GENERAL PRINCIPLES OF MANAGEMENT Introduction

Even before describing and defining the term management it will be usefull to trace the need for it. The need for and the concept of management are associated with the phenomenon of group activity. Everywhere in a modern society, we find groups of people working in all spheres of human activity. Wherever there is an economic activity or a social activity (including religious and cultural activities) or a political activity or any other type activity undertaken by human beings for realising certain specific objectives; we find people working in groups. A school, a college, a university, a business enterprise (in private or public sector), a club, a hospital, a government administrative department, an army, a family, a sports association etc., are all examples of group activities.

Definition
Management is a distinct process consisting of planning, organising, actuating, and controlling, performed to determine and accomplish stated objectives by the use of human beings and other resources. -----George .R. Terry

Nature Of Management
The nature of management are examined by the following perspectives; 1. Management as an Activity: The way a teacher performs, a teaching activity; a player performs a sports activity; in the same way a manager performs a managerial activity. The managerial activity is, in fact, the managerial job i.e., the task performed by a manager or the group of managers in an enterprise. 2. Management as a Discipline: Management education is a gaining popularity in the present day times. Management as a subject is taught at schools, colleges, universities. Specialised management institutes are growing rapidly, imparting management education and prepare for a career in management.
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training and helping people to

3. Management as a Group: Management refers to the totality of all those persons, who are charged with the responsibility of managing a particular enterprise. Management means the group of all managers; who represents a distinct class of society viz. Management as a group could be considered at two levels;At the Micro-level, management as a group refers to all managers from the higher authority to the lowest authority; who are managing a particular enterprise. At the Macro-level, management has a group or class refers to all persons who are performing the managerial jobs in all different enterprises-economic, social, cultural, political etc.., which are located in an economy or a nation. 4. Management as an Economic Resource [or a Factor of Production]: The economist has all the time been speaking of four factors of production viz., land, labour, capital and enterprise. To this list of four, management, as a factor of production, must be added, to make it a complete list of all factors of production. 5. Management as a System of Authority: Management as a system of authority might also be referred to as the management hierarchy i.e. a gradation of managers; consisting of managers from the highest rank to the lowest one. Of course in any enterprise, this management hierarchy is found; because there are various managers, with different grades of authority. 6. Management as an Art: The art of management demands creativity on the part of the practitioner; so as to find or develop new and unique ways of understanding human behaviour; and making people work in the desired manner towards the best realisation of the common objectives. 7. Management as a Science: Management as a science; because There is a large body of knowledge about management, which is further extended into specialised areas of management like production, finance, marketing, personnel, etc.., There are a number of management concepts, principles, theories and techniques.
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8. Management as a Profession: A profession must be defined as an occupation; which involves rendering of services of a specialised and personal nature, for a fee called professional charges. Without going into the question whether management is a profession or not; it could be said that there is an imperative need for management profession, for the following fundamental reason:

Principles Of Management
1. The Concept Of The Term Principle A principle might be defined as a statement of fundamental truth; which is established with reference to a cause and effect relationship between two (or more) variables or events. A principle, as such as, imparts the value of predictability to a science containing principles; and helps a practitioner of the discipline to calculate the effects of certain causes and apply the principles in practical situations of life-making the science meaningful and useful to human beings in society. 2. The Concept Of Management Principle In the concept of management ,too, a principle might be defined as a statement of fundamental truth ,which is established with reference to a cause and effect relationship between two variables or events; such relationship, however, being only a cause of nature. To illustrate the above concept, let us consider the division of work. according to the principle, if the work is divided and only a part of the job is assigned to an individual ; human efficiency would increase .admittedly , what the principle states is fundamental truth. However it is not possible to say and calculate how much human efficiency is likely to increase; if the work is divided in a particular manner, in the appropriate organisational context. 3. Derivation Of Management Principle There are two sources from which management principles are derived;

(i)Observation and experience of practitioners and scholars of management One most important and traditional source from which management principles have been derived is the observation and experience of the practitioners and scholars of management. (ii)outcome of experimental studies conducted by researchers In the present day times ,,a lot of research is being conducted by the practitioners and scholars of management. Experimental studies in the field of management are basically of two types;(a)Experimental studies conducted with a view to testing the validity of some of the existing principles of management and (b)Experimental studies conducted with a view to developing new principles of management.

Principles Of Management
1. Unity Of Objectives The term objectives means a goal to be achieved. the management structure depends upon the objectives of the enterprise. therefore the objectives of an enterprise must be clearly fixed. Every part of management should be designed to facilitate the accomplishment of common objectives. 2. Division Of Work The total work should be divided .this is known as departmentation .all the activities must be planned. this gives an idea of the total work load of the enterprise. Effective organisation must promote specialisation. 3. Span Of Control No executive in the management should be required to supervise more than he can effectively manage. An executive should be asked to supervise a reasonable number of subordinates.

4. Scalar Principles Line of authority must proceed from the highest executive to the worker at the bottom level through a downward flow. this is known as CHAIN OF COMMAND. the superior has a direct authority over his immediate subordinate .he is responsible for efficient performance of the work entrusted. 5. Unity Of Command Each individual should receive orders from only one boss .a person cannot serve under two masters. He is accountable to his immediate superior. Dual subordination should be avoided. it creates disorder and confusion and leads to indiscipline. 6. Functional Definition The authority and responsibility of every individual should be clearly defined. The relationship between different jobs should be clearly specified. 7. Unity Of Direction There must be one head and one plan for a group of activities directing towards the same objectives .this is necessary to ensure completion of tasks and co-ordination of activities. 8. Co-Ordination The various activities of undertaking should be co-ordinated to secure the desired results. The different departments may have to function frequently in close consultation with other departments in a departmental store .the purchase department and sales department activities must be well coordinated to increase profit. 9. Delegation Of Authority Delegation means the entrustment of the part of the work or some duties to the subordinates. Superior has to entrust some of his duties to his immediate subordinate. The subordinates should be granted necessary powers and rights. He becomes accountable to his superior. Delegation creates obligation on the part of the subordinate.

10. The Principles Of Responsibility The superior should be held responsible for the act of his subordinates. He cannot escape from his responsibility. He is accountable to his higher authorities. 11.Flexibility The organization should be flexible. It should be adaptable to changing circumstances. There should be scope for expansion without disrupting the basic design. 12. Efficiency Efficiency should be the watchword of the organisation. The organisation structure should enable the enterprise to function efficiently and accomplish its objective with the lowest possible cost. 13. Ability As people constitute an organisation there is need for proper selection, placement and training to staff. The organisation must ensure optimum use of human resource and encourage development programmes. 14. Simplicity Another principle of organisation is that it should be simple. Too many levels of authority for example, complicate communication channels and by causing confusion and friction makes achievements of co-ordination impossible.

Conclusion:
Management is the art of getting work done out of others, working in a group. Management is the creation of the internal environment is an enterprise; so that people associated with the group are helped to give their best contribution towards the attainment of common objectives. Management is what management does. A minimum work is performed by all people, working in a work endeavour, in order to justify their existence and ensure stability of employment .Therefore the art of management lies in including people to work to the best of their efforts and energies- for the most efficient realisation of common objectives.

REFERENCES: 1. DR.S.N.Maheswari, Sharad K.Maheshwari(1995). Principles Of Management, Sultan Chand & Sons, New Delhi. 2. Charles W L Hill, Steven L McShane. Principles Of Management, Tata McGraw-Hill Publishing Company Limited, New Delhi. 3. R.N.Gupta. Principles Of Management, S.Chand & Company Ltd, Ram Nagar, New Delhi.

MANAGEMENT DECISION MAKING

Management Meaning
Management is the art of getting things done by a group of people with the effective utilisation of available resources. an individual cannot be treated as a managing body running any organisation. a minimum of two persons are essential to form a management persons perform the functions in order to achieve the objectives of an organisation. .these

Definition
According to Terry,Management is not people ;it is an activity like walking ,reading, swimming or running. People who perform management can be designated as managers, members of management or executives leaders.

Features
The following are some of the features or characteristics of management: 1. Art As Well As Science Management is both an art as well as science. It is an art in the sense of possessing of managing skill by a person. In another sense, management is the science because of developing certain principles or laws which are applicable in a place where group of activities are co-ordinated. 2. Management Is An Activity Management is the process of activity relating to the effective utilisation of available resources for production. The term resources includes men, money, material and machine in the organisation. 3. Management Is A Continous Process The process of management consists of planning, organising, directing controlling the resources. The resources (men and money) of an organisation should be used to the best advantages of the organisation and the objectives to be achieved. The management function
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of any one alone cannot produce any results in the absence of any other basic functions of management. So, management is a continuous process. 4. Organised Activity Management is a group of organised activities. A group is found not only in a public limited company but also in an ordinary club. All the organisations have their own objectives. These objectives will be achieved only by a group of persons. These persons activities should be organised in a systematic way to achieve the objectives. The objectives cannot be achieved without any organised activities. 5. Decision Making There are number of decisions taken by the management everyday. Decision making arises only when there is availability of alternative courses of action. If there is only one course of action ,need for decision making does not arise. The success or failure of an organisation depends upon the degree of right decision taken by the manager. 6. Universal Application The principles and practices of management are applicable not to any particular industry alone but applicable to every type of industry. The practice of management is different from one organisation to another according to their nature. 7. Management As A Class Or A Team A class may be defined as a group of people having homogeneous characteristics to achieve common objectives. Engineers and doctors are grouped as a class in a society. Each and every doctor has the same objectives in life. Just like engineers and doctors, the management people have got similar options aspirations to achieve corporate objectives. 8. Direction And Control A manager can direct his sub-ordinates in the performance of a work and control them whenever necessary. If the available resources are not utilised properly by him, he fails to achieve the corporate objectives in the absence of direction and control.

