Ugc net-tourism-ch-09tourismmanagement-130522073942-phpapp02

Tourism Management
©Ramakrishna Kongalla

• Management in all business and organizational activities is the act of getting people
together to accomplish desired goals and objectives using available resources efficiently
and effectively.
• Management comprises planning, organizing, staffing, leading or directing,
and controlling an organization (a group of one or more people or entities) or effort for
the purpose of accomplishing a goal.
• Resourcing encompasses the deployment and manipulation of human
resources, financial resources, technological resources and natural resources.
• Since organizations can be viewed as systems, management can also be defined as
human action, including design, to facilitate the production of useful outcomes from a
system.
• This view opens the opportunity to 'manage' oneself, a pre-requisite to attempting to
manage others
• Towards the end of the 20th century, business management came to consist of six
separate 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 art
R'tist@Tourism, Pondicherry University 2

Process of Management
• MANAGEMENT PROCESS-
Management is considered a process because it involves a series of interrelated
functions. The management process includes planning, organizing, staffing, directing
and 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, hysical
and financial resources. Management process also integrates human efforts so as to maintain
harmony among them.
– 3)MANAGEMENT AS ITERATIVE PROCESS-All managerial functions are contained within each
other. for example, when a manager prepares plans, he is also laying down standards for control
– 4)MANAGEMENT AS CONTINUOUS PROCESS-Management involves continuous identifying and
solving problems. it is repeated again and again.

Functions of Management
• Management operates through various functions, often classified as planning,
organizing, staffing, leading/directing, controlling/monitoring and motivation.
– Planning: Deciding what needs to happen in the future (today, next week, next month, next year,
over the next five years, etc.) and generating plans for action.
– Organizing: (Implementation)pattern of relationships among workers, making optimum use of the
resources 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 without motivation,
employees cannot work effectively. If motivation does not take place in an organization, then
employees may not contribute to the other functions (which are usually set by top-level
management).

Levels of management
Top-level managers
• Consists of board of directors, president, vice-president, CEOs, etc. They are responsible for controlling
and overseeing the entire organization. They develop goals, strategic plans, company policies, and
make decisions on the direction of the business. In addition, top-level managers play a significant role
in 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 effect
organizational effectiveness .
Middle-level managers
• Consist of general managers, branch managers and department managers. They are accountable to
the top management for their department's function. They devote more time to organizational and
directional functions. Their roles can be emphasized as executing organizational plans in conformance
with the company's policies and the objectives of the top management, they define and discuss
information and policies from top management to lower management, and most importantly they
inspire and provide guidance to lower level managers towards better performance. Some of their
functions 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. They
assigning employees tasks, guide and supervise employees on day-to-day activities, ensure quality and
quantity 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.

Top
Middle
Low

Management skills
• Political: used to build a
power base and establish
connections.
• Conceptual: used to analyze
complex situations.
• Interpersonal: used to
communicate, motivate,
mentor and delegate.
• Diagnostic: the ability to
visualise most appropriate
response to a situation
(Or )
• Technical
• Decision making
• Leadership
• Adaptive
• Managing
• Social
Management roles
• Interpersonal: roles that
involve coordination and
interaction with employees.
• Informational: roles that
involve handling, sharing, and
analyzing information.
• Decisional: roles that require
decision-making.
(Or)
• Top management roles
• Middle management roles
• Supervisory management
roles

External Environment of an Organization
Directly interactive forces
• Directly interactive forces include owners, customers,
suppliers, competitors, employees, and employee unions.
Management has a responsibility to each of these groups.
– Owners expect managers to watch over their interests and
provide a return on investments.
– Customers demand satisfaction with the products and services
they purchase and use.
– Suppliers require attentive communication, payment, and a
strong working relationship to provide needed resources.
– Competitors present challenges as they vie for customers in a
marketplace with similar products or services.
– Employees and employee unions provide both the people to do
the jobs and the representation of work force concerns to
management.

• Indirectly interactive forces
– sociocultural dimension is especially important because it determines the goods,
services, and standards that society values. The sociocultural force includes the
demographics and values
– political and legal dimensions of the external environment include regulatory
parameters within which an organization must operate. Political parties create or
influence laws, and business owners must abide by these laws. Tax policies, trade
regulations, and minimum wage legislation
– technological dimension of the external environment impacts the scientific
processes used in changing inputs (resources, labor, money) to outputs (goods
and services)
– economic dimension reflects worldwide financial conditions. Certain economic
conditions of special concern to organizations include interest rates, inflation,
unemployment rates, gross national product, and the value of the U.S. dollar
against other currencies.
– global dimension of the environment refers to factors in other countries.
Although the basic management functions of planning, organizing, staffing,
leading, and controlling are the same whether a company operates domestically
or internationally, managers encounter difficulties and risks on an international
scale. Whether it be unfamiliarity with language or customs or a problem within
the country itself (think mad cow disease), managers encounter global risks that
they probably wouldn't have encountered if they had stayed on their own shores

Social responsibilities
• obligation of management towards the society and
others concerned.
• Business enterprises are creatures of society and
should 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 the
community are expected to be revealed by its policies with
respect to the employment of handicapped persons, and
weaker sections of the community, environmental protection,
pollution control, setting up industries in backward areas, and
providing relief to the victims of natural calamities etc.

Management Ethics…
Reasons to behave ethically
• From the point of view of
internal customer:
– improves the atmosphere at
work and helps motivating the
employees
– ethic behaviour of management
sets a good example to the
employees
– evokes a sense of pride for the
company and improves its image
in the eyes of the employees
• From the point of view of
external customer:
– improves the public image of the
company adds to the overall
development of ethical
behaviour in the society
4 levels of organizational ethics
– Social disregard: the company
shows carelessness for the
consequences of its actions
– Social obligation: the
company does not wish to
extend its activity any further
than just meeting its legal
responsibilities
– Social responsiveness: the
company adjusts its policies
according to the social
conditions, demands and
pressures
– Social responsibility: the
company decides to
concentrate on its long - term
goals for the benefit of
society in general

Ethical decision - making
• When making a decision in management the following criteria
of 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 the
decision and its consequences?
– Long - term effects" - how do the predicted long - term effects relate
to the above parameters?
• "Ethics in Management" Management ethics are the ethical
treatment of employees, stockholders, owners, and the public
by a company. A company, while needing to make a profit,
should have good ethics.
• Employees should be treated well, whether they are employed
here or overseas. By being respectful of the environment in the
community a company shows good ethics, and good, honest
records also show respect to stockholders and owners.

