1. Planning facilitates management by objectives.
Planning begins with determination of objectives.
It highlights the purposes for which various activities are to be undertaken.
In fact, it makes objectives more clear and specific.
Planning helps in focusing the attention of employees on the objectives or goals of enterprise.
Without planning an organization has no guide.
Planning compels manager to prepare a Blue-print of the courses of action to be followed for accomplishment of objectives.
Therefore, planning brings order and rationality into the organization.
2. Planning minimizes uncertainties.
Business is full of uncertainties.
There are risks of various types due to uncertainties.
Planning helps in reducing uncertainties of future as it involves anticipation of future events.
Although future cannot be predicted with cent percent accuracy but planning helps management to anticipate future and prepare for risks by necessary provisions to meet unexpected turn of events.
Therefore with the help of planning, uncertainties can be forecasted which helps in preparing standbys as a result, uncertainties are minimized to a great extent.
3. Planning facilitates co-ordination.
Planning revolves around organizational goals.
All activities are directed towards common goals.
There is an integrated effort throughout the enterprise in various departments and groups.
It avoids duplication of efforts. In other words, it leads to better co-ordination.
It helps in finding out problems of work performance and aims at rectifying the same.
4. Planning improves employee’s moral.
Planning creates an atmosphere of order and discipline in organization.
Employees know in advance what is expected of them and therefore conformity can be achieved easily.
This encourages employees to show their best and also earn reward for the same.
Planning creates a healthy attitude towards work environment which helps in boosting employees moral and efficiency.
5. Planning helps in achieving economies.
Effective planning secures economy since it leads to orderly allocation ofresources to various operations.
It also facilitates optimum utilization of resources which brings economy in operations.
It also avoids wastage of resources by selecting most appropriate use that will contribute to the objective of enterprise. For example, raw materials can be purchased in bulk and transportation cost can be minimized. At the same time it ensures regular supply for the production department, that is, overall efficiency.
5. Planning facilitates controlling.
Planning facilitates existence of certain planned goals and standard of performance.
It provides basis of controlling.
We cannot think of an effective system of controlling without existence of well thought out plans.
Planning provides pre-determined goals against which actual performance is compared.
In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the fruit.
6. Planning provides competitive edge.
Planning provides competitive edge to the enterprise over the others which do not have effective planning. This is because of the fact that planning may involve changing in work methods, quality, quantity designs, extension of work, redefining of goals, etc.
With the help of forecasting not only the enterprise secures its future but at the same time it is able to estimate the future motives of it’s competitor which helps in facing future challenges.
Therefore, planning leads to best utilization of possible resources, improves quality of production and thus the competitive strength of the enterprise is improved.
7. Planning encourages innovations.
In the process of planning, managers have the opportunities of suggesting ways and means of improving performance.
Planning is basically a decision making function which involves creative thinking and imagination that ultimately leads to innovation of methods and operations for growth and prosperity of the enterprise.
Disadvantages of Planning
There are several limitations of planning. Some of them are inherit in the process of planning like rigidity and other arise due to shortcoming of the techniques of planning and in the planners themselves.
Planning has tendency to make administration inflexible.
Planning implies prior determination of policies, procedures and programmes and a strict adherence to them in all circumstances.
There is no scope for individual freedom.
The development of employees is highly doubted because of which management might have faced lot of difficulties in future.
Planning therefore introduces inelasticity and discourages individual initiative and experimentation.
2. Misdirected Planning
Planning may be used to serve individual interests rather than the interest of the enterprise.
Attempts can be made to influence setting of objectives, formulation of plans and programmes to suit ones own requirement rather than that of whole organization.
Machinery of planning can never be freed of bias. Every planner has his own likes, dislikes, preferences, attitudes and interests which is reflected in planning.
3. Time consuming
Planning is a time consuming process because it involves collection of information, it’s analysis and interpretation thereof. This entire process takes a lot of time specially where there are a number of alternatives available.
Therefore planning is not suitable during emergency or crisis when quick decisions are required.
4. Probability in planning
Planning is based on forecasts which are mere estimates about future.
These estimates may prove to be inexact due to the uncertainty of future.
Any change in the anticipated situation may render plans ineffective.
Plans do not always reflect real situations inspite of the sophisticated techniques of forecasting because future is unpredictable.
Thus, excessive reliance on plans may prove to be fatal.
5. False sense of security
Elaborate planning may create a false sense of security to the effect that everything is taken for granted.
Managers assume that as long as they work as per plans, it is satisfactory.
Therefore they fail to take up timely actions and an opportunity is lost.
Employees are more concerned about fulfillment of plan performance rather than any kind of change.
