Module-IV

Functional Areas and Recent

Trends in Management
 Sources of Finance
• Owners Fund: Issue of equity shares, Ploughed
back profits
• Borrow Fund: Debentures, Loans from financial
institutions
• Short Term Finance: Trade creditor, Advance from
customers, Instalment credit, Bank Overdraft
• Medium Term Finance: Commercial banks,
Debentures
• Long Term Finance: Equity shares, Leasing
 Financial Statements
• Financial statements include income statements,
balance sheets, cash flow statements.
• It is standard practice for businesses to present
financial statements that adhere to generally
accepted accounting principles (GAAP).
• Financial statements are often audited by
government agencies, accountants, firms, etc. to
ensure accuracy for tax, financing and investing.
 Balance Sheet
• A balance sheet is a financial statement that
summarizes a company's assets, liabilities and
shareholders' equity at a specific point in time.
• These three balance sheet segments give
investors an idea as to what the company owns
and owes, as well as the amount invested by
shareholders.
• The balance sheet adheres to the formula:
Assets = Liabilities + Shareholders' Equity
 Profit and Loss Account
• Profit and Loss Account (P&L) is a financial statement
that summarizes the revenues, costs and expenses
incurred during a specific period of time, usually a
fiscal quarter or year.
• These records provide information about a company's
ability – or lack thereof – to generate profit by
increasing revenue, reducing costs, or both.
• The P&L statement is also referred to as "statement of
profit and loss", "income statement," "statement of
operations," "statement of financial results," and
"income and expense statement.“
 Human Resource Management
(HRM)
“HRM is management function concerned
with hiring , motivating and maintaining
people in an organization. It focuses on
people in organization”
 HRM FUNCTIONS
• Human resource planning
• Recruitment
• Selection
• Compensation & benefits
• Performance appraisal
• Training and development
• Employee relations
• Safety & health
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Training and Development Methods
On-the job-training (OJT)
– learn while you’re working
Off -the job-training
– In house, training or classroom
– External, consultancies or attending external classes
– Independent bodies, such as government talks
– Distance learning, from books or notes
– Computer-assisted learning
– Interactive-video training
– Video conferencing, same as classroom except teachers and
students are in different locations.
 Operations Management: Objectives
• To produce the goods as per the quality demanded by
the customers in most economic manner.
• To sustain and increase the level of customer
satisfaction.
• To make improvement in existing goods and services.
• To maintain inventory to avoid the blockage of
working capital .
• To ensure uninterrupted supply of goods and services.
• To keep proper maintenance of plant and machinery
 Plant Layout

