Module 5 b

Corporate Social Responsibility

• Every individual living in the society has obligations towards society.
• Business men should consider the interest of the society in running the business.
• The focus on CSR is on social, environmental, and financial success of a company
• To achieve social development while achieving business success.
• Mangers' responsibility towards various segments of the society

The various forms of social responsibility can be classified as follows.

1. Responsibility towards owners or stakeholders –
managers have the following responsibilities towards the shareholders.
a) Reasonable dividend - Shareholders are a source of funds for the company. They expect a high rate
of dividend on the money invested by them and also the maximization of the value of their investment
in the company.
b) Protection of assets : The assets of the company are purchased with shareholders funds. Therefore,
the company is responsible to safeguard these assets.
c) Information - It is the responsibility of the management to keep the shareholders informed about
the financial position as well as the progress of the company.
2. Responsibility towards customers –
Customer's satisfaction is the ultimate aim of all economic activity. Therefore, the management has
the following responsibilities.
a) To make goods of the right quality available to the right people at the right time and place and at
reasonable prices.
b) The business should not indulge into unfair practices such as black marketing, adulteration, etc.
c) To provide prompt and service to customers and handle customer's grievances.
3. Responsibility towards employees –
Employees should be treated as human beings and their co-operation must be achieved for the
realization of organizational goals.
a) Fair wages - Business should pay reasonable salaries so that their employee's may lead a good life
and satisfy their needs.
b) Adequate benefits - Employees should be provided benefits like housing, insurancecover, medical
facilities and retirement benefits.
c) Good Working conditions - are necessary to maintain the health of the workers.
d)Opportunity for growth: Business should give their employees opportunity to develop their
capabilities through training and education.
e) Recognition of worker's rights - The business should recognize the worker's right to fair wages, to
form trade unions, to collective bargaining, etc.
f) Co-operation - The business must win the co-operation of the workers by creating the
conditions in which workers are willing to put forward their best efforts.
4. Responsibility towards suppliers - The business must create healthy relations with the supplier.
Management should deal with them judiciously. They should be provided with fair terms and
conditions regarding price, quality, delivery of goods and payment.
5. Obligations towards Govt.- It is the duty of every business enterprise to manage its affairs according
to the laws affecting it. It should pay taxes and other dues honestly. It should not encourage
corruption, black marketing and other social evils. It should discourage the tendencies of
concentration of economic power, monopoly and encourage fair trade.
6. Obligation towards society-
Every business owes an obligation to the society at large. The following are the areas of social
responsibility of business.
a) Socio-economic objectives - A business should not indulge in any practice which is not fair from
social point of view. The business should use the factors of production effectively and efficiently for
the satisfaction of the needs of the society.
b) Employment opportunities - It is the responsibility of management to help increase
direct and indirect employment in the area where it is functioning.
c) Efficient use of resources - The resources used in the business belongs to the society. Therefore, the
business should make the best possible use of the resources for the wellbeing of the society.
d) Business morality - The business should not indulge into anti-social and unfair trade practices such
as adulteration, hoarding and black marketing.
e) Improving local environment: Business should take preventive measures against water and air
pollution. It can develop the surrounding area for the wellbeing of the employees and the general
public. A business can also contribute to the advancement of local amenities.

Importance of Corporate Social Responsibility

Corporate social responsibility initiatives are important due the following reasons.

• CSR helps to build long-term employee, consumer and citizen trust - CSR is an obligation of an
organization to the society and its stakeholders. It aims at
• improving the quality of life of its stakeholders such as workers and their family members as
well as the local community.
• It involves the adoption of corporate behaviour to meet the social needs and demands and
thus deliver social justice.
• Organizations can fulfil CSR for both business causes (like building business profits and
reputation) and normative causes (like meeting social expectations and norms).
• CSR activities of an organization include donations, sponsorships, partnership with non-profit
organizations, investment in social responsibility-related activities, etc.
• CSR helps to build a positive workplace environment
• Improves public image - Corporation's philanthropic (humanitarian) attitude will improve the
public image as it reflects an empathetic side of the company