Planning

Nature
• A plan is trap laid to capture the future.
If plans are good, the organization
survives and grows. Poor plans lead to
its doom (LA Allen)
• Two attitudes to planning need to be
held in tension:
– on the one hand we need to be prepared
for what may lie ahead, which may mean
contingencies and flexible processes.
– On the other hand, our future is shaped
by consequences of our own planning and
actions.
• A plan should be a realistic view of the
expectations. Depending upon the
activities, a plan can be long range,
intermediate range or short range. It is
the framework within which it must
operate.
• For management seeking external
support, the plan is the most important
document and key to growth.
• Preparation of a comprehensive plan
will not guarantee success, but lack of a
sound plan will almost certainly ensure
failure.
Purpose of a plan
• Just as no two organizations are alike, so
also their plans.
• It is therefore important to prepare a
plan keeping in view the necessities of
the enterprise.
• A plan is an important aspect of
business. It serves the following three
critical functions:
– Helps management to clarify, focus,
and research their business's or
project's development and
prospects.
– Provides a considered and logical
framework within which a business
can develop and pursue business
strategies over the next three to five
years.
– Offers a benchmark against which
actual performance can be
measured and reviewed.

• Planning - a result-oriented process
- can be summarized in 3 easy
steps:
– 1. choosing a destination,
– 2. evaluating alternative routes, and
– 3. deciding the specific course of
your plan
• Types of Planning
– Short term
– Mid term
– Long term
• Process of planning
– Perception of opportunities and
threats (SWOT)
– Establishing objectives
– Planning premises
– Identification of alternatives
– Evaluation alternatives
– Choice of alternative plans
– Formulation of final plan
– Establishing sequence of activities
Importance of the planning
process
• A plan can play a vital role in
helping to avoid mistakes or
recognize hidden
opportunities. Preparing a
satisfactory plan of the
organization is essential. The
planning know the business
and that they have thought
through its development in
terms of products,
management, finances, and
most importantly, markets
and competition.
• Planning helps in forecasting
the future, makes the future
visible to some extent. It
bridges between where we
are and where we want to go.
Planning is looking ahead.

Management by objectives
• According to Koontz & O’Donnel,
MBO is a comprehensive
managerial system that integrates
many key managerial activities in a
systematic manner consciously
directed towards the effective and
efficient achievement of
organisational objectives
• Management by Objectives; a
system that seeks to align
employees' goals with the goals of
the organization. This ensures that
everyone is clear about what they
should be doing, and how that is
beneficial to the whole organization
• Peter Drucker outlined the five-step
process for MBO shown in figure 1,
below. Each stage has particular
challenges that need to be
addressed for the whole system to
work effectively.

Decision making
• Decision making can be
regarded as the mental
processes (cognitive
process) resulting in the
selection of a course of
action among several
alternative scenarios.
• Every decision making
process produces a
final choice.
• The output can be an
action or an opinion of
choice.
• Decision making process

Techniques
– Pros and Cons: Listing the
advantages and disadvantages of
each option, popularized
by Plato and Benjamin Franklin
– Simple Prioritization: Choosing
the alternative with the highest
probability-weighted utility for
each alternative (see Decision
Analysis)
– Satisficing: using the first
acceptable option found
– Acquiesce to a person in
authority or an "expert", just
following orders
– Flipism: Flipping a coin, cutting a
deck of playing cards, and other
random or coincidence methods
– Prayer, tarot cards, astrology, aug
urs, revelation, or other forms
of divination
– Taking the most opposite action
compared to the advice of
mistrusted authorities (parents,
police officers, partners )
Decision-Making Stages
• Developed by B. Aubrey Fisher,
there are four stages that should
be involved in all group decision
making.
– Orientation stage- This phase is
where members meet for the first
time and start to get to know each
other.
– Conflict stage- Once group
members become familiar with
each other, disputes, little fights
and arguments occur. Group
members eventually work it out.
– Emergence stage- The group
begins to clear up vague opinions
by talking about them.
– Reinforcement stage- Members
finally make a decision, while
justifying themselves that it was
the right decision.

Decision-making models
• Rationality,
– Herbert Simon (1976) means ”a style of
behaviour that is appropriate to the
achievement of given goals, within the limits
imposed by given conditions and
constraints”
• Facts
– According to Gortner (2001), facts are the
information and knowledge that the public
administrators possess in formulating
policies.
– Facts are important in deciding the
appropriate means to take to achieve higher
ends.
– They may not be readily known by
administrators but need to be acquired
through extensive research and analysis.
• Values
– Values are internal perceptions on the
desirability and priority of one’s actions and
choices. (Van Wart, 2004) Besides setting
goals for their plans, decision makers make
priorities, interpret facts and act upon
objective situations according to their
values.
• Means
– Means are the instruments to satisfy a
higher end (Simon, 1997). Although
they are used to achieve a higher end,
they are not neutral in value.
– When policy makers devise their
strategies, they choose their means
according to their internal values and
consequences.
• Ends
– Ends are the intermediate goals to a
more final objective. In a means-end
hierarchy, the concept of means and
ends is relative.
– An action can be a mean relative to the
higher levels in the hierarchy but an end
relative to the lower levels.
– However, in this hierarchy, an action is
more value-based when moving
upwards in the hierarchy but more fact-
based when moving downwards

Organizing

• Organizing is the function of management which
follows planning. It 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.
Therefore, organizational function helps in
achievement of results which in fact is important for
the functioning of a concern.
• According to Chester Barnard, “Organizing is a function
by which the concern is able to define the role
positions, the jobs related and the coordination
between authority and responsibility.
• Hence, a manager always has to organize in order to
get results.

A manager performs organizing function
with the help of following steps:-
• Identification of activities - All the
activities which have to be performed in
a concern have to be identified first. For
example, preparation of accounts,
making sales, record keeping, quality
control, inventory control, etc. All these
activities have to be grouped and
classified into units.
• Departmentally organizing the
activities - In this step, the manager
tries to combine and group similar and
related activities into units or
departments. This organization of
dividing the whole concern into
independent units and departments is
called departmentation.
• Classifying the authority - Once the
departments are made, the manager
likes to classify the powers and its
extent to the managers. This activity of
giving a rank in order to the managerial
positions is called hierarchy. The top
management is into formulation of
policies, the middle level management
into departmental supervision and
lower level management into
supervision of foremen.
• Co-ordination between authority and
responsibility - Relationships are
established among various groups to
enable smooth interaction toward the
achievment of the organizational goal.
Each individual is made aware of his
authority and he/she knows whom
they have to take orders from and to
whom they are accountable and to
whom they have to report. A clear
organizational structure is drawn and
all the employees are made aware of
it.