Functions Of Management
The important functions of management are briefly discussed below; 1. Planning Planning is the primary function of management. Nothing can be performed without

planning. Writing a. book starts with planning. In short , planning refers to deciding in advance that which will be done in the near future. In the business world, the organisations should achieve the objectives. In order to achieve the objectives what it is to be done ,when it is to be done ,how it is to be done, and by whom it is to be done . 2. Organising Organising is the distribution of work in group wise or section wise for effective performance. Organisation provides all facilities which are necessary to perform the work. The business developed, the organisation takes the responsibility to create some more departments under different managers. Organisation is of two kinds; 1.organisation of human factor, 2.organisation of material factor . 3. Staffing Staffing function comprises the activities of selection and placement of competent personnel. In other words, staffing refers to placement of right persons in the right job. Staffing includes selection of right persons, training to those needy persons, promotion of best persons, retirement of old persons, performance performance of staffing function. 4. Directing The actual performance of a work starts with the function of direction. Planning, organising and staffing functions are concerned with the preliminary work for the achievement of organisational objectives. But the direction deals with making the workers learn techniques to perform the jobs assigned to them. Direction includes guidance, ,supervision and motivation of employees. appraisal of all the personnel, and adequate remuneration of personnel. The success of any enterprise depends upon the successful

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5.Co-Ordinating All the activities are divided group wise or section wise under organising function .now, such grouped activities are coordinated towards the accomplishment organisation .the difficulty of coordination of objectives of an depends upon the size of organisation .the

difficulty of coordination is increased with the increasing of the size of the organisation. 6. Motivating The goals are achieved by motivation .motivation includes increasing the speed of performance of a work and developing a willingness on the part of workers. this is done by an resourceful approach. 7. Controlling Controlling functions ensures that the achieved objectives conform to pre planned objectives .necessary corrective action may be taken if there is any derivation. the control is very easy whenever the organisation has a fixed standard .a good system of control has the characteristics of economy ,flexibility, understanding and adequacy to organisational needs. 8.Innovation Innovation refers to the preparation of personnel and organisation to face the changes made in the business world continuous changes are made in the business. Consumers are satisfied through innovation. Innovation includes developing new material, new products, and new techniques in production, new package, and new design of a product and cost reduction. 9. Representation A manager has to act as the representative of the company. He has dealings with customers, suppliers, government officials, banks, financial institutions, trade unions, and the like. It is the duty of every manager to have good relations with others. leader .the workers expect favourable climate conditions to work,,,, fair treatment,, monetary or non monetary incentive ,effective communication and gentle

10. Communication
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Communication is the transmission of human thoughts, views or organisations from one person to another person. Workers are informed about what should be done. Communication helps the regulation of job and co ordinate the activities.

Decision Making Meaning

Decision-making is an essential aspect of modern management. It is a primary function of management. A manager's major job is sound/rational decision-making. He takes hundreds of decisions consciously and subconsciously. Decision-making is the key part of manager's activities. Decisions are important as they determine both managerial and organizational actions. A decision may be defined as "a course of action which is consciously chosen from among a set of alternatives to achieve a desired result." It represents a well-balanced judgment and a commitment to action. It is rightly said that the first important function of management is to take decisions on problems and situations. Decision-making pervades all managerial actions. It is a continuous process. Decision-making is an indispensable component of the management process itself.

Definition
The Oxford Dictionary defines the term decision-making as "the action of carrying out or carrying into effect". According to Trewatha & Newport, "Decision-making involves the selection of a course of action from among two or more possible alternatives in order to arrive at a solution for a given problem".

Advantages of Decision Making

1. Decision making is the primary function of management: The functions of management starts only when the top-level management takes strategic decisions. Without decisions, actions will not be possible and the resources will not be put to use. Thus decision-making is the primary function of management.
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2. Decision-making facilitates the entire management process: Decision-making creates proper background for the first management activity called planning. Planning gives concrete shape to broad decisions about business objectives taken by the top-level management. In addition, decision-making is necessary while conducting other management functions such as organizing, staffing, coordinating and communicating. 3. Decision-making is a continuous managerial function: Managers working at all levels will have to take decisions as regards the functions assigned to them. Continuous decision making is a must in the case of all managers/executives. Follow-up actions are not possible unless decisions are taken. 4. Decision-making is essential to face new problems and challenges: Decisions are required to be taken regularly as new problems, difficulties and challenges develop before a business enterprise. This may be due to changes in the external environment. New products may come in the market, new competitors may enter the market and government policies may change. All this leads to change in the environment around the business unit. Such change leads to new problems and new decisions are needed. 5. Decision-making is a delicate and responsible job: Managers have to take quick and correct decisions while discharging their duties. In fact, they are paid for their skill, maturity and capacity of decision-making. Management activities are possible only when suitable decisions are taken. Correct decisions provide opportunities of growth while wrong decisions lead to loss and instability to a business unit.

Steps Involved In Decision Making Process

Decision-making involves a number of steps which need to be taken in a logical manner. This is treated as a rational or scientific 'decision-making process' which is lengthy and time consuming. Such lengthy process needs to be followed in order to take rational/scientific/result oriented decisions. Decision-making process prescribes some rules and guidelines as to how a decision should be taken / made. This involves many steps logically arranged. Drucker recommended the scientific method of decision-making which, according to him, involves the following six steps:

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1.Identifying the Problem: Identification of the real problem before a business enterprise is the first step in the process of decision-making. It is rightly said that a problem well-defined is a problem half-solved. Information relevant to the problem should be gathered so that critical analysis of the problem is possible. This is how the problem can be diagnosed. Clear distinction should be made between the problem and the symptoms which may cloud the real issue. In brief, the manager should search the 'critical factor' at work. It is the point at which the choice applies. Similarly, while diagnosing the real problem the manager should consider causes and find out whether they are controllable or uncontrollable. 2.Analyzing the Problem: After defining the problem, the next step in the decision-making process is to analyze the problem in depth. This is necessary to classify the problem in order to know who must take the decision and who must be informed about the decision taken. Here, the following four factors should be kept in mind: 1. 2. 3. 4. Futurity of the decision, The scope of its impact, Number of qualitative considerations involved, and Uniqueness of the decision.

3.Collecting Relevant Data: After defining the problem and analyzing its nature, the next step is to obtain the relevant information/ data about it. There is information flood in the business world due to new developments in the field of information technology. All available
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information should be utilised fully for analysis of the problem. This brings clarity to all aspects of the problem. 4.Developing Alternative Solutions: After the problem has been defined, diagnosed on the basis of relevant information, the manager has to determine available alternative courses of action that could be used to solve the problem at hand. Only realistic alternatives should be considered. It is equally important to take into account time and cost constraints and psychological barriers that will restrict that number of alternatives. If necessary, group participation techniques may be used while developing alternative solutions as depending on one solution is undesirable. 5.Selecting the Best Solution: After preparing alternative solutions, the next step in the decision-making process is to select an alternative that seems to be most rational for solving the problem. The alternative thus selected must be communicated to those who are likely to be affected by it. Acceptance of the decision by group members is always desirable and useful for its effective implementation. 6.Converting Decision into Action: After the selection of the best decision, the next step is to convert the selected decision into an effective action. Without such action, the decision will remain merely a declaration of good intentions. Here, the manager has to convert 'his decision into 'their decision' through his leadership. For this, the subordinates should be taken in confidence and they should be convinced about the correctness of the decision. Thereafter, the manager has to take follow-up steps for the execution of decision taken. 7.Ensuring Feedback: Feedback is the last step in the decision-making process. Here, the manager has to make built-in arrangements to ensure feedback for continuously testing actual developments against the expectations. It is like checking the effectiveness of follow-up measures. Feedback is possible in the form of organised information, reports and personal observations. Feed back is necessary to decide whether the decision already taken should be continued or be modified in the light of changed conditions.

Conclusion
Means and ends are linked together through decision-making. To decide means to come to some definite conclusion for follow-up action. Decision is a choice from among a set of
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alternatives. The word 'decision' is derived from the Latin words de ciso which means 'a cutting away or a cutting off or in a practical sense' to come to a conclusion. Decisions are made to achieve goals through suitable follow-up actions. Decision-making is a process by which a decision (course of action) is taken. Decision-making lies embedded in the process of management. The effectiveness of management depends on the quality of decision-making. In this sense, management is rightly described as decision-making process. Decision-making has priority over planning function. It is the top management which is responsible for all strategic decisions such as the objectives of the business, capital expenditure decisions as well as such operating decisions as training of manpower and so on. Without such decisions, no action can take place and naturally the resources would remain idle and unproductive. The managerial decisions should be correct to the maximum extent possible. For this, scientific decisionmaking is essential.

References
1. DR.S.N.Maheswari, Sharad K.Maheshwari(1995). Principles Of Management, Sultan Chand & Sons, New Delhi. 2. Charles W L Hill, Steven L McShane. Principles Of Management, Tata McGraw-Hill Publishing Company Limited, New Delhi. 3. R.N.Gupta. Principles Of Management, S.Chand & Company Ltd, Ram Nagar, New Delhi.

DOMESTIC AND GLOBAL BUSINESS ENVIRONMENT Introduction

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Whether an organization markets its goods and services domestically or internationally, the definition of marketing still applies. However, the scope of marketing is broadened when the organization decides to sell across international boundaries, this being primarily due to the numerous other dimensions which the organization has to account for. For example, the organization's language of business may be "English", but it may have to do business in the "French language". This not only requires a translation facility, but the French cultural conditions have to be accounted for as well. Doing business "the French way" may be different from doing it "the English way". This is particularly true when doing business with the Japanese.

Definition
S. Carter defines marketing as: "The process of building lasting relationships through planning, executing and controlling the conception, pricing, promotion and distribution of ideas, goods and services to create mutual exchange that satisfy individual and organisational needs and objectives".

Domestic Trade
Domestic trade is when trade people or the things they produced on a farm, and mail/take it to other countries who cannot produce that food. (produce means to create or make something). With the government's new emphasis on growth in private enterprise since the late 1980s, the expansion of privately-owned retail outlets have competed with the cooperative sector. Most private commercial enterprises are small establishments owned and operated by a single person or a single family; retail outlets are often highly specialized in product and usually very small in quarters and total stock. Often the Indian retail shop is large enough to hold only the proprietor and a small selection of stock; shutters fronting the store are opened to allow customers to negotiate from the street or sidewalk. There are no major national chains but foreign franchises do exist. In most retail shops, fixed prices are rare and bargaining is the accepted means of purchase. Some department stores and supermarkets have begun to appear in shopping centers in major cities. These shopping centers usually offer entertainment and leisure activities as well. India's domestic trade is widely influenced by informal and unreported commerce and income, known as "black money."
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Government and business hours are generally from 10 AM to 5 PM , Monday through Friday, with a lunch break from 1 to 2 PM . Larger shops in Delhi are open from 9:30 AM to 1:30 PM and from 3:30 to 7:30 PM . Normal banking hours are from 10 AM to 4 PM on weekdays and from 10 AM to 12 noon on Saturdays. GLOBAL BUSINESS ENVIRONMENT:International Trade is exchange of capital, goods, and services across international borders or territories. In most countries, it represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. Without international trade, nations would be limited to the goods and services produced within their own borders. International trade is in principle not different from domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. The main difference is that international trade is typically more costly than domestic trade. The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture.

