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making takes place at all the levels but the scope and the
i m p o r t a n c e o f t h e d e c i s i o n s v a r y .I t r e l a t e s t o t h e f u t u r e
and is based on information about numerous factors
including: financial, social, psychological, political and
other ones.
I n f o r m a t i o n Tec h n o l o g y i s w i d e l y u s e d i n a l l t h e
companies
because
it
makes
the
works
easyand
permanently offers the way the organisations are
structured.
All
organizations
exist
within
an
external
environment and are influenced by it and even can cause
its modi fication. According to the Sy stem Theory,
organizations are open systems i.e. they receive inputs
and influences from the environment, transform or deal
with these inputs in a way or in another and pass outs
back to the environment.
Interaction with the environment is vital and is the
way the organizations adapt themselves to the changes
and respond to demands. The adaptation takes many
forms; it may mean changes in goods or services
supplied, the way they are processed or the way the
organization is structured. An important managerial task,
especially at the senior levels is constantly to monitor
the environment for development and trends which will
have an impact on the organization.
The environment interacts and influences the
organization in an ever changing variety of ways;
opportunity to grow because of new markets or
developments
in
technology,
threats
from
new
competitors and substitute products, difficulties caused
by supply problems and so on.
Tak i n g i n t o a c c o u n t t h e l i t e r a r y m e a n i n g o f
environment, one may think of it as everything external
to the organization. The relevant environment of the
organization comprises those elements and influences
with which it has some significant connection or
relationship. The relationships and connections may be
indirect and subtle (the increasing importance to the
general public of the green issues or they may be direct
intervention
to
control
exploitation
and
excesses
occurring from unregulated self interest.
The size of organization varies widely. In the UK,
for
example,
a relative small
number
of
large
organizations are responsible for the most of the
econo mic activity. It is present in sectors such as
transport, chemicals, refining, manufacturing. In other
sectors such as retailing, building, agriculture there is a
tendency for large firms to dominate.
As a consequence, the actions of the large
organizations regarding price, production, employment
and investment have a major effect on the econo my. It
applies particularly to the multi-nationals which operate
in a certain country. Recognition of this i mportance is
demonstrated by the efforts of National and Local
Government to attract investment by the multi-nationals.
The influence of the state extends in all the aspects
of the economy and its involvement will remain in spite
of the many privatization. The State seeks to create
secure and stable conditions for the economic growth
without sharp fluctuations between boom and recession.
But this idea is difficult to be achieved and there are still
sharp divisions between political parties about the best
ways to bring about such conditions.
Here are some areas where the government acts as a
R E G U L ATO R
PROMOTER
ENTREPRENEUR
PLANNER
consumer protection; regulation of wages and hour
of work; control of monopolies;
provisions of training and education; provision of
finance, grants and subsidiaries; protection of domestic
industry through tariffs and quotas; promotion of
research;
public sector employment; public corporations;
purchase of materials and services;
Course 2
The Business Environment
specific features
The specific environment comprises the influences
with which the organization has direct contact. The
influences are immediate and may be local. The major
ele ment s which constitute the organizations specific
environment are: supplies and materials; personnel and
unions; competition; technology; finance; customers and
marketing. They may influence the organization jointly,
in various co mbinations. Lets have a view over the m
briefly.
Custo me rs and mar ket s . All organization s, both the
non-trading organizations (schools, hospitals, local
government) and the trading ones, meet the needs of the
c u s t o m e r s . To s a t i s f y t h e s e n e e d s , t h e y m u s t i d e n t i f y
them; so marketing must be practiced. Marketing has
been defined in various ways, but here is one of its
definitions: a process responsible for identifying,
anticipating
and
satisfying
customer
requirements
profitably(for trading organizations) or effectively (for
non-trading organizations). It means that the whole
organization must be seen from the point of view of the
customers
As far as the markets are concerned, they are used
for trading and influence on prices, types of products,
output volumes and key decisions.
A firm in pure or perfect competition is a price
taker; it cannot affect price because this is set by the
market. Perfect competition does not exist, but many
facets of it still exist in markets that deal with raw
materials or agricultural products. In such industries,
there are often wide swings in prices, production and
incomes so that governments often intervene with
subsidies, quotas and other devices to create a more
orderly market.
Monopolistic competition is similar but the products
are differentiated; the organization has some control over
prices, the competition takes place through advertising,
packing and service as well as price.
Tec h n o l o g y c a n b e d e s c r i b e d a s t h e a p p l i c a t i o n o f
machines, equipment, methods and skills to create and
u s e m a t e r i a l s , p r o c e s s e s a n d p r o d u c t s . Tec h n o l o g y a l s o
refers to the way these are used and the theories
governing their application. It exerts a strong influence
on the structure of organizations, the relationship
between departments, the style of management and the
way the work is organized.