Line and staff organization
• is a modification of line organization
and it is more complex than line
organization.
• According to this administrative
organization, specialized and
supportive activities are attached to
the line of command by appointing
staff supervisors and staff specialists
who are attached to the line
authority.
• The power of command always
remains with the line executives and
staff supervisors guide, advice and
council the line executives. Personal
Secretary to the Managing Director
is 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 Control
Manager, Quality Controller, PRO
• Line and Staff Organization is a
compromise of line organization. It is
more complex than line concern.
• Division of work and specialization takes
place in line and staff organization.
• The whole organization is divided into
different functional areas to which staff
specialists are attached.
• Efficiency can be achieved through the
features of specialization.
• There are two lines of authority which
flow at one time in a concern :
– Line Authority
– Staff Authority
• Power of command remains with the
line executive and staff serves only as
counselors.

• Merits
– Relief to line of executive
– Expert advice
– Benefit of Specialization
– Better co-ordination
– Benefits of Research and
Development
– 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 show
RESPONSIBILITY
• Responsibility is the obligation to accomplish the goals
related to the position and the organization. Managers, at
no matter what level of the organization, typically have
the same basic responsibilities when it comes to
managing the work force: Direct employees toward
objectives, oversee the work effort of employees, deal
with immediate problems, and report on the progress of
work to their superiors.
AUTHORITY
• Authority is seen as the legitimate right of a person to
exercise influence or the legitimate right to make
decisions, to carry out actions, and to direct others. For
example, managers expect to have the authority to assign
work, hire employees, or order merchandise and supplies.
Span of control
is the term now used more commonly in business
management, particularly human resource management.
Span of control refers to the number of subordinates a
supervisor has.
• In the hierarchical business organization of some time in
the past it was not uncommon to see average spans of 1
to 4 or even less. That is, one manager supervised four
employees on average. In the 1980s corporate leaders
flattened many organizational structures causing average
spans to move closer to 1 to 10R'tist@Tourism, Pondicherry University 25

• Delegation
– Managers delegate some of their function
and authority to their subordinates.
– Scope of delegation is limited as superior
delegates the powers to the subordinates on
individual bases.
– Responsibility remains of the managers and
cannot be delegated
– Freedom is not given to the subordinates as
they have to work as per the instructions of
their superiors.
– It is a routine function
– Delegation is important in all concerns
whether big or small. No enterprises can work
without delegation.
– The authority is granted by one individual to
another.
– Responsibility cannot be delegated
– Degree of delegation varies from concern to
concern and department to department.
– Delegation is a process which explains
superior subordinates relationship
– Delegation is essential of all kinds of concerns
– Delegation is essential for creating the
organization
– Delegated authority can be taken back.
– Very little freedom to the subordinates
• Decentralization
– Right to take decisions is shared by top
management and other level of management.
– Scope is wide as the decision making is shared
by the subordinates also.
– Responsibility is also delegated to subordinates.
– Freedom to work can be maintained by
subordinates as they are free to take decision
and to implement it.
– It is an important decision of an enterprise.
– Decentralization becomes more important in
large concerns and it depends upon the decision
made by the enterprise, it is not compulsory.
– It is a systematic act which takes place at all
levels and at all functions in a concern.
– Authority with responsibility is delegated to
subordinates.
– Decentralization is total by nature. It spreads
throughout the organization i.e. at all levels and
all functions
– It is an outcome which explains relationship
between top management and all other
departments.
– Decentralization is a decisions function by
nature.
– Decentralization is an optional policy at the
discretion of top management.
– It is considered as a general policy of top
management and is applicable to all
departments.
– Considerable freedom

• Conflict is defined as a clash between individuals arising out of a difference
in thought process, attitudes, understanding, interests, requirements and
even sometimes perceptions. A conflict results in heated arguments, physical
abuses and definitely loss of peace and harmony. A conflict can actually
change relationships.
• Phases of conflict
• A conflict has five phases.
– Prelude to conflict - It involves all the factors which possibly arise a conflict
among individuals. Lack of coordination, differences in interests, dissimilarity in
cultural, 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 which
triggers the conflict. Jenny and Ali never got along very well with each other. They
were from different cultural backgrounds, a very strong factor for possibility of a
conflict.Ali was in the mid of a presentation when Jenny stood up and criticized
him for the lack of relevant content in his presentation, thus triggering the
conflict between them.
– Initiation Phase - Initiation phase is actually the phase when the conflict has
already begun. Heated arguments, abuses, verbal disagreements are all warning
alarms which indicate that the fight is already on.
– Differentiation Phase - It is the phase when the individuals voice out their
differences against each other. The reasons for the conflict are raised in the
differentiation phase.
– Resolution Phase - A Conflict leads to nowhere. Individuals must try to
compromise to some extent and resolve the conflict soon. The resolution phase
explores the various options to resolve the conflict.

• Change management is a
structured approach to
shifting/transitioning individuals, te
ams, and organizations from a
current state to a desired future
state.
• It is an organizational process aimed
at helping employees to accept and
embrace changes in their current
business environment.
– Mission changes,
– Strategic changes,
– Operational changes (including
Structural changes),
– Technological changes,
– Changing the attitudes and behaviors
of personnel,
• Successful change management
– Benefits management and realization
– Effective Communications
– education, training and/or skills
– personal counseling
– implementation and fine-tuning

• Innovation is the creation of
better or more
effective products, processes, t
echnologies, or ideas that are
accepted by
markets, governments,
and society.
• Innovation differs
from invention in that
innovation refers to the use of
a new idea or method,
whereas invention refers more
directly to the creation of the
idea or method itself.
• Organization development (OD)
• is a new term which means a conceptual,
organization-wide effort to increase an
organization's effectiveness and viability.
• Warren Bennis has referred to OD as a response
to change, a complex educational strategy
intended to change the beliefs, attitudes, values,
and structure of an organization so that it can
better adapt to new technologies, markets,
challenges, and the dizzying rate of change itself.
• OD is neither "anything done to better an
organization" nor is it "the training function of
the organization"; it is a particular kind of change
process designed to bring about a particular kind
of end result.
• OD can involve interventions in the
organization's "processes," using behavioural
science knowledge organizational reflection,
system improvement, planning and self-analysis.
• Kurt Lewin (1898–1947) is widely recognized as
the founding father of OD, although he died
before the concept became current in the mid-
1950s.
• From Lewin came the ideas of group
dynamics and action research which underpin
the basic OD process as well as providing its
collaborative consultant/client ethos.

