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Types of Business organisation

Gives idea for different kinds of private and public sector

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Types of Business organisation

  1. 1. Principles andPrinciples and practices ofpractices of ManagementManagement Dr. Anugamini PriyaDr. Anugamini Priya Symbiosis Institute of BusinessSymbiosis Institute of Business Management, PuneManagement, Pune
  2. 2. Organization “It is a systematic arrangement of people brought together to accomplish some specific purpose.” - Robbins and De Cenzo
  3. 3. What is organization??? Convenience store Convenience store ShowroomShowroomCollegeCollege OrganisationOrganisation ChurchChurch SchoolSchool Multi- National Company Multi- National Company And many more…!!
  4. 4. Purpose Decision making and implementation Developing rules regulations and structure An organization is an entity that has a distinct purpose, has people or members, and has a systematic structure Components
  5. 5. Personal choices and interest Organisational structure and patterns Tradeoff maintenance
  6. 6. Management Getting the work done through and by others in order to accomplish the common goals.
  7. 7. “Managing people” • Human beings are indeed inherently ‘unmanageable • People not intending to get managed; resist being managed. • Managers duty is to give instructions to employees in tightly prescribed and limited areas of activity • .managing people- means handling diverse human behavior- grounded on social, economical and cultural process
  8. 8. “Managing systems” • Emphasis in managerial thinking and organisation theory existing • Once a sensible and coherent system of operating has been devised by systems designers- the people will operate those systems unquestioningly fulfil their roles in the systems. • Issues of human self-expression and the universal tendency of people to resist the power of others arises.
  9. 9. “Management of work” • Willingness to ‘go along’ with the requirements of others or fit into the demands of systems is tightly bounded. • The most helpful starting point for any consideration of organisational and managerial behaviour is the work tasks that are to be carried out and the working relationships associated with those tasks that are managed. • It is tasks and relationships which are organised and ‘managed’, not the people who carry out the tasks & have to be shaped, in a relatively predictable and therefore relatively systematic way, not systems as such.
  10. 10. Plan the event 1.Identify the unique idea to attract more people 2.Identify the budget and the sources 3.Assign duty to your team members 4.Prepare the plan and the advertisement.
  11. 11. Management definition • Management is defined as the creation and maintenance of an internal environment in an enterprise where individuals working together in groups can perform efficiently and effectively towards the attainment of group goals.
  12. 12. Planning Organising Staffing Directing How to manage work in organisation Controlling
  13. 13. 1. Planning • Deciding in advance what to do and how to do • Connected with creativity and innovation • Bridges the gap from we are and where we want to go. • Involves making choices from the available alternative. “ involves setting objectives and developing appropriate courses of action to achieve these objectives.”
  14. 14. Definition • ““Planning Is An Intellectual Process, The Conscious Determination OfPlanning Is An Intellectual Process, The Conscious Determination Of Future Courses Of Action, The Base Of Decisions On Purpose, ActsFuture Courses Of Action, The Base Of Decisions On Purpose, Acts And Considered Estimates”—And Considered Estimates”— Koontz & O’DonnellKoontz & O’Donnell • Management planning involves the development of forecasts,Management planning involves the development of forecasts, objectives, policies, programmes, procedures, schedules desiredobjectives, policies, programmes, procedures, schedules desired results”—results”— Louis A. AllenLouis A. Allen • Planning is deciding in the present what to do in future. It is thePlanning is deciding in the present what to do in future. It is the process whereby companies reconcile their resources with theirprocess whereby companies reconcile their resources with their objectives and opportunities”—objectives and opportunities”— `` `` Philip KotlerPhilip Kotler
  15. 15. Nature of the company Company: “Artificial person, existing only in the eyes of the law with perpetual succession, having a separate legal identity and a common seal.”
  16. 16. Artificial person • Its birth life and death is regulated by the government. • It can buy property • It can take a loan • It can do business in its own name • It cannot marry or die • It cannot be imprisoned but can be fined.
  17. 17. Perpetual succession • Continues to exist regardless of the changes in the membership • No effect on the death or retirement or insolvency of the original members • Until deregistered, wound up and displayed.
  18. 18. Separate legal entity • Separate from its members • Its names different from that of its members • Can be sued or can sue
  19. 19. Common seal • Cannot work as a natural person • Common seal indicate the signature of the artificial person i.e. the company • No two seal are same.
  20. 20. Planning and the nature of business Capital Staff BOD Control Stakeholder Govt. norms Profit motive Reporting Finance Risk taking Promotions
  21. 21. Private company • Restricts the right of members to transfer its shares; • Has a minimum of 2 and a maximum of 200 members, excluding the present and past employees; • Does not invite public to subscribe to its share capital; and • Must have a minimum paid up capital of Rs.1 lakh or such higher amount which may be prescribed from time-to- time.
  22. 22. EXAMPLES
  23. 23. Public company • Has a minimum paid-up capital of Rs. 5 lakhs or a higher amount which may be prescribed from time-to-time; • Is not a private company; • Has a minimum of 7 members and no limit on maximum members; • Has no restriction on transfer of shares; and • Is not prohibited from inviting the public to subscribe to its share capital or public deposits.
  24. 24. Types of public sector companies • Departmental undertaking Established as departments of the ministry A part or an extension of the ministry itself. An integral part of the functioning of the government. Not been constituted as autonomous or independent institutions Not an independent legal entities.
  25. 25. #Eg 1. Ministry of communication and IT Telegraphs Postal service
  26. 26. #Eg.2 Ministry of Railways
