Six Sigma

Six Sigma is a business management strategy, originally developed by Motorola in 1986.[1][2] Six Sigma
became well known after Jack Welch made it a central focus of his business strategy at General Electric in
1995,[3] and today it is widely used in many sectors of industry.[4].

Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of
defects (errors) and minimizing variability in manufacturing and business processes.[5] It uses a set of
quality management methods, including statistical methods, and creates a special infrastructure of people
within the organization ("Black Belts", "Green Belts", etc.) who are experts in these methods.[5] Each Six
Sigma project carried out within an organization follows a defined sequence of steps and has quantified
financial targets (cost reduction and/or profit increase).[5]

The term Six Sigma originated from terminology associated with manufacturing, specifically terms
associated with statistical modeling of manufacturing processes. The maturity of a manufacturing process
can be described by a sigma rating indicating its yield or the percentage of defect-free products it creates. A
six sigma process is one in which 99.99966% of the products manufactured are statistically expected to be
free of defects (3.4 defects per million). Motorola set a goal of "six sigma" for all of its manufacturing
operations, and this goal became a byword for the management and engineering practices used to achieve
it.

Six Sigma is now according to many business development and quality improvement experts, the most
popular management methodology in history. Six Sigma is certainly a very big industry in its own right,
and Six Sigma is now an enormous 'brand' in the world of corporate development. Six Sigma began in
1986 as a statistically-based method to reduce variation in electronic manufacturing processes in Motorola
Inc in the USA.

A six sigma process is defined as one in which 99.99966% of products created are expected to be
statistically free from defects

Strategic planning & Nature

The managerial process of creating and maintaining a fit between the organization's objectives and
resources and the evolving market opportunities Strategic planning is the management task concerned with
the growth and future of a business enterprise. Strategic planning can be viewed as a stream of decisions
and actions that lead to effective strategies and which, in turn, help the firm achieve its growth objectives.
The process involves a thorough self-appraisal by the corporation, including an appraisal of the businesses
it is engaged in and the environment in which it operates.

Strategic planning works as the pathfinder to the various business opportunities; simultaneously, it serves
as a corporate defense mechanism, which helps a firm avoid costly mistakes

Strategic Planning provides the direction to the Corporation and indicates how growth is to be achieved.

Enables Long-term Decisions Concerning the Firm

Ensures Optimum Utilization of Resources: Usually, the resources available to any business firm are
limited. Naturally, the firm has to utilize its resources creatively and optimally. Strategic planning ensures
such utilization.

Prepares the Firm to Face the Future: Strategic planning is not a matter of merely projecting the future.
It also prepares a corporation to face the future. It even shapes the future
Helps acquire relevant competitive advantages: Strategic planning has the burden of equipping a
corporation with the relevant competitive advantages in its fight for survival and growth.

Importance Of Business Environment

Firstly, it is useful to define exactly what is meant by the term 'business environment'. The business
environment relates to the 'external forces' that can influence the decisions of a business. Technological,
political, social and economic factors all make up the business environment and all these factors are very
difficult for a business to control.

There are several reasons why the business environment is of great importance. The first of these is that if
the heads of businesses keep a firm eye on potential economic or technological changes then they can
swiftly adapt their business to capitalize on such changes. This can get a business ahead of its competitors,
as any business will testify, speed and adaptation are crucial for success.

Another reason the business environment is crucial to the success of a business is that if a company does
not successfully predict an upcoming trend or danger such as the recent recession then they will not be able
to survive. Banks and independent and private investors which would freely lend to companies can
suddenly withdraw existing funds or offers of credit which can lead a business to cut staff or close down all
together.

An analysis of business environment helps to identify strength, weakness, opportunities & threats. Analysis
is very necessary for the survival and growth of the business enterprise. The importance of business
environment is briefly explained in an analysis below.

(1) Identification of Strength: The analysis of the internal environment helps to identify strength of the
firm. For instance, if the company has good personal policies in respect of promotion, transfer, training, etc
than it can indicates strength of the firm in respect of personal policies. This strength can be identified
through the job satisfaction and performance of the employees. After identifying the strengths the firm
must try to consolidate its strengths by further improvement in its existing plans & policies.

(2) Identification of Weakness: The analysis of the internal environment indicates not only strengths but
also the weakness of the firm. A firm may be strong in certain areas; where as it may be weak in some
other areas. The firm should identify sue weakness so as to correct them as early as possible.

(3) Identification of Opportunities: An analysis of the external environment helps the business firm to
identify the opportunities in the market. The business firm should make every possible effort to grab the
opportunities as and when they come.

(4) Identification of Threats: Business may be subject to threats from competitors and others. Therefore
environmental analysis helps to identify threats from the environment identification of threats at an earlier
date is always beneficial to the firm as it helps to defuse the same.

