Business Admistration There is no single definition of Business Administration Out of the many, we may select the following: It studies

the influences on organizations, how they are structured and managed and how they operate . It includes study of the nature and roles of management, especially the key tasks of planning, control and decision-making and of the importance of information and communications. The principles of business administration apply to all t yp es of organizations; Public or Private Sector, Profit or Non-Profit seeking. It has a wide ranging field of study and draws upon relevant principles and techniques from many sources and disciplines such as Economics, Behavioural Sciences, Politics, Finance, Management theory, Mathematical and Statistics, Technology, Law. Enormous change has been taken place and is still going on within organisations, in the European economy The changes take many forms because of the incresed competition , new products launched on the markets, new technologies, privat isation, changing in working patterns, contracting out services in the Public Sector and so on. To deal with change, organisations must be very flexible and adaptible, those which will not adapt themselves to the new, will not survive People are very important in organisations. Well motivated people working effectively are the key to organisation success. They respond to increased responsabilities . The current trends empower people , push them to take decisions down to the lowest level and encourage tea m work. The growth in international trade, better communications, technology transfers, the activity of multinational companies, the European Union and many other factors show that the national economies are more closely inter related with the world econom y. Decision making means choosing between alternatives. It is a key function of management. Decision making takes place at all the levels but the scope and the importance of the decisions vary. It relates to the future and is based on information about nume rous factors including: financial, social, psychological, political and other ones. Information Technology is widely used in all the companies because it makes the works easyand permanently offers the way the organisations are structured. All organizations exist within an external environment and are influenced by it and even can cause its modification. According to the S ystem Theory, o rganizations are open s ystems i.e. they receive i nputs and influences from the environment, transform or deal with these inputs in a way or in another and pass outs back to the environment. Interaction with the environment is vital and is the way the organizations adapt themselves to the changes and respond to demands. The adaptation takes many forms; it may mean changes in goods or services supplied the way they are processed or the way the organization is structured. An important managerial task, especially at the senior levels is constantly to monitor the environment for development and trends which will have an impact on the organization.

The environment interacts and influences the organization in an ever changing variety of ways; opportunity to grow because of new markets or developments in technology, threats from new competitors and substitute products, difficulties caused by supply problems and so on. Taking into account the literary meaning of environment, one may think of it as everything external to the organization. The relevant environment of the organization comprises those elements and influences with which it has some significant connection or relationship. The relationships and connections may be indirect and subtle (the increasing importance to the general public of the green issues or they may be direct and immediate (reduction in selling price by a competi tor). The influences in the specific environment are those which are closest and most immediate, the relationship of an organization with its customers whereas the general environment comprises less direct factors, for ex. the t yp e of econom y i n which the organization operates There is a tendency for the local environment of the organization to be of more specific and immediate concern but national and international factors frequently have a direct impact. For example the outbreak of the civil war in Yugoslavia halted tourism, causing the collapse of travel firms specialized in holidays in that part of the world. As a rule, organizations can influence their specific environment more than the general environment and local factors more than national and international ones. Size is important. Large organizations, particularly those called multi-nationals can exert influence on national and even international politics and economics. Multi nationals are large corporations which operate in a number of countries and are co-ordinated by a global strategy; many are American IBM, General Motors, a. s. o. The elements of the general environment may be described, they interact with each other and influence the organization, either separately or jointl y. The environment i s divers, complex and ever changing d ue to political, social and economic influences. In such circumstances, adaptability and flexibility are very important. The economic framework within which the organization works, can be considered to have two levels: 1. general economic principles which underpin all business activit y; 2. the organization of the econom y itself. The general economic problem is of finite resources and infinite wants. The people are assured to be rational and utility maximizes (utility mea ns the satisfaction people gain from goods and services).The quantity demand of good changes in relation to its price. There is diminishing marginal utilit y. As more units of commodit y are consumed in a period the utilit y obtained from each successive unit declines. The principle of diminishing returns: where more and more variable factors are added to a fixed factor, output at first increases, then slows down and even declines. For example: more labor, materials and machines were introduced in a factory. T he output would increase, initially, but increasing inputs would cause output to fall. Economies of scale i.e. if an item is produced in large numbers, there is likely to be greater efficiency and lower costs per unit. Size enables

better equipment to be used and more division of labor (i.e. the people carry out a narrow task, become more specialized and proficient).Increasing size brings managerial, organizational and communication difficulties; excessive specialization has problems too. Organizations are influenced by the type of economic system in which they exist; the planned economy where agencies of government make all the key economic decisions (what t ype and quantit y of goods will be produced, where the goods will be produced, the selling prices, and so on). In a free market economy the decisions are not centralized. Market forces, the profit motive determine prices, production levels. Competition and self interest guide the transactions between consumers and suppliers. A feature of such economies is the private ownership of the production means. The most developed industrialized countries have mixed economies, where free enterprise is combined with the state involvement. The latter involvement includes public ownership, legal regulations, various form s of planning and direction, overall demand management and direct employment of the State. All political parties accept the notion of a mix ed econom y, which should combine the benefits to be gained from market forces, for ex. enterprise, efficiency, compet ition, with State intervention to control exploitation and excesses occurring from unregulated self interest. The size of organization varies widel y. In the UK, for ex ample, a relative small number of large organizations are responsible for the most of the economic activit y. It is present in sectors such as transport, chemicals, refining, manufacturing. In other sectors such as retailing, building, agriculture there is a tendency for large firms to dominate. As a consequence, the actions of the large organ izations regarding price, production, emplo yment and investment have a major effect on the econom y. It applies particularl y to the multi -nationals which operate in a certain country. Recognition of this importance is demonstrated by the efforts of National and Local Government to attract investment by the multi nationals. The influence of the state extends in all the aspects of the economy and its involvement will remain in spite of the many privatization. The State seeks to create secure and stable condi tions for the economic growth without sharp fluctuations between boom and recession. But this idea is difficult to be achieved and there are still sharp divisions between political parties about the best ways to bring about such conditions. Here are some areas where the government acts as a REGULATOR PROMOTER ENTREPRENEUR PLANNER consumer protection; regulation of wages and hour of work; control of monopolies; provisions of training and education; provision of finance, grants and subsidiaries; protection of domestic industry through tariffs and quotas; promotion of research;

public sector emplo yment; public corporations; purchase of materials and services; fiscal policies relating to indirect and direct taxation; monetary policies relating to money supply and interest rates; regional planning. The traditional way of dividing the economy is in to public and private sectors. But there are situations when the public sector sells goods and services in the market place sometimes in competition with the private sector. Ex amples include nationalized industries such as British Railway, the Post Office, British Coal. Trading, profits and competition are encouraged elsewhere in the public sector. European Union seen as a general environment comprises the European countries which accepted the setting up of a customs union and a common market. The former means that tariffs between members are abolished and a levy of a common external tariff to the rest of the world. The common market has in view the treatment of the organ ization of the economies of the member states as if they were one country with free movement of labor, capital and enterprise. The elimination of trade restrictions to achieve the Single Market covers the following areas: free movement of capital harmonization of national laws on trade marks and patents to protect industrial property European standards to ensure the free marketing of products across the community opening up of public and government contracts to all EU members on an equal basis greater and more equal competition in air routes, shipping, telecommunication, information technology professional qualifications from one country will be acceptable across the community Among the many problems that are still to be solved to have a true Single Market, a major one is the fiscal harmonization, i.e. direct and indirect taxes should be roughly harmonized. A single currency for all these countries is another target to be fulfilled. The EU is a Law making body and has a direct effect on the sovereignty of the member states. The Council of Ministers, consisting of members representing the EU countries, frames the major policies and decisions of the community and initiates a Secondary Legislation. This one consists of three elements: regulations. They appl y to t he po pulation of the communit y. Where there is a conflict between a regulation and a national law, the former takes precedence. directives. They are instructions to member states which the individual states must implement decisions. These are directly bind ing but relate to specific organizations or individuals, not to the population generall y.

The social and demographic influences are part of the general environment. The attitudes, numbers, social organization and level education of the population are key influences in the environment. Some of the major characteristics may be these: cultural influences: patterns of communication; ideologies and beliefs s ystems; personal values and norms, attitudes demographic influences: size and rate of the population grow th; birth and death raters; age and sex discrimination; geographic distribution; urban and regional concentration social influences: social structure and mobilit y; famil y patterns; level of industrialization; crime and alienation; emigration and immigratio n educational and training influences: structure of the education system, technical/vocational training; numbers in further and higher education Culture is a rather complex subject; it makes reference to ideas and attitudes through which individuals percei ve and interpret the world, the values, norms and beliefs which the people have, the customs they follow. These values and attitudes change over time. Culture differences exist between peoples and even between regions of the same country. Changes in size of population, its age structure and its distribution are important elements in environmental change and they can be predicted if one knows the number already born. The location and movements of population affect the economy. In the 19th and the 20th there was a general movement of population from the countryside to the towns. Now there are different changes; cit y cent ers are decaying and become less pleasant to live in and people start moving in the suburbs. There is a population drift from a region to anot her. Analyzing these data, we can draw the conclusion that the movement of the population affects econom y i n different ways: housing, transport needs, the provision of service, marketing, labor supply and so on. The famil y has been the most important socia l unit throughout history; everything is changed in these decades. the structure of the society is influenced by the increasing number of divorces and one parent families; the womans role is changed, more and more women work outside the house and there is a greater social and geographical mobilit y. For most people the quality of life has been improved during the latest decays but there are still many crimes, a widening gap between the poor and the rich, the employed and unemployed. Education is of great in fluence in the present day s ociet y, because o f the knowledge and qualifications we may or may not gain but also because it helps to form attitudes and social values. Despite the tendency to attend fee paying schools, there are still many who are still educated in the state sector. Beyond school levels there are problems. There have been many attempts to improve the training position. The law exerts general influence on organization and forms part of the organizations specific environment. it regulates the activities of organizations by providing a known framework of rules within which they operate. Some aspects of law constrain the organization (consumer legislation), some direct the organization (health and safety rules), some

protect the organization (patent and trademark protection). Some parts of the law allow an organization to acquire assets and sell their products safel y. Some of the more important areas in which the Law affects organizations are: emplo yment environment (waste disposal, pollution, noi se) operations (legislation relating to health and safet y, product safet y, transport routing) marketing public interest (merger and monopolies, cartels, price fixing) finance (tax collection, corporation tax payment) organization (rights, obligations, rig hts and duties of directors, local government law All economics of the world are interrelated so the international influences are important to all of them, especially to the small and medium sized economies. The markets for some commodities can be consider ed on an international basis oil is such an example. Apart form import and export problems, international influence is exerted by the growing activity of the multi nationals; their activity can produce more uncertaint y and volatilit y in the host countrys econom y and a reduction in control by national governments. Financial market is also influenced by the international factors. Modern technology and worldwide communication allows the stock exchange to be linked across the world and money exchange rates, i nterest rates, money suppl y are affected b y the events that take place in London, Tok yo, Frankfurt and New York.

VOCABULARY Adaptable adaptabil boom avant economic collapse ofprabusire, daramare commodity materie prima comercializata pe piata de ma rfuri common market piata comunitara customs union uniune vamala decision decizie decision making proces prin care se decide intre doua sau mai multe cursuri ale actiunii to decline a decadea, a scadea diminishing return venit ce scade, provenit dintr-o investitie direct employment angajare directa direct impact impact direct directives directive division of labor diviziunea fortei de munca

education educatie; instruire employed / unemployed angajat / somer enterprise sistem de a desfasura o afacere entrepreneur antreprenor external environment institutiile si oamenii din afara unei organizatii de afaceri fee paying schools scoli platitoare de taxe finite resources resurse limitate fiscal harmonization armonie fiscala free enterprise system economic in care cetatenii au drept sa detina capital si pot sa isi conduca afacerile free market economy economia pietei libere free movement of capital libera miscare a capitalului European Union Growth crestere infinite wants nevoi nelimitate information technology inputs bunuri sau servicii cumparate de o companie carora li se poate adauga TVA to interact with each other a interactiona unii cu altii inter-related inter coretlata interest rate rata dobanzii investment investitie joint comun; unire; a uni/a potrivi key tasks sarcini importante law making body organ ce emite legi legal regulation reglementare legala levy bani ceruti si colectati de catre guvern merger fuziunea a doua sau mai multe firme mixed economy economie combinata money supply furnizare de bani monetary policy politica monetara monopolies monopoluri multi national companiescompanii multi nationale open systemsistem deschis overall demand cerere generala outbreak of izbucnire patent protection protejarea brevetului planned economyeconomie planificata planner planificator, proiectant pollution poluare population drift deplasare a populatiei to predict a prezice to process a prelucra private sectorsector particular private ownership proprietate privata profit / non profit promoter promotor public ownership proprietate publica

public sector purchase of materials and services achizitionare de materiale si servicii regulation of wages/hour work reglarea salariilor/ muncii depuse in o ora regulator cel care controleaza indeplinirea regulilor relevant environment mediu inconjurator relevant secure and stable conditionsconditii stabile si sigure single currency o singura moneda size marime to slow down a incetini small and medium sized economy economie de dimensiune mica si medie state involvement implicarea statutlui stock exchange bursa substitute productsproduse de inlocuire supply goods and services furnizare de bunuri si servicii tariff tendency trade mark; trade mark protection marca inregistrata training instruire threat fromamenintare din partea to underpin a subzidi / a sprijini / a propti waste disposal asezarea deseurilor world economy economie mondiala

QUESTIONS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. What does Business Administration study? Which are the sciences used as background? Are there an y changes within a n organization? W hy? Why must the organizations be flexible and adaptable? What role do the people play? Are national economies inter -related with the world econom y? Wh y? What does decision making mean? What is information technology and which is its role? Which is the role of the external environment? Underline some of its tasks? What about relevant environment? What is local environment? What are multinational organizations ? How do they act? Say something about economic frame Speak about types of economic systems Is size influencing the organization? Which is the role of the state and where does it act?

