Pharmaceutical industrial management

PHARMACEUTICAL INDUSTRIAL
MANAGEMENT
BY
MOHD IRSHAD REZA
& DIVYA GOEL
B PHARM (3RD YEAR)
GALGOTIAS UNIVERSITY

CONTENTS
• ADMINISTRATIVE MANAGEMENT
• ELEMENTS OF MANAGEMENT
• PLANNING
• ORGANIZING
• STAFFING
• DIRECTING
• CONTROLLING
• ENTREPRENEURSHIP DEVELOPMENT
• OPERATIVE MANAGEMENT
• PRINCIPLE OF MANAGEMENT
• SCIENTIFIC MANAGEMENT
• MARKETING RESEARCH
• MEASURING AND FORECASTING MARKET DEMAND

ADMINISTRATIVE MANAGEMENT
• Definition-
• Management is a technique using which the
purposes and the objectives of a particular
group are determined, classified and
effectuated.
• Management is forecasting, planning,
organizing, commanding, coordinating and
controlling.

ELEMENTS OF MANAGEMENT
• The six elements of management are as follows:
• 1. Determine objectives—planning
• 2. To setup an organization and assign responsibility—
organizing
• 3. To interrelate and direct activities—command
• 4. To set standards and effect control accordingly—
controlling
• 5. To motivate and socialize the employee groups—
motivation
• 6. To cause cooperation among various factors of
production and organized groups of personnel—
• coordination

PLANNING
• Definition-
• It is a mental process requiring the use of
intellect, foresight, imagination and a sound
judgment. Planning is deciding in advance
what is to be done, when, where, how and by
whom it is to be done

Elements of Planning
• The following are the important elements of planning:
• a. Objectives-The objectives determine the goals on the basis of
which the action of an enterprise is projected
• b. Policies-Policies provide guidance to the subordinates and
enlist their cooperation on the guided lines
• c. Procedure-Procedure charts out the specific manner in which
the actions are to be taken and the work accomplished.
• d. Programme- Programmes are meant for assembling all plans
into one in a workable form for a complete and an orderly course of
action
• e. Budget-Budgets are said to be the statement of numerical facts
designed to attain the desired results.

Importance of Planning
• 1. Improves competitive strength
• 2. Improves motivation:
• 3. Encourages innovations and creativity
• 4. Planning off sets future uncertainty and change
• 5. Planning helps in management by defining
objectives:
• 6. Better coordination
• 7. Economy in operation
• 8. Helps in control

Steps in Planning
• Following are the important steps in the process of
planning
• 1. Determination of objectives
• 2. Establishment of planning premises
• 3. Determination of alternative courses
• 4. Evaluation of alternatives and selection of the course of
action
• 5. Preparation of derivative plans
• 6. Timing and sequence of operations
• 7. Securing participation of employees
• 8. Considering the strategy
• 9. Providing follow-up to the proposed course of action

Limitations of Planning
• The following are the obstacles to the process
of planning
• 1. A costly proposition
• 2. Planning fails with big and regular changes
• 3. Inelastic administration
• 4. Unreliable estimates
• 5. Initiative, originality and individuality yield
to planned efforts

ORGANIZING
• Definition
• Organizing is a process of dividing and
combining efforts of a working group to make
the joint efforts more productive and fruitful.
• Organizing establishes a pattern of
relationships among the efforts to be put, jobs
to be done and work to be performed.

Elements of organization:
• There are three important elements of an
organization
• 1. Division of work-An effective division of work between
personnel selected to do a particular job(s) is the foremost function
of an organization
• 2. Interrelationship-Establishment of interrelationships
between jobs, duties, responsibilities and authority either in a
formal or in an informal way
• 3. Individual performances-Individuals do the assigned
jobs. Whether an individual or a group of individuals is doing the
assigned duties and carrying out the responsibilities in accordance
with the instructions or not

Types of Organization (Patterns)
• 1. Line organization
a. Pure line organization
b. Departmental line organization
• 2. Functional organization
• Line Organization
• It is also known as vertical organization or
departmental organization or scalar organization. This
organization is based on the superior–subordinate
relationship. When a superior delegates authority to a
subordinate, he in turn does so to another subordinate
thus forming a line from the top to bottom of the
organizational structure.

