NATURE OF MANAGEMENT

Basic Concepts of Management

• Elements Of Management

• Levels Of Management & Their Respective Functions. Management

• External Environment

• The Social Responsibility of Manager.

• Professionalism in Management.

Origin of the word Management

Manager- Italian word- maneggiare

Mesnagement (later menagement )- French word

Additional Key Concepts

Managers are the people responsible for supervising the use of an organization’s resources to meet its goals.

Resources are organizational assets and include:

• People,

• Machinery,

• Raw materials,

• Information, skills,

• Financial capital.

DEFINITION OF MANAGEMENT

Henry Fayol says, “To manage is to forecast and plan, to organise, to direct, to co-ordinate and to control.”

F. W. Tailor, “Management is an art of knowing what you want to do and then seeing that it is done in the best and the cheapest way.”

Management

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

Efficiency versus Effectiveness

ELEMENTS OF MANAGEMENT

Man

Machine

Money

Material

Method

Do things rightDo right things

Effectiveness:Effectiveness comes

from taking the time to stop and evaluate, rather

Efficiency:Operating in such a way that resources

IMPORTANCE OF MANAGEMENT

Effective utilization of resources

Development of resources

Stability in the society

Incorporating innovations

Integrating interest groups

FEATURES OF MANAGEMENT

• Management is Universal: applicable in all the areas.

• Management has an existence of objectives

• Management is a unifying area: reconciles individual goal with organizational goal.

• Management is a social process: it is by the people, through and for the people.

• Management is organised.

• Management is intangible:is an unseen or invisible force.

• Management is situational:different ways of doing things.

• Management is an art as well as science:contains theoretical and practical knowledge.

NATURE OF MANAGEMENT PROCESS

-Levels of Management

KINDS OF MANAGERS BY LEVEL

Top management: consists of board of directors and chief executives. Broadly it performs the following functions:

To analyze and interpret changes in management

To establish long term corporate plans

To formulate and approve master budget and departmental budgets.

To design broad organization structure

Intermediate management: comprises of departmental and divisional heads e.g. marketing manager. Its broad functions include:

Accountable for the performance of his division

He coordinates and controls the activities of all personnel working in different branches or sections of his particular department.

Lower level management: consists of supervisors,foremen,sales officers. Its functions include:

Planning day to day production within the goals laid down

To assign jobs to workers

Ordering an instructing

Advising and assisting workers by explaining work procedures.

FUNDAMENTAL MANAGEMENT SKILLS

Technical

– Skills necessary to accomplish or understand the specific kind of work being done in an organization.

Interpersonal

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

Conceptual

– The manager’s ability to think in the abstract and to see the “big picture.” To perceive how all the parts fit together.

Managerial Roles

Described by Mintzberg.

– A role is a set of specific tasks a person performs because of the position they hold.

Roles are directed inside as well as outside the organization.

There are 3 broad role categories:

1. Interpersonal

2. Informational

3. Decisional

Interpersonal Roles

Roles managers assume to coordinate and interact with employees and provide direction to the organization.

– Figurehead role: symbolizes the organization and what it is trying to achieve.

– Leader role: train, counsel, mentor and encourage high employee performance.

– Liaison role: link and coordinate people inside and outside the organization to help achieve goals.

Informational Roles

Associated with the tasks needed to obtain and transmit information for management of the organization.

– Monitor role: analyzes information from both the internal and external environment.

– Disseminator role: manager transmits information to influence attitudes and behavior of employees.

– Spokesperson role: use of information to positively influence the way people in and out of the organization respond to it.

Decisional Roles

Associated with the methods managers use to plan strategy and utilize resources to achieve goals.

– Entrepreneur role: deciding upon new projects or programs to initiate and invest.

– Disturbance handler role: assume responsibility for handling an unexpected event or crisis.

– Resource allocator role: assign resources between functions and divisions, set budgets of lower managers.

– Negotiator role: seeks to negotiate solutions between other managers, unions, customers, or shareholders.

SOCIAL RESPONSIBILITY OF MANAGER

Definition-

“Social responsibilities refer to the businessman’s decisions and actions taken for reasons atleast partially beyond the firm’s direct economic or technical interest.”

Impact of the decision of business on the society

SHAREHOLDERS

EMPLOYEES

CUSTOMERS

CREDITORS AND SUPPLIERS

SOCIETY

GOVERNMENT

SHAREHOLDERS:

• Interest

• Use of the capital

• Good returns on capital (dividend and increase in stock value)

• Information

EMPLOYEES:

• Treat workers as the main pillars of the organization

• Promote cooperation between employees and employers

• Harmonious and healthy working atmosphere

• Provide fair wages

• Other benefits to motivate them

CUSTOMERS:

• Charging reasonable prices

• Standardized and quality product

• Easy availability of goods and services

• Abstaining from unethical practices

• Refraining from deceiving customers

SOCIETY:

• Using its technical expertise to solve local problems

• Setting socially desirable standards of living

• Providing basic amenities, healthcare and education facility

• Establishing development programs for the benefit of economically weaker sections of the society

• Playing an important role in civic affairs

GOVERNMENT:

• Be law-abiding

• Pay taxes and other dues fully, timely and honestly

• Not bribe government servants

• Not try to use political influence in its favour

• McDonald $15-20 million for Ronald McDonald House Charity

• Tata group

• Colgate - educating kids

• HUL - CRY

• IBM- donated computers

PROFESSION

Profession means an occupation by which the intelligence and the efforts for the purpose of providing skilled service or advice to others for an agreed amount.

MANAGEMENT – A PROFESSION

1. Existence of organized and systematic knowledge

2. Formalized methods of acquiring training

3. Existence of professional association

4. Existence of ethical code of conduct

5. Service motive

Foundation of A Profession

Experience

Education

Training

FREDERICK WINSLOW TAYLOR“Father of Modern Management”

In 1895- proposed a Piece Rate System:

– Observe & Analyze – set the “standard” for job

(use Time and Motion studies)

– Pay workers for meeting/exceeding standard

– Pay individual worker – not everyone, or group/department, or the “job” = pay according to individual value to business

What Adam Smith had done for markets, Taylor does for the firm – place wealth creation squarely on the individual worker who is managed, rewarded for effort.

Biography: Wealthy Philadelphia Quaker family. Worked in hydraulics factory as laborer/foreman/chief engineer

At 25 earned college degree in engineering

At 35- consultant: introduced functional foreman, production planning, differential pay= cut costs/increased production)

1905 – wrote Shop Management

1909-14: Lecturer at Harvard

Management consultant – US Navy and Army

1911- Wrote Scientific Management

“Soldiering” – people don’t always try/work hard. WHY?

If we work hard and complete the job – no more work next day; fewer workers needed!

SO what is the amount of time needed to do the job?

How should it be performed – “One Best Way”

What is the standard?

F.W. TAYLOR AND SCIENTIFIC MANAGEMENT

Scientific Management

The systematic study of the relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.

Four Principles of Scientific Management

1) Study the way workers perform their tasks, gather all the informal job knowledge that workers possess and experiment with ways of improving how tasks are performed

• Time-and-motion study

2) Codify the new methods of performing tasks into written rules and standard operating procedures

3) Carefully select workers who possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures

4) Establish a fair or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level

Problems with Scientific Management

Managers frequently implemented only the increased output side of Taylor’s plan.

– Workers did not share in the increased output.

Specialized jobs became very boring, dull.

– Workers ended up distrusting the Scientific Management method.

Workers could purposely “under-perform.”

– Management responded with increased use of machines and conveyors belts.

FAYOL’S PRINCIPLES OF MANAGEMENT

Division of Labor: allows for job specialization.

– Jobs can have too much specialization leading to poor quality and worker dissatisfaction.

Authority and Responsibility - Both formal and informal authority resulting from special expertise.

Unity of Command - Employees should have only one boss.

Line of Authority - A clear chain of command from top to bottom of the firm.

Centralization - The degree to which authority rests at the top of the organization.

Unity of Direction - A single plan of action to guide the organization.

Equity - The provision of justice and the fair and impartial treatment of all employees.

Order - The arrangement of employees where they will be of the most value to the organization and to provide career opportunities.

Initiative - The fostering (development) of creativity and innovation by encouraging employees to act on their own.

Discipline - Obedient, applied, respectful employees are necessary for the organization to function.

Remuneration of Personnel - An equitable uniform payment system that motivates contributes to organizational success.

Stability of Tenure of Personnel - Long-term employment is important for the development of skills that improve the organization’s performance.

Subordination of Individual Interest to the Common Interest - The interest of the organization takes precedence over that of the individual employee.

Esprit de corps - Comradeship (Company, friendship), shared enthusiasm foster (shared) devotion to the common cause (organization).

THE HAWTHORNE STUDIES: NEW DIRECTION

The “Hawthorne Experiments” were a series of studies into worker productivity performed at the Cicero plant beginning in 1924 and ceasing in 1932, initially conducted by the National Research Council and later by Western Electric and Harvard University

Illumination Studies, 1924 -1927: Does Use of Electric Lights Increase Productivity?

