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Tourism Management©Ramakrishna Kongalla

R'tist@Tourism, Pondicherry University 2

• Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively.

• Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal.

• Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resources and natural resources.

• Since organizations can be viewed as systems, management can also be defined as human action, including design, to facilitate the production of useful outcomes from a system.

• This view opens the opportunity to 'manage' oneself, a pre-requisite to attempting to manage others

• Towards the end of the 20th century, business management came to consist of six separate branches, namely:– Human resource management– Operations management or production management– Strategic management– Marketing management– Financial management– Information technology management (management information systems)

• Nature of Management– It is a dynamic process– It has multi disciplinary approach– It is a science– It is an art


Process of Management• MANAGEMENT PROCESS-

Management is considered a process because it involves a series of interrelated functions. The management process includes planning, organizing, staffing, directing and controlling functions.

• Management as a process has the following implications– 1)MANAGEMENT AS SOCIAL PROCESS-Management process involves interaction among people. Goals

can be achieved only when relations between people are productive.– 2)MANAGEMENT AS INTEGRATED PROCESS-Management process brings together human, hysical and

financial resources. Management process also integrates human efforts so as to maintain harmony among them.

– 3)MANAGEMENT AS ITERATIVE PROCESS-All managerial functions are contained within each other. for example, when a manager prepares plans, he is also laying down standards for control

– 4)MANAGEMENT AS CONTINUOUS PROCESS-Management involves continuous identifying and solving problems. it is repeated again and again.


Functions of Management

• Management operates through various functions, often classified as planning, organizing, staffing, leading/directing, controlling/monitoring and motivation.– Planning: Deciding what needs to happen in the future (today, next week, next month, next year,

over the next five years, etc.) and generating plans for action.– Organizing: (Implementation)pattern of relationships among workers, making optimum use of the

resources required to enable the successful carrying out of plans.– Staffing: Job analysis, recruitment and hiring for appropriate jobs.– Leading/directing: Determining what needs to be done in a situation and getting people to do it.– Controlling/monitoring: Checking progress against plans.– Motivation: Motivation is also a kind of basic function of management, because without

motivation, employees cannot work effectively. If motivation does not take place in an organization, then employees may not contribute to the other functions (which are usually set by top-level management).


Levels of management

Top-level managers• Consists of board of directors, president, vice-president, CEOs, etc. They are responsible for controlling and

overseeing the entire organization. They develop goals, strategic plans, company policies, and make decisions on the direction of the business. In addition, top-level managers play a significant role in the mobilization of outside resources and are accountable to the shareholders and general public.– According to Lawrence S. Kleiman, the following skills are needed at the top managerial level. – Broadened understanding of how: competition, world economies, politics, and social trends effect organizational

effectiveness .

Middle-level managers• Consist of general managers, branch managers and department managers. They are accountable to the top

management for their department's function. They devote more time to organizational and directional functions. Their roles can be emphasized as executing organizational plans in conformance with the company's policies and the objectives of the top management, they define and discuss information and policies from top management to lower management, and most importantly they inspire and provide guidance to lower level managers towards better performance. Some of their functions are as follows:– Designing and implementing effective group and intergroup work and information systems.– Defining and monitoring group-level performance indicators.– Diagnosing and resolving problems within and among work groups.– Designing and implementing reward systems supporting cooperative behavior.

First-level managers• Consist of supervisors, section leads, foremen, etc. They focus on controlling and directing. They assigning

employees tasks, guide and supervise employees on day-to-day activities, ensure quality and quantity production, make recommendations, suggestions, and up channel employee problems, etc. First-level managers are role models for employees that provide:– Basic supervision.– Motivation.– Career planning.– Performance feedback.


Top

Middle

Low


Management skills• Political: used to build a power

base and establish connections.• Conceptual: used to analyze

complex situations.• Interpersonal: used to

communicate, motivate, mentor and delegate.

• Diagnostic: the ability to visualise most appropriate response to a situation

(Or )• Technical• Decision making• Leadership• Adaptive• Managing• Social

Management roles• Interpersonal: roles that

involve coordination and interaction with employees.

• Informational: roles that involve handling, sharing, and analyzing information.

• Decisional: roles that require decision-making.

(Or)• Top management roles• Middle management roles• Supervisory management

roles


External Environment of an Organization

Directly interactive forces• Directly interactive forces include owners, customers,

suppliers, competitors, employees, and employee unions. Management has a responsibility to each of these groups. – Owners expect managers to watch over their interests and provide

a return on investments.– Customers demand satisfaction with the products and services

they purchase and use.– Suppliers require attentive communication, payment, and a strong

working relationship to provide needed resources.– Competitors present challenges as they vie for customers in a

marketplace with similar products or services.– Employees and employee unions provide both the people to do

the jobs and the representation of work force concerns to management.


• Indirectly interactive forces– sociocultural dimension is especially important because it determines the goods,

services, and standards that society values. The sociocultural force includes the demographics and values

– political and legal dimensions of the external environment include regulatory parameters within which an organization must operate. Political parties create or influence laws, and business owners must abide by these laws. Tax policies, trade regulations, and minimum wage legislation

– technological dimension of the external environment impacts the scientific processes used in changing inputs (resources, labor, money) to outputs (goods and services)

– economic dimension reflects worldwide financial conditions. Certain economic conditions of special concern to organizations include interest rates, inflation, unemployment rates, gross national product, and the value of the U.S. dollar against other currencies.

– global dimension of the environment refers to factors in other countries. Although the basic management functions of planning, organizing, staffing, leading, and controlling are the same whether a company operates domestically or internationally, managers encounter difficulties and risks on an international scale. Whether it be unfamiliarity with language or customs or a problem within the country itself (think mad cow disease), managers encounter global risks that they probably wouldn't have encountered if they had stayed on their own shores


Social responsibilities

• obligation of management towards the society and others concerned.

• Business enterprises are creatures of society and should respond to the demands of society– Responsibility towards owners– Responsibility towards employees– Responsibility towards consumers– Responsibility towards the Governments– Responsibility towards the community and society

• The socially responsible role of management in relation to the community are expected to be revealed by its policies with respect to the employment of handicapped persons, and weaker sections of the community, environmental protection, pollution control, setting up industries in backward areas, and providing relief to the victims of natural calamities etc.


