1.management of services

8/6/2019 1.Management of Services

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Introduction


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Primary Sector` When the economic activity depends mainly on exploitation of

natural resources then that activity comes under the primarysector.

`

Agriculture and agriculture related activities, Fishing, Mining,Forestry etc are primary sectors of economy

Secondary Sector` When the main activity involves manufacturing then it is the

secondary sector.` All industrial production where physical goods are produced

creates a finished usable product and hence depends onprimary sector industries for the raw materials` Construction, Petrochemicals, Textiles, Engineering,

Electronics, Food processing, Handicrafts, Machine Tools aresecondary sectors of economy


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Tertiary Sector

` When the activity involves providing intangible

goods like services then this is part of the tertiary

sector.

` Financial services, banking, hospitality, tourism,

healthcare, management consultancy, IT are

examples of service sector.


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` During early civilization all economic activity was

in primary sector.

` When the food production became surplus

peoples need for other products increased.` This led to the development of secondary sector.

` The growth of secondary sector spread its

influence during industrial revolution in nineteenth

century.


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` After growth of economic activity a support

system was the need to facilitate the industrial

activity.

` Certain sectors like transport and finance play animportant role in supporting the industrial activity.

Moreover, more shops were needed to provide

goods in peoples neighbourhood.

` Ultimately, other services like tuition,administrative support developed.


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` To understand this interdependency, let us take an example

of a cold drink.

` A cold drink contains water, sugar and artificial flavour.

` Suppose if there is no sugarcane production then procuring

sugar will become difficult and costly for the cold drink

manufacturer. Now to transport sugarcane to sugar mills and

sugar to the cold drink plant needs the services of a

transporter. A person or system of persons is required to

maintain and monitor all these movements of goods fromfarm to factory to shop in different locations. That is where

role of administrative staff comes.


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` Let us go back to the farmer. He also needs fertilizers and

seeds which is processed in some factory and which will be

delivered to his doorstep by some means of transportation.

` To top it all at every step of these activities we require the

proper monetary and banking system.

` In a nutshell this describes how interrelated all sectors

of an economy are.


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Organized Sector` The sector which carries out all activity through a

system and follows the law of the land is calledorganized sector.

` Moreover, labour rights are given due respect and

wages are as per the norms of the country and those ofthe industry.

` Labour working organized sector get the benefit ofsocial security net as framed by the Government.

` Certain benefits like provident fund, leave entitlement,

medical benefits and insurance are provided to workersin the organized sector.` These security provisions are necessary to provide

source of sustenance in case of disability or death ofthe main breadwinner of the family. Otherwise thedependents will face a bleak future.


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Unorganized Sector` The sector which evade most of the laws and

dont follow the system come under unorganizedsector.

` Small shopkeepers, some small scalemanufacturing units keep all their attention onprofit making and ignore their workers basicrights.

`

Workers dont get adequate salary and otherbenefits like leave, health benefits and insuranceare beyond the imagination of people working inunorganized sectors.


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Public Sector

` Companies which are run and financed by the Government

comprise the public sector.

` After independence India was a very poor country. India needed

huge amount of money to set up manufacturing plants for basic

items like iron and steel, aluminum, fertilizers and cements.

` Additionally infrastructure like roads, railways, ports and airports

also require huge investment.

` In those days Indian entrepreneur was not cash rich so

government had to start creating big PSEs like SAIL (Steel

Authority of India Limited), ONGC (Oil & Natural Gas

Commission).

Courts, Employment exchanges, Hospitals, Municipal services,

Post office, Schools, Colleges, Airports etc


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Private Sector

` Companies which are run and financed by private people comprise

the private sector.

` Companies like Hero Honda, Tata Group, Infosys, Birla Group,

Reliance etc are from private sectors.


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` Long - term, contractual partnerships between public

and private sector agencies Specially targeted towards financing, designing, implementing,

and operating infrastructure facilities services that were

traditionally provided by the public sector. In a PPP, each partner, usually through legally binding contract(s)

or some other mechanism, agrees to share responsibilities related

to implementation and/or operation and management of a project.

