This document provides notes on various topics related to human resource management, including Total Quality Management (TQM), Quality Circles, Human Resource Accounting, Downsizing, Outsourcing, and HR in multinational corporations. It discusses the objectives, components and benefits of TQM and Quality Circles. It also outlines the importance, objectives and limitations of Human Resource Accounting. The document describes the phases, methods, impacts and alternatives of Downsizing. Finally, it briefly discusses Outsourcing and HR in multinational organizations.

1. HUMAN RESORCE MANAGEMENT
SEMINAR NOTESON :-
TQM, QualityCircle,Effectofdownsizing,
HRMin multinationalcorporation,humanresource
Accounting,OUTSOURCING, introductiontofacility management
PREAPERED BY :-
Adhil M M
Sabir J S
Saranya Chandran
Swathy Sathyan

2. 2
TOPIC :-
TQM , QUAILTY CIRCLE , HUMAN RESOURCE ACCOUNTING, EFFECT OF
DOWNSIZING, HRM IN MULTI NATIONAL CORPORATION, OUTSOURCING,
INTRODUCTION TO FACILITY MANAGEMENT.

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INDEX
Serial number Content Page
number
1
2
3
4
5
6
7
8
9
10
INTRODUCTION
TQM
 OBJECTIVES
 Components
 BENEFITS
QUALITY CYCLE
 OBJECTIVES
 BENEFITS
 PROBLEMS
 REQUIREMENTSOF EFFECIVE
QUALITY CYCLE
HUMAN RESOUCE ACCOUNTING
 IMPORTANCE
 OBJECTIVES
 LIMITATIONS
DOWNSIZING
 PHASESOF DOWNSIZING
 METHODSOF DOWNSIZING
 IMPACTOF DOWNSIZING
 BENEFITS
 ALTERNATIVES
 ETHICALDOWNSIZING
OUTSOURCING
 ADVANTAGES
 DISADVATAGES
 PROBLEMS
 TYPESOF OUTSOURCING
HR IN MULTI NATIONALCORPERATIONS
INTRODUCTION TO FACILITY
MANGEMENT
SUMMARY
CONCLUSION
4
5-7
7-10
10-14
14-17
18-20
20-22
22-29
30-34
35

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INTRODUCTION
Human Resourceis very critical for the success of any organisation. Human
beings are a resourceto an organisation but it is the living resourcewhich
cannot be equated with the other resources which are unanimated. Human
resourcesadd to the value while all other resourcesadd to the cost. Allthe
firmsbuy the same material and machines but it is the peoplein the
organisation who built it and makes differencesin the ultimate product.
The human being never reaches an ultimate value throughout his life time
at work which other resourcesreaches to an ultimate value throughout his
life time at work which other resourcesreaches to an ultimate valueit
starts producing. Thus, the managementof human resourceis a very
complicated and challenging task for those who are entrusted with the
successfulrunningof an organisation and this implies considerable
knowledgeby variousaspects of human resourcesmanagement.
Accordingto DALE YODER, “Personalmanagement is that phase of
managementwhich deals with the effective controland use of man power
as distinguished from other sourcesof power”. Seminar note contains
detail notes on TOTAL QUALITY MANAGEMENT, QUALITY CIRCLE ,HUMAN
RESOURCE ACCOUNTING , OUTSOURCING ,DOWNSIZING , HRM IN MULTI
NATIONALCORPORATION and INTRDUCTION TO FACILITY MANGEMENT
which are act as an importantelements to considered for the effective
human resourcemanagement.

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Total Quality Management (TQM)
 Definition
Accordingto Sashkin and Kiser,” Total Quality Management may be defined
as creating an organisational culturecommitted to continuous
improvementof skills, teamwork, processes, productand servicequality
and customer satisfaction”
TQM refersto meeting the requirementsof customersconsistently by
continuous improvementin the quality of work of all employees. For
achieving total quality, three things are essential:-
 Meeting customer’srequirements;
 Continuousimprovementthroughmanagementprocess;
 Involvementof all employees.
 OBJECTIVESOF TOTAL QUALITY MANAGEMENT
 Meeting the customer’s requirements is the primary objectives and
the key to organisational survivaland growth.
 Is the continuousimprovementof quality.
 TQM aims at developing the relationship of openness and trust
amongthe employeesat all levels in organisation.
 COMPONENTSOF TOTAL QUALITY MANAGEMENT
There are three essential elements of TQM . They are :-
1. CUSTOMER ORIENTATION :-
TQM aims at satisfying the requirements of customers which
never remains constant , but keep on changing with the change in
time, environment, circumstances , fashion, etc... Thus, meeting

