The document discusses the key functional areas of management including customer service, operations, marketing and sales, finance, research and development, and human resources. It notes that in small businesses these functions may be performed by individuals, while in larger businesses they are organized into departments and specialized roles. All functional areas must work together to achieve organizational goals. The document then provides more detailed descriptions of the human resources, training, compensation, and finance functions. It outlines the main responsibilities, objectives, and processes within each of these areas.

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

24. OM’s Transformation Process

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)

34. THANK YOU