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Principles and Practices of Management
PART - A
Management
Management is to create a team which accomplishes pre-determined
goals with more efficiently in a prescribed time period as
planned/decided.
Now I would like to start Management as Art and afterwards I will write
about management as science and profession in detail.
Management as an Art
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Management as Science
Management as a Profession
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3. These parent bodies can publish desirable code of conduct but that
cannot be enforced by law in management.
Management as Profession
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Degrees of Delegation
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Problems in Delegation
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Ans.
(A)Delegation of Authority
Degrees of Delegation
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PART – B
Now a days Service sector is contributing more than the half of the
national income. But its contribution to the employment generation
has been less than proportionate. The share of service sector has
grown considerably in Gross Domestic Product from 35% to 47%
(approximately). The total employment has also gone up but not in the
proportion of market share as per the 1999-2000 RBI report.
One out of two Indians earn his livelihood by providing services. This is
because services is the most diverse sector of the economy, consisting
of neurosurgeons, college professors and housemaids.
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Hence,
The growth of services sector is good, but the failure of the industry to
grow is bad. The reasons for the stunted industrial growth, like
restrictive licensing system, a closed economy, anti-employment laws
etc do not exists for services. For most hi-tech service industries, the
two ingredients of are:
a. Labour
b. Knowledge
Both labour and knowledge is abundant in India. But this sector cannot
keep growing by itself. Services need efficient telecom, transport,
roads and power as much as industry and agriculture. The country has
to invest more and better in human resources. India has under
invested in education. The quality of human capital varies from world
class computer professionals to complete illiterate.
The government's projections of the growth of GDP in 2002-2003 are
being revised by various government departments. Within two months
of the start of the new fiscal year (which occurs in April), the then
finance minister Yashwant Sinha had announced that GDP was likely to
grow by 6 to 6.5 per cent this year. This figure was always highly
suspect, for it required agriculture to grow by 4.5 per cent, industry to
grow by 5.5 per cent and the services sector to grow by 6.5 to 7.5 per
cent.
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For example in the service sector, India's foreign equity caps are a
disincentive to foreign investment. Foreign insurance companies are
eager to enter India's virtually vacant market, but New Delhi requires
them to form joint ventures with local firms and limit their investment
to 26 percent. Because of a 45-year government monopoly on
insurance, only a few Indian firms are experienced enough to enter a
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Ans. “Retailing consists of those business activities, which are involved, in the sale of
goods or services to consumers for their personal, family or household use.” It is the
final stage in the distribution process for goods and services from manufacturers to
final consumers
Retailing involves
- Interpreting needs of the consumers
- Developing good assortments of merchandise
- Presenting them in an effective manner so that consumers find it easy and
attractive to buy.
Retailing differs from marketing in the sense that it refers to only those activities,
which are related to marketing goods and/or services to final consumers for personal,
family or household use. Whereas marketing, according to American Marketing
Association, refers to "the process of planning and executing the conception, pricing,
promotion and distribution of ideas, goods and services to create exchanges that
satisfy individual and organizational objectives."
Whatever the form of retailing, a retail marketing strategy defines the execution of
the marketing process and facilitation of customer satisfaction. This retail marketing
strategy involves selecting a retail target market (i.e. the carefully/exactly identified
group of final consumers that a retailer seeks to satisfy) and then implementing the
corresponding retail marketing mix (i.e. a combination of product, price, promotion
and distribution strategies that will satisfy the retail target market). The elements of
the marketing mix encompass the facets shown in the table below. The table depicts
consumer service as the crux of the whole activity.
• Even though India has well over 5 million retail outlets of all sizes
and styles (or non-styles), the country sorely lacks anything that
can resemble a retailing industry in the modern sense of the
term. This presents international retailing specialists with a great
opportunity.
• It was only in the year 2000 that the global management
consultancy AT Kearney put a figure to it: Rs. 400,000 crore (1
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The customers of the 21st century would expect to pick his/her own products from an
array of choices rather than asking the local kirana wallas to deliver a list of monthly
groceries. Thus the way of distribution of products has gained importance in the past
decade.
What is the reason that big groups like Tata’s, ITC, Piramal Enterprises and
S.Kumars are putting huge amounts of money into retailing? The answer is
very simple. Now, just a couple large organized retailers are in the market
whose turnover crosses Rs. 100 crore. And in this sector anything above 25
crore counts you as a major player.
Shopper's Stop: Shopper's Stop launched its Mumbai branch in 1991 with
their men's line soon followed by women's and children clothes. The
concentration was on "one room, one ambience, and one experience" and
its success resulted in opening new branches in Bangalore and Hyderabad.