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the change requirements of customers is a continuous goal of
producer.
2. CONTINUOUS IMPROVEMENT :-
The change in the customer’s requirements may be in terms of
desire for better quality of product / services, bigger size, reduced
cost , etc. So a producer has to cope with these requirements . The
production process has thus to be attuned and accelerated to meet
these changing requirements.
The advancement of technology is another important factor in
improving the quality. The innovations in a particular field may
cause some of the existing technologies to become obsolete and as
a result the survival of the producer not adopting technological
advancementswould becomevery difficult.
3. EMPLOYEE’SINVOLMENT :-
TQM requires a continuous improvement in quality
of products. This calls the improvement in the quality of work of
employees through training and development . The enhancement
of skills of employees will not only improve quality, but also bring
down the cost of production through efficient use of machines and
materials and reduction of wastage
The employees must also be conscious about the need for
improvement in the quality of work . Quality circle is an
outstanding example in this regard. It is because of employee’s
involvementof quality that TQM is referred to as people’sprocess.
 NEEDSAND SIGNIFICANCE OF TOTAL QUAITY MANAGEMENT
Total Quality Management is the need of all modern organisations. This
realisation first came in Japan where it was felt that quality cannot be
ensured by inspection and test alone; every department and the
individual had a role to play in achievement of quality. Thus, ‘Quality
Control” which was basically restricted to testing and inspection of the
end – product gave way to ‘Quality Assurance’ . In addition to inspection

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of the product, quality assurance also involved the inspection of the
production processand equipment.
The followingbenefits can be derived from a sound TQM programme:-
 Total Quality Managementbrings quality consciousnessin the
enterprise which encourages production of quality product.
 TQM helps in providinggreater satisfaction to customer by
meeting their requirements. If the customer is satisfied, the sales
will increase.
 It creates a good public image of the enterprise by helping it to
providegoodsand services of higher quality to the society.
 There is better utilisation of materials, machines, capital, human
resource, etc...
 Wastages are reduced to the minimum. Asa result, cost of
production isreduced and profitability is increased. Even the
customerscould be provided goodsatlower prices. The
competitive position of the firm in the marketis improved.
 The employeesare committed to higher quality and feel highly
motivated. Their moraleis also higher because of the public
image of the firm and its goodwillin the market.
QUALITY CIRCLE
 DEFINITION
A quality circle is a small group of employeesdoingsimilar or related
work who meet regularly to identify , analyseand solve product quality
problemsand to improvegeneral operations.
 KEY FEATURES OF QUALITY CIRCLE
A. A quality circle is a voluntary group.
B. It represents a collective effort.
C. It intendsto improvethe quality of output.
D. It coordinates the activities of members towardsimproving
the quality of work in the work shop.
E. It facilitates frequentmeetings and discussionsof members
for improvingquality.

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F. It has no discrimination against age, sex and position.
 OBJECTIVESOF QUALITY CIRCLE
The main objectives of quality circle are as follows:-
 Overall improvementof quality of products
manufactured by the enterprise.
 Improvementof production methodsand productivity
of the enterprise.
 Self – developmentof the employeeswho take part in
quality circles.
 Encouragementof innovativeideas amongthe
employees.
Buildinghigh morale of employeesby developingteam
 BENEFITSOF QUALITY CIRCLES
Quality circles lead to the followingbenefits for the organisation:-
 Formation of quality circle in Japan and other countries has
helped in bringing out severalinnovations and changes in work
methods and products.
 Quality circles have proved to be a valuabletool for increasing
productivity, improvingquality and increasingworker’sjob
satisfaction.
 Membership in a circle meansa participative environmentthat
providesidentification with work- group. Participation
encouragescommitment of the employeesin producingquality
products. Throughquality circles, every one becomes involved
with the operation of the company. Everyone from top to bottom
workstowardsa single goal, i.e.; success through quality.
 Quality circles help in the developmentof the participants as they
are encouraged to produceinnovativeideasand learn the waysto
improve productquality.
 Quality circles provideopportunitiesfor better understanding
amongthe members.
 Quality circles create awarenessof the potential of the workers.
 PROBLEMSIN IMPLEMENTATON OFQUALITY CIRCLES

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There are several pitfalls in quality circles. Despites their merits ,
they have failed in many companies. The common hurdlesin
initiating quality circles in Indiaare as under :-
a. NEGATIVE ATTITUDE :-
The employeesand even managersmay have negative attitude
towardsthe quality circle. Naturally, they will resist its
implementation. The wrongnotionsof the peopleabout quality
circles should be cleared. They should be properly informed
about the concept of quality circle and its utility.
b. LACK OF ABILITY :-
The workersin India have a low level of education and also
lack of initiative. To overcomethis hurdle, Worker’sEducation
Programmeshould be initiated. It musteducate the workers
about quality circle.
c. LACK OF MANAGEMENTCOMMITMENT:-
The top managementmay notbe committed to the conceptof
quality circle. The employeesmay not be allowed to hold
meetings of quality circles duringthe workinghours . Under
such situations, the employeeswillbe lest interest in devoting
their personaltime to quality circle. Therefore, the
managementshould allow the workersto hold quality circles
meetings periodically duringthe workinghours. It should also
extent the assistance required by the quality circle for the
smooth working.
d. NON_ IMPLEMENTATION OFSUGGESTIONS :-
The workerswillfeel disheartened if their suggestions are
turned down by the top managementwithout any reason . The
suggestions of each quality circle should be given dueweight
age. If they are likely to improvequality of products, they
mustbe implemented. This willenthuse the membersof the
quality circle.
 REQUIREMENTSOF EFFECTIVE QUALITY CIRCLE
For increasing the effectiveness of quality circles, the following
guidelinesshould be followed :-