Collection, analysis and evaluation of different information, facts and alternatives involves a lot of expense in terms of time, effort and money
According to Koontz and O’Donell, ’ Expenses on planning should never exceed the estimated benefits from planning. ’
External Limitations of Planning
Political Climate- Change of government from Congress to some other political party, etc.
Labour Union- Strikes, lockouts, agitations.
Technological changes- Modern techniques and equipments, computerization.
Policies of competitors- Eg. Policies of Coca Cola and Pepsi.
Natural Calamities- Earthquakes and floods.
Changes in demand and prices- Change in fashion, change in tastes, change in income level, demand falls, price falls, etc.
For anything and everything you do in life, you must set goals. Goals help you to stay on track and follow through with your plans.
The best goals are SMART goals.
Goals can be categorized as Financial and Non-Financial Goals
Set specific financial goals before starting a business. Financial goals can include how much money you will earn and how quickly you will pay off debts. Make sure your goals are realistic. If one of your goals is to make large sums of money early on, you almost certainly will be disappointed. It usually takes time for businesses to become well established and profitable. Setting SMART financial goals will help you develop a realistic plan for earning a profit. Goals should be measurable and easily attainable in the time allotted.
Most people who own their own businesses do so for more than just monetary gain. They are looking for personal satisfaction. They may serve a community need, do something they like, or enjoy the personal independence. You will want to specify what nonfinancial goals you want to achieve by being an entrepreneur. Setting and meeting nonfinancial goals can help an entrepreneur live a more satisfying and fulfilling life.
You’ve likely heard of the age-old SWOT analysis and its myriad of uses. SWOT simply stands for strengths, weaknesses, opportunities and threats, where each of these headings placed within a square grid. Companies use this universal planning tool to align their marketing strategies, address their deficiencies in operations, improve sales and customer service, reduce supply chain costs and improve a number of other business related activities.
Unfortunately, this planning tool is somewhat limited in its ability to define these four aforementioned categories. For instance, a company may see its threats differently from how its market and customer base sees them. In addition, the SWOT tool doesn’t allow for an easy transition from high level strategy, to individual plan. Where the SWOT fails, the TOWS analysis succeeds
TOWS Analysis is a variant of the classic business tool, SWOT Analysis. TOWS and SWOT are acronyms for different arrangements of the words Strengths, Weaknesses, Opportunities and Threats.
By analyzing the external environment (threats and opportunities), and your internal environment (weaknesses and strengths), you can use these techniques to think about the strategy of your whole organization, a department or a team. You can also use them to think about a process, a marketing campaign, or even your own skills and experience.
Identifying Strategic Options
SWOT or TOWS analysis helps you get a better understanding of the strategic choices that you face. (Remember that “strategy” is the art of determining how you’ll “win” in business and life.) It helps you ask, and answer, the following questions:
How do you:
- Make the most of your strengths?
- Circumvent your weaknesses?
- Capitalize on your opportunities?
- Manage your threats?
A next step of analysis, usually associated with the externally-focused TOWS Matrix, helps you think about the options that you could pursue. To do this you match external opportunities and threats with your internal strengths and weaknesses, as illustrated in the matrix below:
This helps you identify strategic alternatives that address the following additional questions:
- Strengths and Opportunities (SO) – How can you use your strengths to take advantage of the opportunities?
- Strengths and Threats (ST) – How can you take advantage of your strengths to avoid real and potential threats?
- Weaknesses and Opportunities (WO) – How can you use your opportunities to overcome the weaknesses you are experiencing?
- Weaknesses and Threats (WT) – How can you minimize your weaknesses and avoid threats?
The market consists of many types of customers, products, and needs. The marketer must determine which segments offer the best opportunities. Consumers can be grouped and served in various ways based on geographic, demographic, psychographic, and behavioral factors.
Market segmentation is the division of markets into distinct groups of buyers who have different needs, characteristics or behaviors and who might require separate products or marketing programs.
Buyers differ in their wants, locations, resources and buying attitudes. The process of converting heterogeneous market into homogenous markets is called is called segmentation. Every buyer has different approaches towards product. Their wants and need are different, so separate market programs can satisfy well the buyers wants and needs.
Every market has segments, but not all ways of segmenting a market are equally useful. A market segment consists of consumers who respond in a similar way to a given set of marketing efforts. In the car market, for example, consumers who want the biggest, most comfortable car regardless of price make up one market segment. Consumers who care mainly about price and operating economy make up another segment.
Need for Market Segmentation
The marketing concept calls for understanding customer needs and satisfying them better than the competitor. However all the customers do not have the same need and it is not possible to satisfy the entire customer needs hence the need for market segmentation.