Staffing

• Nature of Staffing Function
– Staffing is an important managerial function- Staffing function is the
most important mangerial act along with planning, organizing, directing
and controlling. The operations of these four functions depend upon the
manpower which is available through staffing function.
– Staffing is a pervasive activity- As staffing function is carried out by all
mangers and in all types of concerns where business activities are carried
out.
– Staffing is a continuous activity- This is because staffing function
continues throughout the life of an organization due to the transfers and
promotions that take place.
– The basis of staffing function is efficient management of personnels-
Human resources can be efficiently managed by a system or proper
procedure, that is, recruitment, selection, placement, training and
development, providing remuneration, etc.
– Staffing helps in placing right men at the right job. It can be done
effectively through proper recruitment procedures and then finally
selecting the most suitable candidate as per the job requirements.
– Staffing is performed by all managers depending upon the nature of
business, size of the company, qualifications and skills of managers,etc. In
small companies, the top management generally performs this function.
In medium and small scale enterprise, it is performed especially by the
personnel department of that concern.

Steps involved in Staffing
• Manpower requirements- The very first step in staffing is to plan the manpower inventory required by a
concern in order to match them with the job requirements and demands. Therefore, it involves
forecasting and determining the future manpower needs of the concern.
• Recruitment- Once the requirements are notified, the concern invites and solicits applications according
to the invitations made to the desirable candidates.
• Selection- This is the screening step of staffing in which the solicited applications are screened out and
suitable candidates are appointed as per the requirements.
• Orientation and Placement- Once screening takes place, the appointed candidates are made familiar to
the work units and work environment through the orientation programmes. placement takes place by
putting right man on the right job.
• Training and Development- Training is a part of incentives given to the workers in order to develop and
grow them within the concern. Training is generally given according to the nature of activities and scope
of expansion in it. Along with it, the workers are developed by providing them extra benefits of indepth
knowledge of their functional areas. Development also includes giving them key and important jobsas a
test or examination in order to analyse their performances.
• Remuneration- It is a kind of compensation provided monetarily to the employees for their work
performances. 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 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 employeesin a concern.
• 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.

Directing

• DIRECTING
– is said to be a process in which the managers
instruct, guide and oversee the performance
of the workers to achieve predetermined
goals.
– Directing is said to be the heart of
management process. Planning, organizing,
staffing have got no importance if direction
function does not take place.
– Directing initiates action and it is from here
actual work starts.
– Direction is said to be consisting of human
factors. In simple words, it can be described
as providing guidance to workers is doing
work.
– In field of management, direction is said to be
all those activities which are designed to
encourage the subordinates to work
effectively and efficiently.
– According to Human, “Directing consists of
process or technique by which instruction can
be issued and operations can be carried out
as originally planned” Therefore, Directing is
the function of guiding, inspiring, overseeing
and instructing people towards
accomplishment of organizational goals.
• Direction has got following characteristics:
– Pervasive Function - Directing is required at
all levels of organization. Every manager
provides guidance and inspiration to his
subordinates.
– Continuous Activity - Direction is a
continuous activity as it continuous
throughout the life of organization.
– Human Factor - Directing function is related
to subordinates and therefore it is related to
human factor. Since human factor is complex
and behaviour is unpredictable, direction
function becomes important.
– Creative Activity - Direction function helps in
converting plans into performance. Without
this function, people become inactive and
physical resources are meaningless.
– Executive Function - Direction function is
carried out by all managers and executives at
all levels throughout the working of an
enterprise, a subordinate receives
instructions from his superior only.
– Delegate Function - Direction is supposed to
be a function dealing with human beings.
Human behaviour is unpredictable by nature
and conditioning the people’s behaviour
towards the goals of the enterprise is what
the executive does in this function. Therefore,
it is termed as having delicacy in it to tackle
human behaviour.

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 communication

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 top
level to low level
– Fears
– Fears of being distorted
– Fear of distortion by grapevine
– Fear of oneself exposing to
criticism
– Fear of getting fired
– Poor or ego-centered supervision
– Insincerity and lack of confidence
• 5. Technical barriers
– Space for geographic disturbances
– Mechanical failures and
disturbances
– Physical obstructions
– Improper time of communication
– Wrong time of communication

Principles of effective communication
• Communication is the process of transmitting
the messages and receiving the response of that
message.
• The person who sends the messages is known
as sender and the person who receives the
message is known as receiver and the response
to the message is known as feed back.
• Since the feedback requires another message
to be communicated by the sender to the
receiver. So communication process become a
circular process.
• In simple words, exchange of ideas/messages,
response there off in total is known as
communication. Any method of communication
like words—oral or written, pictures, graphs,
diagrams, etc.
• may be adopted to communicate. Effective
communication is that communication in which
the receiver is understood actually what the
sender wants to convey, and in the same form.
• ‘Noise’ is something, which has disturbed the
effective sending and receiving of
communication.
– 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 persuade

Motivation
• Motivation is a process that starts
with a physiological or psychological
need that activates a behavior or a
drive 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 job
satisfaction
MOTIVATIONAL 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 hours

• Need and importance of
motivation
– Higher efficiency
– Reduce absenteeism.
– Reduces employee turn
over.
– Improves a corporate image.
– Good relations.
– Improved morale.
– Reduced wastages and
breakages.
– Reduced accidents.
– Facilitates initiative and
innovation.
• Motivational Theories
– Sigmund Freud (Theory X)
– Douglas McGregor(theory y),
– Abraham Maslow(theory z,
hierarchy of needs),
– Alderfer's (ERG theory )
– Frederick Herzberg(two facto
r motivation
hygiene theory,)
– Elton Mayo (Hawthorne Expe
riments)
– Chris Argyris (Bureaucratic/
Pyramidal & Humanistic /
Democratic Value System)
– Rensis Likert(Management
Systems and Styles)
– David McClelland (achieveme
nt motivation.)
– Victor Vroom's ( Expectancy)

