PPITPM-UNIT I Sandip Warate

MCA- V Sem sandipwarate@gmail.com

Page 1


What is Management:
1. According to Harold Koontz,
"Management is the art of getting things done through and with people in formally organised groups."
2. According to Henri Fayol,

"To manage is to forecast and to plan, to organise, to command, to co-ordinate and to control."
3. According to Peter Drucker,
"Management is a multi-purpose organ that manages business and manages managers and manages workers and work."
4. According to Mary Parker Follet,
"Management is the art of getting things done through people."
Roles of management:
A managers role is very crucial in an organization. The success of organization depends upon managers ability in utilizing the
resources for achieving the pre determined goals. Henry Mintzberg suggested three areas where a manger has to work.
Interpersonal Role
Informational Role
Decisional Role
1. Interpersonal Role
a. Interpersonal roles of a manger are concerned with his interacting with people both inside the organization and
outsiders. There are three types of interpersonal roles.
b. Figure Head: In figure head role manager performs activities which are ceremonial and symbolic nature. These
include greeting the visitors attending the social functions involving employees, handing out merit certificates and other
awards to outstanding employees.
c. Leader: Managers leader role involves leading his subordinates and motivating them for willing contributions.
Manager is responsible for activities of his subordinates. He has to set example of hard work and dedication so that
subordinate follow his directions with respect.
d. Liaison Role: In liaison role manager serves as a connecting link between his and outsiders or between his unit and
other organizational units.

2. Informational Role
Informational role involves receiving collecting of information and distributing them as required. It is of three types
a. Monitor: In monitoring role manager collects the information which can affect the organizational activities by reading
magazines and periodicals, reports from the departments, talking with others to learn changes in the publics taste.
b. Disseminator: In disseminator role manger distribute the information to his subordinates and superiors by sending
circulars, holding meetings and making phone calls.
c. Spokesperson: In spokesperson role the manager represents his organization or unit with interacting with outsiders.
These may customer, financer, govt. suppliers or other agencies in society. It can be done by attending press
conferences, meetings and by issuing notices.

3. Decisional Role:
It is very important role. Manager has to take decisions daily. In decisional role he performs four roles.
a. Entrepreneur: As an entrepreneur the manger assumes certain risks which can affect the organization. He has to take
decisions like expansion or diversification, initiation of new projects, development of older procedures etc.
b. As a Conflict Handler: As a conflict handler he has to take care of certain disturbance in organization such as
resolving employee disputes and strikes etc.
c. Resource Allocator: As a resource allocator managers fulfill the demand of various units in terms of human physical
and financial. He tries to utilize these resources in such way that no department suffers for their inadequacy.
d. Negotiator: As negotiator manager has to take decisions regarding prices with suppliers and customers. He also deals
with trade unions and negotiates with them regarding working conditions and wage fixation.
Role of Management in Software Development
Software development is populated by players who can be categorized into one of five constituencies:
1. Senior managers who define the business issues that often have significant influence on the project.
2. Project (technical) managers who must plan, motivate, organize, and control the practitioners who do software work.
3. Practitioners who deliver the technical skills that are necessary to engineer a product or application.
4. Customers who specify the requirements for the software to be engineered and other stakeholders who have a
peripheral interest in the outcome.
5. End-users who interact with the software once it is released for production use.


PPITPM-UNIT I Sandip Warate
MCA- V Sem sandipwarate@gmail.com


Page 2


Importance of Management
1. It helps in Achieving Group Goals It arranges the factors of production, assembles and organizes the resources,
integrates the resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-
determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort.
Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are
coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals.
2. Optimum Utilization of Resources Management utilizes all the physical & human resources productively. This
leads to efficacy in management. Management provides maximum utilization of scarce resources by selecting its best
possible alternate use in industry from out of various uses. It makes use of experts, professional and these services leads
to use of their skills, knowledge, and proper utilization and avoids wastage. If employees and machines are producing
its maximum there is no under employment of any resources.
3. Reduces Costs It gets maximum results through minimum input by proper planning and by using minimum input &
getting maximum output. Management uses physical, human and financial resources in such a manner which results in
best combination. This helps in cost reduction.
4. Establishes Sound Organization No overlapping of efforts (smooth and coordinated functions). To establish sound
organizational structure is one of the objective of management which is in tune with objective of organization and for
For more detail: - fulfillment of this, it establishes effective authority & responsibility relationship i.e. who is
accountable to whom, who can give instructions to whom, who are superiors & who are subordinates. Management fills
up various positions with right persons, having right skills, training and qualification. All jobs should be cleared to
everyone.
5. Establishes Equilibrium It enables the organization to survive in changing environment. It keeps in touch with the
changing environment. With the change is external environment, the initial co-ordination of organization must be
changed. So it adapts organization to changing demand of market / changing needs of societies. It is responsible for
growth and survival of organization.
6. Essentials for Prosperity of Society Efficient management leads to better economical production which helps in
turn to increase the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce
resource. It improves standard of living. It increases the profit which is beneficial to business and society will get
maximum output at minimum cost by creating employment opportunities which generate income in hands.
The different function of Management Or Management Process.
Managerial Functions: Various management scholars studied different organizations at different times; they identified the functions of
management in their own ways. Henry Fayol, the father of functional or administrative management remarked: To manage is to
forecast and plan, to organize, to command, to coordinate and to control Thus, Fayol classified management functions into five
categories as follows:
(i) to forecast and plan,
(ii) to organize,
(iii) to command or to give orders,
(iv) to co-ordinate, and
(v) to control
Luther Gullick offered a list of administrative functions under the catchword PODSCORB. Each alphabet of this keyword
PODSCORB stands for the following activities: P for Planning, O for Organization, D for Directing, S for Staffing, Co for
Coordinating, R for Reporting, and B for Budgeting. According to Koontz and O Donnell, The most useful method of
classifying managerial activities is to group them around the functions of planning, organizing, staffing, directing, and
controlling. They think that coordination is not a separate function but is the essence of management. Thus, for the sake of
analysis of there management process, we can classify the management functions into the following categories:

1. Planning
It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most
appropriate course of actions for achievement of pre-determined goals. According to KOONTZ, Planning is deciding in advance
what to do, when to do & how to do. It bridges the gap from where we are & where we want to be. A plan is a future course of
actions. It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired
goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is
necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also
helps in avoiding confusion, uncertainties, risks, wastages etc.
Budgeting Planning involves the following steps.
(i) Determination of objectives;
(ii) Forecasting;
(iii) Formulation of policies and programmes;
(iv) Preparation of schedules
Planning is a process of seeking answer to some of the following particular questions:
PPITPM-UNIT I Sandip Warate
MCA- V Sem sandipwarate@gmail.com


Page 3


(i) What is o be done?
(ii) Why it is to be done?
(iii) How the work will be done?
(iv) Who will do the work?
(v) When the work will be done?
(vi) Where the work will be done?
Planning pervades at all the levels of organization. But the scope of planning is not the same at each level of organization. Higher
the level of organization, the broader the scope of planning. Planning may be long term and short term.
2. Organizing
It is the process of bringing together physical, financial and human resources and developing productive relationship amongst
them for achievement of organizational goals. According to Henry Fayol, To organize a business is to provide it with everything
useful or its functioning i.e. raw material, tools, capital and personnels. To organize a business involves determining &
providing human and non-human resources to the organizational structure. Organizing as a process involves:

1. Identification of activities.
2. Classification of grouping of activities.
3. Assignment of duties.
4. Delegation of authority and creation of responsibility.
5. Coordinating authority and responsibility relationships.
3. Staffing
It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the
recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main
purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. According to
Kootz & ODonell, Managerial function of staffing involves manning the organization structure through proper and effective
selection; appraisal & development of personnel to fill the roles designed the structure. Staffing involves:
1. Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place).
2. Recruitment, selection & placement.
3. Training & development.
4. Remuneration.
5. Performance appraisal.
6. Promotions & transfer.
4. Directing
It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of
organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning,
organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management
which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals.
Direction has following elements:
1. Supervision
2. Motivation
3. Leadership
4. Communication
Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work &
workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-
monetary incentives may be used for this purpose.
Leadership- may be defined as a process by which manager guides and influences the work of subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from one person to another. It is a bridge of
understanding.
5. Controlling
It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of
organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An
efficient system of control helps to predict deviations before they actually occur.
According to Theo Haimann, Controlling is the process of checking whether or not proper progress is being made towards the
objectives and goals and acting if necessary, to correct any deviation.
According to Koontz & ODonell Controlling is the measurement & correction of performance activities of subordinates in
order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished. Therefore controlling
has following steps:
a. Establishment of standard performance.
b. Measurement of actual performance.
c. Comparison of actual performance with the standards and finding out deviation if any.
d. Corrective action.
PPITPM-UNIT I Sandip Warate
MCA- V Sem sandipwarate@gmail.com