18. 19. 20. 21. 22. 23.

Tell something about the EU Is the EU a law making bod y? Wh y? What about social and demographic influences? Does the movement of population influence the econom y? How? Which is the role of family and education? Does law influence organization? How?

The Business Environment Specific Features The specific environment comprises the influences with which the organization has direct contact. The influences are immediate and may be local. The major elements which constitute the organizations specific environment are: supplies and materials; personnel and unions; compet ition; technology; finance; customers and marketing. They may influence the organization jointl y, in various combinations. Lets have a view over them briefl y. Customers and markets. All organizations, both the non -trading organizations (schools, hospitals, local government) and the trading ones, meet the needs of the customers. To satisfy these needs, they must identify them; so marketing must be practiced. Marketing has been defined in various ways, but here is one of its definitions: a process responsible for identifying, anticipating and satisfying customer requirements profitably (for trading organizations) or effectively (for non trading organizations). It means that the whole organization must be seen from the point of view of the customers As far as the markets are concerned, they are used for trading and influence on prices, t ypes of products, output volumes and key decisions. A firm in pure or perfect competition is a price taker; it cannot affect price because this is set by the market. Perfect competition does not exist, but many facets of it still exist in markets that deal with raw materials or agricultural products. In such industries, there are often wide swings in prices, production and incomes so that governments often intervene with subsidies, quotas and other devices to create a more orderly market.

Monopolistic competition is similar but the products are differentiated; the organization has some control over prices, the competition takes place through advertising, packing and service as well as price. Oligopoly is having in view a few sellers of commodity or service. Oligopolists may produce virtually identical goods or services; there may be product differentiation, very often created by brand advertising. There are many sectors dominated by a few large firms for example, detergents are dominated by Procter and Gamble and Unilever; banking is dominated by five important High Street Banks and so on. Producers have control over prices, there is rarely price competition between oligopolist s. The existing competition takes the form of image or brand advertising, product improvement, service innovation. Monopoly means that there is only one producer of a commodity or service. Almost all the countries have a number of nationalized industries which are state monopolies; for example in the UK, we have in view the British Rail, the Post Office, the British Coal. In these companies, the producers have the complete control over prices or output and hence profit levels. They do not maximize the profi ts because they do not want to have competitors as the large profits may draw the latter enter the market and fear that government may intervene and curtail their activities. There where the monopolies have been created by privatization a Regulator is appo inted to oversee pricing and service. All organizations employ people so they have direct links with the environment. The numbers, ages, level of education and training, experience and attitudes of the available people for emplo yment are very important for the organizations. The growth in size of the organization, the complexities of modern economics brought about the development of a new function Personnel Management. The personnel management is that part of management which deals with people at work and their relationship. It includes activities connected with recruitment, selection, training, pay administration, industrial relations. The large companies have specialist personnel managers, but in the middle and small companies, the personnel matters are dealt with by manager who has some other functions. Every organization needs money for investing or spending. The money sources vary depending on the type of organization. Commercial companies get funds from shareholders or investors by means of loans. They may retain profits instead of paying them as dividends. Charities get the funds from donations and through grants; local councils get funds from Council Taxes and rate payers plus grants from Central Government. The level of economic activity (boom, recession) influence the amount spent by the public , the amount saved and the money spent on luxuries, food and so on. The volatility of finance market is linked with the world money markets existing in New York, Tokyo, and Frankfurt London. Commercial companies do not have access to Government funds; their money must be raised from the markets. Funds may be required for short term or long term purposes; the length of time for which the money is required determines the source that will be approached.

It must be emphasized that the funds generated internally within the company (retained profits, depreciation) are the most important source of company finance, accounting for 70% of all the available funds. The financial structure of most commercial organizations is complex and is determined by their legal status. Except the smallest companies, most of them are limited liability companies. This limited liability enables someone to buy shares in a company without being liable to lose more than they have paid o r promis ed to pay into the compan y. A person wh o bu ys shares in a company becomes a pert owner of the company and has the right to get dividends from the company which represents a share of the profits. The shares may be of two t ypes: ordinary or equity shares (their holders are not guaranteed any dividend but they carry voting rights) and preference shares (they have a prior claim in the distribution of the profits and repayment of capital. They usually have the right to a stated percentage dividend which must be paid before any dividends are paid). Technology can be described as the application of machines, equipment, methods and skills to create and use materials, processes and products. Technology also refers to the way these are used and the theories governing their application. It exerts a strong influence on the structure of organizations, the relationship between departments, the style of management and the way the work is organized. The new technology means application of micro -electronics to telecommunications, manufacture, information, processing, and administration and so on. It is found in an ever increasing variety of applications. An important influence of technology is on the number and t yp es of jobs; it brings about some losses of jobs mainl y the lowe r skill ones. In the service sector the reverse has happened, emplo yment has increased. In general, it has been proved that the introduction of technology has improved the quality of jobs although deskilling has taken place for a minority of workers particularly in manufacturing. The effect is that that the demand for unskilled workers has reduced whilst that for skilled labor has risen. A major interaction with the environment concerns the various materials and services an organization bu ys from its suppl iers. Bought in services and materials constitute a large proportion of costs, especially for the organizations such as manufacturing companies, retailers, wholesalers and so on. The purchasing function is an important one in all the organizations. It is p articularly developed in manufacturing where it has developed into so called material management . It is an approach which takes into account all aspects of planning, control, purchase, storage and usage. The availability and price of some commodities can f luctuate due to both national and international factors. The 1990 Gulf Crisis upset the world oil market, fluctuation in the Brazilian coffee harvest affects the world price of coffee and so on. Organizations that are dependent on uninterrupted flows of materials seek to minimize the problems using a large variety of methods such as forward purchasing of materials, stockpiling, special arrangements with suppliers or manufacturers.

By virtue of their purchasing power some organizations have considerable influence over their suppliers and can demand special discounts or preferential treatment over supplies. The Japanese have greatly influenced modern approaches to suppl ying operations. Their approach can be presented in the following way: standardize parts and materials, wherever possible develop long term relationships with fewer suppliers keep stock levels as low as possible integrate deliveries with production requirements many western manufacturing organizations have adopted these principles successfull y. In market economies where choice is possible, all organizations face some form of competition, the type the manufacturers compete against one another to sell their products. Commercial competition tends to increase when it is relatively easy to enter the sa me product market. For example in the towns many wine bars, restaurants and shops appear creating increased competition for the already existing business. The threat posed by the potential entrants is reduced if there are barriers t o entry. The y may be financial, brand loyalty, patent rights and so on. Organizations try to minimize the adverse effects of competition even though their efforts are not in the interests of the consumers.

VOCABULARY advertising reclama to anticipate brand advertising reclama facuta unei marci de fabrica brand loyalty loialitate fata de marca de fabrica commodity seller vanzator de marfuri curtail a priva de customer client depreciation depreciere; devalorizare flow of material flux de material to identify income venit; castig to intervene a interveni to joint a fuziona; a se uni limited liability company companie cu raspundere limitata loan imprumut long term relationship relatie pe termen lung to lose, lost, lost a job a pierde un serviciu lower skilled people persoane fara pregatire to meet the needs of a satisface nevoile cuiva middle company companie/ firma mde dimensiuni medii

monopolistic competition competitie monopolista non-trading organization organizatii necomerciale oligopoly piata in care sunt putini vanzatori si multi cumparatori ordinary share actiune obisnuita to oversee a supraveghea; a controla output tax taxa pe valoare adaugata patent right drept de brevetare potential entrant potential intrus preference share actiune preferentiala price taker cel care ia pretul existent product improvement imbunatatirea produsului product market piata produsului profit level nivelul profitului to purchase a achizitiona rate payer platitor de dobanda raw material materie prima recruitment recrutare regulator reglementator retailer detailist retained profit profit retinut requirement cerere quota limita asupra unui produs, impusa de guvern service innovation share holder small company companie de dimensiune mica to spend, spent, spent money a cheltui bani state monopoly monopolul statului stock level nivelul stocului storage depozitare subsidy subventie; plata efectuata de guvern to supply a furniza swings in prices urcari ale preturilor trading organization organizatii acre fac negot unions asociatie; sindicat; accord; intelegere unskilled people personae necalificate volatility of finance market nestatornicia pietei financiare wholesaler angrosist

QUESTIONS

1. 2. 3. 4. 5.

What does the specific environment comprise? Which are its elements? What is marketing good for/ Define marketing Can we speak about pure competition? Describe a monopolistic competition

6. What is oligopol y? 7. What about monopol y? 8. Do organizations have links with environment? In which way? 9. What do you know about Personnel Ma nagement? 10.Where do the organizations take their money from? 11.Where do commercial companies obtain the money from? 12.What is a limited liabilit y compan y? 13.How man y t ypes of shares do you know? 14. Is technology important? Wh y? 15.Which is the major interaction of a company with the environment? 16.Causes that may bring about the fluctuations of prices? 17.Do the J apanese have a special theory? 18. What about competition in market econom y?

The Structure of the Organization Organizations are more than groups of people; they have their own objectives, formal patterns of relationships (i.e.structure),practice division of labor (who does what?), specify formal sources of authority (who makes decisions?) These are the key elements of the organizatio ns and the way they are dealt with determines the nature of the organization, what departments and functions it contains, the forms of relationships and communication practiced, the levels of management, the amount of centralization / decentralization and so on. An organization exists if it has some form s of structure or formalit y. An informal organization exists within the formal organization. The formal organization has in view the pattern of relationship and tasks defined b y official rules, policies and s ystems. It is designed to achieve the objectives in a rational and efficient way. There are diagrams which show the official relationships, levels of management and so on which form the formal organization. The way the organization works is affected by t he official procedures and relationships, by the behavior of the people who work in it. People form small groups and social relationships, develop non -standard, informal ways of getting things done. This is known as the informal / unofficial organization and exists within each organization. The social groups develop behavioral patterns, beliefs and objectives which are different and even opposed to the requirements of the formal organizations. The informal organization exists because 1. formal relationships are considered too impersonal 2. it fulfils human needs for friendship and belonging

3. the security of the group provides psychological support for the individual 4. it provides a power base for those dissatisfied with their official influence 5. the formal organization is not considered efficient or flexible enough The two t ypes of organization s exist side b y side in every organization. The management must harness the beneficial aspects of informal organizations and ensure the meeting of the emplo yees needs. The division of the labor within an organization requires specialization. It means that the various tasks and activities , needed to meet the objectives of the organization , should be suitably grouped and divided up. The tasks and activities are grouped into depart ments. By specializing, the people are able to concentrate on one task or group of related tasks and develop proficiency, knowledge and expertise. The more developed an organization is, the more specialization and departamentation is needed. The tasks are linked on the basis of common functions, for example: Production, Finance, Personnel and so on. Here is a scheme that shows the links: Managing Director marketing& research sales finance & purchasing production & dev. accounting personnel

The activities of many organizations are across the country and not concentrated in one single place. Under these circumstances, the organization is divided up on regional basis and local management given responsibility for the activities of the branch, area or region as the case may be. Another commonly encountered form of specialization is by category of product or service. This is encountered in large organiz ations (in private and public sectors) which have a wide range of services and products. Organizations choose structures which are thought to be the most efficient for their particular circumstances and operating conditions. They often use a mix ture of t yp es i n the attempt to combine the best features of functional and geographical specialization . It is not sufficient to , product consider the reasoning behind the departments by the numbers of department and the consequent levels of management. A major influ ence on this is the span control. The span control is the number of subordinates over which a supervisor has direct control. Classical theories tend to indicate a narrow span of control; practice varies greatly with organizations using spans ranging from one to fifty or even more. Larger spans are in the area where work is routine, where smaller forms of control are common with technical, professional and managerial groups. The number of subordinates cannot be determined in advance; it will depend on a large variety of factors such as: 1. complexity of work (the more complex the work is, the narrower the span is)