Traditional theory 'X'
• Sigmund Freud, who was no lover of
people, and was far from being
optimistic.
• Theory X assumes that people are lazy;
they hate work to the extent that they
avoid it; they have no ambition, take no
initiative and avoid taking any
responsibility; all they want is security,
and to get them to do any work, they
must be rewarded, coerced, intimidated
and punished.
• This is the so-called 'stick and carrot'
philosophy of management.
• If this theory were valid, managers will
have to constantly police their staff,
whom they cannot trust and who will
refuse to cooperate.
• In such an oppressive and frustrating
atmosphere, both for the manager and
the managed, there is no possibility of
any achievement or any creative work
Theory 'Y'
• Douglas McGregor
• This is in sharp contrast to theory 'X'.
McGregor believed that people want to
learn and that
work is their natural activity to the extent t
hat they develop self-discipline and self-
development.
• They see their reward not so much in cash
payments as in the freedom to do difficult
and challenging work by themselves.
• The managers job is to 'dovetail' the
human wish for self-development into the
organizations need for maximum
productive efficiency.
• The basic
objectives of both are therefore met and w
ith imagination and sincerity, the enormou
s potential can be tapped. Theory 'Y'
management is soft and slack.
• The leader does no longer hanker after
power, lets people develop freely, and may
even (it is hoped) enjoy watching the
development and actualization of people,
as if, by themselves.
• Everyone, and most of all the organization,
gains as a result.

Maslow ( Theory Z)
• totally rejects the dark and dingy
Freudian basement and takes us out in
to the fresh, open, sunny and cheerful
atmosphere.
• He is the main founder of the
humanistic school or the third force
which holds that all the good qualities
are inherent in people, at least, at birth,
although later they are gradually lost.
• Maslow's central theme revolves
around the meaning and significance of
human work
• The basic human needs, according to
Maslow, are:
– physiological needs (Lowest)
– safety needs;
– love needs;
– esteem needs; and
– self-actualization needs (Highest)
Alderfer's Hierarchy (ERG theory)
• Clayton Alderfer reworked Maslow's
Need Hierarchy to align it more closely
with empirical research.
• Alderfer's theory is called the ERG theory
-- Existence, Relatedness, and Growth.
– Existence refers to our concern with basic
material existence requirements; what
Maslow called physiological and safety
needs.
– Relatedness refers to the desire we have for
maintaining interpersonal relationships;
similar to Maslow's social/love need, and the
external component of his esteem need.
– Growth refers to an intrinsic desire for
personal development; the intrinsic
component of Maslow's esteem need, and
self-actualization
• Alderfer's ERG theory differs from
Maslow's Need Hierarchy insofar as ERG
theory demonstrates that more than one
need may be operative at the same time.
ERG theory does not assume a rigid
hierarchy where a lower need must be
substantially satisfied before one can
move on.

Frederick Herzberg(Hygiene /
Motivation Theory)
• people work first and
foremost in their own self
enlightened interest, for the
y are truly happy and mental
ly healthy through work
accomplishment.
• Peoples needs are of two
types:
– Animal Needs (hygiene
factors)
• 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 experiments
involving six female workers. These experiments are
often referred to as the Hawthorne experiments or
Hawthorne studies as they took place at The
Hawthorne Works of the Western Electric Company in
Chicago.
• Over the course of five years, Mayo’s team altered the
female worker’s working conditions and then
monitored how the working conditions affected the
workers morale and productivity. The changes in
working conditions included changes in working hours,
rest brakes, lighting, humidity, and temperature. The
changes were explained to the workers prior to
implementation.
• At the end of the five year period, the female worker’s
working conditions, reverted back to the conditions
before the experiment began. Unexpectedly the
workers morale and productivity rose to levels higher
than before and during the experiments.
• The combination of results during and after the
experiment (ie the increase in the workers productivity
when they were returned to their original working
conditions) led Mayo to conclude that workers were
motivated by psychological conditions more than
physical working condition. He also concluded that
workers were motivated by more than self interes

Chris Argyris
• According to Argyris, organization
needs to be redesigned for a fuller
utilization of the most
precious resource,
the workers, in particular
their psychological energy.
• The pyramidal structure will be
relegated to the background, and
decisions will be taken by small
groups rather than by a single
boss.
• Satisfaction in work will be more
valued than material rewards.
• Work should be restructured in
order to enable individuals to
develop to the fullest extent.
• At the same time work
will become more meaningful and
challenging through self-
motivation
Rensis Likert
• Likert identified four different
styles of management:
– exploitative-authoritative;
– benevolent-authoritative;
– consultative;
– participative.
• The participative system was
found to be the most effective in
that it satisfies the whole
rangeof human needs.
• Major decisions are taken by
groups themselves and this
results in achievinghigh targets
and excellent productivity.
• There is complete trust
within the group and the
senseof participation leads to
a high degree of motivation

Fred Luthans
• Luthans advocates the so-called
'contingency approach' on the basis
that certain practiceswork better
than others for certain people and
certain jobs. As an example, rigid,
clearlydefined jobs, authoritative le
adership and tight controls lead in s
ome cases to highproductivity and
satisfaction among workers. In
some other cases just the opposite
seems towork. It is necessary,
therefore, to adapt the leadership
style to the particular group
of workers and the specific job
in hand
• Victor Vroom
• Vroom's 'expectancy theory' is an
extension of the 'contingency
approach'. The leadershipstyle
should be 'tailored' to the
particular situation and to the
particular group. In some casesit
appears best for the boss to
decide and in others the group
arrives at a consensus.
Anindividual should also be
rewarded with what he or she
perceives as important rather
thanwhat the manager perceives.
For example, one individual may
value a salary increase,whereas
another may, instead, value
promotion. This theory
contributes an insight into
thestudy of employee motivation
by explaining how individual goals
influence individualperformance

David c McClelland's motivational needs theory
• American David Clarence McClelland (1917-98).
• McClelland is chiefly known for his work on achievement
motivation, but his research interests extended to personality
and consciousness.
• David McClelland pioneered workplace motivational thinking,
developing achievement-based motivational theory and models,
and promoted improvements in employee assessment methods,
advocating competency-based assessments and tests, arguing
them to be better than traditional IQ and personality-based
tests.
• His ideas have since been widely adopted in many organisations,
and relate closely to the theory of Frederick Herzberg.
• David McClelland is most noted for describing three types of
motivational need, which he identified in his 1961 book, The
Achieving Society:
– achievement motivation (n-ach)
– authority/power motivation (n-pow)
– affiliation motivation (n-affil)

