportunities to be promoted to higher level positions because of their serviceand commitment to organization. More over organizations have opportunities to examine thetrack records of its present employees and to estimate which of them would be successful. Alsorecruiting among present employees is less expensive than recruiting from outside theorganization. The major forms of the internal recruiting include:• Promotion from within.• Job posting.• Contacts and referralsPromotion from within: Promoting entry level employees to more responsible positions is oneof the best ways to fill job vacancies and important reason why company should have a humanresource planning system. An organization that has human resource planning system usessuccession plans and replacement charts to identify and prepare individuals for upper levelpositions. Skills inventories are useful in identifying individuals who have the potential foradvancement, and individual’s desire to be promoted can be assessed in the performanceappraisal review. A promotion from within policy is intrinsic to career development and humanresource planning. A promotion from within policy can stimulate great motivation amongemployee, and this motivation is often accompanied by a general improvement in the employee morle.

SELECTIONSelection is the process of choosing from a group of applicants those individuals best suited for aparticular position. Most managers recognize that employee selection is one of their most

difficult, and most important, business decisions. This process involves making a judgment -notabout the applicant, but about the fit between the applicant and the job by consideringknowledge, skills and abilities and other characteristics required to perform the job. Selectionprocedures are not carried out through standard pattern and steps in this. Process can vary fromorganization to organization some steps performed and considered important by one organizationcan be skipped by other organization

The selection process typically begins with the preliminary interview; next, candidates completethe application for employment. They progress through a series of selection tests, theemployment interview, and reference and background checks. The successful applicant receivesa company physical examination and is employed if the results are satisfactory. Typicallyselection process consists of the following steps but it is not necessary that all organization gothrough all these steps as per requirement of the organization some steps can be skipped whileperforming the selection process:The basic idea is to collect maximum possible information about the candidates to ascertain theirsuitability for employment. Below is a discussion of the various steps:• Screening of Applications: Prospective employees have to fill up some sort ofapplication form. These forms have a variety of information about the applicants liketheir bio-data, achievements, experience, etc.• Selection Tests: Many organizations hold different kinds of selection tests to know moreabout the candidates or to reject the candidates who cannot be called for interview, etc.Selection tests normally supplement the information provided in application forms. Suchforms may contain factual information about candidates. Selection tests may giveinformation about their aptitude, interest, personality etc, which cannot be known byapplication forms.

Types of Test1. Achievement Test It is also called performance test or trade test. Achievement isconcerned with what one has accomplished. When candidates claim that they have donecertain things and know these, the achievement test may be conducted to measure howwell the candidates know these. A candidate’s knowledge may be measured through hisanswers to certain questions or his performance at a practical test. For example, a typingtest may measure the typing performance of a typist in terms of speed, accuracy andefficiency. Performance test may be administered for selecting employees at operativelevel as well as junior management level

Intelligence Test Intelligence test tries to measure the level of intelligence of a candidate.This test generally includes verbal comprehension, word fluency, memory, inductive,reasoning, number facility, speed of perception, spatial, visualization, etc. The scores on the test are usually expressed numerically as Intelligence Quotient (IQ), which can becalculated as follows:IQ = Mental age x 100Actual ageIt means that the IQ is derived by converting actual age into mental age and multiplying it by 100 in order to facilitate comparison. Higher is the figure; higher is the level of intelligence. Intelligence test is designed on the basis of age groups. Thus, each age groupmay have different intelligence tests. The basic idea behind intelligence test is that if the organization is able to get people with higher intelligence, its training and learning process will be easier because intelligent employees learn faster than dull employees.3. Personality Test. The personality test is administered to predict performance success for jobs that require dealing with people, or jobs that are essentially supervisory or managerial in character. Dimensions of personality such as interpersonal competence, dominance-submission, extroversion introversion, self-confidence, leadership ability, patience, and ambition can be measured through personality tests. Personality test is essentially a projective test because it projects the personality of the individual who maybe employed by the organization. Among the most widely used personality test isThematic Apperception Test (TAT) and its more improved version Thematic Evaluation of Management Potential (TEMP).

