M.

Com -I Semester-I
Business Management
Unit 1: a) Theory Introduction to Management:
Definition- The term management has been
defined differently by different writers. Few of the important
definitions of management classified on the basis of their
concept are discussed below:
(A) Functional concept as a process, management is what a
manager performs.
“Management is that function of an enterprise which concerns
itself with the direction and control of the various activities to
attain the business objectives” -William Spriegel
“Management is the planning, organising command,
coordination and control of the technical, financial security and
accounting activities.” -Louis A. Allen
“Management is the process by which a corporative group
directs action towards a common goal”. -Joseph Messie
“Management is a distinct process consisting of planning,
organising, activating and controlling performed to determine
and accomplish the objectives by the use of human beings and
other resources.” -George R. Terry
Features and Nature of Management
From the critical analysis of the above definitions, the
following features or characteristics of management evolve:
1. Art as well as science: Management is both an art and a
science. It is an art in the sense of possessing of managing skill
by a person. In another sense, management is the science
because of developing 11 certain principles of laws which are
applicable in a place where a group of activities are co-
coordinated.
2. Management is an activity: Management is the process of
activity relating to the effective utilization of available
resources for production. The term ‘resources’ includes men,
money, materials and machine in the organization.
3. Management is a continuous process: The process of
management mainly consists of planning, organizing, directing
and controlling the resources. The resources (men and money)
of an organization should be used to the best advantages of the
organization and to the objectives. The management function
of nay one alone cannot produce any results in the absence of
any other basic functions of management. So, management is a
continuous process.
4. Management is achieving pre-determined objectives: The
objectives of an organization are clearly laid down. Every
managerial activity results in the achievement of objectives
fixed well in advance.
5. Organised activities: Management is a group of organized
activities. A group is formed not only in a public limited
company but also in an ordinary club. All the organizations
have their own objectives. These objectives will be achieved
only by a group of persons. These persons’ activities should be
organized in a systematic way to achieve the objectives that
cannot be achieved without any organized activities.
Managerial Skills
Robert Katz identifies three types of skills that are
essential for a successful management process:
 Technical skills
 Conceptual skills
 Human or interpersonal management skills
Technical skills
As the name itself indicates, these skills give the
manager knowledge and ability to use different techniques to
achieve what they want to achieve. Technical skills are not
related only to machines, production tools or other equipment,
but they are also skills that will be required to increase sales,
design different types of products and services, market the
products and services, etc. Technical skills are most important
for first-level managers. When it comes to the top managers,
these skills are not something with a high significance level.
Therefore, as we go through a hierarchy from the bottom to
higher levels, technical skills lose their importance.
Conceptual skills
Conceptual skills enable a manager to use their
knowledge or ability for more abstract thinking. That means
they can easily envisage the whole by means of analysis and
diagnosis of the different states. As such, they would be in a
position to predict the future of a business or department as a
whole.
Conceptual skills are vital for top managers, less critical for
mid-level managers and not required for first-level managers.
As we go from the bottom of the managerial hierarchy to the
top, the importance of these skills will rise.
Human or interpersonal managerial skills
Human or interpersonal management skills
facilitate a manager’s knowledge and ability to work with
people. One of the most critical management tasks is working
with people. Without people, the existence of management and
managers becomes redundant.
These skills enable managers to become leaders and motivate
employees for better accomplishments. Additionally, they help
them to make more effective use of human potential in the
company. Simply said, they are essential skills for all
hierarchical levels in the company.
Thanks for taking the time to read our blog post on the three
types of managerial skills. If you are thinking about studying in
Germany, PFH offers a Master’s Degree in General
Management. If, however, you are interested in becoming even
more international, we also offer dual degree programmes,
where you would study partly in New York, London, Bordeaux or
even Australia and receive two degrees.