Levels of Market Segmentation
Buyers have different and unique needs and wants. Every buyer is potentially a separate market. Ideally, then a seller might design a separate marketing program for each buyer. Some companies serve buyers individually, many others face larger number of smaller buyers and do not find complete segmentation. Thus market segmentation can be dividing into:
- Mass Marketing
- Segment Marketing
- Niche Marketing
- Micro Marketing
1. Mass Marketing
Mass marketing is to produce the same product for all the customers. In this segments producer act for:
- Mass production
- Mass distribution
- Mass Promotion
The traditional argument for mass marketing is that it creates prospective markets, which helps to minimize the cost and affected price to settle it low. However, many factors now make mass marketing more and more difficult and in these days it is impossible to follow mass marketing because it is not possible to produce one product and serve different group of customers. In this situation mass media played an important role. Many producers following this now turn to segmentation market. No wonder some have claimed that mass marketing is dying. Many businesses are retreating from mass marketing to segmented marketing.
2. Segmented Marketing
This segment recognizes that buyers vary in their needs, behavior, perception. The process of isolation broad segment, which make a market and can bitterly understand the wants and needs of customers. In fact, it sells models for segments with different combinations of age and income. For instance General Motors designed its Buick Park Avenue for older and higher income consumers. It produces better results as compared to mass marketing. A producer can market it product efficiently, and give good results to its customers.
3. Niche Marketing
Large groups in the market, which is identifiable, it defines as a segment more precisely, by dividing a segment into sub segments. Niche gives a good opportunity to small companies, and they can allocate their resource by serving niches, which are overlooked by large companies. Niche offers smaller companies an opportunity to compete by focusing their limited resources on serving niches that may be unimportant or may overlooked by larger competitors.
4. Micro Marketing
Micro-marketing adopt products and marketing programs to match the taste of specific localities and individuals. Micro Marketing can be divide in to Local Marketing and Individual Marketing.
a. Local Marketing
Adopting brand and promotion to the wants and needs of local customers like cities, specific stores. But it has some drawbacks. It increases manufacturing and marketing cost by reducing economies of scale.
b. Individual Marketing
Adopting products and marketing programs to the needs of individual customers. Through mass communication prevalence individual marketing was locally ignored, but new technologies powerful computers, all have combined to foster mass customization.
Requirements for Market Segmentation
In addition to having different needs, for segments to be practical they should be evaluated against the following criteria:
– Identifiable: the differential attributes of the segments must be measurable so that they can be identified
– Accessible: the segments must be reached through communication and distribution channels
– Substantial: the segments should be substantially large to justify the resources required to target them
– Unique needs: to justify separate offerings, the segments must respond differently to the different marketing mixes.
– Durable: the segments should be relatively stable to minimize the cost of frequent changes
Financial accounting generates some key documents, which includes profit and loss account, patterning the method of business traded for a specific period and the balance sheet that provides a statement, showing mode of trade in business for a specific period.
It records financial transactions showing both the inflows and outflows of money from sales, wages etc.
Financial accounting empowers the managers and aids them in managing more efficiently by preparing standard financial information, which includes monthly management report tracing the costs and profits against budgets, sales and investigations of the cost.
Accounting is not an end in itself; it is a means to an end. It performs the service activity by providing quantitative financial information that helps the users in making better business decisions. Accounting also describes and analyses the mass of data of an enterprise through measurement, classification, and summarization, and reduces that data into reports and statements, which show the financial condition and results of operations of that enterprise. Accounting as an information system collects processes and communicates information about an enterprise to a wide variety of interested parties.
Financial accounting helps to provide useful information for decision-making, increase transparency, standardize enterprise behavior.
Reflected by its financial and accounting functions and provide information on the financial position, operating results and cash flows of information, including investors and creditors are included in all aspects of decision-making.
Financial accounting helps enterprises to strengthen management, improve economic efficiency, and promote sustainable development.
The level of enterprise management directly affect the economic efficiency of enterprises, operating results, competitiveness and development prospects, to a certain extent determine the future and destiny of enterprises.
Financial accounting helps management of financial responsibility for assessing corporate compliance.
Including state enterprises received all investors and creditors, including investment, have the responsibility in accordance with its intended development objectives and requirements, rational use of resources, strengthening management, improving economic efficiency, to accept the examination and evaluation.
The development of the nation largely depends upon the development of the rural population. Mahatma Gandhi had once said: “India’s way is not Europe’s. India is not Calcutta and Bombay. India lives in her several hundreds of villages”.