The new technology means application of microelectronics
to
telecommunications,
manufacture,
information, processing, administration and so on. It is
found in an ever increasing variety of applications. An
important influence of technology is on the number and
types of jobs; it brings about some losses of jobs mainly
the lower skill ones. In the service sector the reverse has
happened, employment has increased.
In general, it has been proved that the introduction
of technology has improved the quality of jobs although
deskilling has taken place for a minority of workers
particularly in manufacturing. The effect is that that the
demand for unskilled workers has reduced whilst that for
skilled labor has risen.
A major interaction with the environment concerns
the various materials and services an organization buys
from its suppliers. Bought in services and materials
constitute a large proportion of costs, especially for the
organizations such as manufacturing companies, retailers,
wholesalers and so on. The purchasing function is an
important one in all the organizations. It is particularly
developed in manufacturing where it has developed into
so called material management. It is an approach which
takes into account all aspects of planning, control,
purchase, storage and usage.
The availability and price of some commodities can
fluctuate due to both national and international factors.
The 1990 Gulf Crisis upset the world oil market,
fluctuation in the Brazilian coffee harvest affects the
world price of coffee and so on. Organizations that are
dependent on uninterrupted flows of materials seek to
minimize the problems using a large variety of methods
Course 3
The Structure of the Organization
Course 4
Management: roles, levels, tasks
Course 5
Planning and Decision Making
Planning is a managerial process of deciding what is
to be done and how is it to be done. Its purpose is to
provide the guidelines necessary for decision making and
resulting action. It is done on both formal and informal
basis and uses information from internal and external
sources. It gathers, understands and communicates the
information that can improve the quality of the current
decisions which are based on future expectations.
P l a n n i n g h a s i n v i e w W H AT i s t o b e d o n e i n t h e
future, HOW is to be done that something, WHEN is to be
done and WHO is supposed to do it. Flexibility is to be
incorporated in planning an action.
The vocabulary used for this contains lots of terms.
Out of them, one selects only three which are defined in
the following way:
OBJECTIVES: general statement of aims/goals to be
achieved
PLANS: statements of specific actions and activities
to achieve objectives (plans may be defined as strategies,
sometimes)
POLICIES: limits to acceptable behavior expressed
in terms of priorities, ethical and moral values,
standards, social responsibilities and so on.
PLANSPOLICIES
MEANS =HOW?
actions to
achieve
Objectives
on
Related
functions
motivation
training &
personal recognition
counseling
coaching
GROUP
INDIVIDUAL NEEDS
TAS K N E E D S
NEEDS
setting objectives
planning
task & resource allocation
setting standards & performance targets
monitoring, control & adjustment
Changing social attitudes to authority and the need
for adaptability cause major changes in management
styles. The leaders must cope with rapidly changing
world, adapt and re-organize. They must accept that
change is normal and vital for long run success and
survival and are responsible for organizing and coordinating activities.
Organizing and co-ordinating represent a key task of
management and the specialists speak about numerous
facets of these aspects, some of them may be summarized
as follows:
deciding what activities , tasks are necessary to
achieve the plans
deciding how the tasks are to be arranged ,
responsibilities allocated
deciding upon an appropriate structure so that tasks,
activities, responsibilities can be coordinated
Although the design of the total organization is
outside the scope of most managers, every manager has
some responsibility for the design of jobs under his
control. The scope of the jobs, the amount of
responsibility accorded to individuals, the type of control
and supervision exercised, the amount of participation
and other similar problems must be faced by every
manager.
Designing/redesigning jobs is not an easy fact; it
causes change in the tasks, in job relationships, in
supervisor/supervised relationships, in the pattern of
working groups, in training and skill requirements. When
work is designed the individual can benefit from more
challenging and satisfying tasks; the organization may
benefit fro m i mproved productivity. If a job is to satisfy
human needs, the following factors are to be taken into
account:
every job should have some goal to aim for; the job
holders role should be made clear
a degree of autonomy should exist over the way
tasks are to be achieved; people should be responsible for
their work and the resources used
there should be an element of variety in the job with
a minimum repetition
there should be some arrangements for providing job
holders with feed back on their performance
the job should be arranged to provide some social
contact
there should be opportunities to learn and to extend
the job holders knowledge and skills
There are several ways of designing jobs to increase
employee satisfaction and some of them are the
following:
job enlargement
job enrichment
autonomous working groups
participation
delegation
Job enlargement has in view the adding of tasks to
the
same
type
and
level
without
adding
more
responsibility or needing more skill, but within certain
limits.