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a) The employeeswho are concerned with quality should be
encouraged to come forward on their own to suggest waysand
meansto improveupon it.
b) The QC members mustbe given adequate training in the area of
statistical analysis to facilitate information processing.
c) Since the members of quality circle have to work in groups, an
understandingof group dynamicsalso necessary. Additionally,
they should develop a problem solving approach.
d) The membersshould feel independentto choose any problem
which they feel is most crucial. In addition, they should be free to
implementand monitor the results.
e) Each quality circle should have a number of meetings and
discussions. Hencefacilitates for such meetings should be
provided withoutany hindrance. In other words, quality circles
musthave the supportof top management.
HUMAN RESOURCE ACCOUNTING
 DEFINITION
M N Baker definesHuman Resource Accountingas, “ Human resource
accounting is the term applied by the accountancy profession to
quantify the cost and valueof employeesto their employing
organization”.
In short , Human resourceaccountingis the art of valuing, recording
and presentingsystematically the worth of human resourcein the book
of accountsof an organisation.
The definition brings outof the followingimportantcharacteristics
featuresof human resourceaccounting :-
i. Valuation of human resource.
ii. Recordingthe valuation in the book of account .
iii. Disclosure of the information in the financialstatements of
the business.
 IMPORTANCE OFHUMAN RESOURCE ACCOUNTING

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Human resourceaccountingprovideusefulinformation to the
management, financial analystand employeesas stated below-
 Human resourceaccountinghelps the managementin the
employment, location and utilisation of human resources.
 It helps in designing the transfer, promotion ,trainingand
retrenchment of human resource.
 It providebasis for planningof physical assets visa-a-vias
human resources.
 It assists in evaluatingthe expenditureincurred for imparting
future education and trainingin the employees in terms of the
benefits derived by the firm.
 It helps to identify the cause of high labour turnover atvarious
levels of taking preventivemeasuresto contain it .
 It helps in locating the real cause for low returnson
investment, like improper or under-utilization of physical
assets or human resource or both.
 It helps in understandingand assessingthe inner strength of an
organisation and helps the magnetto steer the company well
through most adverseand unfavourablecircumstances.
 It providesvaluableinformation of persons interested in
makinglong term investmentin the firm.
 It helps employeesin improvingtheir performanceand
bargaining power. It makes each of them to understand his
contribution towardsthe betterment of the firm visa-a-visa the
expenditureincurred by the firm on him.
 OBJECTIVE OF HUMAN RESOURCESACCOUNTING
The main aim of HRA is to depict the potential of HR in monetary terms,
while casting the organisation’s financialstatements. The concept can be
examined from two dimensions:-
a) The investmentin HR
b) The valueof HR
The expenditureincurred from recruiting, staffing and training
and developingthe HR quality is the investmentin HR . The fruits
of such investmentare increased productivity and profitto the
organisation . The yield that the investment generates is
considered aa the basis for HR values.

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Putting in a capsule the main objectives of HRA are to :-
 Improvemanagementby analyzinginvestmentin HR.
 Consider peopleas its assets .
 Attract and retain qualified people
 Profilethe organisation in financialterms.
The basic objective of HRA is to facilitate the efficiency of human
resource. It is basically adopted to treat human resourceas assets, to
generate human data about human resources, to assign value to human
resourcesand to presenthuman assets in the balance sheet.
THE MAIN OBJECTIVE OF HR ACCOUNTING SYSTEM ARE AS FOLLOWS :-
1) TO furnishcost value information for makingproper and effective
managementdecisions about acquiring, allocating , developingand
maintaininghuman resourcesin order to achieve cost effective
organisational objectives.
2) To monitor effectively the use of human resourcesby the
management.
3) To have an analysisof the human assets i.e.; whether such assets are
conserved, depleted or appreciated.
4) To aid in the developmentof managementprinciples, and proper
decision makingfor the futureby classifyingfinancial consequence,
of variouspractices.
5) In all, it facilitates valuation of human resources, recordingthe
valuation in the books of account and disclosure of the information in
the financialstatement .
6) Further, it is to help the organisation in decision makingin the
followingareas :-
 Direct recruitmentVs promotion .
 Transfer Vs retention
 RetrenchmentVs Retention
 Impact on budgetary controls of human relationsand
organisational behaviour .
 Decision on relocation of plants, closing down existing units
and developingoverseassubsidiaries, etc.
 LIMITATION OF HUMAN RESOURCE ACCOUNTING.

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There are many limitations which make the managementreluctantto
introduceHRA . Some of the attributes are :-
 There is no proper clear cut and specific proceduresor guidelines
for findingcost and valueof human resources of an organisation .
The systemswhich are being adopted have certain drawbacks.
 The period of existence of human resourcein uncertain and hence
valuingthem under uncertainty in futureseemsto be unrealistic.
 There is a fear that HRA may dehumaniseand manipulate
employees.
 The muchneeded empirical evidenceis yet to be found to support
the hypothesis that HRA as a tool of the managementfacilitates
better and effective managementof human resources.
 In what form and manner, their valueto be included in the
financial statement is the question yet to be classified on which
there is no which there consensusin the accountingprofession .
 As human resourcesare not capable of being owned, retained and
utilized, unlikethe physical asset, there is no problem for the
managementto treat them as assets in the strict sense.
 There is a constant fear of opposition from the trade unionsas
placing a valueon employeeswould makethem claim rewards
and compensationsbased on such valuation.
 There is no universally accepted method of human asset valuation.
 In spite of all its significance and necessity, tax laws do not
recognize human being as assets.
 As far as our country isconcerned human resourceaccounting is
still at the developmentstage . Muchadditionalresearch is
necessary for its effective application.
DOWNSIZING
Downsizingmeansareduction in the number of employees, levelsof
managementand overall size of the company in order to increase
profitability or reducecosts.
 DOWNSIZING PHASE
o PHASE -1

