Tourism Management


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Tourism Management

  1. 1. Tourism Management©Ramakrishna Kongalla
  2. 2. • Management in all business and organizational activities is the act of getting peopletogether to accomplish desired goals and objectives using available resources efficientlyand effectively.• Management comprises planning, organizing, staffing, leading ordirecting, and controlling an organization (a group of one or more people or entities) oreffort for the purpose of accomplishing a goal.• Resourcing encompasses the deployment and manipulation of humanresources, financial resources, technological resources and natural resources.• Since organizations can be viewed as systems, management can also be defined ashuman action, including design, to facilitate the production of useful outcomes from asystem.• This view opens the opportunity to manage oneself, a pre-requisite to attempting tomanage others• Towards the end of the 20th century, business management came to consist of sixseparate branches, namely:– Human resource management– Operations management or production management– Strategic management– Marketing management– Financial management– Information technology management (management information systems)• Nature of Management– It is a dynamic process– It has multi disciplinary approach– It is a science– It is an artRtist@Tourism, Pondicherry University 2
  3. 3. Process of Management• MANAGEMENT PROCESS-Management is considered a process because it involves a series of interrelatedfunctions. The management process includes planning, organizing, staffing, directingand controlling functions.• Management as a process has the following implications– 1)MANAGEMENT AS SOCIAL PROCESS-Management process involves interaction among people.Goals can be achieved only when relations between people are productive.– 2)MANAGEMENT AS INTEGRATED PROCESS-Management process brings together human, hysicaland financial resources. Management process also integrates human efforts so as to maintainharmony among them.– 3)MANAGEMENT AS ITERATIVE PROCESS-All managerial functions are contained within eachother. for example, when a manager prepares plans, he is also laying down standards for control– 4)MANAGEMENT AS CONTINUOUS PROCESS-Management involves continuous identifying andsolving problems. it is repeated again and again.Rtist@Tourism, Pondicherry University 3
  4. 4. Functions of Management• Management operates through various functions, often classified asplanning, organizing, staffing, leading/directing, controlling/monitoring and motivation.– Planning: Deciding what needs to happen in the future (today, next week, next month, nextyear, over the next five years, etc.) and generating plans for action.– Organizing: (Implementation)pattern of relationships among workers, making optimum use of theresources required to enable the successful carrying out of plans.– Staffing: Job analysis, recruitment and hiring for appropriate jobs.– Leading/directing: Determining what needs to be done in a situation and getting people to do it.– Controlling/monitoring: Checking progress against plans.– Motivation: Motivation is also a kind of basic function of management, because withoutmotivation, employees cannot work effectively. If motivation does not take place in anorganization, then employees may not contribute to the other functions (which are usually set bytop-level management).Rtist@Tourism, Pondicherry University 4
  5. 5. Levels of managementTop-level managers• Consists of board of directors, president, vice-president, CEOs, etc. They are responsible for controllingand overseeing the entire organization. They develop goals, strategic plans, company policies, andmake decisions on the direction of the business. In addition, top-level managers play a significant rolein the mobilization of outside resources and are accountable to the shareholders and general public.– According to Lawrence S. Kleiman, the following skills are needed at the top managerial level.– Broadened understanding of how: competition, world economies, politics, and social trends effectorganizational effectiveness .Middle-level managers• Consist of general managers, branch managers and department managers. They are accountable tothe top management for their departments function. They devote more time to organizational anddirectional functions. Their roles can be emphasized as executing organizational plans in conformancewith the companys policies and the objectives of the top management, they define and discussinformation and policies from top management to lower management, and most importantly theyinspire and provide guidance to lower level managers towards better performance. Some of theirfunctions are as follows:– Designing and implementing effective group and intergroup work and information systems.– Defining and monitoring group-level performance indicators.– Diagnosing and resolving problems within and among work groups.– Designing and implementing reward systems supporting cooperative behavior.First-level managers• Consist of supervisors, section leads, foremen, etc. They focus on controlling and directing. Theyassigning employees tasks, guide and supervise employees on day-to-day activities, ensure quality andquantity production, make recommendations, suggestions, and up channel employee problems, etc.First-level managers are role models for employees that provide:– Basic supervision.– Motivation.– Career planning.– Performance feedback.Rtist@Tourism, Pondicherry University 5
  6. 6. Rtist@Tourism, Pondicherry University 6TopMiddleLow
  7. 7. Management skills• Political: used to build apower base and establishconnections.• Conceptual: used to analyzecomplex situations.• Interpersonal: used tocommunicate, motivate, mentor and delegate.• Diagnostic: the ability tovisualise most appropriateresponse to a situation(Or )• Technical• Decision making• Leadership• Adaptive• Managing• SocialManagement roles• Interpersonal: roles thatinvolve coordination andinteraction with employees.• Informational: roles thatinvolve handling, sharing, andanalyzing information.• Decisional: roles that requiredecision-making.(Or)• Top management roles• Middle management roles• Supervisory managementrolesRtist@Tourism, Pondicherry University 7
  8. 8. External Environment of an OrganizationDirectly interactive forces• Directly interactive forces includeowners, customers, suppliers, competitors, employees, andemployee unions. Management has a responsibility to eachof these groups.– Owners expect managers to watch over their interests andprovide a return on investments.– Customers demand satisfaction with the products and servicesthey purchase and use.– Suppliers require attentive communication, payment, and astrong working relationship to provide needed resources.– Competitors present challenges as they vie for customers in amarketplace with similar products or services.– Employees and employee unions provide both the people to dothe jobs and the representation of work force concerns tomanagement.Rtist@Tourism, Pondicherry University 8
  9. 9. • Indirectly interactive forces– sociocultural dimension is especially important because it determines thegoods, services, and standards that society values. The sociocultural forceincludes the demographics and values– political and legal dimensions of the external environment include regulatoryparameters within which an organization must operate. Political parties create orinfluence laws, and business owners must abide by these laws. Tax policies, traderegulations, and minimum wage legislation– technological dimension of the external environment impacts the scientificprocesses used in changing inputs (resources, labor, money) to outputs (goodsand services)– economic dimension reflects worldwide financial conditions. Certain economicconditions of special concern to organizations include interestrates, inflation, unemployment rates, gross national product, and the value of theU.S. dollar against other currencies.– global dimension of the environment refers to factors in other countries.Although the basic management functions ofplanning, organizing, staffing, leading, and controlling are the same whether acompany operates domestically or internationally, managers encounterdifficulties and risks on an international scale. Whether it be unfamiliarity withlanguage or customs or a problem within the country itself (think mad cowdisease), managers encounter global risks that they probably wouldnt haveencountered if they had stayed on their own shoresRtist@Tourism, Pondicherry University 9
  10. 10. Rtist@Tourism, Pondicherry University 10
