Management Processes & Skills

Functional Areas of Management

 In big business organizations, there are

separate departments to look after these
functional areas, these functions are inter-
dependent & inter related.
Functional Areas of Management
 1) Finance & Accounting Function
 i) Financial accounting: record keeping of various
financial transactions, their classification & preparation
of various statements
 ii) Management Accounting: analysis &interpretation of
financial records
 iii) Costing: Deals with the recording of costs, their
classification, analysis, interpretation & cost control.
 iv) Investment Management: Takes care of how the
financial resources can be applied to various alternatives.
 v) Taxation: Deals with the management of various direct
& indirect taxes which the organization has to pay.
Functional Areas of Management
 2) Personnel Function
 Deals with the management of human beings in the
organization. It includes following areas:
 i) Recruitment & Selection: Deal with the hiring &
employing of the human beings in the organization.
 ii) Training & Development: Deal with the process of
making employees in the organization more efficient.
 iii) Wage & Salary Administration: Related with wage &
salary surveys, job evaluation & merit rating &
incentives.
 iv) Industrial Relations: Deals with the maintenance of
overall employee relations functions.
Functional Areas of Management
 3) Marketing Function
 This area involves the distribution of organization’s
product to the buyers. It includes following areas:
 i) Advertising: Deals with the advertising of the products
giving information about the products to the prospective
buyers & motivating them to purchase these.
 ii) Marketing Research: Related with the systematic
collection, recording & analyzing of data relating to the
marketing of goods & services.
 iii) Sales Management: Involves managerial efforts
directed towards the movement of products & services
from producers to consumers.
Functional Areas of Management
 4) Production Function:
 This area is usually kept under the control of production
manager who is responsible for the performance of entire
related activities. It includes following areas:
 i) Purchasing: Related with the purchases of various things
required by the organization & managing transportation, etc.
 ii) Materials Management: Deals with the storing of the
materials, materials control & issue of materials to department
where these are needed. This works in coordination with
purchasing management.
 iii) Research & Development: Deals with the R & D of various
products in a manufacturing organization. The objective is
either to bring refinement in an existing product line or to
develop entirely a new product.
Functional Areas of Management
 5) Public Relation Function
 Modern business houses want to be in touch with the
public & government through their public relations
departments. This department organizes publicity
campaigns to increase the image & goodwill of the
business in the society.
 6) Legal Function
 In a big organization, the legal department may be
organized to ensure that the business house is abiding by
the rules & regulations framed by the government.
 It also gives advice to the management in case of
disputes with the customers, suppliers & even government
over various commercial matters.
Levels of Management
 Management levels signify the hierarchy of
management in any organization.
 The number of levels will depend upon the size of
business, number of workers & effective span of
control.
 The Hierarchy of management positions from top to
bottom is called Levels of Management.
 The level of manager in the hierarchy determines the
amount of authority & status enjoyed by him.
 The supervisory level of managers has less authority
than middle level managers who have in turn less
authority than the top managers.
Levels of Management

 Classification of Levels of Management

 1) Top Management
 2) Middle Management
 3) Lower Management
Top Management

 Top Management consists of board of

Directors, chairman, and chief executive officer.
 It performs higher level management functions
& takes the policy decisions.
 This coordinates the affairs of the business &
reviews the performance of the middle & lower
levels of the management.
 It is responsible for overall management and
performs all such functions which are
necessary.
Top Management Functions

 Top Management lays down policies & objectives of

the enterprise.
 Taking decisions for the accomplishment of the

goals of the enterprise.

 Coordination of the various departments & divisions.
 Laying down guidelines for the departmental &

divisional heads.
 Making appointments to middle level positions in the

company organization, such as divisional manager,

Departmental Heads, etc.
 Reviewing the work of executives at different levels.
Middle Management

 Middle management stands between Top

Management & lower level management.
 It consists of Heads of various departments.
 The job of middle level manager is to organize

their departments to implement the Top

Management’s policies.
 They issue the instructions to the lower level

management.
 They serve as the channel of communication

between the Top Management & lower

management.
Middle Management Functions

 Planning for the execution of policies &

programmes of Top Management.
 Analyzing the achievements of lower levels in
the light of various plans and programmes.
 Discussing the solutions of current problems &
proceedings further with their results.
 Appraising the performance of subunits.
 Guidance & motivation of supervisory personnel.
 Achieving coordination between different
sections or units.
Lower Management

 It consists of front line managers, office

superintendents, etc. Who are engaged in the
directions of the directions of operative employees?
 First line supervisors serve as an important link
between the management & the workers.
 They implement the top management policies &
provide feedback to the higher levels of
management.
 The lower level managers plan the day to day
activities & assign tasks to their subordinates, guide
them & take corrective steps whenever necessary.
Lower Management Functions

 To supervise & guide the operative workforce.

 To plan & organize the activities of the group.
 To arrange for necessary materials, machine,

tools, etc for workers & to provide them the

necessary working environment.
 To provide training & solve problems of the

workers.
 To communicate workers problems to the

higher level management.