Pure line organization
• Pure line organization is simple in form and
seen in small units that produce only one item
and where activities can be grouped according
to their nature.
Departmental line organization
• In departmental line organization, the
business unit is divided into departments that
are headed by department heads

Advantages of Line Organization
• Line organization is easy to establish and very
simple for the employees.
• It leads to better coordination and stability.
• It ensures strong discipline because of the
unity of command.
• The authorities of various personnel are well-
defined hence, noconflict in their powers and
authority.

Disadvantages of Line Organization
• All the decisions are taken by the single boss
and the success and growth of the whole
department depends on his abilities only.
• The boss is overloaded with work and he may
not direct the efforts of his subordinates
properly

Functional Organization
• In functional organization, the whole task of
management is classified according to the
type of work involved. The normal operations
performed in a business house are production,
research, personnel, purchasing, finance, etc.

Advantages of Functional Organization
• It ensures higher degree of efficiency as the
workers get instructions from experts they
• have to perform a limited number of tasks.
• It ensures a greater division of labour
Disadvantages of Functional Organization
• Conflict in authority
• Discipline is slackened
• Lack of coordination
• Complication procedure

STAFFING
• Definition
• Staffing is the procurement of efficient people
for the organization. It is a process of
matching the jobs with the individuals.
• by means of staffing, the management
recruits, selects and trains the employees

Staffing is related to the following
functions-
• 1. Forecasting the manpower requirements
• 2. Establishing job specifications and job
descriptions
• 3. Determining the sources of recruitment
• 4. Recruitment
• 5. Selection and placement
• 6. Training and educating the employees
• 7. Coordinating, promotions, transfers etc.
• 8. Maintenance of necessary records for the
efficient manpower management

Importance of Staffing
• Staffing injects life into the organization by
providing the right person for every job.
• The effectiveness of directing and the control
functions also depend on staffing.
• Employees in the organization are the most
valuable asset of an organization.
• Staffing helps to build a healthy organization
where the job performance and satisfaction
for every employee is high.

DIRECTING
• Definition
• Directing consists of the processes and
techniques utilized in issuing instructions and
making certain that operations are carried out
as originally planned. In simple words,
directing is guiding the subordinates in their
work.

The function of direction has three
essential components
• 1. Function of command: It is the issuing of
instructions and orders.
• 2. Guiding the people: It is the responsibility
of a manager to guide and teach the
subordinates the proper methods of work.
• 3. Supervising the people: The management
has to supervise the subordinates to ensure
that their performance conforms to the plans.

Principles of Direction
• principles can be divided into two parts
• 1. Order
• 2. Supervision
• Order- An order is a command by a superior
requiring a subordinate to act or refrain from
acting in a given circumstance. It is usually an
instruction given by a superior to his
subordinate

Characteristics of a Good Order
• A good order has the following characteristics:
• 1. The order must be reasonable
• 2. The order must be compatible with the
purposes and the objectives of the enterprise.
• 3. The order should be intelligible, complete and
clear.
• 4. The tone of the order should be appropriate. It
should stimulate ready acceptance.
• 5. It must specify the deadline of completing the
instruction.

Techniques of Orders
• Following are the important techniques of
issuing orders-
• General or specific orders
• Written or oral orders
• Conformality
• Timing
• Follow-up orders

SUPERVISING
• Supervision is overseeing the subordinates at work. It is
an important part of direction for every manager.
Functions of a supervisor-
• 1. To schedule work for its even and steady flow
• 2. To assign work to different workers according to
their abilities.
• 3. To provide proper working environment to the
workers
• 4. To provide leadership to the workers
• 5. To elicit their willingness to work for the
achievement of the group objectives
• 6. To control the performance of the workers

CONTROLLING
• Control is checking the current performance
against the predetermined standards
contained in the plans with a view to ensure
adequate progress and satisfactory
performance.