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Duringthe early 199os, downsizingwasundertaken by successful
companiesas a purposefulstrategy : not only the companies reduced their
workforce, butalso redesigned their organisations and implemented
quality improvementprograms. Focuson enhancingthe valueof the
organisation as a whole.
Companiestaking uo downsizingto :-
Reducecosts
Becomemore competitive
Optimise resource
Improvingdecision making
Increasing the speed and responsiveness
Improveproductivity
o PHASE -2
Downsizingwason the rise in the early 21 st century dueto :-
Worldwideeconomicrecession
Increase in the global competition
Dynamicchanges in technology
Increase in the availability of temporary employeebase( lean
manufacturingand outsourcing)
Wage reduction
 DOWNSIZING STRATERGIES.
 Early retirement offerslike early separation schemes.
 Transfers
 Outplacements
 Attrition
 Layoffs
 METHODSOF DOWNSIZING
 Termination For Cause(TFC)
Termination as a resultof unlawfulbehaviour, breakingcompany
polices ,conflict of interest, etc.

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 Performance-Based Termination (PBT)
Termination based on track record/history of poor performance,
failureto deliver on job responsibilities or against
business/position objectives.
 Surprise/emergency Layoffs(SL)
Termination of severalemployees based on businessneeds
executed without appropriateplanning/analysis.
 Planned reduction in work force(Downsizingor RIWF)
Termination of severalemployeesbased on businessneeds
carefully executed based on appropriateplanningand in-depth
analysis.
 IMPACTOF DOWNSIZING
I. ON EMPLOYEES
 Employeemotivation disrupted :- Increase in political behaviours,
anger, fear-which is likely to negatively impact quality of
customer service.
 Violation of psychological contract, leadsto cynicism, lowered
work commitment, fewer random acts of “good will”.
 “Survivors” experiencemorestress dueto longer work hours with
re- designed jobs, and increased uncertainty regardingfuture
downsizing.
II. WORK FORCE QUALITY
 Many senior employeesleave dueto application of early
retirement incentives: result is loss of institutional memory.
 The useof voluntary workforcereduction(buyouts)resultsin the
most marketable employeesleaving (“stars”)- difficult to control
since all employeesmust be legally eligible to qualify.
 Early retirement and voluntary reductionsoften resultin too
many peoplequitting, and some are hired back as consultantsat
higher cost to firm.

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 BENEFITSAND COSTS OF DOWNSIZING
A. BENEFITSOF DOWNSIZING
 Reducecosts
 Symbolism of cutting jobs
B. COSTS OF DOWNSIZING
 Cost associated with downsizing
 Potential law suits
 Public image of firm
 Decreased loyalty of currentemployees
 Danger of losing the wrongpeople
 Difficultiesin recruitment
 ALTERNATIVESTO DOWNSIZING
 Preventthe need of staff with contingent workers.
 Treat employeesas assets.....
 Reassign workersto differentjobs within firm.
 Retrain workersin new technologies
 Shorten hours/ pay cuts.
 When there is no alternative someless painfuloptions
 Attrition
 Early retirements
 Layoffs(temporary)
 Voluntary severance
 SURVIVORS ARE THE KEY – DON’T NEGLECTTHEM
 The success or failure of a downsized organisation depends on
the remainingemployees.
 Don’t communicate that survivors are fortunate to keep their
jobs in the difficultbusinessenvironment.
 Many survivors behave in dysfunctional ways after the event
including falling victim to “ survivor sickness”, whose symptoms
include decreased effort and creativity and increased fatigue and
resentment.

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 Survivors are critical to your organisation’s future, so take care of
them and acknowledge that there will be increased workloads,
which help them to adjust them.
 ETHICALDOWNSIZING – LESSONS TO BE LEARNED
 Each employee to be laid off should be told personally, however
difficultthat may be.
 The conversation should be done privately – in the manager’s office
with the door closed and certainly not within earshot of others
 The manager must give the employee his full attention . The
impulse to allow interruptions and to turn to other matters may
exist, but downsizing with integrity is one of the most important
obligations a manager has.
 The manager should be honest, but not brutally so. One reason is a
possible law suit by the employee.
 The manager should not rush . The employee is entitled to believe
the manager cares and is sympathetic.
 Continuousmotivation to boost employeemorale.
 Incentiveand compensation planning.
OUTSOURCING
Outsourcingdenotesthe continuousprocurementof servicesfrom a
third party, makinguse of highly integrated processes, organizational
modelsand information systems.
 DEFINITION
DAVE GRIFFITHS ,” The strategic use of outsideresourcesto
perform activities traditionally handled by internal staff and
resources”
 TOP REASONS FOR OUTSOURCING.