Management Ethics…

Reasons to behave ethically• From the point of view of

internal customer:– improves the atmosphere at work

and helps motivating the employees– ethic behaviour of management

sets a good example to the employees

– evokes a sense of pride for the company and improves its image in the eyes of the employees

• From the point of view of external customer:– improves the public image of the

company adds to the overall development of ethical behaviour in the society

4 levels of organizational ethics– Social disregard: the company

shows carelessness for the consequences of its actions

– Social obligation: the company does not wish to extend its activity any further than just meeting its legal responsibilities

– Social responsiveness: the company adjusts its policies according to the social conditions, demands and pressures

– Social responsibility: the company decides to concentrate on its long - term goals for the benefit of society in general


Ethical decision - making

• When making a decision in management the following criteria of ethical decision - making should be considered:– Legality - will the decision somehow affect the legal status?– Fairness - how will the decision affect those involved in it?– Self - respect - does the decision - maker feel good about the decision and its

consequences?– Long - term effects" - how do the predicted long - term effects relate to the

above parameters?• "Ethics in Management" Management ethics are the ethical

treatment of employees, stockholders, owners, and the public by a company. A company, while needing to make a profit, should have good ethics.

• Employees should be treated well, whether they are employed here or overseas. By being respectful of the environment in the community a company shows good ethics, and good, honest records also show respect to stockholders and owners.


Planning


Nature• A plan is trap laid to capture the future. If

plans are good, the organization survives and grows. Poor plans lead to its doom (LA Allen)

• Two attitudes to planning need to be held in tension: – on the one hand we need to be prepared

for what may lie ahead, which may mean contingencies and flexible processes.

– On the other hand, our future is shaped by consequences of our own planning and actions.

• A plan should be a realistic view of the expectations. Depending upon the activities, a plan can be long range, intermediate range or short range. It is the framework within which it must operate.

• For management seeking external support, the plan is the most important document and key to growth.

• Preparation of a comprehensive plan will not guarantee success, but lack of a sound plan will almost certainly ensure failure.

Purpose of a plan• Just as no two organizations are alike, so

also their plans. • It is therefore important to prepare a

plan keeping in view the necessities of the enterprise.

• A plan is an important aspect of business. It serves the following three critical functions:– Helps management to clarify, focus,

and research their business's or project's development and prospects.

– Provides a considered and logical framework within which a business can develop and pursue business strategies over the next three to five years.

– Offers a benchmark against which actual performance can be measured and reviewed.

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• Planning - a result-oriented process - can be summarized in 3 easy steps:– 1. choosing a destination,– 2. evaluating alternative routes, and – 3. deciding the specific course of your

plan

• Types of Planning– Short term– Mid term– Long term

• Process of planning– Perception of opportunities and threats

(SWOT)– Establishing objectives– Planning premises– Identification of alternatives– Evaluation alternatives– Choice of alternative plans– Formulation of final plan– Establishing sequence of activities

Importance of the planning process• A plan can play a vital role in

helping to avoid mistakes or recognize hidden opportunities. Preparing a satisfactory plan of the organization is essential. The planning know the business and that they have thought through its development in terms of products, management, finances, and most importantly, markets and competition.

• Planning helps in forecasting the future, makes the future visible to some extent. It bridges between where we are and where we want to go. Planning is looking ahead.

R'tist@Tourism, Pondicherry University


Management by objectives• According to Koontz & O’Donnel, MBO

is a comprehensive managerial system that integrates many key managerial activities in a systematic manner consciously directed towards the effective and efficient achievement of organisational objectives

• Management by Objectives; a system that seeks to align employees' goals with the goals of the organization. This ensures that everyone is clear about what they should be doing, and how that is beneficial to the whole organization

• Peter Drucker outlined the five-step process for MBO shown in figure 1, below. Each stage has particular challenges that need to be addressed for the whole system to work effectively.


Decision making

• Decision making can be regarded as the mental processes (cognitive process) resulting in the selection of a course of action among several alternative scenarios.

• Every decision making process produces a final choice.

• The output can be an action or an opinion of choice.

• Decision making process

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Techniques – Pros and Cons: Listing the

advantages and disadvantages of each option, popularized by Plato and Benjamin Franklin

– Simple Prioritization: Choosing the alternative with the highest probability-weighted utility for each alternative (see Decision Analysis)

– Satisficing: using the first acceptable option found

– Acquiesce to a person in authority or an "expert", just following orders

– Flipism: Flipping a coin, cutting a deck of playing cards, and other random or coincidence methods

– Prayer, tarot cards, astrology, augurs, revelation, or other forms of divination

– Taking the most opposite action compared to the advice of mistrusted authorities (parents, police officers, partners )

Decision-Making Stages• Developed by B. Aubrey Fisher,

there are four stages that should be involved in all group decision making. – Orientation stage- This phase is

where members meet for the first time and start to get to know each other.

– Conflict stage- Once group members become familiar with each other, disputes, little fights and arguments occur. Group members eventually work it out.

– Emergence stage- The group begins to clear up vague opinions by talking about them.

– Reinforcement stage- Members finally make a decision, while justifying themselves that it was the right decision.R'tist@Tourism, Pondicherry University


Decision-making models• Rationality,

– Herbert Simon (1976) means ”a style of behaviour that is appropriate to the achievement of given goals, within the limits imposed by given conditions and constraints”

• Facts– According to Gortner (2001), facts are the

information and knowledge that the public administrators possess in formulating policies.

– Facts are important in deciding the appropriate means to take to achieve higher ends.

– They may not be readily known by administrators but need to be acquired through extensive research and analysis.

• Values– Values are internal perceptions on the

desirability and priority of one’s actions and choices. (Van Wart, 2004) Besides setting goals for their plans, decision makers make priorities, interpret facts and act upon objective situations according to their values.

• Means– Means are the instruments to satisfy a

higher end (Simon, 1997). Although they are used to achieve a higher end, they are not neutral in value.

– When policy makers devise their strategies, they choose their means according to their internal values and consequences.

• Ends– Ends are the intermediate goals to a

more final objective. In a means-end hierarchy, the concept of means and ends is relative.

– An action can be a mean relative to the higher levels in the hierarchy but an end relative to the lower levels.

– However, in this hierarchy, an action is more value-based when moving upwards in the hierarchy but more fact-based when moving downwards


Organizing

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• Organizing is the function of management which follows planning. It is a function in which the synchronization and combination of human, physical and financial resources takes place.

• All the three resources are important to get results. Therefore, organizational function helps in achievement of results which in fact is important for the functioning of a concern.

• According to Chester Barnard, “Organizing is a function by which the concern is able to define the role positions, the jobs related and the coordination between authority and responsibility.

• Hence, a manager always has to organize in order to get results. R'tist@Tourism, Pondicherry University


A manager performs organizing function with the help of following steps:-

• Identification of activities - All the activities which have to be performed in a concern have to be identified first. For example, preparation of accounts, making sales, record keeping, quality control, inventory control, etc. All these activities have to be grouped and classified into units.