Another difference between domestic and international trade is that factors of production such as capital and labour are typically more mobile within a country than across countries.
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Thus international trade is mostly restricted to trade in goods and services, and only to a lesser extent to trade in capital, labor or other factors of production. Then trade in goods and services can serve as a substitute for trade in factors of production. Instead of importing a factor of production, a country can import goods that make intensive use of the factor of production and are thus embodying the respective factor. An example is the import of labor-intensive goods by the United States from China. Instead of importing Chinese labor the United States is importing goods from China that were produced with Chinese labor. One report in 2010 suggested that international trade was increased positively when a country hosted a network of immigrants, but the trade effect was weakened when the immigrants became assimilated into their new country. International trade is also a branch of economics, which, together with international finance, forms the larger branch of international economics.

Domestic Vs International Trade

Conducting and managing international business operations is more complex than undertaking domestic business. Because of variations in political, social, cultural and economic environments across countries, business firms find it difficult to extend their domestic business strategy to foreign markets. To be successful in the overseas markets, they need to adapt their product, pricing, promotion and distribution strategies and overall business plans to suit the specific requirements of the target foreign markets Key aspects in respect of which domestic and international businesses differ from each other are discussed below. 1.Mobility of factors of production The degree of mobility of factors like labor and capital is generally less between countries than within a country. While these factors of movement can move freely within the country, there exist various restrictions to their movement across nations. Apart from legal restrictions, even the variations in socio-cultural environments, geographic influences and economic conditions come in a big way in their movement across countries. 2.Differences in business systems and practices
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Countries differ from one another in terms of their socio-economic development, availability, cost and efficiency of economic infrastructure and market support services, and business customs and practices due to their socio-economic milieu and historical coincidences. All such differences make it necessary for firms interested in entering into international markets to adapt their production, finance, human resource and marketing plans as per the conditions prevailing in the international markets. 3.Political system and risks Political factors such as the type of government, political party system, political ideology, political risks, etc., have a profound impact on business operations. Since a business person is familiar with the political environment of his/her country, he/she can well understand it and predict its impact on business operations. But this is not the case with international business. Political environment differs from one country to another. One needs to make special efforts to understand the differing political environments and their business implications. A major problem with a foreign countrys political environment is a tendency among nations to favor products and services originating in their own countries to those coming from other countries. While this is not a problem for business firms operating domestically, it quite often becomes a severe problem for the firms interested in exporting their goods and services to other nations or setting up their plants in the overseas markets.

4.Business regulations and policies Coupled with its socioeconomic environment and political philosophy, each country evolves its own set of business laws and regulations. Though these laws, regulations and economic policies are more or less uniformly applicable within a country, they differ widely among nations. Tariff and taxation policies, import quota system, subsidies and other controls adopted by a nation are not the same as in other countries and often discriminate against foreign products, services and capital.

Top Traded Commodities(Exports)

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Rank Commodity

Value in US$('000) Date

of

information 1 2 3 4 5 6 7 8 9 10 Mineral fuels, oils, distillation products, etc. Electrical, electronic equipment Machinery, nuclear reactors, boilers, etc. Vehicles other than railway, tramway Plastics and articles thereof $2,183,079,941 $1,833,534,414 $1,763,371,813 $1,076,830,856 $470,226,676 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010

Optical, photo, technical, medical, etc. apparatus $465,101,524 Pharmaceutical products Iron and steel Organic chemicals Pearls, precious stones, metals, coins, etc. $443,596,577 $379,113,147 $377,462,088 $348,155,369

Risk In International Trade

Companies doing business across international borders face many of the same risks as would normally be evident in strictly domestic transactions. For example, 1. Buyer insolvency (purchaser cannot pay); 2. Non-acceptance (buyer rejects goods as different from the agreed upon specifications); 3. Credit risk (allowing the buyer to take possession of goods prior to payment); 4. Regulatory risk (e.g., a change in rules that prevents the transaction); 5. Intervention (governmental action to prevent a transaction being completed); 6. Political risk (change in leadership interfering with transactions or prices); and 7. War, piracy and civil unrest or turmoil; 8. Natural catastrophes, freak weather and other uncontrollable and unpredictable events,
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In addition, international trade also faces the risk of unfavorable exchange rate movements (and, the potential benefit of favorable movements).

Conclusion
The transformation of international business and related developments in the global economy pose important and urgent new challenges and opportunities to the GMS economies individually and as a group. Global value chains and associated production networks offer significant opportunities for qualified SMEs in GMS. However, to qualify for competing in the new world of international business such enterprises must meet a multiplicity of demanding requirements. This in turn is posing new challenges to governments and enterprises, large and small; it is also redefining the framework for business-government relations. A fundamental challenge for effective participation in global value chains is for Governments of GMS economies and enterprises to develop a new perspective, a GVC mindset as the basis for achieving systemic efficiencies in value chains, rather than focusing only on improving individual firm-level performance. In the traditional image of exporting, an enterprise makes a product for the domestic market first then finds foreign customers for it through trade fairs or by contacting foreign buyers or brokers.

References
1.The Indian and Global Business - Dr.A.K.Ojha Jan 2004, Page 30. 2.Globalisation and India's Business prospectives - Lecture - Ravi Kastia. 3.Globalisation: Imperatives, Challenges and the Strategies, - Prof .Sagar Jain, University of N.Carolina.Page 39.

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SOCIAL RESPONSIBILITY OF BUSINESS AND MANAGERIAL ETHICS Social Responsibility Introduction

The definition of social responsibility is the obligation an organization's management team has towards the interests and welfare of the society or community that provides it with resources and environment to not only survive but flourish. At the same time society is affected by the policies and the actions of the company. In other words, social responsibility is the way your company gives back to and takes care of the community it is located in and the greater society we are all a part of. There are a number of positive examples of companies acting socially responsible. Starting with the way the company operates on a day to day basis. Offering recycling bins at the workplace so that employees and visitors can recycle their trash instead of throwing it in the dumpster. Recycling office waste such as paper and empty ink cartridges are also small but effective ways to support the definition of social responsibility. In doing this your company is
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showing your employees on a daily basis how to make the work day more socially responsible. A great way for smaller companies to get involved is by sponsoring youth groups or youth sports such as PeeWee football or soccer. Helping raise money for a local charity or the food shelter, if money is an object you and your employees can dedicate time helping out at the homeless shelter or reading to children in the library. Some nursing facilities also have "adopt a grandparent" that your company could take part in. There are numerous ways, big and small that any size company can get involved in the community. Here are a few steps you can take to make social responsibility work for you
1. Set goals: What do you want to achieve? What do you want your company to

achieve? Do you want to enter a new market? Introduce a new product? Enhance your business's image?
2. Decide what cause you want to align yourself with: This may be your toughest

decision, considering all the option out there: children, the environment, senior citizens, homeless people, people with disabilities--the list goes on. You might want to consider a cause that fits in with your products or services. For example, a manufacturer of women's clothing could get involved in funding breast cancer research. Another way to narrow the field is by considering not only causes you feel strongly about, but also those that your customers consider significant.
3. Choose a non-profit or other organization to partner with: Get to know the group,

and make sure it's sound, upstanding, geographically convenient and willing to cooperate with you in developing a partnership.
4. Design a program, and propose it to the non-profit group: Besides laying out what

you plan to accomplish, also include indicators that will measure the program's success in tangible terms.
5. Negotiate an agreement with the organization: Know what they want before you

sit down, and try to address their concerns upfront.

6. Involve employees: Unless you get employees involved from the beginning, they

won't be able to communicate the real caring involved in the campaign to customers.
7. Involve customers: Don't just do something good and tell your customers about it

later. Get customers involved, too. A sporting goods store could have customers bring
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in used equipment for a children's shelter, then give them a 15 percent discount on new purchases. Make it easy for customer to do good; then reward them for doing it.

Arguments For Social Responsibility

Manager should have social responsibility for the people. Because manager is a person who is very skilled, if he will take interest in the social functions or problem, it will create a good impression on other people living or working under him it will motivate the sub-ordinates working under him. Thus, it creates a favorable impression on the society, which will ultimately helps the business. Managers have a creative and also communicative skill. As their main task is to have the cordial relations with people inside the organization or outside the organization. The had to interact with his subordinates, superiors and other members relating to business. So, the managers are very creative and if they will take part in social problems, the society is bound to improve in some kind or others. Managers take the input from the society e.g. education values etc. if managers will take part in social event or they will become responsible towards society, the society is sure to make progress become one man can change the whole environment. It will thus create the source of motivation towards the society. According to System theory, for the efficient working and smooth working small subsystems should work properly.
1. Business is a part of society: Since business organizations are a part of society they

must have a positive attitude towards the needs of society. Business is only a subsystem of society and this sub-system must contribute to the welfare of the main system.
2. Avoidance of govt. regulation: If business does not care of its social responsibility,

the govt. has to interfere increasingly in the business system, which adversely affects the progress of business.
3. Long term self-interest of business: the social responsibility of business, if taken

care of in the present ensures the success of the organization in the future.
4. Code of conduct: Members of a profession are bound to follow a code of conduct.

