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FUNCTIONAL ASPECTS
   OF MANAGEMENT




                Lav Nigam
KEY FUNCTIONS IN BUSINESS
                    Customer
                    Services
                                Administration
 Operations                     and IT support

                    The main        Marketing and
                   functional           Sales
Finance              areas


                                  Human
          Research and
                                 Resources
          Development
DELIVERING KEY FUNCTIONS
        In a small business, will be done
         by individuals

        In a medium/large business, will be
         done by individuals working in
         functional areas or departments
LINKS BETWEEN FUNCTIONS

    All functional areas
    must link together to   HR             R&D
    achieve the overall
                                  Ops
    aims and objectives
   This means              IT   Admin     Sales
    cooperation and good
    communications
                            CS            Marketing
                                 Financ
                                    e
HUMAN RESOURCES
                      Recruitment, Retention
                          and dismissal

Compensation
                                                         Working
                           The main                     conditions
                      responsibilities of the
                        human resources
                            function
  Employee                                              Training,
Organizations                                         Development
 and Unions                                          and Promotion

    Includes the legal rights and responsibilities of employer and
                              employees
SELECTION & RECRUITMENT
Selection:
Selection is a process of collecting and evaluating information about
   an individual in order to extend an offer for employment.
Such employment can be either first position for a new employee or a
   different position for a current employee.
The selection process is performed under legal and environmental
   constraints and addresses the future interests of the organization and
   the individual.
Recruitment:
Recruitment is defined as those organizational activities (choosing
  recruitment sources, developing recruitment ads, deciding money to be
  spent) that influence the number & type of individuals who apply
  for a position & which also affects the decision of individual to accept
  the job offer.
OBJECTIVES OF RECRUITMENT
 Objectives Of Recruitment:
 Recruitment has 3 main objectives:
 1. Develop an appropriate number of applicants for each
     position while keeping costs low. This helps in increasing
     probability of identifying only well-qualified individuals.
 2. To meet organization’s legal & social obligations regarding
     the demographic composition of workforce -females, disabled
     etc Ensuring demographic balance depends on the applicant pool
 3. Help increase success rate of selection process by reducing
     % of applicants poorly qualified or wrong skills. Processing
     applications is expensive both in terms of time and money.
     Money spent on evaluating unsuitable candidates is waste.
COMPENSATION

Compensation:
Compensation is the remuneration received by an
  employee in return for his/her contribution to the
  organization. It is an organized practice that
  involves balancing the work-employee relation by
  providing monetary and non-monetary benefits to
  employees
OBJECTIVES OF COMPENSATION

   Compensation:
   Objectives:
    When managed correctly, it helps the organization achieve
     its objectives and obtain, maintain, and retain a productive
     workforce.
    Compensation is a key factor in attracting and keeping the
     best employees and ensuring that your organization has the
     competitive edge in an increasingly competitive world.
    Without adequate compensation, current employees are
     likely to leave and replacements will be difficult to recruit.
    The outcomes of pay dissatisfaction harm productivity and
     affect the quality of work life.
TYPES OF COMPENSATION

Types Of Compensation:
   Direct in the form of monetary benefits and/or
   Indirect in the form of non-monetary benefits known as
    perks, time off, etc.
(A) Financial Compensation:
Total Financial compensation = Direct + Indirect Compensation
   Direct Financial Compensation
   pay received in forms of wages, salaries, bonuses &
    commissions, stocks, fringe benefits
   Indirect Financial Compensation(benefits)
   All financial rewards not included in direct compensation.
    For example, workers compensation, Family & medical leave,
    Disability Protection
TYPES OF COMPENSATION
 Types Of Compensation:

 (B) Nonfinancial Compensation
   Satisfaction person receives from psychological & or
    physical environment in which person works. For
    example, skills variety, experiences, good working
    conditions, flextime
NEED OF COMPENSATION
Need Of Compensation:
   A good compensation package is important to motivate the
    employees to increase the organizational productivity.
   Unless compensation is provided no one will come and work
    for the organization. Thus, compensation helps in running an
    organization effectively and accomplishing its goals.
   Salary is just a part of the compensation system, the
    employees have other psychological and self-actualization
    needs to fulfill. Thus, compensation serves the purpose.

    The most competitive compensation will help the organization
    to attract and sustain the best talent. The compensation
    package should be as per industry norms.
TRAINING
What is Training?
 Training refers to a planned process of modifying employee behavior,
  attitude, and skill through learning in order to increase the probability of
  goal achievement.
 The goal of training is for employees to master the knowledge, skill, and
  behaviors emphasized in training programs, and apply them to their day-to-
  day activities
Objectives of Training: Primary objective is to reduce gap between what
  employees know and what they should know.