Page 4


Nature of management:
Nature of management can be described as follows.
1. Continuous Process: Management is a never ending process. It will remain the part of organization till the
organization itself exists. Management is an unending process as past decisions always carry their impact for the future
course of action.
2. Universal in Nature: Management is universal in nature i.e. it exists everywhere in universe wherever there is a
human activity. The basic principles of management can be applied any where whether they are business or non-
business organization.
3. Multidisciplinary: Management is basically multidisciplinary. Though management has developed as a separate
discipline it draws knowledge and concepts of various other streams like sociology, psychology, economics, statistics
etc. Management links ideas and concepts of all these disciplines and uses them for good-self of the organization.
4. Management is a group activity. Management is a vital part of group activity. As no individual can satisfy all his
needs himself, he unites with his co-workers and work together as an organized group to achieve what he cannot
achieve individually.
5. Management is goal oriented: Management is a goal oriented activity. It works to achieve some predetermined
objectives or goals which may be economic or social.
6. Dynamic: Management is dynamic in nature i.e. techniques to mange business changes itself over a period of time.
7. System of authority: Authority is power to get the work done by others and compel them to work systematically.
Management cannot perform in absence of authority. Authority and responsibility depends upon position of manager in
organization.
8. Management is an art: Management is considered as art as both requires skills, knowledge, experience and creativity
for achievement of desired results.
9. Management is Science. Management is considered as science. Science tells about the causes and effects of
applications and is based on some specific principles and procedures. Management also uses some principles and
specific methods. These are formed by continuous observations.
Purpose of Management
The main role of the management is to steer an organisation towards its goals or purposes by assigning activities that its members
perform. If Management makes sure that all activities are designed successfully, then each individual worker's production will
contribute to the realisation of the organisational goals.
Fayol's principles are listed below:
1. Division of Work When employees are specialized, output can increase because they become increasingly skilled
and efficient.
2. Authority Managers must have the authority to give orders, but they must also keep in mind that with authority
comes responsibility.
3. Discipline Discipline must be upheld in organizations, but methods for doing so can vary.
4. Unity of Command Employees should have only one direct supervisor.
5. Unity of Direction Teams with the same objective should be working under the direction of one manager, using one
plan. This will ensure that action is properly coordinated.
6. Subordination of Individual Interests to the General Interest The interests of one employee should not be allowed
to become more important than those of the group. This includes managers.
7. Remuneration Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-
financial compensation.
8. Centralization This principle refers to how close employees are to the decision-making process. It is important to
aim for an appropriate balance.
9. Scalar Chain Employees should be aware of where they stand in the organization's hierarchy, or chain of command.
10. Order The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.
11. Equity Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with
kindness where appropriate.
12. Stability of Tenure of Personnel Managers should strive to minimize employee turnover. Personnel planning should
be a priority.
13. Initiative Employees should be given the necessary level of freedom to create and carry out plans.
14. Spirit of Co-operation Organizations should strive to promote team spirit and unity.
Henry Fayol's 14 Principles of Management
Henry Fayol, a French industrialist, developed the theory of management. According to him, managerial excellence is
atechnical ability and can be acquired. He developed theories and principles of management which are universally accepted
andmake him universalistic. He was pioneer of the formal educationin management. Fayol's principles of management meet
therequirements of modern management.
Henry Fayol, offered fourteen principles of management for thefirst time in 1916. During the period of 1920-40 in the
U.S.many authors did hard work in developing and testing various principles of management. Today, there is a very lengthy list
of management principles and it is not possible to give anexhaustive lot of these management principles. Here, we aregiving
some important principles of management.

1.Division of Work:
According to Henry Fayol under division of work, "Theworker always on the same post, the manager alwaysconcerned
with the same matters, acquire an ability,sureness and accuracy which increases their output. Inother words, division of work
mean specialization.According to this principle, a person is not capable of doing all types of work. Each job and work should be
assigned tothe specialist of his job. Division of work promotesefficiency because it permits an organizational member towork in a
limited area reducing the scope of hisresponsibility. Fayol wanted the division of work not onlyat factory but at management
levels also.
2.Authority and Responsibility:
Authority and responsibility go together or co-existing.Both authority and responsibility are the two sides of acoin. In
this way, if anybody is made responsible for any job, he should also have the concerned authority. Fayol's principle of
management in this regard is that an efficientmanager makes best possible use of his authority and doesnot escape from the
responsibility. In other words when theauthority is exercised the responsibility is automaticallygenerated.
PPITPM-UNIT I Sandip Warate
MCA- V Sem sandipwarate@gmail.com


Page 5



3.Discipline:
According to Henry Fayol discipline means sincerity aboutthe work and enterprise, carrying out orders andinstructions
of superiors and to have faith in the policiesand programs of the business enterprise, in other sense,discipline in terms of
obedience, application, energy andrespect to superior. However, Fayol does not advocatewarming, fines, suspension and
dismissals of worker for maintaining discipline. These punishments are rarelyawarded. A well disciplined working force is
essential for improving the quality and quantity of the production.
4.Unity of Command:
A subordinate should take order from only one boss and heshould be responsible and accountable to him. Further
heclaimed that if the unit of command is violated, authority isundermined, disciplined in danger, order disturbed andstability
threatened. The violation of this principle will facesome serious consequences. In this way, the principle of unity of command
provides the enterprise disciplined stableand orderly existence. It creates harmonious relationship between officers and
subordinates, congenial atmosphere of work. It is one of the Fayol's important essential principlesof management.5.

5. Unity of direction:
Fayol advocates "One head and one plan" which means thatgroup efforts on a particular plan be led and directed by
asingle person. This enables effective co-ordination of individual efforts and energy. This fulfils the principles of unity of
command and brings uniformity in the work of same nature. In this way the principle of direction creatededication to purpose and
loyalty. It emphasizes theattainment of common goal under one head.6.

6. Subordination of individual interests to generalinterests:
the interest of the business enterprise ought to come beforethe interests of the praise individual workers. In other words,
principle of management states that employeesshould surrender their personnel interest before the generalinterest of the
enterprise. Sometimes the employees due to this ignorance, selfishness, laziness, carelessness andemotional pleasure overlook the
interest of theorganization. This attitude proves to be very harmful to theenterprise
7.Fair Remuneration to employees:
According to Fayol wage-rates and method of their payment should be fair, proper and satisfactory. Bothemployees
and ex-employers should agree to it. Logicaland appropriate wage-rate and methods of their paymentreduces tension and
differences between workers andmanagement, create harmonious relationship and a pleasingatmosphere of work. Further Fayol
recommends thatresidential facilities be provided including arrangement of electricity, water and facilities.8.

8. Centralization and Decentralization:
There should be one central point in the organization whichexercises overall direction and control of all the parts.
Butthe degree of centralization of authority should varyaccording to the needs of situation. According to Fayolthere should be
centralization in small units and proper decentralization in big organization. Further, Fayol doesnot favor centralization or
decentralization of authorities but suggests that these should be proper and effectiveadjustment between centralization and
decentralization inorder to achieve maximum objectives of the business. Thechoice between centralization and decentralization is
madeafter taking into consideration the nature of work and the efficiency, experience and decision-making capacity of
theexecutives..