Hypothesis: Increased illumination is correlated with higher productivity.

Finding: No relationship“Hawthorne effect” or "halo effect“ – Researcheraffects outcome (bias)

2nd Hawthorne Experiment

Relay Assembly Test Room Experiments, 1927-1929 Harvard research team set up experiment with 5 females from Relay Assembly area to test impact of incentives and work conditions on worker fatigue

There is no conclusive evidence that these affected fatigue or productivity.Productivity and workersatisfaction increase whenconditions are improvedand made worse.

3rd Hawthorne Experiment

Mica-Splitting Test group, 1928 – 1930 Relationship between work conditions and productivity, by maintaining a piece-rate incentive system and varying work conditions

Productivity increased by about 15% and researchers concluded that productivity was affected by non-pay considerations

Conclusion: social dynamics were the basisof worker performance.

Hawthorne Interviews

Plant-wide Interview program, 1928-1931

1. Western Electric implemented a plant-widesurvey of employees to record their concerns and grievances. From 1928 to 1930, 21,000 employees were interviewed.

2. Data supported the research conclusion that work improved when supervisors began to pay attention to employees, that work takes place in a social context in which work and non-work considerations are important, norms and groups matter to workers.

Hawthorne: Final Experiment

Bank Wiring Observation group, 1931-1932

– The final test studying 14 male workers in the Bank Wiring factory to study the dynamics of the group when incentive pay was introduced.

There was no effect. Why?

Work group established a work “norm” – a sharedexpectation about how much work should beperformed in a day and stuck to it, regardless ofpay.

The conclusion: informal groups operate in the work environment to manage behavior.

Hawthorne Experiments – Importance

Changed perspective in management from Taylor’s engineering approach to a social sciences approach, leading to "Human Relations" approach and, later, "Organization Behavior" approach:

Engineering approach subordinated to social sciences

Managers = leaders, motivators, communicators

At one time major contributors to Management theory worked on Hawthorne experiments.

Elton Mayo - “Human Relations” approach (to 1950’s). Mayo’s viewslead to the construction of manageras a leader.

MANAGEMENT FUNCTIONS OR PROCESS OF MANAGEMENT

Planning

Organization

Staffing

Directing

Decision Making

Controlling

Coordination

Motivating

Innovation

Representation

The traditional classification of management functions

Organizing

Controlling Directing

Planning

Staffing Organizing

Controlling Directing

DecisionMaking

Planning

Management Functions

Function 1: Planning

Develop Strategies for Success. Set Goalsand Objectives Develop Action Plans

Function 2: Organizing

Employee Activities Facilities and Equipment Decision Making Supervision Resource Distribution

Function 3: Directing

Implementing Plans Motivating People

Function 4: Controlling

Monitoring Progress Resetting the Course Correcting Deviations

FUNCTIONS OF MANAGEMENT VERSUS LEADERSHIP

Leadership produces Change and Movement

Establishing Direction

– Create a vision– Clarify big

picture– Set strategies

Aligning People

Management produces Order and Consistency

Planning / Budgeting

– Establish agendas– Set time tables– Allocate resources

Organizing / Staffing

LeadershipMotivating and

Inspiring– Inspire and

energize– Empower

subordinates– Satisfy unmet

needs

ManagementControlling /

Problem Solving

– Develop incentives

– Generate creative solutions

WHAT SKILLS DO MANAGERS NEED? (KATZ 1955)

Too often managers over-rely on interpersonal skills. However, careers in management depend heavily on the managers’ technical skills and especially on the managers conceptual skills.

PLANNING

DEFINITION

“Planning involves selecting mission and objectives and the actions to achieve them; it requires decision-making that is, choosing from alternative courses of action.”

- Heinz and Koontz

“A plan is a trap laid to capture.”

-Allen

Planning is the process of bridging the gap between where we are and where we want to be in the future.

Thinking before doing is planning.

Nature Of Planning

Technical skills

Specialized

Interpersonal skills

Sensitivity

Conceptual skills

Logical reasoni

Characteristics Of Planning

• Goal- oriented

• An intellectual or Rational process

• A primary function

T2T1Time

status

Desired Status

GapPlanningRequired

Current Status

• Pervasive (Strong/Single minded, Determined, Persistent)

• Forward looking

• A perpetual (unending) process

• An integrated process

• Involves choice

Planning Process

Formulating of Supporting

plans

Choice of Alternative

plans

Evaluation of alternatives

Identification of alternatives

Determining Planning premises

Establishingobjectives

Reviewing theplans

Analyzing opportunities

Types of Planning

Plans based on organizational levels

Making Planning Effective

Linked to long-term objectives

Direction for action

Consistent

Feasible

Simplicity

Flexible

ORGANIZING

Type of Planning

– Corporate and functional planning

– Strategic/functional planning

– Long-term/

Dimensions– Coverage of

activities– Importance of

contents– Time period

involved– Approach

Organizing is a function in which the synchronization and combination of human, physical and financial resources takes place. All the three resources are important to get results.

DEFINITION

According to Chester Barnard, “Organizing is a function by which the concern is able to define the role positions, the jobs related and the co- ordination between authority and responsibility. Hence, a manager always has to organize in order to get results.

Organizing is a technical function; it means establishing authority and responsibility relationships, and formal structure and reporting relationships. Organizing focuses on grouping activities and resources in a logical manner, including the division of work and job design, work methods and processes, coordination among units, and the use of information and feedback systems.

• Organizingis establishing the internal organizational structure of the organization. The focus is on division, coordination, and control of tasks and the flow of information within the organization. It is in this function that managers distribute authority to job holders.

• Organizing establishes relationships between activity and authority.

Importance

Specialization

Well defined jobs

Clarifies authority

Co- ordination

Effective administration

Growth and Diversification

Sense of security

Scope for new changes

The various steps involved in this process

Determination of Objectives

Enumeration (list) of Objectives

Classification of Activities

Assignment of Duties

Delegation of Authority

Determination of Objectives

It is the first step in building up an organization. Organization is always related to certain objectives.

Determination of objectives will consist in deciding as to why the proposed organization is to be set up

Enumeration (List) of ObjectivesThe first step in organizing group effort is the division of the total job into essential activities. Each job should be properly classified and grouped.

For example, the work of an industrial concern may be divided into the following major functions – production, financing, personnel, sales, purchase, etc.

Classification of Activities

Activities according to similarities and common purposes and functions and taking the human and material resources into account. Then, closely related and similar activities are grouped into divisions and departments and the departmental activities are further divided into sections.

Assignment of Duties

Here, specific job assignments are made to different subordinates for ensuring a certainty of work performance. Each individual should be given a specific job to do according to his ability and made responsible for that.

Delegation of Authority

Authority without responsibility is a dangerous thing and similarly responsibility without authority is an empty vessel. Everybody should clearly know to whom he is accountable; corresponding to the responsibility authority is delegated to the subordinates for enabling them to show work performance.

ORGANISATION

Introduction

Organization involves division of work among people whose efforts must be co-ordinate to achieve specific objectives

Definition OfOrganisation

McFerland has defined organization as, "an identifiable group of people contributing their efforts towards the attainment of goals".

Mooney and Railey, "Organization is the form of every human association for the attainment of a common purpose.”

OrganisationAs A Process

Organization is the process of establishing relationship among the members of the enterprise. The relationships are created in terms of authority and responsibility.

Principles OfOrganisation

Consideration of unity of objectives

Specialization

Co-ordination

Clear unbroken line of Authority

Responsibility

Efficiency

Delegation

Unity of Command:

Span of Management:

Communication

Flexibility

Organisation Structure

An organization structure shows the authority and responsibility relationships between the various positions in the organization by showing who reports to whom. Organization involves establishing an appropriate structure for the goal seeking activities. It is an established pattern of relationship among the components of the organization.

Formal And Informal Organisation

Formal Organization:

-"a system of consciously coordinated activities or forces of two or more persons. It refers to the structure of well-defined jobs, each bearing a definite measure of authority, responsibility and accountability."

Characteristic Features of formal organization

Laid down by the top management

Formal organization prescribes the relationships

Concentrates on the jobs to be performed

Individuals are fitted into jobs

Is bound by rules, regulations and procedures.

authority, responsibility and accountability of each level are clearly defined.

division of labor and specialization to achieve efficiency in operations.

coordination proceeds according to the prescribed pattern.

Advantages of formal organization

on the jobs to be performed.

everybody responsible for a given task.

bound by rules, regulations and procedures.

people of the organization to work together

Disadvantages or criticisms of formal organization

does not consider the goals of the individuals.

bound by rigid rules, regulations and procedures. This makes the achievement of goals difficult.

Informal Organization

an informal organization is an organization which is not established by any formal authority, but arises from the personal and social relations of the people.