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 KEY AREASOF OUT SOURCING
 Information technology/ IT solution.
 Call centres
 Finance and Accountingoutsourcing
 ProcurementOutsourcing
 Textiles
 Manufacturing
 Human Resourcemanagement.
 ADVANTAGESOFOUT SOURCING
 Cost effective.
 Skill expertise
 Time zonedifference
 Focus on core competencies
 Increase productivity and efficiency
 Distribution of risk
 Improvingcustomer service
 Better peoplemanagement
 Access to world –classsolution.
 DISADVANTAGESOFOUT SOURCING
 Loss of managerial control
 Hidden costs
 Threat to security and confidentiality
Reduce Costs
Focus on core
Improve Quality
Increase speed to
market
Conserve Capital

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 Quality problems
 Tied to the financial well- being of another company
 Bad publicity and ill will
 Lack of customer focus
 Lose talent within your company
 Linguistic barriers.
 PROBLEMSWITH OUTSOURCING
 Loss of control
 Increased cash outflow
 Confidentiality and security
 Selection of supplier
 Too dependenton serviceprovider
 Loss of staff or moral problems
 Time consuming
 Provider may notunderstand businessenvironment
 Provider slow to react to change in strategy.
 TYPESOF OUTSOURCING
1) BUSINESS PROCESSOUTSOURCING {BPO}
BPOis a subset of outsourcingthat involvesthe contracting of
the operationsand responsibilities of specific business
functionsor processes to a third – party service provider.
2) KNOWLEDGE PROCESSOUTSOURCING{KPO}
KPO describes the outsourcing of core business activities,
which often are competitively importantor form an integral
part of company’svaluechain. Therefore KPOrequires
advanced analyticaland technical skills as well as a high
degree of proprietary domain expertise.
3) LEGALPROCESSOUTSOURCING{LPO}
LPO refersto the practise of a law firm or corporation
obtaining legal supportservicesfrom an outsidelaw firm or
legal supportservicescompany. Thisprocess has been marked
by practice of outsourcingany activity except those where
personalpresenceor contact is required.

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4) RECRUITMENTPROCESSOUTSOURCING {RPO}
RPO is a form of businessprocess of outsourcing(BPO) where
an employer outsourceor transfer all or part of its recruitment
activities to an external service provider.
5) ENGINEERING PROCESSOUTSOURCING {EPO}
EPO offersglobal consultingand out sourcingservices
providingend to end services in the areas of engineeringand
technical process outsourcing.
HRM IN MULTI NATIONAL COR PORATION
HRM is a strategic function concerned withrecruitment, training and
development, performanceappraisal, communication and labour relations.
HR policies guidethe variousfunctionsof HRM. The need for a particular
typeof HRM is determined by the need for standardization or adaptation.
Managinghuman resourcesin an internationalcontext is morecomplex
than in a domestic set up because of the many differencebetween the
headquarters and the subsidiaries. The HR policies of certain companies
seems to discriminate on the basis of religion, race ,caste ,sex or
nationality. Companieslike Ford and Volvo, however, strive to maintain
equality in work and pay.
Staffing is an importantaspect of HRM . The staffing policies of MNCsare
determined by their approachto globalisation. MNCswith an ethnocentric
approachfill all top management positionswith home country nationals to
ensurethat home country practices are replicated in subsidiaries.
Companiesthat adopt a polycentricapproachto globalisation, fill all senior
managementposition with local nationals to ensuremaximum adaption to
local conditions.
Companiesthat adopt a geocentric approachto globalization, identify
managers irrespective of their nationality for variousinternational
assignments to ensurethat best practices are identified and replicated in all
units of the organization. Managersbelonging to a particular country and
workingin another country called expatriates.

21. 21
The selection , training, period of stay abroad, compensation and
repatriation of expatriates are delicate issuesthat have to be managed by
the HR department. On their repatriation, they mustbe provided suitable
challenging assignmentsthat give them the autonomy they have become
accustomed to. Since maintainingexpatriate manager is expensive, a
company mustdevelop localtalent.
Companiescan identify and develop local talent through in house
ManagementDevelopmentPrograms{MDP}. Theseprogramswill help
improvethe coordination between employeeswith diversecultural,
religious and educationalbackgrounds. Performanceappraisalisanother
activity where there can be differenceof opinion between headquarters
and subsidiaries.
Subsidiary managersmust be involved in setting of unambiguoustargets
and the establishment of criteria for measuringperformance. Performance
Managementattempts to link performanceappraisalto employeetraining
and development, and possibility to compensation. There are three
theories concerningthe autonomy of subsidiariesin decision making.
They are : limited autonomy, variableautonomy and negotiated autonomy.
Accordingto the theory of limited autonomy, the degree of autonomy will
depend on the MNC’sapproachto globalisation. The theory of variable
autonomy states that the degree of autonomy varieswith the degreeof
internationalization of the company.
Companiesthat adopt an export strategy can afford to have centralized
decision makingwhereas strategic business unit(SBU) will require
decentralized decision – making. Accordingto the theory of negotiated
autonomy, the degreeof autonomy of a subsidiary will dependson its
ability to negotiate with headquarters.
HRM playsan importantrole in maintain harmoniousindustrialrelations.
Certain companiesare often intimated by the strength of the union and the
political supportitenjoys. Certain companieslike Volvo ensurecordial
relations with the labour union by actively participating in their
development.