• Departmentally organizing the activities - In this step, the manager tries to combine and group similar and related activities into units or departments. This organization of dividing the whole concern into independent units and departments is called departmentation.

• Classifying the authority - Once the departments are made, the manager likes to classify the powers and its extent to the managers. This activity of giving a rank in order to the managerial positions is called hierarchy. The top management is into formulation of policies, the middle level management into departmental supervision and lower level management into supervision of foremen.

• Co-ordination between authority and responsibility - Relationships are established among various groups to enable smooth interaction toward the achievment of the organizational goal. Each individual is made aware of his authority and he/she knows whom they have to take orders from and to whom they are accountable and to whom they have to report. A clear organizational structure is drawn and all the employees are made aware of it.


Line and staff organization• is a modification of line organization

and it is more complex than line organization.

• According to this administrative organization, specialized and supportive activities are attached to the line of command by appointing staff supervisors and staff specialists who are attached to the line authority.

• The power of command always remains with the line executives and staff supervisors guide, advice and council the line executives. Personal Secretary to the Managing Director is a staff official.

• Features of Line and Staff Organization• There are two types of staff :

– Staff Assistants- P.A. to Managing Director, Secretary to Marketing Manager.

– Staff Supervisor- Operation Control Manager, Quality Controller, PRO

• Line and Staff Organization is a compromise of line organization. It is more complex than line concern.

• Division of work and specialization takes place in line and staff organization.

• The whole organization is divided into different functional areas to which staff specialists are attached.

• Efficiency can be achieved through the features of specialization.

• There are two lines of authority which flow at one time in a concern :– Line Authority– Staff Authority

• Power of command remains with the line executive and staff serves only as counselors.


• Merits– Relief to line of executive– Expert advice– Benefit of Specialization– Better co-ordination– Benefits of Research and

Development– Training– Balanced decisions– Unity of action

• Demerits– Lack of understanding– Lack of sound advice– Line and staff conflicts– Costly– Assumption of authority– Staff steals the show

RESPONSIBILITY• Responsibility is the obligation to accomplish the goals

related to the position and the organization. Managers, at no matter what level of the organization, typically have the same basic responsibilities when it comes to managing the work force: Direct employees toward objectives, oversee the work effort of employees, deal with immediate problems, and report on the progress of work to their superiors.

AUTHORITY• Authority is seen as the legitimate right of a person to

exercise influence or the legitimate right to make decisions, to carry out actions, and to direct others. For example, managers expect to have the authority to assign work, hire employees, or order merchandise and supplies.

Span of control is the term now used more commonly in business

management, particularly human resource management. Span of control refers to the number of subordinates a supervisor has.

• In the hierarchical business organization of some time in the past it was not uncommon to see average spans of 1 to 4 or even less. That is, one manager supervised four employees on average. In the 1980s corporate leaders flattened many organizational structures causing average spans to move closer to 1 to 10


• Delegation– Managers delegate some of their function and

authority to their subordinates.– Scope of delegation is limited as superior

delegates the powers to the subordinates on individual bases.

– Responsibility remains of the managers and cannot be delegated

– Freedom is not given to the subordinates as they have to work as per the instructions of their superiors.

– It is a routine function– Delegation is important in all concerns whether

big or small. No enterprises can work without delegation.

– The authority is granted by one individual to another.

– Responsibility cannot be delegated– Degree of delegation varies from concern to

concern and department to department.– Delegation is a process which explains superior

subordinates relationship– Delegation is essential of all kinds of concerns– Delegation is essential for creating the

organization– Delegated authority can be taken back.– Very little freedom to the subordinates

• Decentralization– Right to take decisions is shared by top

management and other level of management.– Scope is wide as the decision making is shared by

the subordinates also.– Responsibility is also delegated to subordinates.– Freedom to work can be maintained by

subordinates as they are free to take decision and to implement it.

– It is an important decision of an enterprise.– Decentralization becomes more important in large

concerns and it depends upon the decision made by the enterprise, it is not compulsory.

– It is a systematic act which takes place at all levels and at all functions in a concern.

– Authority with responsibility is delegated to subordinates.

– Decentralization is total by nature. It spreads throughout the organization i.e. at all levels and all functions

– It is an outcome which explains relationship between top management and all other departments.

– Decentralization is a decisions function by nature.– Decentralization is an optional policy at the

discretion of top management.– It is considered as a general policy of top

management and is applicable to all departments.– Considerable freedom


• Conflict is defined as a clash between individuals arising out of a difference in thought process, attitudes, understanding, interests, requirements and even sometimes perceptions. A conflict results in heated arguments, physical abuses and definitely loss of peace and harmony. A conflict can actually change relationships.

• Phases of conflict• A conflict has five phases.

– Prelude to conflict - It involves all the factors which possibly arise a conflict among individuals. Lack of coordination, differences in interests, dissimilarity in cultural, religion, educational background all are instrumental in arising a conflict.

– Triggering Event - No conflict can arise on its own. There has to be an event which triggers the conflict. Jenny and Ali never got along very well with each other. They were from different cultural backgrounds, a very strong factor for possibility of a conflict.Ali was in the mid of a presentation when Jenny stood up and criticized him for the lack of relevant content in his presentation, thus triggering the conflict between them.

– Initiation Phase - Initiation phase is actually the phase when the conflict has already begun. Heated arguments, abuses, verbal disagreements are all warning alarms which indicate that the fight is already on.

– Differentiation Phase - It is the phase when the individuals voice out their differences against each other. The reasons for the conflict are raised in the differentiation phase.

– Resolution Phase - A Conflict leads to nowhere. Individuals must try to compromise to some extent and resolve the conflict soon. The resolution phase explores the various options to resolve the conflict.


• Change management is a structured approach to shifting/transitioning individuals, teams, and organizations from a current state to a desired future state.

• It is an organizational process aimed at helping employees to accept and embrace changes in their current business environment.– Mission changes,– Strategic changes,– Operational changes (including

Structural changes),– Technological changes,– Changing the attitudes and behaviors

of personnel,

• Successful change management– Benefits management and realization– Effective Communications– education, training and/or skills– personal counseling– implementation and fine-tuning


• Innovation is the creation of better or more effective products, processes, technologies, or ideas that are accepted by markets, governments, and society.

• Innovation differs from invention in that innovation refers to the use of a new idea or method, whereas invention refers more directly to the creation of the idea or method itself.

• Organization development (OD) • is a new term which means a conceptual, organization-

wide effort to increase an organization's effectiveness and viability.