9. Scalar chain:
the scalar chain is a chain of supervisors from the highest tothe lowest rank. It should be short-circuited. An
employeeshould feel the necessity to contact his superior through thescalar chain. The authority and responsibility
iscommunicated through this scalar chain. Fayol definesscalar chain as "the chain of superiors ranging from theultimate authority
to the lowest rank." The flow of information between management and workers is a must.Business opportunities must be
immediately avoided of. Sowe must make direct contact with the concerned employee.Business problems need immediate
solution, so we cannotalways depend on the established scalar chain. It requiresthat direct contact should be established.
10.Order:
According to Fayol there should be proper, systematic andorderly arrangement of physical and social factors, such
asland, raw materials, tools and equipments and employeesrespectively. As per view, there should be safe, appropriateand
specific place for every article and every place to beused effectively for a particular activity and commodity. Inother words,
principles that every piece of land and everyarticle should be used properly, economically and in the best possible way. Selection
and appointment of the mostsuitable person to every job. There should be specific placefor everyone and everyone should have
specific place. This principle also stresses scientific selection and appointmentof employees on every job.

11.Equity:
The principle of equality should be followed and applicable at every level of management. There should not be any
discrimination as regards caste, sex and religion. Ineffective management always accords sympathetic and human treatment. The
management should be kind, hone stand impartial with the employees. In other words, kindness and justice should be exercised
by management in dealing with their subordinates. This will create loyalty and devotion among the employees. Thus, workers
should be treated at par at every level.
12. Stability of use of personnel:
Principle of stability is linked with long tenure of personnel in the organization. This means production being
teamwork, an efficient management always builds a team of good workers. If the members of the team go on changing the entire
process of production will be disturbed. It is always in the interest of the enterprise that its trusted, experienced and trained
employees do not leave the organization. Stability of job creates a sense of belongingness among workers who with this feeling
are encouraged to improve the quality and quantity of work.
13. Initiative:
Under this principle, the successful management provides an opportunity to its employees to suggest their new ideas,
experiences and more convenient methods of work. The employees, who has been working on the specific job since long
discover now, better alternative approach and technique of work. It will be more useful, if initiative to do so is provided to
employees. In simple, to ensure success, plans should be well formulated before they are implemented.
14. Spirit of Co-operation:
In order to achieve the best possible results, individual and group efforts are to be effectively integrated and
coordinated. Production is a team work for which the whole-hearted support and co-operation of the members at all levels is
required. Everyone should sacrifice his personal interest and contribute his best energies to achieve the best results. It refers to the
spirit of loyalty, faithfulness on the part of the members of the group which can be achieved by strong motivating recognition and
importance of the members for their valuable contribution, effective coordination, informal mutual social relationship between
members of the group and positive and constructive approach of the management towards workers' welfare.
Business Policy
Business Policy defines the scope or spheres within which decisions can be taken by the subordinates in an organization. It
permits the lower level management to deal with the problems and issues without consulting top level management every time
for decisions. Business policies are the guidelines developed by an organization to govern its actions. They define the limits
PPITPM-UNIT I Sandip Warate
MCA- V Sem sandipwarate@gmail.com


Page 6


within which decisions must be made. Business policy also deals with acquisition of resources with which organizational goals
can be achieved. Business policy is the study of the roles and responsibilities of top level management, the significant issues
affecting organizational success and the decisions affecting organization in long-run.
Features of Business Policy
An effective business policy must have following features-
1. Specific- Policy should be specific/definite. If it is uncertain, then the implementation will become difficult.
2. Clear- Policy must be unambiguous. It should avoid use of jargons and connotations. There should be no
misunderstandings in following the policy.
3. Reliable/Uniform- Policy must be uniform enough so that it can be efficiently followed by the subordinates.
4. Appropriate- Policy should be appropriate to the present organizational goal.
5. Simple- A policy should be simple and easily understood by all in the organization.
6. Inclusive/Comprehensive- In order to have a wide scope, a policy must be comprehensive.
7. Flexible- Policy should be flexible in operation/application. This does not imply that a policy should be altered always,
but it should be wide in scope so as to ensure that the line managers use them in repetitive/routine scenarios.
8. Stable- Policy should be stable else it will lead to indecisiveness and uncertainty in minds of those who look into it for
guidance.
Difference between Policy and Strategy
The term policy should not be considered as synonymous to the term strategy. The difference between policy and strategy
can be summarized as follows-
1. Policy is a blueprint of the organizational activities which are repetitive/routine in nature. While strategy is concerned
with those organizational decisions which have not been dealt/faced before in same form.
2. Policy formulation is responsibility of top level management. While strategy formulation is basically done by middle
level management.
3. Policy deals with routine/daily activities essential for effective and efficient running of an organization. While strategy
deals with strategic decisions.
4. Policy is concerned with both thought and actions. While strategy is concerned mostly with action.
5. A policy is what is, or what is not done. While a strategy is the methodology used to achieve a target as prescribed by a
policy.
Strategic Management Tools & Techniques

