MIS 04 Management of Business


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The series of presentations contains the information about "Management Information System" subject of SEIT for University of Pune.
Subject Teacher: Tushar B Kute (Sandip Institute of Technology and Research Centre, Nashik)

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MIS 04 Management of Business

  1. 1. Management information system<br />Third Year Information Technology<br />Part 04<br />Management of Business<br />Tushar B Kute,<br />Department of Information Technology,<br />Sandip Institute of Technology and Research Centre, Nashik<br />http://www.tusharkute.com<br />
  2. 2. Concept of corporate planning<br />A plan is predetermined course of action to be taken in the future.<br />The goals and objectives that a plan is supposed to achieve, are the pre-requisites of the plan.<br />Planning is a dynamic process. As the future becomes present reality, the course of action decided earlier may require a change.<br />Planning involves a chain of decisions, one dependent on the other, since it deals with a long term period.<br />
  3. 3. Concept of corporate planning<br />Long Range<br />A period of five or more years.<br />Deals with resource selection, acquisition, allocation.<br />Short Range<br />For one year at most.<br />
  4. 4. Dimensions of planning<br />Time<br />Long range or short range.<br />Entity<br />The production in terms of quantity or new product. It could be about finance, marketing, capacity, manpower or research and development.<br />Organization<br />The corporate plan could deal with the company as whole. <br />Elements<br />The plan begins with the mission and goal which the organization would like to achieve.<br />
  5. 5. Dimensions of planning<br />Characteristics<br />The choice of characteristics is a matter of convenience helping to communicate to everybody concerned in the organization and for easy understanding in execution.<br />The typical characteristics of a corporate plan are goals, the resources, the important milestones, the investment details and a variety of schedules.<br />
  6. 6. Essentiality of strategic planning<br />Market forces<br />Demand and supply.<br />Technological change<br />Made product obsolete, threatening current business, and created new business opportunities.<br />Complex diversity of business<br />Expansion: vertical or horizontal<br />Integration: Forward or backward.<br />Competition<br />Fighting a number of fronts.<br />Environment (Threats, Challenges and Opportunities)<br />
  7. 7. Development of business strategies<br />Long range strategic planning<br />Mission: purpose of organization for which it work.<br />Set targets for detailed working and reference: the objective of the business is to be translated in terms of functional and operational units.<br />
  8. 8. Strategy formulation model<br />Environment<br />Socio-economic<br />Purpose <br />Mission, Goals<br />Factors for <br />Strategy <br />Formulation<br />Strength and <br />Weakness of <br />the organization<br />Business<br />Strategy<br />Competition<br />
  9. 9. Types of strategies<br />Overall company Strategy<br />Growth Strategy<br />Product Strategy<br />Market Strategy<br />
  10. 10. Overall company strategy<br />A very long term business perspective, deals with the overall strength of the entire company and involves those policies of the business which will dominate the course of the business movement.<br />It is the most productive strategy, if chosen correctly and fatal if chosen wrongly.<br />Other strategies act under the overall company strategy.<br />
  11. 11. Overall company strategy: Examples<br />A two wheeler manufacturing company will have a strategy of mass production and aggressive marketing.<br />A computer manufacturer will have strategy of adding new products every two or three years.<br />A consumer goods manufacturer will have a strategy of maximum reach to the customer and exposure by way of wide distribution network.<br />A company can have a strategy of expanding very fast to capture market.<br />A third company can have strategy of creating a corporate brand image to build a brand loyalty. E.g. Escorts, Kirloskar, Godrej, Tata, Bajaj, BHEL, MTNL.<br />
  12. 12. Growth strategy<br />Growth may be either mean the growth of existing business turnover, year after year, or it may mean the expansion and diversification of the business.<br />Growth strategy means the selection of a product with a very fast growth potential.<br />These are adopted to establish, consolidate and maintain a leadership and acquire a competitive edge in the business and industry. It has a direct, positive impact on the profitability.<br />
  13. 13. Product strategy<br />Product strategy means choice of a product which can expand as a family of products and provide the basis for adding associated products.<br />Examples:<br />A company producing low prices detergent pressure cookers enter the business of making ovens, boilers, washing machines and mixers- the products for home markets.<br />A company producing s low prices detergent powder enters the business of washing soap and soap bath.<br />A company producing refrigerators offers wide range of models with different capacities and features and further enters into the market of coolers, window air conditioners etc. <br />
  14. 14. Market strategy<br />A marketing strategy deals with the distribution, services, market research, pricing, advertising, packing and choice of the market itself. Examples:<br />Many companies adopt the strategy of providing after sales service of the highest order.<br />A company can offer its product in different packages keeping in mind the consumer budget.<br />A company can arrange for loan facilities to buy its products and keeps prices low.<br />A computer company manufactures computers and markets them through the market leader under their brand name.<br />Marketing strategy generally centered around quality, price service and availability.<br />