  11. 11. Social responsibilities• obligation of management towards the society andothers concerned.• Business enterprises are creatures of society andshould respond to the demands of society– Responsibility towards owners– Responsibility towards employees– Responsibility towards consumers– Responsibility towards the Governments– Responsibility towards the community and society• The socially responsible role of management in relation to thecommunity are expected to be revealed by its policies withrespect to the employment of handicapped persons, andweaker sections of the community, environmentalprotection, pollution control, setting up industries in backwardareas, and providing relief to the victims of natural calamitiesetc.Rtist@Tourism, Pondicherry University 11
  12. 12. Management Ethics…Reasons to behave ethically• From the point of view ofinternal customer:– improves the atmosphere atwork and helps motivating theemployees– ethic behaviour of managementsets a good example to theemployees– evokes a sense of pride for thecompany and improves its imagein the eyes of the employees• From the point of view ofexternal customer:– improves the public image of thecompany adds to the overalldevelopment of ethicalbehaviour in the society4 levels of organizational ethics– Social disregard: the companyshows carelessness for theconsequences of its actions– Social obligation: thecompany does not wish toextend its activity any furtherthan just meeting its legalresponsibilities– Social responsiveness: thecompany adjusts its policiesaccording to the socialconditions, demands andpressures– Social responsibility: thecompany decides toconcentrate on its long - termgoals for the benefit ofsociety in generalRtist@Tourism, Pondicherry University 12
  13. 13. Ethical decision - making• When making a decision in management the following criteriaof ethical decision - making should be considered:– Legality - will the decision somehow affect the legal status?– Fairness - how will the decision affect those involved in it?– Self - respect - does the decision - maker feel good about thedecision and its consequences?– Long - term effects" - how do the predicted long - term effects relateto the above parameters?• "Ethics in Management" Management ethics are the ethicaltreatment of employees, stockholders, owners, and the publicby a company. A company, while needing to make a profit,should have good ethics.• Employees should be treated well, whether they are employedhere or overseas. By being respectful of the environment in thecommunity a company shows good ethics, and good, honestrecords also show respect to stockholders and owners.Rtist@Tourism, Pondicherry University 13
  14. 14. PlanningRtist@Tourism, Pondicherry University 14
  15. 15. Nature• A plan is trap laid to capture the future.If plans are good, the organizationsurvives and grows. Poor plans lead toits doom (LA Allen)• Two attitudes to planning need to beheld in tension:– on the one hand we need to be preparedfor what may lie ahead, which may meancontingencies and flexible processes.– On the other hand, our future is shapedby consequences of our own planning andactions.• A plan should be a realistic view of theexpectations. Depending upon theactivities, a plan can be longrange, intermediate range or shortrange. It is the framework within whichit must operate.• For management seeking externalsupport, the plan is the most importantdocument and key to growth.• Preparation of a comprehensive planwill not guarantee success, but lack of asound plan will almost certainly ensurefailure.Purpose of a plan• Just as no two organizations are alike, soalso their plans.• It is therefore important to prepare aplan keeping in view the necessities ofthe enterprise.• A plan is an important aspect ofbusiness. It serves the following threecritical functions:– Helps management toclarify, focus, and research theirbusinesss or projects developmentand prospects.– Provides a considered and logicalframework within which a businesscan develop and pursue businessstrategies over the next three to fiveyears.– Offers a benchmark against whichactual performance can bemeasured and reviewed.Rtist@Tourism, Pondicherry University 15
  16. 16. • Planning - a result-oriented process- can be summarized in 3 easysteps:– 1. choosing a destination,– 2. evaluating alternative routes, and– 3. deciding the specific course ofyour plan• Types of Planning– Short term– Mid term– Long term• Process of planning– Perception of opportunities andthreats (SWOT)– Establishing objectives– Planning premises– Identification of alternatives– Evaluation alternatives– Choice of alternative plans– Formulation of final plan– Establishing sequence of activitiesImportance of the planningprocess• A plan can play a vital role inhelping to avoid mistakes orrecognize hiddenopportunities. Preparing asatisfactory plan of theorganization is essential. Theplanning know the businessand that they have thoughtthrough its development interms of products,management, finances, andmost importantly, marketsand competition.• Planning helps in forecastingthe future, makes the futurevisible to some extent. Itbridges between where weare and where we want to go.Planning is looking ahead.Rtist@Tourism, Pondicherry University 16
  17. 17. Management by objectives• According to Koontz &O’Donnel, MBO is a comprehensivemanagerial system that integratesmany key managerial activities in asystematic manner consciouslydirected towards the effective andefficient achievement oforganisational objectives• Management by Objectives; asystem that seeks to alignemployees goals with the goals ofthe organization. This ensures thateveryone is clear about what theyshould be doing, and how that isbeneficial to the whole organization• Peter Drucker outlined the five-stepprocess for MBO shown in figure1, below. Each stage has particularchallenges that need to beaddressed for the whole system towork effectively.Rtist@Tourism, Pondicherry University 17
  18. 18. Decision making• Decision making can beregarded as the mentalprocesses (cognitiveprocess) resulting in theselection of a course ofaction among severalalternative scenarios.• Every decision makingprocess produces afinal choice.• The output can be anaction or an opinion ofchoice.• Decision making processRtist@Tourism, Pondicherry University 18
  19. 19. Techniques– Pros and Cons: Listing theadvantages and disadvantages ofeach option, popularizedby Plato and Benjamin Franklin– Simple Prioritization: Choosingthe alternative with the highestprobability-weighted utility foreach alternative (see DecisionAnalysis)– Satisficing: using the firstacceptable option found– Acquiesce to a person inauthority or an "expert", justfollowing orders– Flipism: Flipping a coin, cutting adeck of playing cards, and otherrandom or coincidence methods– Prayer, tarot cards, astrology, augurs, revelation, or other formsof divination– Taking the most opposite actioncompared to the advice ofmistrusted authorities(parents, police officers, partners)Decision-Making Stages• Developed by B. AubreyFisher, there are four stages thatshould be involved in all groupdecision making.– Orientation stage- This phase iswhere members meet for the firsttime and start to get to know eachother.– Conflict stage- Once groupmembers become familiar witheach other, disputes, little fightsand arguments occur. Groupmembers eventually work it out.– Emergence stage- The groupbegins to clear up vague opinionsby talking about them.– Reinforcement stage- Membersfinally make a decision, whilejustifying themselves that it wasthe right decision.Rtist@Tourism, Pondicherry University 19
  20. 20. Decision-making models• Rationality,– Herbert Simon (1976) means ”a style ofbehaviour that is appropriate to theachievement of given goals, within the limitsimposed by given conditions andconstraints”• Facts– According to Gortner (2001), facts are theinformation and knowledge that the publicadministrators possess in formulatingpolicies.– Facts are important in deciding theappropriate means to take to achieve higherends.– They may not be readily known byadministrators but need to be acquiredthrough extensive research and analysis.• Values– Values are internal perceptions on thedesirability and priority of one’s actions andchoices. (Van Wart, 2004) Besides settinggoals for their plans, decision makers makepriorities, interpret facts and act uponobjective situations according to theirvalues.• Means– Means are the instruments to satisfy ahigher end (Simon, 1997). Althoughthey are used to achieve a higher end,they are not neutral in value.– When policy makers devise theirstrategies, they choose their meansaccording to their internal values andconsequences.• Ends– Ends are the intermediate goals to amore final objective. In a means-endhierarchy, the concept of means andends is relative.– An action can be a mean relative to thehigher levels in the hierarchy but an endrelative to the lower levels.– However, in this hierarchy, an action ismore value-based when movingupwards in the hierarchy but more fact-based when moving downwardsRtist@Tourism, Pondicherry University 20
  21. 21. OrganizingRtist@Tourism, Pondicherry University 21