CSR in India
In India, the concept of CSR is governed by clause 135 of the Companies Act,2013, which was passed
by both Houses of the Parliament. The CSR provisions within the Act is applicable to companies with
an annual turnover of 1,000 crore INR and more, or a net worth of 500 crore INR and more. The Act
encourages companies to spend at least 2% of their average net profit in the previous three years
on CSR activities. The Act lists out a set of activities eligible under CSR.
CSR initiatives by various corporate
1. Tata companies work towards empowering people by helping them develop the skills they need to
succeed in a global economy, which is consolidated into a group CSR programme called Tata STRIVE.
The group equips communities with information, technology and the capacity to achieve improved
health, education and livelihood outcomes. It also works towards enabling other living things on the
planet get their fair share of the resources. (http://www.tatastrive.com)
2. Boschs' corporate social responsibility endeavor is known as 'Bosch Social Engagement. It is
designed to create programmes as per the needs of society to change the lives of the people for the
better. (http://www.boschindia.com)
Advantages of corporate social responsibility initiatives
1. CSR improves corporate reputation.
2. Discourages government regulation.
3. Stimulates long-term orientation and profits for business.
4. Balances corporate power with responsibility.
5. Improves relationships with stakeholders.
 Disadvantages of corporate social responsibility initiatives
1. Major corporations can afford to allocate a budget to CSR, but this is not always open to smaller
businesses.
2. The main objective of a business organization is to create profits. Establishment CSR can cause
conflict in the business objectives of the corporation while making important decisions.
3. CSR, when integrated with a company's operations, might increase the cost of production of the
product or service a business offers

Intellectual property rights

Intellectual property rights are the rights given to persons over the creations of their minds. They
usually give the creator an exclusive right over the use of his/her creation for a certain period of time.
IPR includes the following independent intellectual property rights.

1. Patents
2. Copyright
3. Trademarks
4. Industrial designs
5. Layout Designs of Integrated Circuits
6. Geographical indication
7. Protection of undisclosed information/Trade secrets

• IPR are largely territorial rights except copyright, which is global in nature
• Awarded in a country and are monopoly rights implying that no one can use these rights
without the consent of the right holder.
• IPR rights have to be renewed from time to time for keeping them in force except in case of
copyright and trade secrets.
• IPR have fixed term except trademark and geographical indications
• Trade secrets also have an infinite life but they don't have to be renewed.
• IPR can be assigned, gifted, sold and licensed like any other property.
• IPR rights can be simultaneously held in many countries at the same time.
• IPR can be held only by legal entities i.e., who have the right to sell and purchase property.
• Improvements and modifications made over known things can be protected.
• It would however, be possible to utilize geographical indications for protecting some
agriculture and traditional products.

India is a member of the following international organisations and treaties in respect of patents.
1. World Trade Organization (WTO)
2. Convention establishing World Intellectual Property Organisation, (WIPO)
3. Paris Convention for the protection of Industrial Property
4. Patent Co-operation Treaty (PCT)
5. Budapest Treaty
 Positive Aspects of IP rights
1. Providing guarantees regarding the quality and safety of products -
Many fake products place our children's and citizens' safety or health at risk. Enforcing IP
rights in respect of such products guarantees at least that the product’s origin is known and
that the products are genuine. Eg: trademarks
2. Enabling indirect exploitation –
Where a company has protected its products (or processes, etc.) by IP rights, it can derive
revenues not only from their direct exploitation (by that company), but also from their indirect
exploitation by third parties, under licensing contracts. Eg: universities and public research
centres.
3. Cost-free mechanisms –
Certain IP rights can be enjoyed without any formal procedure and without paying any official
fees. eg :copyright
4. Dissemination of technical information –
Patents are the most productive and up-to-date source of technological information, and
contain detailed technical information which often cannot be found anywhere else.
Moreover, this information is rapidly available, as most patent applications are published 18
months after the first filing.
5. Facilitating technology transfer –
Patents often constitute a convenient means to not only protect but also describe in a very
accurate way technologies which are the subject of technology transfer and similar
agreements (licensing, assignment, etc
Patents are considered as the "currency" of the knowledge-based economy.
6. Open source relies on IPR-
Open source mechanisms are becoming popular in certain sectors such as software
7. Collateral to obtain financing
As intangible assets, IP rights often play an instrumental role for SMEs (Small Scale
Enterprises)trying to convince third parties to provide financing to them .