Mintzberg's Management Roles-

Identifying the Roles Managers Play As a manager, you
probably fulfil many different roles every day. For instance, as
well as leading your team, you might find yourself resolving a
conflict, negotiating new contracts, representing your
department at a board meeting, or approving a request for a
new computer system.
Put simply, you're constantly switching roles as
tasks, situations, and expectations change. Management expert
and professor Henry Mintzberg recognized this, and he argued
that there are ten primary roles or behaviours that can be used
to categorize a manager's different functions. In this article and
video, we'll examine these roles and see how you can use your
understanding of them to improve your management skills.
Mintzberg published his Ten Management Roles in
his book, "Mintzberg on Management: Inside our Strange World
of Organizations," in 1990.
The ten management roles are:
1. Figurehead.
2. Leader.
3. Liaison.
4. Monitor.
5. Disseminator.
6. Spokesperson.
7. Entrepreneur.
8. Disturbance Handler.
9. Resource Allocator.
10. Negotiator.
From MINTZBERG ON MANAGEMENT by Henry Mintzberg.
Copyright © 1989 by Henry Mintzberg. Reprinted by permission
of Free Press, a division of Simon & Schuster, Inc.
Interpersonal Management Roles
The managerial roles in this category
involve providing information and ideas.
1. Figurehead – As a manager, you have social, ceremonial
and legal responsibilities. You're expected to be a source
of inspiration. People look up to you as a person with
authority, and as a figurehead.
2. Leader – This is where you provide leadership for your
team, your department or perhaps your entire
organization; and it's where you manage the performance
and responsibilities of everyone in the group.
3. Liaison – Managers must communicate with internal and
external contacts. You need to be able to network
effectively on behalf of your organization.
Informational Management Roles
The managerial roles in this category
involve processing information.
1. Monitor – In this role, you regularly seek out information
related to your organization and industry, looking for
relevant changes in the environment. You also monitor
your team, in terms of both their productivity, and their
well-being.
2. Disseminator – This is where you communicate
potentially useful information to your colleagues and your
team.
3. Spokesperson – Managers represent and speak for their
organization. In this role, you're responsible for
transmitting information about your organization and its
goals to the people outside it.
Decisional Management Roles
The managerial roles in this category
involve using information.
1. Entrepreneur – As a manager, you create and control
change within the organization. This means solving
problems, generating new ideas, and implementing them.
2. Disturbance Handler – When an organization or team
hits an unexpected roadblock, it's the manager who must
take charge. You also need to help mediate disputes
within it.
3. Resource Allocator – You'll also need to determine
where organizational resources are best applied. This
involves allocating funding, as well as assigning staff and
other organizational resources.
4. Negotiator – You may be needed to take part in, and
direct, important negotiations within your team,
department, or organization.
Management as a Profession-
The definition of management states that it is the
act of coordinating and administrating a workforce to achieve a
target. This includes building strategies and manoeuvring the
workforce accordingly to optimize its potential. In recent years,
the expansion of companies and their initiative to sell shares
have separated ownership from day-to-day company activities.
Management employees and managers have come through to
fill this gap and ensure the smooth running of an organization.
The duty of management professionals has evolved, and they
are now the key to the success of any company. Along with
directing the workforce collectively to meet company
objectives, their job role extends further to ensure the well-
being of employees as well.
What is a Profession?
A profession is an occupation that demands specialized
knowledge of a subject matter alongside intense academic
background. Moreover, competent authorities regulate the
entry in a particular occupation, and they look for experience,
ethics, and formal training. According to experts, a profession
includes the following fundamentals.

1. Special Knowledge
The emergence of professions of any kind, stems from a body
of particular knowledge, which individuals can study.
Professionals need to make an effort to acquire this knowledge
and its techniques. Management professionals need to do the
same to secure employment at their level.
2. Dedicated Training and Education
The knowledge is not enough to succeed in any profession; one
needs to know its technical nits and grits. In this regard,
training, particular to a job, comes in handy. Also, one cannot
become an expert without a dedicated course of education.
Thus, going through them is vital.
3. Code of Conduct
There is a code of conduct, commonly known as work ethics, in
every profession, and members associated with it must abide
by it. Typically, this code varies from one company to another.
This code of conduct includes the rules and regulations of a
firm.
4. Social Obligations
Social obligation is an unseen part of every profession.
Professionals seek motivation from their desire to serve society,
and social norms influence their actions.
5. Representation
Every profession has a competent authority at its forefront,
which regulates that sector. These associations are in charge of
regulating and developing criteria for a particular profession.