This collaboration or partnership is built on the expertise of each

partner that meets clearly defined public needs throughappropriate allocation of: Resources, Risks, Rewards,

Responsibilities


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` The most important services in the Indian economy has beenhealth and education. They are one of the largest and most

challenging sectors and hold a key to the country's overall

progress.

The 'Ministry of Health and Family Welfare' is responsible for

implementation of various programmes in the areas of healthand family welfare, prevention and control of major

communicable diseases as well as promotion of traditional

and indigenous systems of medicines.`

While, education strongly influences improvement in health,hygiene and demographic profile. The 'Ministry of Human

resource Development' is involved in eradicating illiteracy from

the country.


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` India has achieved impressive demographic transition owing to

the decline of crude birth rate, crude death rate, total fertility

rate and infant mortality rate as well as gained high literacy

rate in the country.


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` Corporate Sectors 2007 Q4 performance higher

than Q4 2006 thanks to a booming service sector -

while agriculture is growing at 3%, industry at

9.4%, services are highest, at 11.2%


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- 70% - 80% GDP in

highly developedeconomies like US.

- Service sector in

India about 55%.

List of countries by service output (2009)


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` The service industry forms a backbone of social andeconomic development of a region.

` It has emerged as the largest and fastest-growing sectorsin the world economy, making higher contributions to the

global output and employment.` Its growth rate has been higher than that of agriculture and

manufacturing sectors.

` It is a large and most dynamic part of the Indian economyboth in terms of employment potential and contribution to

national income.


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` It covers a wide range of activities such as: Trading

Transportation and communication

Financial services

Real estate Business services

Community, social and personal services

` In India, services sector, as a whole, contributed as muchas 68.6 per cent of the overall average growth in gross

domestic product (GDP) between the years 2002-03 and2006-07.


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` It is impossible for any country to prosper today

under the burden of an inefficient and expensive

services infrastructure.

` Producers and exporters of textiles, tomatoes orany other product will not be competitive without

access to efficient banking, insurance,

accountancy, telecoms and transport systems.


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` Affluence (services like pest control, personal security,

interior designer, maintenance, housekeeping, facilities

management)

` Leisure time (services of travel agencies, resorts,

hotels, entertainment)

` Life expectancy (services like old age homes, health

care)

` Working wives (services of day care, packed food,

home delivery, domestic help services )


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` Product complexity (water purifiers, microwave ovens,

home computers)

` Lifes complexity (tax consultants, legal advisors,property advisors)

` Resource scarcity and ecology (pollution control

agencies, water management, rain water harvesting

companies)

` New products (blackberry, social networking sites,

online shopping)


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` Technological innovations

` Internationalization and globalization

` Expansion of leasing and rental businesses

` Manufacturers as service providers` Hiring of employees

` Privatization of some public / non - profit services

` Policy - Changing pattern of government

regulations


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` Economic liberalization may be described as the

freedom to engage in economic activity at home and/or

abroad, a freedom subject to institutional and policy

constraints needed to guarantee public interests at large.

` Globalization may be seen as a major driving force of

global economic integration, is characterized by-

Internationalization of production with very fast changes in

the structure of production

Liberalization and expansion of world trade in goods andservices

Unprecedented expansion of international financial flows

supported by the latest technological advances


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` Opening up of markets

` Increased inflow of foreign direct investments

` Ease of trade regulations

Eliminating barriers to trade in services like transport that facilitatetrade

Enhanced competition from both domestic and foreign suppliers

` Increase in supply level led to increase in

employment

` India became a huge consumer market Now, around 54% of the annual Gross Domestic Product

(GDP) of India comes from the service industry as a

result ofLiberalization & Globalization


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` The financial sector reforms is the most important

component of the program in India toward

economic liberalization.

` Economic liberalization has opened the door toforeign competitors enter our market.

` Deregulation in the form of removal of exchange

controls and protection of the interest rates have

made the market more competitive.` Innovation has become a necessity for survival.

1.management of services

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