Principles of Management

Management

Management is the art of getting things done through people

Management as a process consists of planning, organizing, actuating and controlling, performed to determine and accomplish the objectives by the use of people and resources.

Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.

Importance of Management

1)   Management is a critical element in the economic growth of a country

2)   Management is essential in all organized efforts, be it a business activity or any other activity

3)   Management is the dynamic, life-giving element in every organization

Management Functions

1)   Planning

2)   Organizing

3)   Directing

4)   Controlling

5)   Innovating

6)   Representation

Planning

Determination of what is to be done, how and where it is to be done, who is to do it and how results are to be evaluated

Function which is performed by managers at all levels – top, middle and bottom

Organizing

To provide a business with everything useful: majorly human organization and material organization

According to Allen, Organization refers to the structure which results from identifying and grouping work, defining and delegating responsibility and authority, and establishing relationships’.

Directing

Function can also be called leading, directing, motivating, actuating, etc.

Directing involves 3 sub-functions:

1)   Communication

2)   leadership

3)   motivation

Two broad categories of motivation

1)   Financial

2)   non-financial

Controlling

Function of controlling involves

1)   Establishing standards of performance

2)   Measuring current performance and comparing it against the established standards

3) Taking action to correct any performance that does not meet those standards

Innovation

   Creating new ideas which may improve a product, process or practice

1)   Innovation in packaging: HUL’s shampoo sachets

2)   Innovation in distribution: Eureka forbes’ DTH salesforce

3)   Innovation in business model: ITC’s e-choupal

Representing

A manager is required to spend a part of his time in representing his organization before various outside groups which have some stake in the organization

Retail Service Layout

Service facilities can be costly, like hospitals, resort hotels, universities, and company headquarters, or less costly than other types of facilities, like groceries, department stores, restaurants, banks, hotels, cleaners, clinics and low offices.

Factor influence location of retail and service facilities.

A.-Dominant factors

1)   Proximity of customers

2)  Integration with other parts of organization.

3)  transportation costs and proximity to market

4)  Location of competitors

B.-Secondary factor

A.  Dominant factors

The factors considered for manufactures are also applied to service provides, with one important additions- the impact of location on the sales and customers satisfaction. Customers usually look about how close a service facility is, particularly if the process require considerable customers contact.

Proximity of customers

Location is key factor in determining how conveniently customers can carry on business with firm for examples.- few peoples would like to go to remotely located dry cleaner or supermarket if another is more convenient. Thus the influence of location on revenues tends to be the dominant factor

Integration with other parts of organization

If the new plant or facility is one of a number owned operated by a single organization or group, it should so situated that its work can be integrated with that of the associated units.

Transportation costs and proximity to market

For warehousing and distribution operations, transportation costs and proximity to market are extremely important. With a warehouse nearby, many firms can hold inventory closer to be customers, thus reducing delivery time and promoting sales.

Location of competitors

One complication in estimating the sales potential at different location is the impact of competitors management must not only consider the current location of competitors but also try to anticipate their reaction  to the firms locations. Avoiding areas where competitors are already well established often pays.

B.-Secondary factor

Retailer also consider level of retail activity, residential density, traffic flow and site visibility. Retail activity in the area important, a shoppers often diced on impulse to go shopping or to it in a restaurant. Traffic flow and visibility are important because businesses customer arrives in car. Visibility involes distant from the street and size of near by buildings in sings. High residential density insure nighttime and we can business when the population in the area fits the firms competitive priorities and target market segment.

Dividend Policy

Dividend policy is the set of guidelines a company uses to decide how much of its earnings it will pay out to shareholders. Some evidence suggests that investors are not concerned with a company's dividend policy since they can sell a portion of their portfolio of equities if they want cash.

Dimensions of Dividend Policy

1) Funds requirement

The funds required for forecasting prepares context of long range planning and consequently considerable funding needs tend to keep their payout ratio rather low to conserve resources for growth.

2) Liquidity

Dividend entitles cash payment. Hence, the liquidity position of the firm has a bearing on its dividend decision. A firm may be unable to distribute more than a small fraction of its earning, despite to do so, because of insufficient liquidity.

3) Access to external sources of financing.

The firm which has difficulty in raising finance externally is likely to lean heavily on internally generated funds.

4) Shareholder preference

The preference of shareholders may influence the dividend payout ratio of the firm.

5) Difference in the cost of external equity & retained earnings

The cost of external equity, expecting that which is raised by way of rights issue, is higher than the cost of retained earnings. Two factors cause this difference: Issue cost & under pricing.

6) Control

External finance, unless it is through a right issue, involves dilution of control. If the finance is raised by public, the existing shareholders will have to share control with new shareholders.

7) Taxes

Presently dividend income is tax exempt in the hands of investors.

Transaction Process System

A transaction process system is an information processing system for business transactions involving the collection, modification and retrieval of all transaction data. Characteristics of a TPS include performance, reliability and consistency.

TPS is also known as transaction processing or real-time processing.

A transaction process system and transaction processing are often contrasted with a batch process system and batch processing, where many requests are executed all at one time. The former requires the interaction of a user, whereas batch processing does not require a user to be present. Also, in batch processing the results of each transaction are not immediately available. Additionally, there is a delay while the many requests are being organized, stored and eventually executed. In transaction processing there is no delay and the results of each transaction are immediately available. During the delay time for batch processing, errors can occur. Although errors can occur in transaction processing, they are infrequent and tolerated, but do not warrant shutting down the entire system.

To achieve performance, reliability and consistency, data must be readily accessible in a data warehouse, backup procedures must be in place and the recovery process must be in place to deal with system failure, human failure, computer viruses, software applications or natural disasters.

Organization Behavior

OB refers to the behavior of individual & Group with in the organization and their interaction b/w Organization members and their external environment.

Organization Behavior is the subset of Management activity concerning with Understanding, Predicting and Influencing individual behavior in the organization setting.

Positive OB

Positive prospective of OB emphasis on the needs to recognize and built strength rather them attempting weakness and to cure them .

Categories of Positive approach

1)   Internality

2)   Self –Management

3)   Optimism

4)   Trust

5)   Collaboration

Indian Organizational Setting

Organizational Structure

1)   Work Specialization

2)   Departmentalization

3)   Chain Of Command (Authority, Unity Of Command)

4)   Span Of Control

5)   Centralization & Decentralization

6)   Formalization

Organizational Design

1)   Simple Structure

2)   Bureaucracy

3)   Matrix

Contemporary Organization

1)   Team Structure

2)   Virtual Organization

3)   learning Organization

4)   Boundaries Organization

5)   Empowered Organization