Functional areas of Management - Human Resource-

A human resources professional must understand the
functional areas of their department so they can assist
employees as needed. At the same time, they must also
develop plans to expand human resources practices so they
can have a positive impact on the rest of the organization. Here
are eight of the functional areas that a human resources team
can focus on:
1. Recruiting and staffing employees
2. Employee benefits
3. Employee compensation
4. Employee and labour relations
5. Human resources compliance
6. Organizational structure
7. Human resources information and payroll
8. Employee training and development

1. Recruiting and staffing employees

Hiring employees is usually the job of the hiring
manager, but the human resources department usually
sorts through job applications to find suitable candidates
for the hiring manager. An applicant tracking system (ATS)
uses keywords to help human resources pull applications
that meet the job listing’s criteria. As suitable applications
are identified, they’re forwarded to the hiring manager for
further review. Once the hiring manager has made their
decision on who they want to interview, they contact
human resources to set up the interview.
2. Employee benefits
Employee benefits include health insurance,
retirement accounts, health care flexible spending
accounts, vacation time, sick leave, family leave and any
other benefits an employer offers. A good benefits
package helps an employer attract and retain talent. That
means human resources has to know the different types of
employee benefit programs, what insurance company
offers the best benefits at the right cost in addition to
ensuring the plans are compliant with federal laws. Human
resources hold open enrolment educational meetings for
employees regarding their benefits, along with making
sure they update their plans for the next year.
3. Employee compensation
It’s the duty of human resources to decide how
much someone will be paid, performance bonuses, raises
and if someone is salaried or hourly. To that extent, they
supply the payroll department with the information it
needs to pay employees the correct amount if vacation
pay is due, when a sick day was taken and if a bonus has
been issued.
4. Employee and labour relations
Human resources must adhere to procedures
despite the fact if their employees are in a union or not.
For union employers, humans’ resources need to
understand collective bargaining practices while non-union
employers may have contracts for employees who are
considered subcontractors.
5. Human resources compliance
Federal and state laws govern how many hours
employees can work, define how an employee can be
terminated, anti-discrimination protections and how much
unpaid time an employee can take for family leave. Thus,
an employer must work within the confines of the law to
respect and observe these laws at all times.
6. Organizational structure
Although this may be the responsibility of the
management team, human resources assist them in
formulating the business goals and the mission of an
organization. They can conceptualize how an
organization’s chart is built and the flow in which projects
run through each department. If changes are needed after
further evaluation, human resources can suggest
recommendations for management to enact in order to
achieve goals such as decreasing employee turnover,
create career paths for existing employees and promote
individuals who reach the desired metrics of
management.
7. Human resources information and payroll
In addition to monitoring payroll activity, human
resources employees are accountable for keeping track of
the working environment of the company. They also must
receive feedback from employees on their individual
working environments to see if they can do more to
service external clients. Overall, working conditions are
essential in determining the reputation of the organization
and if customers will buy from them. In this case, human
resources professionals must take inventory as to what
they need to upgrade in the building where they operate
and what systems can help increase the productivity of
their employees. They’ll need to check in with
management on the budget they’ll have to make
necessary changes and purpose the benefits it gives the
company.