  22. 22. • Organizing is the function of management whichfollows planning. It is a function in which thesynchronization and combination of human, physicaland financial resources takes place.• All the three resources are important to get results.Therefore, organizational function helps inachievement of results which in fact is important forthe functioning of a concern.• According to Chester Barnard, “Organizing is a functionby which the concern is able to define the rolepositions, the jobs related and the co- ordinationbetween authority and responsibility.• Hence, a manager always has to organize in order toget results.Rtist@Tourism, Pondicherry University 22
  23. 23. A manager performs organizing functionwith the help of following steps:-• Identification of activities - All theactivities which have to be performed ina concern have to be identified first. Forexample, preparation of accounts,making sales, record keeping, qualitycontrol, inventory control, etc. All theseactivities have to be grouped andclassified into units.• Departmentally organizing theactivities - In this step, the managertries to combine and group similar andrelated activities into units ordepartments. This organization ofdividing the whole concern intoindependent units and departments iscalled departmentation.• Classifying the authority - Once thedepartments are made, the managerlikes to classify the powers and itsextent to the managers. This activity ofgiving a rank in order to the managerialpositions is called hierarchy. The topmanagement is into formulation ofpolicies, the middle level managementinto departmental supervision andlower level management intosupervision of foremen.• Co-ordination between authority andresponsibility - Relationships areestablished among various groups toenable smooth interaction toward theachievment of the organizational goal.Each individual is made aware of hisauthority and he/she knows whomthey have to take orders from and towhom they are accountable and towhom they have to report. A clearorganizational structure is drawn andall the employees are made aware ofit.Rtist@Tourism, Pondicherry University 23
  24. 24. Line and staff organization• is a modification of line organizationand it is more complex than lineorganization.• According to this administrativeorganization, specialized andsupportive activities are attached tothe line of command by appointingstaff supervisors and staff specialistswho are attached to the lineauthority.• The power of command alwaysremains with the line executives andstaff supervisors guide, advice andcouncil the line executives. PersonalSecretary to the Managing Directoris a staff official.• Features of Line and Staff Organization• There are two types of staff :– Staff Assistants- P.A. to Managing Director,Secretary to Marketing Manager.– Staff Supervisor- Operation ControlManager, Quality Controller, PRO• Line and Staff Organization is acompromise of line organization. It ismore complex than line concern.• Division of work and specialization takesplace in line and staff organization.• The whole organization is divided intodifferent functional areas to which staffspecialists are attached.• Efficiency can be achieved through thefeatures of specialization.• There are two lines of authority whichflow at one time in a concern :– Line Authority– Staff Authority• Power of command remains with theline executive and staff serves only ascounselors.Rtist@Tourism, Pondicherry University 24
  25. 25. • Merits– Relief to line of executive– Expert advice– Benefit of Specialization– Better co-ordination– Benefits of Research andDevelopment– Training– Balanced decisions– Unity of action• Demerits– Lack of understanding– Lack of sound advice– Line and staff conflicts– Costly– Assumption of authority– Staff steals the showRESPONSIBILITY• Responsibility is the obligation to accomplish the goalsrelated to the position and the organization. Managers, atno matter what level of the organization, typically havethe same basic responsibilities when it comes tomanaging the work force: Direct employees towardobjectives, oversee the work effort of employees, dealwith immediate problems, and report on the progress ofwork to their superiors.AUTHORITY• Authority is seen as the legitimate right of a person toexercise influence or the legitimate right to makedecisions, to carry out actions, and to direct others. Forexample, managers expect to have the authority to assignwork, hire employees, or order merchandise and supplies.Span of controlis the term now used more commonly in businessmanagement, particularly human resource management.Span of control refers to the number of subordinates asupervisor has.• In the hierarchical business organization of some time inthe past it was not uncommon to see average spans of 1to 4 or even less. That is, one manager supervised fouremployees on average. In the 1980s corporate leadersflattened many organizational structures causing averagespans to move closer to 1 to 10Rtist@Tourism, Pondicherry University 25
  26. 26. • Delegation– Managers delegate some of their functionand authority to their subordinates.– Scope of delegation is limited as superiordelegates the powers to the subordinates onindividual bases.– Responsibility remains of the managers andcannot be delegated– Freedom is not given to the subordinates asthey have to work as per the instructions oftheir superiors.– It is a routine function– Delegation is important in all concernswhether big or small. No enterprises can workwithout delegation.– The authority is granted by one individual toanother.– Responsibility cannot be delegated– Degree of delegation varies from concern toconcern and department to department.– Delegation is a process which explainssuperior subordinates relationship– Delegation is essential of all kinds of concerns– Delegation is essential for creating theorganization– Delegated authority can be taken back.– Very little freedom to the subordinates• Decentralization– Right to take decisions is shared by topmanagement and other level of management.– Scope is wide as the decision making is sharedby the subordinates also.– Responsibility is also delegated to subordinates.– Freedom to work can be maintained bysubordinates as they are free to take decisionand to implement it.– It is an important decision of an enterprise.– Decentralization becomes more important inlarge concerns and it depends upon the decisionmade by the enterprise, it is not compulsory.– It is a systematic act which takes place at alllevels and at all functions in a concern.– Authority with responsibility is delegated tosubordinates.– Decentralization is total by nature. It spreadsthroughout the organization i.e. at all levels andall functions– It is an outcome which explains relationshipbetween top management and all otherdepartments.– Decentralization is a decisions function bynature.– Decentralization is an optional policy at thediscretion of top management.– It is considered as a general policy of topmanagement and is applicable to alldepartments.– Considerable freedomRtist@Tourism, Pondicherry University 26
  27. 27. • Conflict is defined as a clash between individuals arising out of a differencein thought process, attitudes, understanding, interests, requirements andeven sometimes perceptions. A conflict results in heated arguments, physicalabuses and definitely loss of peace and harmony. A conflict can actuallychange relationships.• Phases of conflict• A conflict has five phases.– Prelude to conflict - It involves all the factors which possibly arise a conflictamong individuals. Lack of coordination, differences in interests, dissimilarity incultural, religion, educational background all are instrumental in arising a conflict.– Triggering Event - No conflict can arise on its own. There has to be an event whichtriggers the conflict. Jenny and Ali never got along very well with each other. Theywere from different cultural backgrounds, a very strong factor for possibility of aconflict.Ali was in the mid of a presentation when Jenny stood up and criticizedhim for the lack of relevant content in his presentation, thus triggering theconflict between them.– Initiation Phase - Initiation phase is actually the phase when the conflict hasalready begun. Heated arguments, abuses, verbal disagreements are all warningalarms which indicate that the fight is already on.– Differentiation Phase - It is the phase when the individuals voice out theirdifferences against each other. The reasons for the conflict are raised in thedifferentiation phase.– Resolution Phase - A Conflict leads to nowhere. Individuals must try tocompromise to some extent and resolve the conflict soon. The resolution phaseexplores the various options to resolve the conflict.Rtist@Tourism, Pondicherry University 27