Characteristics features of informal organization

It is unplanned

Reflects human relationships.

It is not based on rules,

Informal organizations are based on common taste, problem, language,

Benefits of Informal organization

It is more effective.

Many things which cannot be achieved through formal organization can be achieved

It provides social satisfaction to group members.

Job satisfaction.

The best means of employee communication.

It serves as an agency for social control of human behavior.

Differences Between Formal and Informal Organization

Formal Organization:

Formal organization is established with the explicit aim of achieving well-defined goals.

The social and psychological needs and interests of members of the organizationget little attention.

In formal organization, much emphasis is placed on efficiency, discipline, conformity, consistency and control.

The roles and relationships of people in formal organization are impersonally defined

Is bound together by authority relationships among members.

Informal Organization:

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

In informal organization the relationships among people are interpersonal.

Is characterized by relative freedom, spontaneity, homeliness and warmth.

The socio psychological needs, interests and aspirations of members get priority.

Organisational Structures

Why Have a Structure?

All businesses have to organise what they do

A clear structure makes it easier to see which part of the business does what

There are many ways to structure a business

Some Key Terms

Flat or tall structure

Span of control

Chain of command

Hierarchy

Delegation

Empowerment (Authority)

Ways to Structure a Business

By Function: arranging the business according to what each section or department does

By Product or Activity: organising according to the different products made

By Area: geographical or regional structure

By Customer: where different customer groups have different needs

By Process: where products have to go through stages as they are made

What are the advantages/disadvantages of different types of business structure?

Pros and Cons of Different Structures

This depends on the business type, size and structure used

Let’s look at a functional structure:

Functional Structure

Organisation By Product/Activity

Chief Executive

Board of Directors

ITPersonnelAccountsMarketingProduction

Disadvantages Closed

communication could lead to lack of focus

Departments can become resistant to change

Coordination may take too long

Advantages Specialisation –

each department focuses on its own work

Accountability – someone is responsible for the section

An Example of Organisation by Product/Activity

Organisation By Area

Hewlett-Packard’s Headquarters Worldwide

Hewlett Packard

HP FinancialServices

HP ServicesEnterprise

Systems GroupPersonal

Systems GroupImaging and

Printing Group

Disadvantages Duplication of

functions (e.g. different sales force for each division)

Negative effects of competition

Lack of central

Advantages Clear focus on

market segment helps meet customers’ needs

Positive competition between divisions

Better control as

Other Organisational Structures

By Customer:Similar effects to structuring by product

By Process:Similar to structuring by function

Hewlett Packard

Asia PacificHong Kong

Europe, Middle East, AfricaGeneva, Switzerland

AmericasHouston, Texas

Disadvantages Conflict between

local and central management

Duplication of resources and functions

Advantages Serve local needs

better Positive

competition More effective

communication between firm and local customers

ORGANISATIONAL STRUCTURES

Flat Structure Organisation

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

Flat Structure

Advantages of flat Organisations

More/Greater communication between management and workers

Better team sprit

Less bureaucracy and easier decision making.

Fewer levels of management which includes benefits such as lower costs as managers are generally paid more than worker.

Disadvantages of flat Organisations

Workers may have more than one manager/boss.

May limit/hinder the growth of the organisation.

Structure limited to small organisations such as partnerships, co-operatives and some private limited companies.

Function of each department/person could be blurred and merge into the job roles of others.

Tall Structure Organisation

In its simplest form a tall organisation has many levels of management and supervision. There is a “long chain of command” running from the top of the organisationeg Chief Executive down to the bottom of the organisationeg shop floor worker.

Tall Structure

Advantages of tall Organisations

There is a narrow span of control ie each manager has a small number of employees under their control. This means that employees can be closely supervised

There is a clear management structure

The function of each layer will be clear and distinct. There will be clear lines of responsibility and control.

Clear progression and promotion ladder

Disadvantages of tall OrganisationsThe freedom and responsibility of employees (subordinates) is restricted

Decision making could be slowed down as approval may be needed by each of the layers of authority.

Communication has to take place through many layers of management.

High management costs because managers are generally paid more than subordinates. Each layer will  tend to pay it’s managers more money than the layer below it.

Matrix (or project-based) organisations  

A Matrix structure organisation contains teams of people created from various sections of the business. These teams will be created for the purposes of a specific project and will be led by a project manager. Often the team will only exist for the duration of the project and matrix structures are usually deployed to develop new products and services.

Advantages of matrix

Individuals can be chosen according to the needs of the project.

The use of a project team which is dynamic and able to view problems in a different way as specialists have been brought together in a new environment.

Project managers are directly responsible for completing the project within a specific deadline and budget.

Disadvantages

A conflict of loyalty between line managers and project managers over the allocation of resources.

If teams have a lot of independence can be difficult to monitor.

Costs can be increased if more managers (ie project managers) are created through the use of project teams

Matrix Structure

IMPORTANCE OF ORGANISATION

Facilitates Administration

Facilitates Growth and Diversification

Provides for Optimum use of Technological Improvements

Encourages Human use of Human Beings

Stimulates Creativity

Facilitates stability of the organisation

Reduces Employee Turnover

Reduces Duplication of Activities

Fosters Coordination

Facilitates Administration

A properly designed and balanced organization facilitates both management and operation of the enterprise. It increases management's efficiency and

promptness, avoids delay and duplication of work and motivates the employee to perform their job efficiently.

Facilitates Growth and Diversification

The organization structure should provide for expansion and diversification of the enterprise otherwise, the enterprise will find itself in a serious administrative crisis.

Provides for Optimum use of Technological Improvements

A sound organization structure facilitates the optimum use of technological improvements like computer systems etc.

Encourages Human use of Human Beings

A sound organization provides for efficient selection, training and development of staff, job rotation and job enlargement. The organization structure can profoundly affect the people of the company. Proper organization facilitates the intensive use of human capital.

Stimulates Creativityorganization provides sufficient freedom to the managers and encourages their initiative, independent thinking and creativity.

Facilitates stability of the organization

By ensuring delegation of authority, two-way communication, co-operation, effectiveleadership, employee morale and flexibility to adjust to changes in the conditions, a soundorganization facilitates stability of the organization.

Reduces Employee Turnover

Organization increases employee satisfaction, ensures better relations between the management and the workers, and thereby reduces employee turnover.

Reduces Duplication of Activities

Organisation avoids delay and duplication of activities and consequent confusion by ensuring well-defined responsibilities and authority.

Fosters Coordination

By providing the framework for holding together the various functions in an orderlypattern, organization fosters co-ordination.

ORGANISATION CHARTS AND MANUALS

Organization chart: The pattern of network of relations between the various positions in an organization as well as between the persons who hold those positions is referred to as "Organization chart".

In the word of J Batty, "An organization chart is a diagrammatic representation of the framework or structure of an organization."

The organization chart has the following characteristics:

It is a diagrammatical presentation

l It shows principal lines of authority in the organization

It shows the interplay of various functions and relationships

l It indicates the channels of communication.

Advantages of Organization Chart

It gives a clear picture of the organization structure.

It shows at a glance the lines of authority and responsibility.

to avoid misunderstanding of jurisdictional problems

outsiders can easily know the persons whom

they have to approach in connection with their work.

to avoid overlapping and duplication of authority and secure unity of command.

what extra training is required for promotion to a higher position.

Types of Organization Chart

An organization chart can be drawn in different forms. They are:

Top-to-down chart or vertical chart

Left-to-right chart or Horizontal chart

Circular chart.

Top-to-down chart or vertical chart:

Most organizations use this type of chart which presents the different levels of organization in the form of a pyramid with senior executive at the top of the chart and successive levels of management depicted vertically below that

Left-to-right or Horizontal Chart:

Horizontal charts which read from left to right areoccasionally used.

The pyramid lies horizontally instead of standing in the vertical position.The line of command proceeds horizontally from left to right showing top level at the left and each successive level extending to the right.

Circular Chart:

In this chart, top positions are located in the centre of the concentric circle. Positions of successive echelons extend in all directions outward from the centre.

Positions of equal status lie at the same distance from the centre on the same concentric circle

MEANING OF ORGANIZATION MANUAL

An organization may prepare a Manual or Management Guide. Manual sets down in the form of a book or booklet all the details of the organization.

Good organization manual has the following contents.

1.Nature of the enterprise

2. Objectives of the enterprise

3. Policies of the management

4. Job Descriptions

5. Duties and responsibilities of various personnel

6. Instructions relating to the performance of standard as well as non-standard jobs.

Types of Manuals

Policy Manuals:

Operations Manual:

Organization Manual:

Departmental Practice Manual:

Rules and Regulations Manual:

Policy Manuals:

It describes the overall limitations within which activities are to take place and thus reveals the broad courses of managerial action likely to take place under certain conditions.

Operations Manual:

It is prepared to inform the employees of established methods, procedures and standards of doing the various kinds of work.

Departmental Practice Manual:

It deals in detail with the internal policies,organization and procedures of one department.