4. Aptitude test is used for measuring human performance characteristics related to the possible development of proficiency on specific jobs. These basic characteristics can bethought of as aptitudes. As such, aptitude test measures the latent or potential characteristics to do something provided proper environment and’ training are provided to the individuals. This test is more valid when the applicants have no experience or very little experience along the lines of the jobs. Specific tests have been developed for jobs that require clerical, mechanical, spatial relationships, and manual dexterity, abilities and skills. However, aptitude test does not measure motivation. Since on-the-job motivation is found to be more important than aptitude for the job, aptitude test is supplemented byinterest tests.5. Interest Test Interest test is designed to discover a person’s area of interest, and to identify the kind of jobs that will satisfy him. It is assumed that a person who is interested in a job can do much better than the person who is not interested. Interest test generallymeasures interest in outdoor activities, mechanical, computational, scientific, persuasive,artistic, literary, musical, clerical, social services, etc. INDUCTION /ORIENTATIONWe must all know that after a candidate joins the firm, he or she goes through the firm’s orientation program. Orientation is the process of acquainting new employees with theorganization. Orientation topics range from such basic items as the location of the company cafeteria to such concerns as various career paths within the firm.Hence we can say that induction or orientation is the process through which a new employee is introduced to the job and the organization. In the words of Armstrong, induction is “the processof receiving and welcoming an employee when he first joins a company and giving him the basic information he needs to settle down quickly and start work.ObjectiveInduction serves the following purposes:Removes fears: A newcomer steps into an organization as a stranger. He is new to the people,workplace and work environment. He is not very sure about what he is supposed to do. Inductionhelps a new employee overcome such fears and perform better on the job. It assists him inknowing more about:• The job, its content, policies, rules and regulations.• The people with whom he is supposed to interact.• The terms and conditions of employment.

Creates a good impression: Another purpose of induction is to make the newcomer feel athome and develop a sense of pride in the organization. Induction helps him to:• Adjust and adapt to new demands of the job.• Get along with people.• Get off to a good start.Through induction, a new recruit is able to see more clearly as to what he is supposed to do, howgood the colleagues are, how important is the job, etc. He can pose questions and seekclarifications on issues relating to his job. Induction is a positive step, in the sense; it leaves agood impression about the company and the people working there in the minds of new recruits.They begin to take pride in their work and are more committed to their jobs.Act as a valuable source of information: Induction serves as a valuable source of informationto new recruits. It classifies many things through employee manuals/ handbook. Informaldiscussions with colleagues may also clear the fog surrounding certain issues. The basic purposeof induction is to communicate specific job requirements to the employee, put him at ease andmake him feel confident about his abilities.

Steps in Induction ProgramThe HR department may initiate the following steps while organizing the induction program:• Welcome to the organization• Explain about the company.• Show the location, department where the new recruit will work. .• Give the company’s manual to the new recruit.• Provide details about various work groups and the extent of unionism within thecompany.

LECTURE NO.33 Training and Development, PlacementTraining is the process of planned programs and procedures undertaken for the improvement of employee's performance in terms of his attitude, skills, knowledge and behavior. These training and development programs can significantly improve the overall performance of organization

Training is normally viewed as a short process. It is applied to

technical staff, lower, middle, senior level management. When applied to lower and middle management staff it is called as training and for senior level it is called managerial development program/executive development program/development program.

The principal objective of training and development division is to make sure the availability of a skilled and willing workforce to an organization. In addition to that, there are four other objectives: Individual, Organizational, Functional, and Societal.

Individual Objectives – help employees in achieving their personal goals, which in turn, enhances the individual contribution to an organization.

Organizational Objectives – assist the organization with its primary objective by bringing individual effectiveness.

Functional Objectives – maintain the department’s contribution at a level suitable to the organization’s needs.

Societal Objectives – ensure that an organization is ethically and socially responsible to the needs and challenges of the society.

Importance Of Training and Development 

Optimum Utilization of Human Resources – Training and Development helps in optimizing the utilization of human resource that further helps the employee to achieve the organizational goals as well as their individual goals.

Development of Human Resources – Training and Development helps to provide an opportunity and broad structure for the development of human resources’ technical and behavioral skills in an organization. It also helps the employees in attaining personal growth.

Development of skills of employees – Training and Development helps in increasing the job knowledge and skills of employees at each level. It helps to

expand the horizons of human intellect and an overall personality of the employees.