Patent
A patent is an exclusive right granted by a country to the owner of an invention to make, use,
manufacture and market the invention, provided the invention satisfies certain conditions
stipulated in the law.
• Exclusive right implies that no one else can make, use, manufacture or market the invention
without the consent of the patent holder
• This right is available for a limited period of time
• Use of the rights by the owner of the patent may not be possible due to other laws of the
country which has awarded the patent. These laws may relate to health, safety, food, security,
etc.
• Further, existing patents in similar area may also come in the way.
• A patent in the law is a property right and hence, can be gifted, inherited, assigned, sold or
licensed.
• It can be revoked by the country under very special circumstances even if the patent has been
sold or licensed or manufactured or marketed in the meantime.
• The patent right is territorial in nature and inventors/their assignees will have to file separate
patent applications in countries of their interest, along with necessary fees, for obtaining
patents in those countries.
• Eg: A new chemical process or a drug molecule or an electronic circuit or a surgical
instrument or a vaccine
 The Indian Patent Act
❖ The first Indian patent laws were first promulgated in 1856. These were modified from time
to time. New patent laws were made after the independence in the form of the Indian Patent
Act, 1970.
❖ The Act has now been radically amended to become fully compliant with the provisions of
TRIPS (Trade Related Aspects of Intellectual Property Rights) Agreement, 1995.
❖ Invention means a new product or process involving an inventive step and capable of
industrial application.
❖ New invention means any invention or technology which has not been anticipated by
publication in any document or used in the country or elsewhere in the world before the date
of filing of patent application with complete specification
❖ An invention to be patentable should be technical in nature and should meet the following
criteria
1. Novelty –
An invention will be considered novel if it does not form a part of the global state of the art.
Information appearing in magazines, technical journals, books, newspapers, etc., constitutes
the state of the art. Novelty is assessed in a global context.
Eg: In a chemical process, for example, use of new reactants, use of a catalyst, new process
conditions can lead to a patentable invention.
2. Inventive step - Inventive step means a feature of an invention that involves technical advance
as compared to existing knowledge or having economic significance or both and that makes
the invention not obvious to a person skilled in the art.
3. Industrially applicable - Invention should possess utility, so that it can be made or used in an
industry.
Filing a patent application
➢ For the purpose of facilitating the registration of patents, Indian Patent Office functions from
four locations viz., Kolkata, Delhi, Chennai and Mumbai.
➢ Application for Patent shall be filed with the Patent Office having the appropriate territorial
limits. If any application is to be filed abroad, without filing in India, it should be made only
after taking a written permission from the Controller.
➢ The inventor may make an application, either alone or jointly with another, or his /their
assignee or legal representative of any deceased inventor or his assignee.
➢ Section 7 dealing with form of application requires every application for a patent to be made
for one invention only.
➢ A provisional specification is usually filed to establish priority of the invention in case the
disclosed invention is only at a conceptual stage and a delay is expected in submitting full and
specific description of the invention.
➢ No patent is granted on the basis of a provisional specification. It has to be a followed by a
complete specification for obtaining a patent for the said invention.
➢ Complete specification must be submitted within 12 months of filing the provisional
specification. This period can be extended by 3 months.

Copyright
• Copyright is a right, which is available for creating an original literary or dramatic or musical
or artistic work.
• The Copyright Law in India at present is governed by the Copyright Act, 1957 (as amended in
2012) along with the Copyright Rules, 2013 governs the copyright protection in India.
• Copyright gives protection for the expression of an idea and not for the idea itself.
• Copyright gives protection for the expression of an idea and not for the idea itself. For
example, many authors write textbooks on physics covering various aspects like mechanics,
heat, optics, etc.
 • Even though these topics are covered in several books by different authors, each author will
have a copyright on the book written by him/her, provided the book is not a copy of some
other book published earlier.
• Copyright gives the creator of the work the right to reproduce the work, make copies,
translate, adapt, sell or give on hire and communicate the work to public. Any of these
activities done without the consent of the author or his assignee is considered infringement
of the copyright.

Trademarks
• A trademark is a distinctive sign, which identifies certain goods or services as those produced
or provided by a specific person or enterprise.
• Trademarks may be one or combination of words, letters, and numerals.
• They may also consist of drawings, symbols, three dimensional signs used as distinguishing
feature.
• Collective marks are owned by an association whose members use them to identify
themselves with a level of quality.
• Certification marks are given for compliance with defined standards. (eg. 1SO 9000)
• The registration of a trademark confers upon the owner the exclusive right to the use the
trademark in relation to the goods or services in respect of which the mark is registered and
to indicate so by using the symbol ®
Pricing
• Price is the amount of money needed to acquire a product.
• Pricing is the process of setting price for a product.
• Decisions on price are important in marketing. Price set for a product should be optimum.
• If the price set for a product is high the consumers/users tend not to use that product. Or in
other words the volume of sales may come down for that product.
• If the price is deliberately kept low, the product may be looked upon an as a low quality
product and may be rejected by the market.
• Price set for a product should cover the expenses associated with its production and
marketing.