Job enrichment increases the scope, challenge and
breadth of a task. It is a vertical extension of the job
responsibilities. It is a reaction to the industrial
engineering approach to work with emphasis on the micro
division of labor. The approach gives an individual more
scope, more autonomy, more responsibility, variety and
seeks to satisfy an individuals higher order needs.
The autonomous work groups are self organized work
groups which are held responsible for the rate and quality
of their output. These groups have been used in
S c a n d i n a v i a , e s p e c i a l l y a t Vol v o . Wi t h i n t h e g r o u p , t h e
employees are multi skilled and accept full responsibility
for the development of the group members and the
designated task in terms of quality and output.
Course 7
Control
Control is a primary management task; it is the
process of insuring the operations proceed according to
plan. It may be defined (according to Mockler) as a
systematic effort by business management to compare
performance to predetermined standards, plans or
objectives, in order to determine whether performance is
in line with these standards and in order to take any
remedial action required to see that human and other
corporate resources are being used in the most effective
and efficient way possible in achieving corporate
objectives.
The control activity type varies according to the
level of management and the amount of time spent
controlling. Control activities will occupy most of the
time of a supervisor or foreman at the operational level
and most operational control systems use formal,
systematic rules with clear targets expressed in
quantitative or financial terms. At higher levels, planning
and control are more interlinked with management, being
concerned both to monitor progress against the original
plans and to review the suitability of the plans
themselves for current and anticipated future conditions.
Control
is
necessary
because
unpredictable
disturbances and cause actual results to deviate from the
expected or planned results. Control activities seek to
keep the system outputs in the line with the original plan,
or to enable the system to change safely to meet the new
conditions. disturbances can range from minor matters
(short delay in the delivery of raw materials) to
disturbances which threaten the organization itself (the
unexpected entry of a new competitor into the market).
To b e s u c c e s s f u l t h e o r g a n i z a t i o n s m u s t p r o d u c e
outputs in the form of good, services, facilities that meet
i t s o b j e c t i v e s . To d o t h i s , p l a n n i n g m u s t t a k e p l a c e a n d ,
when plans have been implemented, control must be
with targets
and
OUTPUT
Tar g e t
Agency
full
cost
Civil Service
recovery
College
plus unit cost
Central
targets
Office
of
Information
no.of
testes
vehicle
perfor
inspectorate
med
QUALITY of
S E RVI C E
a) timeliness
b) quality of
product
c)
availability
EFFICIENCY
time to handle
passport
application
office
proportion of
Civil Service
course
College
evaluation
all documents
Companies
to be
House
available
within 5
days
of
receipt
efficiency/
economy
unit cost
20% reduction
in the cost of
common
services
over 5 years
472
pounds/producti
ve
professional
day
Patent Office
Occupational
Health
Service
PRICE
basic price
discounts
credit terms
trade-in allowances
more
expenditure
on
promotion
to obtain strong position
product
improvement,
Maturity means :
sales rise but al slower rate
branding, packaging, product identification essential
to maintain position
severe competition, possible over-capacity in market
product modified and new market segments sought to
prolong
product life
good profits but under pressure from competition
Saturation implies the following steps:
sales level off and start to decline
profits start to fall
weaker companies leave the market
Decline involves:
rapid sales decline
obsolescence of product
profits decline and losses may occur
superior products appear
consideration given to elimination or extension
The length of time for the whole product cycle
varies between products.
Price is the key element of the marketing mix. In
competitive markets pricing is constantly reviewed as it
is the most flexible element in the market mix. It
changes, either direct or indirect through devices such as
no
deposit/interest
free
credit
enabling
the
organization to adapt to the changes on the market. These
may be caused by changing of the consumer preferences,
appearance of new competing products, price changes by
competitors, and so on. Price is important at all times but
especially at certain points such as :
new product introduction
when competitors change prices
when entering new markets with existing price
producer
producer
wholesaler
wholesaler
retailer
customer
customer
industrial goods
mail order
and some
cash& carry
consumer goods
business selling
services
huge range of
e.g.cosmetics
products
insurance
retailer
customer
customer
mass marketed
chain typical
consumer goods
of large
detergents
retailers
footwear
cars and
electrical goods
etc.
financial
service
Different
promotional
activities
with
varying
emphases take place according to the product, the
position on the product life-cycle, the target market. The
type of market influences the promotional mix.
Advertising is a non-personal process directed at
large numbers of potential consumers. It communicates
information by one, or a combination of written, spoken
or visual materials. It seeks to inform, persuade and to
increase sales volume. The advertiser pays for planning,
designing and inserting or displaying the advertisement
in the selected mediu m. Advertising costs form a part of
total costs which must be recouped fro m the consu mer.