(5) Exploitation of Business Opportunities: Environment opens new opportunities for the expansion of
business activities. Study of environment is necessary in order to discover and exploit such opportunities
fully.

(6) Keeping Business Enterprise Alert: Environment study is needed as it keeps the business unit alert in
its approach and activities. In the absence of environmental changes, the business activities will be dull and
lifeless. The problems & prospects of business can be understood properly through the study of business
environment. This enables an enterprise to face the problems with confidence and secure the maximum
benefits of business opportunities available.
(7) Keeping Business Flexible and Dynamic: Study of business environment is needed for keeping
business flexible and dynamic as per the changes in the environmental forces. This will enable the
development of business organization.

(8) Understanding Future Problems and Prospects: The study of business environment enables to
understand future problems and prospects of business in advance. This enables business organizations to
face the problems boldly and also take the benefit of favorable situation.

(9)Making Business Socially Acceptable: Environment study enables businessmen to expand the business
and also make it acceptable to different social groups. Business organizations can make positive
contribution for maintaining ecological balance by studying social environment.

(10) Ensures Optimum Utilization of Resources: The study of business environment is needed as it
ensures optimum use of resources available. For this, the study of economic and technological environment
is useful. Such study enables organization to take full benefit of government policies, concessions
provided, and technological developments and so on.

(11) Ensures Survival and Growth: Business environment inform about suitable changes to be affected in
business policies. This helps the business organizations to grow & prosper.

(12) Maintaining adaptability to changes: Business environment guides the business organization about
socio-economic changes & the organization must accordingly adapt these change. This enables the
business organization to survive for a longer period.

What are personnel policies?

A set of rules that define the manner in which an organization deals with human resources.

A personnel policy should reflect good practice, be written down, be communicated across the
organization, and should adapt to changing circumstances.

Personnel policies are guidelines that an organization or company creates to manage its workers. Personnel policies
describe the type of job performance and workplace behavior an organization expects from its employees, and
what type of compensation and opportunities for advancement it is offering in return. The rules, requirements,
benefits and opportunities outlined in personnel policies are often viewed as a reflection of an organization's values
and goals.

Personnel policies define the treatment, rights, obligations, and relations of people in an organization. They
are the blueprints by which the organization runs--the rules and procedures that protect workers (and the
organization) from being abused, put them in control of their jobs, and keep them from making errors that
will hurt the organization or one another. It may be hard work to devise a set of policies, but when
situations arise that need answers, you'll see how helpful they are.

What do personnel policies include?

Personnel policies may differ significantly from organization to organization, but they must contain
instructions and rules for dealing with issues and overcoming obstacles that may present themselves both
during normal working days and under extraordinary circumstances. They touch on relationships
(staff/staff, staff/administration, etc.), expectations (hours worked, schedules, what defines the work of a
 position), and ways of doing things (who gets to use what equipment when, how to arrange a sick day) that
affect employees' lives and the running of the organization.

What do personnel policies look like?

Personnel policies should be written in clear, understandable language, so that everyone knows exactly
what they mean and as little as possible is left open to interpretation. In many organizations, employees are
either given their own copy, or are encouraged to read the policies in some easily available form (e.g.,
online at the organization's website, printed and kept in an easily accessible location). It is extremely
important that everyone in the organization be reasonably familiar with these policies, and that they always
be readily available to any employee.

There are essentially three types of personnel policies that you will need to develop for your organization.

General Policies have to do with the basic structure, philosophy, and rules of the organization. They deal
with issues ranging from equal opportunity in hiring and advancement to conflicts of interest, sexual
harassment, alcohol in the workplace, and Internet usage.

Hiring and Employment Status Policies involve the worker's employment relationship with the
organization -- hiring, firing, and everything in between. Here is where pay scale, title, promotions, and
performance reviews are laid out. These policies also cover benefits, employees' rights, and reasons for
termination.

Everyday Procedural Policies deal with issues that affect the everyday life of the worker (or volunteer),
and the day to day operation of the organization. They generally include the hours employees are required
to be at work, how workers should dress, when they get paid, and issues of security, as well as guidelines
for how things are done in the organization.

Meaning and Characteristics of Financial planning.

Finance is the life blood of business. No business can run successfully without adequate finance. Finance is
required to bring a business into existence, to keep it alive and also to see it growing and prospering.

Meaning of Financial Planning:

Finance is an important function of business. The application of planning to this function is called financial
planning. Financial planning is mainly concerned with the economical procurement and profitable use of funds.
According to Gutlman and Dougall, "Financial planning is concerned with raising, controlling and
administering of funds used in business." In the words of Bouneville and Dewey, "Financial planning consists in
the raising, providing and managing of all the money, capital of funds of any kind to be used in connection with
the business." Financial planning is an important element of the overall planning of business enterprise.
Financial planning includes the following:

Estimating the amount of capital required for financing the business enterprise;
Determining capital structure;
Laying down policies for the administration of capital;
Formulating the programmes to provide the most effective use of capital.