2. degree of environmental change (fast rates of change require narrow spans to increase adaptabilit y) 3. ability to subordinate (the more and better the people are trained, the less supervision they require) 4. riskness/danger associated with work (if mistakes are costly or there ph ysical hazards, narrower spans are require) 5. managers ability (good organizers and communicators will be able to deal with many persons). The spans of control vary from higher levels to lower ones. So do the number of levels of management or authority and are dependent on a variety of factors. The number of levels determines the configuration or shape of the organization. An organization may have many levels of authority or management; it is the number of levels between the workers and top management which determines the configuration /shape of the organization. Part of the factors that influence the number of levels in an organizatio n are: 1. size of organization 2. complexity and nature of operation 3. production methods 4. technology 5. management style; attitude to authority 6. amount of delegation practiced 7. spans of control 8. ability of management and personnel Here we have an example of an organizat ion, of four levels, so specific to many small and medium sized organizations: level level level level top management departmental/functional managers section heads/ supervisors clerks/ operatives / general personnel There is a tendency to increase the number of levels with the increasing in size of the organization, but it is rare to find more than 8 or 10 levels of authority even in very large organizations. Two other influences on organization structure are centralization and decentralization. The latter refers to the dispersal of authority to the parts of the organization, does not describe physical locations. The authority to take decisions is spread throughout the various levels; opposed to it , is the centralized organization where the top management is the decision taker. Because of their nature, certain functions are more easily decentralized than the others. Production, Marketing are of this t yp e, while Finance and Research function better in centralized manner. According to the specialists there are three main groups of decisions that are to be reserved for top management, namel y: 1.decisions about what technology, markets and products to go into; what business to start or abandon 2.decisions on corporate finance 3.decisions on corporate personnel policy and on key appointments 1 2 3 4

If these types of decisions are not centrally controlled, the organization will become fragmented with no real cohesion. All the organizations must have a legal status. There are a lot of legal possibilities beginning with sole traders to public limited companies, from a partnership to a local authority. The sole trader is the simplest and common form of a business organization; the owner has the total control and has unlimited liability for the debts of the business. A partnership is there where two or more people own and carry on a business together. The number of partners is limited to 20. The rights and obligations of partnerships are covered by the Partnership Act of 1890; all the partners have unlimite d liabilit y. There are also limited partnerships where all the partners may enjo y limited liabilit y; there must be one partner who has unlimited liability while the rest have a limited one and are not allowed to take part to the business Management. These two t ypes of organizations are known as UNINCORPORATED ASSOCIATIONS. The limited liability companies are the forms which account for the overwhelming proportion of business activit y. The y are legal entities in their own right; the liability of the sharehol ders is limited to the amount paid or to be paid, on the shares taken up on them. The shareholders know their total potential liability in case of failure. The concept of limited liability is universal in all industrialized economies and develops because the sole trader and partnership forms are less appropriate for larger enterprises with substantial capital requirements. The shareholders may invest money in an enterprise without taking part in the management of the business and have unlimited liability fo r the debts of the business.

VOCABULARY behavior comportare belief incredere; credinta capital requirement necesar/ nevoie de capital to carry on a business a face o afacere centralization/ decentralization centralizare/ descentralizare configuration of shape conturul formei the + comparative, the + comparative cu cat este mai, cu atat este mai to deal, dealt, dealt with a trata debt datorie decision taker persoana care ia deciziile to ensure the meeting of employees needs a asigura satisfacerea nev oilor angajatilor enterprise intreprindere; initiativa to fulfill the human needs a indeplini nevoile umane formality formalitate; formalism informal neoficial; neprotocolar;liber; degajat; intim; familiar key appointment intrevedere/ numire importanta

labor forta de munca level of management nivel de conducere/management medium sized organization organizatie de nivel mediu to met, met, met the objectives a indeplini obiectivele official rule regula oficiala liability raspundere, (pl.) datorii; pasive overwhelming proportion proportie coplesitoare pattern of relationship model de relatie policy politica procedure procedura psychological support ajutor psihologic side by side alaturi share holder actionar small sized organizationorganizatie de dimensiuni mi ci sole practitioner liber profesionist sole trader comerciant individual span control nr.de subordonati controlati de o persoana supervisor controlor; supraveghetor; administrator task sarcina trader negustor to traina instrui under the circumstances in aceste imprejurari wide range of services gama variata de servicii

Questions 1.Give the definition of an organization 2.Which are the key elements that determine an organization? 3.What has a formal organization in view? 4.Which are the elements that affect the organization work? 5.What is an informal organization? 6.Which are the elements that determine the existence of an informal organization? 7.What does the labor division require? 8.Which are the elements of the organization scheme? 9.Where do the organization activities take place? 10.What kind of organization t ypes do they need? 11.What is a span control? 12.Which are the factors that determine the number of subordinates? 13.Which are the levels of an organization? 14.Indicate other two influences on an organization 15. Indicate the three main decision groups that are to be taken into account 16.What is a sole trader? 17.What about a partnership? 18. What are limited liability partnerships?

Management: Roles, Levels, Tasks Fa yol describes it as an action of forecasting, planning, organizing, commanding, coordinating and controlling. Lots of definition try to give a more or less complex presentation of what management is supposed to be, but all of them are basically formulated on these elements. Management has to do with work, people, structures and systems. It deals with the way work is divided, organized, and coordinated, with the selection of people who are supposed to carry on the work, with the structure of the organization, their relationships, with the way the operating systems work, the t yp e of information used for this operating and so on. Organizations have to face changes of different t yp es (competitive pressures, legislation, operating environment, consumer preferences, and new technology).Their adaptation to all these can be achieved by means of management actions. These may cause changes in the way the organizations take decisions, in the processed used, in the services or products or in the structure of the organization itself. Specialists suggest to overcome resistance to change and inertia; innovation is to be supported in a personal way, unnecessary layers of

hierarchy are to be eliminated, communication should be improved across the organization, company plans are to be made known. Organizations may adapt to change and most of them use the Theory Z of William Ouchi who describes an ideal cultural s yst em based mainl y on the successful methods and approach used by large Japanese companies. According to this theory, t he culture of an organization includes the philosophies, tradition, experience and corporate values of the respective organization. The Z culture is characterized by a commitment to people trust and effective personal relationships long term employment a desire to humanize working conditions consensus decision making It claims that high levels of performance and job satisfaction go together. Hierarchy and formal structures exist; self direction and mutual trust replace to a certain extend the t raditional hierarchical direction and coordination. Theory Z underlines the fact that although the individual managers might have to accept responsibility for decisions there is a consensus in decision making, reached by agreement with subordinates and pee r colleagues. It is a participative approach which encourages information flows and goal congruence. Behind the Theory Z there is the belief that differences between J apanese companies and Western European ones lies in matters of productivity, quality and motivation and a more effective management. Management takes place at all levels in an organization and is carried out b y people having managerial functions not all of the same t ype or of same importance. Specialists speak about key roles in managerial jo bs such as: entrepreneur (planner and risk taker) organizer and coordinator motivator and coordinator controller spokesman/negotiator disturbance handler (motivator and co -ordinator) The list may continue; manager deals with processes, organization structures, tasks but also with people and he/she must take into account their attitudes, beliefs, values, reactions. There are no limits between all these and the manager must combine all of them to reach the target i.e. to identify the s ymptoms, to find out the ways o f diagnosing them, to decide how to solve them and begin the action. In spite of the many sophisticated titles, one may divide the managerial functions in three categories: strategic management (it involves the board of directors, the chief executives) tactical management (it has in view the departmental managers, personnel managers, accountant, sales managers) operational management (it makes reference to the foremen, supervisors, chief clerks).

The planning horizon decides the category of manageme nt used for an organization. It ranges from long term (at the highest level) to day to day term (existing at the lowest level). A useful way of grouping the task of management is into the following categories: -planning (all the activities should have wel l formulated goals which are to be met) -motivation and leadership (behavioral processes by means of which the manager influences others to make them participate to the achievement of the goals) -organizing and co-ordinating (determine the necessary activities, structures and responsibilities in order to reach the target) -control (it is a monitoring activity that compares the actual results with the planned ones to bring activities in line or to amend the plans). The all pervasive task of decision making takes place within each of the above categories.

Vocabulary accountant contabil approach abordare, interpretare, maniera behavioral process proces comportamental to carry on a continua, a duce mai departe, chief clerk functionar principal commitment angajament, obligatie congruence accord, concordanta consensus consens, accord, parere corporate values valori ale corporatiei, valori comune day to day term termen ce dureaza o zi diagnosing diagnoza disturbance deranjament, tulburare employment angajare entrepreneur antreprenor, impresar environment mediu inconjurator to face a infrunta, a face fata to flow, flew,flown a curge, a se scurge forecasting previziune foreman supraveghetor, sef de echipa goal tinta, scop handler agent intermedia ry,manuitor layers of hierarchy straturile ierarhiei leadership lidersip, conducere legislation legislatie long term termen lung management management, conducere manager conducator, manager mutual trust incredere reciproca

to overcome,came,come a invinge, a coplesi, a dobori peer colleague coleg egal in rang performance executare, indeplinire,performanta, realizare pervasive universal,atotpatrunzator, care se imprastie peste tot to range a se insira, a se situa, reached by atinsa de, to reach the target a atinge tinta spokesman purtator de cuvant supervisor supraveghetor, controlor task sarcina trust incredere Questions 1. What is management according to Fayol? 2. What has management to do with? 3. Do organizations face changes and what kind of? 4. Which is the suggestion made by specialists? 5. Which is the theory the organizations may use and what does it say? 6. What is Z culture characterized by? 7. Which fact does it underline? 8. Where does management take place? 9. Which are the key roles in manager ial jobs? 10.Which are the categories of the managerial functions ? 11.What does planning horizon decide ? 12.How can you group the management tasks? Planning and Decision Making Planning is a managerial process of deciding what is to be done and how is to be done. Its purpose is to provide the guidelines necessary for decision making and resulting action. It is done on both formal and informal basis and uses information from internal and external sources. It gathers, understands and communicates the information that can improve the quality of the current decisions which are based on future expectations. Planning has in view WHAT is to be done in the future, HOW is to be done that something, WHEN is to be done and WHO is supposed to do it. Flexibility is to be incorporated in planning an action. The vocabulary used for this contains lots of terms. Out of them, one selects only three which are defined in the following way: OBJECTIVES: general statement of aims/goals to be achieved PLANS: statements of speci fic actions and activities to achieve objectives (plans may be defined as strategies, sometimes) POLICIES: limits to acceptable behavior expressed in terms of priorities, ethical and moral values, standards, social responsibilities and so on. Overall Purpose of Organization OBJECTIVES

AIMS= WHAT? Statements of AIMS and GOALS PLANS MEANS =HOW? Actions to achieve Objectives POLICIES (influences on actions) The objectives of the organization are of two levels of detail. At the highest level, there are those which state the purpose of the organization. They are relatively permanent. There are more detailed objectives which would set the long term aims of the organization and must be specific enough (they can be assessed over a long interval of ti me whether they have been achieved or not). These objectives may be influenced by the owners attitude, political pressures, t ype of business and so on. There is a theory which takes into account the beneficiaries of the organization as well, the so calle d stakeholders (they ma y include emplo yees, customers, the public at large).It makes the balancing of needs of the various stakeholders; the customers, staff and shareholders, with the needs of the community as a whole, public good and quality of life in t he community. It is the area of social responsibility so seriously taken into account by many organizations. Activities charitable in nature should be distinguished from the promotional activities (i.e. sports sponsorship which are getting their money from advertising and public relation budgets) There is an increasing world wide attention given to the environment and the environmental matters are on the list of the normal objectives of the organizations. Here are some examples: compliance with the legislat ion and standards; the building of the works according to the regulations (the requirement of the best environmental practice within the industry), to reduce wastes, to establish a revitalized energy and resource conservation program, clear policy and prac tice on waste recycling. POLICIES are guides to managers which make them take actions in certain ways. They express the official attitude of the organization to different forms of behavior. Once the objectives are established, the policies offer the guidance on the way the former could be achieved. Policies express the culture and the belief s ys tems of the organization. All the levels of the organization make plans but planning should have a hierarchy and begin on the top level of the organization. Planning at tactical and operational levels takes place within the guidelines of strategic plans which is essential because otherwise the organization has no direction/overall purpose. Planning is a vital process in all the organizations; it is often shirked, management often seeks wa ys of av oiding it if at all possible. This is because of different reasons some being the following ones: - planning is time consuming task - it makes evident the uncertainty of future events

- lack of confidence of the managers and so on. Planning starts from the top and such a strategic planning seeks to obtain a consensus among the top people of the organization about the overall direction of the organization about the medium or long term. It affects the whole corporation at the hi ghest level. It is the systematic planning of the direction and total resources of an organization as a whole in order to achieve the specified objectives over the medium up to the long term. A planning team has to create a plan anal yzin g t he top issues facing the organization. This team establishes the overall purposes of the organization and then establishes the strategic objectives of the organization over the medium to long term. Within the framework of the overall purpose, the strategic objectives are written in general terms and related to different parts of organization. For ex ample, within a Local Authorit y, strategic objectives could be set for housing, education, social services, planning; in a manufacturing compan y, the y can be related to market ing, finance, personnel and so on. Top management will establish corporate policies that provide guidelines which help the organization to reach the targets. The planning team should consider the environment within which the organization operates to try to identify the trends and factors which will have a material effect on the organization in the medium and long term. Discussions follow with outside ex perts, anal ysts, special investigations ex amination of national and international statistics. Depending on the size of the company, the appraisal could include local, national or international factors. Political factors, market factors, economic and social factors as well the technological ones may represent threats and opportunities worth to be taken into acc ount. The strategies should be clear enough to be so that they can be evaluated. Specific targets can be set at tactical and operational levels for shorter periods. The information s ystem of the organization can be helpful for the planning team for the consideration of the alternative strategies. Then the team prepares the action plans for the different departments and functions of the organization. They should contain enough details so that the tactical level management knows the task they have to perform. It contains new tasks, existing operations that will turn into reality the targets. The strategic plan will be used by tactical management to prepare operational plans, budgets, sets new short term targets. There is little point in any planning exercise if progress is not monitored after the plans have been implemented. It is to be taken into account the activities, do they need adjustment to be brought into line with the original strategies or is it time to review the strategies themselves. Monitoring an d control at all the levels works by the feedback of information, a major function of the information s ystem of the organization. Planning needs a great deal of information; its t ypes and sources differ from one organization to another one. For long term planning, environmental information is of critical importance. For the short term, at lower levels, international information is very important; for planning the long term direction of the organization and ensuring survival and success, external information is important.