The problems of rural marketing are continuing in spite of efforts to improve in the five year plans. The position is improving but slowly. So, the rural marketer has many challenges. But the vast & expanding markets call for good marketing strangers to create win situations to all parties in the chain of rural marketing.
Where the rural market does offer a vast untapped potential, it should also be recognized that it is not that easy to operate in rural market because of several attendant problems. Rural marketing is thus a time consuming affair and requires considerable investments in terms of evolving appropriate strategies with a view to tackle the problems.
The challenges of rural marketing are as follows:-
- Under developed people
- Under developed market
- Improper communication facilities
- Many languages
- Vastness & uneven spread
- Low per capita income
- Poor infrastructure facilities
- Seasonal demand
- Ineffective distribution channel
- Spurious brands
- Low Literacy Levels
1. Underdeveloped people
Rural society is found by tradition, old customs, practices etc. The impact of modern science & technology has made very less impact of the old beliefs are still continuing.
2. Underdeveloped market
Rural markets are not developing because of inadequate banking & credit facilities. Rural market needs banks to enable remittance, to transact on credit basis and to obtained credit support from the bank.
3. Poor or improper communication facilities
Most villages even today largely depends on telegrams and phones for their communication needs print media and visual media[Television cinema] etc reaches only a small percentage of rural Indians.
4. Many languages
India is a country of many languages. Language becomes a barrier in effective communication in the marketing efforts. The languages vary from state to state, place to place, district to district. There are now 18 schedule national languages.
5. Vastness & unevenly spread
India is a vast time & major approximately 3214km from North to South &2933km from East to West. Rural market consists of approximately 75 cores rural consumers spread across approximately 6,38,365 villages. Despite the urban migration, the rural areas continue to be the place of living for a vast majority Indians.
6. Low per capital income
Most farmers have small lands and many villages are brought prone, this result in low per capita income. Low per capita income results in low consumption pattern as compared to the urban population. The marketers faces challenges in rural marketing to decide about quantities, frequency of distributions, package size etc… due to the low per capita income of the rural people.
7. Poor infrastructure facilities
Infrastructural facilities like roads, ware houses, powers etc… are inadequate in rural areas. Infrastructural cost are very high and impact adversely in the rural market activities.
8. Seasonal demand
Rural economic is seasonal, rural people have two seasonal namely khariff & rabi. Villages have money mostly in these seasons. As village income are seasonal, demands are also.
9. Ineffective distribution channels
The distribution chain is not very well organized and requires a large number of intermediaries, which in turn increases the cost and creates administrative problems. Due to lack of proper infrastructure, manufacturers are reluctant to open outlets in these areas. They are mainly dependent on dealers, who are not easily available for rural areas. This is a challenge to the marketers.
10. Spurious brands
Cost is an important factor that determines purchasing decision in rural areas. A lot of spurious brands or look-alikes are available, providing a low cost option to the rural customer. Many a time the rural customer may not be aware of the difference due to illiteracy.
11. Low Literacy Levels
The low literacy levels in rural areas leads to a problem of communication. Print media has less utility compared to the other media of communication.
Transportation is one of the biggest challenges in rural markets. As far as road transportation is concerned, about 50% of Indian villages are connected by roads. However, the rest of the rural markets do not even have a proper road linkage which makes physical distribution a tough task. Many villages are located in hilly terrains that make it difficult to connect them through roads. Most marketers use tractors or bullock carts in rural areas to distribute their products.
Warehousing is another major problem in rural areas, as there is hardly any organized agency to look after the storage issue. The services rendered by central warehousing corporation and state warehousing corporations are limited only to urban and suburban areas.
Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers.
Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.
Human Resource Management has a place of great importance. According to Peter F. Drucker, “The proper or improper use of the different factors of production depend on the wishes of the human resources. Hence, besides other resources human resources need more development. Human resources can increase cooperation but it needs proper and efficient management to guide it”.
HRM is important for below reasons:
- Output will be greater than the input
- Each individual is different from culture, education, environment, background etc…
- We cannot purchase the loyalty, dedication, devotion towards the organization.
- Time passes human factor can bring experience to organization to accept the challenges
- Recent developments like legislation, trade unions enhanced their importance.
Now let us look at the importance of Human Resource at different levels:
At the enterprise level:
– Good HR practice can help in attracting & retaining the best people in the organization planning alerts the company to the types of people it will need in the short, medium of long run.
– It helps in training people for challenging roles developing right attitude towards the job & the company, promoting team sprit among employee & developing loyalty & commitment through appropriate reward schemes.
At the individual level
Effective management of HR helps employee thus:
– It promotes team work & team spirit among employees.