Characteristics of a Good/ Sound Financial Planning:

The main characteristics of a good financial planning are as follows:

Simplicity
The financial plan should be as simple as possible so that it can be easily understood even by a layman, property
executed and administered. A complicated financial plan creates unnecessary complications and confusion.

Based on Clear-cut Objectives

The financial plan should be based on the clear-cut objectives of the company. It should aim to procure
adequate funds at the lowest cost so that the profitability of the business is improved.

Flexibility
The financial plan should not be rigid, but rather flexible enough to accommodate the changes which may be
introduced in it as and when necessary. The rigid composition of the financial plan may cause unnecessary
irritation and may limit the future development of the business unit.

Solvency an Liquidity
The financial plan should ensure solvency and liquidity of the business enterprise. solvency requires that short-
term and long-term payments should be made on due dates positively. This will ensure credit worthiness and
good will to the business enterprise. Liquidity means maintenance of adequate cash balance in hand.
Sometimes insufficiency of cash may make a business enterprise bankrupt.

Planning Foresight
Financial planning should have due foresight and vision to access the future needs, scope and scale of operation
of the business enterprise. On the basis, financial planning should be done in such a manner that any
adjustment needed in the future may be made without much difficulty. As the business proceeds, the financial
adjustments become necessary which should be adjustable properly as and when desired.

Contingencies Anticipated
The financial plan should be able to anticipate various contingencies which may arise in the near future. The
financial plan should make adequate provision for meeting the challenge of unforeseen events.

Minimum Dependence on Outside Sources

A long-term financial planning should aim at minimum dependence on outside resources. This can be possible
by retaining a part of the profits for ploughing back.

Intensive Use of Capital

Financial planning should ensure intensive use of capital. As far as possible, a proper balance between fixed and
working capital should be maintained.

Profitability
A financial plan should be drafted in such a way that the profitability of the business enterprise is not adversely
affected.

Economical
The financial plan should be quite economical i.e., the cost burden of raising various types of capital should be
minimum.

Government Financial Policy and Regulation

The financial policy should be prepared in accordance with the government financial policy and regulation. It
should not violate it under any circumstances.

Benchmarking is the process of comparing one's business processes and performance metrics to
industry bests or best practices from other industries. Dimensions typically measured are quality, time and
cost. In the process of benchmarking, management identifies the best firms in their industry, or in another
industry where similar processes exist, and compare the results and processes of those studied (the
"targets") to one's own results and processes. In this way, they learn how well the targets perform and,
more importantly, the business processes that explain why these firms are successful.

The term benchmarking was first used by cobblers to measure people's feet for shoes. They would place
someone's foot on a "bench" and mark it out to make the pattern for the shoes. Benchmarking is used to
measure performance using a specific indicator (cost per unit of measure, productivity per unit of
measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of
performance that is then compared to others.[citation needed]

Also referred to as "best practice benchmarking" or "process benchmarking", this process is used in
management and particularly strategic management, in which organizations evaluate various aspects of
their processes in relation to best practice companies' processes, usually within a peer group defined for
the purposes of comparison. This then allows organizations to develop plans on how to make
improvements or adapt specific best practices, usually with the aim of increasing some aspect of
performance. Benchmarking may be a one-off event, but is often treated as a continuous process in which
organizations continually seek to improve their practices.

Benefits and use

In 2008, a comprehensive survey [1] on benchmarking was commissioned by The Global Benchmarking
Network, a network of benchmarking centers representing 22 countries. Over 450 organizations
responded from over 40 countries. The results showed that:

1. Mission and Vision Statements and Customer (Client) Surveys are the most used (by 77% of
organizations of 20 improvement tools, followed by SWOT analysis(72%), and Informal
Benchmarking (68%). Performance Benchmarking was used by 49% and Best Practice
Benchmarking by 39%.
2. The tools that are likely to increase in popularity the most over the next three years are
Performance Benchmarking, Informal Benchmarking, SWOT, and Best Practice Benchmarking.
Over 60% of organizations that are not currently using these tools indicated they are likely to use
them in the next three years.
3. Benchmarking is the process of identifying "best practice" in relation to both products
(including) and the processes by which those products are created and delivered. The search
for "best practice" can taker place both inside a particular industry, and also in other
industries (for example - are there lessons to be learned from other industries?).
4. The objective of benchmarking is to understand and evaluate the current position of a
business or organisation in relation to "best practice" and to identify areas and means of
performance improvement.