Factors affecting pricing

1. Internal factors –
When setting price, marketers must take into consideration several factors which are the
result of company decisions and actions. Various internal factors affecting pricing are as
follows.
a) Marketing objectives
Marketing decisions are guided by the overall objectives of the company. The four main
marketing objectives affecting price include
• Return on Investment (ROI)
• Cash flow
• Market share
• Maximize profits
b) Marketing strategy –
Marketers selling high quality products would be expected to price their products in a range
that will add to the perception of the product being at high-level.
c) Costs
i) Fixed costs are not affected by level of production or sales.
ii)Variable costs are directly associated with the production and sales of products
2. External factors -
a) Customer expectations
b) Competitive products
c)Government regulations

Important situations where price setting is a problem

1. When a firm is setting price for the first time.
2. When the competitor changes the price.
3. When the firm produces several products and demand for one product is influenced by another.
(For instance, consider the sale of Maruthi 800 and Maruthi Alto. If the price margin between these
two cars is low, then the sale of one of the car will be affected.)
4. When the firm has to change the price because of certain circumstance such as change in
government policy, change in economy, etc. 4.

Methods for pricing

1. Develop marketing strategy - Perform marketing analysis, targeting, and positioning.
2. Make marketing mix decisions - Define the product, distribution, and promotional tactics.
3. Estimate the demand curve - Understand how quantity demanded varies with price.
4. Calculate cost-Include fixed and variable costs associated with the product.
5. Understand environmental factors
6 .Determine pricing

Pricing methods
1.Market penetration - In this method of pricing, low price are fixed to capture market. This method
is used when products are sensitive to (affected by) price changes or when the product faces strong
competition. This method is also called as low price policy.
2. Market skimming - This method sets the prices at the highest level at which goods can be sold. This
method is used usually when company has monopoly in the market or there is rare chance for entry
of a competitor in the market.
3. One price system - In one price system same price is charged for every customer who buys the same
product. Under variable pricing system, prices charged for the same quantities may vary among
different customers such as one time customers and regular customers.
4. Odd pricing system - This is a practice of pricing the goods at odd-ending prices such as 11.99 or
299.99, etc.
5.Follow the market pricing - In this method, price is fixed on the basis of the prices fixed by
competitors and trend in the market.
6. Fixing a price to reduce loss - In this method the product is sold below the cost of production
7. Ethical pricing - In this type of pricing, the product may be sold below cost of production. Here main
consideration given is not profit generation or to cover cost of production. Here the responsibility
towards public is given importance. eg. Vaccines or special medicines.
8. Mark-up price - In this method, companies add a standard mark-up price to the cost of production
of the product. This mark-up price is the profit to the company. For example, if the cost of production
is Rs. 25 for a product, then company may add the fixed standard mark-up price say 10% of cost of
production to the cost of production which is the profit to the company.
Channels of distribution
Activities involved in distribution are
1. Ordering
2. Handling and shipping
3. Storage
4. Display
5. Promotion
6. Selling
7. Information feedback.

• Retailer is a person or business firm that sells goods to consumers.

• Retailers purchase purchases goods either from the manufacturer or from the wholesaler and
then sell in small lots or in piece to the consumers.
• Wholesaler is someone who buys large quantities of goods and resells to retailers rather than
to the ultimate customers.
• Wholesaling includes all the activities involved in selling of goods or services to these who buy
for resale or business use.
Manufactures use wholesalers because wholesalers can perform functions more efficiently and cost
effectively than the manufacturers themselves can.
Following are the common channels of distribution.
1. Direct selling by the manufacturer to the consumer called as direct distribution
In direct selling, products sell his products directly to the customers. This system is effective where
margin of profit is more, number of products are less, consumers are limited and products are costly.
eg. sale of products by Amway, Modicare, etc.
2. Selling through middle man
In indirect selling, the products from the manufacturer reach the consumer through middleman. This
system is effective where huge volume of products with a low margin of profit (per product) is sold to
large number of consumers.
eg. Fast Moving Consumer Goods (FMCG) like tooth paste, soap, etc.

Importance of distribution channels

The importance of marketing channels is discussed below.