– It office excellent growth opportunity to people who have the potential to rise.
– It allows people to work with diligence & commitment.
At the society level
Society, as a whole, is the major beneficiary of good HR practice.
– Employment opportunities multiply.
– Scare talents are but to best use. A company that pays & treats people well always race ahead of others & delivers excellent results.
At national level
Effective use of HR helps in exploitation of natural, physical & financial resources in a better way. People with right skills, proper attitude & appropriate values help the nation to get ahead & compete with the best in the world leading are letter standard of living & better employment.
The aim of buyer behavior models is to take complex interrelated variables involved in purchase decisions, and simplify them to be of use to the marketer. Buyer behavior models describe the characteristics affecting purchases of goods and services as well as giving insights into potential outcomes of marketing strategies. Many buyer behavior models have been developed from a ‘black box’ model.
The information that is processed by the buyer is not explained by the model. The above diagram represents a black box model where the black box refers to the buyer.
This basic model has been developed into more complex models. In this model, the process and influences on the buyer’s decision are not explained. Multivariate models try to explain in more detail what is going on in the buying decision. Most of these models view the buyer as a ‘problem solver’ and concentrate on the influences upon behavior and the processes involved in purchase. Awareness of a problem arises from some stimuli (e.g. recognizing the need for a new item of clothing), information is processed, environmental and individual influences are evaluated and there is an output of purchase or non-purchase. Models have been developed for consumer, family and organizational buying. Discussions of the most popular models can be found in Schiffman and Kanuk.
Criticisms have been made regarding the practicality of these models because of the difficulty in testing them empirically. Tuck8 criticized multivariate models as they were not operational. He suggested that the approach took the basic ‘black box’ and merely broke it into many black boxes so the prediction criterion for a good model was not fulfilled. However, although this criticism is legitimate, most agree that multivariate models give valuable insights on the influences and processes involved in buying decisions and it is our view that these are fundamental to an understanding of customers. They provide a framework that marketers can use to evaluate important marketing opportunities in the buying process. Despite the contributions of multivariate models, in recent years the trend has been towards modeling specific aspects of buyer behavior using partial models such as for example Damparat and Jolibert’s model of buyer–seller relationships or Talluri et al. and their model of ‘buyer/supplier negotiations’
A rational approach to goal achievement planning is a rational approach to accomplishing objectives. The process can be shown by figure.
In this diagram, progress (toward more sales, higher profits, lower costs, and so forth) is on the vertical axis, and time is on the horizontal axis. Here x indicates where we are (at to or time zero) and y where we want to be at future time (at tn). In short, we are at ax and want to go to y. often we do not have all the data, but we start planning anywhere. We may even have to start our planning study at x (at t-n). the line x y is the decision path.
If the future work completely certain, the line x y would be relatively easy to draw. Because we cannot forecast or consider everything, we try to develop our path x to y in light of the most critical premises.
The essential logic of planning applies regardless of time interval between TO and TN, weather it is five minutes or twenty years. If the time span is long, premises may be unclear, goals may be more difficult to achieve and other planning complexities may be great.
Entrepreneurs are change agents; Managers are maintainers.
When you compare managers and entrepreneurs you need to first look at the definitions of both titles. A manager is someone who directs a team and an entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise. With these definitions you can surmise that an entrepreneur can be a manager but a manager cannot be an entrepreneur. The reasons for this are plentiful, but it basically comes down to the type of person you are. If you like to control all aspects of a situation then you are generally a manager, but if you are someone who works through problems with people then you are more likely an entrepreneur.
The terms Entrepreneur and Manager are considered one and the same. But the two terms have different meanings.
The following are some of the differences between a manager and an entrepreneur.
The main reason for an entrepreneur to start a business enterprise is because he comprehends the venture for his individual satisfaction and has personal stake in it where as a manager provides his services in an enterprise established by someone.
An entrepreneur and a manager differ in their standing, an entrepreneur is the owner of the organization and he bears all the risk and uncertainties involved in running an organization where as a manager is an employee and does not accept any risk.
An entrepreneur and a manager differ in their objectives. Entrepreneur’s objective is to innovate and create and he acts as a change agent where as a manager’s objective is to supervise and create routines. He implements the entrepreneur’s plans and ideas.
“An entrepreneur could be a manager but a manager cannot be an entrepreneur”. An entrepreneur is intensely dedicated to develop business through constant innovation. He may employ a manager in order to perform some of his functions such as setting objectives, policies, rules etc. A manager cannot replace an entrepreneur in spite of performing the allotted duties because a manager has to work as per the guidelines laid down by the entrepreneur.