Salient features (characteristics) of
controlling
• 1. An end itself: Control is an end function of the
process of management
• 2. A forward looking process: Even though it lives
in the present, it is related to the future
• 3. A dynamic process: Control is a dynamic
process. And the management functions are
flexible
• 4. A continuous process: Control is a continuous
activity. It does not stop
• 5. Operation at all levels: Controlling is done at
all the levels of management.

Steps in the Process of Control
• 1. Well-defined objectives and goals
• 2. Determination of strategic point of control
• 3. A predetermined criterion
• 4. Determination of controllable cost and control
period
• 5. Strengthening the organization
• 6. Measurement of performance
• 7. Comparison of actual performance with
standards
• 8. Correction of deviations

Entrepreneurship development
Definition
Entrepreneurship is neither a science nor a art. It
is a practice. It is not just about making money. It
is all about imagination, flexibility, creativity,
willingness to think conceptually, readiness to
take risk.
• The word is derived from the French word
‘entreprendre’ which means ‘undertakers’.
• The word referred to those who undertook the
risk of starting a new enterprise

STAGES OF ENTREPRENEURSHIP
Fundamentally there are five (often overlapping) stages:
1. Discovery: In which the entrepreneur generates ideas, recognizes
opportunities, and determines the feasibility of ideas, markets, and
ventures;
2. Concept development: In which the entrepreneur plans the
venture, identifies needed resources using a business plan, and
identifies strategies for penetrating markets or protecting
intellectual property;
3. Resourcing: In which the entrepreneur identifies and acquires the
financial, human, and capital resources needed for the venture start-
up,
4. Actualization: In which the entrepreneur operates the venture and
utilizes resources to achieve its goals and objectives
5. Harvesting: In which the entrepreneur decides on the venture’s
growth, development, or even demise.

BENEFITS OF ENTREPRENEURSHIP
• Opportunity of huge personal financial gain.
• Scope of high order of Job satisfaction, sense of
achievement, self employment.
• Generation of employment / income for others.
• Contribution to overall growth in the region/
nation /world
• Encourages higher quality products.
• Development of new products and markets.

OPERTIVE MANAGEMENT
• Operations management is defined as the,
and improvement of the system design,
operations that create and deliver the
firm’s primary products and services

Importance of management
Operations
Management
Business Education/
Career Opportunities
Systematic Approach
to Org. Processes
Increase Competitive
Advantage/Survival
Cross-Functional
Applications
3

Quality
Management
Statistical
Process Control
Just in Time
Materials Requirement Planning
Inventory Control
Aggregate
Planning
Operations Management - Overview
Project
Management
Supply Chain
Management
Process Analysis
and Design
Process Control
and Improvement
Waiting Line Analysis and
Simulation
Services
Manufacturing
Operations
Strategy
Facility Layout
Consulting and
Reengineering
Process Analysis
Job Design
Capacity Management
Planning for Production
Supply Chain
Strategy

Operations Strategy
Customer Needs
Corporate Strategy
Operations Strategy
Decisions on Processes
and Infrastructure
ExampleStrategy Process
More Product
Increase Org. Size
Increase Production Capacity
Build New Factory

PRINCIPLE OF MANAGEMENT
• Management is a science. Management has to
perform a number of functions, such as
planning, organizing, coordinating, directing,
control ling, etc., for the purpose of achieving
its objectives
• The principles of management are statements
of fundamental facts. These principles serve
as guidelines for decisions and actions of
managers

Need of principle of management
• 1. To increase efficiency
• 2. To highlight the true nature of management
• 3. To aid in the training of managers
• 4. To improve research
• 5. To attain social goals

SCIENTIFIC MANAGEMENT
• Various thinkers have contributed to the
development of modern management. F.W.
Taylor and Henry Fayol are two outstanding
names in the field of management.
• According to F.W. Taylor, ‘Scientific
management means knowing exactly what
you want men to do and seeing that they do it
in the best and the cheapest way’.