Code of conduct includes rules connected with profession, honesty and morality, which form its base.
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5. Business is a creation of the society and so it should respond to the demands of

the society: Since business uses the resources which belong to the society. It is necessary that every business are obliged to use the social resources for the common good of society.
6. The long-term self interests of the business are best served when business

assumes social responsibilities: There is a growing realization on the part of the enlightened businessmen that it is in their self-interest to fulfill the demands and aspirations of the society. People who have good environment, education, and opportunity make better employees, customers and neighbours for business than those who are poor, ignorant or oppressed.
7. It is the moral and right thing to do: It is widely agreed that businessmen today

have considerable social power. This power is virtually granted to them by the society, which must have a general relationship with social responsibilities. The social responsibilities of businessmen must be proportionate to their social power. If the businessmen do not assume social responsibilities, their social power must be taken away by the society through government controls and regulations and other measures.
8. Public image of business would be improved: The business will retain the needed

credibility with the public if it performs its social obligations. It will also avoid conflict with the society in its own interest. Good relation with the workers, consumers and suppliers will lead to success of business.
9. The consumers are well informed: They expect higher quality products at

responsible rates. If they dont get fair treatment form business, they will organize themselves and compel the business its social responsibilities.

Arguments Against Social Responsibilities

The main function of the manager is to govern his organization smoothly and efficiently. So, he should not make himself responsible towards the society. He should not be able to do his work properly. The social problem should be left for those people. So generally take the responsibility (political parties, interest groups etc) of improving are solving the problem of the society. Manager takes the salary for governing his organizing properly not for solving the social problem of the society. Thus, manager should not move his mind towards social responsibilities of the society.

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1. Contrary to the objective of business: Just as the primary objective of players in the

play-ground is to achieve victory, in the same way the chief objective of business is to enhance its profits by utilizing its, resources.
2. Inefficiency in the system: there is no power other than self-interest, which can get

work out of people. It owners of business, by ignoring self-interest, start thinking of social responsibility the whole work-system will turn inefficient.
3. Effects of business values: Business should not have any social responsibility

otherwise social values will come to be dominated by business values, which in itself is a painful delaminate. It means that when business is alive to its social responsibility, the people in the beginning will be so thoroughly impressed by it, that in future business will come to occupy a position of predominance the idea of social responsibility of management opinion against.
4. Conflicting

consideration: A business manager will be guided by two

considerations, namely, private market mechanism and social responsibilities which are opposite to each other.
5. Arbitrary power: Business managers will get arbitrary power in the matter of

allocation of resources in the welfare of the society. They should have no right to interfere with the external environment of business.
6. Disregard of marketing mechanism: the doctrine of social responsibilities implies

acceptance of socialist view that political mechanism rather than market mechanism is the appropriate way to allocate scarce resources to alternative uses.
7. Burden on customer: if the price in the market for a product does not truly reflect the

relative costs of producing mechanism of the market place will be distorted. The consumers will have to pay higher costs.
8. Difficult implementation: the concept of social responsibility is ill conceived and ill

defined and is difficult to be implemented.

Managerial Ethics Introduction

The term ethics refers to value-oriented decisions and behaviour. The word ethics comes from the Greek root, ethros, meaning character, giving beliefs, standards, or deals that pervade a group, a community, a people. Today ethics is the study of moral behavior the
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study of how the standards of moral conduct among the individuals are established and expressed behaviourally. Terms such as business ethics, corporate ethics, medical ethics, or legal ethics are used to indicate the particular area of application. But to have meaning, the ethics involved in each area must still refer to the value-oriented decisions and behaviour of individuals. Ethics refer to a set of moral principles, which should pay a very significant role in guiding the conduct of managers and employees in the operation of any enterprise. Ethics is concerned with what is right and what is wrong is human behaviour. It is normative and prescriptive, not neutral. It addresses the question of what ought to be. Ethics refer both to the body of moral principles governing a particular society or group and to the personal normal precepts of an individual.

Dilemma Of Managerial Ethics

An ethical dilemma arises in a situation concerning right or wrong when values are in conflict. Right and wrong cannot be clearly identified. The individual who must make an ethical choice in an organization is the moral agent. Consider the dilemmas facing a moral agent in the following situations: 1. A top employee at your small company tells you he needs some time off because he has AIDS. You know the employee needs the job as well as the health insurance benefits. Providing health insurance has already stretched the companys budget, and this will send premiums through the roof. You know the federal courts have upheld the right of an employer to modify health plans by putting a cap on AIDS benefits. 2. As a sales manager for a major pharmaceuticals company, you have been asked to promote a new drug that costs $2,500 per dose. You have read the reports saying the drug is only 1 percent more effective than an alternative drug that costs less than onefourth as much. 3. Your company is hoping to build a new overseas manufacturing plant. You could save about $5 million by not installing standard pollution control equipment that is required in the United States. The plant will employ many local workers in a poor country where jobs are scarce. Your research shows that pollutants from the factory could potentially damage the local fishing industry. Yet building the factory with the pollution control equipment will likely make the plant too expensive to build.
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4. You are the accounting manager of a division that is $15,000 below profit targets. Approximately $20,000 of office supplies were delivered on December 21. The accounting rule is to pay expenses when incurred. The division general manager asks you not to record the invoice until February. 5. You have been collaborating with a fellow manager on an important project. One afternoon, you walk into his office a bit earlier than scheduled and see sexually explicit images on his computer monitor. The company has a zero-tolerance sexual harassment policy, as well as strict guidelines regarding personal use of the Internet. However, your colleague was in his own office and not bothering anyone else. Managers must deal with these dilemmas that fall squarely in the domain of ethics. Now turn to approaches to ethical decision making that provide criteria for understanding and resolving these difficult issues.

Conclusion
The first responsibility to society is to operate at a profit, and only slightly less important is the necessity for growth. The business is the wealth-creating and wealth-producing organ of the society. Management must maintain its wealth-producing resource intact by making adequate profits to offset the risk of economic activity. And it must beside increase the wealth-producing capacity of these resources and with them the wealth of society. Ethics play an importance role in social responsibility. The business organizations must have ethical responsibility as they are doing business, including production, management, and services and so on. Without ethics, it would be danger to the human. Ethics is simply the rules that say what is right and wrong, as defined by a particular reference group or individual. The social responsibility is very importance to both society and business organizations. Although there are some arguments for and against social responsibility, even more of the organizations would take action on social responsibility. Many of the advantages being social responsibility was created, some of that was already discuss on previous pages.

References
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1.Anderson, Chris. Social Responsibilities of business, Bizmanualz, July 22nd, 2009.

2. Rummler & Brache (1995). MANAGERIAL ETHICS-DILEMA Jossey-Bass, San Francisco

VALUE CHAIN OF BUSINESS Introduction

Value chain selling is supported through two business models: demand chain and a supply chain; WebSphere Commerce supports the transactions through, and relationship management of both the demand chain business model and supply chain business model. These models support transactions involving multiple enterprises or parties. Products, goods, services, or information are delivered through the parties of the value chain from producers to end users. A value chain also has relationship and administrative aspects, that is, you can manage the relationship of the partners or enterprises in your value chain, as well as offer some administrative services to those parties. As a result, value chain business models must manage the two sides of their businesses: their customers and direct sales, and their channel partners and suppliers. Each requires its own management channels and practices.To sell directly to customers (direct sales), value chain models usually include a storefront, where customers can purchase their goods or services directly. To manage relationships with partners or suppliers, the demand chain and a supply chain models within the value chain include a hub. Under these models, value chain administrators can administer the operational aspects of the value chain in the hub, including enabling partners or suppliers to participate in the value chain by registering them, setting them up,
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and conducting various operations. Partners and suppliers can also access the hub to complete administrative tasks such as registering users.

Definition
The successive stages during which value is created when producing, distributing, and servicing a product. Distinct stages in the value chain may include: (1) receiving and distributing raw materials, (2) converting raw materials into a finished product, (3) identifying customers and distributing the product, and (4) providing customer support. Identifying the value chain allows a firm to refine its operations in an effort to improve quality, add efficiencies, and increase profits.

Value Chain Analysis Introduction

Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Influential work by Michael Porter suggested that the activities of a business could be grouped under two headings: (1) Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and (2) Secondary Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities. Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best provided by others ("out sourced").

Primary Activities
Primary activities include:
Primary Activity Description Inbound logistics All those activities concerned with receiving and storing externally sourced 31

materials Operations The manufacture of products and services - the way in which resource inputs (e.g. materials) are converted to outputs (e.g. products) Outbound logistics Marketing sales Service and Essentially an information activity - informing buyers and consumers about products and services (benefits, use, price etc.) All those activities associated with maintaining product performance after the product has been sold All those activities associated with getting finished goods and services to buyers

Secondary Activities
Secondary activities include: Secondary Activity Procurement This concerns how resources are acquired for a business (e.g. sourcing and negotiating with materials suppliers) Human Resource Management Technology Development Infrastructure Activities concerned with managing information processing and the development and protection of "knowledge" in a business Concerned with a wide range of support systems and functions such as finance, planning, quality control and general senior management Those activities concerned with recruiting, developing, motivating and rewarding the workforce of a business Description

Steps In Value Chain Analysis

Value chain analysis can be broken down into a three sequential steps:

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(1) Break down a market/organisation into its key activities under each of the major headings in the model; (2) Assess the potential for adding value via cost advantage or differentiation, or identify current activities where a business appears to be at a competitive disadvantage; (3) Determine strategies built around focusing on activities where competitive advantage can be sustained

Value Chain Business Model

The following diagram provides an overview of the partners and relationships that can be supported in value chain models.

Importance Of Value Chain

Business processes comprise a set of sequential sub-processes or tasks, with alternative paths depending on certain conditions as applicable, performed to achieve a given objective or produce given outputs. Each process has one or more needed inputs. The inputs and outputs may be received 33

from, or sent to other business processes, other organizational units, or internal or external stakeholders. Business processes are designed to be operated by one or more business functional units, and emphasize the importance of the process chain rather than the individual units. In general, the various tasks of a business process can be performed in one of two ways 1) manually and 2) by means of business data processing systems such as ERP systems. Typically, some process tasks will be manual, while some will be computer-based, and these tasks may be sequenced in many ways. In other words, the data and information that are being handled through the process may pass through manual or computer tasks in any given order.

The Four Major Process Improvement Area

The point to note here is that, irrespective of the class of the task - whether manual or computerised - it is important that each task - and hence the process as a whole is designed and periodically reviewed, improved, or substituted by another task, with a view to continuous improvement in four major areas:

1.Effectiveness
The overall effectiveness of a process is the extent to which the outputs expected from the process are being obtained at all, and is therefore a first measure of the basic adequacy of the process and its capability to fulfill the logical and reasonable expectations of process uses and operators. For example, consider the material procurement process. One of its important tasks is the sub-process for supplier follow-up to ensure timely deliveries of materials. Such a task is considerably less effective if it does not provide accurate and timely purchase order status reports for use of the purchase department staff responsible for follow-up.