Productivity – Training and Development helps in increasing the productivity of the employees that helps the organization further to achieve its long-term goal.

Team spirit – Training and Development helps in inculcating the sense of team work, team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn within the employees.

Organization Culture – Training and Development helps to develop and improve the organizational health culture and effectiveness. It helps in creating the learning culture within the organization.

Organization Climate – Training and Development helps building the positive perception and feeling about the organization. The employees get these feelings from leaders, subordinates, and peers.

Quality – Training and Development helps in improving upon the quality of work and work-life.

Healthy work environment – Training and Development helps in creating the healthy working environment. It helps to build good employee, relationship so that individual goals aligns with organizational goal.

Health and Safety – Training and Development helps in improving the health and safety of the organization thus preventing obsolescence.

Morale – Training and Development helps in improving the morale of the work force.

Image – Training and Development helps in creating a better corporate image.

Profitability – Training and Development leads to improved profitability and more positive attitudes towards profit orientation.

Training and Development aids in organizational development i.e. Organization gets more effective decision making and problem solving. It helps in understanding and carrying out organisational policies

Training and Development helps in developing leadership skills, motivation, loyalty, better attitudes, and other aspects that successful workers and managers usually display

LECTURE NO.34Training and Development Methods

I. On-the-Job MethodsThis refers to the methods of training in which a person

learns a job by actually doing/performing it. A person works on a job and learns and develops expertise at the same time.

1.Understudy

In this the employee is trained by his or her supervisor. The trainee is attached with his or her senior and called understudy or assistant. For example, a future manager might spend few months as assistant to the present manager.

2. Job rotation

This refers to shifting/movement of an employee from one job to another on regular intervals.

3. Special projects

The trainees' may ask to work on special projects related with departmental objectives. By this, the trainees will acquire the knowledge of the assigned work and also learn how to work with others.

4. Experience

It refers to learning by doing. This is one of the oldest methods of on-the-job training. Although this is very effective method but it also very time-consuming and wasteful. Thus it should be followed by other training methods.

5. Committee assignment

In this, the trainees become members of a committee. The c o m m i t t e e i s a s s i g n e d a p r o b l e m t o d i s c u s s a n d m a k e recommendations.

6. Coaching

In this, the supervisor or the superior acts as a guide and instructor of the trainee. This involves extensive

demonstration and continuous critical evaluation and correction.

II. Off-the-Job Methods

These methods require trainees to leave their workplace and concentrate their entire time towards the training objectives. These days off-the-job training methods have become popular due to limitations of the on-the-job training methods such as facilities and environment, lack of group discussion and full participation among the trainees from different disciplines, etc. In the off-the job methods, the development of trainees is the primary task rest everything is secondary. Following are the main off-the-job training methods:

1. Special courses and lectures

These are the most traditional and even famous today, method of developing personnel. Special courses and lectures are either designed by the company itself or by the management/professional schools. Companies then sponsor their trainees to attend these courses or lectures. These are the quick and most simple ways to provide knowledge to a large group of trainees.

2. Conferences and seminars

In this, the participants are required to pool their thoughts, ideas, viewpoints, suggestions and recommendations. By attending conferences and seminars, trainees try to look at a problem from different angles as the participants are normally from different fields and sectors.

3. Selected reading

This is the self-improvement training technique. The persons acquire knowledge and awareness by reading various trade journals and magazines. Most of the companies have their own libraries. The employees become the members of the professional associations to keep abreast of latest developments in their respective fields.

4. Case study method

This technique was developed by Harvard Business School, U.S.A. It is used as a supplement to lecture method. A case is a written record of a real business situation/problem faced by a company.

The case is provided to the trainees for discussion and analysis. Identification and diagnose of the problem is the aim in case study method. Alternate courses of action are suggested from participants.

5. Programmed instruction/learning

This is step-by-step self-learning method where the medium may be a textbook, computer or the internet. This is a systematic method for teaching job skills involving presenting questions or facts, allowing the person to respond and giving the learner immediate feedback on the accuracy of his or her answers."

6. Brainstorming

This is creativity-training technique, it helps people to solve problems in a new and different way. In this technique, the trainees are given the opportunity to generate ideas openly and without any fear of judgment. Criticism of any idea is not allowed so as to reduce inhibiting forces. Once a lot of ideas are generated then they are evaluated for their cost and feasibility.

