Prof.

Vidhya Srinivas

Sectors of Economy
Primary Sector
Secondary Sector Tertiary Sector

Interdependency
Growth of Different sectors

Primary Sector
Agriculture
Subsistence Commercial

Mining
Forestry Packaging and Processing Raw Materials

Secondary Sector
Also Known as Manufacturing Sector Automobiles Textiles Chemical and Engineering Construction and Shipping

Tertiary Sector

Retail Transportation and Logistics Entertainment Restaurants Professional Service Media Tourism Banking and Insurance Healthcare Law Medical Services

Let us understand with an example

Interdependency of sectors
Let us Manufacture a cold drink

Ingredients
Water
Sugar Artificial flavour

Are they enough???

Quaternary Sector
Intellectual activities like: Government Culture Libraries Scientific research Education IT

Other Sectors
Organised and Unorganised Public and Private NGOs

What is Business
1.
2.

3.
4. 5.

Differentiate the three meanings of business as commerce, occupation and organization and identify the four main kinds of productive resources. Understand the forces of supply and demand determine fair or market price. Appreciate how a companys business model is the source of its competitive advantage and the difference between profit and profitability Recognize the way specialization and the division of labor through the invisible had of the market lead to increasing profit and wealth. List the reasons why business organizations are created to structure business exchanges and facilitate business commerce.

Factors of Production
There are four crucial ingredients or productive factors or resources needed to profit from business - Land - Labor - Capital - Enterprise

Functional areas of Business

Marketing
Production HR

IT/System
Finance

Models used for analysis

Analyze environment : PEST, SLEPT, STEEPLE
Organizational analysis : SWOT, Value chain analysis Portfolio Management : BCG matrix

Competitive analysis: Porters 5 force model

The Business Environment

Micro
Macro Operating

The Micro Environment

Policies
Culture Climate

Operations and process

The Macro Environment - PEST

Politico-Legal
Economic-Demographical Socio-Cultural

Technological
Natural

The SWOT Analysis

Strength
Weakness Opportunities

Threats

Modern Business Challenges

Volatile Markets
CSR Environmental Concerns

Dynamic Environment

What is an Organization
Organizations
Formal Informal

What is Management
Management refers to the task and activities involved

in directing an organization or one of its units:

Planning Organizing Leading Controlling

PODSCORB

Definition of Management
Management in business and human organization activity is simply the act of getting people together to accomplish desired goals According to the management guru Peter Drucker, Organization and coordination of the activities of an enterprise in accordance with certain policies and in achievement of clearly defined objectives

WHAT IS MANAGEMENT?
An art more than a science Deductive Method: General to Particular Inductive Method: Particular to General Inherently social in nature Getting things done through others

GOALS OF BUSINESS OR MANAGEMENT

Business/economics traditionally defined as based on

a sole primary motive of self-interest

Lead to thinking about profit-maximization as the

major goal of enterprise

Failed to account for the social nature of

business/economics -- inaccurate based on new science

Is Administration and Management same?

Administration refers to the activities of the higher

level of the management group who identifies the major aims and policies.
Administration is a part of management

Managerial Competencies
Communication Competency Formal Communication Informal Communication Negotiation Teamwork competency Designing teams Creating supporting environment Managing team dynamics

Contd
Planning and Administration competency Planning and organizing projects Information gathering, analysis and problem solving Time management Budgeting and financial management Strategic action competency Understanding the industry Understanding the organization Taking strategic actions

Contd
Global Awareness Competency Cultural knowledge and understanding Cultural openness and sensitivity Self Management Competency Integrity and ethical conduct Personal drive Balance work and life Self awareness and development

What is a Manager
A person who plans, organizes, leads, and controls, the

allocation of human, material, financial, and informational resources in pursuit of the organizational goals.

Managerial skills
Technical skills
Human skills Conceptual skills

Decision making skills

Basic levels in the Management

Non managers
First level managers Middle level managers

Top level managers

Managers and Managing

Measure of how well or how productively resources are

used to achieve a goal Measure of the appropriateness of the goals managers have selected for the organization to pursue A) Efficiency B) Effectiveness

History to Management thoughts

Traditional view
Behavioral view Systems view

Contingency view
Quality management

Traditional view point

Bureaucratic Management Rules Impersonality Division of labor Hierarchical structure Authority structure Scientific Management Henry Fayol , Federick Taylor, Henry Gantt

Henry Fayol
Division of labor, authority and responsibility, unity of command, line of authority, centralization, unity of direction, equity, order, initiative, discipline, remuneration of personnel, stability of tenure of personnel, subordination of individual interest to the common interest, esprit de corps

The Operational Approach (contd)

Frederick W. Taylors Scientific Management Developing performance standards on the basis of systematic observations and experimentation.

Standardization of work practices and methods reduce waste and increase productivity Time and task study of workers efforts to maximize productivity and output. Systematic selection and training of workers to increase efficiency and productivity. Differential pay incentives based on established work standards.

Taylors Followers
Frank and Lillian Gilbreth Refined time and motion study methods for use in work simplification. Henry L. Gant Refined production control and cost control techniques. Developed the Gantt chart for work-scheduling of projects. Early advocate of the importance of the human factor and the importance of customer service over profits.

Traditional viewpoint contd

Administrative view Defining managerial functions Division of labor Chain of command Span of control Centralization and decentralization Formalization

Behavioral viewpoint
Chester Barnad
Hawthrone contribution

Systems approach
Closed systems
Open systems

Contingency view point

External environment
Technology Individuals

Quality management
Performance
Features Conformance

Reliability
Durability Serviceability Responsiveness Aesthetics Reputation