In strategic management, knowledge of the right tools and techniques can help businesses solve critical problems and develop
strategic plans. There are four commonly used tools and techniques in this field: the SWOT analysis, the BCG Matrix, the five
forces model and the balanced scorecard. Understanding these basic tools and techniques will help managers develop their
company's strategies.
SWOT Analysis
A SWOT analysis is a useful technique for analyzing a firm's position in the market. A SWOT analysis considers the
firm's internal strengths and weaknesses against external opportunities and threats. This can allow a firm to exploit
opportunities using its strengths, while at the same time improving upon its weaknesses in order to avoid external
threats.
The SWOT analysis is a strategic management tool which is used to determine the organization's Strengths,
Weaknesses, Opportunities and Threats. This information will help the management team to decide how best to
capitalize on its strengths and lessen the impact of its weaknesses, which are both internal factors that may affect the
organization's positioning within the industry. The SWOT analysis also considers outside factors such as opportunities
to be taken advantage of and threats from outside entities which may be avoided.
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for identifying both the
Opportunities open to you and the Threats you face.
Used in a business context, a SWOT Analysis helps you carve a sustainable niche in your market. Used in a personal
context , it helps you develop your career in a way that takes best advantage of your talents, abilities and opportunities.

PPITPM-UNIT I Sandip Warate
MCA- V Sem sandipwarate@gmail.com


Page 7


How to Use SWOT Analysis
Originated by Albert S Humphrey in the 1960s, SWOT Analysis is as useful now as it was then. You can use it in two ways as
a simple icebreaker helping people get together to "kick off" strategy formulation, or in a more sophisticated way as a serious
strategy tool.
Strengths:
What advantages does your organization have?
What do you do better than anyone else?
What unique or lowest-cost resources can you draw upon that others can't?
What do people in your market see as your strengths?
What factors mean that you "get the sale"?
What is your organization's Unique Selling Proposition (USP)?
Consider your strengths from both an internal perspective, and from the point of view of your customers and people in your
market.
Also, if you're having any difficulty identifying strengths, try writing down a list of your organization's characteristics. Some of
these will hopefully be strengths!
When looking at your strengths, think about them in relation to your competitors. For example, if all of your competitors provide
high quality products, then a high quality production process is not a strength in your organization's market, it's a necessity.
Weaknesses:
What could you improve?
What should you avoid?
What are people in your market likely to see as weaknesses?
What factors lose you sales?
Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you don't see? Are
your competitors doing any better than you?
It's best to be realistic now, and face any unpleasant truths as soon as possible.
Opportunities:
What good opportunities can you spot?
What interesting trends are you aware of?
Useful opportunities can come from such things as:
Changes in technology and markets on both a broad and narrow scale.
Changes in government policy related to your field.
Changes in social patterns, population profiles, lifestyle changes, and so on.
Local events.
Tip:
A useful approach when looking at opportunities is to look at your strengths and ask yourself whether these open up any
opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open up opportunities by eliminating
them.
Threats
What obstacles do you face?
What are your competitors doing?
Are quality standards or specifications for your job, products or services changing?
Is changing technology threatening your position?
Do you have bad debt or cash-flow problems?
Could any of your weaknesses seriously threaten your business?
BCG Matrix
Portfolio analysis is a technique used in strategic management to assess the product and service offerings of a company.
The Boston Consulting Group Matrix is the most common tool for performing a portfolio analysis. The BCG Matrix
considers products and services according to two dimensions: market growth and relative market share. According to
the BCG Matrix, products and services with high growth and high market share are the most desirable, while those with
low growth and low market share are undesirable.
PPITPM-UNIT I Sandip Warate
MCA- V Sem sandipwarate@gmail.com


Page 8



BCG matrix (or growth-share matrix) is a corporate planning tool, which is used to portray firms brand portfolio or
SBUs on a quadrant along relative market share axis (horizontal axis) and speed of market growth (vertical axis) axis.
Growth-share matrix is a business tool, which uses relative market share and industry growth rate factors to evaluate
the potential of business brand portfolio and suggest further investment strategies.
Relative market share. One of the dimensions used to evaluate business portfolio is relative market share. Higher
corporates market share results in higher cash returns. This is because a firm that produces more, benefits from higher
economies of scale and experience curve, which results in higher profits. Nonetheless, it is worth to note that some
firms may experience the same benefits with lower production outputs and lower market share.
Market growth rate. High market growth rate means higher earnings and sometimes profits but it also consumes lots
of cash, which is used as investment to stimulate further growth. Therefore, business units that operate in rapid growth
industries are cash users and are worth investing in only when they are expected to grow or maintain market share in
the future.
There are four quadrants into which firms brands are classified:
Dogs. Dogs hold low market share compared to competitors and operate in a slowly growing market. In general, they
are not worth investing in because they generate low or negative cash returns. But this is not always the truth. Some
dogs may be profitable for long period of time, they may provide synergies for other brands or SBUs or simple act as a
defense to counter competitors moves. Therefore, it is always important to perform deeper analysis of each brand or
SBU to make sure they are not worth investing in or have to be divested.
Strategic choices: Retrenchment, divestiture, liquidation
Cash cows. Cash cows are the most profitable brands and should be milked to provide as much cash as possible. The
cash gained from cows should be invested into stars to support their further growth. According to growth-share
matrix, corporates should not invest into cash cows to induce growth but only to support them so they can maintain
their current market share. Again, this is not always the truth. Cash cows are usually large corporations or SBUs that
are capable of innovating new products or processes, which may become new stars. If there would be no support for
cash cows, they would not be capable of such innovations.
Strategic choices: Product development, diversification, divestiture, retrenchment
Stars. Stars operate in high growth industries and maintain high market share. Stars are both cash generators and cash
users. They are the primary units in which the company should invest its money, because stars are expected to become
cash cows and generate positive cash flows. Yet, not all stars become cash flows. This is especially true in rapidly
changing industries, where new innovative products can soon be outcompeted by new technological advancements, so
a star instead of becoming a cash cow, becomes a dog.
Strategic choices: Vertical integration, horizontal integration, market penetration, market development, product
development
Question marks. Question marks are the brands that require much closer consideration. They hold low market share in
fast growing markets consuming large amount of cash and incurring losses. It has potential to gain market share and
become a star, which would later become cash cow. Question marks do not always succeed and even after large amount
of investments they struggle to gain market share and eventually become dogs. Therefore, they require very close
consideration to decide if they are worth investing in or not.