  27. 27. Statutory corporations • Brought into existence by a Special Act of the Parliament. • The Act defines its powers and functions, rules and regulations governing its employees and its relationship with government departments. • Financially independent with a clear control over a specified area or a particular type of commercial activity. • Separate legal entity. • Less govt interference.
  28. 28. #Eg 3. • Airport Authority of India • National Highways Authority of India • LIC of India • Reserve Bank of India.
  29. 29. Government company • Established registered and governed under the Indian Companies Act, 1956 • Established for purely business purposes and in true spirit to compete with companies in the private sector. • Company in which not less than 51 percent of the paid up capital is held by the central/ state government. • Shares purchased in the name of the president. • Separate legal entity. • Can raise money from the money market.
  30. 30. #Eg. 4
  31. 31. Characteristics of planning 1. Focus on realizing the objectives set 2. Intellectual process involving mental exercise 3. Selective as it selects the best course of action 4. Pervasive- at all the levels of management plan 5. Lays foundation of the successful actions of management 6. It is flexible 7. It is Continuous 8. Efficiency is measured by what it contributes to the objectives
  32. 32. 6 P’s in planning PURPOSE—Goals should be verifiable so that we can check it PHILOSOPHY—ideology PROMISES—uniting factor PLANS—manager has to ascertain the goals, actions to achieve goals, requirement of resources, sources of resources POLICY—general guidelines on which management can take decision PRIORITY—Needs
  33. 33. Planning Process
  34. 34. STEP 1 Determine situation Determination of objectives is the first step in planning process. The objectives so determined decide the future course of action.
  35. 35. STEP 2 Establishment Of Planning Premises Planning premises are the assumptions for future which provide a framework for the planning process. They form the very basis for action. Business environments are uncertain.
  36. 36. Planning premises • Internal • External • Controllable premises: factors like materials, money and machine are controllable factors. • Semi controllable: these are under partial control of a business like labour relations and marketing strategy. • Non controllable: which are beyond the control of any organization like govt. policy, wars and natural calamities.
  37. 37. Planning Premises give a prediction about future uncertainties of business environments. On the basis of these forecasts are made and future trends are indicated.
  38. 38. STEP 3 Selection of the Best Plan from the Alternatives Available All alternatives are found out, studied and evaluated. After careful consideration of all the points one alternative is selected and decision is taken according to the choice made.
  39. 39. STEP 4 Timing and Sequence of Operation Timing is an essential consideration in any planning. Sequence of operation is also arranged carefully. Priorities are fixed.
  40. 40. STEP 5 Estimation of Future Events Some estimation is made for future events. There are trend studies which indicate possible future events. Keeping some provision for margin of error, these trend studies can be relied upon. Experience, judgment and discretion also help in estimating future events.
  41. 41. STEP 6 Follow Up Action The plans so prepared are to be carried out. Follow up action is also needed for seeing through the plan during the course of implementation. A regular follow-up action is both desirable and needed for effective implementation and accomplishment of tasks assigned.
  42. 42. Hierarchy of planning process
  43. 43. Mission A written declaration of an organization's core purpose and focus that normally remains unchanged over time. Serve as filters to separate what is important from what is not, Clearly state which markets will be served and how, Communicate a sense of intended direction to the entire organization.
  44. 44. Vision • Conveys the unique purpose of the company • Delimits the scope of activities that the company is or will be, undertaking. • Mission indicates the formal commitment to the vision
  45. 45. Apple’s mission statement • Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad.”
  46. 46. Apple’s vision statement We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self- honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.”
  47. 47. Difference- mission and vision • A mission is different from a vision in that the former is the cause and the latter is the effect; • A mission is something to be accomplished whereas a vision is something to be pursued for that accomplishment.
  48. 48. Objectives • Mission statement gives the basis for objectives. • Quantified form of the goals i.e. the general statement of the aim or the purpose. • Represents the end point of the planning • Directs management activities and the resources • Helps in measuring the outcomes
  49. 49. Strategy • ‘The art of war’- Planning of movement of troops or ships • A plan of action - Mediating force to match the organization and environment • More concerned with external problems rather than internal • To furnish a framework for more detailed tactical planning and action.
  50. 50. Situational analysis
  51. 51. Political •Supranational •National •Sub national or local Economic •GDP •Growth •Inflation •Central bank lending rates •Currency exchange rates •Fiscal policy etc. Social •Attitudes values beliefs •Culture •Demography –age , gender •Social structure- income level Technological •Hardware & Software •Network •Production process •Transport and distribution •IT and computing etc. External
  52. 52. Internal environment
  53. 53. Others.. • Human resource –the people • Organizational structure- flat/ hierarchy/ complexity • Physical assets – funds, assets • Financial health • Management body
  54. 54. SWOT analysis Winners recognize their limitations but focus on their strengths; losers recognize their strengths but focus on their limitations” • S- Strength • W – Weakness • O- opportunities • T- threat
  55. 55. External analysis
  56. 56. Porter’s five factor model
  57. 57. Barriers to entry
  58. 58. Competitive rivalry
  59. 59. Supplier power
  60. 60. Buyer power
  61. 61. Threat of substitutes
  62. 62. Internal analysis
  63. 63. Competence
  64. 64. Core competence
  65. 65. Resources analysis

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Gives idea for different kinds of private and public sector


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