Leadership
• “Leadership is a process whereby an
individual influences a group of
individuals to achieve a common goal”.
– (Peter Northouse, 2004)
• Four Factors of Leadership
– Leader
– Followers
– Communication
– Situation
Important Keys to Effective Leadership
• Trust and confidence in top leadership
was the single most reliable predictor of
employee satisfaction in an organization.
• Effective communication by leadership in
three critical areas was the key to
winning organizational trust and
confidence:
– Helping employees understand the
company's overall business strategy.
– Helping employees understand how they
contribute to achieving key business
objectives.
– Sharing information with employees on
both how the company is doing and how an
employee's own division is doing — relative
to strategic business objectives.
Principles of Leadership
• To help you be, know, and do, follow
these eleven principles of leadership
– Know yourself and seek self-improvement
– Be technically proficient
– Seek responsibility and take responsibility
for your actions
– Make sound and timely decisions
– Set the example
– Know your people and look out for their
well-being
– Keep your workers informed
– Develop a sense of responsibility in your
workers.
– Ensure that tasks are understood,
supervised, and accomplished .
– Train as a team
– Use the full capabilities of your
organization

Leadership Styles
• Leadership style is the
manner and approach of
providing direction,
implementing plans, and
motivating people.
• Kurt Lewin (1939) led a
group of researchers to
identify different styles of
leadership.
• This early study has been
very influential and
established three major
leadership styles.
• The three major styles of
leadership are (U.S. Army
Handbook, 1973):
– Authoritarian or autocratic
– Participative or democratic
– Delegative or Free Reign

Theories
1. "Great Man" Theories:
• Great man theories assume that the
capacity for leadership is inherent –
that great leaders are born, not made.
These theories often portray great
leaders as heroic, mythic and destined
to rise to leadership when needed. The
term "Great Man" was used because, at
the time, leadership was thought of
primarily as a male quality, especially in
terms of military leadership.
2. Trait Theories:
• Similar in some ways to "Great Man"
theories, trait theories assume that
people inherit certain qualities and
traits that make them better suited to
leadership. Trait theories often identify
particular personality or behavioral
characteristics shared by leaders. If
particular traits are key features of
leadership, then how do we explain
people who possess those qualities but
are not leaders? This question is one of
the difficulties in using trait theories to
explain leadership.
3. Contingency Theories:
• Contingency theories of leadership
focus on particular variables related to
the environment that might determine
which particular style of leadership is
best suited for the situation. According
to this theory, no leadership style is best
in all situations. Success depends upon
a number of variables, including the
leadership style, qualities of the
followers and aspects of the situation.
4. Situational Theories:
• Situational theories propose that
leaders choose the best course of
action based upon situational variables.
Different styles of leadership may be
more appropriate for certain types of
decision-making.

5. Behavioral Theories:
• Behavioral theories of leadership are
based upon the belief that great leaders
are made, not born. Rooted
in behaviorism, this leadership theory
focuses on the actions of leaders not on
mental qualities or internal states.
According to this theory, people
can learn to become leaders through
teaching and observation.
6. Participative Theories:
• Participative leadership theories
suggest that the ideal leadership style is
one that takes the input of others into
account. These leaders encourage
participation and contributions from
group members and help group
members feel more relevant and
committed to the decision-making
process. In participative theories,
however, the leader retains the right to
allow the input of others.
7. Management Theories:
• Management theories, also known
as transactional theories, focus on the
role of supervision, organization and
group performance. These theories base
leadership on a system of rewards and
punishments. Managerial theories are
often used in business; when employees
are successful, they are rewarded; when
they fail, they are reprimanded or
punished. Learn more about theories
of transactional leadership.
8. Relationship Theories:
• Relationship theories, also known as
transformational theories, focus upon
the connections formed between
leaders and followers. Transformational
leaders motivate and inspire people by
helping group members see the
importance and higher good of the task.
These leaders are focused on the
performance of group members, but
also want each person to fulfill his or her
potential. Leaders with this style often
have high ethical and moral standards

Controlling

"Controlling is determining what is being accomplished - that is, evealuating
performance and, if necessary, applying corrective measures so that
performance takes place according to plans". - Terry and Franklin.
Features of Controlling
• One can control future
happenings but not the
happened. Hence in here all
the past performance is
measured for taking
corrective actions for future
periods.
• Every manager in an
organisation has to perform
the control function. The
control may be quality
control, inventory control,
production control, or even
administrative control.
• Control is a continuous
process, it follow a definite
pattern and time-table,
month after month and year
after year on a continuous
basis.
Importance of Controlling
• Control system acts as an adjustment in
organisational operations. It mainly checks whether
plans are being observed and suitable progress
towards the objectives is being made or not, and if
necessary any action to control the deviations.
• Policies and other planning elements set by the
managers become the basis and reason for control.
Through control it is monitored whether the
individuals adhere to those frameworks or not so
that organisation and management can verify the
quality of various policies.
• Exercising some authority and forming superior-
subordinate relationship throughout the
organisation can be established through
controlling.
• With the presence of authority or control the
individuals will work properly and exhibit better
performance to reach the targets set for them.
• Control system ensures the organisational
efficiency and effectiveness. When Proper system
exists the organisation effectively achieves its
objectives.