  28. 28. • Change management is astructured approach toshifting/transitioning individuals, teams, and organizations from acurrent state to a desired futurestate.• It is an organizational process aimedat helping employees to accept andembrace changes in their currentbusiness environment.– Mission changes,– Strategic changes,– Operational changes (includingStructural changes),– Technological changes,– Changing the attitudes and behaviorsof personnel,• Successful change management– Benefits management and realization– Effective Communications– education, training and/or skills– personal counseling– implementation and fine-tuningRtist@Tourism, Pondicherry University 28
  29. 29. • Innovation is the creation ofbetter or moreeffective products, processes, technologies, or ideas that areaccepted bymarkets, governments,and society.• Innovation differsfrom invention in thatinnovation refers to the use ofa new idea or method,whereas invention refers moredirectly to the creation of theidea or method itself.• Organization development (OD)• is a new term which means a conceptual,organization-wide effort to increase anorganizations effectiveness and viability.• Warren Bennis has referred to OD as a responseto change, a complex educational strategyintended to change the beliefs, attitudes, values,and structure of an organization so that it canbetter adapt to new technologies, markets,challenges, and the dizzying rate of change itself.• OD is neither "anything done to better anorganization" nor is it "the training function ofthe organization"; it is a particular kind of changeprocess designed to bring about a particular kindof end result.• OD can involve interventions in theorganizations "processes," using behaviouralscience knowledge organizational reflection,system improvement, planning and self-analysis.• Kurt Lewin (1898–1947) is widely recognized asthe founding father of OD, although he diedbefore the concept became current in the mid-1950s.• From Lewin came the ideas of groupdynamics and action research which underpinthe basic OD process as well as providing itscollaborative consultant/client ethos.Rtist@Tourism, Pondicherry University 29
  30. 30. StaffingRtist@Tourism, Pondicherry University 30
  31. 31. • Nature of Staffing Function– Staffing is an important managerial function- Staffing function is themost important mangerial act along with planning, organizing, directingand controlling. The operations of these four functions depend upon themanpower which is available through staffing function.– Staffing is a pervasive activity- As staffing function is carried out by allmangers and in all types of concerns where business activities are carriedout.– Staffing is a continuous activity- This is because staffing functioncontinues throughout the life of an organization due to the transfers andpromotions that take place.– The basis of staffing function is efficient management of personnels-Human resources can be efficiently managed by a system or properprocedure, that is, recruitment, selection, placement, training anddevelopment, providing remuneration, etc.– Staffing helps in placing right men at the right job. It can be doneeffectively through proper recruitment procedures and then finallyselecting the most suitable candidate as per the job requirements.– Staffing is performed by all managers depending upon the nature ofbusiness, size of the company, qualifications and skills of managers,etc. Insmall companies, the top management generally performs this function.In medium and small scale enterprise, it is performed especially by thepersonnel department of that concern.Rtist@Tourism, Pondicherry University 31
  32. 32. Steps involved in Staffing• Manpower requirements- The very first step in staffing is to plan the manpower inventory required by aconcern in order to match them with the job requirements and demands. Therefore, it involvesforecasting and determining the future manpower needs of the concern.• Recruitment- Once the requirements are notified, the concern invites and solicits applications accordingto the invitations made to the desirable candidates.• Selection- This is the screening step of staffing in which the solicited applications are screened out andsuitable candidates are appointed as per the requirements.• Orientation and Placement- Once screening takes place, the appointed candidates are made familiar tothe work units and work environment through the orientation programmes. placement takes place byputting right man on the right job.• Training and Development- Training is a part of incentives given to the workers in order to develop andgrow them within the concern. Training is generally given according to the nature of activities and scopeof expansion in it. Along with it, the workers are developed by providing them extra benefits of indepthknowledge of their functional areas. Development also includes giving them key and important jobsas atest or examination in order to analyse their performances.• Remuneration- It is a kind of compensation provided monetarily to the employees for their workperformances. This is given according to the nature of job- skilled or unskilled, physical or mental, etc.Remuneration forms an important monetary incentive for the employees.• Performance Evaluation- In order to keep a track or record of the behaviour, attitudes as well as opinionsof the workers towards their jobs. For this regular assessment is done to evaluate and supervise differentwork units in a concern. It is basically concerning to know the development cycle and growth patterns ofthe employeesin a concern.• Promotion and transfer- Promotion is said to be a non- monetary incentive in which the worker is shiftedfrom a higher job demanding bigger responsibilities as well as shifting the workers and transferring themto different work units and branches of the same organization.Rtist@Tourism, Pondicherry University 32
  33. 33. DirectingRtist@Tourism, Pondicherry University 33
  34. 34. • DIRECTING– is said to be a process in which the managersinstruct, guide and oversee the performanceof the workers to achieve predeterminedgoals.– Directing is said to be the heart ofmanagement process. Planning, organizing,staffing have got no importance if directionfunction does not take place.– Directing initiates action and it is from hereactual work starts.– Direction is said to be consisting of humanfactors. In simple words, it can be describedas providing guidance to workers is doingwork.– In field of management, direction is said to beall those activities which are designed toencourage the subordinates to workeffectively and efficiently.– According to Human, “Directing consists ofprocess or technique by which instruction canbe issued and operations can be carried outas originally planned” Therefore, Directing isthe function of guiding, inspiring, overseeingand instructing people towardsaccomplishment of organizational goals.• Direction has got following characteristics:– Pervasive Function - Directing is required atall levels of organization. Every managerprovides guidance and inspiration to hissubordinates.– Continuous Activity - Direction is acontinuous activity as it continuousthroughout the life of organization.– Human Factor - Directing function is relatedto subordinates and therefore it is related tohuman factor. Since human factor is complexand behaviour is unpredictable, directionfunction becomes important.– Creative Activity - Direction function helps inconverting plans into performance. Withoutthis function, people become inactive andphysical resources are meaningless.– Executive Function - Direction function iscarried out by all managers and executives atall levels throughout the working of anenterprise, a subordinate receivesinstructions from his superior only.– Delegate Function - Direction is supposed tobe a function dealing with human beings.Human behaviour is unpredictable by natureand conditioning the people’s behaviourtowards the goals of the enterprise is whatthe executive does in this function.Therefore, it is termed as having delicacy in itto tackle human behaviour.Rtist@Tourism, Pondicherry University 34
  35. 35. Rtist@Tourism, Pondicherry University 35
  36. 36. Types of Communication• 1. Number of Participants– Intra-personal– Inter-personal (Dyadic)– Intra group(Multiadic)– Inter group– Organisational– Public– Mass communication• 2. Direction of Flow– Downward, Upward– Horizontal, vertical– Crosswise (Diagonal)• 3. way of Expression– Written– Oral– Visual– Audio visual– Non verbal– No communication– Face to face• 4. organisation structure– formal– Informal(grapevine)• 5. objective– Mass/societal– Socialising– Political– Educational– Business– Entertainament– News and views– City information– Data collection• 6. Environment of the firm– External– Internal• 7. Modes of mediation– Human Communication– Mediated communicationRtist@Tourism, Pondicherry University 36