7. Role-playing

In this method, the trainees are assigned a role, which they have to play in an artificially created situation. For example, a trainee is asked to play the role of a trade union leader and another trainee is required to perform the role of a HR manager. This technique results in better understanding of each other's situation by putting foot in other's shoes.

8. Vestibule schools

Large organizations frequently provide what are described as vestibule schools a preliminary to actual shop experience. As far as possible, shop conditions are duplicated, but instruction, not output is major objective." A vestibule school is operated as a specialized endeavor by the personnel department. This training is required when the amount of training that has to be done exceeds the capacity of the line supervisor; a portion of training is evolved from the line and assigned to staff through a vestibule school." The advantage of a vestibule school is specialization.

9. Apprenticeship training

This training approach began in the Middle Ages when those who wanted to learn trade skill bound themselves to a master craftsman and worked under his guidance. Apprenticeship training is a structured process by which people become skilled workers through a combination of classroom instruction and on-the-job training.

10. In-basket exercise

In this technique, the trainees are provided background information on a simulated firm and its products, and key personnel. After this, the trainees are provided with in-basket of memos, letters, reports, requests and other documents related with the firm. The trainee must make sense out of this mass of paperwork and prepare memos, make notes and delegate tasks within a limited time period."

11. Business games

Business games involve teams of trainees. The teams discuss and analyze the problem and arrive at decisions. Generally, issues related with inventories, sales, R&D, production process, etc. are taken up for consideration.

12. Behavior modeling

This is structured approach to teach specific supervisory skill. This is based on the social learning theory in which the trainee is provided with a specific model of behaviour and is informed in advance of the consequences of engaging in that type of behaviour.

13. Sensitivity (T-group) training

In this type of training, a small group of trainees consisting of 10 to 12 persons are formed which meets in an unstructured situation. There is no set agenda or schedule or plan. The main objectives are more openness with each other, increased listening skills, trust, support, tolerance and concern for others. The trainers serve a catalytic role. The group meets in isolation without any formal agenda. There is great focus on inter-personal behaviour. And, the trainer provides honest but supportive feedback to members on how they interacted with one another.

14. Multiple management

This technique of training was first introduced by McCormick, President of McCormick & co. of Baltimore in 1932. He gave the idea of establishing a junior board of directors. Authority is given to the junior board members to discuss any problem that could be discussed in senior board and give recommendations to the senior board. Innovative and productive ideas became available for senior board.

PLACEMENT

After the employee is hired and oriented, he/she must be placed in his/her right job. Placement is understood as the allocation of people to the job. It is assignment or re-assignment of an employee to a new or different job. Placement includes initial assignment of new employees and promotion, transfer or demotion of present employees. The placement is arising out of promotion, transfer, demotion. Assignment of new employee to a job apparently seems to be simple task. The employer advertises inviting applications from candidates for a specific post. The advertisement contains job description and job specifications in detail. When a candidate has selected, it is logical that individual is placed in a position that was advertised earlier. But the task of placement is not that simple it appears. Times are changing. Changes in the work ethics reflecting the demand for meaningful work. All these factors are causing organizations and individuals to determine the placement process more closely. We are entering the age when applicants must be considered for several jobs rather than one. From the managerial perspective, the task is to understand and capitalize on each person’s individually. Since, human attributes vary along many relatively independent ability, interest, biographical sketch and the personality dimensions, a person’s individuality is best viewed as his/her unique profile of scores on a variety of individual measures. Once we establish the unique profile for each individual, people and jobs can be matched optimally within the constraints set by available jobs and available people. If the number of individuals is large in relation to the available jobs, only the best qualified persons can be selected and placed. On the other hand, when more jobs are available, optimal placement is possible. Thus the number of people and the number of jobs determine the placement process in any organization.

Placement Problems

The difficulty with placement is that we tend to look at the individual but not at the job. Often, the individual does not work independent of others. Whether the employee works independent of others or is dependent depends on the types of jobs. Jobs in this context can be classified into the three   categories:

Independent (in such activities of one worker have little bearing on the activities of the other workers, here the placement is simple to conduct).

Sequential (activities of the workers are dependent on activities of a fellow worker example assembly line sequential jobs).