2.Efficiency
Supposing it has been observed that the average time taken to prepare and send out a purchase order after receipt of a properly prepared intent from the end-user is unacceptably high, leading to delayed customer deliveries and consequent customer complaints.
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The process of converting the end-users intent to a purchase order is effective because a purchase order is being somehow generated, but its efficiency is very low since it takes an inordinate amount of time and costs considerably more in terms of the cost to the company of the salaries of staff members involved.

3.Internal Control
In a scenario where quantities of major raw materials are regularly ordered and consumed, rates are fixed with selected, reliable, approved vendors for an extended period commonly a year. Moreover, let us say that the rate contract does not contain a price escalation clause. This safeguards the organisation from unanticipated price escalation during the period. The rate contract data are stored in the ERP systems database. Whenever materials are to be ordered (with or without a delivery schedule), purchase orders are generated mentioning the rate finalised in the rate contract. An internal control exists to keep the purchase rate constant throughout the year.

4.Compliance to various statutes and policies

There are certain situations where payments made to consultants or service contractors must be statutorily made after deducting tax at source (T.D.S.), and such T.D.S. amounts must be deposited in government treasury accounts with banks on or before a specified date in the month following the month in which the payments are made. In such cases, if a business process does not provide for deduction of T.D.S. and/or fails to ensure deposition into government accounts by the specified date, then this is a statutory compliance issue that makes the concerned executives liable to civil / criminal legal action.

Value Chain Business Model Sitemap

Specializing in business process modelling and business process management, the Value Chain Group provides a value chain business model and facilitates effective value chain communication by creating a unified business process framework and reference model - the Value Reference model (VRM). The mission of Value Chain Group is to excel in value chain performance through market, education, research, communication and collaboration.

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The Value Chain Group will continually develop the value chain business model for keeping the integration of business processes, coordinating the development and marketing of any constituent reference models, and providing a central point to establish architecture and coordinate compliance of standards integration across all enterprise value chain constituent domains. To improve your business process management, become a member of the Value Chain Group. The benefits of becoming a member include the right to access and use the Value Reference model (VRM) within your organization and a client server access to the ValuePoint database which manages the VRM framework.

Conclusion
The transformation of international business and related developments in the global economy pose important and urgent new challenges and opportunities to the GMS economies individually and as a group. Global value chains and associated production networks offer significant opportunities for qualified SMEs in GMS. However to qualify for competing in the new world of international business such enterprise must meet a multiplicity of demanding requirements. This in turn is posing new challenges to governments and enterprises, large and small; it is also redefining the framework for business-government relations. A fundamental challenge for effective participation in global value chain is for governments of GMS economies and enterprises to develop a new perspective, a GVC mindset: as the basis for achieving systemic efficiencies in value chains, rather than focusing only on improving individual firm-level performance. In the traditional image of exporting, an enterprise makes a product for the domestic market first then finds foreign customers for it through trade fairs or by contacting foreign buyers or brokers. Consistent with this, the firm has been the basic unit of analysis in looking for ways to improve export performance and related efficiencies. As this paper suggests, supplying global markets in many industries increasingly does not involve an enterprise making a finished product for sale to end-users. It
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involves more and more making parts of products to specifications given by or defined jointly with lead firms or global suppliers providing opportunities for enterprises, including SMEs, to specialize and requiring value-chain-related coordination. This has important implications for public policy and strategy.

References
1. Principles Of Management, G.k Sivakumar.Lakshmi Publication. 2. Thomas Davenport (1993).Value chain sitemap. Harvard Business School Press, Boston

CREATIVITY AND MANAGEMENT OF INNOVATION

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Introduction
Creativity is the process of bringing something new into being...creativity requires passion and commitment. Out of the creative act is born symbols and myths. It brings to our awareness what was previously hidden and points to new life. The experience is one of heightened consciousness-ecstasy.A product is creative when it is(a) novel and (b) appropriate. A novel product is original not predictable. The bigger the concept, and the more the product stimulates further work and ideas, the more the product is creative. You may have heard many a definition of creativity, taken a creativity test or have studied creativity research, but where does all of that leave us in trying to understand our own processes of creativity?Here, I would offer you a completely NEW, simple and manageable explanation on the origins of creativity and how we get to use this marvellous function of the human mind to have more fun and find creative solutions to our own problems.

Definition
First of all, let's remember that although we use the word "creativity" all the time, it is not something you can put in the boot of your car or sell in a can - it is a nominalisation, and that means it was taken from a verb which describes an activity and frozen into this nebulous noun. The verb at the bottom of the well is, "to create". In essence, this means "to make something", and that's our first stop on re-defining creativity.

Creativity at Work
Creativity is a core competency for leaders and managers and one of the best ways to set your company apart from the competition. Corporate Creativity is characterised by the ability to perceive the world in new ways, to find hidden patterns, to make connections between seemingly unrelated phenomena, and to generate solutions. Generating fresh solutions to problems, and the ability to create new products, processes or services for a changing market, are part of the intellectual capital that give a company its competitive edge. Creativity is a crucial part of the innovation equation.

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Creativity right-brain

requires imagination,

whole-brain artistry and

thinking; intuition,

plus left-brain logic and planning. Creativity is fostered in organizational cultures that value independent thinking, risk taking, and learning. They are tolerant of failure and they value diversity. Open communication, a high degree of trust and respect between individuals are crucial.

Innovation Introduction
The term innovation derives from the Latin word innovatus, which is the noun form of innovare "to renew or change," stemming from in-"into" + novus-"new". Although the term is broadly used, innovation generally refers to the creation of better or more effective products, processes, technologies, or ideas that are accepted by markets, governments, and society. Innovation differs from invention or renovation in that innovation generally signifies a substantial positive change compared to incremental changes.

Definition
Innovation is a process, involving multiple activities, performed by multiple actors from one or several organizations, during which new combinations of means and/or ends, which are new for a creating and/or adopting unit, are developed and/or produced and/or implemented and/or transferred to old and/or new market-partners.

Interdisciplinary View
Society Due to its widespread effect, innovation is an important topic in the study of economics, business, entrepreneurship, design, technology, sociology, and engineering. In society, innovation aids in comfort, convenience, and efficiency in everyday life. For instance, the benchmarks in railroad equipment and infrastructure added to greater safety, maintenance, speed, and weight capacity for passenger services. These innovations included wood to steel
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cars, iron to steel rails, stove-heated to steam-heated cars, gas lighting to electric lighting, diesel-powered to electric-diesel locomotives. By mid-20th century, trains were making longer, more comfortable, and faster trips at lower costs for passengers.[1] Other areas that add to everyday quality of life include: the innovations to the light bulb from incandescent to compact fluorescent and LEDs which offer longer-lasting, less energy-intensive, brighter technology; adoption of modems to cellular phones, paving the way to smart phones which meets anyones internet needs at any time or place; cathode-ray tube to flat-screen LCD televisions and others. Business and economics In business and economics, innovation is the catalyst to growth. With rapid advancements in transportations and communications over the past few decades, the old world concepts of factor endowments and comparative advantage which focused on an areas unique inputs are outmoded for todays global economy. Now, as Harvard economist Michael Porter points out competitive advantage, or the productive use of any inputs, which requires continual innovation is paramount for any specialized firm to succeed. Economist Joseph Schumpeter, who contributed greatly to the study of innovation, argued that industries must incessantly revolutionize the economic structure from within, that is innovate with better or more effective processes and products, such as the shift from the craft shop to factory. He famously asserted that creative destruction is the essential fact about capitalism. In addition, entrepreneurs continuously look for better ways to satisfy their consumer base with improved quality, durability, service, and price which come to fruition in innovation with advanced technologies and organizational strategies. Organizations In the organizational context, innovation may be linked to positive changes in efficiency, productivity, quality, competitiveness, market share, and others. All organizations can innovate, including for example hospitals, universities, and local governments. For instance, former Mayor Martin OMalley pushed the City of Baltimore to use CitiStat, a performancemeasurement data and management system that allows city officials to maintain statistics on crime trends to condition of potholes. This system aids in better evaluation of policies and procedures with accountability and efficiency in terms of time and money. In its first year, CitiStat saved the city $13.2 million. Even mass transit systems have innovated with hybrid
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bus fleets to real-time tracking at bus stands. In addition, the growing use of mobile data terminals in vehicles that serves as communication hubs between vehicles and control center automatically send data on location, passenger counts, engine performance, mileage and other information. This tool helps to deliver and manage transportation systems.

Competitive advantage
The only competitive advantage for any company reflects in its ability to innovate.

1.TrainingGoals

To enable you to gain hands-on experiences and give you practical tools to stimulate innovation processes in your organization, with a goal of increasing your competitive advantages on the global marketplace.

2.Who should attend

Large and medium enterprise managers on all levels Owners and directors of small enterprises entrepreneurs All organizations who need to increase their competitive advantage and achieve better business results Everybody who wishes to stimulate innovation on all organizational levels, and increase efficiency profit

3.Training content

What is the innovation process and its role in increasing competitive advantage in your organization? 4P innovation management model innovative company case study group workshop. Characteristics of innovative organization - like yours. Organizations innovation readiness audit practical exercise group workshop. What are the innovation barriers in your organization? Industry analysis and trends, vehicles of corporate profitability. Competitive strategies and innovation plans - the vehicles of exclusivity.
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Practical exercise to find vehicles of exclusivity in your organisation group workshop.

4.Benefits for you and your organization

You will understand the importance of innovation process, on al levels, in your organizations (any organization). You will discover how to practically improve your business (or organizations efficiency), using the most advanced innovation management methodology. You will learn on practical examples and through interactive workshops, how to make your organization innovative, and increase its competitive advantage on the global marketplace.

5.EducationalMethods Training is realized using the most advanced educational methods trough intensive group work, with active engagement of each participant.

During this training course, through interactive workshops and practical training exercises, we will introduce you to innovation management, and enable you to increase the competitive advantage of your organization.