• Warren Bennis has referred to OD as a response to change, a complex educational strategy intended to change the beliefs, attitudes, values, and structure of an organization so that it can better adapt to new technologies, markets, challenges, and the dizzying rate of change itself.

• OD is neither "anything done to better an organization" nor is it "the training function of the organization"; it is a particular kind of change process designed to bring about a particular kind of end result.

• OD can involve interventions in the organization's "processes," using behavioural science knowledge

organizational reflection, system improvement, planning and self-analysis.

• Kurt Lewin (1898–1947) is widely recognized as the founding father of OD, although he died before the concept became current in the mid-1950s.

• From Lewin came the ideas of group dynamics and action research which underpin the basic OD process as well as providing its collaborative consultant/client ethos.


Staffing


• Nature of Staffing Function– Staffing is an important managerial function- Staffing function is the most

important mangerial act along with planning, organizing, directing and controlling. The operations of these four functions depend upon the manpower which is available through staffing function.

– Staffing is a pervasive activity- As staffing function is carried out by all mangers and in all types of concerns where business activities are carried out.

– Staffing is a continuous activity- This is because staffing function continues throughout the life of an organization due to the transfers and promotions that take place.

– The basis of staffing function is efficient management of personnels- Human resources can be efficiently managed by a system or proper procedure, that is, recruitment, selection, placement, training and development, providing remuneration, etc.

– Staffing helps in placing right men at the right job. It can be done effectively through proper recruitment procedures and then finally selecting the most suitable candidate as per the job requirements.

– Staffing is performed by all managers depending upon the nature of business, size of the company, qualifications and skills of managers,etc. In small companies, the top management generally performs this function. In medium and small scale enterprise, it is performed especially by the personnel department of that concern.


Steps involved in Staffing

• Manpower requirements- The very first step in staffing is to plan the manpower inventory required by a concern in order to match them with the job requirements and demands. Therefore, it involves forecasting and determining the future manpower needs of the concern.

• Recruitment- Once the requirements are notified, the concern invites and solicits applications according to the invitations made to the desirable candidates.

• Selection- This is the screening step of staffing in which the solicited applications are screened out and suitable candidates are appointed as per the requirements.

• Orientation and Placement- Once screening takes place, the appointed candidates are made familiar to the work units and work environment through the orientation programmes. placement takes place by putting right man on the right job.

• Training and Development- Training is a part of incentives given to the workers in order to develop and grow them within the concern. Training is generally given according to the nature of activities and scope of expansion in it. Along with it, the workers are developed by providing them extra benefits of indepth knowledge of their functional areas. Development also includes giving them key and important jobsas a test or examination in order to analyse their performances.

• Remuneration- It is a kind of compensation provided monetarily to the employees for their work performances. This is given according to the nature of job- skilled or unskilled, physical or mental, etc. Remuneration forms an important monetary incentive for the employees.

• Performance Evaluation- In order to keep a track or record of the behaviour, attitudes as well as opinions of the workers towards their jobs. For this regular assessment is done to evaluate and supervise different work units in a concern. It is basically concerning to know the development cycle and growth patterns of the employeesin a concern.

• Promotion and transfer- Promotion is said to be a non- monetary incentive in which the worker is shifted from a higher job demanding bigger responsibilities as well as shifting the workers and transferring them to different work units and branches of the same organization.


Directing


• DIRECTING – is said to be a process in which the

managers instruct, guide and oversee the performance of the workers to achieve predetermined goals.

– Directing is said to be the heart of management process. Planning, organizing, staffing have got no importance if direction function does not take place.

– Directing initiates action and it is from here actual work starts.

– Direction is said to be consisting of human factors. In simple words, it can be described as providing guidance to workers is doing work.

– In field of management, direction is said to be all those activities which are designed to encourage the subordinates to work effectively and efficiently.

– According to Human, “Directing consists of process or technique by which instruction can be issued and operations can be carried out as originally planned” Therefore, Directing is the function of guiding, inspiring, overseeing and instructing people towards accomplishment of organizational goals.

• Direction has got following characteristics:– Pervasive Function - Directing is required at all

levels of organization. Every manager provides guidance and inspiration to his subordinates.

– Continuous Activity - Direction is a continuous activity as it continuous throughout the life of organization.

– Human Factor - Directing function is related to subordinates and therefore it is related to human factor. Since human factor is complex and behaviour is unpredictable, direction function becomes important.

– Creative Activity - Direction function helps in converting plans into performance. Without this function, people become inactive and physical resources are meaningless.

– Executive Function - Direction function is carried out by all managers and executives at all levels throughout the working of an enterprise, a subordinate receives instructions from his superior only.

– Delegate Function - Direction is supposed to be a function dealing with human beings. Human behaviour is unpredictable by nature and conditioning the people’s behaviour towards the goals of the enterprise is what the executive does in this function. Therefore, it is termed as having delicacy in it to tackle human behaviour.


Types of Communication

• 1. Number of Participants– Intra-personal– Inter-personal (Dyadic)– Intra group(Multiadic)– Inter group– Organisational– Public– Mass communication

• 2. Direction of Flow– Downward, Upward– Horizontal, vertical– Crosswise (Diagonal)

• 3. way of Expression– Written– Oral– Visual – Audio visual– Non verbal– No communication– Face to face

• 4. organisation structure– formal– Informal(grapevine)

• 5. objective– Mass/societal– Socialising – Political– Educational– Business– Entertainament– News and views– City information– Data collection

• 6. Environment of the firm– External– Internal

• 7. Modes of mediation– Human Communication– Mediated communication


Barriers of communication

• 1. Personal Barriers– Personal emotions– Biases– Perceptual variations– Competencies– Mental faculties– Five senses– Psychological

• 2. Semantic barriers– Word interpretations– Gestures (hand shakes & frowns)– Language translations– Signs and symbols– Cue meanings

• 3. Organisational structure barriers– Lack of chain of comand– Bureaucratic– Political manipulations– Class conflicts

• 4. Organisational climatic barriers– Problems in the culture– Lack of proper directions form top

level to low level– Fears– Fears of being distorted– Fear of distortion by grapevine– Fear of oneself exposing to criticism– Fear of getting fired– Poor or ego-centered supervision– Insincerity and lack of confidence

• 5. Technical barriers– Space for geographic disturbances– Mechanical failures and

disturbances– Physical obstructions– Improper time of communication– Wrong time of communication


Principles of effective communication

• Communication is the process of transmitting the messages and receiving the response of that message.

• The person who sends the messages is known as sender and the person who receives the message is known as receiver and the response to the message is known as feed back.

• Since the feedback requires another message to be communicated by the sender to the receiver. So communication process become a circular process.