Functional areas of Management – Finance-

1. Determining Financial Needs:
A finance manager is supposed to meet financial
needs of the enterprise. For this purpose, he should determine
financial needs of the concern. Funds are needed to meet
promotional expenses, fixed and working capital needs. The
requirement of fixed assets is related to the type of industry. A
manufacturing concern will require more investments in fixed
assets than a trading concern. The working capital needs
depend upon the scale of operations, larger the scale of
operations, the higher will be the needs for working capital. A
wrong assessment of financial needs may jeopardise the
survival of a concern.
2. Selecting the Sources of Funds:
A number of sources may be available for
raising funds. A concern may resort to issue of share capital
and debentures. Financial institutions may be requested to
provide long-term funds. The working capital needs may be
met by getting cash credit or overdraft facilities from
commercial banks. A finance manager has to be very careful
and cautious in approaching different sources. The terms and
conditions of banks may not be favourable to the concern. A
small concern may find difficulties in raising funds for want of
adequate securities or due to its reputation. The selection of a
suitable source of funds will influence the profitability of the
concern. This selection should be made with great caution.
3. Financial Analysis and Interpretation:
The analysis and interpretation of financial
statements is an important task of a finance manager. He is
expected to know about the profitability, liquidity position,
short-term and long-term financial position of the concern. For
this purpose, a number of ratios have to be calculated. The
interpretation of various ratios is also essential to reach certain
conclusions. Financial analysis and interpretation have become
an important area of financial management.
4. Cost-Volume-Profit Analysis:
Cost-volume-profit analysis is an important
tool of profit planning. It answers questions like, what is the
behaviour of cost and volume? At what point of production a
firm will be able to recover its costs? How much a firm should
produce to earn a desired profit? To understand cost-volume-
profit relationship, one should know the behaviour of costs. The
costs may be subdivided as: fixed costs, variable costs and
semi-variable costs. Fixed costs remain constant irrespective of
changes in production.
5. Capital Budgeting:
Capital budgeting is the process of making
investment decisions in capital expenditures. It is an
expenditure the benefits of which are expected to be received
over a period of time exceeding one year. It is an expenditure
incurred for acquiring or improving the fixed assets, the
benefits of which are expected to be received over a number of
years in future. Capital budgeting decisions are vital to any
organization. An unsound investment decision may prove to be
fatal for the very existence of the concern.
6. Working Capital Management:
Working capital is the life blood and nerve
centre of a business. Just as circulation of blood is essential in
the human body for maintaining life, working capital is essential
to maintain the smooth running of business. No business can
run successfully without an adequate amount of working
capital. Working capital refers to that part of the firm’s capital
which is required for financing short-term or current assets
such as cash, receivables and inventories. It is essential to
maintain a proper level of these assets. Finance manager is
required to determine the quantum of such assets. Cash is
required to meet day-to-day needs and purchase inventories
etc.
7. Profit Planning and Control:
Profit planning and control is an important
responsibility of the financial manager. Profit maximization is,
generally, considered to be an important objective of a
business. Profit is also used as a tool for evaluating the
performance of management. Profit is determined by the
volume of revenue and expenditure. Revenue may accrue from
sales, investments in outside securities or income from other
sources. The expenditures may include manufacturing costs,
trading expenses, office and administrative expenses, selling
and distribution expenses and financial costs.
The excess of revenue over expenditure determines the
amount of profit. Profit planning and control directly influence
the declaration of dividend creation of surpluses, taxation etc.
Break even analysis and cost-volume profit relationship are
some of the tools used in profit planning and control.
8. Dividend Policy:
Dividend is the reward of the
shareholders for investments made by them in the shares of
the company. The investors are interested in earning the
maximum return on their investments whereas management
wants to retain profits for further financing. These contradictory
aims will have to be reconciled and in the interests of
shareholders and the company. The company should distribute
a reasonable amount as dividends to its members and retain
the rest for its growth and survival.

Production and Marketing.

Production-
A system can be defined as a purposeful collection of
people, objects & producers for operating within an
environment. Thus, every organization can be represented as a
system consisting of interacting sub-system. The features of a
system are that these have inputs and outputs. the basic
process of the system converts the resource inputs into some
useful form of outputs. Depending upon the efficiency of the
conversion process we may have undesirable outputs too-such
as pollution, scraps or wastage, rejection, loss of human life
etc. Using the generalized concepts of production, we can say
such system a production system.