KEY FUNCTIONS IN BUSINESS Customer Services Administration Operations and IT support The main Marketing and functional SalesFinance areas Human Research and Resources Development
DELIVERING KEY FUNCTIONS In a small business, will be done by individuals In a medium/large business, will be done by individuals working in functional areas or departments
LINKS BETWEEN FUNCTIONS All functional areas must link together to HR R&D achieve the overall Ops aims and objectives This means IT Admin Sales cooperation and good communications CS Marketing Financ e
HUMAN RESOURCES Recruitment, Retention and dismissalCompensation Working The main conditions responsibilities of the human resources function Employee Training,Organizations Development and Unions and Promotion Includes the legal rights and responsibilities of employer and employees
SELECTION & RECRUITMENTSelection:Selection is a process of collecting and evaluating information about an individual in order to extend an offer for employment.Such employment can be either first position for a new employee or a different position for a current employee.The selection process is performed under legal and environmental constraints and addresses the future interests of the organization and the individual.Recruitment:Recruitment is defined as those organizational activities (choosing recruitment sources, developing recruitment ads, deciding money to be spent) that influence the number & type of individuals who apply for a position & which also affects the decision of individual to accept the job offer.
OBJECTIVES OF RECRUITMENT Objectives Of Recruitment: Recruitment has 3 main objectives: 1. Develop an appropriate number of applicants for each position while keeping costs low. This helps in increasing probability of identifying only well-qualified individuals. 2. To meet organization’s legal & social obligations regarding the demographic composition of workforce -females, disabled etc Ensuring demographic balance depends on the applicant pool 3. Help increase success rate of selection process by reducing % of applicants poorly qualified or wrong skills. Processing applications is expensive both in terms of time and money. Money spent on evaluating unsuitable candidates is waste.
COMPENSATIONCompensation:Compensation is the remuneration received by an employee in return for his/her contribution to the organization. It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees
OBJECTIVES OF COMPENSATION Compensation: Objectives: When managed correctly, it helps the organization achieve its objectives and obtain, maintain, and retain a productive workforce. Compensation is a key factor in attracting and keeping the best employees and ensuring that your organization has the competitive edge in an increasingly competitive world. Without adequate compensation, current employees are likely to leave and replacements will be difficult to recruit. The outcomes of pay dissatisfaction harm productivity and affect the quality of work life.
TYPES OF COMPENSATIONTypes Of Compensation: Direct in the form of monetary benefits and/or Indirect in the form of non-monetary benefits known as perks, time off, etc.(A) Financial Compensation:Total Financial compensation = Direct + Indirect Compensation Direct Financial Compensation pay received in forms of wages, salaries, bonuses & commissions, stocks, fringe benefits Indirect Financial Compensation(benefits) All financial rewards not included in direct compensation. For example, workers compensation, Family & medical leave, Disability Protection
TYPES OF COMPENSATION Types Of Compensation: (B) Nonfinancial Compensation Satisfaction person receives from psychological & or physical environment in which person works. For example, skills variety, experiences, good working conditions, flextime
NEED OF COMPENSATIONNeed Of Compensation: A good compensation package is important to motivate the employees to increase the organizational productivity. Unless compensation is provided no one will come and work for the organization. Thus, compensation helps in running an organization effectively and accomplishing its goals. Salary is just a part of the compensation system, the employees have other psychological and self-actualization needs to fulfill. Thus, compensation serves the purpose. The most competitive compensation will help the organization to attract and sustain the best talent. The compensation package should be as per industry norms.
TRAININGWhat is Training? Training refers to a planned process of modifying employee behavior, attitude, and skill through learning in order to increase the probability of goal achievement. The goal of training is for employees to master the knowledge, skill, and behaviors emphasized in training programs, and apply them to their day-to- day activitiesObjectives of Training: Primary objective is to reduce gap between what employees know and what they should know. New employees need to be socialized to fit in organization. Also to fill the gap. Obsolescence of skill. Employees need to keep abreast with the latest skill. Improve performance in existing jobs. Employees want to grow and change. New skills required as employees move up the hierarchy. Long term plan may change & require employees to develop transferrable skills.
