COURSE CODE:: MP101COURSE ::MANAGEMENT THEORY AND PRACTICE

Unit -8::MANAGEMENT OF ORGANIZATIONAL FUNCTIONS

OBJECTIVES

Explain the procedure of managing an organization Define human resource management in an organization Discuss marketing management in a an organization Explain financial management in an organization Learn the concept of production and operations

management Elaborate on managing information systems in an

organization

INTRODUCTION

The different functions of an organization can be broadly classified under five major functions, namely, human resource management, marketing management, financial management, production and operations management, and information system management.

Every function of an organization plays a crucial role in its overall success of the business. Therefore, an organization needs to manage all of its functions carefully and efficiently. The human resource management function of an organization needs to be managed properly as it is the most productive resource that creates a long lasting advantage for the organization by utilizing its skills and knowledge. On the other hand, the marketing management function of an organization helps persuading customers and increasing the market share.

An efficient management of financial function of an organization results in identifying the new investment opportunities and proper allocation of resources. Apart from this, managing information systems helps in implementing advanced technology in the organization and getting an edge over its competitors.

DEFINING ORGANIZATIONAL FUNCTIONS

The success of any organization depends on the efficiency of its organizational functions.

The business environment of an organization is full of uncertainties.

Therefore, an organization should make its functions flexible and efficient to overcome any adverse situation.

In addition, it needs to define its functions clearly for the accomplishment of goals and objectives in the allotted time.

The operative functions of an organization, namely, human resource management, marketing management, financial management, production and operations management, and information systems management.

HUMAN RESOURCE MANAGEMENT

Human Resource (HR) refers to the workforce of an organization that is employed to achieve organizational goals.

The key characteristics of HR are as follows Possess a particular set of skills used for creating

wealth Makes the use of mental as well as physical abilities

for earning money Encompasses unique traits, such as knowledge,

skills, attitude, and experience Exhibits different behavior of human beings in

different situations

HUMAN RESOURCE PLANNING (HRP)

Human Resource Planning (HRP) can be comprehended as the process of developing and determining objectives, policies, and programs to procure, develop, utilize, and retain human resource for achieving the goals and objectives of an organization.

The importance of HRP in a new organization is shown in the following points:

Anticipating future human resource requirements in an organization Preventing the shortage and surplus of human resource in the organization Identifying the skills and competencies of human resource for a particular

job Regulating various HR activities, such as selection, training, and

performance appraisal, of the organization Ensuring a continuous supply of human resource as per the demand Evaluating the current status of the available human resource and

estimating the human resource needs in future Ensuring overall organizational planning, which forms the basis of other

HR activities, such as job analysis, selection, and training

PERFORMANCE APPRAISAL

Performance appraisal is such a mechanism that helps the organization to understand the abilities and competencies of its each employee.

Following are some of the objectives of performance appraisal: Improves the performance of employees Determines the training and development needs of employees Helps the organization to achieve its strategic goals Represents a future-oriented activity Leads to the self-development of employees Provides effective feedback to employees, which, in turn, helps them to

improve their performance or get rewarded for their good performance Lays a foundation for various employee policies related to transfers,

promotions, layoffs, or terminations Reduces internal conflicts and employee grievances Helps the organization to decide compensation and incentives to be paid

to the employees

PROMOTIONAL MARKETING TECHNIQUES

Advertising: Refers to a promotional technique of marketing communication that is used to target a huge number of geographically dispersed audiences.

Direct Marketing: Refers to the type of marketing in which the organizations reach customers directly without any intermediary.

Personal Selling: Refers to face-to-face selling in which a sales representative tries to convince the customer to purchase a product by explaining or demonstrating its features.

Sales Promotion: Refers to a traditional element of marketing communication. It is used to increase the sales of a product by offering incentives, gifts, and schemes provided to customers at the time of purchase.

Public Relations (PR): Refers to the process in which organizations maintain a relationship with the customers, shareholders, employees, distributors, partners, competitors, and the government.

MARKETING MANAGEMENT

Marketing management can be described as a process of creating, building, and maintaining beneficial products.

A market consists of different types of customers; therefore, an organization divides the market as per the customers’ gender, age, tastes, attitudes, and personalities.

These divided customer groups are called market segments in making rough estimates of the market demand for the product.

Marketing is a vast field of operations, which can be understood in terms of three main functions of the entrepreneur, which include exchange or selling, physical supply or storage and warehousing, and facilitation or market research.

FINANCIAL MANAGEMENT

Financial management refers to the functions involved in the management of financial resources.

The three elements of financial management are explained as follows:

Financial Planning: Refers to scheduling the usage of financial resources, such as the raising of fund, deciding the amount of fund, and ensuring low cost and low risk in the raised finance.

Financial Control: Refers to the process of supervising and monitoring the financial operations of the organization.

Financial Decision-Making: Helps the organization in taking various decisions that involve the usage of funds.

MANAGING CASH FLOW

Cash flow is the movement of money in and out of a business during a specific period of time.

Cash flow can be of three types, which are explained as follows:

Operational Cash Flow: Refers to cash inflows generated from the operations of a business.

Investment Cash Flow: Indicates cash received by selling assets or paid by making capital expenditures, acquisitions or investments that benefit the organization in the long run.

Financial Cash Flow: Shows the cash received or paid as a result of financial activities, such as issuing or repurchasing stocks, receiving or paying loans and dividends.

PRODUCTION AND OPERATIONS MANAGEMENT

Production and operations management is the field of management that deals with supervising, designing, and redesigning business operations in the production of goods and services.

It ensures the efficient utilization of resources, so that the needs of existing and potential customers can be satisfied.

Production and operations management is all about managing processes that convert inputs, such as labor, material, and expenses, into outputs, including goods and services.

Generally, production and operations management aspires to enhance the content of value-added activities in any specified process.

QUALITY CONTROL

Quality control refers to a process by which entrepreneurs review the quality of all factors involved in production.

These three tools for quality control are as follows Inspection: Refers to the method that detects quality

problems at the end of the production process before they reach the final customer.

Quality Assurance: Refers to the method that focuses the efforts on improving quality.

Total Quality Management (TQM): Refers to the process that ensures quality is being checked at every stage of the production process.

INFORMATION SYSTEM AND ITS TYPES

An information system plays an indispensable role in supporting the decision-making process of an organization by providing accurate and relevant information.

The four types of information systems (as shown in Figure-14) are explained as follows:

Transaction Processing System (TPS): Refers to a type of information system that serves the information requirements of individuals at the operational level of an organization.

Management Information Systems (MIS): Refers to an integrated system designed to provide the information to middle level managers through internal sources.

Decision Support System (DSS): Refers to a computer-based information system that supports the organizational decision-making process by providing useful information.

Executive Information System (EIS): Refers to the system designed to help top management in making strategic decisions.

SUMMARY

Managing organizational functions involve several interrelated tasks, such as targeting customers, increasing market share, sourcing funds, producing products and services, incorporating advanced technology.

The different functions of an organization can be broadly classified under five major functions, namely, human resource management, marketing management, financial management, production and operations management, and information system management.

The human resource management function of an organization needs to be managed properly as it is the most productive resource that creates a long lasting advantage for the organization by utilizing its skills and knowledge.

The marketing management function of an organization helps persuading customers and increasing the market share.

Managing information systems helps in implementing advanced technology in the organization and getting an edge over its competitors.

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