Advantages and disadvantages
Benefits of the matrix:
Easy to perform;
Helps to understand the strategic positions of business portfolio;
Its a good starting point for further more thorough analysis.
Growth-share analysis has been heavily criticized for its oversimplification and lack of useful application. Following
are the main limitations of the analysis:
Business can only be classified to four quadrants. It can be confusing to classify an SBU that falls right in the middle.
It does not define what market is. Businesses can be classified as cash cows, while they are actually dogs, or vice
versa.
PPITPM-UNIT I Sandip Warate
MCA- V Sem sandipwarate@gmail.com


Page 9


Does not include other external factors that may change the situation completely.
Market share and industry growth are not the only factors of profitability. Besides, high market share does not
necessarily mean high profits.
It denies that synergies between different units exist. Dogs can be as important as cash cows to businesses if it helps to
achieve competitive advantage for the rest of the company.
How to perform BCG matrix analysis?
Although BCG analysis has lost its importance due to many limitations, it can still be a useful tool if performed by
following these steps:
Step 1. Choose the unit
Step 2. Define the market
Step 3. Calculate relative market share
Step 4. Find out market growth rate
Step 5. Draw the circles on a matrix
Step 1. Choose the unit. BCG matrix can be used to analyze SBUs, separate brands, products or a firm as a unit itself.
Which unit will be chosen will have an impact on the whole analysis. Therefore, it is essential to define the unit for
which youll do the analysis.
Step 2. Define the market. Defining the market is one of the most important things to do in this analysis. This is
because incorrectly defined market may lead to poor classification. For example, if we would do the analysis for the
Daimlers Mercedes-Benz car brand in the passenger vehicle market it would end up as a dog (it holds less than 20%
relative market share), but it would be a cash cow in the luxury car market. It is important to clearly define the market
to better understand firms portfolio position.
Step 3. Calculate relative market share. Relative market share can be calculated in terms of revenues or market
share. It is calculated by dividing your own brands market share (revenues) by the market share (or revenues) of your
largest competitor in that industry. For example, if your competitors market share in refrigerators industry was 25%
and your firms brand market share was 10% in the same year, your relative market share would be only 0.4. Relative
market share is given on x-axis. Its top left corner is set at 1, midpoint at 0.5 and top right corner at 0 (see the example
below for this).

Step 4. Find out market growth rate. The industry growth rate can be found in industry reports, which are usually
available online for free. It can also be calculated by looking at average revenue growth of the leading industry firms.
Market growth rate is measured in percentage terms. The midpoint of the y-axis is usually set at 10% growth rate, but
this can vary. Some industries grow for years but at average rate of 1 or 2% per year. Therefore, when doing the
analysis you should find out what growth rate is seen as significant (midpoint) to separate cash cows from stars and
question marks from dogs.
Step 5. Draw the circles on a matrix. After calculating all the measures, you should be able to map your brands on the
matrix. You should do this by drawing a circle for each brand. The size of the circle should correspond to the
proportion of business revenue generated by that brand.
Five Forces Model
The five forces model is a technique for analyzing the attractiveness of a market. The model looks at the five forces that
shape an industry: supplier bargaining power, customer bargaining power, the threat of new entrants, the threat of
substitutes and the degree of industry rivalry. The ideal industry is one in which these forces are relatively low,
meaning that there is little competition, buyers and suppliers cannot bargain and there are few threats from new entrants
or substitutes.
Balanced Scorecard
The balanced scorecard is a management accounting tool that has become popular in strategic management. The
balanced scorecard is a method of evaluating a firm across a broad range of perspectives, specifically the financial,
customer, internal business process, and learning and growth perspectives. The four perspectives can give a firm a
better idea of the company's overall health than the financial perspective alone.
Mission Statement
The creation of a mission statement will help clarify how the organization is perceived and how it wants to be
perceived. Managers can identify gaps between where the organization is and where it wants to be by rewording a
current mission statement to reflect how the organization wants to be perceived in the future. A properly worded
mission statement will also specify how the organization hopes to differentiate itself from others within the industry.
S.M.A.R.T. Goals
The use of S.M.A.R.T. goals as a strategic management tool helps ensure the goals set by management are Specific,
Measurable, Attainable, Relevant and Timely. The purpose of setting such goals is to avoid the frustration that results
PPITPM-UNIT I Sandip Warate
MCA- V Sem sandipwarate@gmail.com