Pooled (where the job are high degree of interdependence among activities. The final output of is the result of contribution of all workers. It is team work which matters. Placement for this is quite difficult).

Principles of Placement

A few basic principles should be followed at the time of placement of a worker on the job. This is elaborated below:

1. Man should be placed on the job according to the requirements of the job. The job should not be adjusted according to the qualifications or requirements of the man. Job first; man next, should be the principle of the placement.

2. The job should be offered to the person according to his qualification. This should neither the higher nor the lower than the qualification.

3. The employee should be made conversant with the working conditions prevailing in the organization and all things relating to the job. He should also be made aware of the penalties if he commits the wrong.

4. While introducing the job to the new employees, an effort should be made to develop a sense of loyalty and cooperation in him so that he may realize his responsibility better towards the job and the organization.

5. The placement should be ready before the joining date of the newly selected person.

6. The placement in the initial period may be temporary as changes are likely after the completion of training. The employee may be later transferred to the job where he can do better.

Proper placement helps to improve the employees’ morale. The capacity of the employees can be utilized fully. The right placement also reduces labour turnover, absenteeism and also the accident rate. Than the employee can adjust to the required environment of the organization effectively and the performance of the employee will not be hampered

LECTURE NO.35 Wage and Salary Administration

Wage and Salary Administration’ refers to the establishment and implementation of sound policies and practices of employee compensation. The basic purpose of wage and salary administration is to establish and maintain an equitable wage and salary structure. Wages and salaries are often one of the largest components of cost of production and such have serious implications for growth and profitability of the company. On the other hand, they are the only source of workers’ income.

After the independence and particularly after 1948, some new terms relating to wages began to be used. These are:1. Statutory Minimum Wages2. Basic Minimum Wages3. Minimum Wages4. Fair Wages5. Living Wages6. Need Based Wages1. Statutory Minimum Wages: By it we mean the minimum amount of wages which should essentially be given to the workers as per provisions of the Minimum Wages Act, 1948.2. Basic Minimum Wages: This minimum wage is fixed through judicial pronouncement, awards, industrial tribunals and labour. The employers are essentially to give this minimum wage to the workers.3. Minimum Wages: The concept of minimum wages has

developed due to different standards in different countries. In Indian context, minimum wage means the minimum amount which an employer thinks necessary for the sustenance of life and preservation of the efficiency of the worker. According to Fair Wage Committee, the minimum wages must also provide for some measures of education- medical requirements and amenities.

4. Fair Wages: In order to bring about improved relations between labour and management an effort has been made in modern times that the labour gets a fair deal at the hands of owners and managers of industries. Various proposals were undertaken at the Industries Conference in 1947 and a resolution known as the Industrial Truce Resolution was passed. It is provided for the payment of fair wages to labour. The government of India appointed a Fair Wages committee in 1948 to determine the principles on which fair wages should be based and to suggest the lines on which those principles should be applied. According to the report on this Committee, Fair Wages is that wages which the labourer gets for his work just near to minimum wages and living wages. Generally, the current rate of wages being paid in the enterprise are known as fair wages.

5. Living Wages: According to Fair Wage Committee Report, “The living wage should enable the male earner to provide for himself and his family not merely the bare essentials of food, clothing and shelter, but also a measure of frugal comfort including education for children, protection against ill health, requirements of essential social needs and a measure of insurance against the more important misfortunes including old age.” According to the Committee on Fair Wages, the living wages represent the highest level of the wages and include all amenities which a citizen living in a modern civilized society is to expect when the economy of the country is sufficiently advanced and the employer is able to meet the expanding aspirations of his workers. The Living Wage should be fixed keeping in view the National income and the capacity of the industry to pay.

6. Need Based Wages: The Indian Labour Conference at its 15th session held at New Delhi in July, 1957 suggested that minimum wage fixation should be need based. Following are the important points of the Resolution of the Conference.a) The standard working class family should include three consumption units for the one earner.b) Calculation of minimum food requirements should be made on the basis of the recommendation of Dr. Aykoroyed i.e. 27000 calories for an average Indian adult.

c) Calculation of cloth should be made @ 18 yards annually for one member. As such, a family consisting of four members will require 72 yards of cloth.d) The workers should get minimum rent as per guidelines fixed by the government in the industrial housing policy.e) Expenses for fuel, light and so on should be equal to 20% of the entire minimum wages.