Process of Controlling
– Setting performance
standards.
– Measurement of actual
performance.
– Comparing actual
performance with
standards.
– Analysing deviations.
– Correcting deviations.
• Controlling methods
– (1) the nature of the information
flow designed into the system (that
is, open- or closed-loop control),
– (2) the kind of components
included in the design (that is man
or machine control systems), and
– (3) the relationship of control to
the decision process (that is,
organizational or operational
control).
• techniques
– Costing method
– Program evaluation and review
method
– Return on investment method
– Management by objectives method
– Budgetary control method

International Business
• International business is a term used
to collectively describe all commercial
transactions
(private and governmental, sales, inve
stments, logistics,and transportation)
that take place between two or
more regions, countries and nations b
eyond their political boundary.
• Usually, private companies undertake
such transactions for profit;
governments undertake them for
profit and for political reasons.
• It refers to all those business activities
which involves cross border
transactions of goods, services,
resources between two or more
nations.
• Transaction of economic resources
include capital, skills, people etc. for
international production of physical
goods and services such as finance,
banking, insurance, construction etc
• Operations
– Objectives: sales expansion,
– resource acquisition,
– risk minimization
• Means
– Modes: importing and exporting, tour
ism and transportation, licensing and
franchising, turnkey operations, mana
gement contracts, direct
investment and portfolio investments.
– Functions: marketing,
global manufacturing and supply
chain
management, accounting, finance, hu
man resources
– Overlaying alternatives: choice of
countries, organization and control
mechanisms

• Physical and societal factors
– Political policies and legal
practices
– Cultural factors
– Economic forces
– Geographical influences
• Competitive factors
– Major advantage
in price, marketing, innovation, or
other factors.
– Number and comparative
capabilities of competitors
– Competitive differences
by country
– Local taxes
• Studying international business is
important because:
– Most companies are
either international or compete
with international companies.
– Modes of operation may differ from
those used domestically.
– The best way of conducting
business may differ by country.
– An understanding helps you make
better career decisions.
– An understanding helps you decide
what governmental policies to
support.
• The Six Tenets are as follows
– Take advantage of trade
agreements: think outside the
border
– Protect your brand at all costs
– Maintain high ethical standards
– Stay secure in an insecure world
– Expect the Unexpected
– All global business is personal

Information systems
• Automation
• use of control systems and information
technologies to reduce the need for human work
in the production of goods and services.
• In the scope of industrialization, automation is a
step beyond mechanization.
• automation greatly decreases the need for human
sensory and mental requirements as well.
• Auomation has had a notable impact in a wider
range of industries beyond manufacturing (where
it began).
• Once-ubiquitous telephone operators have been
replaced largely by automated telephone
switchboards and answering machines.
• Medical processes such as primary screening
in electrocardiography or radiography and
laboratory analysis of human genes, sera, cells,
and tissues are carried out at much greater speed
and accuracy by automated systems.
• Automated teller machines have reduced the need
for bank visits to obtain cash and carry out
transactions. In general, automation has been
responsible for the shift in the world economy
from industrial jobs to service jobs in the 20th and
21st centuries
• The main advantages of automation are:
– Replacing human operators in tasks that involve hard
physical or monotonous work.
– Replacing humans in tasks done in dangerous
environments (i.e. fire, space, volcanoes, nuclear
facilities, underwater, etc.)
– Performing tasks that are beyond human capabilities
of size, weight, speed, endurance, etc.
– Economy improvement: Automation may improve in
economy of enterprises, society or most of
humanity. For example, when an enterprise invests
in automation, technology recovers its investment;
or when a state or country increases its income due
to automation like Germany or Japan in the 20th
Century.
– Reduces operation time and work handling time
significantly.
• The main disadvantages of automation are:
– Unemployment rate increases due to machines
replacing humans and putting those humans out of
their jobs.
– Technical Limitation: Current technology is unable to
automate all the desired tasks.
– Security Threats/Vulnerability: An automated system
may have limited level of intelligence, hence it is
most likely susceptible to commit error.
– Unpredictable development costs: The research and
development cost of automating a process may
exceed the cost saved by the automation itself.
– High initial cost: The automation of a
new product or plant requires a huge initial
investment in comparison with the unit cost of the
product, although the cost of automation is spread
in many product batches of thingsR'tist@Tourism, Pondicherry University 56

• Additional goals of
automation
– Reliability and precision
– Health and environment
– Convertibility and
turnaround time
• Automation tools
– Computer-aided
technologies (or CAx)
– Computer-aided design (CAD
software)
– Computer-aided
manufacturing (CAM
software)
– programmable logic
controller (PLC)
• Different types of
automation tools exist:
– ANN - Artificial neural
network
– DCS - Distributed Control
System
– HMI - Human Machine
Interface
– SCADA - Supervisory Control
and Data Acquisition
– PLC - Programmable Logic
Controller
– PAC - Programmable
automation controller
– Instrumentation
– Motion control
– Robotics

Data processing
• Data processing is the how
raw information is
manipulated in order to
produce a result.
• The result may lead a
better understanding of a
problem or a situation.
• Data processing is a very
essential aspect of
businesses all over the
world.
• The success of a business
depends on how the
volumes of data generated
are handled and
interpreted.
• There are six stages of data
processing.
– Collection
– Preparation
– Input
– Processing
– Output and interpretation
– Storage

From EDP to MIS
• Until the 1960s, the role of most
information systems was simple.
They were mainly used for
electronic data processing
(EDP),purposes such as transactions
processing, record-keeping and
accounting. EDP is often defined as
the use of computers in recording,
classifying, manipulating, and
summarizing data. It is also called
transaction processing systems
(TPS), automatic data processing, or
information processing.
• Transaction processing systems –
these process data resulting
• from business transactions, update
operational databases, and produce
business documents. Examples:
sales and inventory processing and
accounting systems.
• In the 1960s, another role was
added to the use of computers: the
processing of data into useful
informative reports. The concept of
management information
systems(MIS) was born. This new
role focused on developing business
applications that provided
managerial end users with
predefined management reports
that would give managers the
information they needed for
decision-making purposes.
• Management information
systems – provide information in
the form
• of pre specified reports and displays
to support business decision-
making. Examples: sales analysis,
production performance and cost
trend reporting systems.