Page
10


from setting unrealistic goals. It is important that the goals of the strategic management team are specific, as it can
sometimes be impossible to determine whether vague goals have actually been met. They must be measurable in that
there must be a set system for determining how close the team is to its goals as well as how much work is left to do to
get there. Unattainable goals will lead to a breakdown of the strategic management process when workers realize it's
pointless to even attempt to reach their goals. The strategic management plan must also include goals which are
relevant to the organization's mission statement and can be reached within a given period of time.
Benchmarking
According to the American Productivity and Quality Center, benchmarking is "the process of identifying,
understanding and adapting outstanding practices and processes from organizations anywhere in the world to help your
organization improve its performance." Benchmarking is an important strategic management tool which helps
managers determine the best way to meet the organization's individual goals and improve the organization's positioning
within the industry.

What is Business Ethics?
The concept has come to mean various things to various people, but generally it's coming to know what it right or wrong in the
workplace and doing what's right -- this is in regard to effects of products/services and in relationships with stakeholders. Wallace
and Pekel explain that attention to business ethics is critical during times of fundamental change -- times much like those faced
now by businesses, both nonprofits or for-profit. In times of fundamental change, values that were previously taken for granted
are now strongly questioned. Many of these values are no longer followed. Consequently, there is no clear moral compass to
guide leaders through complex dilemmas about what is right or wrong. Attention to ethics in the workplace sensitizes leaders and
staff to how they should act. Perhaps most important, attention to ethics in the workplaces helps ensure that when leaders and
managers are struggling in times of crises and confusion, they retain a strong moral compass. However, attention to business
ethics provides numerous other benefits, as well (these benefits are listed later in this document).
Note that many people react that business ethics, with its continuing attention to "doing the right thing," only asserts the obvious
("be good," "don't lie," etc.), and so these people don't take business ethics seriously. For many of us, these principles of the
obvious can go right out the door during times of stress. Consequently, business ethics can be strong preventative medicine.
Anyway, there are many other benefits of managing ethics in the workplace. These benefits are explained later in this document.
Business ethics is the behavior that a business adheres to in its daily dealings with the world. The ethics of a particular business
can be diverse. They apply not only to how the business interacts with the world at large, but also to their one-on-one dealings
with a single customer.
Many businesses have gained a bad reputation just by being in business. To some people, businesses are interested in making
money, and that is the bottom line. It could be called capitalism in its purest form. Making money is not wrong in itself. It is the
manner in which some businesses conduct themselves that brings up the question of ethical behavior.
Good business ethics should be a part of every business. There are many factors to consider. When a company does business with
another that is considered unethical, does this make the first company unethical by association? Some people would say yes, the
first business has a responsibility and it is now a link in the chain of unethical businesses.
Many global businesses, including most of the major brands that the public use, can be seen not to think too highly of good
business ethics. Many major brands have been fined millions for breaking ethical business laws. Money is the major deciding
factor.
Business Ethics Examples:
Actions that result in civil lawsuits, criminal liability, or that simply damage the reputation of a business can all be
considered examples of bad business ethics. Dishonesty is a common example of bad business ethics. For example,
if a company makes false claims in its advertising, the company is being dishonest to its customers.
Other considerations in taking a business ethics course are its focus. For example, many companies are concerned
about their social responsibility, particularly to the environment and to workers in the third world.
Social Responsibility
Social responsibility and business ethics are often regarding as the same concepts. However, the social responsibility movement
is but one aspect of the overall discipline of business ethics. The social responsibility movement arose particularly during the
1960s with increased public consciousness about the role of business in helping to cultivate and maintain highly ethical practices
in society and particularly in the natural environment.
Social responsibility is an ethical theory that an entity, be it an organization or individual, has an obligation to act to benefit
society at large. Social responsibility is a duty every individual has to perform so as to maintain a balance between the economy
and the ecosystems. A trade-off may exist between economic development, in the material sense, and the welfare of the society
and environment. Social responsibility means sustaining the equilibrium between the two. It pertains not only to business
organizations but also to everyone whos any action impacts the environment. This responsibility can be passive, by avoiding
engaging in socially harmful acts, or active, by performing activities that directly advance social goals.

Businesses can use ethical decision making to secure their businesses by making decisions that allow for government agencies to
minimize their involvement with the corporation. For instance if a company follows the United States Environmental Protection
Agency (EPA) guidelines for emissions on dangerous pollutants and even goes an extra step to get involved in the community
and address those concerns that the public might have; they would be less likely to have the EPA investigate them for
environmental concerns. A significant element of current thinking about privacy, however, stresses "self-regulation" rather than
market or government mechanisms for protecting personal information. According to some experts, most rules and regulations
PPITPM-UNIT I Sandip Warate
MCA- V Sem sandipwarate@gmail.com