Cashing on in the current consumerist trend, the shop not only offers
products but also offers an avenue to channelize operations. For customers
who cannot afford a John Miller or Wendell Rodericks original once a year
moderately priced truck show is held at Shopper's Stop.
Organized retailing is not a bed of roses for the big players also. In addition to the
advent of Internet, various issues glare at retailing. Some of them are
Human Resource:
Big retail shops do not confine their target segments for employees to
undergraduates. Shoppers Stop broke the myth of MBAs not wanting to go into the
retailing career. Cross Roads and Spencer also hire MBAs to manage their chains.
However there still exists a gap between the supply and demand of professionals. Mr.
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Goenka, chairman RPG Group, hopes that one of the greatest challenges facing
modern retailing in India is the availability of trained personnel. In order to address
the problem RPG Group has set up a national retail Institute in Chennai, which, offers
a variety of courses in retail management for frontline, supervisory and managerial
post.
Retaining the human resources is also a major challenge for these big retailers. The
bigwigs like Crossroads offer high compensation and create a cohesive environment
that makes an employee proud to be a part of such big retail chains.
To establish a retail shop/ Mall, the real estate and the infrastructure are very vital.
The expenditure and availability on both the accounts do hinder the growth of the
retail chain. The land ceiling restrictions and other state restrictions on land use have
prevented the growth of efficient retailing in the cities. An average investment of
about Rs. 5 crore is required to establish a mall and that explains the rush of big
companies into this business. Small and individual retailers find it difficult to pour in
that much of investment. In addition to the initial investment, to combat e-tailing,
expenditure has to be incurred on technological side. This makes the retail projects
less attractive for the individual players.
In India the concept of discount stores like Wall-Mart, at which genuine, defect free
international brands are available at 50% discount, is yet to catch on. Still, the major
section of customers is conservative and choosy and prefers to go to a known retail
shop than opt for a discount store. Very few discount stores like SM2, Mumbai are at
present operational. Its reach is confined to major cities. Breaking the conventional
mindset of the Indian consumers that discount stores do not sell inferior goods will
take some time.
Penetration into the rural market is what big retailers have to concentrate on for
growth. Attracting rural markets will be different from that of the urban market. For
example detergent cakes are preferred to powder and coconut oil in bottle to sachets
in the rural areas. The rural consumer are different from the urban consumers as they
are more price sensitive and their quantity of consumption would be less as their
share of wallet for shopping along with entertainment is delineated. Food and
agricultural inputs dominate the rural consumers list and whatever is left would be
used to fulfill aspiration needs. Customers in the rural area are not urbanites without
money. He has a distinct identity and value system. One more challenge in the rural
market is that shopping habits vary according to seasons. During harvest time, the
spending of a rural consumer increases compares to other times. However,
penetration of television, increasing literacy levels, mobility between rural and urban
areas and telecommunication (STD Services) have increased their awareness towards
branded products and entertainment. Customized retail shops would be a big success
in the rural areas too if the right strategies are adopted.
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E-Tailing
The retailing community has accepted and realized the fact that the consumers want
to choose between the variety of brand and value for money is their topmost priority.
The big retailers have to deliver a consistent branded experience. Crossroads in
Mumbai is an endeavor to achieve the same, though its target segments the upper
and upper middle class. Technology has made a difference in retailing also. E-tailing
(through internet) is considered to be eroding the store retailing slowly. Is it the real
picture? With the concept of B2C (Business to Consumer Transactions over internet)
coming up at a fast pace, an intimate two-way access is emerging between the
retailer and the customers. Customized products are offered to the customers. For
instance while one buys a book through Amazon.com, a synopsis of the book, its
reviews, its prominent readers and other books of the same author are some of the
information provided to the customers. Within minutes of placing an order, one gets a
confirmation thus saving time and satisfying the customer. The penetration level of
the internet is increasing at a pace that the reach would be equivalent to what
television took about 40 years and that cable about 15 years.
In online services and the web, the retailers seek out the customers unlike the
traditional model where the customer goes to the store and locates the product. The
busy life-style of the consumers in this hectic era, tilts the preference needle towards
the online retail model. However, B2C success depends on the behavioral and
attitudinal changes in customers. First, the customers have to be familiar with
Internet and have to be informed about buying on the net. Then, the customers have
to build the mentality to trust the e-sellers and be convinced on the products quality.
The KSA customer 2000 study showed that only 1% have ever used net shopping
though 40% are aware of it. But 10% of the representatives do not trust the quality in
net shopping. This shows e-tailing (stand alone) has a long way to go in India.
The major advantage of the retailers in India is that, most of the products operate on
the push factor than pull factor. In order to popularize their products the
manufacturers have to attract the customers to feel the products, physical existence
and this is enabled by the retailers.