SWOT Analysis

 The term SWOT stands for Strength, weaknesses, Opportunity

and Threats. SWOT analysis compares the organization’s
strengths and weaknesses (company profile) with external
threats and opportunities (environmental analysis).
 SWOT analysis is the starting point of formulating a strategy. It
evaluates organization’s strengths and weakness,
environmental opportunities and threats and helps the
organization formulate strategies and achieve its objective by:
 Exploiting its strengths,
 Exploiting environmental opportunities,
 Minimizing and correcting its weakness, and
 Minimizing environmental threats.
Objectives of SWOT analysis

 To compare the company’s profile (strengths and

weakness) with threats and opportunities in the product or
market areas where it wants to compete. It highlights
company’s strengths on which strategies will be based (to
exploit environmental opportunities) and weakness that
must be overcome.
 To compare company’s profile with that of its competitors.
This highlights areas where company has advantage over
competitors in different product/market areas.
 Strengths and weakness reflect internal environment of
the organization (company profile) and opportunities and
threats reflect its external environment (environmental
analysis).
(i)Strength
 i)Strength is a positive attribute of the
organization. It enables it to accept environmental
challenges and improve its competitive position.

 Organizational strengths can be:

 Common strengths: is the organizational skill and
capability possessed by other organizations
 Distinctive competencies: is the organizational
skill and capability which is possessed by a small
number of competing firms.:
(i)Strength
Strength can be:
 Your specialist marketing expertise
 A new innovative product or service
 Location of your business
 Quality processes or procedures
 Any other aspect of your business that adds

value to your product or service

Strength of Wipro
 Strengths:
 Global R&D facility.
 Retention of the man-power is the best in the industry.
 Impressive list of clientele.
 Diversified skill base across service lines
 Delivery capabilities & client satisfaction
 Commitment to go the extra mile
 Technological partnership with other software
companies
 Low cost advantage
 MEGA Partnership – Cisco, EMC, Microsoft, Oracle and
SAP
(ii) Weakness
 Weakness is an attribute of the organization
which restricts its competitive strength.
 It restricts organization’s ability to make

effective strategies for achieving its goals.

 Organizational capabilities or investment in

capabilities where organizational strengths

can be applied. This enables the
organizations implement strategies that will
help to attain its objectives.
(ii) Weakness
Weaknesses could be:
 Lack of marketing expertise
 Undifferentiated product & services (i.e. in

relation to your competitors)

 Location of your business
 Poor quality goods or services
 Damaged reputation
Weaknesses of Wipro
 Weaknesses:
 Low operating margin of the other group

companies.
 Free floating stock is very less.
 Domestic market was huge but was
underdeveloped
 Small player in global market
 Clients not trusting the capabilities of Indian

Software Cos
(iii) Opportunities
 (iii) Opportunities are environmental
challenges which improve organization’s
operational efficiency.
 They are the favourable environmental
conditions.

 The external opportunities are: development

of new technology, growing markets, liberal
government policies, etc.
  
(iii) Opportunities
 Opportunities could be:
 A developing market such as internet
 Mergers or joint ventures
 Moving into new market segments that offer

improved profits
 A new international market
 A new market vacated by an ineffective

competitors
  
Opportunities of Wipro
 Opportunities:
 In the branded product category.
 In the emerging technology areas like Blue

Tooth, etc.
 Huge global market
 The Company has entered into the global

market so now it’s the biggest opportunity

available to the company.
 Huge potential in domestic market
(iv) Threats
 (iv) Threats are environmental challenges which
weaken the organization’s competitive position.
 They are the unfavorable environmental
conditions.
 Some of the external threats are: recession in the
economy, changing consumer preferences,
development of new technology by competitors,
substitute products with high brand image or low
cost, foreign competitors, increase in
competition, political instability, etc.
  
(iv) Threats
Threats could be:
 A new competitor in your home market
 Price wars with competitor
 A competitor has new, innovative product or

service
 Competitor have superior channels of

distribution
 Taxation is introduced on your product or

service
Threats of Wipro
 Threats:
 Increasing cost of human capital.
 Slowdown in the US economy.
 Will face fierce competition in the areas of e-business
 Competition by Indian companies in domestic market
 Presence of big companies in global market
 Exchange rate : This can be a threat to the company
as the company is making profits due to the high
exchange rate and if this rate comes down in future it
can lead to a major problem for the company.
SWOT or TOWS Matrix

 This matrix has a wider scope. However, it

does not replace the earlier model.
 It is not sufficient to merely consider the

strengths, weakness, and opportunities of an

organization.
 It is important to thoroughly evaluate all of

these factors. If you carefully observe the

following diagram you will understand the
concept better.

SWOT or TOWS Matrix

Internal and External Strengths Weaknesses

Factors

Opportunities SO WO
Develop new methods Eliminate weaknesses
which are suitable to to enable new
the company’s opportunities
strength.
Threats ST WT
Use strength to defend Develop strategies, to
threats avoid that weaknesses
could be targeted by
threats.
Four Strategies
 The “SO” strategy is the most preferred one. In this strategy, the
organization can use its strengths and take advantage of the
opportunities available to it. All the organizations would try to reach
this state of business.
 In the “ST” strategy, the threats are taken care of with the strengths
of the organization.
 The “WO” strategy tries to minimize the weakness and maximize the
opportunities.
 The “WT” strategy attempts to minimize both the weakness and the
threats. In this process, the organization may try to form a joint
venture, reduce or even close down the operation.