Page
11


are formed due to public outcry, which threatens profit maximization and therefore the well-being of the shareholder, and that if
there is not outcry there often will be limited regulation.
Critics argue that Corporate social responsibility (CSR) distracts from the fundamental economic role of businesses; others argue
that it is nothing more than superficial window-dressing; others argue that it is an attempt to pre-empt the role of governments as
a watchdog over powerful corporations though there is no systematic evidence to support these criticisms. A significant number
of studies have shown no negative influence on shareholder results from CSR but rather a slightly negative correlation with
improved shareholder returns
Student social responsibility is the responsibility of every student for his/her actions. It is morally binding on everyone to act in
such a way that the people immediately around them are not adversely affected. It is a commitment everyone has towards the
society contributing towards social, cultural and ecological causes. SSR is based on an individuals ethics. Instead of giving
importance only to those areas where one has material interests the individual supports issues for philanthropic reasons. It forms
the base for CSR or Corporate Social Responsibility because if everyone in a business organization does his/her bit the bigger
things automatically fall into place. The trends however show that big charitable organizations recorded high growth due to the
SR efforts of individuals and not corporates or the government. ISR may be slightly impractical, especially in the modern
competitive world, where everyone works for self-interest, but it will succeed if we take decisions based on what will benefit a
large number of people and respect everyones fundamental rights. As individuals we can make our small contributions to society
by donating money to trustworthy NGOs, saving our resources by reducing our consumption, e.g. by switching off lights or
computers when not in use.
Corporate Social Responsibility or CSR has been defined by Lord Holme and Richard Watts in The World Business Council
for Sustainable Developments publication Making Good Business Sense as the continuing commitment by business to
behave ethically and contribute to economic development while improving the quality of life of the workforce and their families
as well as the local community and society at large". CSR is one of the newest management strategies where companies try to
create a positive impact on society while doing business. There is no clear-cut definition of what CSR comprises. Every company
has different CSR objectives though the main motive is the same. All companies have a two point agenda- to improve
qualitatively (the management of people and processes) and quantitatively (the impact on society). The second is as important as
the first and stake holders of every company are increasingly taking an interest in the outer circle-the activities of the company
and how these are impacting the environment and society.
[7]

Social Resposibility of Engg & ScintistOne common view is that scientists and engineers are morally responsible for the
negative consequences which result from the various applications of their knowledge and inventions. After all, if scientists and
engineers take personal pride in the many positive achievements of science and technology, why should they be allowed to
escape responsibility for the negative consequences related to the use or abuse of scientific knowledge and technological
innovations? Furthermore, scientists and engineers have a collective responsibility for the choice and conduct of their work.
Committees of scientists and engineers are often involved in the planning of governmental and corporate research programs,
including those devoted to the development of military technologies and weaponry. Many professional societies and national
organizations, such as the National Academy of Science and the National Academy of Engineering in the United States, have
ethical guidelines (see Engineering ethics and Research ethics for the conduct of scientific research and engineering). Clearly,
there is recognition that scientists and engineers, both individually and collectively, have a special and much greater
responsibility than average citizens with respect to the generation and use of scientific knowledge.
Unfortunately, it has been pointed out that the situation is not that simple and scientists and engineers should not be blamed for
all the evils created by new scientific knowledge and technological innovations. First, there is the common problem of
fragmentation and diffusion of responsibility. Because of the intellectual and physical division of labor, the resulting
fragmentation of knowledge, the high degree of specialization, and the complex and hierarchical decision-making process within
corporations and government research laboratories, it is exceedingly difficult for individual scientists and engineers to control the
applications of their innovations. This fragmentation of both work and decision-making results in fragmented moral
accountability, often to the point where everybody involved was responsible but none could be held responsible.
Another problem is ignorance. The scientists and engineers cannot predict how their newly generated knowledge and
technological innovations may be abused or misused for destructive purposes in the near or distant future. While the excuse of
ignorance is somewhat acceptable for those scientists involved in very basic and fundamental research where potential
applications cannot be even envisioned, the excuse of ignorance is much weaker for scientists and engineers involved in applied
scientific research and technological innovation since the work objectives are well known. For example, most corporations
conduct research on specific products or services that promise to yield the greatest possible profit for share-holders. Similarly,
most of the research funded by governments is mission-oriented, such as protecting the environment, developing new drugs, or
designing more lethal weapons. In all cases where the application of scientific knowledge and technological innovation is well
known a priori, it is impossible for a scientist or engineer to escape responsibility for research and technological innovation that
is morally dubious. As John Forge writes in Moral Responsibility and the Ignorant Scientist: Ignorance is not an excuse
precisely because scientists can be blamed for being ignorant.
Another point of view is that responsibility falls on those who provide the funding for the research and technological
developments, which in most cases are corporations and government agencies. Furthermore, because taxpayers provide indirectly
the funds for government-sponsored research, they and the politicians that represent them, i.e., society at large, should be held
accountable for the uses and abuses of science. Compared to earlier times when scientists could often conduct their own research
independently, todays experimental research requires expensive laboratories and instrumentation, making scientists dependent
on those who pay for their studies.
Emerging normative status of social responsibility
Social responsibility as a non-binding, or soft law principle has received some normative status in relation to private and public
corporations in the United Nations Educational, Scientific and Cultural Organization (UNESCO) Universal Declaration on
Bioethics and Human Rights developed by the UNESCO International Bioethics Committee particularly in relation to child and
maternal welfare. (Faunce and Nasu 2009) The International Organization for Standardizationrd will "encourage voluntary
commitment to social responsibility and will lead to common guidance on concepts, definitions and methods of evaluation." The
standard describes itself as a guide for dialogue and language, not a constraining or certifiable management standard.