  15. 15. Short range planning<br />Its deals with the targets and the objectives of the organization. Based on the goals and objectives, a short range plan provides the scheme for implementation of the long range plan.<br />Short range plans are made for one year in terms of the targets which are to be achieved within the given budgets.<br />Details of resources required to achieve targets.<br />Control mechanism.<br />Self-motivating tool for achieving operational performance.<br />
  16. 16. Advantages of short-range planning <br />It gives the manager to clear target of achievement.<br />Specifies manager to resource allocation for a given task and the freedom to use it.<br />Provides manager with information on performance.<br />Provides an efficient tool to coordinate all the efforts within organization.<br />Provides management selective information on the shortfalls and overruns, for immediate action.<br />Provides all the information in monetary terms for comparison between any two business entities in the organization.<br />
  17. 17. Tools for planning<br />Creativity<br />Systems Approach<br />Sensitivity Analysis<br />Modelling<br />
  18. 18. creativity<br />Ability to generate number of ideas rapidly.<br />Ability to change quickly from one frame of reference to another.<br />Originality in interpreting an event and generating different views on the situation.<br />Ability to handle with clarity and ease a complex relationship of various factors in a given situation.<br />
  19. 19. Systems approach<br />It uses all the areas and branches of knowledge.<br />It follows a scientific analysis to identify the problem.<br />It uses a model of complex situation to handle the problem.<br />It weighs cost against benefit for assessment of alternatives.<br />It deals with problems where time context is futuristic.<br />It considers the environment and its impact on the problem situation.<br />Every solution is tested on the grounds of rationality and feasibility and accepts a given criterion for selection of most preferred alternatives.<br />It uses operation research models if the problem is well defined.<br />
  20. 20. Sensitivity analysis<br />It helps to test validity of the solution in variable condition.<br />The problem situation is handled with certain assumptions and conditions.<br />If various factors are involved, the sensitivity analysis helps to assess the criticality of the factor against the impact it make on that solution.<br />The sensitivity analysis helps to test the validity of the optimal solution under changed conditions.<br /> The sensitivity analysis helps to test the solution on the principal of utility.<br />
  21. 21. modeling<br />A model is meaningful representation of a real situation on a mini scale, where only the significant factors of the situations are highlighted.<br />There are several types of models<br />Physical: house, park, or a sport complex.<br />Mathematical: break even analysis, linear programming, queuing, network.<br />A complex situation is represented using variables, constants and parameters which play significant role in that situation.<br />A model could be static of dynamic.<br />
  22. 22. Balance score card, score card and dash board<br />It was developed in nineties by Dr. Robert Kaplan, and Dr. Davie Norton.<br />They recognized somewhat weaknesses and ambiguity in then prevailing traditional approach to strategic management and thought of new approach termed as, Balance Score Card (BSC).<br />It takes comprehensive balance view of four business aspects: Finance, Process, People and Customer.<br />The view talks about objectives, measures, targets and initiatives in these four aspects of the business. <br />
  23. 23. Bsc system development process<br />
  24. 24. dashboard<br />It monitor and measure processes performance.<br />The common industry perception is that a dashboard is more real-time in nature, like an automobile dashboard which informs driver continuously of current speed fuel level and engine temperature at a glance.<br />It follows that dashboard is linked directly to operating system of the car and its performance. It warns driver through 3As (Attention, Alert and Action).<br />
  25. 25. Score card<br />Scorecard charts progress at a point of time, day, time, week or month towards reaching objectives.<br />Scorecard is built for key result areas in business operations by choosing key operation indicators.<br />The common perception of score card is that it displays periodic snapshots of performance associated with an organization’s strategic objectives and plans.<br />
  26. 26. Mis: strategic business planning<br />Deciding goals and objectives.<br />Determine the correct status of the further business and projects.<br />Provide the correct focus for the attention and action of the management.<br />Evolve, decide, and determine the mix of strategies.<br />Evaluate the performance parameters and give a critical feedback on the strategic failures.<br />Keep the score card updated.<br />Display on dashboard real time status of performance parameters. <br />
  27. 27. Mis and strategic management<br />Strategic Planning<br />Management Control<br />Tactical Planning<br />MIS<br />Helps to<br />Operations Control<br />Implement Pure and <br />Mixed strategies<br />Survival Breakthrough<br />Overall Company Growth, Product Marketing Strategies<br />Through<br />Strategy<br />Implement Pure and <br />Mixed strategies<br />Revise<br />Strategy<br />Achieve Goals and<br />Objectives<br />
  28. 28. reference<br /><ul><li>WamanJawadekar, "Management Information Systems” , 4th Edition, Tata McGraw-Hill Publishing Company Limited.</li>