Decision making represents the next step; in fact it is a choice between the alternatives. It is a part of the management and occurs at all the levels of the organization. The decision makers must decide, choosing the outcomes considered to be necessary or desirable to them after an appraisal of the situation. There is feedback, inter -relationships between decisions, intuition, judgement and creativity. Decision making is based on information, information is used for defining and structuring the problem, for exploring and choosing between alternative solutions and for reviewing the effects of the implemented choice. Decision making takes place at each level of the organization but with different characteristics for each. There are two approach es to this; one is known as the rational approach it can be used for structured problems, all the factors are defined and known. For this t ype, numerous techniques exist being drawn from the accounting, finance, economics, statistics, operational research. On the other hand, descriptive models have been developed by behavioral scientists who seek to explain actual behavior in decision making. In practice, decision makers simplify the factors involved and are prepared to accept a satisfactory solution rather than attempt to find the best theoretical solution.

VOCABULARY aim scop, tinta appraisal evaluare, apreciere, estimare approach abordare compliance conformitate, acord, maleabilitate decision making intocmirea deciziilor environmental matters probleme legate de mediul inconjurator feedback reactie inversa formal basis baza formala goal tinta, scop guideline linie directoare informal basis baza de informare operational level nivel operational overall purpose scop general policy politica political pressure presiune politica priority prioritate promotional activity activitate promotionala tactical level nivel tactic to provide a aproviziona, a inzestra to reduce waste a reduce deseurile to set the long term aim a fixa un scop pe termen lung to shirk a se sustrage short term target sarcina pe termen scurt to take into account a lua in considerare threat amenintare trend curent, moda waste recycling reciclarea deseurilor

to be worth to a merita sa

Questions 1.What is planning? 2.Where is it done and what does it use? 3.What has planning in view? 4.Select some terms used for planning and define them 5.What can you tell about the organization objectives ? 6.Which are the elements that influence the objectives? 7.Is there any theory which takes into account the organization beneficiaries? 8.What does it make? 9.Is environment taken into account and how? 10.What do policies do? 11.What can you tell about planning? 12.What has a planning team to do ? 13.What about top management? 14.Do strategies play a role and which is it? 15.Speak about short term targets and long term ones 16.What is decision making? 17.What are descriptive models?

Leadership, organizing and co -ordinating The objectives of an organizations will be achieved efficiently when th e people who work in it are motivated. Management tries to increase motivation b y using motivators (pay, status, recognition), b y their st yle of man agement and the way they practice leadership. The manager trying to increase motivation is faced with a comp lex problem with no universal solutions. Managers in practice may adopt the carrot or stick approach. The latter could include reprimands, demotions, threats of dismissal. On the other hand, the former approach may be achieved by external motivators such as pay or promotion or by offering internal

satisfaction for the individual through a sense of achievement or responsibilit y. Management use a variety of methods to make jobs more fulfilling, more motivating including: job enrichment, job enlargement and job rotation, delegating authority to subordinates, encouraging participating in decision making. A general definition of LEADERSHIP can be the ability to influence the behavior of others It is a vital factor, but it is very difficult to lay down the general rules for effective leadership to fit all the situations. The so many theories speak about managers who do things right, but about leaders who do the right things. There is a continuous interaction between the factors present in any situation including personal characteristics of the leader, tasks, environment, technology, attitudes, motivation, behavior Out of the theories about leader, his tasks , we have selected professors Adair theory which is based on the idea that the leader meets the needs of the task, group and individual. Here are the functions of leadership applied to the three inter-acting variables : Related leadership functions Related leadership functions - motivation - motivation -encouraging team spirit - training and development -communication -personal recognition -appointment of sub leaders -counseling -setting standards and perfor-coaching mance targets -training and development

GROUP NEEDS -

INDIVIDUAL NEEDS TASK NEEDS setting objectives planning task & resource allocation setting standards & performance targets monitoring, control & adjustment

Changing social attitudes to authority and the need for adaptability cause major changes in management styles. The leaders must cope with rapidly changing world, adapt and re-organize. They must accept that change is normal and vital for long run success and survival and are responsible for organizing and co-ordinating activities. Organizing and co-ordinating represent a key task of management and the specialists speak about numerous facets of these aspects, some of them may be summarized as follows: - deciding what activities, tasks are necessary to achieve the plans - deciding how the tasks are to be arranged, respon sibilities allocated - deciding upon an appropriate structure so that tasks, activities, responsibilities can be coordinated

Although the design of the total organization is outside the scope of most managers, every manager has some responsibility for the design of jobs under his control. The scope of the jobs, the amount of responsibility accorded to individuals, the t yp e of control and supervision ex ercised, the amount of participation and other similar problems must be faced by every manager. Designing/redesigning jobs is not an easy fact; it causes change in the tasks, in job relationships, in supervisor/supervised relationships, in the pattern of working groups, in training and skill requirements. When work is designed the individual can benefit from mo re challenging and satisfying tasks; the organization may benefit from improved productivit y. If a j ob is to satisfy human needs, the following factors are to be taken into account: - every job should have some goal to aim for; the job holders role shoul d be made clear - a degree of autonomy should exist over the way tasks are to be achieved; people should be responsible for their work and the resources used - there should be an element of variety in the job with a minimum repetition - there should be some arrangements for providing job holders with feed back on their performance - the job should be arranged to provide some social contact - there should be opportunities to learn and to extend the job holders knowledge and skills There are sever al ways of designing jobs to increase emplo yee satisfaction and some of them are the following: - job enlargement - job enrichment - autonomous working groups - participation - delegation Job enlargement has in view the adding of tasks to the same type and level without adding more responsibility or needing more skill, but within certain limits. Job enrichment increases the scope, challenge and breadth of a task. It is a vertical extension of the job responsibilities. It is a reaction to the industrial engineering approach to work with emphasis on the micro division of labor. The approach gives an individual more scope, more autonomy, more responsibilit y, variet y and seeks to satisfy an individuals higher order needs. The autonomous work groups are self organized work groups which are held responsible for the rate and quality of their output. These groups have been used in Scandinavia, especially at Volvo. Within the group, the emplo yees are multi skilled and accept full responsibilit y for the devel opment of the group members and the designated task in terms of quality and output. Participation is a word with a wide range of meanings; from mere consultation to full worker control. It means the sharing of decision making between managers and managed. Participa tion means something good, but certain criteria are to be met; here are some of them: - the manager must want participation and not indulge in it because he feels he ought to

- the invitation to employees to participate must be genuine. If the decision i s already taken or if the group decision is not accepted, then there is not genuine participation - the decision must be worth the time and effort of all concerned. Trivial matters, matters outside the individuals or group concern, situations where there is no effective control over the factors concerned and so on will cause participation meaningless Where these conditions are met, participation will tend to result in increased commitment from the individual. Job enrichment and autonomous work groups are examples of participation at the job level. An important consequence of participation is the need for more information at lower levels. Effective decision making requires good information so that pushing decision making down the hierarchy requires radical changes in the organizations information system and a change in management st yle. Delegation means a transfer of the authority to a subordinate so that the latter can carry out some tasks. The responsibility for the task remains with the manager and is not delegated. A true delegation means delegation with trust and the minimum of necessary controls. The area of trust must be clearly defined; the individual must be allowed full control within the defined limits. There should be a control of the results, n amely the way of achieving the results. The reasons for delegation are: - a manager is relieved of some less important/ immediate tasks and has time for higher work - delegation can be more efficient because decisions are taken lower down the hierarchy, communication delays are reduced/eliminated - delegation makes the organization more flexible - it satisfies higher order needs (it is part of the staff development program). But there is a risk involved in this action. The manager may not be sure that the subordinate may be trusted to carry out the task delegated to him. Risks cannot be eliminated but some guidelines may be taken into account. So, the manager has: -to set clear objectives, indicate the standards of the expected performance -to define the level and limits of authority and ensure that sufficient resources are allocated - to give the briefing advice, training, guidance - to establish a control system to monitor results - to ensure that the task is completed , to review the performance with the subordinate. Not many managers delegate; some think that they lose contact with day to-day operations or because they feel threatened that the subordinate is doing part of his job. It is recognized that in every organization, the managers must delegate authority to subordinates.

Vocabulary

adjustment ajustare,potrivire, reglementare amount of responsibility doza de responsabilitate appointment of sub-leader numirea sub sefului appropriate structure structura alocata/ corespunzatoare behavior comportament to carry out a duce la indeplinire coaching antrenament, instruire commitment for angajament, obligatie to cope with a face fata +D, a invinge+Ac counsel sfat, povata, indemn delegation authority delegarea autoritatii demotion degradare to encourage team spirit a incuraja spiritual de echipa feed back reactie inversa to be held responsible for a fi raspunzator pentru to indulge a permite, a ingadui job enrichment mod de abordare a proiectarii postului/imbogatirea job enlargement largirea postului job holder detinatorul unei post/slujbe to lay down a pune bazele leadership management meaningless participation participare fara importanta to meet the needs a satisface nevoile/ motivator cel care impulsioneaza output quality calitatea productiei performance target scopul ce trebuie indeplinit personal recognition recunoastere personala to provide a asigura to be relieved of a fi privat de recognition recunoastere reprimand mustrare, dojana, observatie to be responsible for a fi responsabil pentru/ raspunzator de scope sfera, intindere, libertate, posibilitate to seek to a incerca sa faca ceva skill requirement necesarul de abilitati/ indemanari status statut legal, apartenenta supervisor controlor threats of dismissal amenintari de concediere training instruire

Questions

1.What does management try to do ? 2.What is the manager faced with? 3.What does management use methods for? 4.Give definitions of leadership 5.What does Adairs theory sa y? 6.What does the management st yl e change? 7.Which are the key tasks of management? 8. What is job designing and what does it cause? 9. Which are the factors a manager has to face? 10.What does the redesigning of a job cause? 11.Indicate factors needed for satisfying human needs? 12.Name some ways of designi ng jobs ; define them 13.Name some criteria which are to be met for participation ? 14. What does delegation mean? 15. Which are the reasons for delegation? 16. Can you n ame some guidelines that are to be taken into account b y managers?

Control

Control is a primary management task; it is the process of insuring the operations proceed according to plan. It may be defined (according to Mockler) as a systematic effort by business management to compare performance to predetermined standards, plans or objectives, in order to determine whether performance is in line with these standards and in order to take any remedial action required to see that human and other corporate resources are being used in the most effective and effic ient way possible in achieving corporate objectives. The control activit y t yp e varies according to the level of management and the amount of time spent controlling. Control activities will occupy most of the time of a supervisor or foreman at the operation al level and most operational control s ystems use formal, s ystematic rules with clear targets expressed in quantitative or financial terms. At higher levels, planning and control are more interlinked with management, being concerned both to monitor progress against the original plans and to review the suitability of the plans themselves for current and anticipated future conditions. Control is necessary because of unpredictable disturbances and cause s actual results which deviate from the expected or planned results. Control activities seek to keep the system outputs in the line with the original plan, or to enable the system to change safely, to meet the new conditions. Disturbances can range from minor matters (short delay in the delivery of raw materials) to disturbances which threaten the organization itself (the unexpected entry of a new competitor into the market). To be successful, the organizations must produce outputs in the form of goods, services, facilities that meet its objectives. To do this, pl anning must take place and, when plans have been implemented, control must be exercised to ensure conformity to the plans and that the plans remain relevant. A vital element in any planning process is consideration of the controls and control s ystems nece s sary to ensure adherence to the plan. In ph ysical s ystems, control is an integral part of the design and is based on direct and immediate measurement and sensing of voltages, pressures, temperatures, flows, and so on. In organizational and managemen t s ys tems, the need to monitor activities is not always apparent and there must be a conscious effort to include appropriate control s ystems throughout the organizations. A crucial difference between organizational and mechanical s ystems is that in organizational systems, control is exercised by the use of information. Most managers do not see the actual operations and rely on information about the activities that have taken place in order to be able to exercise control. That is why formalized information system s are so essential, particularly for operational and tactical level management. Control is the activity which measures deviations from planned performance and provides information upon which corrective action can be taken either to alter future performance so as to conform to the original plan, or to modify the original plan. Here are some elements of the complete control cycle: - a standard specifyin g the ex pected performance. It can be in the form of a budget, a procedure, a stock level, an output rate o r some other target.