Organization Manual:

It explains the organization, the duties and responsibilities of various departments, and their respective sub-divisions.

Rules and Regulations Manual: It gives information about the operating rulesand employment regulations. It is a handbook of employment rules.

Advantages of Manuals

1. It contains in writing all-important decisions relating to internal organization of theenterprise.

2. It avoids conflicts and overlapping of authority.

3. It enables new employees to know the various procedure and practice in the shortest possible time.

4. It enables quick decisions.

5. It contains rules and regulations which employees must follow.

Disadvantages of Manual

1. The preparation of manual is costly and time consuming and process.

2. Manuals leave little scope of individual's initiative and direction.

3. Manuals bring rigidity to the organization.

4. Manuals may put on record those relationships which no one would like to see exposed.

Staffing

• Staffing is filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating and compensating are the specific activities included in the function.

• Staffing success is having the "right person" in a position, rather than simply filling a position.

Directing

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

One important category of directing

• Motivation covers up ability and skill deficiencies in employees.

• The most effective motivation for employees comes from within each employee -self-motivation.

• Highly motivated people perform better than unmotivated people.

Controlling

• Controlling - The final function of management

• Controlling is a five-step process of establishing performance standards based on the firm's objectives, measuring and reporting actual performance, comparing the two, and taking corrective or preventive action as necessary.

• The basic purpose of controlling is to determine how successful the planning function has been.

OBJECTIVES

• “Objectives are the goals, aims or purposes that organizations wish to achieve over varying periods of time.”

• “Objective is a term commonly used to indicate the end point of a management program.”

Organizational Hierarchy Types of Objectives

Board of Directors and Top Level Managers

Socio-economic purpose

Mission

In all Key Areas

Middle-Level Managers Divisional Objectives

Departmental Objectives

Lower-Level Managers Department and Unit

Objectives for Subordinates

• Performance goal

• Development goals

Nature Of Objectives

- Hierarchy of Objectives

- The process of formulating objectives and the organizational hierarchy

- A network of objectives

- Multiplicity of objectives

Advantages of objectives

- Unified planning

- Individual motivation

- Co-ordination

- Control

- Basis for Decentralization

MANAGEMENT BY OBJECTIVES

- Peter Drucker in his 1954 book 'The Practice of Management'.

- The essence of MBO is participative goal setting, choosing course of actions and decision making. An important part of the MBO is the measurement and the comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and the choosing the course of action to be followed by them, they are more likely to fulfill their responsibilities.

Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources.

THE GILBRETHS

1. Break up and analyze every individual action necessary to perform a particular task into each of its component actions

2. Find better ways to perform each component action

3. Reorganize each of the component actions so that the action as a whole could be performed more efficiently-at less cost in time and effort

Administrative Management Theory

Administrative Management

– The study of how to create an organizational structure that leads to high efficiency and effectiveness.

Max Weber

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

Weber’s Principles of Bureaucracy

1) A manager’s formal authority derives from the position he holds in the organization.

2) People should occupy positions because of their performance, not because of their social standing or personal contacts.

Weber’s Principles of

3) The extent of each position’s formal authority and task responsibilities and it’s relationship to other positions should be clearly specified.

4) Authority can be exercised effectively when positions are arranged hierarchically, so employees know whom to report to and who reports to them.

5) Managers must create a well-defined system of rules, standard operating procedures, and norms so they can effectively control behavior .

RULES, SOPS AND NORMS

Rules–

Formal written instructions that specify actions to be taken under different circumstances to achieve specific goals

Standard Operating Procedures (SOPs) –

Specific sets of written instructions about how to perform a certain aspect of a task

Norms –

Unwritten, informal codes of conduct that prescribe how people should act in particular situations

FAYOL’S PRINCIPLES OF MANAGEMENT

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

Authority and Responsibility - Both formal and informal authority resulting from special expertise.

Unity of CommandEsprit de corps - Comradeship, shared enthusiasm foster devotion to the common cause (organization).

Behavioral Management Theory

Behavioral Management

The study of how managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals.

Mary Parker Follett

Concerned that Taylor ignored the human side of the organization

Suggested workers help in analyzing their jobs

If workers have relevant knowledge of the task, then they should control the task

Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932.

The Hawthorne StudiesWorker productivity was measured at various levels of light illumination.

Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased.

Human Relations Implications

Hawthorne effect — workers’ attitudes toward their managers affect the level of workers’ performance

Human relations movement – advocates that supervisors be behaviorally trained to manage subordinates in ways that elicit their cooperation and increase their productivity

Implications

Behavior of managers and workers in the work setting is as important in explaining the level of performance as the technical aspects of the task

Demonstrated the importance of understanding how the feelings, thoughts, and behavior of work-group members and managers affect performance

Theory X and Theory YDouglas McGregor proposed the two different sets of assumptions about workers.

Theory X assumes the average worker is lazy, dislikes work and will do as little as possible.

Workers have little ambition and wish to avoid responsibility

Managers must closely supervise and control through reward and punishment.

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

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

Theory X vs. Theory Y

Management Science TheoryContemporary approach to management that focuses on the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services.

Quantitative management — utilizes linear and nonlinear programming, modeling, simulation, queuing theory and chaos theory.

Operations management —techniques used to analyze any aspect of the organization’s production system.

Total Quality Management (TQM) —focuses on analyzing input, conversion, and output activities to increase product quality.

Management Information Systems (MIS)— provides information vital for effective decision making.

Organizational Environment

The set of forces and conditions that operate beyond an organization’s boundaries but affect a manager’s ability to acquire and utilize resources

The Open-Systems View

– Employees should have only one boss.

Line of Authority - A clear chain of command from top to bottom of the firm.

Centralization - The degree to which authority rests at the top of the organization.

Unity of Direction - A single plan of action to guide the organization.

Equity - The provision of justice and the fair and impartial treatment of all employees.

Order - The arrangement of employees where they will be of the most value to the organization and to provide career opportunities.

Initiative - The fostering of creativity and innovation by encouraging employees to act on their own.

Discipline - Obedient, applied, respectful employees are necessary for the organization to function.

Remuneration of Personnel - An equitable uniform payment system that motivates contributes to organizational success.

Stability of Tenure of Personnel - Long-term employment is important for the development of skills that improve the organization’s performance.

Subordination of Individual Interest to the Common Interest - The interest of the organization takes precedence over that of the individual employee.

Esprit de corps - Comradeship, shared enthusiasm foster devotion to the common cause (organization).

Behavioral Management Theory

Behavioral Management

– The study of how managers should personally behave to motivate employees and encourage them to perform at high levels and be committed to the achievement of organizational goals.

Mary Parker Follett

– Concerned that Taylor ignored the human side of the organization

• Suggested workers help in analyzing their jobs

• If workers have relevant knowledge of the task, then they should control the task

– Studies of how characteristics of the work setting affected worker fatigue and performance at the Hawthorne Works of the Western Electric Company from 1924-1932.

The Hawthorne Studies

– Worker productivity was measured at various levels of light illumination.

– Researchers found that regardless of whether the light levels were raised or lowered, worker productivity increased.

– Human relations movement – advocates that supervisors be behaviorally trained to manage subordinates in ways that elicit their cooperation and increase their productivity

Implications

Behavior of managers and workers in the work setting is as important in explaining the level of performance as the technical aspects of the task

Demonstrated the importance of understanding how the feelings, thoughts, and behavior of work-group members and managers affect performance

Theory X and Theory Y

Douglas McGregor proposed the two different sets of assumptions about workers.

– Theory X assumes the average worker is lazy, dislikes work and will do as little as possible.

• Workers have little ambition and wish to avoid responsibility

• Managers must closely supervise and control through reward and punishment.

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

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

Theory X vs. Theory Y

Management Science Theory

Contemporary approach to management that focuses on the use of rigorous quantitative techniques to help managers make maximum use of organizational resources to produce goods and services.

Quantitative management — utilizes linear and nonlinear programming, modeling, simulation, queuing theory and chaos theory.

Operations management —techniques used to analyze any aspect of the organization’s production system.

Total Quality Management (TQM) —focuses on analyzing input, conversion, and output activities to increase product quality.

Management Information Systems (MIS) — provides information vital for effective decision making.

Organizational Environment –

The set of forces and conditions that operate beyond an organization’s boundaries but affect a manager’s ability to acquire and utilize resources

The Open-Systems View

Open System

– A system that takes resources for its external environment and transforms them into goods and services that are then sent back to that environment where they are bought by customers.

– Inputs: the acquisition of external resources to produce goods and services

– Conversion: transforms the inputs into outputs of finished goods and services.

– Output: the release of finished goods and services to its external environment.

Closed System

A self-contained system that is not affected by changes in its external environment.

Likely to experience entropy and lose its ability to control itself

Systems

Synergy – the performance gains that result from the combined actions of individuals and departments

– Possible only in an organized system

Contingency Theory

“There is no one best way to organize”

The idea that the organizational structures and control systems manager choose depend on—are contingent on—characteristics of the external environment in which the organization operates.