Instead of viewing e-commerce as a threat for retailing the big retailers can embrace
technology and provide value added and personalized services to the customers. In
the recent times, companies like ARCHIES have used technology to their
advertisement and increased their sales. By promoting, Fathers day, mothers, sisters,
friendship, valentines, and even egg and Love at first sight days, Archies has been
successful in pulling crowd in their galleries all over India.
The big retailers can learn the lesson from Archies. A recent KSA Technopark survey
finding showed that Apparels and Consumer durables occupy the top slot in priority
for shopping in India. Apparels and Consumer durables and for that matter even
footwear are those products which gives satisfaction when you feel it. How can the
big retailers use technology in this? Technology is so flexible that it can coexist with
business anywhere. The big retailers have to have their websites to combat the
competition from e-tailing. For instance for clothing, the big retailers can show the
variety and design offered by them through the net. A virtual experience can be
provided and the customer can have n option whether to visit the shop or shop from
home. If the virtual round through the shop is irresistible, the customer will definitely
come to the shop for an experience at least. Thus, in this era of Information
Technology store and retailers have to become technology savvy to satisfy customer
preferences. The consumer mercantile activities grouped into three phases, pre-
purchase preparation, purchase consummation and post-purchase interaction have to
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be properly incorporated with technology. The model below explains the activities in
the three phases of mercantile procedures.
Comparison of shopping
and product selection
Placement of Order
Receipt of Product
In the product/ service search, the retailers can give search for basic products and
the brands available with the retailer, the price and discounts if any. In case of
customer specific information like size and colours, the available colours size and a
preview of the same can be displayed to attract the customers.
Comparison of the prices between the products and unique features and attributes
can make the customer more informed and aware. The mode of receipt of money and
the two-way communication i.e. between the customer and retailer will ensure better
customer service. This will also ensure that the big retailers will not loose their
customers who cannot visit their store but would prefer goods from that particular
retailer.
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The after sales service plays a vital role in customer satisfaction and loyalty. By
providing the details and clauses for return of products, if such a situation arises, and
personalized greeting cards to the customers would ensure a personal touch and
would motivate the customers to refer the store to his/ her friends to visit the shop.
Even though adopting e-tailing along with store retailing would involve larger
investment and expenditure, the big retailers have to do so in order to sustain the
onslaught of technology. With the customer, especially the upper class becoming
more techno- savvy, the retailers need to formulate such strategies to retain and
expand its customer base.
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Ans. Since ancient times human race has been engaged in mass
activities the cause of which varied, to encourage the feeling of
brotherhood, for recreation or just for beer and skittles. These
activities include entertainment in sports. All these activities enhanced
the feeling of brotherhood and sense of belongingness in the society. A
new sector has emerged in modern times that have taken care of all
these emotions and that sector is know to be as Event Management.
An event management company works on an event from is very
conceptualization and works till the execution of the same. Any mass
gathering under the sun can be considered as an event be it a birthday
party or republic day parade. To make it memorable one has to work
on the details. To take care of all these things and to perform them
professionally even management companies come in the picture.
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1. Concerts.
2. Corporate events (Brand launch etc).
3. Celebrity management.
4. Television events (Awards nights like Filmfare, Channel[V]
Music Awards etc).
5. Exhibitions.
6. Sporting events.
7. Artist Management.
8. High profile weddings, Birthday parties.
9. Parties at Discos, Night Clubs.
10.Talent Bank.
11.Direct Sales promotions.
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New opportunities that are coming up are offers like one made by ZEE
Television Networks for the entire leading event management
companies of India to work with its event section to promote the
programme aired on the network.
The live concert circuit is probably the fastest growing segment of the
business. As per the industry estimates, it has grown more than 200 %
between 1995 and 1999. The last three years have witnessed a spate
of International Artists coming to India to perform in live events.
With Indian Films and film celebrities always being close to the heart of
Indians, wherever they may be located, there is a huge potential for
the event management industry to organize live shows abroad. The
last few years have seen a plethora of such shows in Countries like the
US, UAE, UK and South Africa, where there is a large non resident
Indian presence.
These shows have evoked tremendous response not only from the
Indians settled there but also from Pakistanis, Sri-Lankan, and UAE
residents. Shows already organized in the US featuring leading film
artists have been a complete sell-out, with people craving for more.
The UAE with a large concentration of South Indian population has
been a favourite stop over for South Indian Film Artists who have
always performed to a full house. Moreover, with the growing
expatriate population in countries like Australia, Canada and New
Zealand, there is a huge untapped potential for shows/events to be
organized abroad with Indian Cinema Actors.