  37. 37. Barriers of communication• 1. Personal Barriers– Personal emotions– Biases– Perceptual variations– Competencies– Mental faculties– Five senses– Psychological• 2. Semantic barriers– Word interpretations– Gestures (hand shakes & frowns)– Language translations– Signs and symbols– Cue meanings• 3. Organisational structure barriers– Lack of chain of comand– Bureaucratic– Political manipulations– Class conflicts• 4. Organisational climatic barriers– Problems in the culture– Lack of proper directions form toplevel to low level– Fears– Fears of being distorted– Fear of distortion by grapevine– Fear of oneself exposing tocriticism– Fear of getting fired– Poor or ego-centered supervision– Insincerity and lack of confidence• 5. Technical barriers– Space for geographic disturbances– Mechanical failures anddisturbances– Physical obstructions– Improper time of communication– Wrong time of communicationRtist@Tourism, Pondicherry University 37
  38. 38. Principles of effective communication• Communication is the process of transmittingthe messages and receiving the response of thatmessage.• The person who sends the messages is knownas sender and the person who receives themessage is known as receiver and the responseto the message is known as feed back.• Since the feedback requires another messageto be communicated by the sender to thereceiver. So communication process become acircular process.• In simple words, exchange ofideas/messages, response there off in total isknown as communication. Any method ofcommunication like words—oral orwritten, pictures, graphs, diagrams, etc.• may be adopted to communicate. Effectivecommunication is that communication in whichthe receiver is understood actually what thesender wants to convey, and in the same form.• ‘Noise’ is something, which has disturbed theeffective sending and receiving ofcommunication.– Principle of clarity– Principle of objective– Principle of understanding the receiver– Principle of consistency– Principle of completeness– Principle of feedback– Principle of time• 7 C’s off effective communication– Clarity– Completeness– Coherence– Conciseness– Correctness– Continuity– Credibility• Functions of Mass Communication:– To inform– To entertain and– To persuadeRtist@Tourism, Pondicherry University 38
  39. 39. Motivation• Motivation is a process that startswith a physiological or psychologicalneed that activates a behavior or adrive that is aimed at a goal.• features of motivation :– Motivation is an act of managers– Motivation is a continuous process– Motivation can be positive or negative– Motivation is goal oriented– Motivation is complex in nature– Motivation is an art– Motivation is system-oriented– Motivation is different from jobsatisfactionMOTIVATIONAL FACTORS• I. MONETARY FACTORS:– Salaries or wages:– Bonus– Incentives:– Special individual incentives:• II. NON MONETARY FACTORS– Status or job title:– Appreciation and recognition:– Delegation of authority:– Working conditions– Job security:– Job enrichment– Workers participation:– Cordial relations:– Good superiors:– Other factors• Providing training to the employees.• Proper job placements.• Proper promotions and transfers.• Proper performance feed back.• Proper welfare facilities.• Flexible working hoursRtist@Tourism, Pondicherry University 39
  40. 40. • Need and importance ofmotivation– Higher efficiency– Reduce absenteeism.– Reduces employee turnover.– Improves a corporate image.– Good relations.– Improved morale.– Reduced wastages andbreakages.– Reduced accidents.– Facilitates initiative andinnovation.• Motivational Theories– Sigmund Freud (Theory X)– Douglas McGregor(theory y),– Abraham Maslow(theory z, hierarchy of needs),– Alderfers (ERG theory )– Frederick Herzberg(two factor motivationhygiene theory,)– Elton Mayo (Hawthorne Experiments)– Chris Argyris (Bureaucratic/Pyramidal & Humanistic /Democratic Value System)– Rensis Likert(ManagementSystems and Styles)– David McClelland (achievement motivation.)– Victor Vrooms ( Expectancy)Rtist@Tourism, Pondicherry University 40
  41. 41. Traditional theory X• Sigmund Freud, who was no lover ofpeople, and was far from beingoptimistic.• Theory X assumes that people are lazy;they hate work to the extent that theyavoid it; they have no ambition, take noinitiative and avoid taking anyresponsibility; all they want is security,and to get them to do any work, theymust be rewarded, coerced, intimidatedand punished.• This is the so-called stick and carrotphilosophy of management.• If this theory were valid, managers willhave to constantly police their staff,whom they cannot trust and who willrefuse to cooperate.• In such an oppressive and frustratingatmosphere, both for the manager andthe managed, there is no possibility ofany achievement or any creative workTheory Y• Douglas McGregor• This is in sharp contrast to theory X.McGregor believed that people want tolearn and thatwork is their natural activity to the extent that they develop self-discipline and self-development.• They see their reward not so much in cashpayments as in the freedom to do difficultand challenging work by themselves.• The managers job is to dovetail thehuman wish for self-development into theorganizations need for maximumproductive efficiency.• The basicobjectives of both are therefore met and with imagination and sincerity, the enormous potential can be tapped. Theory Ymanagement is soft and slack.• The leader does no longer hanker afterpower, lets people develop freely, and mayeven (it is hoped) enjoy watching thedevelopment and actualization of people,as if, by themselves.• Everyone, and most of all the organization,gains as a result.Rtist@Tourism, Pondicherry University 41
  42. 42. Maslow ( Theory Z)• totally rejects the dark and dingyFreudian basement and takes us out into the fresh, open, sunny and cheerfulatmosphere.• He is the main founder of thehumanistic school or the third forcewhich holds that all the good qualitiesare inherent in people, at least, atbirth, although later they are graduallylost.• Maslows central theme revolvesaround the meaning and significance ofhuman work• The basic human needs, according toMaslow, are:– physiological needs (Lowest)– safety needs;– love needs;– esteem needs; and– self-actualization needs (Highest)Alderfers Hierarchy (ERG theory)• Clayton Alderfer reworked MaslowsNeed Hierarchy to align it more closelywith empirical research.• Alderfers theory is called the ERG theory-- Existence, Relatedness, and Growth.– Existence refers to our concern with basicmaterial existence requirements; whatMaslow called physiological and safetyneeds.– Relatedness refers to the desire we have formaintaining interpersonal relationships;similar to Maslows social/love need, and theexternal component of his esteem need.– Growth refers to an intrinsic desire forpersonal development; the intrinsiccomponent of Maslows esteem need, andself-actualization• Alderfers ERG theory differs fromMaslows Need Hierarchy insofar as ERGtheory demonstrates that more than oneneed may be operative at the same time.ERG theory does not assume a rigidhierarchy where a lower need must besubstantially satisfied before one canmove on.Rtist@Tourism, Pondicherry University 42
  43. 43. Frederick Herzberg(Hygiene /Motivation Theory)• people work first andforemost in their own selfenlightened interest, for they are truly happy and mentally healthy through workaccomplishment.• Peoples needs are of twotypes:– Animal Needs (hygienefactors)• Supervision• Interpersonal relations• Working conditions• Salary– Human Needs (motivators)• Recognition• Work• Responsibility• Advancement• Elton Mayo’s Hawthorn experiments• Elton Mayo’s team conducted a number of experimentsinvolving six female workers. These experiments areoften referred to as the Hawthorne experiments orHawthorne studies as they took place at TheHawthorne Works of the Western Electric Company inChicago.• Over the course of five years, Mayo’s team altered thefemale worker’s working conditions and thenmonitored how the working conditions affected theworkers morale and productivity. The changes inworking conditions included changes in working hours,rest brakes, lighting, humidity, and temperature. Thechanges were explained to the workers prior toimplementation.• At the end of the five year period, the female worker’sworking conditions, reverted back to the conditionsbefore the experiment began. Unexpectedly theworkers morale and productivity rose to levels higherthan before and during the experiments.• The combination of results during and after theexperiment (ie the increase in the workers productivitywhen they were returned to their original workingconditions) led Mayo to conclude that workers weremotivated by psychological conditions more thanphysical working condition. He also concluded thatworkers were motivated by more than self interesRtist@Tourism, Pondicherry University 43