Type of Structure

Mechanistic Structure

– Authority is centralized at the top.

– Emphasis is on strict discipline and order

– Employees are closely monitored and managed.

– Can be very efficient in a stable environment.

Organic Structure

– Authority is decentralized throughout the organization.

– Departments are encouraged to take a cross-departmental or functional perspective

– Works best when environment is unstable and rapidly changing

CONTROLLING

– Knootz and O’Donnel, “Controlling is the measurement of accomplishment against the standards and the correction of deviations to assure attainment of objectives according to plans.”

– Standards

– Performance

– Deviations

– Controlling

– Evaluation of performance and the implementation of corrective actions to accomplish organizational objectives.

Importance Of Controlling

1. Coping with uncertainty

2. Detecting irregularities

3. Identifying opportunities

4. Handling complex situations

5. Decentralizing authority

6. Decentralizing authority

7. Minimizing costs

Steps of controlling

1. Establishing standards

2. Measuring performance

3. Comparison of actual with standards

4. Taking corrective actions

Requirements of effective controlling

- Controls should reflect plans, positions and structures (suitability).

- Timely and forward looking.

- They should be objective and comprehensive (understandable).

- They should be cost effective.

- Identify only major expectations.

- Flexibility

- Motivational (employee centered ).

- Should provide adequate and complete information.

- Should not lead to less attention to other aspects

Types of control

- Feedforward control (future oriented)

- Concurrent control (steering control)

- Feedback control (past oriented)

Old Techniques New Techniques

- Budgeting *

- Standard costing

- Responsibility centres*

- Financial statements

- Ratio analysis*

- Break- even analysis

- Audits

- Reports

- Rules and observations

- PERT

- CPM

- HRA

BUDGETING

- Sales

- Selling and distribution cost

- Production

- Production cost

- Capital expenditure

- Cash

- Master (summary of all functional budgets)

Ratio analysis

- Liquidity ratios

- Leverage ratios

- Activity ratios

- Profitability ratios

Responsibility Centers

- Standard cost

- Discretionary expenses

- Revenue

- Profit

- Investment

Relationship between planning and controlling

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

REASONS

1. enhancing market

2. Huge profits

3. Getting products for home market

4. Satisfying management’s desire

5. Protecting domestic market

6. Acquiring technology

7. Diversifying geographically

STAFFING

Staffing involves manning the organization structure through proper and effective selection, appraisal and development of the personnel to fill the roles assigned to the employers/workforce.

• Staffing is filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating and compensating are the specific activities included in the function.

• Staffing success is having the "right person" in a position, rather than simply filling a position.

• According to Theo Haimann, “Staffing pertains to recruitment, selection, development and compensation of subordinates.”

STAFFING

• Staffinginvolves a set of activitiesaimedatattracting and selectingindividuals for positions in awaythatwillfacilitate the achievement of organizational goals.

• The two basic steps of staffing are recruitment and selection.

NATURE of Staffing

• An important managerialfunction

• A continuousactivity

• The basis of staffingfunctionis efficient management of personnels

• Helps in placing right men at the right job

• It isperformed by all managers

• Carried out in all types of organization

• Staffing PROCESSManpower requirements

• Recruitment

• Selection

• Orientation and Placement

• Training and Development

• Remuneration

• Performance Evaluation

• Promotion and Transfer

Manpower Planning

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

Procedure

• Analyzing the current manpower inventory

• Making future manpower forecasts

• Developing employment programs

• Design training programs

Analyzing the current manpower inventory

Type of organization

Number of departments

Number and quantity of such departments

Employees in these work units

Manpower forecasting techniques commonly employed

Expert Forecasts: This includes informal decisions, formal expert surveys and Delphi technique

Trend Analysis: Manpower needs can be projected through extrapolation (projecting past trends), indexation (using base year as basis), and statistical analysis (central tendency measure)

Work Load Analysis: It is dependent upon the nature of work load in a department, in a branch or in a division.

Work Force Analysis: Whenever production and time period has to be analyzed, due allowances have to be made for getting net manpower requirements.

Other methods: Several Mathematical models, with the aid of computers are used to forecast manpower needs, like budget and planning analysis, regression, new venture analysis.

Developing employment programs

• Once the current inventory is compared with future forecasts, the employment programs can be framed and developed accordingly, which will include recruitment, selection procedures and placement plans.

Design training programs

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

Importance of Manpower Planning

• Key to managerial functions

• Efficient utilization

• Motivation

• Better human relations

• Higher productivity

Types of Recruitment

• Internal Recruitment

• External Recruitment

3 Internal Sources

• Transfers

• Promotions (through Internal Job Postings)

• Re-employment of ex-employees

External Recruitment

• Employment at Factory Level

• Advertisement

• Employment Exchanges

• Employment Agencies

• Educational Institutions

• Recommendations

• Labour Contractors

Employee Selection Process

• Right Men Right Job

• Organizational Requirements = Skills & Qualifications

• Effective Matching impact Effective Selection

Organization

• Quality Performance of Employees

Results of Effective Selection

• Quality Performance of Employees

• Less Absenteeism Employee Turnover

• Save Time & Money

Selection

• Proper screening of candidates

• Tested

• Choosing the best candidate with

o Best abilities

o Skills

o Knowledge for the required job

Selection Vs Recruitment

• Recruitment - Positive process - Motivates more of candidates to apply for the job

o Creates a pool of applicants.

o Just sourcing of data

• Selection - Negative process - Inappropriate candidates - Rejected here

• Recruitment precedes Selection

Employee selection Process

• Preliminary Interviews

• Application blanks

• Written Tests

• Employment Interviews

• Medical examination

• Appointment Letter

Preliminary Interviews

• Used to eliminate those candidates who do not meet the minimum eligibility criteria

• Skills, academic and family background, competencies and interests of the candidate are examined during preliminary interview

• Less formalized & planned than the final interviews.

• Candidates are given a brief up about the company & the job profile;

• Also examined how much the candidate knows about the company

• Preliminary interviews are also called screening interviews.

Application blanks

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

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

Written Tests

• Written tests conducted

Aptitude test

Intelligence test

Reasoning test

Personality test, etc.

• Tests are used to objectively assess the potential candidate (Not to be biased)

Employment Interviews

• Interaction between the interviewer and the potential candidate

• Used to find whether the candidate is best suited for the required job or not

• Consume time and money both

• Competencies of the candidate cannot be judged

• May be biased at times

• Should be conducted properly

• No distractions should be there in room

• Should be an honest communication between candidate and interviewer.

Medical examination

• Medical tests conducted to ensure physical fitness of the potential employee

• Will decrease chances of employee absenteeism

Appointment Letter

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

PERFORMANCE APPRAISAL

Performance

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

Appraisal

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

Performance appraisal is a method of evaluating the behavior of employees in the work spot, normally including both the qualitative and quantitative aspects of job performance.

• Performance here refers to the degree of accomplish of the task that make up an individual job.

• Performance Appraisal is a process of obtaining analysis and recording information about the relative worth of an employee.

• Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development.

Performance Appraisal

• Definition:

“It is the systematic evaluation of the individual with regard to his or her performance on the job & his potential for development”.

Systematic Ways of Doing PA

• The supervisors measure the pay of employees and compare it with targets and plans.

• The supervisor analyses the factors behind work performances of employees.

• The employers are in position to guide the employees for a better performance.

Objectives of PA

• Salary increase

• Promotion

• Training & development

• Feedback

• Pressure on employees

Features of Performance Appraisal

• Performance Appraisal is the systematic description of an employee’s job- relevant strengths and weaknesses

• The basic purpose is to find out how well the employee is performing the job and establish a plan of improvement

•  Appraisal is arranged periodically according to a defined plan

• Performance appraisal is a continuous process of every large organization

• Performance appraisal is not job evolution it refers to how well someone is doing the assigned job .Job evolution determine how much a job is worth to the organization and there what range of pay should be assigned to the job

Objectives of Performance Appraisal

• To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.

• To identify the strengths and weaknesses of employees to place right men on right job.

• To maintain and assess the potential present in a person for further growth and development.

• To provide a feedback to employees regarding their performance and related status.

• It serves as a basis for influencing working habits of the employees.

• To review and retain the promotional and other training programs.

• To reduce grievances of the employees

Advantages of Performance Appraisal

• Promotion

• Compensation

• Employees Development

• Communication

• Motivation

Performance Evaluation

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

Aims of a performance appraisal

• Give employees feedback on performance

• Identify employee training needs

• Document criteria used to allocate organizational rewards

• Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, bonuses, etc.

• Provide the opportunity for organizational diagnosis and development

• Facilitate communication between employee and employer

• Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.

• To improve performance through counseling, coaching and development.