• In simple words, exchange of ideas/messages, response there off in total is known as communication. Any method of communication like words—oral or written, pictures, graphs, diagrams, etc.

• may be adopted to communicate. Effective communication is that communication in which the receiver is understood actually what the sender wants to convey, and in the same form.

• ‘Noise’ is something, which has disturbed the effective sending and receiving of communication.

– Principle of clarity– Principle of objective– Principle of understanding the receiver– Principle of consistency– Principle of completeness– Principle of feedback– Principle of time

• 7 C’s off effective communication– Clarity– Completeness– Coherence– Conciseness– Correctness– Continuity– Credibility

• Functions of Mass Communication:– To inform– To entertain and– To persuade

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Motivation

• Motivation is a process that starts with a physiological or psychological need that activates a behavior or a drive that is aimed at a goal.

• features of motivation : – Motivation is an act of managers – Motivation is a continuous

process – Motivation can be positive or

negative – Motivation is goal oriented – Motivation is complex in nature – Motivation is an art – Motivation is system-oriented – Motivation is different from job

satisfaction

MOTIVATIONAL FACTORS • I. MONETARY FACTORS:

– Salaries or wages: – Bonus – Incentives: – Special individual incentives:

• II. NON MONETARY FACTORS – Status or job title: – Appreciation and recognition: – Delegation of authority: – Working conditions – Job security: – Job enrichment – Workers participation: – Cordial relations: – Good superiors: – Other factors

• Providing training to the employees. • Proper job placements. • Proper promotions and transfers. • Proper performance feed back. • Proper welfare facilities. • Flexible working hours



• Need and importance of motivation – Higher efficiency – Reduce absenteeism. – Reduces employee turn

over. – Improves a corporate

image. – Good relations. – Improved morale. – Reduced wastages and

breakages. – Reduced accidents. – Facilitates initiative and

innovation.

• Motivational Theories – Sigmund Freud (Theory X)– Douglas McGregor(theory y),– Abraham Maslow(theory z,

hierarchy of needs),– Alderfer's (ERG theory )

– Frederick Herzberg(two factor motivation hygiene theory,)

– Elton Mayo (Hawthorne Experiments)

– Chris Argyris (Bureaucratic/ Pyramidal & Humanistic / Democratic Value System)

– Rensis Likert(Management Systems and Styles)

– David McClelland (achievement motivation.)

– Victor Vroom's ( Expectancy)

http://www.accel-team.com/human_relations/hrels_02_maslow.html


Traditional theory 'X'• Sigmund Freud, who was no lover of

people, and was far from being optimistic.

• Theory X assumes that people are lazy; they hate work to the extent that they avoid it; they have no ambition, take no initiative and avoid taking any responsibility; all they want is security, and to get them to do any work, they must be rewarded, coerced, intimidated and punished.

• This is the so-called 'stick and carrot' philosophy of management.

• If this theory were valid, managers will have to constantly police their staff, whom they cannot trust and who will refuse to cooperate.

• In such an oppressive and frustrating atmosphere, both for the manager and the managed, there is no possibility of any achievement or any creative work

Theory 'Y' • Douglas McGregor • This is in sharp contrast to theory 'X'. McGregor

believed that people want to learn and that work is their natural activity to the extent that they develop self-discipline and self-development.

• They see their reward not so much in cash payments as in the freedom to do difficult and challenging work by themselves.

• The managers job is to 'dovetail' the human wish for self-development into the organizations need for maximum productive efficiency.

• The basic objectives of both are therefore met and with imagination and sincerity, the enormous potential can be tapped. Theory 'Y' management is soft and slack.

• The leader does no longer hanker after power, lets people develop freely, and may even (it is hoped) enjoy watching the development and actualization of people, as if, by themselves.

• Everyone, and most of all the organization, gains as a result.


Maslow ( Theory Z)• totally rejects the dark and dingy

Freudian basement and takes us out in to the fresh, open, sunny and cheerful atmosphere.

• He is the main founder of the humanistic school or the third force which holds that all the good qualities are inherent in people, at least, at birth, although later they are gradually lost.

• Maslow's central theme revolves around the meaning and significance of human work

• The basic human needs, according to Maslow, are:– physiological needs (Lowest)– safety needs;– love needs;– esteem needs; and– self-actualization needs (Highest)

Alderfer's Hierarchy (ERG theory)• Clayton Alderfer reworked Maslow's Need

Hierarchy to align it more closely with empirical research.

• Alderfer's theory is called the ERG theory -- Existence, Relatedness, and Growth. – Existence refers to our concern with basic

material existence requirements; what Maslow called physiological and safety needs.

– Relatedness refers to the desire we have for maintaining interpersonal relationships; similar to Maslow's social/love need, and the external component of his esteem need.

– Growth refers to an intrinsic desire for personal development; the intrinsic component of Maslow's esteem need, and self-actualization

• Alderfer's ERG theory differs from Maslow's Need Hierarchy insofar as ERG theory demonstrates that more than one need may be operative at the same time. ERG theory does not assume a rigid hierarchy where a lower need must be substantially satisfied before one can move on.


Frederick Herzberg(Hygiene / Motivation Theory)

• people work first and foremost in their own self enlightened interest, for they are truly happy and mentally healthy through work accomplishment.

• Peoples needs are of two types:– Animal Needs (hygiene

factors)• Supervision• Interpersonal relations• Working conditions• Salary

– Human Needs (motivators)• Recognition• Work• Responsibility• Advancement

• Elton Mayo’s Hawthorn experiments• Elton Mayo’s team conducted a number of experiments

involving six female workers. These experiments are often referred to as the Hawthorne experiments or Hawthorne studies as they took place at The Hawthorne Works of the Western Electric Company in Chicago.

• Over the course of five years, Mayo’s team altered the female worker’s working conditions and then monitored how the working conditions affected the workers morale and productivity. The changes in working conditions included changes in working hours, rest brakes, lighting, humidity, and temperature. The changes were explained to the workers prior to implementation.

• At the end of the five year period, the female worker’s working conditions, reverted back to the conditions before the experiment began. Unexpectedly the workers morale and productivity rose to levels higher than before and during the experiments.

• The combination of results during and after the experiment (ie the increase in the workers productivity when they were returned to their original working conditions) led Mayo to conclude that workers were motivated by psychological conditions more than physical working condition. He also concluded that workers were motivated by more than self interes


Chris Argyris• According to Argyris, organization

needs to be redesigned for a fuller utilization of the most precious resource, the workers, in particular their psychological energy.

• The pyramidal structure will be relegated to the background, and decisions will be taken by small groups rather than by a single boss.

