MGT 1 (Fundamentals of Management)

16TH WEEK & 17TH WEEK INTRODUCTION TO VARIOUS

AREAS OF MANAGEMENT

HUMAN RESOURCE MANAGEMENT

*The process of planning, organizing, directing, and
controlling of personnel activities.
*It emerged in the late 70's as a reaction against the more
functional approach embodied in personnel management.
*Traditionally considered as a staff function, responsible for
an indirect or support function that would have costs but
whose bottomline contributions were less direct.
*The Human Resource department (HRD) has the main
responsibility for personnel activities, but all managers
should perform personnel functions.
*The HRD works closely together with all other departments
in the organization. It is concerned with selecting new
employees, their job assignments, and their continuing
development.
*The safety and general welfare of the employees is the
general responsibility of human resource management.
*Employee attitudes and their needs and wants, including
adequate and equitable compensation programs, are vital
concerns of human resource management.
*Human resource management is not the sole concern either
of the HRD of top management. It is part of the job of every
manager, for the personnel function is necessary in every
operation where people are employed.

*Major Purposes of Manpower Management

A.Acquisition - To get the right person for the right job.
1.Job analysis
2.Recruitment
3.Selection
4.Procurement
B.Development To get the most from the employee.
1.Training and development
2.Performance appraisal
3.Coping with changing technology
C.Maintenance To retain the best workforce.
1.Wage & salary administration
2.Benefits and services
3.Labor-management relations
4.Collective bargaining
5.Discipline, complaints and grievances
D.Utilization To instill loyalty among the employees.
1.Human resource planning
2.Career development
OFFICE MANAGEMENT
*The process of planning, organizing, staffing, directing, and
controlling office activities and those performing them in

order to achieve determined objectives.

*In a broader sense, it covers managerial efforts over office
work anywhere in the company.
*It requires ingenuity, decisiveness, and creativity.
*Office Management Activities
1.Seeing to that the correspondence work is performed.
2.Filing records and reports.
3.Handling incoming and outgoing mail.
4.Supplying reception and messengerial services.
5.Determining the complete course of action to accomplish
the work.
6.Providing an effective office organization.
7.Inspiring the office personnel to do their best.

MARKETING MANAGEMENT
*It is the process of planning, organizing, staffing, directing,
and controlling the marketing activities.
*Every business must adopt a market-oriented approach to
capture a growing share of the market. It must develop and
satisfy demand, identify the needs and wants of its potential
customers more effectively than its competitors.
*Marketing is the performance of business activities that
direct the flow of goods and services from producer to
consumers or users for the latter's ultimate consumption.
*Marketing refers to all activities involving the processing,
sale, and physical distribution of goods from the time they

are produced up to the time they are delivered to their

ultimate consumer. It also includes marketing research,
transportation, product packaging, and the use of
advertising and credits as the means of satisfying consumer
needs and influencing consumer patronage. It covers
merchandising, promotion, selling, and transportation, which
are limited in scope.
*The arrangement of the different aspects of marketing into
an integrated function is the role of marketing management.
Goods and services are distributed and rendered into two (2)
different markets: the industrial market and the consumer
market.
*Difference between Marketing and Sales Management
Marketing is selling plus a lot more.
Selling focuses on the needs of the seller, marketing on the
needs of the buyer.
Selling is pre-occupied with the seller's need to convert his
products into cash, marketing with the idea of satisfying the
needs of the customer by means of the product and a whole
cluster of things associated with creating, delivering and
finally consuming it.

FINANCIAL MANAGEMENT
It is the process of planning, organizing, staffing, directing,
and controlling the financial activities.
It is the management-level responsibility for capital
procurement, funds allocation, capital structuring, and profit
administration.
This area is responsible for the liquidity, solvency

profitability, and financial control of the business. This

responsibility involves: financial planning, analysis of
financial condition, and supervision of financial operations.
To perform these functions, the finance manager uses the
following tools:
1.Operating statements to measure income, expenses, and
profits.
2.Operating margins to identify the components of gross
sales and percentage of sales.
3.Comparative operating statements to compare results for
the current period against those earlier periods and the
company's results against those of others in the same line of
business.
4.Balance sheet analysis (comparative studies, ratios)
5.Operations budget to forecast sales, costs, expenses, and
profits.
6.Cash budget to forecast short-run cash flows from
operations and short-run working capital requirements.
7.Capital budget to forecast capital expenditures.
*The objective of financial planning is to appropriate the
needs and capabilities of the business through a projection
of the availability-funds for a short-term period (working
capital cashflow, operating budgets, and sources of working
capital) and for a long-range period (investment cash flow,
capital and conditions of the capital market.