Sources of innovation
There are several sources of innovation. The general sources of innovations are different changes in industry structure, in market structure, in local and global demographics, in human perception, mood and meaning, in the amount of already available scientific knowledge, etc. Also, internet research, developing of people skills, language development, cultural background, skype, facebook, ect. In the simplest linear model of innovation the traditionally recognized source is manufacturer innovation. This is where an agent (person or business) innovates in order to sell the innovation. Another source of innovation, only now becoming widely recognized, is end-user innovation. This is where an agent (person or company) develops an innovation for their own (personal or in-house) use because existing products do not meet their needs. MIT economist Eric von Hippel has identified end-user innovation as, by far, the most important and critical in his classic book on the subject, Sources of
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Innovation. In addition, the famous robotics engineer Joseph F. Engelberger asserts that innovations require only three things: 1. A recognized need, 2. Competent people with relevant technology, and 3. Financial support. Innovation by businesses is achieved in many ways, with much attention now given to formal research and development (R&D) for "breakthrough innovations." R&D help spur on patents and other scientific innovations that leads to productive growth in such areas as industry, medicine, engineering, and government. Yet, innovations can be developed by less formal on-the-job modifications of practice, through exchange and combination of professional experience and by many other routes. The more radical and revolutionary innovations tend to emerge from R&D, while more incremental innovations may emerge from practice but there are many exceptions to each of these trends. An important innovation factor includes customers buying products or using services. As a result, firms may incorporate users in focus groups (user centred approach), work closely with so called lead users (lead user approach) or users might adapt their products themselves.

Conclusion
Creativity is thinking up new things. Innovation is doing new things. Creativity is not the miraculous road to business growth and affluence that is so abundantly claimed these days Those who extol the liberating virtues of corporate creativity tend to confuse the getting of ideas with their implementation that is, confuse creativity in the abstract with practical innovation. Since business is a uniquely get things done institution, creativity without action oriented follow-through is a uniquely barren form of individual behaviour. Actually, in a sense, it is even irresponsible. This is because: (1) The creative man who tosses out ideas and does nothing to help them get implemented is shirking any responsibility for one of the prime requisites of the business, namely, action; and (2) by avoiding follow-through, he is behaving in an organizationally intolerable or, at best, sloppy fashion.

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Creativity = Ideas but Innovation = Ideas + Action.

The ideas are often judged more by their novelty than by their potential usefulness, either to consumers or to the company.

Creativity = Novelty But Innovation = Novelty + Value

Creativity is the generation of new ideas by approaching problems or existing practices in innovative or imaginative ways Creativity is linked to innovation, which is the process of taking a new idea and turning it into a market offering.

Reference
1. Michael Hammer and James Champy (1993). Creativity: A Manifesto for Business

Revolution, Harper Business. 2. Rummler & Brache (1995Cretivity Innovation are not same. Jossey-Bass, San Francisco

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CUSTOMER FOCUS AND RELATIONSHIP MANAGEMENT Customer Focus Introduction

In a firm, firm's attention should be to what customers want or need. An organizational orientation toward satisfying the needs of potential and actual customers. Customer focus is considered to be one of the keys to business success. Achieving customer focus involves ensuring that the whole organization, and not just frontline service staff, puts its customers first. All activities, from the planning of a new product to its production, marketing, and after-sales care, should be built around the customer. Every department and every employee should share the same customer-focused vision. This can be aided by practicing good customer relationship management and maintaining a customer relations program.

Definition
Customer focus is the commitment to putting customers first and ability to deliver a consistently high quality service. Customers are both internal (i.e. colleagues) and external (i.e. the community, tenants/service users or other organisations).

Why Customer Focus Is Important

All employees must demonstrate a full understanding of customer needs and expectations to enable the effective delivery and development of appropriate quality services which exceed customer expectations. Here includes 4 level to focus the customer, they are Level 1 1. Identifies and clarifies individual customers needs. 2. Takes pride in delivering high quality services and seeks to expand own skills. 3. Resolves customer enquiries promptly at point of contact and only refers to others when genuinely appropriate. 4. Interacts well with all customers taking into account customers diverse needs. 5. Understands all services and accurately matches these to customers needs.
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6. Keeps customers up to date and informed. 7. Deals with customers fairly and equitably. Level 2 1. Consistently makes decisions focussed on customer needs. 2. Analyses delivery of services and provides solutions to problems. 3. Finds different ways to satisfy customer needs. 4. Constantly questions how will this benefit the customer? 5. Seeks customer feedback to investigate ways to improve customer experience. 6. Goes beyond their day-to-day work to assist customers in a positive manner. Level 3 1. Acts as role model in personal approach to customer focus. 2. Takes time to establish underlying needs of customers beyond those initially expressed. 3. Organises processes around customer taking account of complex and sensitive issues to meet their long term needs. 4. Implements systems to record customer feedback and communicates ideas and information to appropriate people. 5. Creates an environment where team/s are empowered to put customers first. Level 4 1. Makes sure the organisation continuously develops and improves services most important to customers. 2. Identifies good practice & solutions and integrates into service provided. 3. Translates operational feedback into strategic improvements. 4. Forms strategic & diverse groups/partnerships to improve services. 5. Recognises need for developing new customer bases & acts accordingly.

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Positive Indicators 1. Treats all customers with respect. 2. Responds to all customer enquiries promptly, positively and courteously. 3. Asks appropriate questions to identify customers needs. 4. Tries to see things from the customers point of view. 5. Brings ideas of ways to improve policies, procedures and service delivery to meet customers needs. 6. Actively requests feedback from customers and acts constructively upon both positive and negative feedback. 7. Goes the extra mile for customers. Warning Signs 1. Does not treat all customers with respect. 2. Makes assumptions rather than finding out the customers needs. 3. Is not flexible about own way of doing things. 4. Is insensitive to customer concerns and carries out tasks without thought of the impact on the customer. 5. Uses jargon, bureaucracy and red tape . 6. Makes promises to customers that cannot be delivered. 7. Does not prioritise customer needs. 8. Ignores customer feedback. 9. Takes negative feedback personally.

Customer Relationship Management [ CRM] Introduction

The better a business can manage the relationships it has with its customers the more successful it will become. Therefore IT systems that help support dealing with customers on a day-to-day basis are growing in popularity. Customer relationship management (CRM) is not just the application of technology, but is a strategy to learn more about customers' needs and behaviours in order to develop stronger
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relationships with them. As such, it is more of a business philosophy than a technical solution to assist in dealing with customers effectively and efficiently. Nevertheless, successful CRM relies on the use of technology. This guide will outline the business benefits and the potential drawbacks of implementing CRM. It will also offer help on the types of solution you could choose and how to implement them.

Definition
Customer relationship management is a broadly recognized, widely-implemented strategy for managing and nurturing a companys interactions with customers and sales prospects. It involves using technology to organize, automate, and synchronize business processes principally sales related activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new customers, nurture and retain those the company already has, entice former customers back into the fold, and reduce the costs of marketing and customer service.

Customer Relationship Management

For any organization, customer is the heart of business. A organization maintaining healthy relationships with its customers will always succeed in the competitive business environment. A customer relationship management (CRM) is the modern business strategy to enhance the customer relationship with the help of latest technology. This customer focus strategy helps to achieve maximum customer satisfaction and retain loyal customers. The success of the customer relationship management (CRM) depends on the adaptability of the organization to the new customer oriented work culture.

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Necessary Of CRM
In the commercial world the importance of retaining existing customers and expanding business is paramount. The costs associated with finding new customers mean that every existing customer could be important. The more opportunities that a customer has to conduct business with your company the better, and one way of achieving this is by opening up channels such as direct sales, online sales, franchises, use of agents, etc. However, the more channels you have, the greater the need to manage your interaction with your customer base. Customer relationship management (CRM) helps businesses to gain an insight into the behaviour of their customers and modify their business operations to ensure that customers are served in the best possible way. In essence, CRM helps a business to recognize the value of its customers and to capitalize on improved customer relations. The better you understand your customers, the more responsive you can be to their needs.
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CRM can be achieved by:

Finding out about your customers' purchasing habits, opinions and preferences Profiling individuals and groups to market more effectively and increase sales Changing the way you operate to improve customer service and marketing

Benefiting from CRM is not just a question of buying the right software. You must also adapt your business to the needs of your customers.

HOW TO IMPLEMENT CRM:The implementation of a customer relationship management (CRM) strategy is best treated as a six-stage process, moving from collecting information about your customers and processing it to using that information to improve your marketing and the customer experience.

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Stage 1 - Collecting information The priority should be to capture the information you need to identify your customers and categorise their behaviour. Those businesses with a website and online customer service have an advantage as customers can enter and maintain their own details when they buy. Stage 2 - Storing information The most effective way to store and manage your customer information is in a relational database - a centralised customer database that will allow you to run all your systems from the same source, ensuring that everyone uses up-to-date information. Stage 3 - Accessing information With information collected and stored centrally, the next stage is to make this information available to staff in the most useful format. Stage 4 - Analysing customer behaviour Using data mining tools in spreadsheet programs, which analyse data to identify patterns or relationships, you can begin to profile customers and develop sales strategies. Stage 5 - Marketing more effectively Many businesses find that a small percentage of their customers generate a high percentage of their profits. Using CRM to gain a better understanding of your customers' needs, desires and self-perception, you can reward and target your most valuable customers. Stage 6 - Enhancing the customer experience Just as a small group of customers are the most profitable, a small number of complaining customers often take up a disproportionate amount of staff time. If their problems can be identified and resolved quickly, your staff will have more time for other customers.

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Conclusion
Service teams work. They provide customer focus in ways that cannot be provided using other structures. Customer service is not something that service teams do; it is hardwired into the foundation of the teams. At the Montana State Fund, we have data that supports this assertion. After reorganizing our operations into service teams, we hired Ipsos Reid to conduct a customer satisfaction survey. We found that customer satisfaction improved in almost every area because of the service team structure. Overall, 74% of our customers indicated they were satisfied or very satisfied with Montana State Funds customer service. We largely attribute this improvement in customer service satisfaction to our service team concept. Workers compensation insurance is not a commodity. Price should not be our customers only consideration when selecting an insurer. In order to enhance our industrys reputation, we must continually distinguish ourselves by exceeding our customers service expectations. Service teams provide the focus for us to attain those customer service aspiration.