Promotion and Transfer

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

Process of Performance Appraisal-

Establishing Performance Standard

Commenting standards and Expectations

Measuring actual Performance

Comparing with Standard

Discussing Result

(Providing Feedback)

Decision making -taking corrective actions

INTRODUCTION TO MARKETING

Understanding Marketing Management

‘Marketing is the human activity directed at satisfying human needs and wants through an exchange process’

Kotler 1980

‘Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others’

Kotler 1991

Another Definition of Marketing

Marketing is the study of an organization’s relationship with its customers.

What is marketing?

‘Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably’

- The Chartered Institute of Marketing

‘The right product, in the right place, at the right time, and at the right price’

For an exchange to occur;

There are at least two parties.

Each party has something that might be of value to the other party.

Each party is capable of communication and delivery.

Each party is free to reject the exchange offer.

Each party believes it is appropriate or desirable to deal with the other party

WHAT IS MARKETED?

Places

Properties

Organizations

Information

Ideas

Goods

Services

Events

Experiences

Persons

A total system of interacting business activities designed to plan ,price ,promote and distribute want satisfying products and services to present and potential buyers.

-William j Stanton

Art of selling surplus

Discover needs & translate in product service

Marketers create the needs or needs preexist

Create and serve demand for these products & services

Nature Of Marketing

Marketing is both consumer & competitor oriented

It starts with consumer and ends with consumers by satisfying their needs profitably

Marketing is an integrated process which is based on strategies and models

Must deliver goods and services in exchange of money

self-centered competitor -oriented

Customer -oriented

Market driven

Scope Of Marketing

Marketing is typically seen as task of creating promoting goods and services to consumers and business.

Goods: food,commodities, clothing,housing,cars, Steel,cotton are the main stay of the economy.

NCAER 2002

Distribution population

Rural 72.22 %

Urban 27.78%

SERVICES

Almost 60 % of the contribution to India's GDP from service sector.

PATA(pacific Asia travels association) reported 5.5 million foreign tourists arrived India in 2009

This would increase to 5.9 million in 2010.

jet airways-air Sahara- 46% market share

Indian airlines 25%,air deccan-13% spice jet 6%, Kingfisher 8 %

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

company house hold penetration

HUL 88%

NIRMA 56%

COLGATE 33%

PARLE FOODS 31%

EXPERIENCES

There is market for different experiences.Like spending a week at Jammu and Kashmir and experiencing the skiing or climbing Mount Everest.

A jungle safari, water sports, a roller coaster ride.

Walt Disney,Essel world,Ramoji film city, planet holllywood

EVENTS

Marketers Promote Time Based Events. There are professionals who plan ,work out details of an event and make it perfectly.

Event management companies.

Olympics,Twenty-20,Auto-Expo, It Exhibition, Major trade shows, sports events,artistic performances.

PERSONS

Celebrity branding has become a major business. Tom peters marketing guru has advised every person can brand himself.

PLACES

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

Amitabh Bacchan charges

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

PROPERTIES

Properties are intangible rights of ownership of either real property(real estate) or financial property (stocks and bonds).These are bought and sold and thus can be marketed.

Investment companies and banks ,and insurance firms are involved in its marketing to both individual as well as institutions.

Hiranandani, DSK, Soft Corner Marketing,LIC housing, ICICI, HDFC home loans

ORGANIZATIONS

Organizations actively work to build a strong and favorable brand image In the mind of their publics .We call it as corporate branding

Heritage

Assets and capabilities

People

Values and culture

Corporate Performance

INFORMATION

Information can be produced and marketed by as a product.

Schools, colleges, universities, Encyclopedias,C.D’s, internet, books

The production,packaging, and distribution are one of the society's major industries.

IDEAS

Products and services are platforms for delivering some idea or benefit.Marketers try hard to search for core need they try to satisfy.

MARKETING STRATEGY PLANNING

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

Key Customer Markets

Consumer markets

Business markets

International Markets/Global markets

Nonprofit/Government markets

Core Concepts

Needs, wants, and demands

Target markets, positioning, segmentation

Offerings and brands

Value and satisfaction

Marketing channels

Supply chain

Competition

Marketing environment

Marketing planning

Core Concepts of Marketing

Exchange and Transactions

Relationships and Networks

Simple Marketing System

Structure of Flows

Goods/

Money

Informati

Communica

Market(a

collection of Buyers)

Industry(a

collection of sellers)

TaxeTaxes,s,

TaxeTaxes,s,

TaxesTaxes,,

TaxesTaxes

ResourceResourceResourcesResources

Manufacturer

markets

Goods,Goods, servicesservices

Goods,Goods, servicesservices

Intermediary

markets

MoneMoneMoneyMoney

ServicServices,es,

ServiceService

ServiceServices,s, Governmen

tmarkets

ServiceServices,s,

MoneyMoneyMoneyMoney Resourcemarkets

Customer Equity

How Much Is A Customer Worth

How does an organization create a customer?

• Identifying customer needs

• Designing goods and services that meet those needs

• Communicating information about those goods and services to prospective buyers

• Making the goods or services available at times and places that meet customers’ needs

• Pricing goods and services to reflect costs, competition, and customers’ ability to buy

• Providing for the necessary service and follow-up to ensure customer satisfaction after the purchase*

Evolving Views of Marketing’s Role

Production

Marketin

Finance

HumanresourceMarketin

Production

Finance

b. Marketing as a more

a. Marketing as an

Marketing

Production

Customer

Production

Humanresource Finance

d. The customer as the

c. Marketing as the

Finance

Humanresource

Production

Marketing

Customer

e. The customer as the controlling

function and marketing as the

Company Orientations Towards the Marketplace

Production Concept

Product Concept

Selling Concept

Marketing Concept

Consumers prefer products that,

- are widely available and inexpensive- offer the most quality, performance, or innovative features

Consumers will buy products only if the company aggressively promotes/sells these products.

Focuses on needs/ wants of target markets & delivering value better than competitors

The Marketing Concept

HOW CUSTOMERS FORM EXPECTATIONS

TheMark

Total Compa

Customer

Profit

Evolution of Marketing

Production Era

Sales Era

ExternalCommunicatio

ns

PastExperience

Personal Needs

Word of Mouth

CustomerExpectatio

ns

Marketing Concept Era

Societal Era

Production Orientation

Focuses on internal capabilities of firm.

“ Field of Dreams” strategy

“If we build it, they will come”

Best used when

competition is weak

demand exceeds supply

generic products competing solely on price

Problem is that they don’t understand wants/needs of marketplace.

Sales Orientation

People will buy more goods/services if aggressive sales techniques are used.

High sales will result in high profits.

Used with unsought products

life insurance

encyclopedias

Problem is that they don’t understand wants/needs of marketplace.

I can sell everything, if I know how to sell it

Marketing Orientation

Marketing concept

The social and economic justification for an organization’s existence is the satisfaction of customer wants and needs, while meeting organizational objectives.

Focusing on customer wants so the organization can distinguish its products from competitors’ .

Integrating all the organization’s activities, including promotion, to satisfy these wants.

Achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly.

Requires:

Top management leadership

A customer focus

Competitor intelligence

strengths

weaknesses

Interfunctional coordination to meet customer wants/needs and deliver superior values.

Societal Marketing Orientation

Organization exists not only to satisfy customer wants/needs and to meet organizational objectives, but also to preserve and enhance individuals’ and society’s long-term best interests.

Extends marketing concept to serve one more customer - society as a whole.

Company

(Profits

Consumers

(Satisfact

Societal (Human Welfare)

Differences between Sales & Marketing Orientations

Production/ Sales Focus

Organization’s needs

Producing/Selling goods/services

Everybody

Profit through max. sales volume

Intensive promotion

Marketing Focus

Customer’s needs

Satisfying customer wants/needs

Specific groups of people

Profit through customer satisfaction

Coordinated mktg. activities (4 p’s)

Marketing Philisophies

Orientation Key Ideas

Production Focus on efficiency of internal operations –

if we make it, they will buy it

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

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

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

Relationship Marketing

Forging long-term partnerships with customers and contributing to their success.

Companies benefit from

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

decreased costs - it’s less expensive to serve existing customers than attract new ones.

Customers benefit from:

stable relationships with suppliers (especially in business-to-business)

greater value and satisfaction

discounts, (frequent flyer programs, shopper clubs, etc.)

Successful relationship marketers have:

customer-oriented personnel

effective training programs

employees with authority to make decisions and solve problems

teamwork

Marketing Mix and the Customer Four Ps

Product

Price

Place

Promotion

Four Cs

Customer solution

Customer cost

Convenience

Communication

The Four Cs & The Four Ps

Convenience

CommunicationCustomerCost

CustomerSolution Promoti

onPrice

Product

Marketing

Mix

Implications of marketing

Who are our existing / potential customers?

What are their current / future needs?

How can we satisfy these needs?

CompetitiveEnvironment

Economic andTechnologicalEnvironment

Resourcesand

Objectivesof the Firm

Political andLegal

Environment

Cultural andSocial Environment

PromotionPrice

Place

Product

C

Can we offer a product/ service that the customer would value?