LECTURE NO.36Performance Appraisal

Meaning of Performance Appraisals

Performance Appraisals is the assessment of individual’s performance in a systematic way. It is a developmental tool used for all round development of the employee and the organization. The performance is measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility and health. Assessment should be confined to past as well as potential performance also. The second definition is more focused on behaviors as a part of assessment because behaviors do affect job results.

Use of Performance Appraisals

1.    Promotions

2.    Confirmations

3.    Training and Development

4.    Compensation reviews

5.    Competency building

6.    Improve communication

7.    Evaluation of HR Programs

8.    Feedback & Grievances

Performance Appraisal Process

1.    Objectives definition of appraisal

2.    Job expectations establishment

3.    Design an appraisal program

4.    Appraise the performance

5.    Performance Interviews

6.    Use data for appropriate purposes

7.    Identify opportunities variables

8.    Using social processes, physical processes, human and computer assistance

LECTURE NO.37TECHNIQUES / METHODS OF PERFORMANCE APPRAISALS

Numerous methods have been devised to measure the quantity and quality of performance appraisals. Each of the methods is effective for some purposes for some organizations only. None should be dismissed or accepted as appropriate except as they relate to the particular needs of the organization or an employee.

Broadly all methods of appraisals can be divided into two different categories.

Past Oriented Methods

Future Oriented Methods

Past Oriented Methods

1.    Rating Scales: Rating scales consists of several numerical

scales representing job related performance criterions such as dependability, initiative, output, attendance, attitude etc. Each scales ranges from excellent to poor. The total numerical scores are computed and final conclusions are derived. Advantages – Adaptability, easy to use, low cost, every type of job can be evaluated, large number of employees covered, no formal training required. Disadvantages – Rater’s biases

2.    Checklist: Under this method, checklist of statements of traits of employee in the form of Yes or No based questions is prepared. Here the rater only does the reporting or checking and HR department does the actual evaluation. Advantages – economy, ease of administration, limited training required, standardization. Disadvantages – Raters biases, use of improper weighs by HR, does not allow rater to give relative ratings

3.    Forced Choice Method: The series of statements arranged in the blocks of two or more are given and the rater indicates which statement is true or false. The rater is forced to make a choice. HR department does actual assessment. Advantages – Absence of personal biases because of forced choice. Disadvantages – Statements may be wrongly framed.

4.    Forced Distribution Method: here employees are clustered around a high point on a rating scale. Rater is compelled to distribute the employees on all points on the scale. It is assumed that the performance is conformed to normal distribution. Advantages – Eliminates Disadvantages – Assumption of normal distribution, unrealistic, errors of central tendency.

5.    Critical Incidents Method: The approach is focused on certain critical behaviors of employee that makes all the difference in the performance. Supervisors as and when they occur record such incidents. Advantages – Evaluations are based on actual job behaviors, ratings are supported by descriptions, feedback is easy, reduces recency biases, chances of subordinate improvement are high. Disadvantages – Negative incidents can be prioritized, forgetting incidents, overly close supervision; feedback may be too much and may appear to be punishment.

6.    Behaviorally Anchored Rating Scales: statements of effective and ineffective behaviors determine the points. They are said to be behaviorally anchored. The rater is supposed to say, which behavior describes the employee performance. Advantages – helps overcome rating errors. Disadvantages – Suffers from

distortions inherent in most rating techniques.

7.    Field Review Method: This is an appraisal done by someone outside employees’ own department usually from corporate or HR department. Advantages – Useful for managerial level promotions, when comparable information is needed, Disadvantages – Outsider is generally not familiar with employees work environment, Observation of actual behaviors not possible.

8.    Performance Tests & Observations: This is based on the test of knowledge or skills. The tests may be written or an actual presentation of skills. Tests must be reliable and validated to be useful. Advantage – Tests may be apt to measure potential more than actual performance. Disadvantages – Tests may suffer if costs of test development or administration are high.

9.    Confidential Records: Mostly used by government departments, however its application in industry is not ruled out. Here the report is given in the form of Annual Confidentiality Report (ACR) and may record ratings with respect to following items; attendance, self expression, team work, leadership, initiative, technical ability, reasoning ability, originality and resourcefulness etc. The system is highly secretive and confidential. Feedback to the assessee is given only in case of an adverse entry. Disadvantage is that it is highly subjective and ratings can be manipulated because the evaluations are linked to HR actions like promotions etc.