• By the 1970s, these pre-defined
management reports were not
sufficient to meet many of the
decision-making needs of
management. In order to satisfy
such needs, the concept of
decision support systems (DSS)
was born. The new role for
information systems was to
provide managerial end users
with ad hoc and interactive
support of their decision-making
processes.
• Decision support systems –
provide interactive ad hoc
support for
• the decision-making processes
of managers and other business
professionals. Examples: product
pricing, profitability forecasting
and risk analysis systems.
• In the 1980s, the introduction of
microcomputers into the
workplace ushered in a new era,
which led to a profound effect
on organizations. The rapid
development of microcomputer
processing power (e.g. Intel’s
Pentium microprocessor),
application software packages
(e.g. Microsoft Office), and
telecommunication networks
gave birth to the phenomenon
of end user computing. End
users could now use their own
computing resources to support
their job requirements instead
of waiting for the indirect
support of a centralized
corporate information services
department. It became evident
that most top executives did not
directly use either the MIS
reports

MIS
• Types
• Most management information systems
specialize in particular commercial and
industrial sectors, aspects of the enterprise,
or management substructure.
– Management information systems (MIS), per se,
produce fixed, regularly scheduled reports based
on data extracted and summarized from the
firm’s underlying transaction processing systems
to middle and operational level managers to
identify and inform structured and semi-
structured decision problems.
– Decision support systems (DSS) are computer
program applications used by middle
management to compile information from a wide
range of sources to support problem solving and
decision making.
– Executive information systems (EIS) is a reporting
tool that provides quick access to summarized
reports coming from all company levels and
departments such as accounting, human
resources and operations.
– Marketing information systems are MIS designed
specifically for managing the marketing aspects of
the business.
– Office automation systems (OAS) support
communication and productivity in the enterprise
by automating work flow and eliminating
bottlenecks. OAS may be implemented at any and
all levels of management.
• A management information
system (MIS) provides information
needed to manage organizations
efficiently and effectively.
• Management information systems
involve three primary resources:
people, technology, and information.
• Management information systems are
distinct from other information
systems in that they are used to analyze
operational activities in the
organization.
• Academically, the term is commonly
used to refer to the group of
information management methods tied
to the automation or support of human
decision making,
• e.g. decision support systems, expert
systems, and executive information
systems

• Enterprise applications
– Enterprise systems, also known
as enterprise resource planning
(ERP) systems provide an organization with
integrated software modules and a unified
database which enable efficient planning,
managing, and controlling of all core
business processes across multiple
locations. Modules of ERP systems may
include finance, accounting, marketing,
human resources, production, inventory
management and distribution.
– Supply chain management (SCM) systems
enable more efficient management of the
supply chain by integrating the links in a
supply chain. This may include suppliers,
manufacturer, wholesalers, retailers and
final customers.
– Customer relationship management
(CRM) systems help businesses manage
relationships with potential and current
customers and business partners across
marketing, sales, and service.
– Knowledge management system
(KMS) helps organizations facilitate the
collection, recording, organization, retrieval,
and dissemination of knowledge. This may
include documents, accounting records, and
unrecorded procedures, practices and skills.
• Developing Information Systems
• "The actions that are taken to
create an information system
that solves an organizational
problem are called system
development (Laudon & Laudon,
2010)".
• These include
– system analysis,
– system design,
– programming,
– testing,
– conversion,
– production and finally
maintenance.
• These actions usually take place
in that specified order but some
may need to repeat or be
accomplished concurrently.

CRS
• A computer reservations system (or
central reservation system) is
a computerized system used to store and
retrieve information and conduct
transactions related to air travel.
• Originally designed and operated
by airlines, CRSes were later extended for
the use of travel agencies.
• Major CRS operations that book and sell
tickets for multiple airlines are known
as global distribution systems (GDS).
• Airlines have divested most of their direct
holdings to dedicated GDS companies,
who make their systems accessible to
consumers through Internet gateways.
• Modern GDSes typically allow users to
book hotel rooms and rental cars as well
as airline tickets. They also provide access
to railway reservations and bus
reservations in some markets although
these are not always integrated with the
main system.
• Origins
• In 1946, American Airlines installed the
first automated booking system, the
experimental electromechanical Reservis
or.
• A newer machine with temporary
storage based on a magnetic drum, the
Magnetronic Reservisor, soon followed.
• This system proved successful, and was
soon being used by several airlines, as
well as Sheraton Hotels and
Goodyear for inventory control.
• It was seriously hampered by the need
for local human operators to do the
actual lookups; ticketing agents would
have to call a booking office, whose
operators would direct a small team
operating the Reservisor and then read
the results over the telephone.
• There was no way for agents to directly
query the system

• Travel agent access
• In 1976, United began offering its
Apollo system to travel agents; while it
would not allow the agents to book
tickets on United's competitors, the
marketing value of the convenient
terminal proved indispensable. SABRE,
PARS, and DATAS were soon released to
travel agents as well
• Following airline deregulation in 1978,
an efficient CRS proved particularly
important; by some counts, Texas
Air executive Frank Lorenzo purchased
money-losing Eastern Air
Lines specifically to gain control of its
System One CRS.
• in 1976 Videcom
international with British
Airways, British Caledonian and CCL
launched Travicom, the world's first
multi-access reservations system
(wholly based on Videcom technology),
forming a network providing
distribution for initially 2 and
subsequently 49 subscribing
international airlines to thousands of
travel agents in the UK.
• European airlines also began to invest in
the field in the 1980s initially by deploying
their own reservations systems in their
homeland, propelled by growth in
demand for travel as well as technological
advances which allowed GDSes to offer
ever-increasing services and searching
power.
• In 1987, a consortium led by Air
France and West
Germany's Lufthansa developed Amadeus,
modeled on SystemOne. Amadeus Global
Travel Distribution was launched in 1992.
• In 1990, Delta, Northwest Airlines, and
Trans World Airlines formed Worldspan
and in 1993, another consortium
(including British Airways, KLM and United
Airlines, among others) formed the
competing company Galileo
International based on Apollo.
• Numerous smaller companies such
as KIU have also formed, aimed at niche
markets not catered for by the four largest
networks, including the Low Cost
Carrier segment, and small and medium
size domestic and regional airlines.

Amadeus
• Created by Air France, Iberia, Lufthansa,SAS
• 144 Airline Passenger Service System Customers through 60,000 airline
sales offices worldwide
• 90,000 travel agencies worldwide, both offline and online, in 195
countries. 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 Companies

Sabre
• Created by American Airlines
• Used by Aeroflot, Vietnam Airlines, JetBlue Airways, Frontier, Westjet, Volaris,
AeroMexico, Virgin America
• Online Travel Agencies:
– Travelocity
– zuji
– Lastminute.com
– Travel Guru
– Priceline
• Schedules for 400 airlines
• 380 airline industry customers, including 44 airlines representing all major
alliances
• 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 service
providers
• 55,000 travel agencies in over 100 countries

Galileo
• by Travelport (as Apollo Reservation System 1970-early
1990s)
• United Airlines (using their subsidiary Covia) United
Airlines is moving to SHARES because of the merger with
Continental Airlines
• Used by CheapOair, ebookers, Flight Centre, Orbitz,
Trailfinders.

Thank You

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