• His philosophy of scientific management is
based upon the following principles:
• 1. Development of true science for each element
of work
• 2. Scientific selection, training and development
of workers
• 3. Close cooperation between workers and
management
• 4. Equal division of work and responsibility
• 5. Maximum prosperity for both the employers
and the employees
• 6. Mental revolution

HENRY FAYOL’S PRINCIPLES OF
MANAGEMENT
• Henry Fayol was a French industrialist. He
classified all business activities into six categories.
• 1. Technical (production or manufacturing)
• 2. Commercial (buying, selling and exchange)
• 3. Financial (search for optimum use of capital)
• 4. Security (protection of property and people)
• 5. Accounting
• 6. Managerial

• According to Fayol, the first five groups of
activities are quite well known and therefore,
he concentrated his attention on the analysis
of the sixth group, i.e. managerial activities.
Fayol suggested the following 14 principles of
management in order to make the job of
managing more effective:
• 1. Division of work
• 2. Authority and responsibility
• 3. Discipline
• 4. Unity of command

• 5. Unity of direction
• 6. Subordination of individual interest to general
interest
• 7. Remuneration of personnel
• 8. Centralization and decentralization
• 9. Scalar chain
• 10. Order
• 11. Equity
• 12. Stability of tenure of personnel
• 13. Initiative
• 14. Esprit de corps

MARKETING RESEARCH
• Definition-
• Marketing research is the collection, summary
and analysis of the data regarding the goods
and services so that the behaviour of the
consumers may be understood and maximum
satisfaction may be provided to them.

SCOPE OF MARKETING RESEARCH
• The scope of marketing research is very wide.
• The scope of marketing research may be
explained as follows:
• 1. Research of products and services
• 2. Research on markets
• 3. Research on sales methods and policies
• 4. Advertising research
• 5. Research on miscellaneous activities

ADVANTAGES OR IMPORTANCE OF
MARKETING RESEARCH
• Production of New Products
• New Uses of Products
• Important Information About Customers
• Selection of the Channels of Distribution
• Existence in Competitive Situation
• Knowledge of Demand
• Planned Production
• Improvement in the Quality of Products
• Discovery of Potential Markets

TYPES OF MARKETING RESEARCH
• Product Analysis-Product analysis is a detailed and a
thorough study of the popularity of products among
consumers of an enterprise
• Market Analysis-Market analysis is the study of
markets available for a particular product of an
enterprise.
• Distribution Analysis-Distribution analysis is related
with the analysis of different problems related to the
physical distribution of goods and services, such as
storage, transportation, advertisement, sales
promotion, pricing policy, etc.

• Competition Analysis-Competition analysis is the
analysis of the competitive situations prevailing in
the market.
• Consumer Research-Consumer research is the
research on the present and the potential
consumer of the enterprise.
• Sales Analysis-Sales analysis is an important tool
to measure the effectiveness of the sales
organization of an enterprise.
• Motivational Research-Motivational research is
the study of the reaction of consumers or society
towards the products of an enterprise or the
enterprise itself.

• Advertisement Research-The evaluation of
the effectiveness of advertising programmes
and sales promotion campaign is much more
important. Advertising research undertakes
this responsibility.

NEED OF MARKETING RESEARCH
• Marketing research is not only desirable but has
become a necessity of all the business and industrial
enterprises of today.
• Market research is necessary in the following
conditions:
• 1. When a new product is to be launched into the
market
• 2. When adequate data are not available with respect
to the demand of a product
• 3. When there are fast changes in the habits, tastes and
attitudes of the consumers
• 4. When there are fast changes in fashion

• 5. When the sale of a particular enterprise goes
on declining
• 6. When adequate data is not available about the
consumers of a particular group
• 7. When adequate data is not available about a
particular market segment
• 8. When the data of consumer reactions to the
packing or utility or price of a product are to be
collected
• 9. When the effectiveness of an advertising
campaign is to be evaluated
• 10. When the possibilities of developing a new
products are to be explored

MEASURING AND FORECASTING
MARKET DEMAND
• Market measuring and forecasting requires an
analysis of the market with an aim of
expressing it in quantitative (numeric)
quantities both present and in the future