Problems Faced
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B. Apart from the tax rates, the payment of entertainment tax also
poses a major problem to the organizers. Currently the tax has to be
paid before the tickets of the events are sold and the relevant
department stamps the tickets for the tax paid is lost, if the tickets
remain unsold. The Government should only levy tax on the exact
number of tickets sold.
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Ans. After 1991 in this complex age of new liberalized economy, such
business families also face common problems like
a. Transnational attack.
b. Stiff Competition.
c. Low Profiles.
d. Fickle Consumers.
e. Unproductive Labor.
f. Falling Share Values etc.
1. Splits like a clash between father and son or other members of the
family leading to division of the company e.g. the Birla Groups division
into many companies after the death of Mr. G.D.Birla.
2. Successful planning to get the right person at the right place after
the business pioneer retires or expires. The rules have changed after
liberalization and the successor needs to have the right qualification or
the corporate needs to outsource a person from outside the company,
thus restricting the family’s control on the business.
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country was opened upto foreign competition was unfair, but it has
to be faced upto by the family business with a new set of strategies.
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In this entire shake up, some business families are emerged victorious
and others have disintegrated or lost out.
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Emotional intelligence
Emotional intelligence is a combination of competencies. These skills
contribute to a person’s ability to manage and monitor his or her own
emotions, to correctly gauge the emotional state of others and to
influence opinions. Goleman describes a model of five dimensions.
Each area has its own set of behavioral attributes as follows.
2. Self-awareness is the ability to recognize a feeling as it happens,
to accurately perform self-assessments and have self-confidence.
It is the keystone of emotional intelligence (Goleman, 1995).
3. Self-management or self-regulation is the ability to keep
disruptive emotions and impulses in check (self-control),
maintain standards of honesty and integrity (trustworthiness),
take responsibility for one’s performance (conscientiousness),
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Effective Leadership
The term effective in this essay can be defined as (1) "getting the job
done through high quantity and quality standards of performance, and
(2) getting the job done through people, requiring their satisfaction and
commitment".
Major Findings
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(2) Do you usually know what other people are feeling, even if they
do not say so?
(3) Does your awareness of what others are going through give you
feelings of compassion for them?
(4) Can you carry on doing the things you want to do under
distressing circumstances, so they do not control your life?
(5) When you are angry, can you still make your needs known in a
way that resolves rather than exacerbates the situation?
(6) Can you hang on to long-term goals, and avoid being too
impulsive?
(7) Do you keep trying to achieve what you want, even when it
seems impossible and it is tempting to give up?
(8) Can you use your feelings to help you to reach decisions in your
life?
Emotions at work
Low emotional intelligence brings a plethora of negative emotions, like
fear, anger and hostility. These use up a lot of energy, lower morale,
absenteeism, apathy, and are an effective block to collaborative effort.
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tight knot in the stomach that comes with anger and resentment, and
the primitive urges it brings to wreak revenge, or at least discomfort,
to the one we see as opposing us. We also know the excitement of
being involved in developing some project, be it an ambitious new
product, or winning a football match. It is obvious in the extremes that
emotions have a huge effect. They also have a steady, day to day
effect.
There are insensitive managers who try to bulldoze their staff. They
think that steady criticism, backed by a loud voice and veiled threats of
redundancy, will spur staff on to greater efforts. This is certainly
emotionally unintelligent. The typical reaction is for people to start
huffing and puffing in corners, and occasionally have a showdown
shouting match. This is also emotionally unintelligent.
The reasons for this behaviour stem from emotions. Being badly
treated by the manager rouses anger, antagonism, fear, desire to get
your own back, and a general feeling of ill will. The manager probably
behaves like that because of similar feelings, caused by past
experiences or they are mimicking how their boss behaves. The
behaviour evokes bad reactions, which evoke bad behaviour. Once
emotionally unintelligent behaviour starts, it creates a downward spiral
of low morale, avoidance, and negative politics.
This staid point of view does not seem valid when you see and feel
inspiration. It comes with a whoosh, seemingly from nowhere.
Suddenly, one thought locks into another, a new connection is made,
and we feel what is pithily known as the "Aha" experience. There is a
rush of excitement as we see a dozen possibilities all at once, and can
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not wait to try them out. We write feverishly in case we forget, we rush
into the next office to tell our colleagues. We phone up whoever we
think can help us expand the ideas. Nothing will stop us. That is when
ideas really develop. The careful step by step process gets ideas into
action, but their first development comes from that heady rush of
adrenaline. The logic is there in abundance, but it is fuelled by
emotional fervour.
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Summary
To sum up, emotional intelligence is being able to harness
emotions effectively, so that they play a role in business
success. It is not emotionally intelligent to allow the heart to
rule the head. It is no better to allow the head to rule the
heart. The heart and the head must each play an intelligent
role so that business relationships and business projects can
both improve, side by side.
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