Can we communicate with our customers?

Can we deliver a competitive product of service?

Why should customers buy from us?

Successful marketing requires

Profitable

Offensive (rather than defensive)

Integrated (Incorporated)

Strategic (is future orientated)

Effective (gets results)

Marketing management process

Analysis/Audit - where are we now?

Objectives - where do we want to be?

Strategies - which way is best?

Tactics - how do we get there?

Implementation - Getting there

Control - Ensuring arrival

Marketing Environment

All the factors and forces influencing the company’s ability to transact business effectively with it’s target market

Includes:

Microenvironment - forces close to the company that affect its ability to serve its customers.

Macroenvironment - larger societal forces that affect the whole microenvironment

All the actors and forces influencing the company’s ability to transact business effectively with it’s target market

UNCONTROLLABLE FACTORS AFFECTING MARKETING DECISIONS

Comp

The Company’s Microenvironment

Company’s Internal Environment- functional areas such as top management, finance, and manufacturing, etc.

Customers - five types of markets that purchase a company’s goods and services.

Competitors - those who serve a target market with similar products and services.

Public - any group that perceives itself having an interest in a company’s ability to achieve its objectives.

Suppliers - provide the resources needed to produce goods and services.

Marketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers.

Demographic - monitors population in terms of age, sex, race, occupation, location and other statistics.

Economic - factors that affect consumer buying power and patterns.

External Environme

ntal Factors

Competitive

Political and Legal

Technologic

Economic

Natural

Social

Natural - natural resources needed as inputs by marketers or that are affected by marketing activities.

Political/legal

Monopolies legislation

Environmental protection laws

Taxation policy

Employment laws

Government policy

Legislation

Economic Factors

Inflation

Employment

Disposable income

Business cycles

Energy availability and cost

Socio-cultural factors

Demographics

Distribution of income

Social mobility

Lifestyle changes

Consumerism

Levels of education

Technological

New discoveries and innovations

Speed of technology transfer

Rates of obsolescence

Internet

Information technology

Marketing Plan

Market Analysis

Company Analysis

Determining the Goals

Determining the Strategies

Determining the Tactics

Control

Market Analysis

Customer Analysis

Segmentation

Motivation

Unmet Needs

Competitor Analysis

Who are our competitors (Rivals)?

What advantages do they have?

What are their goals?

What are their strategies?

What are their organizational structures?

What are their strengths and weaknesses?

Market Analysis

Structural Analysis

Industrial analysis

Actual and potential size of the industry

Growth of the industry

Cost structure of the industry

Distribution structure of the industry

Changes in the industry

Company Analysis

SWOT analysis

Strengths (internal)

Weaknesses (internal)

Opportunities (external)

Threats (external)

ORGANISATIONAL STRUCTURES

Why Have a Structure?

All businesses have to organise what they do

A clear structure makes it easier to see which part of the business does what

There are many ways to structure a business

Some Key Terms

Flat or tall structure

Span of control

Chain of command

Hierarchy

Delegation

Empowerment (Authority)

Ways to Structure a Business

By Function: arranging the business according to what each section or department does

By Product or Activity: organising according to the different products made

By Area: geographical or regional structure

By Customer: where different customer groups have different needs

By Process: where products have to go through stages as they are made

What are the advantages/disadvantages of different types of business structure?

Pros and Cons of Different Structures

This depends on the business type, size and structure used

Let’s look at a functional structure:

Functional Structure

Advantages

Specialisation – each department focuses on its own work

Accountability – someone is responsible for the section

Clarity – know your and others’ roles

Disadvantages

Closed communication could lead to lack of focus

Departments can become resistant to change

Coordination may take too long

Gap between top and bottom

Chief Executive

Board of Directors

ITPersonnelAccountsMarketingProduction

Organisation by Product/Activity

Organisation by Product/Activity

Advantages

Clear focus on market segment helps meet customers’ needs

Positive competition between divisions

Better control as each division can act as separate profit centre

Disadvantages

Duplication of functions (e.g. different sales force for each division)

Negative effects of competition

Lack of central control over each separate division

Organisation by Area

Hewlett-Packard’s Headquarters Worldwide

Hewlett Packard

HP FinancialServices

HP ServicesEnterpriseSystems Group

PersonalSystems Group

Imaging andPrinting Group

Advantages

Serve local needs better

Positive competition

More effective communication between firm and local customers

Disadvantages

Conflict between local and central management

Duplication of resources and functions

Other Organisational Structures

By Customer:

Similar effects to structuring by product

By Process:

Similar to structuring by function

Organisational Structures

Flat Structure Organisation

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

Flat Structure

Hewlett Packard

Asia PacificHong Kong

Europe, Middle East, AfricaGeneva, Switzerland

AmericasHouston, Texas

Advantages of flat Organisations

More/Greater communication between management and workers

Better team sprit

Less bureaucracy and easier decision making.

Fewer levels of management which includes benefits such as lower costs as managers are generally paid more than worker.

Disadvantages of flat Organisations

Workers may have more than one manager/boss.

May limit/hinder the growth of the organisation.

Structure limited to small organisations such as partnerships, co-operatives and some private limited companies.

Function of each department/person could be blurred and merge into the job roles of others.

Tall Structure Organisation

In its simplest form a tall organisation has many levels of management and supervision. There is a “long chain of command” running from the top of the organisation eg Chief Executive down to the bottom of the organisation eg shop floor worker.

Advantages of tall Organisations

There is a narrow span of control ie each manager has a small number of employees under their control. This means that employees can be closely supervised

There is a clear management structure

The function of each layer will be clear and distinct. There will be clear lines of responsibility and control.

Clear progression and promotion ladder

Disadvantages of tall Organisations

The freedom and responsibility of employees (subordinates) is restricted

Decision making could be slowed down as approval may be needed by each of the layers of authority.

Communication has to take place through many layers of management.

High management costs because managers are generally paid more than subordinates. Each layer will  tend to pay it’s managers more money than the layer below it.

Matrix ( or project-based) organisations  

A Matrix structure organisation contains teams of people created from various sections of the business. These teams will be created for the purposes of a specific project and will be led by a project manager. Often the team will only exist for the duration of the project and matrix structures are usually deployed to develop new products and services.

Advantages of matrixIndividuals can be chosen according to the needs of the project.                              

The use of a project team which is dynamic and able to view problems in a different way as specialists have been brought together in a new environment.

Project managers are directly responsible for completing the project within a specific deadline and budget.

DisadvantagesA conflict of loyalty between line managers and project managers over the allocation of resources.

If teams have a lot of independence can be difficult to monitor.

Costs can be increased if more managers (ie project managers) are created through the use of project teams

THE MARKETING RESEARCH

Uses of Marketing Research

Key Point

To practice marketing; to implement the marketing concepts; to implement marketing strategy, managers must make decisions.

Many decisions require additional information and marketing research is needed in order to supply that information.

We need Marketing Research to:

Make the “right” decisions to

Implement marketing

Analyze

Analyze

Analyze

Analyze

Marketing Research

Practice the marketing concept and

Make the right decisions to select the right marketing strategy

Research Objective

Precise

Detailed

Clear

Operational

The Iceberg Principle

What is Marketing Research? (Burns and Bush Definition)

Problem Definition

Marketing Management Problems

Obvious Symptoms

Marketing research is the process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem.

What is Marketing Research? AMA definition

Marketing research: the function that links the consumer, customer, and public to the marketer through information – information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve the understanding of marketing as a process.

Market Research vs. Marketing Research

Market research: the “systematic gathering, recording, and analyzing of data with respect to a particular market, where ‘market’ refers to a specific group in a specific geographic area.”

What is the purpose of Marketing Research?

To link the consumer to the marketer by providing information that can be used in making marketing decisions

What are the uses of Marketing Research?

Identify marketing opportunities and problems

Generate, refine, and evaluate potential marketing actions

Monitor marketing performance

Improve marketing as a process

Classifying Marketing Research Studies

Identifying marketing opportunities and problems

Market-demand determination

Market segments identification

Marketing audits SWOT analysis

A marketing plan outlines the specific actions you intend to carry out to interest potential customers and clients in your product and/or service and persuade them to buy the product and/or services you offer.

For successful business marketing, you need to develop a proper business marketing plan, and then gauge its performance for your business growth. There are many things that your business marketing plan needs to address and these points may include some of the following:

• -What are your business marketing goals?

• -What is your target audience?

• -Deciding business marketing system

SWOT Analysis

A basic marketing plan begins with SWOT analysis about your company and the SWOT should be :

A summary of the key elements in your business

Brief, concise and interesting, without being too abbreviated

Focused on the real issues facing your company

Action-oriented, so that positive proposals can be envisaged

Strengths - You can bank upon these.

Weaknesses - Definitely need to be corrected

Opportunities - Help you in setting the target where you want to reach.