1. The main use of distribution channel marketing is to provide a link between product and consumer.
2. One of the chief roles of marketing channels helps to convert potential buyers into
profitable orders.
3. Distribution channel assist in the data collection about of customers, competitors and other
forces in the marketing environment for market research.
4. Distribution channel searches out buyers and sellers matching goods to the requirements of market.
5. Distribution channel suggests the pricing policies in such a manner that would be acceptable to
buyers and ensure effective distribution.

Choice of a channel of distribution

The factors to be considered before choosing a suitable channel of distribution are listed
below.
1. Product considerations
2. Market considerations
3. Company considerations
4. Middlemen considerations

Advertising

• Advertising is the publication of information regarding products put up for sales and is a
method to bring the producer in touch with the customers.
• Advertising is the process of communicating convincing information about the product to
target markets by means of written and speech or by visual material.
 • Advertising management begins from the market research phase.
• Data produced by market research should be used to identify what types of advertising would
be adequate for the specific product.

Functions of advertising department

1. Preparation and control of advertising budget.
2. Supervising advertising and market research.
3. Cooperation with the sales and other departments.
4. Distribution of advertising material.
5. Production and supervision of sales promotion material
6. Co-ordination with the employer and public relation department for improving public and employee
relations.

Importance of advertising
1. Advertising is important for the customers -Advertising helps people find the best products for to
themselves, their kids, and their family. Advertising helps to compare the products and buy so that
they get what they desire after spending their valuable money
2. Advertising is important for the seller and companies producing the products - manufacturer can
build up goodwill and good image in the business world and also among the consumers through
advertising.
3. Advertising is important for the society - Advertising helps educating people. There are some social
issues also which advertising deals with like child labour, liquor consumption, smoking, family planning
education, etc. thus, advertising plays a very important role in society.

Classification of advertising

1. Print advertising - The newspapers and magazines are quite popular modes of advertising for
different companies all over the world. Using the print media, the companies can also promote their
products through brochures and fliers.
2. Broadcast advertising - The commercials aired on radio and televisions are an essential part of
broadcast advertising. The radio and television commercials fall under the category of mass marketing
as the national as well as global audience can be reached through it.
3. Outdoor advertising - communicates the message to the general public through highway billboards,
transit posters and so on.
4. Direct marketing - Direct marketing includes the following.
a) Direct mail
b) Telephonic advertising - The advertising is done by calling up the customers on their telephones,
giving messages on mobile phones, etc.
c) Online advertising - This includes companies sending e-mails to the customers of other companies
enclosing information about their products and services, putting online banners, providing e-shopping
options, etc.
5. Covert Advertising - Covert advertising is a unique kind of advertising in which a product or a
particular brand is incorporated in some entertainment and media channels like movies, television
shows or even sports.

Benefits of advertising
1. Advertising introduces existing and new products to the public.
2. Advertising enhances (improves) potential buyer's responses.
3. Advertising tells that a product which customer wants exists and from where it can be procured and
at what price.
4. Advertising makes a product stand against competitors' products.
5. Advertising supports sales man and increases profit.
6. Advertising tells public the good qualities of the product.
7. Advertising builds up reputation for the company's goods and services.
8. Advertising creates a confidence in the mind of buyers regarding quality of goods.

Steps in advertising
For the development of advertising and to get best results, one need to follow the advertising process
step by step.
1. Knowing the objective - One should first know the objective or the purpose of advertising.
2. Research - This step involves finding out the market behaviour, knowing the competitors, what type
of advertising they are using, what is the response of the consumers, availability of the resources
needed in the process, etc.
3.Target audience - The next step is to identify the target consumers most likely to buy the product.
4. Media selection-The selection of media depends upon factors such as desired reach, frequency,
impact, etc.
5. Setting the budget
6. Designing and creating the Ad - First the design that is the outline of Ad on papers is made by the
copywriters of the agency. Then the actual creation of Ad is done with help of the art directors and
the creative personnel of the agency.
7. Place and time of Ad- The next step is to decide where and when the Ad will be shown. The place
will be decided according to the target customers where the Ad is most visible clearly to them.
8.Execution
9. Performance: The last step is to judge the performance of the ad in terms of the response from the
customers, whether they are satisfied with the Ad and the product.