10.  Essay Method: In this method the rater writes down the employee description in detail within a number of broad categories like, overall impression of performance, promote ability of employee, existing capabilities and qualifications of performing jobs, strengths and weaknesses and training needs of the employee. Advantage – It is extremely useful in filing information gaps about the employees that often occur in a better-structured checklist. Disadvantages – It its highly dependent upon the writing skills of rater and most of them are not good writers. They may get confused success depends on the memory power of raters.

11.  Cost Accounting Method: Here performance is evaluated from the monetary returns yields to his or her organization. Cost to keep employee, and benefit the organization derives is ascertained.

Hence it is more dependent upon cost and benefit analysis.

12.  Comparative Evaluation Method (Ranking & Paired Comparisons): These are collection of different methods that compare performance with that of other co-workers. The usual techniques used may be ranking methods and paired comparison method.

Ranking Methods: Superior ranks his worker based on merit, from best to worst. However how best and why best are not elaborated in this method. It is easy to administer and explanation.

Paired Comparison Methods: In this method each employee is rated with another employee in the form of pairs. The number of comparisons may be calculated with the help of a formula as under

N x (N-1) / 2

Future Oriented Methods

1.    Management By Objectives: It means management by objectives and the performance is rated against the achievement of objectives stated by the management. MBO process goes as under.

Establish goals and desired outcomes for each subordinate

Setting performance standards

Comparison of actual goals with goals attained by the employee

Establish new goals and new strategies for goals not achieved in previous year.

Advantage – It is more useful for managerial positions.

Disadvantages – Not applicable to all jobs, allocation of merit pay may result in setting short-term goals rather than important and long-term goals etc.

2.    Psychological Appraisals: These appraisals are more directed to assess employee’s potential for future performance rather than the past one. It is done in the form of in-depth interviews, psychological tests, and discussion with supervisors and review of other evaluations. It is more focused on employees emotional, intellectual, and motivational and other personal characteristics affecting his performance. This approach is slow and costly and may be useful for bright young members who may have considerable potential. However quality of these appraisals largely depends upon the skills of psychologists who perform the evaluation.

3.    Assessment Centers: This technique was first developed in USA and UK in 1943. An assessment center is a central location where managers may come together to have their participation in job related exercises evaluated by trained observers. It is more focused on observation of behaviors across a series of select exercises or work samples. Assessees are requested to participate in in-basket exercises, work groups, computer simulations, role playing and other similar activities which require same attributes for successful performance in actual job. The characteristics assessed in assessment center can be assertiveness, persuasive ability, communicating ability, planning and organizational ability, self confidence, resistance to stress, energy level, decision making, sensitivity to feelings, administrative ability, creativity and mental alertness etc. Disadvantages – Costs of employees traveling and lodging, psychologists, ratings strongly influenced by assessee’s inter-personal skills. Solid performers may feel suffocated in simulated situations. Those who are not selected for this also may get affected.

Advantages – well-conducted assessment center can achieve better forecasts of future performance and progress than other methods of appraisals. Also reliability, content validity and predictive ability are said to be high in assessment centers. The tests also make sure that the wrong people are not hired or promoted. Finally it clearly defines the criteria for selection and promotion.

4.    360-Degree Feedback: It is a technique which is systematic collection of performance data on an individual group, derived from a number of stakeholders like immediate supervisors, team members, customers, peers and self. In fact anyone who has useful information on how an employee does a job may be one of the appraisers. This technique is highly useful in terms of broader

perspective, greater self-development and multi-source feedback is useful. 360-degree appraisals are useful to measure inter-personal skills, customer satisfaction and team building skills. However on the negative side, receiving feedback from multiple sources can be intimidating, threatening etc. Multiple raters may be less adept at providing balanced and objective feedback.