  New employees need to be socialized to fit in organization. Also to fill the
  gap.
 Obsolescence of skill. Employees need to keep abreast with the latest skill.
 Improve performance in existing jobs.
 Employees want to grow and change.
 New skills required as employees move up the hierarchy.
 Long term plan may change & require employees to develop transferrable
  skills.
OBJECTIVES OF TRAINING
Primary objective is to reduce gap between what employees know and what
   they should know.
Objectives are:
1. Socialization: Training important technique of socialization the new
   employee in organization culture. Socialization or induction program helps
   employee understand organizational policies, structure, role relationship,
   behavioral norm. Employee blends his attitude & behavior as per
   organization expectation.
2. Removing Obsolescence: Update skills & knowledge. Technology change
   is very fast & organizations need to keep pace with change. Ex: computer
3. Future Job Needs: Train employees to prepare them for future roles.
   Training needs are identified by finding out the gap between competencies
   required and present.
TRAINING DESIGN PROCESS
                      Ensuring
Conducting Needs     Employees’         Creating a
  Assessment        Readiness for       Learning
                      Training         Environment



Developing an      Ensuring Transfer
Evaluation Plan       of Training




                      Monitor and
 Select Training
                      Evaluate the
     Method
                       Program
TRAINING DESIGN APPROACHES
   Assumptions of Training Design Approaches
    Training design is effective only if it helps
     employees reach instructional or training goals
     and objectives.
    Measurable learning objectives should be
     identified before training.
      Evaluation plays an important part in planning
       and choosing a training method, monitoring the
       training program, and suggesting changes to
       the training design process.
FINANCE
Concerned with money and future plans

  Preparing accounts, eg invoices, management
  accounts, financial accounts for shareholders
  and Inland Revenue

  Preparing wages and salaries

  Obtaining capital and resources, eg money for
  expansion or to pay for resources such as
  equipment and materials.
FINANCIAL MANAGEMENT
 Financial management refers to that
    part of management activity which is
    concerned with the planning and
    controlling of the firm’s financial
    resources.
 It deals with finding out various
    sources of raising funds for the firm
    and also using such funds in the
    most appropriate manner
FINANCIAL MANAGEMENT
 Importance Of Financial Management
 Financial Management helps in:
   Financial planning & successful promotion of an
    enterprise
   Acquisition of funds at minimum cost
   Proper use & allocation of funds
   Taking sound financial decisions
   Improving profitability through financial control
   Increasing the wealth of investors and the nation
   Promoting and mobilizing individual and corporate
    savings
FINANCIAL MANAGEMENT
Functional Areas Of Financial Management:
 Determining Financial needs
 Choosing the sources of funds

  Financial Analysis & Interpretation

  Cost-Volume Profit Analysis
 Capital Budgeting
 Working Capital Management
 Dividend Policy
Administration and IT Support
                     Clerical work, eg
                    mail, record keeping
Facility and
maintenance                                 Office
                                           Supplies
                      The role of
                   administration and
                      IT function


                                           Security
  Support for software applications,
   electronic communications and
       electronic transactions
Operations
   Concerned with the main business activities

    Obtains and converts resources of the
    business into goods/services, ie
       Buildings and land
       Equipment
       People
       Materials
Operations Management

Operations Management is

    A management function

    An organization’s core function
   In every organization whether Service or
    Manufacturing, profit or Not for profit
OM’s Transformation Process
OM’s Transformation Role

    To add value
        Increase product value at each stage
        Value added is the net increase between
         output product value and input material value

 
     Provide an efficient transformation
        Efficiency – means performing activities well
         for least possible cost
Marketing and Sales
Both are concerned with customer needs.

           Market research



             Activities
             include:

Sales                           Promotion
Marketing Management
 Definitions of marketing
 ‘Marketing is the management process that
    identifies, anticipates and satisfies
    customer requirements profitably’
 The Chartered Institute of Marketing


 ‘The right product, in the right place, at the
    right time, and at the right price’
Marketing Management
 Definitions of marketing
 ‘Marketing is the human activity
   directed at satisfying human needs
   and wants through an exchange
   process’ - Kotler 1980
Implications of Marketing
   Who are our existing / potential customers?
   What are their current / future needs?
   How can we satisfy these needs?
        Can we offer a product/ service that

         the customer would value?
        Can we communicate with our

         customers?
        Can we deliver a competitive product

         of service?
   Why should customers buy from us?
Customer Service
Concerned with customer relationships
Activities include:
 Providing information
 Giving advice

  Providing credit facilities

  Delivering goods
 Providing after-sales service
Research and Development
Concerned with developing new goods/services
and updating old ones

Activities include:

  Technological developments
 Scientific research
 Design features

  Performance of product
The use of IT
Relates to all functional areas:

  Electronic communications (eg email)
 Data sharing (eg databases)
 Security systems (eg virus protection)

  External communications (eg Internet)

  Online support for customers (eg order
  tracking)
 Electronic transactions (eg EFT)
Functional variations
No two businesses are the same!
Functions will vary because of:
 Size and scale of business
 Activities of business

  Type(s) of customers

  Needs of customers
 Preferences of owner(s)
THANK YOU

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Functional aspect of management

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

Editor's Notes

  1. 11/06/12