  44. 44. Chris Argyris• According to Argyris, organizationneeds to be redesigned for a fullerutilization of the mostprecious resource, the workers, inparticulartheir psychological energy.• The pyramidal structure will berelegated to the background, anddecisions will be taken by smallgroups rather than by a singleboss.• Satisfaction in work will be morevalued than material rewards.• Work should be restructured inorder to enable individuals todevelop to the fullest extent.• At the same time workwill become more meaningful andchallenging through self-motivationRensis Likert• Likert identified four differentstyles of management:– exploitative-authoritative;– benevolent-authoritative;– consultative;– participative.• The participative system wasfound to be the most effective inthat it satisfies the wholerangeof human needs.• Major decisions are taken bygroups themselves and thisresults in achievinghigh targetsand excellent productivity.• There is complete trustwithin the group and thesenseof participation leads toa high degree of motivationRtist@Tourism, Pondicherry University 44
  45. 45. Fred Luthans• Luthans advocates the so-calledcontingency approach on the basisthat certain practiceswork betterthan others for certain people andcertain jobs. As an example, rigid,clearlydefined jobs, authoritative leadership and tight controls lead in some cases to highproductivity andsatisfaction among workers. Insome other cases just the oppositeseems towork. It is necessary,therefore, to adapt the leadershipstyle to the particular groupof workers and the specific jobin hand• Victor Vroom• Vrooms expectancy theory is anextension of the contingencyapproach. The leadershipstyleshould be tailored to theparticular situation and to theparticular group. In some casesitappears best for the boss todecide and in others the grouparrives at a consensus.Anindividual should also berewarded with what he or sheperceives as important ratherthanwhat the manager perceives.For example, one individual mayvalue a salary increase,whereasanother may, instead, valuepromotion. This theorycontributes an insight intothestudy of employee motivationby explaining how individual goalsinfluence individualperformanceRtist@Tourism, Pondicherry University 45
  46. 46. David c McClellands motivational needs theory• American David Clarence McClelland (1917-98).• McClelland is chiefly known for his work on achievementmotivation, but his research interests extended to personalityand consciousness.• David McClelland pioneered workplace motivationalthinking, developing achievement-based motivational theoryand models, and promoted improvements in employeeassessment methods, advocating competency-basedassessments and tests, arguing them to be better thantraditional IQ and personality-based tests.• His ideas have since been widely adopted in manyorganisations, and relate closely to the theory of FrederickHerzberg.• David McClelland is most noted for describing three types ofmotivational need, which he identified in his 1961 book, TheAchieving Society:– achievement motivation (n-ach)– authority/power motivation (n-pow)– affiliation motivation (n-affil)Rtist@Tourism, Pondicherry University 46
  47. 47. Leadership• “Leadership is a process whereby anindividual influences a group ofindividuals to achieve a common goal”.– (Peter Northouse, 2004)• Four Factors of Leadership– Leader– Followers– Communication– SituationImportant Keys to Effective Leadership• Trust and confidence in top leadershipwas the single most reliable predictor ofemployee satisfaction in an organization.• Effective communication by leadership inthree critical areas was the key towinning organizational trust andconfidence:– Helping employees understand thecompanys overall business strategy.– Helping employees understand how theycontribute to achieving key businessobjectives.– Sharing information with employees onboth how the company is doing and how anemployees own division is doing — relativeto strategic business objectives.Principles of Leadership• To help you be, know, and do, followthese eleven principles of leadership– Know yourself and seek self-improvement– Be technically proficient– Seek responsibility and take responsibilityfor your actions– Make sound and timely decisions– Set the example– Know your people and look out for theirwell-being– Keep your workers informed– Develop a sense of responsibility in yourworkers.– Ensure that tasks are understood,supervised, and accomplished .– Train as a team– Use the full capabilities of yourorganizationRtist@Tourism, Pondicherry University 47
  48. 48. Leadership Styles• Leadership style is themanner and approach ofprovidingdirection, implementingplans, and motivating people.• Kurt Lewin (1939) led agroup of researchers toidentify different styles ofleadership.• This early study has beenvery influential andestablished three majorleadership styles.• The three major styles ofleadership are (U.S. ArmyHandbook, 1973):– Authoritarian or autocratic– Participative or democratic– Delegative or Free ReignRtist@Tourism, Pondicherry University 48
  49. 49. Theories1. "Great Man" Theories:• Great man theories assume that thecapacity for leadership is inherent –that great leaders are born, not made.These theories often portray greatleaders as heroic, mythic and destinedto rise to leadership when needed. Theterm "Great Man" was used because, atthe time, leadership was thought ofprimarily as a male quality, especially interms of military leadership.2. Trait Theories:• Similar in some ways to "Great Man"theories, trait theories assume thatpeople inherit certain qualities andtraits that make them better suited toleadership. Trait theories often identifyparticular personality or behavioralcharacteristics shared by leaders. Ifparticular traits are key features ofleadership, then how do we explainpeople who possess those qualities butare not leaders? This question is one ofthe difficulties in using trait theories toexplain leadership.3. Contingency Theories:• Contingency theories of leadershipfocus on particular variables related tothe environment that might determinewhich particular style of leadership isbest suited for the situation. Accordingto this theory, no leadership style is bestin all situations. Success depends upona number of variables, including theleadership style, qualities of thefollowers and aspects of the situation.4. Situational Theories:• Situational theories propose thatleaders choose the best course ofaction based upon situational variables.Different styles of leadership may bemore appropriate for certain types ofdecision-making.Rtist@Tourism, Pondicherry University 49
  50. 50. 5. Behavioral Theories:• Behavioral theories of leadership arebased upon the belief that great leadersare made, not born. Rootedin behaviorism, this leadership theoryfocuses on the actions of leaders not onmental qualities or internal states.According to this theory, peoplecan learn to become leaders throughteaching and observation.6. Participative Theories:• Participative leadership theoriessuggest that the ideal leadership style isone that takes the input of others intoaccount. These leaders encourageparticipation and contributions fromgroup members and help groupmembers feel more relevant andcommitted to the decision-makingprocess. In participativetheories, however, the leader retainsthe right to allow the input of others.7. Management Theories:• Management theories, also knownas transactional theories, focus on therole of supervision, organization andgroup performance. These theories baseleadership on a system of rewards andpunishments. Managerial theories areoften used in business; when employeesare successful, they are rewarded; whenthey fail, they are reprimanded orpunished. Learn more about theoriesof transactional leadership.8. Relationship Theories:• Relationship theories, also known astransformational theories, focus uponthe connections formed betweenleaders and followers. Transformationalleaders motivate and inspire people byhelping group members see theimportance and higher good of the task.These leaders are focused on theperformance of group members, butalso want each person to fulfill his or herpotential. Leaders with this style oftenhave high ethical and moral standardsRtist@Tourism, Pondicherry University 50
  51. 51. ControllingRtist@Tourism, Pondicherry University 51
  52. 52. "Controlling is determining what is being accomplished - that is, evealuatingperformance and, if necessary, applying corrective measures so thatperformance takes place according to plans". - Terry and Franklin.Features of Controlling• One can control futurehappenings but not thehappened. Hence in here allthe past performance ismeasured for takingcorrective actions for futureperiods.• Every manager in anorganisation has to performthe control function. Thecontrol may be qualitycontrol, inventorycontrol, productioncontrol, or evenadministrative control.• Control is a continuousprocess, it follow a definitepattern and time-table, month after monthand year after year on acontinuous basis.Importance of Controlling• Control system acts as an adjustment inorganisational operations. It mainly checks whetherplans are being observed and suitable progresstowards the objectives is being made or not, and ifnecessary any action to control the deviations.• Policies and other planning elements set by themanagers become the basis and reason for control.Through control it is monitored whether theindividuals adhere to those frameworks or not sothat organisation and management can verify thequality of various policies.• Exercising some authority and forming superior-subordinate relationship throughout theorganisation can be established throughcontrolling.• With the presence of authority or control theindividuals will work properly and exhibit betterperformance to reach the targets set for them.• Control system ensures the organisationalefficiency and effectiveness. When Proper systemexists the organisation effectively achieves itsobjectives.Rtist@Tourism, Pondicherry University 52