LECTURE NO.38 Grievance Handling, Welfare Aspects

A grievance is any dispute or difference arising between any employee and management or between the union and management. Most collective bargaining agreements define, in general, what the parties have agreed to consider being a grievance. Unions usually prefer a broaddefinition that recognizes any dispute, while management prefers to limit grievances to the meaning or application of a particular clause. The primary function of the definition is to outlinethe parameters of what types of disputes may be grieved.According to Michael Jucius, “ A grievance can be any discontent or dissatisfaction, whetherexpressed or not, whether valid or not, and arising out of anything connected with the companythat an employee thinks, believes, or even feels as unfair, unjust, or inequitable.”

A grievance means any discontentment or dissatisfaction in an employee arising out of anything related to the enterprise where he is working. It may not be expressed and even may not be valid. It arises when an employee feels that something has happened or is going to happen which is unfair, unjust or inequitable. Thus, a grievance represents a situation in which an employee feels that something unfavorable to him has happened or is going to happen. In an industrial enterprise, an employee may have grievance because of long hours of work, non fulfillment of terms of service by the management, unfair treatment in promotion, poor working facilities, etc.

In an organization, a grievance may arise due to several factors such as:• Violation of management’s responsibility such as poor working conditions

• Violation of company’s rules and regulations• Violation of labor laws• Violation of natural rules of justice such as unfair treatment in promotion, etc.Various sources of grievance may be categorized under three heads: (i) management policies, (ii)working conditions, and (iii) personal factorsGrievance resulting from Management Policies include:• Wage rates• Leave policy• Overtime• Lack of career planning• Role conflicts• Lack of regard for collective agreement• Disparity between skill of worker and job responsibilityGrievance resulting from Working Conditions include:• Poor safety and bad physical conditions• Unavailability of tools and proper machinery• Negative approach to discipline• Unrealistic targetsGrievance resulting from Inter-Personal Factors include:• Poor relationships with team members• Autocratic leadership style of superiors• Poor relations with seniors• Conflicts with peers and colleaguesGrievance resulting from Working Conditions include:• Poor safety and bad physical conditions• Unavailability of tools and proper machinery• Negative approach to discipline• Unrealistic targetsGrievance resulting from Inter-Personal Factors include:• Poor relationships with team members• Autocratic leadership style of superiors• Poor relations with seniors• Conflicts with peers and colleagues

9.6.1 Forms of GrievancesA grievance may take any of the following forms:• Factual,• Imaginary,• Disguised.Factual: When an employee is dissatisfied with his job, for genuine or factual reasons like abreach of terms of employment or any other reasons that are clearly attributed to the management, he is said to have a factual grievance. Thus, factual grievances arise when the legitimate

needs are unfulfilled. The problem that he has is real and not virtual

Imaginary: When an employee’s grievance or dissatisfaction is not because of any factual or Valid reason but because of wrong perception, wrong attitude or wrong information he has. Sucha grievance is called an imaginary grievance. Though it is not the fault of management, the responsibility of dealing with it still rests with the management. So the problem is not real. It is in the mind or just a feeling towards someone or something.

Disguised: An employee may have dissatisfaction for reasons that are unknown to him. This may be because of pressures and frustrations that an employee is feeling from other sources likehis personal life. For example if you have had a bad day in the institute, that will reflect in the mood at home. We are all humans and are sensitive to the environment that we operate in themanagers have to detect the disguised grievances and attend to them by counseling the concerned employees. They have to find out the root cause of the problem rather than find quick fixsolutions to them.

Guidelines for Effective Grievance HandlingWhile dealing with grievances, a manager cannot depend upon some ready-made, solutions.Every case has to be dealt with on merit. The following guidelines may help to deal effectively with the grievances:1. The complaint should be given a patient hearing by his superior. He should be allowed to express himself completely. The management should be empathetic.2. The superior should try to get at the root of the problem. It should be remembered thatsymptoms are not the problems. It should also be noted that if there are symptoms, there would be a problem as well.3. The management must show it anxiety to remove the grievances of the workers. The workers should feel that the management is genuinely interested in solving its problems.4. If the grievances are real and their causes located, attempts should be made to remove the causes.5. If the grievances are imaginary or unfounded, attempts should be made to convince the workers.6. Every grievance must be handled within the reasonable time limit.7. All grievances should be put into writing. Some proofs required as well.8. Relevant facts about the grievance must be gathered. The

management should not haste!9. Decision taken to redress the grievance of the worker must be communicated to him.10. Follow up action should be taken to know the response of the forced employee.