The main media for advertising are:
newspapers, magazines, journals
commercial television
direct mail
commercial radio
outdoor advertising (hoarding, buses, bill-boards
Each of the various media have advantages and
disadvantages.
Sales promotion is the term given to the range of
activities which aid product/brand recognition, draw
attention to the product, increase usage, assist the dealer
to sell the product and try to increase goodwill and
repeat business. It includes inducements and incentives
such as free samples, temporary price reduction,
provision of display material, special pack offers and so
on. Sales promotion is directed both at consumers and
the trade and is used for consumer products.
Personal selling is the most expensive part of the
promotion mix. It is important in industrial markets and
for more complex consumer products. Some firms have a
relatively restricted view of the role of their sales
representatives considering sales generations as their
prime tasks. Others take a broader, marketing view which
takes account of the needs of the buyer, information
flows, customer support as well as sales generation. The
tasks of the sales representatives are :
gathering market information including customer
reactions, competitors activities
for the person to get the job and practice it. The
organizations may develop their own schemes; there are
Rodger s seven point plan or Munroes five point plan.
The former has in view:
physical attitudes( appearance, speech, health)
attainments( qualifications, education, experience)
general intelligence
special aptitudes (dexterity, speed, numeracy )
personal interests(social, artistic, sport)
disposition
or
manner(
helpful,
friendly,
dependability)
background circumstance s ( family, do me stic)
Munroes plan includes:
impact on others ( bearing, speech, appearance)
acquired knowledge or qualifications( qualifications,
education, experience)
innate ability (aptitude, comprehension, learning
ability)
motivation(determination, drive, consistency)
adjust ment( attitude to stress, e motional stability,
sociability)
Tak i n g i n t o a c c o u n t t h e t y p e o f v a c a n c i e s , s o u r c e s o f
suitable candidates are chosen. Sources include :
ads in newspapers, magazines, journals
internal ads in-house magazines, noticeboards
recruitment agencies
job centers
schools, universities,
local radio and TV
`If done properly, the recruitment process attracts a
number of possible candidates. The next step is the
selection of the proper person(s) by means of
assessment of written material (application form,
C V, r e f e r e n c e s , t e s t i m o n i a l s , c e r t i f i c a t e s )
testing(including proficiency and aptitude tests,
intelligence and psychometric ones).
task performance(auditions, presentations, trade
tests)
interviews
Course 11
Management Functions: Production
Production is a process that transforms various
for ms of inputs( materials, energy, skill, money ) into
outputs or finished products using a range of facilities
(machines, buildings, people information)
Outputs may be physical products such as TV sets,
cars, or they may be in the form of services for ex. life
assurance, package of holiday and so on.
Production management is the specialist management
function which deal with all aspects of the production
process. This includes the following:
a)long
term
planning
and
decision
making
concerning:
product design
factory location and layout
work organization and methods
equipment design and selection
job and method design
supplier selection
training and development of product personnel
total Quality management
b) short term and decision making concerning
purchasing and materials scheduling
production and stock control
inspection and quality control
factory and production scheduling
cost and waste control
maintenance
provision of fitting, jigs, tools
labor organization and supervision
equipment
Numerous factors influence the form of production.
They include :
volume required
degree of repetition in the product/service demanded
analyzing
summarizing
calculating
filing
interpreting
generating
editing
memos
forms
minutes
reports
invoices
fax
e-mail
controlling
controlling
orders
faxes
e-mail
Traditionally all offi ce work was done in the offi ce
premises The use of faxes, e-mail and personalized
telephone numbers which enable a subscriber to be
tracked down anywhere in the world mean that, with the
right facilities, a person can always be in two-way
contact.
There are changes that can take place and are known
as hotelling/hot-desking. Some companies have found that
30 to 40 % of desks are vacant at any one time. In
consequence expensive office space is being wasted. One
approach to overcome this problem has been adopted by
Arthur Anderson,
manager
consultant.
Each work
position, known as carrel, is assigned to employees
according to the task being perfor med that day. This is
temporarily personalized with name plates, re-routed
phone calls and any files required being made available.
This is known as hot-desking. Although undeniably space
saving, the process does strip workers of their own fixed
desks and offices.
The question of whether or not to centralize services
is an important one for large organizations. The choice
depends on a careful study of volumes, costs, service
requirements, degree of control and other factors. Each
organization must choose the best compromise to suit its
own requirements. The advantages and disadvantages of
centralization are the following ones:
advantages :
greater control of costs and standards
enables higher skilled, specialist staff to be used
possible economies of scale through higher volumes,
bulk purchasing
greater utilization of expensive equipment
disadvantages :
may not be responsive to local requirements
delays and inflexibility
loss of personal contact and convenience
more
necessary
communication
and
transport
becomes
Ad ministration,
1994,