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INTRODUCTION TO FACILITY MANAGEMENT
 INTRODUCTION
In the final decadeof the last millennium, thefacility management(FM)
industry emerged asone of the fastest growingsectors. Now a days, the
importanceof FM is readily acknowledged in many companieswhich
recognise the necessity of properly managingelaborate and expensive
supportfacilities. The tasks are multi-disciplinary and cover a wide
range of activities, responsibilities and knowledgebecause every aspect
of an organisation will come under the purview of FM.
The IFMA modelof a triangleof ‘Ps’ sumsup facility management
concernsin today’swork place : PEOPLE,PROCESSand PLACE. These
three factors are interdependentand have directreciprocal
relationships. As ARMSTRONG pointed out, “ we know there is a need to
manage the physical environmentin concert with peopleand job
processes”. FM findsmanagementsolutionsby positioningitself at the
intersection of these three factors( figure1). This strategy makes sense,
since people , process and place are the three main factors of
organisations and FM involvesthe whole organisation. The position of
FM at centre implies enhanced cooperation amongthe key factors in any
organisation . However, FM is most active with factors relating to place.
Figure1: Triangle of P’s and FM.(source: IFMA)
SuccessfulFM leads to work places which better supportthe flow of
productiveprocesseswhile addingvalueand reducingcosts .The scope,
range of services, activities, responsibilities, skills and knowledge of
facility managementare all intended to better integrate existing
organisational factors. This essay describes the currentscope of the
disciplineat both operationaland strategic levels. The futurescopeof

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FM is also considered, taking into account organisational factors, current
conditionsand the impact of futureinnovation and change.
 THE CURRENTSCOPE OFFM
HowFM works in an organisation
The currentscopeof FM is madeclear in the framework suggested by
KINCIAD(1994), whichdescribesmany aspects of managementpractice.
Kincaid sees FM as a supportroleor service, part of the organisation’s
non-corebusiness, and service, the needsof primary activities or core
business. The function of Fm is to reconcile, through time ,these demand
and supply aspectin the organisation . In the IFMA model, FM worksin
the area of place ,but with obligations to supportthe needsof the people
and processes associated with those places.
Figure2: Relationships among place, people, processes and FM in an
organisation
The facility manager, with place as the central focusof his or her field of
concerns, has two key roles. The first involvesusingthe organisation’s
capital resources, especially property, physicalplantand facilities. The
second means managingthe organisation’s supportservices, both routinely
and in emergencies.
These two managementroles integrate three main activities:
1. Property management(real estate);
2. Property operationsand maintenance;
3. Office administration.
The operational and strategic levels ofFM

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Barrett and Owen (1992)divideFM into two broad categories by function
analysis:
 Operational or implementation functions
 Management functions
Operational or Implementation functions
Operational activities are day-to-day or routinesupportfunctionsinvolving
workers. Activities includethe operation and upkeep of overall physical
resourcesin order to maintain the good condition and appearanceof the
work place, to add valueto physicalresources, and to provideasafe and
healthy environmentfor the organisation’s primary activities. Tasks at this
level have a relatively short-term scope, and involvespecific processes,
simpleand direct, such as cleaning, replacing, repairing, redecorating,
grounds-keepingetc. Secure arrangementsfor such routineoperations and
services are the bedrock of good FM practice (Nutt, 2002).
Management functions
Managementfunctionscan be distinguished at tactical and strategic levels.
Tactics are action plansinvolvingroutine, specificand short-term
preventiveor managerial operations. (Johnson & Scholes, 2002). Such
activities, which are best keptsimple, focus, for example, on routineactions
such as safety proceduresfor prevention or proper useand care of
maintenanceresources. Activities on this level supportresponsible
behaviour in the workplaceand the continuity of workingconditions.
At the strategic level there is consultation and non-routineplanningaimed
at makingthe best, long-term use of the organisation’s physical resources
and overall facilities. Johnson & Scholes (2002)see managementstrategy
as dealing with the complexities of ambiguous, non-routinesituations
which can affect the direction and futureof the whole organisation.
Strategic decisions demand an integrated approachsince the entire
organisation should move, in unison, in the same developmentdirection.
Tactical and operational levels depend on policy direction from strategic
planners. The field of tasks envisioned by strategists appearssophisticated
and complex, because many processes and peopleare involved and many
aspects of the organisation must be orchestrated.
Strategy is needed to cope with the prospectof an unknown and changing
futuresince it may generally be said that “the further we look ahead, the
moreuncertain we become” (Nutt, 2002-03). Althoughlongterm
forecasting can only hypothesise about the future, strategic planningaims

25. 25
to reduce uncertainty by choosing a preferred path and a reasonable long
term direction for the development of the organisation (Nutt, 2002)
Strategic overviewshavetwo objectives (Nutt, 2002-03):
 Negative aims (Reactive): to reducerisk and constraint, and to avoid
failureand undesirableoutcomes;
 Positive aims (Proactive): to increase opportunitiesand advantages;
to achieve success; to increase value; and to achieve desirable
outcomes.
Figure 3 : How FM is carried out
Supportactivities in facility managementcan thus provideboth short and
long-term support, carryingoutspecific tasks at operational levels and
conceivingprojects and plansfrom policy and strategy, as well, with a view
to what lies ahead in the distant future.
 The relationshipof management and operational functions
BecauseFM is managementled, operationalactivities are expected to
follow directives from the top. However, the two functionsare understood
to be equally important. Operational and strategic concernsare
interrelated and mustbe developed in parallel (Nutt, 2002)to addressboth
existing and outsourced supplies. Strategy is the compass which leads