• Satisfaction in work will be more valued than material rewards.

• Work should be restructured in order to enable individuals to develop to the fullest extent.

• At the same time work will become more meaningful and challenging through self-motivation

Rensis Likert• Likert identified four different

styles of management:– exploitative-authoritative;– benevolent-authoritative;– consultative;– participative.

• The participative system was found to be the most effective in that it satisfies the whole rangeof human needs.

• Major decisions are taken by groups themselves and this results in achievinghigh targets and excellent productivity.

• There is complete trust within the group and the senseof participation leads to a high degree of motivation


Fred Luthans• Luthans advocates the so-called

'contingency approach' on the basis that certain practiceswork better than others for certain people and certain jobs. As an example, rigid, clearlydefined jobs, authoritative leadership and tight controls lead in some cases to highproductivity and satisfaction among workers. In some other cases just the opposite seems towork. It is necessary, therefore, to adapt the leadership style to the particular group of workers and the specific job in hand

• Victor Vroom• Vroom's 'expectancy theory' is an

extension of the 'contingency approach'. The leadershipstyle should be 'tailored' to the particular situation and to the particular group. In some casesit appears best for the boss to decide and in others the group arrives at a consensus. Anindividual should also be rewarded with what he or she perceives as important rather thanwhat the manager perceives. For example, one individual may value a salary increase,whereas another may, instead, value promotion. This theory contributes an insight into thestudy of employee motivation by explaining how individual goals influence individualperformance


David c McClelland's motivational needs theory• American David Clarence McClelland (1917-98).• McClelland is chiefly known for his work on achievement motivation,

but his research interests extended to personality and consciousness. • David McClelland pioneered workplace motivational thinking,

developing achievement-based motivational theory and models, and promoted improvements in employee assessment methods, advocating competency-based assessments and tests, arguing them to be better than traditional IQ and personality-based tests.

• His ideas have since been widely adopted in many organisations, and relate closely to the theory of Frederick Herzberg.

• David McClelland is most noted for describing three types of motivational need, which he identified in his 1961 book, The Achieving Society:– achievement motivation (n-ach)– authority/power motivation (n-pow)– affiliation motivation (n-affil)


Leadership

• “Leadership is a process whereby an individual influences a group of individuals to achieve a common goal”.– (Peter Northouse, 2004)

• Four Factors of Leadership– Leader– Followers– Communication– Situation

Important Keys to Effective Leadership• Trust and confidence in top leadership was the

single most reliable predictor of employee satisfaction in an organization.

• Effective communication by leadership in three critical areas was the key to winning organizational trust and confidence:– Helping employees understand the company's

overall business strategy.– Helping employees understand how they

contribute to achieving key business objectives.– Sharing information with employees on both

how the company is doing and how an employee's own division is doing — relative to strategic business objectives.

Principles of Leadership• To help you be, know, and do, follow

these eleven principles of leadership– Know yourself and seek self-

improvement– Be technically proficient– Seek responsibility and take

responsibility for your actions – Make sound and timely decisions – Set the example– Know your people and look out for

their well-being – Keep your workers informed – Develop a sense of responsibility in

your workers.– Ensure that tasks are understood,

supervised, and accomplished .– Train as a team– Use the full capabilities of your

organization


Leadership Styles• Leadership style is the manner

and approach of providing direction, implementing plans, and motivating people.

• Kurt Lewin (1939) led a group of researchers to identify different styles of leadership.

• This early study has been very influential and established three major leadership styles.

• The three major styles of leadership are (U.S. Army Handbook, 1973):– Authoritarian or autocratic– Participative or democratic– Delegative or Free Reign


Theories

1. "Great Man" Theories:• Great man theories assume that the

capacity for leadership is inherent – that great leaders are born, not made. These theories often portray great leaders as heroic, mythic and destined to rise to leadership when needed. The term "Great Man" was used because, at the time, leadership was thought of primarily as a male quality, especially in terms of military leadership.

2. Trait Theories:• Similar in some ways to "Great Man"

theories, trait theories assume that people inherit certain qualities and traits that make them better suited to leadership. Trait theories often identify particular personality or behavioral characteristics shared by leaders. If particular traits are key features of leadership, then how do we explain people who possess those qualities but are not leaders? This question is one of the difficulties in using trait theories to explain leadership.

3. Contingency Theories:• Contingency theories of leadership

focus on particular variables related to the environment that might determine which particular style of leadership is best suited for the situation. According to this theory, no leadership style is best in all situations. Success depends upon a number of variables, including the leadership style, qualities of the followers and aspects of the situation.

4. Situational Theories:• Situational theories propose that

leaders choose the best course of action based upon situational variables. Different styles of leadership may be more appropriate for certain types of decision-making.


5. Behavioral Theories:• Behavioral theories of leadership are

based upon the belief that great leaders are made, not born. Rooted in behaviorism, this leadership theory focuses on the actions of leaders not on mental qualities or internal states. According to this theory, people can learn to become leaders through teaching and observation.

6. Participative Theories:• Participative leadership theories

suggest that the ideal leadership style is one that takes the input of others into account. These leaders encourage participation and contributions from group members and help group members feel more relevant and committed to the decision-making process. In participative theories, however, the leader retains the right to allow the input of others.

7. Management Theories:• Management theories, also known

as transactional theories, focus on the role of supervision, organization and group performance. These theories base leadership on a system of rewards and punishments. Managerial theories are often used in business; when employees are successful, they are rewarded; when they fail, they are reprimanded or punished. Learn more about theories of transactional leadership.

8. Relationship Theories:• Relationship theories, also known as

transformational theories, focus upon the connections formed between leaders and followers. Transformational leaders motivate and inspire people by helping group members see the importance and higher good of the task. These leaders are focused on the performance of group members, but also want each person to fulfill his or her potential. Leaders with this style often have high ethical and moral standards


Controlling


"Controlling is determining what is being accomplished - that is, evealuating performance and, if necessary, applying corrective measures so that

performance takes place according to plans". - Terry and Franklin.

Features of Controlling• One can control future

happenings but not the happened. Hence in here all the past performance is measured for taking corrective actions for future periods.

• Every manager in an organisation has to perform the control function. The control may be quality control, inventory control, production control, or even administrative control.

• Control is a continuous process, it follow a definite pattern and time-table, month after month and year after year on a continuous basis.

Importance of Controlling• Control system acts as an adjustment in organisational

operations. It mainly checks whether plans are being observed and suitable progress towards the objectives is being made or not, and if necessary any action to control the deviations.

• Policies and other planning elements set by the managers become the basis and reason for control. Through control it is monitored whether the individuals adhere to those frameworks or not so that organisation and management can verify the quality of various policies.