- a measurement of actual performance. It should be made in an accurate manner, using relevant units (time taken, pounds spent, units produced, efficiency rating) - a comparison of the above mentioned elements. The comparison is accompanied b y an anal ysis which attempts to isolate the reason for an y variations. - feedback of deviations or variations to a control unit(i.e. a manager).This t yp e is single loop feedback. - actions by the control unit to alter performance in accordance w ith the plan. - feedback to a higher level control unit regarding large variations between performance and plan and used upon results of lower level control units actions. It is a double loop feedback. The feedback loops gather information on past performa nce from the output side of a system, department or process which is used to govern future performance b y adjusting the input side of the s ystem , altering the amount of finance available (for instance), the number of staff, the amount of equipment. Higher level controller e.g. Board of Directors Double Loop information Feedback Lower level of controller e.g. manager (manager compares performance with targets and required) Single Loop information Feedback Inputs Labor Required Adjust. S ystem being

makes

adjustments,

as

Measurement of outputs Outputs of Goods and services

finance materials methods Single loop feedback is the conventional feedback of small variations between actual and plan in order that corrective action can be taken to bring performance in line with the plan. Its implication is that performance standards and plans remain unchanged. It is associated with the normal control s ystems at operational and tactical levels (i.e. stock control, p roduction control, budgetary control and standard costing). At lower levels, these s ystems are closed as the performance standards do not change. The double loop or higher order feedback are to ensure that plans, budgets, organizational structures and the control s ystems themselves are revised to meet changes in conditions. Ross Ashby supports the idea that this is essential if the s ystem is to adapt to a changing environment. The business environment abounds with uncertainties (competitors actions, inflation, industrial dispute, changes in tastes and technology, new legislation) and the monitoring of trends and performance so that appropriate adjustments can be made to plans ; it is likely to be more productive than the

rigid adherence to historical plans and budgets which were prepared in earlier circumstances. The timing information flows and control decisions differs from level to level. In general, at the lowest level, there is a need for more or less immediate information and decision making; at higher levels, weekl y, monthl y and longer review periods are more effective. (Reviewing quality on an automatic production line needs to be done minute by minute whereas reviewing the performance of a factory as a whole is to be done on a monthl y/quarterl y basis .) Control action is to be effective when the time lag between output and correction action via the information loop is as short as possible. Too great a time lag may cause the resulting control action to be the opposite of what it should be. The factors which influence the speed of control are the organizational structure and the reporting period. Decisions should be made at the lowest possible level, consistent with the nature of the decision and as close to the scene of action as possible. There is a tendency for some types of control information, for example budgetary control and standard costing reports, to be produced in accordance with conventional accounting periods (monthl y) for all levels in the organization. Because of the procedures involved, such reports are frequently not available until halfway through the next period and consequently much of the information is out-of-date and is misleading as a guide to action. The most effective control period is not necessarily the same as an accounting or calendar period such as a week/month/year. At lower levels , in the organization, rapid feedback of a relatively restricted range of matters is likel y to be more effective; at higher levels , there is less immediacy. Research into formal managerial contr ol s ystems (e.g. budgetary control) indicates that they are by no means as effective as top management would like to believe. Man y managers considered the control s ystem to be ineffective and ignored the reports and statements produced by the systems. The studies showed that there are five main reasons for managements failure to use the information provided: - subjects covered were outside the managers control - the information arrived too late for effective action to be taken - insufficient detail was provided - the information supplied was thought by the manager to be inaccurate - the information was provided in a form which could not be understood The first two factors were the most important, close attention should be given to them. The full control cycle (continual monitoring of results, comparison with plans, anal ysis of variations and reporting) is an ex pensive and time consuming process. It is important as the effort is concentrated where it can be most effective, in areas of high exp enditure, vital operations and processes, departments. In more complex and uncertain conditions where both external and internal influences need to be considered, a more flexible and broader control s ystem is required. Complex organizations e.g. commercial and industrial firms contain a large number of elements and pursue a range of objectives. The consequence of

this is, that, simple control s ystems , which have traditionall y concentrated solely on financial factors, cannot be expected to control the multi -facet activities of a complex organization. Whilst the profit factor is important (in the long run), there is general recognition that it is only one facet of the management task. Profit is objective and easily measurable while the others are less. Many co mpanies have tried to deal with such problems; General Electric Company of America established 8 key factors which are to be taken into account: - productivity - personnel development - profitability - market position - product leadership - emplo yee attitu des - public responsibility - balance between short and long term goals. Within each key area, various performance targets were established and a manager would be expected to achieve a satisfactory performance level across all eight facets. Even between these areas, General Electric laid emphases on some of them such as personnel development; it is concerned with the s ys tematic training of managers to fill present and future manpower needs to allow for both the individual development and organizational grow th. The quality of the program was appraised by informal interviews covering the staffs views on: - selection periodic performance reviews - training available. A manning audit was taken annually to assess how well the department could fill its own promotional needs by examining the preparation and training of each manager and the amount of internal and external training undertaken. Personnel development and other parts of a managers task are long term in nature and, if no attempt is made to measure pe rformance in such areas, a manager might be tempted to ignore them and concentrate on a short term factor such as profitabilit y. At operational levels, there is the awareness that a single control factor cannot satisfactorily monitor the richness and diver sity of any operation. J.C.Miller carried out an international survey to find out what performance measures were used to control and monitor production in Europe, the USA and Japan. The results are the following ones: Performance measures listed in order o f importance EUROPE the USA JAPAN outgoing quality incoming quality manufacturing leadtime unit manufacturing inventory accuracy direct labor costs productivity unit material costs direct labor WIP turnover productivity overhead costs manufacturing lead- incoming quality

time on-time deliveries vendor lead-time vendor lead-time incoming quality set-up times Indirect productivity direct labor WIP turnover material yield productivity Public sector organizations are complex and face a similar range of co problems to those of the private sector.According to the 1988 government report free standing agencies should set up to carry out specific activities; they were f with problems of controlling the Agencies. The main objective of the prog ram w bring about better performance in the provision of Central Government services manage better and to improve reporting, there was a need for more comprehensive timely information on all aspects of performance, not just financial performan c was decided that performance would be monitored and controlled across four b headings: - financial performance - volume of output - quality - efficiency Within these headings, targets are set specially related to the activities, serv or products of the particular Agency and control by comparing actual perform with the targets. Here are some of the examples worth to be taken into account: Area financial performance Target Agency full cost recovery plus Civil Service unit cost targets College Central Office of Information no. of tests performed vehicle inspectorate

OUTPUT QUALITY of SERVICE a) timeliness

time to handle application b) quality of product proportion of course evaluation c) availability all documents to be available within 5 days of receipt EFFICIENCY efficiency/economy 20% reduction in the cost of common services over 5 years unit cost 472 pounds/producti ve professional day

passport office Civil Service College Companies House

Patent Office

Occupational Health Service

Close ex amination of an y real s ys tem (private or public sector) will show there are two t ypes of control loop: - feedback loops: monitor past results to detect and correct disturbances to the pl - feedforward loops: react to immediate or forthcoming dangers by ma adjustments to the s ystem in advance , in order to cope with the problem in good tim None of the two will act independentl y, a balance between them is desirable. Feedforward uses flair and insight and relies heavi ly on information a environment to anticipate critical changes in the non -controllable variables be they have an effect on the system. It is open loop and does not feed back through process as closed-loop feedback control does. The ability to sense impending prob and to take prior corrective action, which is the essence of feedforward control also the hallmarks of successful managers and businessmen. Examples of feedback forward include: - news of political instability, in a country which was a major supplier o important rare metal , would cause astute bu yers to buy before prices went up and own stocks were depleted(in contrast , a pure feedback system would react until st had actually fallen) - a company, hearing of a possible industrial dispute , would make altern production arrangements such as sub -contracting or engaging non-union labor advance of the withdrawal of labor. Traditionall y, co ntrols in organizations have been hierarchical moving lower to middle, to higher management in a regulated way. This pattern suits s conditions where real decisions making is concentrated at the top. Conditions are changing quickly and the organizations have to adapt themse to them. There is the need for mor e flexibility and local decision making. This brought about the growth of decentralized decision making and the establishmen smaller, autonomous units, operating with considerable freedom and flexibility w a large framework . Man y business orga nizations have this st yle of operation. As organizations and the st yle o f operations change , so must the st yle method of control. Old report based controls passing up and down the hierarch y stifle initiative and inhibit flexibility. The solution to problem of achieving both control and freedom is to combine tight contro performance with freedom of operation. This means that individuals and units are held accountable for mutu agreement goals while being free to achieve the results as they se e fit. Results performances are controlled; methods are not. This places more reliance on individ and encourages initiative. Operating units become self managing organizations w are innovative and adaptable. The effectiveness of another featur e of traditional control s ystem, that of event monitoring, is increasingly being questioned. For example labor cost con Labor costs are collected and, at the end of a period, an assessment is made a whether the labor is being used effectively and costs controlled. There is a growing awareness that the factors which influence labor costs mainly determined at the planning stage (the investment decision, about the mach equipment and methods to be used). Once these decisions have been mad e, labor costs are predetermined an traditional post -event controlis largel y illusory. Proper planning is the best method of control. This has been accepted by J apanese in all the important area of product qualit y. Take an automatic pop -toast

an analogy for a production s ystem. If, from time to time, the toaster pops up b toast, the traditional Western approach, called Quality Control, is to set up elaborate recording system to record the number of burnt slices and , the rectificati on system to scrap them ; the J apanese approach is to fix the toaster.

VOCABULARY

Course 8 Management Functions: Marketing

Most managers are specialists, i.e. they work in a particular area of organiza So they plan, organize, control and so on within their area of expertise. They migh the Works Manager who is re-organizing a production line to increase efficiency Chief accountant dealing with a loan from bank; the Personnel Manager wh arranging the training program for new rec ruits a.s.o. Peter Drucker has stated that marketing is the primary management function that it is the whole business seen from the point of view of its final result th from the customers point of view. There are a lot of definitions of marketi ng, but here is one , according to wh MARKETING is the process responsible for identifying, anticipating and satisf customer requirements profitably (for trading organizations) or effectively (for trading organizations). So marketing is applicable both to trading and non trading organizations. have to consider the customers point of view, the essence of marketing. Organizations that adopt a market oriented approach focus on the needs of customers. So production must respond to the n eeds of their customers. With a ma oriented approach the customer forms the starting point for the development of organizations corporate strategy; marketing is regarded as an activity shared b y Marketing is a philosoph y; it is much more than selling. It tries to get the compan produce what the customer wants. The marketing process is a way of developing a customer based strategy meets the organizations objectives. The details will vary from organizatio organization; it is a proc ess to identify , anticipate, satisfy customers wants. T yp components of the process include : market research: acquisition and analysis of information a existing and potential markets and marketing methods

product development and planning: development of new prod services, features and so on to meet customers wants and reviewing cu products pricing: setting appropriate prices having regard to product st competitive pressures, desire for market shares, cost etc. distribution: consideration of the channels of distribution wholesaler, retailer, mail -order, physical distribution promotion: identifying appropriate and cost -effective method advertising promoting and selling product. These are stages used for developing the market ing strategy for the organiza i.e. market situation is identified (customers, suppliers, competitors). Decisions taken to target the market. So the marketing mix comes crucial at this point. Kotler defines marketing mix as the set of controllable variables and levels that the firm uses to influence the target market. Professor Borden reduces it to the FOUR Ps: PRODUCT PRICE PLACE PROMOTION They are presented in more details in the following figure: PRODUCT PROMOTION quality advertising brand name publicity features offered sales promotion packaging personal selling variety direct mailing service/ guarantees TARGET MARKET (at a particular time) PLACE PRICE sales outlets: no. & type stock availability transportation delivery methods