PRODUCTION AND OPERATIONS MANAGEMENT

*Production management is the process of planning,

organizing, staffing, directing, and controlling the production

activities.
*Production is the creation of anything of value such as
goods, services, or ideas that people want and are willing to
pay for. Production is the operation stage of any business.
*With reference to manufacture, production is the processing
of materials into a new expected form.
*Products are a blend of raw materials extracted from the
earth or the oceans. The process of getting these raw
materials from the mines, oceans, forests, and farms are part
of the broader process of production.
*Production includes in addition to the raising of crops and
the removal of lumber and minerals manufacturing, which
is the process of making finished goods.
*Manufacturing process refers to the method used to change
the form of materials. Most materials fall into one of the
following classes or types:
a.Extractive Process It means using methods, such as
mining or quarrying, in digging out the raw materials taken
from the land (Ex.: salt, coal, copper, zinc, silver, gold, &
petroleum), the air (Ex.: nitrogen & oxygen), and the ocean
(Ex.: magnesium, chlorine, & sodium).
b.Analytical Process One in which a raw material is broken
up into its components. (Ex.: petroleum which is refined into
gasoline, lubricating oils, fuel oil, etc.; meat-packing industry
which is broken up into dressed meat, hides into finished
leather, & wastes for by-products.
c.Synthetic Process It is exactly the opposite of the
analytical process (to "synthesize" is to put together). This
process combines raw materials to form new products (Ex.:

plastic, paints, drugs, fertilizers, concrete, etc.).

d.Fabricating Process To fabricate is to put together things
to form a whole. The fabricating process includes the
shaping of materials into new forms, as well as the
assembling of many parts into an integrated product. (Ex.:
automobile industry, furniture makers, etc.).

PROCUREMENT MANAGEMENT
*It is the process of planning, organizing, staffing, directing,
and controlling the procurement activities.
*To assure the successful operation of any modern industrial
manufacturing concern, it is important to consider the
procedure in the proper delivery of materials and supplies at
the right price, at the right time, and from the right source.
Difference between Procurement and Purchasing
*Purchasing describes the process of buying, identifying the
need, selecting supplies, negotiating prices, and following up
to ensure effective delivery.
*Procurement encompasses broader areas and covers the
responsibilities performed by purchasing, as well as other
functions of material supervision and management, such as
inventory control, receiving, incoming inspection, and
salvage operations. Procurement covers production control,
traffic, and shipping.
*Procurement is vital because of the following reasons:
1.The proper utilization of money is extremely important to
the survival of every individual and company.
2.Purchased materials and services include the biggest part

of expenditure in most companies.

3.The investment in raw materials, parts and supplies
inventory in some companies is essential, and the efficient
management of such inventory can contribute to profit.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

*CRM is necessary once a supplying company first
establishes a relationship with a customer. To keep
customers satisfied and coming back, firms must
demonstrate their capabilities and the value these
capabilities provide to customers. The often-told story that
"finding a new customer costs five times (5x) as much as
keeping an old customer" is the motivation behind customer
relationship management.
*In the long term, value continues to be demonstrated to
customers through reliable, on-time delivery, high-quality
products and services, competitive pricing, innovative new
products and services, attention to customer needs and the
flexibility to respond to those needs adequately.
*First and foremost, managing customer relationships start
with building core competencies that focus on customer
requirements and then delivery products and services in a
manner that results in high levels of customer satisfaction.
Definition
1.An interactive process for achieving the optimum balance
between corporate investments and the satisfaction of
customer needs to generate the maximum profit.
2.Managing the relationships among people within an
organization and between customers and the company's

customer service representatives in order to keep the

customers continually satisfied and creating profit or
benefits for the selling organization.
3.A core business strategy for managing and optimizing all
customer interactions across an organization's traditional
and electronic interfaces.
*Elements required when developing effective CRM
initiatives:
1.Segmenting customers. Customer segmentation can
occur based on sales territory or region, preferred sales
channel, profitability, products purchased, sales history,
demographic information, desired product features, service
preferences, etc.
2.Predicting customer behaviours. These predictions allow
firms to forecast which products customers are likely to
purchase, which ones they will purchase next, and how much
they are likely to pay.
3.Determining customer value. Capturing customer
profitability information is possible for many businesses.
However, use of this information can potentially cause poor
decisions to be made regarding some customers. For
instance, customers that are unprofitable now may be
profitable later.
4.Personalizing customer communications. Knowledge of
customers, their behaviours, and their preference allows
firms to customize communications aimed at specific groups
of customers. Referring to customers by their first name or
suggesting services used in the past communicates value to
the customer and is likely to result in greater levels of sales.
5.Automating the sales force. Sales force automation
products are used for documenting field activities,

communicating with the home office, and retrieving sales

history and other company-specific documents in the field.
Some of the desired CRM capabilities in the area of sales
force automation are: sales activity management tools, sales
territory management tools, lead management tools, and
knowledge management tools.
6.Managing customer service attributes. One customer
service definition covers the "Seven Rs Rule" (Having the
right product, in the right quantity, in the right condition, at
the right place, at the right time, for the right customer, at
the right cost.