OBJECTIVES OF TRAININGPrimary objective is to reduce gap between what employees know and what they should know.Objectives are:1. Socialization: Training important technique of socialization the new employee in organization culture. Socialization or induction program helps employee understand organizational policies, structure, role relationship, behavioral norm. Employee blends his attitude & behavior as per organization expectation.2. Removing Obsolescence: Update skills & knowledge. Technology change is very fast & organizations need to keep pace with change. Ex: computer3. Future Job Needs: Train employees to prepare them for future roles. Training needs are identified by finding out the gap between competencies required and present.
TRAINING DESIGN PROCESS EnsuringConducting Needs Employees’ Creating a Assessment Readiness for Learning Training EnvironmentDeveloping an Ensuring TransferEvaluation Plan of Training Monitor and Select Training Evaluate the Method Program
TRAINING DESIGN APPROACHES Assumptions of Training Design Approaches Training design is effective only if it helps employees reach instructional or training goals and objectives. Measurable learning objectives should be identified before training. Evaluation plays an important part in planning and choosing a training method, monitoring the training program, and suggesting changes to the training design process.
FINANCEConcerned with money and future plans Preparing accounts, eg invoices, management accounts, financial accounts for shareholders and Inland Revenue Preparing wages and salaries Obtaining capital and resources, eg money for expansion or to pay for resources such as equipment and materials.
FINANCIAL MANAGEMENT Financial management refers to that part of management activity which is concerned with the planning and controlling of the firm’s financial resources. It deals with finding out various sources of raising funds for the firm and also using such funds in the most appropriate manner
FINANCIAL MANAGEMENT Importance Of Financial Management Financial Management helps in: Financial planning & successful promotion of an enterprise Acquisition of funds at minimum cost Proper use & allocation of funds Taking sound financial decisions Improving profitability through financial control Increasing the wealth of investors and the nation Promoting and mobilizing individual and corporate savings
FINANCIAL MANAGEMENTFunctional Areas Of Financial Management: Determining Financial needs Choosing the sources of funds Financial Analysis & Interpretation Cost-Volume Profit Analysis Capital Budgeting Working Capital Management Dividend Policy
Administration and IT Support Clerical work, eg mail, record keepingFacility andmaintenance Office Supplies The role of administration and IT function Security Support for software applications, electronic communications and electronic transactions
Operations Concerned with the main business activities Obtains and converts resources of the business into goods/services, ie Buildings and land Equipment People Materials
Operations ManagementOperations Management is A management function An organization’s core function In every organization whether Service or Manufacturing, profit or Not for profit
OM’s Transformation Role To add value Increase product value at each stage Value added is the net increase between output product value and input material value Provide an efficient transformation Efficiency – means performing activities well for least possible cost
Marketing and SalesBoth are concerned with customer needs. Market research Activities include:Sales Promotion
Marketing Management Definitions of 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’
Marketing Management Definitions of marketing ‘Marketing is the human activity directed at satisfying human needs and wants through an exchange process’ - Kotler 1980
Implications of Marketing Who are our existing / potential customers? What are their current / future needs? How can we satisfy these needs? 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?
Customer ServiceConcerned with customer relationshipsActivities include: Providing information Giving advice Providing credit facilities Delivering goods Providing after-sales service
Research and DevelopmentConcerned with developing new goods/servicesand updating old onesActivities include: Technological developments Scientific research Design features Performance of product
The use of ITRelates to all functional areas: Electronic communications (eg email) Data sharing (eg databases) Security systems (eg virus protection) External communications (eg Internet) Online support for customers (eg order tracking) Electronic transactions (eg EFT)
Functional variationsNo two businesses are the same!Functions will vary because of: Size and scale of business Activities of business Type(s) of customers Needs of customers Preferences of owner(s)