  53. 53. Process of Controlling– Setting performancestandards.– Measurement of actualperformance.– Comparing actualperformance withstandards.– Analysing deviations.– Correcting deviations.• Controlling methods– (1) the nature of the informationflow designed into the system (thatis, open- or closed-loop control),– (2) the kind of componentsincluded in the design (that is manor machine control systems), and– (3) the relationship of control tothe decision process (that is,organizational or operationalcontrol).• techniques– Costing method– Program evaluation and reviewmethod– Return on investment method– Management by objectives method– Budgetary control methodRtist@Tourism, Pondicherry University 53
  54. 54. International Business• International business is a term usedto collectively describe all commercialtransactions(private and governmental, sales, investments, logistics,and transportation)that take place between two ormore regions, countries and nations beyond their political boundary.• Usually, private companies undertakesuch transactions for profit;governments undertake them forprofit and for political reasons.• It refers to all those business activitieswhich involves cross bordertransactions ofgoods, services, resources betweentwo or more nations.• Transaction of economic resourcesinclude capital, skills, people etc. forinternational production of physicalgoods and services such asfinance, banking, insurance, construction etc• Operations– Objectives: sales expansion,– resource acquisition,– risk minimization• Means– Modes: importing and exporting, tourism and transportation, licensing andfranchising, turnkey operations, management contracts, directinvestment and portfolio investments.– Functions: marketing,global manufacturing and supplychainmanagement, accounting, finance, human resources– Overlaying alternatives: choice ofcountries, organization and controlmechanismsRtist@Tourism, Pondicherry University 54
  55. 55. • Physical and societal factors– Political policies and legalpractices– Cultural factors– Economic forces– Geographical influences• Competitive factors– Major advantagein price, marketing, innovation, orother factors.– Number and comparativecapabilities of competitors– Competitive differencesby country– Local taxes• Studying international business isimportant because:– Most companies areeither international or competewith international companies.– Modes of operation may differ fromthose used domestically.– The best way of conductingbusiness may differ by country.– An understanding helps you makebetter career decisions.– An understanding helps you decidewhat governmental policies tosupport.• The Six Tenets are as follows– Take advantage of tradeagreements: think outside theborder– Protect your brand at all costs– Maintain high ethical standards– Stay secure in an insecure world– Expect the Unexpected– All global business is personalRtist@Tourism, Pondicherry University 55
  56. 56. Information systems• Automation• use of control systems and informationtechnologies to reduce the need for human workin the production of goods and services.• In the scope of industrialization, automation is astep beyond mechanization.• automation greatly decreases the need for humansensory and mental requirements as well.• Auomation has had a notable impact in a widerrange of industries beyond manufacturing (whereit began).• Once-ubiquitous telephone operators have beenreplaced largely by automated telephoneswitchboards and answering machines.• Medical processes such as primary screeningin electrocardiography or radiography andlaboratory analysis ofhuman genes, sera, cells, and tissues are carriedout at much greater speed and accuracy byautomated systems.• Automated teller machines have reduced the needfor bank visits to obtain cash and carry outtransactions. In general, automation has beenresponsible for the shift in the world economyfrom industrial jobs to service jobs in the 20th and21st centuries• The main advantages of automation are:– Replacing human operators in tasks that involve hardphysical or monotonous work.– Replacing humans in tasks done in dangerousenvironments (i.e. fire, space, volcanoes, nuclearfacilities, underwater, etc.)– Performing tasks that are beyond human capabilitiesof size, weight, speed, endurance, etc.– Economy improvement: Automation may improve ineconomy of enterprises, society or most ofhumanity. For example, when an enterprise investsin automation, technology recovers its investment;or when a state or country increases its income dueto automation like Germany or Japan in the 20thCentury.– Reduces operation time and work handling timesignificantly.• The main disadvantages of automation are:– Unemployment rate increases due to machinesreplacing humans and putting those humans out oftheir jobs.– Technical Limitation: Current technology is unable toautomate all the desired tasks.– Security Threats/Vulnerability: An automated systemmay have limited level of intelligence, hence it ismost likely susceptible to commit error.– Unpredictable development costs: The research anddevelopment cost of automating a process mayexceed the cost saved by the automation itself.– High initial cost: The automation of anew product or plant requires a huge initialinvestment in comparison with the unit cost of theproduct, although the cost of automation is spreadin many product batches of thingsRtist@Tourism, Pondicherry University 56
  57. 57. • Additional goals ofautomation– Reliability and precision– Health and environment– Convertibility andturnaround time• Automation tools– Computer-aidedtechnologies (or CAx)– Computer-aided design (CADsoftware)– Computer-aidedmanufacturing (CAMsoftware)– programmable logiccontroller (PLC)• Different types ofautomation tools exist:– ANN - Artificial neuralnetwork– DCS - Distributed ControlSystem– HMI - Human MachineInterface– SCADA - Supervisory Controland Data Acquisition– PLC - Programmable LogicController– PAC - Programmableautomation controller– Instrumentation– Motion control– RoboticsRtist@Tourism, Pondicherry University 57
  58. 58. Data processing• Data processing is the howraw information ismanipulated in order toproduce a result.• The result may lead abetter understanding of aproblem or a situation.• Data processing is a veryessential aspect ofbusinesses all over theworld.• The success of a businessdepends on how thevolumes of data generatedare handled andinterpreted.• There are six stages of dataprocessing.– Collection– Preparation– Input– Processing– Output and interpretation– StorageRtist@Tourism, Pondicherry University 58
  59. 59. From EDP to MIS• Until the 1960s, the role of mostinformation systems was simple.They were mainly used forelectronic data processing(EDP),purposes such as transactionsprocessing, record-keeping andaccounting. EDP is often defined asthe use of computers inrecording, classifying, manipulating,and summarizing data. It is alsocalled transaction processingsystems (TPS), automatic dataprocessing, or informationprocessing.• Transaction processing systems –these process data resulting• from business transactions, updateoperational databases, and producebusiness documents. Examples:sales and inventory processing andaccounting systems.• In the 1960s, another role wasadded to the use of computers: theprocessing of data into usefulinformative reports. The concept ofmanagement informationsystems(MIS) was born. This newrole focused on developing businessapplications that providedmanagerial end users withpredefined management reportsthat would give managers theinformation they needed fordecision-making purposes.• Management informationsystems – provide information inthe form• of pre specified reports and displaysto support business decision-making. Examples: salesanalysis, production performanceand cost trend reporting systems.Rtist@Tourism, Pondicherry University 59
