1. COURSE CODE:: MP101
Course ::Management theory
and Practice
Unit -8::MANAGEMENT OF ORGANIZATIONAL
FUNCTIONS
2. OBJECTIVES
Explain the procedure of managing an organization
Define human resource management in an organization
Discuss marketing management in a an organization
Explain financial management in an organization
Learn the concept of production and operations management
Elaborate on managing information systems in an organization
3. INTRODUCTION
The different functions of an organization can be broadly classified under five
major functions, namely, human resource management, marketing
management, financial management, production and operations management,
and information system management.
Every function of an organization plays a crucial role in its overall success of
the business. Therefore, an organization needs to manage all of its functions
carefully and efficiently. The human resource management function of an
organization needs to be managed properly as it is the most productive
resource that creates a long lasting advantage for the organization by utilizing
its skills and knowledge. On the other hand, the marketing management
function of an organization helps persuading customers and increasing the
market share.
An efficient management of financial function of an organization results in
identifying the new investment opportunities and proper allocation of resources.
Apart from this, managing information systems helps in implementing advanced
technology in the organization and getting an edge over its competitors.
4. DEFINING ORGANIZATIONAL FUNCTIONS
The success of any organization depends on the efficiency of its
organizational functions.
The business environment of an organization is full of uncertainties.
Therefore, an organization should make its functions flexible and efficient to
overcome any adverse situation.
In addition, it needs to define its functions clearly for the accomplishment of
goals and objectives in the allotted time.
The operative functions of an organization, namely, human resource
management, marketing management, financial management, production
and operations management, and information systems management.
5. HUMAN RESOURCE MANAGEMENT
Human Resource (HR) refers to the workforce of an
organization that is employed to achieve organizational goals.
The key characteristics of HR are as follows
Possess a particular set of skills used for creating wealth
Makes the use of mental as well as physical abilities for earning
money
Encompasses unique traits, such as knowledge, skills, attitude, and
experience
Exhibits different behavior of human beings in different situations
6. HUMAN RESOURCE PLANNING (HRP)
Human Resource Planning (HRP) can be comprehended as the process of
developing and determining objectives, policies, and programs to procure, develop,
utilize, and retain human resource for achieving the goals and objectives of an
organization.
The importance of HRP in a new organization is shown in the following points:
Anticipating future human resource requirements in an organization
Preventing the shortage and surplus of human resource in the organization
Identifying the skills and competencies of human resource for a particular job
Regulating various HR activities, such as selection, training, and performance appraisal, of
the organization
Ensuring a continuous supply of human resource as per the demand
Evaluating the current status of the available human resource and estimating the human
resource needs in future
Ensuring overall organizational planning, which forms the basis of other HR activities, such
as job analysis, selection, and training
7. PERFORMANCE APPRAISAL
Performance appraisal is such a mechanism that helps the organization to understand
the abilities and competencies of its each employee.
Following are some of the objectives of performance appraisal:
Improves the performance of employees
Determines the training and development needs of employees
Helps the organization to achieve its strategic goals
Represents a future-oriented activity
Leads to the self-development of employees
Provides effective feedback to employees, which, in turn, helps them to improve their
performance or get rewarded for their good performance
Lays a foundation for various employee policies related to transfers, promotions, layoffs, or
terminations
Reduces internal conflicts and employee grievances
Helps the organization to decide compensation and incentives to be paid to the employees
8. PROMOTIONAL MARKETING TECHNIQUES
Advertising: Refers to a promotional technique of marketing communication that
is used to target a huge number of geographically dispersed audiences.
Direct Marketing: Refers to the type of marketing in which the organizations
reach customers directly without any intermediary.
Personal Selling: Refers to face-to-face selling in which a sales representative
tries to convince the customer to purchase a product by explaining or
demonstrating its features.
Sales Promotion: Refers to a traditional element of marketing communication. It
is used to increase the sales of a product by offering incentives, gifts, and
schemes provided to customers at the time of purchase.
Public Relations (PR): Refers to the process in which organizations maintain a
relationship with the customers, shareholders, employees, distributors, partners,
competitors, and the government.
9. MARKETING MANAGEMENT
Marketing management can be described as a process of creating, building, and
maintaining beneficial products.
A market consists of different types of customers; therefore, an organization divides
the market as per the customers’ gender, age, tastes, attitudes, and personalities.
These divided customer groups are called market segments in making rough
estimates of the market demand for the product.
Marketing is a vast field of operations, which can be understood in terms of three
main functions of the entrepreneur, which include exchange or selling, physical
supply or storage and warehousing, and facilitation or market research.
10. FINANCIAL MANAGEMENT
Financial management refers to the functions involved in the
management of financial resources.
The three elements of financial management are explained as follows:
Financial Planning: Refers to scheduling the usage of financial resources,
such as the raising of fund, deciding the amount of fund, and ensuring low
cost and low risk in the raised finance.
Financial Control: Refers to the process of supervising and monitoring the
financial operations of the organization.
Financial Decision-Making: Helps the organization in taking various
decisions that involve the usage of funds.
11. MANAGING CASH FLOW
Cash flow is the movement of money in and out of a business
during a specific period of time.
Cash flow can be of three types, which are explained as
follows:
Operational Cash Flow: Refers to cash inflows generated from the
operations of a business.
Investment Cash Flow: Indicates cash received by selling assets
or paid by making capital expenditures, acquisitions or
investments that benefit the organization in the long run.
Financial Cash Flow: Shows the cash received or paid as a result
of financial activities, such as issuing or repurchasing stocks,
receiving or paying loans and dividends.
12. PRODUCTION AND OPERATIONS MANAGEMENT
Production and operations management is the field of management that
deals with supervising, designing, and redesigning business operations
in the production of goods and services.
It ensures the efficient utilization of resources, so that the needs of
existing and potential customers can be satisfied.
Production and operations management is all about managing processes
that convert inputs, such as labor, material, and expenses, into outputs,
including goods and services.
Generally, production and operations management aspires to enhance
the content of value-added activities in any specified process.
13. QUALITY CONTROL
Quality control refers to a process by which entrepreneurs review
the quality of all factors involved in production.
These three tools for quality control are as follows
Inspection: Refers to the method that detects quality problems at the
end of the production process before they reach the final customer.
Quality Assurance: Refers to the method that focuses the efforts on
improving quality.
Total Quality Management (TQM): Refers to the process that ensures
quality is being checked at every stage of the production process.
14. INFORMATION SYSTEM AND ITS TYPES
An information system plays an indispensable role in supporting the decision-
making process of an organization by providing accurate and relevant
information.
The four types of information systems (as shown in Figure-14) are explained
as follows:
Transaction Processing System (TPS): Refers to a type of information
system that serves the information requirements of individuals at the
operational level of an organization.
Management Information Systems (MIS): Refers to an integrated system
designed to provide the information to middle level managers through
internal sources.
Decision Support System (DSS): Refers to a computer-based
information system that supports the organizational decision-making
process by providing useful information.
Executive Information System (EIS): Refers to the system designed to
help top management in making strategic decisions.