Objectives of sales promotions

1. To introduce new products
2. To attract new customers and retain the existing ones
3. To maintain sales of seasonal products
4. To meet the challenge of competition

Important sales promotion methods

1. Consumer promotion: In this type of sales promotion customers are persuaded to purchase the
product by offering discount, money-refund, contests and competitions, etc. to about to
2. Trade promotion: - In this type of sales promotion, efforts of distributors wholesalers and other
intermediaries are stimulated by offering allowances, discounts, free holiday trips, etc.
3. Sales force promotion: In this type of sales promotion, efforts of sales persons are stimulated by
giving bonuses, contests, etc.
4. Product demonstrations and conferences - Fairs and exhibitions may be organized at local,
regional, national or international to introduce new products, demonstrate the products and to
explain special features and usefulness of the products.
5. Displays - This type of sale promotion involves installation of displays at points of sale, use posters,
banners, placards and leaflets.

Staffing and related HRD functions

• Human resource is the integral component of every organization.
• Human resource refers to the knowledge, education, skills and proficiency of the
employees.
• Staffing/Human Resource Management (HRM) is that part of the management process,
which is primarily concerned with the human constituents of an organization.
• Staffing function of managers involves effective utilization of human resources (HR) towards
organizational goal accomplishment.
 • Human resource management (HRM), or staffing, is defined as the management function
devoted to acquiring, training, appraising, and compensating employees.
• Human Resource Development (HRD) is the process of increasing the capacity of the human
resource through development.
• It is thus the process of adding value to individuals, teams or an organization as a human
system.

Process of staffing
The process of staffing consists of the following steps.

1. Manpower planning
2. Recruitment
3.Selection
4. Orientation and placement
5. Training and development
6.Remuneration
7. Performance evaluation
8. Promotion and transfer

Factors affecting staffing

1.Promotion policy
2. Future growth plans
3. Technology used
4. Support from top management
5. Image of organization
6. Labour laws
7. Pressure from socio-political groups
8.Competition
9. Other external factors - Staffing is also affected by other external factors such as trade unions, social
attitude towards work, etc.

Principles of staffing
1. Principle of the purpose of staffing - The objective of managerial staffing is to ensure that
organizational roles are filled by qualified personnel who are able and keen to occupy.
2. Defining organizational roles
3. Principle of job definition
4. Principles of managerial appraisal
5. Principle of open competition
6. Principle of management training and development
7. Principle of training objectives
8. Principles of continuous development

Manpower planning
Manpower planning which is also called as human resource planning consists of putting right
number of people, right kind of people at the right place, right time, doing the right things for which
they are suited for the achievement of goals of the organization.
Objectives of manpower planning
The major objectives of manpower planning in an organization are to :
1. Ensure the presence of adequate human resources in the organization and also its effective
utilization so that all the activities of the organization are efficiently carried out.
2.Recruit the right persons for the right jobs at the right time at the right cost.
3. Training to employees to develop their skills and performance so that the individual and
organizational objectives are effectively accomplished.
4. Evaluate the performance of the employees to determine and reward their job efficiency.
5. Improve employee motivation, group morale and labour-management relations through the
implementation of employee welfare schemes.
6. Protect and promote the quality of work life of employees through necessary employee health and
safety measures.
7. Encourage ethical values and behaviour, and also socially-responsive actions among the employees.
8. Develop a sense of team spirit and collaborative attitude among the employees.

Steps in manpower planning

1. Analyzing the current manpower inventory - Before a manager makes forecast of future
manpower, the current manpower status has to be analyzed.
2. Making future manpower forecasts for the future manpower requirements in several work units.
3. Developing employment programmes - Once the current inventory is compared with future
forecasts, the employment programmes can be framed and developed accordingly, which will include
recruitment, selection and placement plans.
4. Design training and induction programmes - These will be based upon extent of diversification,
expansion plans, development programmes, extent of improvement in technology to take place, etc.

Significance of manpower planning

Some of the major of significance of manpower planning in an organization are discussed below.

1. Key to managerial functions - The four managerial functions, i.e., planning, organizing, directing
and controlling are based upon the manpower. Human resources help in the implementation of all
these managerial activities.
2. Efficient utilization
3. Identification of gaps in the existing manpower
4. Motivation -
5.Better human relations
6. Higher productivity
7. Growth of the organization

Recruitment process

The general recruitment process is as follows.