• Product / Line Layout

• Process / Functional Layout
• Combination / Mixed Layout
• Project / Stationary Layout
• Cellular / Group Layout
 Site Selection
• Business location is an essential component in
its eventual success or failure.
• Site selection can be pivotal in all sorts of
businesses, including retail, service,
wholesale, and manufacturing efforts.
• Poor location is one of the primary causes of
business failure.
• Good business location can be enormously
beneficial to firms.
 Factors Affecting Site Selection
• Availability of Raw Materials
• Availability of labour
• Availability of Power and Fuel
• Transport and Communication facilities
• Nearness to Market
• Political and economic situation
• Possibilities of future expansion
• Social Reactions
 Productivity
• Productivity is a measure of how well resources
are utilized to produce output
• It relates output to input in any system, where
some value addition is performed on the input
resource
• Productivity is the ratio between “ Output of
Work “ and “Input of Resources “ used in the
“Process of Creating Wealth”--- ILO.
• It is the ratio between the amount Produced
(Output) and the amount of Resources (Input)
used in Production by eliminating Waste.
 Inventory Control
• The term inventory means the value or amount of
materials or resource on hand.
• It includes raw material, work-in-process, finished
goods & stores & spares.
• nventory Control is the process by which
inventory is measured and regulated according to
predetermined norms such as economic lot size,
stock levels, safety stock, etc.
• Inventory control pertains primarily to the
administration of established policies, systems &
procedures in order to reduce the inventory cost.
 Inventory Control Methods
• ABC Analysis
• This technique divides inventory into A, B & C
categories based on annual consumption value.
• It is the method of Selective Inventory Control.
• This method categorizes inventory items according
to the potential amount to be controlled.
• VED Classification: Vital, Essential & Desirable
• FSN Analysis: (Fast , slow & non) moving
• XYZ Analysis: (Negligible. Moderate & Maximum)
Variation
ABC Analysis
Total Quality Management (TQM)
• A core definition of total quality management
(TQM) describes a management approach to
long–term success through customer
satisfaction.
• In a TQM effort, all members of an
organization participate in improving
processes, products, services, and the culture
in which they work.
• TQM is also known as total productive
maintenance.
 History of TQM
• TQM, in the form of statistical quality control,
was invented by Walter A. Shewhart.
• It was initially implemented at Western
Electric Company, in the form developed by
Joseph Juran.
• TQM was demonstrated by Japanese industry
through the intervention of W. Edwards
Deming—who, has come to be viewed as the
"father" of quality control, quality circles, and
the quality movement.
 Change Management
• It is the creation and implementation of the roles, processes
and tools used to effectively manage the change.
• Phases of Change Management:
1. Preparing for Change:
• Define Change Management strategy.
• Prepare Change Management Team.
2. Managing Change.
• Develop Change Management Plans.
• Take action and Implement.
3. Reinforcing Change.
• Collect and analyse feedback.
• Diagnose gaps, manage resistance and rectify actions.
 Supply Chain Management
• The term supply chain refers to the entire network of
companies that work together to design, produce, deliver,
and service products.
• It covers all activities associated with the flow and
transformation of goods from raw materials to end users.
• SCM involves:
1. Design, planning, execution, control, and monitoring of
supply chain activities
2. creating net value
3. building a competitive infrastructure
4. leveraging worldwide logistics
5. synchronizing supply with demand
6. measuring performance globally
 Digital Marketing
• Digital marketing is an umbrella term for the
marketing of products or services using digital
technologies, mainly on the Internet, but also
including mobile phones, display advertising,
and other digital medium.
• Digital marketing revolves around 5Ds:
• digital devices, digital platforms, digital media,
digital data, and digital technology.
 Management in Post-Covid Scenario
• Organizations shift to more remote work operations,
explore the critical competencies employees will need
to collaborate digitally
• Make sure to follow best practices to ensure
responsible use of employee information and
analytics.
• Evaluate how performance management systems
apply to contingent workers and determine whether
they will be eligible for the benefits.
• Promote physical health and improve the emotional
well-being of employees.
• Encourage employees to develop critical skills that
potentially open up multiple opportunities for their
career development
 Business Ethics
• Business ethics is the study of appropriate business
policies and practices regarding potentially
controversial subjects including corporate governance,
insider trading, bribery, discrimination and corporate
social responsibility.
• Business ethics can be denoted as written or
unwritten codes of morals, values, and principles.
• It governs actions and decisions in a company.
• In the business world, standards are set for
determining good and bad behaviour and
decision-making.
• Business ethics leads to a more productive workplace.
 • Three powerful transforming pillars of Ethics are
Character, Competence and Collaboration.
• They decide; what is right, ethical, logical and pragmatic.
• Advantages of Business Ethics
1. Provide competitive advantage & customer satisfaction
2. Improve employee happiness
3. Attract more investors
4. Better for society
• Bad business ethics lead to instance in which a company
knowingly ignores the best interests of its employees,
customers or the society for earning more money
 Assignment-IV
1. Describe various functions of HRM.
2. Discuss different types of plant layout.
3. Explain the concept of digital marketing.
4. Write in brief:
a) Change Management
b) ABC Analysis
c) Business Ethics
d) Management in Post-Covid Scenario