Threats - Make necessary contingency plan to combat threats which would automatically become a part of the marketing plan.

Classifying Marketing Research Studies

Generating, refining, and evaluating potential marketing actions

Proposed marketing-mix evaluation testing

New-product prototype testing

Advertising pretesting…see Insight Express AdInsight ad pretesting…

Monitoring marketing performance

Image analysis…bank image analysis

Tracking studies...sales, market shares of all brands in our category

Customer satisfaction studies

Improving marketing as a process

The purpose of these studies is to expand knowledge (basic research) of marketing as a process rather than to solve a specific problem facing a company…How does background music affect perceptions of products…How preshopping information affects product returns…Understanding cultural differences in consumer impatience…all in Journal of Marketing.

Identifying Target Market

Identifying Market Characteristics

Measurement of Marketing Potential

Competitors Analysis

Sales Analysis

Identify and forecast Business Trends

Sales Forecasting

New Product/Service Acceptance and Potential

Long Range Forecasting of Marketing Mix Variables

Pricing Strategies and Studies

How to collect certain information about your customers, market and competitors. This information tells you about your potential market, prices, trends, competition, target customer, its preferences, income, habits, accessibility, convenient time and plans. This information should be accurate, and reliable to help you make the right business decision.

Step One : Defining the Purpose or Objectives

Ask people what they think of the product or service and collect some background demographics & attitudes of these individuals.

How much potential customers would be willing to pay for the product or service.

Where potential customers would prefer to purchase the product or service.

Where the customer would expect to hear about or learn about such a product or service.

Step Two: Gathering Data from Secondary Sources

Data that already exists i.e information from

Trade magazines

Libraries

Government Agencies

Universities

Internet

The entrepreneur should exhaust all possible secondary data sources, observation, and networking before beginning any more costly primary data research.

Step Three: Gathering Information from Primary Sources

Information that is new is Primary data and involves data collection procedures like

Observation

Networking

Interviewing

Focus Groups

Experimentation

Data collection is done with the help of Data Instruments like Questionnaire.

FOCUS Groups: They are more informal method of gathering in-depth information. A focus group is a sample of 10-12 potential customers who are invited to participate in a discussion relating to the Entrepreneurs’ research objectives.

Step Four: Analyzing & Interpreting the results

The results should be evaluated and interpreted in response to the research objectives. The data can then be cross tabulated to give better insights and interpretations regarding the segmentation of the market.

Input into a Marketing Information System

Marketing Information Systems

Gather data from inside and outside the organization

Process and store the data

Marketingdecision maker

MarketingInformation

System

Governmentstatistics

Competitorinformation

Accountingand salesreports

Industrydata

Make information available to everyone in the organization

Allow employees to request additional information from the system

Informal vs. Formal Marketing Research

The Marketing Research Process

The Research Question(s):

“What is the likely acceptance of this product among females?”

“How might the packaging be changed to improve the product?”

“Which radio station do you listen to the most?”

“Do you like the color scheme being used in our new packaging materials?”

Types of Data

secondary data

primary data

qualitative data -

quantitative data -

Sources of Data

Primary Data

Internet

Mail Surveys

Telephone Surveys

Personal Interview

Secondary Data

Databases

Government

Periodicals

Trade Journals

Trade Associations

Data Collection Methods

experimentation

observation

survey

qualitative research:

Comparison of Four Survey Methods

Alternative Sample Designs

Sampling Alternatives

3. 2. 1.

Probability Sample

3. 2. 1.

Nonprobability Samples

Marketing Research – Analyse Complexity of Buying Behaviour

BUYING PROPOSITION PRODUCT OR SERVICE

INDIVIDUAL PSYCHOL-OGICALFACTORSCOGNITION, LEARNING PROCESSES,INTERPERSONAL RESPONSE, ATTITUDESMOTIVATION, PERSONALITY THEORIES

ECONOMICPRICE, DELIVERY,PAYMENT TERMS,SALES SERVICE

SOCIOLOGICALSOCIAL CLASS,STRUCTUREFAMILY/GROUP INFLUENCE,LIFECYCLE, OPINION LEADERSHIP

CULTURALBELIEFS & VALUES, LIFE STYLES

Understanding Consumer Characteristics

CHARACTERISTICS Innovators

2-3%

Early Adopters

12-15%

Early Majority

33%

Late Majority

34%

Laggards

12-15%

PERSONAL

Social,

Income, Occupation,

Education,

Housing,

Family Influence,

Time orientation

PSYCHOLOGICAL

Nature of needs, Perceptions,

Self-concept, Aspiration Groups, Reference Groups

Changing Priorities

Stage Priorities Major Purchases

Fledging : Teens & early 20s

Self,Socialising, Education Appearance Products, Clothing, Automobiles, Recreation, Hobbies, Travel

Courting :20s Self & Other, Pair bonding,Career

Furniture & Furnishing, Entertainment, Savings

Nest Building:20s &early 30s

Babies & Career Home, Garden,,Baby Care products, insurnce

Full Nest 30-50s Children, Career, Midlife crisis

Children Food, clothing, education, transportation, life counseling

Empty Nest 50-70 Self & others, relaxation Furniture, Entertainment, Travel, Hobbies, Luxury Automobiles, Investments

Sole survivor 70-90 Self, health,loneliness Health care , Diet, Security, Comfort, TV, Books, Long distance telephone services

Analyse Target Market

Marketing Strategy to be Based on WHO MAKES THE BUYING DECISIONS

DECIDER

INFLUENCER

BUYER

USER

GATE KEEPER

Characteristics of a Marketing Plan

Should provide a strategy for accomplishing company goals and missions

Should be based on facts and valid assumptions

Should provide for continuity so that future plans can be built on it for long-term goals

Should be simple and short

Should be flexible i.e. should provide scope for inclusion of “what if” scenarios

Should specify performance criteria that will be monitored and controlled

OCCUPANTS WHOSERVICES WHATOCCASION WHEN

ORGANISATION WHO IS INVOLVED

OBJECTIVES WHYOPERATIO HOW

Marketing Plan- The Algorithm

Defining the Business Situation – Describe the past and present business achievements of the new venture.

Defining the Target market –

Market Segmentation- Dividing a market into definable and measurable groups for the purpose of targeting market strategy.

Market Segmentation- The process of segmenting & targeting the market should process in the following way

Decide what general market or industry you wish to pursue

Divide the market into smaller groups based on

Characteristics of the customer

Geographic

Demographic

Psychographic

Buying situation

Desired benefits (e.g. Product features)

Usage (e.g. frequency of usage)

Buying conditions (e.g. time available & product purpose)

Awareness of buying intention (e.g. familiarity of product & willingness to buy)

Select segment or segments to Target

Develop a marketing plan integrating product, price, distribution & promotion (together called THE MARKETING MIX)

Considering the Strengths and Weaknesses – The SWOT analysis which was discussed earlier.

Establishing Goals & Objectives – Asking oneself “Where do we want to go?” in terms of Market share, profits, sales, market penetration, new products launching

etc. All such goals n objectives should be quantifiable and could be measured for control purposes.

Defining Marketing Strategy – Outline all the activities needed to meet the venture’s business plan goals & objectives.

The 5-P’s

In the marketing plan, you should endeavor to follow best practice to maximize your competitive advantage in each of the following key areas:

Product – packaging, the brand name, warranty, image, service, delivery time, features, style etc.

Price – Pricing of a product or service has to be done very carefully considering numerous things like quality, prospective demand, margins, competitor’s prices, discounts, market segmentation etc..

Promotion – The promotion plan itself a mini-marketing plan. Advertising is an effective as well as an expensive way & has to be taken care of. The procedure to be followed includes :

• Set specific campaign objectives (building sales, market share)

• Decide your strategy (budget, media choice, geographical profile)

• Target the Audience (market segment, demographic profile)

• Decide the advertising content (specific product/service benefits to highlight)

• Decide the execution and style

Place (Distribution Plan)- The distribution plan must match the other elements of the Marketing MIX to maintain the differentiation and focus of the Company.

If your product is of highest quality, with price & promotion to match, it must be available in the major quality stores.

The choice of distribution channel, therefore can make an important contribution to both your company differentiation & to reaching your target group of customers.

People – The final ingredient in the marketing plan jigsaw must be quality salespeople who can consistently maintain your marketing differentiation.

A well remunerated & motivated staff will act as enthusiastic sales promoters and act as eyes and ears of the company in the competitive market place.

Coordination of the planning process

Designating responsibility for implementation

Budgeting the Marketing Strategy

Implementation of the Market Plan

Monitoring Progress of Market Actions

Lack of a real plan (particularly regarding goals & objectives)

Inadequate situational analysis – There is no point in deciding where you want to go if you do not know “where you are?” and “where you have been?”

Lack of Goal Clarity and Unrealistic Goals – This generally happens due to lack of understanding of the situation.

Unexpected competitive moves, product deficiencies, Delay in Getting Finance, and acts of God.