basic price discounts credit terms trade-in allowances

The diagram shows how the four Ps are correlated with each other and management seeks to obtain the right mix of factors to meet conditions in the ta market at a particular time. There may be market segmentation where consumers wants vary across the w market requiring the organization to develop various marketing mixes to meet needs of various market segments. For example car manufacturers have di ff marketing mixes (discounts, facilities, promotion methods etc.)to deal with bu yers as compared to private bu yers. Lets see each of the four Ps what looks like. PRODUCT includes ph ysical objects(video recorder, packet of detergent, ban and insurance services and so on). The range of products offered by an organizatio

known as its product mix. Most organizations keep their product mix under con review; adding, amending, deleting in response to or anticipation of, market chang In consumer products, branding is of particular importance. Consumers loy is encouraged by brand identification and brand advertising for everything. S brands are so well known that they have become s yn on ymous with certain t ype products. Packaging is important for brand identification and for protection convenience in use. Examples include : ring -pull cans for soft drinks; pet foods, b and re-fillable containers for detergents, shampoos, washing up liquids. The provision of technical supp ort , after sales service, guarantees mecha and electrical products. Considerations of the features and benefits of the pro must take into account the product life cycle. The product life cycle is an attempt to recognize distinct stages in a produ sales history. It is important to try to identify at what stage a product is in its cycle because sales and profitability will vary at different stages and adjustmen marketing tactics will be required. In time, a product knows the introducti on on market, growth, maturit y, saturation and decline. The product development implies identification of market opportunity research and development of product development of marketing plans and preliminary marketing prior to launch expensive and loss making phase The introduction on the market implies: low sales, difficult to gain acceptance low output and high unit costs often high prices but still likely to be loss making often radical adjustments required to marketing mix likely teething problems The growth characteristics are the following ones: sales rise strongly start making profits production rises, unit cost fall relatively static price levels growth in sales attracts competition more expenditure on product improvement, promotion to obtain strong position Maturity means : sales rise but al slower rate branding, packaging, product identification essential to maintain position severe competition, possible over-capacity in market product modified and new market segments sought to prolong product life good profits but under pressure from competition

Saturation implies the following steps: sales level off and start to decline profits start to fall weaker companies leave the market

Decline involves: rapid sales decline obsolescence of product profits decline and losses may occur superior products appear consideration given to elimination or extension The length of time for the whole product cycle varies between products. Price is the key element of the marketing mix. In competitive markets prici constantly reviewed as it is the most flexible element in the market mix. It chan either direct or indirect through devices such as no deposit/interest free cre enabling the organization to adapt to the changes on the market. These ma y be ca by changing of the consumer preferences, appearance of new competing products, p changes by competitors, and so on. Price is important at all times but especiall certain points such as : new product introduction when competitors change prices when entering new markets with existing price at times of rapid change when competitors improve/enhance products without changing prices when positioning individual products in a product range when substantial legal or political changes occur which affect market when new competitors enter the market There are three common approaches to pricing used in practice : cost plus pricing, demand-based pricing, competition -based pricing, all of involve adding a profit element to the costs of p roduction. The methods are simp apply and are widely used. Full cost pricing adds a mark-up (say 30%) on to the full cost of productio arrive at a selling price. The full cost of a product includes both variable costs those that vary with production together with an allocation of a proportion of organizations fixed costs i.e. those that do no vary with activity changes. Full pricing is simple to apply and is widely used especially when the fir does not details of demand. It incl udes several problems: it does not take account of demand and the price elasticity of demand nor of competitor actions it does not have the flexibility to deal with changes in the mark of demand it ignores the inherent arbitrariness of costing proced ures espec relating to fixed cost allocations in multi product firms. Rate of Return pricing seeks to calculate what percentage mark -up shoul added on to the full cost of a product in order to obtain the firms planned rat return on capital em plo yed(return on Capital Employed = a ratio of profit to ca emplo yed).The following formula is to be used for calculating it:

%mark-up on cost = Capital employed: Total annual costs x Planned Rat Return on Capital Emplo yed Marginal pricing, known as variable cost pricing or contribution pricing cost based pricing s ystem using on l y the variable costs of a product i.e. those ou pocket costs which are incurred when an additional unit is produced. The objec with marginal pricing is to set prices so as to maximize contribution to fixed costs profit. Contribution = sales variable costs. For short term decision making, marg pricing increases pricing flex ibilit y but needs to be used judiciousl y. They frequently used by hotel chai ns, transport services, holiday providers, electr companies. They suffer from wide variation in demand. Demand based pricing is a system which uses the demand for a product, ra than production costs, as the starting point in setting prices. A prod uct is not al sold at the same price in all parts of the market. Where the market is segmen different prices can be charged to the various segments. Where the identical produ sold to different segments at different prices this is known as price discrimina Where there are slight changes in the product sold in the various segments changes in quality, packaging, finish, brand names)and different prices charged, th known as differential pricing. No company can ignore the price of co mpetitive products so all pricin competition based. A prime example of competition based pricing is that of the p of petrol from the major oil companies (Esso, B.P., Shell, Gulf).The companies ch similar prices for their products and price chan ges by one of the companies bring immediate response by all the others. Place is the element in the marketing mix that deals with distribution whic moving the product / service to the final consumer. There are two aspect distribution: channels of distribution is moving the product or service to final consumer ph ysical distribution The former are links or institutions in the chain between the producer customer. Some of them are short and direct; the producer of a service (lawyer) d directly with customers. Most channels are indirect, especially in consumer mark there are some intermediaries such as wholesalers and retailers, between the produ and consumers. The channels of distribution are changing and become shorter shorter. Here are some of the commonly encountered channels: producer producer wholesaler retailer customer industrial goods and some consumer goods services e.g.cosmetics customer retailer customer customer mail order cash& carry business selling huge range of products producer producer wholesaler

mass marketed chain t ypical consumer goods of large detergents retailers footwear cars and electrical goods financial

insurance

etc.

service

The import/export business is to introduce an agent in the chain who ac behalf of producers to ease the flow of goods, deal with documentation, etc. The wholesalers and retailers are important links in the distribu channels; their main functions are : wholesaler : to break bulk consignments down into quantities suitable individual retailers provision of storage facilities which help to even out flow goods often provide credit facilities for retailers and many provide ad and assistance with marketing reduces overall distribution retailer: convenient service for customers with a variety of goods displayed examination and choice information, technical back-up and advice available to customers after sales service and delivery often available often provide credit facilities Numerous factors need to be considered in the choice of which channe channels best suits a particular product. Consumer products tend to have lo channels than industrial products or complex consumer items such as pers computers. The shorter and more direct the channel, the more the producer become involved with the marketing effort but the producer obtains more control such matters as the provision of advice, quality or service. All markets consist of different parts, segme nts, rather than a si homogeneous whole. Each segment is characterized by different customer attrib and attitudes and consequently differences in buyer behavior. Where the differe between the market segments is substantial, the differences can be clearly identi then the producer can adjust their marketing mix to suit the segments targeted. S target only one segment while others try to attract a wider range of customers. The variables used in market segmentation relate to personal cha racteristics, geogra and purchasing behavior. PERSONAL factors include: age, sex, occupation, income, social c education. GEOGRAPHIC variables include: population, densit y, climate, reg accessibilit y. PURCHASING behavior include: brand loyalty , usage rate, buying patt benefits sought The second t ype of distribution is the physical one which deals with mo goods from producer to possible customer. It is a series of activities concerned stocking, order processing, inventory control, packaging and transport. There are m elements to be considered in physical distribution which can be grouped in five are follows: 1.Storage : will warehouses/depots be required ? If so, how many and where? What size and what facilities? 2.Packaging : Will goods be prepackaged or in bulk?

Will containers be required? If s o, size and quantit y? How will perishables/frozen goods be handled? 3.Communication and information? What ordering, invoicing, control s ystems? What IT/computer s ystems? What communication links? 4.Inventory control What level of stocks will be held? What will control levels be? Replenishment rates? Lead times for replenishment? Stock turnover ratios? 5.Transport What t ype of transport road, rail or air? Volumes and delivery schedules. Own vehicles/leased or contract? Transport costs? There is an integration of all these elements, one element cannot be alt without altering the others. Promotion is the element of the marketing mix whi ch draws the attentio the market to the product and emphasizes its benefits, special features and advant over the competition. It seeks to inform, influence, persuades the customer to Promotional activities can be subdivided into five : advertising sales promotion personal selling publicity packaging Different promotional activities with varyin g emphases take place accor to the product, the position on the product life -cycl e, the target market. The t yp market influences the promotional mix. Advertising is a non-personal process directed at large numbers of pote consumers. It communicates information by one, or a combination of written, sp or visual materials. It seeks to inform, persuade and to increase sales volume. advertiser pays for planning, designing and inserting or displaying the advertise in the selected medium. Advertising costs form a part of total costs which mus recouped from the consumer. The main media for advertising are: newspapers, magazines, journal s commercial television direct mail commercial radio outdoor advertising (hoarding, buses, bill -boards Each of the various media have advantages and disadvantages. Sales promotion is the term given to the range of activities which product/brand recognition, draw attention to the product, increase usage, assist dealer to sell the product and try to increase goodwill and repeat business. It incl inducements and incentives such as free samples, temporary price reduction, provi

of display material, special pack offers and so on. Sales promotion is directed bo consumers and the trade and is used for consumer products. Personal selling is the most expensive part of the promotion mix. It is impo in industrial markets and for more complex c onsumer products. Some firms ha relatively restricted view of the role of their sales representatives considering s generations as their prime tasks. Others take a broader, marketing view which t account of the needs of the buyer, information f lows, customer support as well as generation. The tasks of the sales representatives are : gathering market information including customer react competitors activities advising customer on technical queries, performance, deliv operating details seeking out new products/customers/markets building and retaining goodwill product demonstration and display advice on stock levels, merchandising dealing with delivery and progressing existing orders closing new sales To carry out these tasks the sales representatives must be well motivated, trained and supplied with a range of pertinent information. Publicity is information about product or the organization which is given in media without charge. Good publicity is sought after by firm s as it seen as independent and more reliable than conventional advertising. It may be done by help of press releases about noteworthy events, personalities, achievem products sponsorship of Arts and Sporting Events e.g. concerts, exhibit tennis contributions to welfare and charitable causes involvement in and financial backing for local and national events funding of academic posts or for research institutes Packaging of a product is a vital part of product management especially in moving consumer products. Apart from the basic functions of containing protecting the product, packaging seeks to : identify and make the product more distinctive help sales promotion by making the product instantly recognizable add to consumer convenience place the product in the required market niche re-vitalize interest in a declining or long-established product associate the product with the manufacturer and /or other produc the range. Marketing research is the process of acquiring an d anal yzin g informatio assist decision making in marketing. It is increasing in importance for various rea including: competition growth rapidly changing market conditions move from local to national and international markets increasing pace of technological change shorter product life cycles associated with high development costs

the trend toward more non-price factors being used to compete Marketing research seeks to produce information concerning existing potential markets and about current and propose d marketing methods. The gen objective is to improve marketing decision making, reduce risks, increase probability of success.

Course 9 Management functions: Personnel The aim of the personnel management is to ensure the optimum use of the hu resources to the mutual benefit of the organization, the person and the communi large. Personnel management is a special function of management dealing with aspects of the human resources of the organization. It includes policy developm advising line manager on personnel matters and specific responsibilities for wel and for recruiting, selecting, appraising and training and developing people to c out jobs in the organization. Personnel strategies include : manpower planning personnel policy development They have several facets that can be presented below in the following way : recruitment & selection (they imply recruitment, selection, induc termination, record keeping) emplo yee develo pment (it includes needs identification, train management and staff development, education, performance, appraisal) welfare (it means health and safety, counseling, stress managem social activities) remuneration(it has in view pay systems and pay, administra pensions, administration fringe benefits, job evaluation and merit rating) 5.emplo yee relations (it includes communication, consultation, works committees, grievance procedures, industrial relations) In small organizations many of these tasks a re carried out by line manager part of their normal dut y.

The development of the personnel strategies is a high level task. They toward the fulfillment of the organizations Corporate Plan and form a framewor all the tactical level personnel activities. Two core items are to be taken into acco manpower planning, personnel policy development. The former seeks to make sure that the organization will have sufficient sta achieve the targets of the organization. The MP consists of four in ter re activities: developing a forecast of future manpower requirements to corporate objectives. assessing existing manpower numbers, skills, potentials anal yzing ex ternal sources, present and future developing and implementing manpower plans to meet perce shortfalls.