References
1. Anderson, Chris. Why CRM necessary?, Bizmanualz, July 22nd, 2009.

2. Focus on customer relationship management application on Friday October-15 2010 by Sidney Angelos. 3. Implements & Steps of CRM, Vodim Kotel Nikov Founder of E-business Coach.

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GLOBALIZATION OF BUSINESS AND INTERNATIONAL TRADE RELATION Introduction

Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import quotas. Globalization accompanied and allegedly contributed to economic growth in developed and developing countries through increased specialization and the principle of comparative advantage. The term can also refer to the transnational circulation of ideas, languages, and popular culture. Opponents alleged that globalization's benefits have been overstated and its costs underestimated. Among other points, they argued that it decreased inter-cultural contact while increasing the possibility of international and intra-national conflict.

Definition
Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical wellbeing in societies around the world. Globalization is not new, though. For thousands of years, peopleand, later, corporations have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages. Likewise, for centuries, people and corporations have invested in enterprises in other countries. In fact, many of the features of the current wave of globalization are similar to those prevailing before the outbreak of the First World War in 1914.

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Globalization For Small Business

Globalization is a big word and not universally popular. There is a view that

globalization will make the whole world look the same with no regional differences between nations. Others take the view that it will increase poverty in some countries. Equally, in the Multinational Search column, we are sometimes guilty of talking as if the only organizations who need to think about globalization are large ones. This is definitely not the case and so it like to set the record straight as well as pointing you at some fascinating articles in the Small is Beautiful column which make great reading. My focus here is on the global opportunity for small businesses.

How Globalization Influenced In Business

In short, by definition, globalization has removed many borders and barriers to international trade and business. The result is heightened competition across geographies and reduced arbitrage from international trade--at least for those markets which are reasonably efficient and open to global business. Business is all about developing, producing, marketing and distributing mention substitute products and services. There has always been international trade--throughout the millenia. But, it has been frought with market inefficiencies and discontinuities, enabling traders to make a pretty good living in the middle. Today as the, result of technological advances and more countries adopting open trade policies, a business in Kansas is as likely to be competing with companies all over the world, manufacturing in several Asian markets, buying from and supplying players internationally. This makes it much more difficult for the average small business. One no longer can simply blunder into a business and expect to survive. The Kansas entrepreneur may have thought s/he was just serving a local, small town market and competing with companies across the street...not so. Outsourcing has become a "bad word" in many US political circles. It seems to be an evil that has arisen over the last few years. This is an inaccurate view. First of all, outsourcing
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products

and

services to customers. It generally operates with suppliers, buyers, competitors, not to

has been around for a very long time. US companies have certainly taken advantage of lower cost and higher quality labor forces within the US for decades. International outsourcing or offshoring is not new either. But, there is no question it has come into its own over the past decade or so. China and India are experiencing booming economies as a result of this. Of course, with booming economies comes prosperity, rapidly rising wages, and high employee turnover. It doesnt take a rocket scientist to forecast where this goes. The labor arbitrage which forms the business case of such outsourcing decreases rapidly. Companies relying on cheaper labor in India and China need to plan for the day when they may be outsourcing to the US, as Japan does for instance.

International Trade Relation

International Trade Relations examines the political, legal and institutional aspects of today's global trading system. It focuses on the WTO and the role of the United States in global trade relations. In particular, this course assesses critical issues concerning global trade. This assessment is from both public and private sector perspectives. Issues examined relate to the World Trade Organization, its Dispute Resolution System, the current round of global trade negotiations (Doha). Issues also considered are those relating to the U.S. system as it interfaces with the WTO and the global trading system. In addition, the following specific topics are examined relating to the role of the United States in global trade relations: the constitutional concepts of separation of powers and federalism, extraterritoriality, trade agreements / "fast track," import relief, export controls, trade sanctions, corruption, global antitrust and global mergers. It is important to understand the critical aspects of global trade in order to have a useful and critical discussion of the policy issues of competition and competitiveness confronting the global trading system and the United States. This course is taught through lectures, class discussion, team presentation and guest lectures. Questions posted on this website form the basis of most class sessions and students are expected to consider them prior to each class. The principal material used this class is the actual documents emanating from official sources -- which are provided on this website and in the sourcebook. They need to be reviewed prior to each class. The course is highly interactive and class participation will be considered as part of the final grade. Attendance is required. The assignments include a mid-term exam and two team projects /PowerPoint Presentations (recent DSU cases between the U.S. and China) (U.S. economic legislation and
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global corporate competitiveness). The mid-term exam counts 50% of the final grade and each team presentation is 25%. [Good class participation can raise the final grade.] This Website is continuously updated through the year.

International Economic Relation

International Economic Relations provides students with the range of analytical skills needed to understand international economic and financial problems in a policy setting. What distinguishes the program is its focus on specific international trade and financial policies and business transactions using analytical tools from economics, political science, business, and law. Students learn to analyze critically economic issues and the political economy of policymaking in the areas of international trade, finance, investment, and development. Throughout the program, students demonstrate their ability to apply concepts and theories from international economics and international political economy to explain policymaking and market dynamics in the global economy.

General Agreement On Tariff And Trade [GATT]

General Agreement on Tariffs and Trade (GATT), set of multilateral trade agreements aimed at the abolition of quotas and the reduction of tariff duties among the contracting nations. When GATT was concluded by 23 countries at Geneva, in 1947 (to take effect on Jan. 1, 1948), it was considered an interim arrangement pending the formation of a United Nations agency to supersede it. When such an agency failed to emerge, GATT was amplified and further enlarged at several succeeding negotiations.A new geography of trade is emerging
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and reshaping the global economic landscape, and the South is gradually moving from the periphery of global trade to the centre. A similar pattern is emerging in international investment flows, suggesting the possible emergence of a new geography of international investment relations. A South-South cooperation strategy focused on a number of key thrust areas could consolidate and expand the transformation that is taking place in South-South trade, investment and economic cooperation. This would enable the South to play the role of a genuine locomotive for sustained economic growth, diversification, employment and poverty reduction in the South itself and in the rest of the world. There is much that the international community can do to assist the South in this endeavour. Developed countries can be instrumental in facilitating South-South trade through appropriate trade, aid, financial, monetary, technology transfer and development policies and actions. Development assistance in creating the trade-supporting infrastructure and facilities for South-South trade is particularly critical. UNCTAD can be an important partner of developing countries in the revitalization of South-South cooperation. It is in a unique position to assist developing countries and their regional groupings in trade and investment promotion and trade negotiations through research andanalysis, intergovernmental consensus building and technical cooperation.

Conclusion
Globalization refers to the growing interdependence of countries resulting from the increasing integration of trade, finance, people, and ideas in one global marketplace. International trade and cross-border investment flows are the main elements of this integration. Globalization started after World War II but has accelerated considerably since the mid-1980s, driven by two main factors. One involves technological advances that have lowered the costs of transportation, communication, and computation to the extent that it is often economically feasible for a firm to locate different phases of production in different countries. The other factor has to do with the increasing liberalization of trade and capital markets: more and more governments are refusing to protect their economies from foreign competition or influence through import tariffs and nontariff barriers such as import quotas, export restraints, and legal prohibitions. A number of international institutions established in the wake of World War IIincluding the World Bank, International Monetary Fund (IMF), and General Agreement on Tariffs and Trade (GATT), succeeded in 1995 by the World
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Trade Organization (WTO)have played an important role in promoting free trade in place of protectionism. Empirical evidence suggests that globalization has significantly boosted economic growth in East Asian economies such as Hong Kong (China), the Republic of Korea, and Singapore. But not all developing countries are equally engaged in globalization or in a position to benefit from it. In fact, except for most countries in East Asia and some in Latin America, developing countries have been rather slow to integrate with the world economy. The share of Sub- Saharan Africa in world trade has declined continuously since the late 1960s, and the share of major oil exporters fell sharply with the drop in oil prices in the early 1980s. Moreover, for countries that are actively engaged in globalization, the benefits come with new risks and challenges. The balance of globalization's costs and benefits for different groups of countries and the world economy is one of the hottest topics in development debates.

References
1. Journal of World Business, Volume 40, Issue 2, May 2008

Michael R. Czinkota, Ilkka A. Ronkainen.

2. Bhagwati, Jagdish (2004). In Defense of Globalization. Oxford, New York: Oxford

University Press.

COMPETATIVE ADVANTAGE & COMPETENCY Introduction

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Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry. Achieving competitive advantage strengthens and positions a business better within the business environment. Competitive advantage is based on the theory that seeks to address some of the criticisms of comparative advantage. Michael Porter proposed the theory in 1985. Competitive advantage theory suggests that states and businesses should pursue policies that create highquality goods to sell at high prices in the market. Porter emphasizes productivity growth as the focus of national strategies. Competitive advantage rests on the notion that cheap labor is ubiquitous and natural resources are not necessary for a good economy. The other theory, comparative advantage, can lead countries to specialize in exporting primary goods and raw materials that trap countries in low-wage economies due to terms of trade. Competitive advantage attempts to correct for this issue by stressing maximizing scale economies in goods and services that garner premium prices.

Definition
The term competitive advantage is the ability gained through attributes and resources to perform at a higher level than others in the same industry or market. The study of such advantage has attracted profound research interest due to contemporary issues regarding superior performance levels of firms in the present competitive market conditions. A firm is said to have a competitive advantage when it is implementing a value creating strategy not simultaneously being implemented by any current or potential player. Successfully implemented strategies will lift a firm to superior performance by facilitating the firm with competitive advantage to outperform current or potential players. To gain competitive advantage a business strategy of a firm manipulates the various resources over which it has direct control and these resources have the ability to generate competitive advantage. Superior performance outcomes and superiority in production resources reflects competitive advantage.

Occurrence Of Competitive Advantage

Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors. These attributes can
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include access to natural resources, such as high grade ores or inexpensive power, or access to highly trained and skilled personnel human resources. New technologies such as robotics and information technology either to be included as a part of the product, or to assist making it. ' Information technology has become such a prominent part of the modern business world that it can also contribute to competitive advantage by outperforming competitors with regard to internet presence. From the very beginning, i.e. Adam Smith's Wealth of Nations, the central problem of information transmittal, leading to the rise of middle-men in the marketplace, has been a significant impediment in gaining competitive advantage. By using the internet as the middle-man, the purveyor of information to the final consumer, businesses can gain a competitive advantage through creation of an effective website, which in the past required extensive effort finding the right middle-man and cultivating the relationship.