26. 26
toward appropriatefacilities development. Tactics and operationsare the
practical meanspropellingthe organisation toward its objectives. The
functionsare mutually dependent. A good relationship between them helps
the organisation movetoward its goals with a peaceful, safe and stable
work environment.
Thompson (1990)supported thisapproachwith an analogy using
computer language. ‘Software’ representsthe strategic level of facilities
planningand general/officeservices. The operationallevel is figured as the
‘hardware,’including, for example, real estate, buildingconstruction and
buildingoperationsand maintenance. The correct choice of ‘software’
enables hardware’to function. That is, the right managementplan enables
the best facilities implementation.
Categorising FM activities in operational and strategic levelslinkswith
Kincaid (1994)’sthree main strandsof integrated activity;
1. Property management:
strategic activities;
2. Property operationsand
maintenanceactivities:
operationalfunctions;
3. Office administration:
tactical activities
Fig 4:The types of tasks and activities categorized by function and FM task
characteristics
Kincaid (1994)concluded thatthese three disparate sets of complementary
activities can be effectively integrated only with an impressivearray of

27. 27
dramatically differentskills, a vast information base, and a full
managementrange which covers everythingfrom routineoperations to
long-term strategy.
Kincaid (1996)identified three distinctive characteristics of FM as follows:
1. Facility managementtakes a supportrole within an organisation, or
providesasupportservice to the organisation.
2. FM must link strategically, tactically and operationally to other
supportactivities and primary activities in order to create value.
3. The managersmustbe reasonably knowledgeablein terms of
facilities and management.
 Integrating FM in an organisation
FM activities are relevantto the variousaspects and dimensionsof
organisations. This means that managersneed to have an intimate
understandingof how the organisation works(Kincaid, 1994). To create
and implementFM strategy, plannersneed to understand alldimensionsof
the organisation. Four basic dimensionscan be posited (Nutt, 2002-03):
1. The purposeof the organisation, its vision, mission, objectives, core
competency and goals.
2. The processes of work, operationsand projects.
3. The environmentalcontext, organisational behaviour, cultureand
market.
4. The product(s), infrastructure, property and facilities.
A clear understandinghelpsshapeappropriateFM strategy and plans, and
supportsthe use of the processes and operationsmost suited to each
organisation in its existing property and facilities.
Johnson & Scholes (2002)emphasisethat each aspect in itself is important
but noneis adequate alone. The manager who aspires to manage or
influencestrategy mustbe able to see a larger picture. A perception of the
whole rather than justthe parts is critical.
Organisational culture, technological change, and global competition
inevitably affect FM, and an integrated view from a business perspectiveis
indispensable.
 The range of FM knowledge

28. 28
Kincaid (1994) stated that FM is not simply the practice of managing
the various support services in an organisation. Facilities
management should integrate knowledge of both facilities and
management in order to work effectively. Concerns about support
services for operations and activities should be driven by
appropriate, relevant and adequate knowledge of facilities and
management.
Figure5: Integrated FM in practice, four components
SUMMARY

29. 29
 Accordingto Sashkin and Kiser,” Total Quality Managementmay be
defined as creating an organisational culturecommitted to
continuousimprovementof skills, teamwork, processes, productand
service quality and customer satisfaction”
 OBJECTIVESOF TOTAL QUALITY MANAGEMENT
 Meeting the customer’s requirements is the primary objectives and
the key to organisational survivaland growth.
 Is the continuousimprovementof quality.
 TQM aims at developing the relationship of openness and trust
amongthe employeesat all levels in organisation.
 COMPONENTSOF TOTAL QUALITY MANAGEMENT
 CUSTOMER ORIENTATION
 CONTINUOUS IMPROVEMENT
 EMPLOYEE’SINVOLMENT :-
 NEEDSAND SIGNIFICANCE OF TOTAL QUAITY MANAGEMENT
Total Quality Managementbrings quality consciousnessin the enterprise
which encourages production of quality product.
 TQM helps in providinggreater satisfaction to customer by
meeting their requirements. If the customer is satisfied, the
sales will increase.
 It creates a good public image of the enterprise by helping it to
providegoodsand services of higher quality to the society.
 There is better utilisation of materials, machines, capital, human
resource, etc...
 Wastages are reduced to the minimum. Asa result, cost of
production isreduced and profitability is increased. Even the
customerscould be provided goodsatlower prices. The
competitive position of the firm in the marketis improved.
 The employeesarecommitted to higher quality and feel highly
motivated. Their moraleis also higher because of the public
image of the firm and its goodwillin the market.
 A quality circle is a small group of employeesdoingsimilar or related
work who meet regularly to identify , analyseand solve product
quality problemsand to improvegeneraloperations
 OBJECTIVESOF QUALITY CIRCLE