• Exercising some authority and forming superior-subordinate relationship throughout the organisation can be established through controlling.

• With the presence of authority or control the individuals will work properly and exhibit better performance to reach the targets set for them.

• Control system ensures the organisational efficiency and effectiveness. When Proper system exists the organisation effectively achieves its objectives.


Process of Controlling– Setting performance

standards.– Measurement of

actual performance.– Comparing actual

performance with standards.

– Analysing deviations.– Correcting deviations.

• Controlling methods – (1) the nature of the information

flow designed into the system (that is, open- or closed-loop control),

– (2) the kind of components included in the design (that is man or machine control systems), and

– (3) the relationship of control to the decision process (that is, organizational or operational control).

• techniques– Costing method– Program evaluation and review

method– Return on investment method– Management by objectives method– Budgetary control method


International Business

• International business is a term used to collectively describe all commercial transactions (private and governmental, sales, investments, logistics,and transportation) that take place between two or more regions, countries and nations beyond their political boundary.

• Usually, private companies undertake such transactions for profit; governments undertake them for profit and for political reasons.

• It refers to all those business activities which involves cross border transactions of goods, services, resources between two or more nations.

• Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services such as finance, banking, insurance, construction etc

• Operations– Objectives: sales expansion,– resource acquisition,– risk minimization

• Means– Modes: importing and exporting,

tourism and transportation, licensing and franchising, turnkey operations, management contracts, direct investment and portfolio investments.

– Functions: marketing, global manufacturing and supply chain management, accounting, finance, human resources

– Overlaying alternatives: choice of countries, organization and control mechanisms


• Physical and societal factors– Political policies and legal

practices– Cultural factors– Economic forces– Geographical influences

• Competitive factors– Major advantage

in price, marketing, innovation, or other factors.

– Number and comparative capabilities of competitors

– Competitive differences by country

– Local taxes

• Studying international business is important because:– Most companies are

either international or compete with international companies.

– Modes of operation may differ from those used domestically.

– The best way of conducting business may differ by country.

– An understanding helps you make better career decisions.

– An understanding helps you decide what governmental policies to support.

• The Six Tenets are as follows– Take advantage of trade agreements:

think outside the border– Protect your brand at all costs– Maintain high ethical standards– Stay secure in an insecure world– Expect the Unexpected– All global business is personal


Information systems• Automation • use of control systems and information

technologies to reduce the need for human work in the production of goods and services.

• In the scope of industrialization, automation is a step beyond mechanization.

• automation greatly decreases the need for human sensory and mental requirements as well.

• Auomation has had a notable impact in a wider range of industries beyond manufacturing (where it began).

• Once-ubiquitous telephone operators have been replaced largely by automated telephone switchboards and answering machines.

• Medical processes such as primary screening in electrocardiography or radiography and laboratory analysis of human genes, sera, cells, and tissues are carried out at much greater speed and accuracy by automated systems.

• Automated teller machines have reduced the need for bank visits to obtain cash and carry out transactions. In general, automation has been responsible for the shift in the world economy from industrial jobs to service jobs in the 20th and 21st centuries

• The main advantages of automation are:– Replacing human operators in tasks that involve hard

physical or monotonous work.– Replacing humans in tasks done in dangerous

environments (i.e. fire, space, volcanoes, nuclear facilities, underwater, etc.)

– Performing tasks that are beyond human capabilities of size, weight, speed, endurance, etc.

– Economy improvement: Automation may improve in economy of enterprises, society or most of humanity. For example, when an enterprise invests in automation, technology recovers its investment; or when a state or country increases its income due to automation like Germany or Japan in the 20th Century.

– Reduces operation time and work handling time significantly.

• The main disadvantages of automation are:– Unemployment rate increases due to machines replacing

humans and putting those humans out of their jobs.– Technical Limitation: Current technology is unable to

automate all the desired tasks.– Security Threats/Vulnerability: An automated system may

have limited level of intelligence, hence it is most likely susceptible to commit error.

– Unpredictable development costs: The research and development cost of automating a process may exceed the cost saved by the automation itself.

– High initial cost: The automation of a new product or plant requires a huge initial investment in comparison with the unit cost of the product, although the cost of automation is spread in many product batches of things


• Additional goals of automation– Reliability and precision– Health and environment– Convertibility and

turnaround time

• Automation tools– Computer-aided

technologies (or CAx)– Computer-aided

design (CAD software) – Computer-aided

manufacturing (CAM software)

– programmable logic controller (PLC)

• Different types of automation tools exist:– ANN - Artificial neural

network– DCS - Distributed Control

System– HMI - Human Machine

Interface– SCADA - Supervisory Control

and Data Acquisition– PLC - Programmable Logic

Controller– PAC - Programmable

automation controller– Instrumentation– Motion control– Robotics


Data processing

• Data processing is the how raw information is manipulated in order to produce a result.

• The result may lead a better understanding of a problem or a situation.

• Data processing is a very essential aspect of businesses all over the world.

• The success of a business depends on how the volumes of data generated are handled and interpreted.

• There are six stages of data processing.– Collection– Preparation– Input– Processing– Output and interpretation– Storage


From EDP to MIS

• Until the 1960s, the role of most information systems was simple. They were mainly used for electronic data processing (EDP),purposes such as transactions processing, record-keeping and accounting. EDP is often defined as the use of computers in recording, classifying, manipulating, and summarizing data. It is also called transaction processing systems (TPS), automatic data processing, or information processing.

• Transaction processing systems – these process data resulting

• from business transactions, update operational databases, and produce business documents. Examples: sales and inventory processing and accounting systems.

• In the 1960s, another role was added to the use of computers: the processing of data into useful informative reports. The concept of management information systems(MIS) was born. This new role focused on developing business applications that provided managerial end users with predefined management reports that would give managers the information they needed for decision-making purposes.

• Management information systems – provide information in the form

• of pre specified reports and displays to support business decision-making. Examples: sales analysis, production performance and cost trend reporting systems.


• By the 1970s, these pre-defined management reports were not sufficient to meet many of the decision-making needs of management. In order to satisfy such needs, the concept of decision support systems (DSS) was born. The new role for information systems was to provide managerial end users with ad hoc and interactive support of their decision-making processes.

• Decision support systems – provide interactive ad hoc support for

• the decision-making processes of managers and other business professionals. Examples: product pricing, profitability forecasting and risk analysis systems.