  60. 60. • By the 1970s, these pre-definedmanagement reports were notsufficient to meet many of thedecision-making needs ofmanagement. In order to satisfysuch needs, the concept ofdecision support systems (DSS)was born. The new role forinformation systems was toprovide managerial end userswith ad hoc and interactivesupport of their decision-makingprocesses.• Decision support systems –provide interactive ad hocsupport for• the decision-making processesof managers and other businessprofessionals. Examples: productpricing, profitability forecastingand risk analysis systems.• In the 1980s, the introduction ofmicrocomputers into theworkplace ushered in a new era,which led to a profound effecton organizations. The rapiddevelopment of microcomputerprocessing power (e.g. Intel’sPentium microprocessor),application software packages(e.g. Microsoft Office), andtelecommunication networksgave birth to the phenomenonof end user computing. Endusers could now use their owncomputing resources to supporttheir job requirements insteadof waiting for the indirectsupport of a centralizedcorporate information servicesdepartment. It became evidentthat most top executives did notdirectly use either the MISreportsRtist@Tourism, Pondicherry University 60
  61. 61. MIS• Types• Most management information systemsspecialize in particular commercial andindustrial sectors, aspects of theenterprise, or management substructure.– Management information systems (MIS), perse, produce fixed, regularly scheduled reportsbased on data extracted and summarized fromthe firm’s underlying transaction processingsystemsto middle and operational level managersto identify and inform structured and semi-structured decision problems.– Decision support systems (DSS) are computerprogram applications used by middlemanagement to compile information from a widerange of sources to support problem solving anddecision making.– Executive information systems (EIS) is a reportingtool that provides quick access to summarizedreports coming from all company levels anddepartments such as accounting, humanresources and operations.– Marketing information systems are MIS designedspecifically for managing the marketing aspects ofthe business.– Office automation systems (OAS) supportcommunication and productivity in the enterpriseby automating work flow and eliminatingbottlenecks. OAS may be implemented at any andall levels of management.Rtist@Tourism, Pondicherry University 61• A management informationsystem (MIS) provides informationneeded to manage organizationsefficiently and effectively.• Management information systemsinvolve three primary resources:people, technology, and information.• Management information systems aredistinct from other informationsystems in that they are used to analyzeoperational activities in theorganization.• Academically, the term is commonlyused to refer to the group ofinformation management methods tiedto the automation or support of humandecision making,• e.g. decision support systems, expertsystems, and executive informationsystems
  62. 62. • Enterprise applications– Enterprise systems, also knownas enterprise resource planning(ERP) systems provide an organization withintegrated software modules and a unifieddatabase which enable efficient planning,managing, and controlling of all corebusiness processes across multiplelocations. Modules of ERP systems mayinclude finance, accounting, marketing,human resources, production, inventorymanagement and distribution.– Supply chain management (SCM) systemsenable more efficient management of thesupply chain by integrating the links in asupply chain. This may include suppliers,manufacturer, wholesalers, retailers andfinal customers.– Customer relationship management(CRM) systems help businesses managerelationships with potential and currentcustomers and business partners acrossmarketing, sales, and service.– Knowledge management system(KMS) helps organizations facilitate thecollection, recording, organization, retrieval,and dissemination of knowledge. This mayinclude documents, accounting records, andunrecorded procedures, practices and skills.• Developing Information Systems• "The actions that are taken tocreate an information systemthat solves an organizationalproblem are called systemdevelopment (Laudon & Laudon,2010)".• These include– system analysis,– system design,– programming,– testing,– conversion,– production and finallymaintenance.• These actions usually take placein that specified order but somemay need to repeat or beaccomplished concurrently.Rtist@Tourism, Pondicherry University 62
  63. 63. CRS• A computer reservations system (orcentral reservation system) isa computerized system used to store andretrieve information and conducttransactions related to air travel.• Originally designed and operatedby airlines, CRSes were later extended forthe use of travel agencies.• Major CRS operations that book and selltickets for multiple airlines are knownas global distribution systems (GDS).• Airlines have divested most of their directholdings to dedicated GDScompanies, who make their systemsaccessible to consumersthrough Internet gateways.• Modern GDSes typically allow users tobook hotel rooms and rental cars as wellas airline tickets. They also provide accessto railway reservations and busreservations in some markets althoughthese are not always integrated with themain system.• Origins• In 1946, American Airlines installed thefirst automated booking system, theexperimental electromechanical Reservisor.• A newer machine with temporarystorage based on a magnetic drum, theMagnetronic Reservisor, soon followed.• This system proved successful, and wassoon being used by several airlines, aswell as Sheraton Hotels andGoodyear for inventory control.• It was seriously hampered by the needfor local human operators to do theactual lookups; ticketing agents wouldhave to call a booking office, whoseoperators would direct a small teamoperating the Reservisor and then readthe results over the telephone.• There was no way for agents to directlyquery the systemRtist@Tourism, Pondicherry University 63
  64. 64. • Travel agent access• In 1976, United began offering itsApollo system to travel agents; while itwould not allow the agents to booktickets on Uniteds competitors, themarketing value of the convenientterminal proved indispensable. SABRE,PARS, and DATAS were soon released totravel agents as well• Following airline deregulation in 1978,an efficient CRS proved particularlyimportant; by some counts, TexasAir executive Frank Lorenzo purchasedmoney-losing Eastern AirLines specifically to gain control of itsSystem One CRS.• in 1976 Videcominternational with BritishAirways, British Caledonian and CCLlaunched Travicom, the worlds firstmulti-access reservations system(wholly based on Videcom technology),forming a network providingdistribution for initially 2 andsubsequently 49 subscribinginternational airlines to thousands oftravel agents in the UK.• European airlines also began to invest inthe field in the 1980s initially by deployingtheir own reservations systems in theirhomeland, propelled by growth indemand for travel as well as technologicaladvances which allowed GDSes to offerever-increasing services and searchingpower.• In 1987, a consortium led by AirFrance and WestGermanys Lufthansa developed Amadeus,modeled on SystemOne. Amadeus GlobalTravel Distribution was launched in 1992.• In 1990, Delta, Northwest Airlines, andTrans World Airlines formed Worldspanand in 1993, another consortium(including British Airways, KLM and UnitedAirlines, among others) formed thecompeting company GalileoInternational based on Apollo.• Numerous smaller companies suchas KIU have also formed, aimed at nichemarkets not catered for by the four largestnetworks, including the Low CostCarrier segment, and small and mediumsize domestic and regional airlines.Rtist@Tourism, Pondicherry University 64
  65. 65. Amadeus• Created by Air France, Iberia, Lufthansa,SAS• 144 Airline Passenger Service System Customers through 60,000 airlinesales offices worldwide• 90,000 travel agencies worldwide, both offline and online, in 195countries. Online agencies include:– Expedia– CheapOair– ebookers– CheapTickets– MakeMyTrip– Opodo– Jetabroad• 440 bookable airlines (including over 60 Low Cost Carriers)• Over 100,000 unique hotel properties• 30 Car rental companies representing over 36,000 car rental locations• 21 Cruise Lines• 203 Tour Operators• 103 Rail Operators• 23 Travel Insurance CompaniesRtist@Tourism, Pondicherry University 65
  66. 66. Sabre• Created by American Airlines• Used by Aeroflot, Vietnam Airlines, JetBlue Airways, Frontier, Westjet, Volaris,AeroMexico, Virgin America• Online Travel Agencies:– Travelocity– zuji–– Travel Guru– Priceline• Schedules for 400 airlines• 380 airline industry customers, including 44 airlines representing all majoralliances• 88,000 hotels• 50 rail carriers• 180 tour operators• 13 cruise lines• 24 car rental brands serving 30,000 locations• 9 limousine vendors providing access to more than 33,500 ground serviceproviders• 55,000 travel agencies in over 100 countriesRtist@Tourism, Pondicherry University 66
  67. 67. Galileo• by Travelport (as Apollo Reservation System 1970-early1990s)• United Airlines (using their subsidiary Covia) UnitedAirlines is moving to SHARES because of the merger withContinental Airlines• Used by CheapOair, ebookers, FlightCentre, Orbitz, Trailfinders.Rtist@Tourism, Pondicherry University 67
  68. 68. Thank YouRtist@Tourism, Pondicherry University 68
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