1. Identifying the vacancy :-
These contain the following.
a) Posts to be filled,
b) Number of persons,
c) Duties to be performed and
d) Qualifications required
2. Preparing the job description and person specification
3. Locating and developing the sources of required number and type of employees
4. Screening
 • Selection is a process of examining the applicants to find out the suitability of the applicant
for the given job and choosing the best from them.
• Selection is a process of picking the best suited for the organizations' requirements.
• Selection process involves rejection of unsuitable applicants.
• Recruitment process precedes selection process.
Selection process
1.Obtaining job description and job specification -.
2. Application form
3. Employment tests
4. Interview
5. Physical examination
6. Induction and orientation
Techniques and instruments used for selection
A large number of techniques and instruments are available for selection. Important among them are
discussed below.

1. Tests - After screening the applications, eligible candidates are given tests to determine skill and
abilities in terms of the requirements of the job. Different types of tests are classified under
a) Intelligence (IQ) test - The aim of intelligence test is to measure the general intellectual abilities of
a person. Intelligence tests measures mental capacity, memory, speed of thought, etc
b) Personality tests - Personality tests are designed to reveal a candidate's personal characteristics
and the way the candidate may interact with others, thereby giving a measure of leadership potential.
c) Trade tests - Trade tests (technical tests) measures an applicant's trade knowledge and skill for a
given job. Examples of job knowledge tests include tests of basic accounting principles, C++/ Net
programming, etc.
d) Aptitude tests - Aptitude tests are used to test the speed and accuracy in numerical, verbal and
reasoning. An aptitude test determines whether an applicant has potential for acquiring skills.

2. Interview
An interview is a conversation between an applicant and the interviewer (recruiting officer) in which
the interviewer asks questions to the applicant on various topics and judge their ability and suitability.
Interview is conducted to find whether the applicant is dependable, adaptable, co-operative, hard
worker, motivated and good in human relationships.
Types of interviews
a) Traditional face-to-face interview: - Most interviews are face-to-face. The most traditional is a one-
on-one conversation.
b) Panel/Committee interview:- In this situation, there is more than one interviewer. A panel of two
or more interviewer if formed to interview the candidate simultaneously.
c) Telephonic interview: - Interviews may also be used as a preliminary interview for candidates who
live far away from the job site.
d) Stress interview:- The purpose of this type of interview is to test the candidate's ability to handle
difficult situations.

Steps Involved in writing a business Plan

1. Define Purpose
2. Collect Information
3. Write Down Things
4. Prepare a rough draft
5. Financial Analysis
6. Finalize the plans
7. Get the Plan reviewed
ENTREPRENEURSHIP

❖ Entrepreneur refers to those who "undertake" the risk of new enterprises.

❖ An enterprise is created by an entrepreneur.
❖ The process of creation is called "entrepreneurship".
Characteristics of Entrepreneurship:
1. Economic and dynamic activity:
Entrepreneurship is an economic activity because it involves the creation and operation of an
enterprise with a view to creating value or wealth by ensuring optimum utilisation of scarce resources.
Since this value creation activity is performed continuously in the midst of uncertain business
environment, therefore, entrepreneurship is regarded as a dynamic force.
2. Related to innovation:
Entrepreneurship involves a continuous search for new ideas.
3. Profit potential:
Profit potential is the likely level of return or compensation to the entrepreneur for taking on the risk
of developing an idea into an actual business venture
4. Risk bearing:
The essence of entrepreneurship is the 'willingness to assume risk' arising out of the creation and
implementation of new ideas. New ideas are always tentative and their results may not be
instantaneous and positive.

In the intervening period (time gap between the conception and implementation of an idea and its
results), an entrepreneur has to assume risk. If an entrepreneur does not have the willingness to
assume risk, entrepreneurship would never succeed.

Entrepreneurial Process
1. Idea Generation:
To generate an idea, the entrepreneurial process has to pass through three stages:
a. Germination: Most creative ideas can be linked to an individual’s interest about a specific
problem
b. Preparation: - Eg: Inventors will set up laboratories
c. Incubation: - The sub-conscious mind joins unrelated ideas so as to find a resolution.
2.Feasibility Study:
a. Illumination: Idea is thought of as a realistic creation
b. Verification: It is concerned about practicality to implement an idea

Classification of Entrepreneurship
1. On the Basis of capital ownership
Private State/Public
Joint Co-Operative
2. On the basis of Atitude
Traditional Modern
3. On the basis of Centralisation
Centralised Decentralised
4. On the basis of size
Large Small
5. Routine New Type
6. Individual Group Level
7. Urban Rural