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The main objectives of quality circle are as follows:-
 Overall improvementof quality of products
manufactured by the enterprise.
 Improvementof production methodsand productivity
of the enterprise.
 Self – developmentof the employeeswho take part in
quality circles.
 Encouragementof innovativeideas amongthe
employees.
Buildinghigh morale of employeesby developingteam
 REQUIREMENTSOF EFFECTIVE QUALITY CIRCLE
 BENEFITSOF QUALITY CIRCLES
Quality circles lead to the followingbenefits for the organisation:-
 Formation of quality circle in Japan and other countries has
helped in bringing out severalinnovationsand changes in work
methods and products.
 Quality circles have proved to be a valuabletool for increasing
productivity, improvingquality and increasingworker’sjob
satisfaction.
 Membership in a circle meansa participative environmentthat
providesidentification with work- group. Participation
encouragescommitment of the employeesin producingquality
products. Throughquality circles, every one becomes involved
with the operation of the company. Everyonefrom top to bottom
workstowardsa single goal, i.e.; success through quality.
 Quality circles help in the developmentof the participants as they
are encouraged to produceinnovativeideasand learn the waysto
improveproductquality.
 Quality circles provideopportunitiesfor better understanding
amongthe members.
 PROBLEMSIN IMPLEMENTATON OFQUALITY CIRCLES
 M N Baker definesHuman ResourceAccountingas, “ Human
resourceaccounting is the term applied by the accountancy
profession to quantify the cost and valueof employeesto their
employingorganization”.

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
 IMPORTANCE OFHUMAN RESOURCE ACCOUNTING
Human resourceaccountingprovideusefulinformation to the
management, financial analystand employeesas stated below-
 Human resourceaccountinghelps the managementin the
employment, location and utilisation of human resources.
 It helps in designing the transfer, promotion ,trainingand
retrenchment of human resource.
 It providebasis for planningof physical assets vis-a-vias
human resources.
 It assists in evaluatingthe expenditureincurred for imparting
future education and trainingin the employees in terms of the
benefits derived by the firm.
 It helps to identify the cause of high labour turnover atvarious
levels of taking preventivemeasuresto contain it .
 OBJECTIVE OF HUMAN RESOURCESACCOUNTING
 LIMITATION OF HUMAN RESOURCE ACCOUNTING.
There are many limitations which make the managementreluctantto
introduceHRA . Some of the attributes are :-
 There is no proper clear cut and specific proceduresor guidelines
for findingcost and valueof human resources of an organisation .
The systemswhich are being adopted have certain drawbacks.
 The period of existence of human resourcein uncertain and hence
valuingthem under uncertainty in futureseemsto be unrealistic.
 There is a fear that HRA may dehumaniseand manipulate
employees.
Downsizingmeansareduction in the number of employees, levelsof
managementand overall size of the company in order to increase
profitability or reducecosts.
 METHODSOF DOWNSIZING
 IMPACTOF DOWNSIZING
 BENEFITSAND COSTS OF DOWNSIZING

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C. BENEFITSOF DOWNSIZING
 Reducecosts
 Symbolism of cutting jobs
D. COSTS OF DOWNSIZING
 Cost associated with downsizing
 Potential law suits
 Public image of firm
 Decreased loyalty of currentemployees
 Danger of losing the wrongpeople
 Difficultiesin recruitment
 ALTERNATIVESTO DOWNSIZING
 DAVE GRIFFITHS ,” The strategic use of outsideresourcesto
perform activities traditionally handled by internal staff and
resources”_ outsourcing
 ADVANTAGESOFOUT SOURCING
 Cost effective.
 Skill expertise
 Time zonedifference
 Focus on core competencies
 Increase productivity and efficiency
 DISADVANTAGESOFOUT SOURCING
 Loss of managerial control
 Hidden costs
 Threat to security and confidentiality
 TYPESOF OUTSOURCING
 BUSINESS PROCESSOUTSOURCING {BPO}
 KNOWLEDGE PROCESSOUTSOURCING{KPO
 LEGALPROCESSOUTSOURCING{LPO}
 RECRUITMENTPROCESSOUTSOURCING {RPO}
 ENGINEERING PROCESSOUTSOURCING {EPO}
 HRM IN MULTINATIONALCOR PORATION
 Managinghuman resourcesin an internationalcontext is morecomplex
than in a domestic set up because of the many differencebetween the
headquarters and the subsidiaries. The HR policies of certain companies

33. 33
seems to discriminate on the basis of religion, race ,caste ,sex or
nationality. Companieslike Ford and Volvo, however, strive to maintain
equality in work and pay
 They are : limited autonomy, variableautonomy and negotiated
autonomy. Accordingto the theory of limited autonomy, thedegree of
autonomy willdepend on the MNC’sapproachto globalisation. The
theory of variable autonomy states that the degree of autonomy varies
with the degree of internationalization of the company
INTRODUCTION TOFACILITYMANAGEMENT
 The IFMA modelof a triangleof ‘Ps’ sumsup facility management
concernsin today’swork place : PEOPLE,PROCESSand PLACE. These
three factors are interdependentand havedirectreciprocal
relationships. As ARMSTRONG pointed out, “ we know there is a need to
manage the physical environment in concert with peopleand job
processes”. FM findsmanagementsolutionsby positioningitself at the
intersection of these three factors( figure1). This strategy makes sense,
since people, process and place are the three main factors of
organisations and FM involvesthe whole organisation. The position of
FM at centre implies enhanced cooperation amongthe key factors in any
organisation . However, FM is most active with factors relating to place.

34. 34
CONCLUSION
From this seminar notes we conclude that TQM , Quality Cycle ,HR
ACCOUNTING ,OUTSOURCING ,EFFECT OF DOWNSIZING and
Introduction to facility management will help in increasing the
profitability of a firm . The factors like downsizing and
outsourcing should be used carefully otherwise it may happen to
the failure of that firm. A profitable firm will use all these factors
which plays an important role in the success of a firm will use in
the correct proposition.