Manpower planning(MP)deals with skills development, training and educa programs, management development and persuading people to accept and adap changes in methods of working technology, organization structures, new prod uc and administration s ystems. It affects all managers and must be reviewed frequentl y. Conditions ch rapidly and appropriate adjustments must be done to cope with the new cre situations. Policies are behavioral guidelines which influence the w ay the organization d with emplo yees and the employee related activities. They are long term and influ all aspects of personnel management including the way in which the manpower pl developed and implemented. Here are some t ypes of policies: the organization will advertise all vacancies internally before external advertising takes place the organization will conform to all relevant employment and he and safety legislation The open minded emplo yers publish their policies so that everybo d y may hav chance to see them. Recruitment of personnel means that a number of suitable applicants are attra to the organization. It is a positive action concerned with generating interest in vacancies, internally and externally. selection mea ns choosing the best candidate the vacancies. Prior to these two actions, there must be a clarification of the job concerned of the personal characteristics necessary to perform the job. These are contained job description that should contain the following elements: title of job salary/ grad e of job purpose of job principal tasks and responsibilities organizational relationship(to whom responsible and for w responsible) number of subordinates limits of responsibility special equipment, facilities, resources available performance targets, methods of performance assessment location of job special conditions relating to job These are useful for recruitment and selection as well as for providing the framework(a basis for payment, merit awar ds, identification where trainin necessary). Besides the job description, it is necessary to prepare a personnel specifica which has in view the skills, knowledge and personal characteristics necessary fo person to get the job and practice it. The organizations may develop their schemes; there are Rodgers seven point plan or Munroes five point plan. The fo has in view: ph ysical attitudes( appearance, speech, health) attainments( qualifications, education, experience) general intelligence special aptitudes (dex terit y, speed, numeracy) personal interests(social, artistic, sport)

disposition or manner( helpful, friendl y, dependability) background circumstances ( famil y, domestic) Munroes plan includes: impact on others ( bearing, speech, appearance) acquired knowledge or qualifications( qualifications, education, experie innate ability (aptitude, comprehension, learning ability) motivation(determination, drive, consistency) adjustment( attitude to stress, emotional stabilit y, sociabil it y)

Taking into account the t ype of vacancies, sources of suitable candidates chosen. Sources include : ads in newspapers, magazines, journals internal ads in-house magazines, noticeboards recruitment agencies job centers schools, universities, local radio and TV `If done properly, the recruitment process attracts a number of pos candidates. The next step is the selection of the proper person(s) by means of assessment of written material (application form, CV, referen testimonials, certificates) testing(including proficiency and aptitude tests, intelligence psychometric ones). task performance(auditions, presentations, trade tests) interviews When one has got the job, a contract of emplo yment is to be signed between parties. It contai ns terms and conditions of employment and specify in some de some items such as : hours of work; holiday entitlement salary title of job regulations regarding sickness pension; entitlements and contributions period of notice and redundancy arrangement s grievance and disciplinary procedures Emplo yee development seeks to maintain and enhance the skill and aptitude all levels of employees and to develop their potential for promotion. It is don increase the efficiency and flexibility of the organiz ation and to improve motivation of the emplo yees. Emplo yee devel opment is dealt with performance appraisal and n identification, training, management development. The informal appraisal is don ensure that jobs are carried out efficientl y and as a help in identifyi ng a partic training need for an individual. A training need is a shortfall between the skill, knowledge required to carry a job satisfactorily and the level of skill and knowledge currently possessed by emplo yee. A train ing need can be arise when it is known that the job will chang the future and it is necessary to upgrade the skills of the current staff. Performance appraisal is carried out in a more formal manner, at an intervals, usuall y. It is the process of ex am ining the past performance of an empl

to assess strengths and weaknesses and to compare them against targets; assessing potential of an emplo yee to carr y out more demanding work and for performa considering how performance may be improved by tr aining, wider experie counseling. The appraisal frequently forms the basis of pay adjustments and merit award must be constructive The appraisal of staff has many problems and difficulties consequently may not be efficient at evaluating staff as organizations like to think Training is a job oriented process to provide employees with the skills knowledge required to carr y out their duties efficientl y and effectivel y. It shoul carried out in a s ystematic manner with a close control of t he achieved result should identify training needs for individual; establish specific learning target terms of skills, knowledge and performance standards; it should take into accoun strengths, limitations, experience and aptitudes of the pers on and develop a system learning and developing program to suit the person. It is important to monitor progress with the trainee in order to adjust the program.

Course 10 Management functions: personnel part two Management development is a form of training but it is concerned with developing of the individuals for future challenges. Specialists have made a lo recommendations concerning it and according to them, the emplo yees should see create personal development programs for all the ir managers; it should be a major of responsibilities for Chiefs Executives and should be a regular item for boardr discussions and part of a long term corporate plan. Some of them concentrate on the individuals, others on the group and development. Most programs seek to enhance the knowledge and capabilitie managers in the following areas: skills(what decision making, problem solving, social and ski manager should possess) knowledge (what details of the job, s ystems, procedures and organization itself that the manager must know) personal attitudes(what is required in coping with pressure and st attitudes to staff, customers, general public) managerial st yle (effects of leadership, means of motivation on sta Management development programs and the progress of individuals are revie during the appraisal process. Personnel development is directed at the welfare of emplo yees. It deals welfare of the staff; it makes reference to the health and safet y, counseling and s management and social activities. The first of the three has in view the legislatio includes a number of specific duties and legal obligations on employers with o riding obligation on every employer. All firm must prepare and keep up to date a wri tten statement of safety po This must be known by all the employees. Some organizations employ a safety of within the personnel department. Stress management and counseling anal yze all the factors that cause s brought about by personal and d omestic problems. Some are job related; to re stress on individuals, the organizations must take various actions including : increasing the persons autonomy

decreasing/increasing personal responsibilities allowing more flexible working hours giving appropriate training providing better working conditions

Counseling is an activity in which a person who seeks help shares his or problem with a trained person, a counselor. Counseling is intended not to sol persons problem or to do an ything to the m, but to get the person to put hi problems into perspective and to see what he himself/she herself can do to solve th Social activities may include social and leisure clubs, sports facilities and te parties, discos, outings, hobby clubs. It is well developed in public se organizations. Remuneration costs ( wages, salaries, bonuses, pensions, pay administration a major element in cost structures of all organizations being over 50%. Conventionally the term WAGES is used for manual and pr oduction wor SALARIES for office workers, supervisors, managers. There are many pay system manual workers but they can be classified into those based on TIME and on OUTPU Wages are paid at a basic rate per hour up to x hours per week. Time wo above these hours is usually paid at a higher rate, depending on the number of h worked and when they were worked. Output wages depend on the output; there are man y schemes used for this t yp payment. They can increase production and wages. Salaries are paid to staff workers and sometime to all emplo yees. A salary s y consists of a number of salary bands or grades applied to different levels of j Within a given salary band, for a grade, there must be a number of pay points, ca increments. Movement up the increments may depend on length of service or s combination of the two. Job evaluation is a reasonable manner of giving an objective worth of jobs. done b y attempting to do an anal ysis of the co ntent of the job under var categories: training required, degree of responsibilit y, working conditions, t ype decisions, each factor getting a certain score. The total of the points is use establish a scale of the payment, the normal salary for the job. Performance related pay is a pay system where a proportion of the persons is linked to their performance in achieving one or more performance targets. targets may be ex pressed in terms of profitability, qualit y, cases handled, inc raised , some other measurement that can be qualified. Profit sharing is a payment to employees of a proportion of company profits. amount got is related to salary level and /or length of service; it may be given in form of shares or cash., in fact it is a bonus above basic pay. Emplo yee benefits are often called fringe benefits, they are in addition to wages and salaries organizations provide. Some are for all the employees (pensi while other are only for a certain category of people (for ex. cars for se emplo yees). Employee relations deal with the individual and collective relationships betw emplo yer and emp lo yee; the following may have some interest or influence: emplo yees emplo yers trade unions tribunals and courts

arbitrators government departments emplo yers associa tions With the growing integration with Europe, the law has become more in line with industrialized countries. The most important single item in emplo yee relations is individual contract of emplo yment. On the assumption that the person is an emplo yee, and freel y enters in contract of service a typical employment contract contains both explicit and imp terms. The former involve: letter of engagement, job description and duties, t and conditions of emplo yment, relevant collective agreem ents between employer trade unions, rule book of organization, general personnel procedures relatin promotion, dismissal, grievances, disciplinary matters. The latter have in view custom and practice, common law obligations, imp features of organizations rules, implicit features of relevant collective agreements The main requirements of this contract are: title job rates of payment and payment periods normal hours to be worked sick pay and holiday arrangements pension arrangements terms of notice specific rules relating to the job grievance, redress procedure Emplo yment contracts are individual they are often influenced b y collec agreements and the general activities of the trade unions.

Course 11 Management Functions: Production Production is a process that transforms various forms of inputs( materials, energy, skill, money) i nto outputs or finished products using a range of facilities (machines, buildings, people information) Outputs may be p h ysical products such as TV sets, cars, o r they ma y be in the form of services for ex. life assurance, package of holiday and so on. Production management is the specialist management function which deal with all aspects of the production process. This includes the following: a)long term planning and decision making concerning: product design factory location and layout work organization and methods equipment design and selection job and method design supplier selection training and development of product personnel total Quality management

b) short term and decision making concerning purchasing and materials scheduling production and stock control inspection and quality control factory and production scheduling cost and waste control maintenance provision of fitting, jigs, tools labor organization and supervision equipment Numerous factors influence the form of production. They include : volume required degree of repetition in the product/service demanded amount of standardization possible t yp e of product/service The three t ypes o f production categ ories are: jobbing production, batch production, flow production. Job or Jobbing production is common in civil engineering, building, printing, repair shops, small foundries, ship -building and other industries. Products are produced at the order of a cust omer as one-offs or in very small quantities. They may be huge in size (ship, bridge) or a small hand finishing casting. The main characteristics of this t ype of production are: work is done to special order, usually one -offs general purpose tools, equipment and machinery are required to cope with variety possible parts/materials cannot be stocked in advance because of unpredictable demands workers need to be highly skilled and versatile each job requires customized planning and sequencing of production job planning materials ordering and production cannot be done in advance of orders workers and management need to be adaptable because of the special orders and variety possible some idle time is inevitable relatively expensive form of production with lit tle or no opportunity for economies of scale. Batch production is encountered in the footwear, clothing, light engineering and similar industries. It is the production of a quantity of the same product often in different versions, finishes and colors. The product is standardized and quantities large to justify dealing with the batches in a s ystematic, sequenced series of operations. Each operation is completed before the batch is passed on to the next stage or operation. The main characteristics are : general purpose machinery/process still needed to cope with variet y but t ypicall y machines of a like t ype are grou ped together batches pass from one machine / process to the next as standardized operations are complete

more divisions of labor than in jobbing pr oduction so that less skill required by the individual operator need for efficient planning and control of production need for efficient facilities for transferring work -in-progress from operation to operation completed products may move into stock, go to several customers or occasionally go to a single customer forward planning and purchasing of materials is required continual problem of determining an optimum batch size particularly where there is generalized demand Flow production is on large scale, a single object or a restricted range of products are made on a continuous basis with an unbroken production flow from one operation to the next. It may contain two categories: PROCESS PRODUCTION is where a single homogenous product is made by continuously operating fixed sequence of processes. Examples of continuous process include : chemicals, oil, paper, steel -making. MASS PRODUCTION OR ASSEMBLY -LINE PRODUCTION is where the individual, discrete products are made in a series of repetitive operations in a fixed sequence, usually on an assembly line. Mass production methods are used., for ex. vehicles, television, domestic appliances, computers The main characteristics of flow production include: high capital investment specialized machines, tools, equipme nt arranged to facilitate the continuous flow sufficient demand to maintain flows closely defined product and material specifications meticulously integrated production planning and control s ystem required continuous maintenance to avoid breakdowns Where the product is sufficiently standardized and volumes are high, flow production is cost effective and it is possible to achieve striking economies of scale. Electronic monitoring and computerized control have enabled some process factories to be run almost a utomatically with very low staffing levels. There are some production methods playin g a key role in development of production. Here are some : JUST-INTIME SYSTEM whose aims are to produce the required items, of high qualit y, ex actly at the time they requ ired. Th is s ystem is characterized by the pursuit of excellence at all stages with a climate of continuous improvement. A J IT environment is characterized b y: a move towards zero inventory elimination of non-value added activities an emphasis on perfect quality (zero defects) short set-ups a move towards a batch size of one 100% ion time deliveries a constant drive for improvement demand-pull manufacture

Production only takes place when there is actual customer demand for the product so JIT works on a pull -through basis which means that products are not made to go into stock. JIT systems have two aspects: JIT purchasing JIT production. The former seeks to match the usage of materials with delivery of materials from external suppliers. It means that materi al stocks can be kept at near-zero levels. For putting it to work, it requires: confidence that the suppliers will deliver exactly on time that suppliers will deliver materials of 100% quality so that there will be no rejects, returns and consequent produc tion delays. The reliability of the suppliers is all important and JIT purchasing means that the company must build up close working relationships with their suppliers. It is achieved by doing more business with fewer suppliers and placing long term purchasing orders in order that the supplier has assured sales and can plan to meet the demand. JIT Production works on a demand pull basis and seeks to eliminate all waste and activities which do not add value to the product. As an example, consider the lead time associated with making and selling a product. These include: inspection time transport time queuing time storage time processing time The last of the line adds value to the product, all the others add cost but not value. The ideal for J IT s ystems is to convert materials to finished products with a lead time equal to processing time so eliminating all activities which do not add value. It means that the components are not made until requested by the next process. It is achieved by monitoring parts consump tion at each stage and using a s ystem of markers which authorize production and movement to the process which requires the parts. There is continual pressure in JIT s ystems to reduce set -up times and eventuall y eliminate them so that the optimal batch size can become one. With a batch size of one, the work can flow smoothly to the next stage without the need to store it and schedule the next machine to accept the item.