• In the 1980s, the introduction of microcomputers into the workplace ushered in a new era, which led to a profound effect on organizations. The rapid development of microcomputer processing power (e.g. Intel’s Pentium microprocessor), application software packages (e.g. Microsoft Office), and telecommunication networks gave birth to the phenomenon of end user computing. End users could now use their own computing resources to support their job requirements instead of waiting for the indirect support of a centralized corporate information services department. It became evident that most top executives did not directly use either the MIS reports


MIS• Types• Most management information systems specialize

in particular commercial and industrial sectors, aspects of the enterprise, or management substructure.– Management information systems (MIS), per se,

produce fixed, regularly scheduled reports based on data extracted and summarized from the firm’s underlying transaction processing systems to middle and operational level managers to identify and inform structured and semi-structured decision problems.

– Decision support systems (DSS) are computer program applications used by middle management to compile information from a wide range of sources to support problem solving and decision making.

– Executive information systems (EIS) is a reporting tool that provides quick access to summarized reports coming from all company levels and departments such as accounting, human resources and operations.

– Marketing information systems are MIS designed specifically for managing the marketing aspects of the business.

– Office automation systems (OAS) support communication and productivity in the enterprise by automating work flow and eliminating bottlenecks. OAS may be implemented at any and all levels of management.

• A management information system (MIS) provides information needed to manage organizations efficiently and effectively.

• Management information systems involve three primary resources: people, technology, and information.

• Management information systems are distinct from other information systems in that they are used to analyze operational activities in the organization.

• Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making,

• e.g. decision support systems, expert systems, and executive information systems


• Enterprise applications– Enterprise systems, also known as enterprise

resource planning (ERP) systems provide an organization with integrated software modules and a unified database which enable efficient planning, managing, and controlling of all core business processes across multiple locations. Modules of ERP systems may include finance, accounting, marketing, human resources, production, inventory management and distribution.

– Supply chain management (SCM) systems enable more efficient management of the supply chain by integrating the links in a supply chain. This may include suppliers, manufacturer, wholesalers, retailers and final customers.

– Customer relationship management (CRM) systems help businesses manage relationships with potential and current customers and business partners across marketing, sales, and service.

– Knowledge management system (KMS) helps organizations facilitate the collection, recording, organization, retrieval, and dissemination of knowledge. This may include documents, accounting records, and unrecorded procedures, practices and skills.

• Developing Information Systems• "The actions that are taken to

create an information system that solves an organizational problem are called system development (Laudon & Laudon, 2010)".

• These include– system analysis, – system design, – programming, – testing, – conversion, – production and finally

maintenance.

• These actions usually take place in that specified order but some may need to repeat or be accomplished concurrently.


CRS• A computer reservations system (or

central reservation system) is a computerized system used to store and retrieve information and conduct transactions related to air travel.

• Originally designed and operated by airlines, CRSes were later extended for the use of travel agencies.

• Major CRS operations that book and sell tickets for multiple airlines are known as global distribution systems (GDS).

• Airlines have divested most of their direct holdings to dedicated GDS companies, who make their systems accessible to consumers through Internet gateways.

• Modern GDSes typically allow users to book hotel rooms and rental cars as well as airline tickets. They also provide access to railway reservations and bus reservations in some markets although these are not always integrated with the main system.

• Origins• In 1946, American Airlines installed the

first automated booking system, the experimental electromechanical Reservisor.

• A newer machine with temporary storage based on a magnetic drum, the Magnetronic Reservisor, soon followed.

• This system proved successful, and was soon being used by several airlines, as well as Sheraton Hotels and Goodyear for inventory control.

• It was seriously hampered by the need for local human operators to do the actual lookups; ticketing agents would have to call a booking office, whose operators would direct a small team operating the Reservisor and then read the results over the telephone.

• There was no way for agents to directly query the system


• Travel agent access• In 1976, United began offering its Apollo

system to travel agents; while it would not allow the agents to book tickets on United's competitors, the marketing value of the convenient terminal proved indispensable. SABRE, PARS, and DATAS were soon released to travel agents as well

• Following airline deregulation in 1978, an efficient CRS proved particularly important; by some counts, Texas Air executive Frank Lorenzo purchased money-losing Eastern Air Lines specifically to gain control of its System One CRS.

• in 1976 Videcom international with British Airways, British Caledonian and CCL launched Travicom, the world's first multi-access reservations system (wholly based on Videcom technology), forming a network providing distribution for initially 2 and subsequently 49 subscribing international airlines to thousands of travel agents in the UK.

• European airlines also began to invest in the field in the 1980s initially by deploying their own reservations systems in their homeland, propelled by growth in demand for travel as well as technological advances which allowed GDSes to offer ever-increasing services and searching power.

• In 1987, a consortium led by Air France and West Germany's Lufthansa developed Amadeus, modeled on SystemOne. Amadeus Global Travel Distribution was launched in 1992.

• In 1990, Delta, Northwest Airlines, and Trans World Airlines formed Worldspan and in 1993, another consortium (including British Airways, KLM and United Airlines, among others) formed the competing company Galileo International based on Apollo.

• Numerous smaller companies such as KIU have also formed, aimed at niche markets not catered for by the four largest networks, including the Low Cost Carrier segment, and small and medium size domestic and regional airlines.


Amadeus• Created by Air France, Iberia, Lufthansa,SAS• 144 Airline Passenger Service System Customers through 60,000 airline sales

offices worldwide• 90,000 travel agencies worldwide, both offline and online, in 195 countries.

Online agencies include:– Expedia– CheapOair– ebookers– CheapTickets– MakeMyTrip– Opodo– Jetabroad

• 440 bookable airlines (including over 60 Low Cost Carriers)• Over 100,000 unique hotel properties• 30 Car rental companies representing over 36,000 car rental locations• 21 Cruise Lines• 203 Tour Operators• 103 Rail Operators• 23 Travel Insurance Companies


Sabre• Created by American Airlines• Used by Aeroflot, Vietnam Airlines, JetBlue Airways, Frontier, Westjet, Volaris,

AeroMexico, Virgin America• Online Travel Agencies:

– Travelocity– zuji– Lastminute.com– Travel Guru– Priceline

• Schedules for 400 airlines• 380 airline industry customers, including 44 airlines representing all major alliances• 88,000 hotels• 50 rail carriers• 180 tour operators• 13 cruise lines• 24 car rental brands serving 30,000 locations• 9 limousine vendors providing access to more than 33,500 ground service

providers• 55,000 travel agencies in over 100 countries

67

Galileo• by Travelport (as Apollo Reservation System 1970-early

1990s)• United Airlines (using their subsidiary Covia) United

Airlines is moving to SHARES because of the merger with Continental Airlines

• Used by CheapOair, ebookers, Flight Centre, Orbitz, Trailfinders.



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