Measuring Current Market Demand
• Marketers will want to estimate three different
aspects of current market demand
o Total market demand
o Area market demand
o Actual sales and market shares

Estimating Total market demand
• The total market demand for a product or
service is the total volume that would be
bought by a defined consumer group in a
defined geographic area in a defined time
period in a defined marketing environment
under a defined level and mix of industry
marketing effort

• Q = n x q x p
Where,
Q = total market demand
n = number of buyers in the market
q = quantity purchased by an average buyer per
year
p = price of an average unit
A common way to estimate total
market demand is as follows:

Estimating Area Market Demand
• Two major methods are available
o Market buildup method – used primarily by
business goods firms
o Market-factor index method – used primarily by
consumer goods firms.

Market-Buildup Method
• Calls for identifying all the potential buyers in each
market and estimating their potential purchases.
• Mining instruments that test the actual proportion of
gold content in gold-bearing ores.
• Price of instrument $1,000. The company wants to
determine the market potential.
• To estimate the market potential the manufacturer can
consult the Standard Industrial Classification (SIC).

SIC (1)
Number of
employees
(2)
Number
of mines
(3)
Potential
Number of
instruments
per size
class
(4)
Unit
market
potential
(2 x 3)
(5)
Dollar
market
potential
(at $1,000
each)
1042
(lode
deposits)
Under 10
10 to 50
Over 50
80
50
20
150
1
2
4
80
100
80
260 $260,000
1043
(placer
deposits)
Under 10
10 to 50
Over 50
40
20
10
70
1
2
3
40
40
30
110 110,000
$370,000

Market-Factor Index Method
• Identifies market factors that correlate with
market potential and combines them into
weighted index.
• A manufacturer of men’s dress shirts wishes to
evaluate its sales performance relative to
market potential in several major market
areas

ESTIMATING ACTUAL SALES AND
MARKET SHARES
• Besides estimating total and area demand, a company
will want to know the actual industry sales in its
market. Thus, it must identify its competitors and
estimate their sales.
• Industry’s trade associations often collect and publish
total industry sales,
• although not individual company sales. In this way,
each company can evaluate its performance against
the industry as a whole. Suppose the company’s sales
are increasing at a rate of five percent a year and
industry sales are increasing at 10 percent. This
company actually is losing its relative standing in the
industry.

FORECASTING FUTURE DEMAND
• Forecasting is the art of estimating future
demand by anticipating what buyers are likely
to do under a given set of future conditions.
• Companies commonly use a three-stage
procedure to arrive at a sales forecast. First
they make an environmental forecast,
followed by an industry forecast, followed by a
company sales forecast.

• Companies use several specific techniques to
forecast their sales.
• All forecasts are built on one of three
information bases-
1- What people say
2 -What people do
3 -What people have done

What people say
• Surveys of buyers’
• intentions Composite sales force opinions
• Expert opinion
What people do
• Test markets
What people have done
• Time-series analysis
• Leading indicators
• Statistical demand analysis

SURVEY OF BUYERS’ INTENTIONS
• One way to forecast what buyers will do is to
ask them directly. This suggests that the
forecaster should survey buyers.
COMPOSITE OF SALES-FORCE OPINIONS
• When buyer interviewing is impractical, the
company may base its sales forecasts on
information provided by the sales force.

EXPERT OPINION
• Companies can also obtain forecasts by
turning to experts. Experts include dealers,
distributors, suppliers, marketing consultants,
and trade associations.
TEST MARKETING
• A direct test market is especially useful in
forecasting new-product sales or established
product sales in a new distribution channel or
territory

Time-series analysis
• Time-series analysis consists of breaking down
past time series into four components (trend,
cycle, seasonal, and erratic) and projecting
these components into the future
LEADING INDICATORS
• Many companies try to forecast their sales by
finding one or more leading indicators other
time series that change in the same direction
but in advance of company sales.

Pharmaceutical industrial management

Pharmaceutical industrial management

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