Course 12 Management functions: finance and accounting Finance and accounting is the s pecialist management function responsible for collecting, recording, anal yzing financial data and for presenting financial statements and financial information of all t ypes to managers and others inside the organization and to people outside the organizati on. The three main subdivisions of finance and accounting are: financial accounting(includes stewardship functions, external relationships, record

keeping using ledger accounting, preparation of the key statutory financial statements, tax computations. The main emphasis is on recording, anal yzing and reporting on past activities) management accounting(includes product costing, cost control through budgets and standards, provision of financial information for planning, control and decision making. The main f ocus is on the production of relevant information for internal purposes ) financial management(includes working capital and cash management, raising finance, divided policy, investment appraisal ). Modern accounting evolved out of managements stewardship fu nction and this remains a key role of financial accounting. Stewardship means accounting for and taking care of the financial resources entrusted to the management of the organization by the owners, for example by the shareholders. A comprehensive definiti on of accounting is taken from the Terminology, Chartered Institute of Management Accountants The classification and recording of monetary transactions of an entity in accordance with established concepts, principles, accounting standards and legal requirements and presentation of a view of the effect of those transactions during and at the end of an accounting period. All financial transactions are recorded using double entry accounting in ledgers(the same terms and principles are used whether the syste m is manual or computerized). The different classes and types of transactions are separately identified and recorded. For example: cash sales and sales on credit, purchases of assets used permanently in the business i.e. fixed assets and temporary assets such as goods for resale i.e. current assets, amounts owed by the business to creditors and amounts owed to the business by debtors and so on. The records are summarized in such a way that the owners and others can see the overall effect of all the transac tions. The two key summary statements are the Profit and Loss Account(which shows the profit or loss made over a period) and the Balance sheet (which shows the assets and liabilities and capital emplo yed of the business at the end of the period). Companies are the main form of business organization and the records they must keep and the information thy must public are defined by Statute in great detail in the Companies Act 1985 The key statements that must be published are the Balance Sheet, the Profit and Loss Account, the Directors Report, the Auditors Report and Notes to the Accounts. In addition a Cash Flow Statement is published although this latter statement is not a statutory requirement. The Profit and Loss Account is a summary statement of the rev enues and costs of the organization and resulting profit or loss for a past period. It must be published annually though for internal management purposes it is prepared on a monthly basis. It shows what happens in the covered period of time and is based on a number of accounting conventions of which some are presented here: Realization profit is deemed to be earned at the time of sale not at the time of payment Accruals- revenue and costs are recognized and included in financial statements as they are earned or incurred not as they are received or paid

Conservatism or Prudence known as liabilities or losses are provided for in current statements but gains or profits are only included when they have been realized. Going Concern it is assumed that the business will continue in operational existence for the foreseeable future. Consistency there should be consistent accounting treatment of like items from period to period Business Entity the business is seen as separate from the owners. A balance sheet is a summarized statement of the organizations assets(things it owns), liabilities(what it owes to its creditors) and capital emplo yment (the shareholders capital and reserve). A cash flow statement shows in some detail the causes of the change in cash and cash equivalents between last years Balance Sheet and this years one. Types of ratios may be presented here ; they may be separated into two categories: performance ratios - to assess the firms profitability, how it uses its capital liquidity ratios - to assess a firms solvency, cash flow We are going to introduce the performance ratios: Ratio 1 Return of Capital Emplo yed = Net Profit: Capital Emplo yed Ratio 2 Profit to Sales Ratio = Net Profit: Sales Ratio 3 Rate of asset turnover = Sales : Capital Employed Liquidity ratios Current ratio = Current assets : current liabilities Acid Test ratio = (Current assets Stock) : Current liabilities Stock Turnover ratio = Cost of goods sold in period : Average stock in period Average collection period i n days = Debtors : Credit sales x 365 Average payment in days = Creditors : Credit purchase x 365 Management Accounting is that part of accounting which is concerned with identifying, presenting and interpreting information to management. It deals with internal matters and provides vital financial information to management in three inter-related areas : cost anal ysis and cost ascertainment planning and control decision making and performance appraisal The foundation of MA is a well developed cost anal ysis s ystem. At a minimum every item of ex penditure is classified in two ways: b y t yp e of expenditure location or use of expenditure. The former includes wages, materials, salaries, electricit y, rat es, insurance. The latter makes reference to expenditure going directly into the product, that spent by the Advertising Department, the Personnel Office, etc.

Information for planning and control: planning is the managerial process of deciding in advance WHAT is to be done and HOW it is to be done. C ontrol is the process of ensuring that operations proceed according to plan. Cost, revenues and profits are essential elements in planning and control and management accounting is a major supplier of information for these purposes. Budgeting is a short term planning and control technique widely used in industry, commerce and governmen t. A budget is a financial ex pression of a plan. For example, the plan may be to produce 10,000 units. A budget is then developed showing in details the types and amounts of ex penditure necessary to produce 10,000 units. This is the planning side of the budgeting. During and after production, control is exercised by comparing actual expenditure with that budgeted. The procedures of budgetary planning and control are to be seen in the following structure : Long Internal External range capacities factors plans resources & trends

Forecasting & Quantity Budgets Financial budgets preparation Agreement with budget holders & top management Budgets published (these constitute the budgetary planning) Actual results recorded Budget/Actual comparison Reporting of variations (they constitute the budgetary control) Budgeting is usually done for the year ahead divided for control purposes into months.. Properly carried o ut, budgeting aids coordination between departments, improves communication, assists control and may motivate staff to achieve targets. Decision making is a vital management task and the management accounting s ystem is an important provider of financial in formation for decision making purposes. The information supplied must be relevant for the purpose and relevant information for decision making has the following characteristics: future costs and revenues

(Decision making relates to the future so it is expe cted future costs and revenues that are important. Costs already spent, known as sunk costs, are irrelevant.) differences in costs and revenues (If a cost or revenue, remains constant for all the options being considered it can be ignored; only the differe nces are relevant.) Financial management is concerned with many tasks including the setting of financial objectives, acquiring and managing the finances required to meet the objectives, investment appraisal, managing the working capital of the organization. Some of them are complex and require detailed technical knowledge of matters such as company law, taxation, actuarial calculations, working capital management, cash forecasting and investment appraisal.

Course 13 Office Organization and Management

The office deals with the clerical work of the organization. Traditionally this work was almost entirely paper -based but the increase in usage of information technology, computers and telecommunications means that major changes are taking place in the way t hat office work is dealt with. The function of an office include: gathering, processing, filing, sorting and retrieving information communicating information by typing, telephoning, posting, cop yin g, printing, fax ing originating information by writing repo rts, editing, rearranging, collating, cross referencing control activities including checking and audit, inspection, safeguarding assets, personal evaluation ensuring that legal requirements are met An alternative term for office management is administra tive management. It is defined as a branch of management which is concerned with the services of obtaining, recording and anal yzing information, of planning and of communicating, by means of which the management of a business safeguards its assets, promotes its affairs and achieves its objectives. The office can be considered in s ys tem terms : input, process and output and each of them has more elements that are to be taken into account: INPUTS PROCESSING OUTPUTS correspondence orders invoices phone calls messages cheques telex anal yzing summarizing calculating filing interpreting generating editing messages correspondence memos forms minutes reports invoices

orders faxes e-mail Traditionally all office work was done in the office premises The use of faxes, e-mail and personalized telephone numbers which enable a subscriber to be tracked down anywhere in th e world mean that, with the right facilities, a person can always be in two -way co ntact. There are changes that can take place and are known as hotelling/hotdesking. Some companies have found that 30 to 40 % of desks are vacant at any one time. In conseq uence expensive office space is being wasted. One approach to overcome this problem has been adopted by Arthur Anderson, manager consultant. Each work position, known as carrel, is assigned to emplo yees according to the task being performed that day. This is temporaril y personalized with name plates, re-routed phone calls and any files required being made available. This is known as hot -desking. Although undeniably space saving, the process does strip workers of their own fixed desks and offices. The question of whether or not to centralize services is an important one for large organizations. The choice depends on a careful study of volumes, costs, service requirements, degree of control and other factors. Each organization must choose the best compromis e to suit its own requirements. The advantages and disadvantages of centralization are the following ones: advantages : greater control of costs and standards enables higher skilled, specialist staff to be used possible economies of scale through higher vo lumes, bulk purchasing greater utilization of expensive equipment disadvantages : may not be responsive to local requirements delays and inflex ibilit y loss of personal contact and convenience more communication and transport becomes necessary In certain areas of work there has been more decentralization over recent years. There are numerous factors to be considered in planning the ph ysical conditions of offices and deciding what t ypes of offices should be provided. These range from objective, measurable it ems such as temperature and lighting to more subjective matters such as status. Some of the more important factors include: what work must be done? Is there a normal sequence or work flow? what communications are required? Internall y? Ex ternall y? What equi pment is required? Is it nois y? Does it need to be separated? How can the existing space be best utilized? How can team work and co-operation be encouraged? How can movements, distractions be reduced?

fax e-mail

controlling controlling

How much supervision is required? How will this be prov ided? Are there privacy and security requirements? Will visitors/customers need to be dealt with? What physical working conditions are necessar y t o ensure good working conditions? What t ype of furn iture and equipment best suits the staff and work to be done? An important strategic decision relates to the t ypes of offices provided. These can range from individual, private offices to open plan, landscape offices. These characteristics of the main types of offices are to be presented. Private offices are often provided for executives, for those who have to deal with confidential or high security work, or have numerous visitors. In many organizations the provision of private offices, often with individual chosen furniture, is more related to status and senior it y than to the t yp e of work carried out. Departmental or cellular offices are larger offices designed to house a section or department carryin g out related work. Such offices help to foster a team approach but may encourage an insular attitude to the rest of the organization. In general, such offices are relatively expensive and use space inefficientl y. Open plan offices are large offices, often housing several sections or departments with staff of all grades in the one office i.e. clerks, supervisors and managers. Open plan offices have a number of advantages and disadvantages. The advantages are : space savings less costly more flexible easier supervision machine/equipment sharing becomes easier communications and work flow may be improved The disadvantages are : noise and distraction caused by movement, conversation, visitors, phones less confidentiality and security loss of morale due to large numbers, change from small group offices perceived loss of status by managers and senior staff A way of overcoming some of the disadvantages of open plan offices is called the landscape office. They are an attempt to alleviate the regimentation of the traditional open plan office, reduce noise and distraction and to foster sectional or group identities. In a landscape office desks and work areas are arranged either singly or in groups at different angles to one another. Boundaries between sections are subtle marked by low visual and acoustic screens, the liberal use of plants and the positionin g of cabinets and equipment. The general effect of landscaping is to soften and break up the formal appearance of a large office in order to tone down any regimented look. Great care is made the office as attractive as possible, good lighting and coordinat ed

furniture and equipment. This type of office uses space somewhat less efficiently than an ordinary open plan one but the psychological benefits are generally thought to outweigh this disadvantage. In addition to numerous statutes regardin g emplo yee righ ts, legislation relating to health and safety and working conditions is of particular importance to managers responsible for offices. In earlier days relatively few people worked in administration so the efficiency and productivity of offices was largely i gnored. The position today is totally different. Far more people work in administration and offices than are directly employed in production. In most organizations administrative costs are a major element in their cost structure. Accordingly it is essentia l that the office work is carried out as efficiently as possible and that the office is as productive as the factory. Computers and IT enable gains in efficiency to be made but more fundamental questions need to be asked before the means of doing the work is considered. Organization and methods is a specialist service to management. It aims to improve administrative, clerical and office procedures. To do this, it is necessary to study the methods of work, the way the organization is structured and how work is subdivided.. This broader view is necessary as various factors inter-relate and one cannot be studied without the others. Because of their importance in clerical work it is normal to be a central control. Frequently this is the task of the Clerical S ervices Manager or the Organization and methods department. Such an arrangement ensures that the need of a single department as a whole are considered instead of the narrower requirements of a single department. In addition to control over the design of ne w forms it is normal in large organizations to maintain a central register of all existing forms. This enables usage to be monitored, stocks controlled and periodic reviews to be undertaken to eliminate unnecessary forms or to re -design forms not fulfilling their roles effectively. Terry Lucey Business Administration, 1994, , Complete Course Text ad