Core Competence Introduction

Competencies refer to skills or knowledge that lead to superior performance. These are formed through an individual/organizations knowledge, skills and abilities and provide a framework for distinguishing between poor performances through to exceptional performance. Competencies can apply at organizational, individual, team, and occupational and functional levels. Competencies are individual abilities or characteristics that are key to effectiveness in work. Competencies are the characteristics of a manager that lead to the demonstration of skills and abilities, which result in effective performance within an organizational area. Once the job requirements have been clarified then competency interviewing helps interviewers look for evidence of those requirements in each candidate. For people already in jobs, competencies provide a way to help identify opportunities for growth within their jobs. Competencies are not "fixed"they can usually be developed with effort and support (though some are harder to develop than others). Employees and their managers together can identify which competencies would be most helpful to work on to improve the employees effectiveness. They can then integrate that into a learning plan that may include on-the-job experience, classroom training, or other developmental activities.

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Competencies are not a tool to be used for evaluating people for layoffs. Competencies are only a way of talking about what helps people get results in their jobs. What matters is performance being effective and meeting job expectations.

Fundamentals of Core Competency

Core competence is fundamental, unique and inimitable strength of the firm that: (i) Provides the firm, the access to a variety of products/markets. (ii) Contributes significantly to customer benefits in the end products. (iii) Is an exclusive preserve of the firm and cannot be imitated easily by competitors. Core competence is largely a technological competence, a competence at the root technology in particular. This is because new businesses/new products are largely the result of technology. This is especially true in todays technology-driven world, where technology is fast altering existing boundaries of businesses. The core competencies of these corporations are the outcome of their command over several overarching technologies. Corporations who enjoy a core competence in the root technology / process / expertise keep gaining lasting advantage, through new and proprietary products and fresh value enhancement. In particular, for firms playing the business game through the product route, core competence is very essential. Often, command over multiple streams of interrelated and overarching technologies, (e.g. tele-computers, fiber optics) confers a core competences to a firm in the composite area, giving rise to many unique products. Core competence is a knowledge base, which gives rise to a variety of products with widely varying product missions. Core competency Idea does not restrict the number of Businesses.The core competency concept is sometimes misunderstood as a perspective that restricts the numbers of businesses a company can be in. Firms wrongly assume that when they adopt the concept of core competence, it compels them to remain with a single business.

Need For Competency

1. The best way to understand performance is to observe what people actually do to be successful rather than relying on assumptions pertaining to trait and intelligence.
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2. The best way to measure and predict performance is to assess whether people have key competencies. 3. Competencies can be learnt and developed. 4. They should be made visible/accessible. 5. They should be linked to meaningful life outcomes that describe how people should perform in the real world

Professional Competencies or functional competencies

These distinctive competencies are grouped for each job within the organization. The goal is to optimize performance by having the technical skills to perform a job. 1.Behavioral Competencies These refer to competencies that are required by people in terms of behavior. Team working is an example of competency required by an employee working in a typing group in an office where they may be required to cover up for others as the work grows 2. Threshold competencies The characteristics required by a jobholder to perform a job effectively are called threshold competencies. For the position of a typist it is necessary to have primary knowledge about typing, which is a threshold competency. 3. Differentiating competencies The characteristics, which differentiate superior performers from average performers, come under this category; such characteristics are not found in average performers. Knowledge of formatting is a competency that makes a typist to superior to others in performance, which is a differentiating competency. A trainer requires a different set of competencies than an accountant, and a teller requires a different set than a maintenance worker. If there are different levels within the same position, then each job level might also have its own set of vertically derived competencies Measurement of Competency

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All competencies are defined from levels in a competency framework. Each definition typically expresses the behavior expected of the associates if he were to be rated at that level. Competency is used to measure BARS. Behavioral-Anchored Rating Scales (BARS): A BARS describes behaviors differentiating between effective and ineffective performers that can be observed and anchors them at points on a scale. The applicants behavior displayed (e.g. role-play, oral presentation, in-basket) or past behavior described (e.g. behavioral interview, reference checks) are compared to these examples and rated accordingly. The content of the scale is developed from a job analysis and is based on responses to critical job incidents or situations. The scale used is usually a 3-Point or 5-Point scale but could also be narrative if appropriate. Competency: Customer Service Orientation implies a desire to identify and serve customers/clients, It means focusing one's efforts on discovering and meeting the needs of the customer/client. Rating using BARS 3 ( Superior ) The applicant must exhibit all these behaviors to rated as superior 1. Did not interrupt the client 2. Took notes but maintained interest and eye contact 3. Asked probing questions to ensure understanding 4. Remained patient when the client struggled with the language. 5. Paraphrased the clients statements to ensure understanding. 6. Reflected the clients thoughts for verification. 7. Provided complete and clear information / service given the problem. 8. Offered specific referrals (names, addresses, phone numbers) on clients other 9. problems 2 (Adequate) The applicant must exhibit all these behaviors to pass
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1. Showed empathy for the clients problems. 2. Took notes. 3. Obtained the required information. 4. Provided adequate information / service for a problem resolution. 1 (Ineffective) The applicant fails if he or she exhibits any four of the following plausible but inappropriate behaviors 1. Displayed boredom or lack of empathy. 2. Took no notes of the clients information. 3. Failed to obtain accurate or complete information. 4. Provided inappropriate information or service given the problem. 5. Interrupted the client. 6. Did not prompt for further understanding. 7. Displayed impatience when the client struggled with language. 8. Did not check understanding.

Conclusion
A competitive advantage does not necessarily imply a core competence while a core competence does imply a number of competitive advantages. A competitive advantage does not constitute a sure success formula for a firm over a long term; a core competence usually does. A core competence provides a lasting superiority to the company while a competitive advantage provides a temporary competitive superiority. And behind any lasting competitive superiority, one can always find a core competence.

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While a competitive advantage accrues from a functional strength in any of the manifold functions performed by a firm, a core competence does not normally accrue from functional strength. The strength has to be at the root of businesses and product; it has to be core strength like a unique capability in technology or process. A competitive advantage helps a firm in a specific and limited way; a core competence helps it in a general, far-reaching and multifaceted manner. A competitive advantage provides competitive strength to the firm in a given business or product. A core competence helps the firm to excel in a variety of businesses and products. To conclude, a core competence is fundamental and unique to a firm. A competitive advantage can be easily imitated and competitors catch up fast. Core competence is an exclusive and inimitable preserve of a firm. It is long lasting; competitors cannot easily catch up with the firm. Competitive advantages are not unique to any firm over the long term.

Reference
1. Competitive Advantage: Creating and Sustaining Superior Performance by Michael E.

Porter
2. Creating Competitive Advantage: Give Customers a Reason to Choose You Over

Your Competitors by Jaynie L. Smith

3. Unraveling The Resource-Based Tangle by Peteraf M. & Barney J (2003). Managerial

and Decision Economics 24. DOI:10.1002/mde.1126

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ROLE OF QUALITY IN BUSINESS Introduction

As customers' expectations grow, it is essential that businesses continually improve to provide products and services of the highest quality. Quality is a continual process that doesn't just happen but it evolves over time and with experience. Organizations can help secure their future by committing to a process of continual improvement and introducing a quality management system (QMS) such as ISO 9000, or by adopting the new process of conformity assessment.

Meaning
What is quality = how the recipient of the product or service views the product or service: before buying, upon delivery, and after the delivery-and use. The meaning of quality differs depending upon circumstances and perceptions. For example, quality is a different concept when focusing on tangible products versus the perception of a quality service. The meaning of quality is also time-based or situational.

Common Meanings of Quality

1- Quality is fitness for use: Quality means the product or service does what it is intended to do. Poor quality of a product or service cost users if it doesn't do what it is supposed to do. 2- Quality is meeting customer expectations: Quality is satisfying the customer. The customer defines quality. The customer perceives the quality of a product or service.
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3- Quality is exceeding the customer expectations Quality is the extent to which the customers or users believe the product or service surpasses their needs and expectations. Quality is delighting the customer. 4- Quality is superiority to competitors: Quality is how a companys products and services compare to those of competitors or how they compare to those offered by the company in the past.

Examples of Quality Characteristics

For Products, Performance, Serviceability, Reliable, Reasonable Price, Ease of Use, Maintainability, Durability, Simplicity of Design, Aesthetics, Available, Safe, Ease of Disposal, For Service, Responsiveness, Credibility, Available, Reliable, Safe, Security, Competence, Understand the Customer, Accuracy, Completeness, Timeliness, Communication.

Drivers of Quality
1-Customers In a customer-driven organization, quality is established with a focus on satisfying or exceeding the requirements, expectations, needs, and preferences of customers. Customerdriven quality is a common culture within many organizations. 2-Products / Services A culture of product / service-driven quality was popular in the early stages of quality improvement. Conformance to requirements and zero defect concepts have roots in producing a product / service that meets stated or documented requirements. In some cases, product / service requirements originate from customer requirements, thereby creating a common link to customer-driven quality, but the focus of the culture is on the quality of the product/ service. If the customer requirements is accurately stated and designed into the production / service delivery process, then as long as the product / service meet the requirements, the customer should be satisfied. This approach is common in supporting the ISO 9001-based quality management system. 3- Employee Satisfaction
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This concept is that an organization takes care of employees needs so that they can be free to worry only about the customer. Employee satisfaction is a primary measure of success for this type of organization.

4- Organizational focus Some organizations tend to focus on total organizational quality while others arequite successful at using a segmented approach to implementing quality.

Methods Of Quality Implementation

1- Quality of design versus quality of conformance The organizations values, goals, mission, policies, and practices reinforce designing into the product or service rather than inspecting it in. emphasis is placed on doing the right things right the first time. The organizations aim is to not only meet, to the letter, customers' requirements, but to exceed them wherever possible. Conformance is the norm. The organizations overriding purpose is to excite the customers with extraordinary products and service. 2- Quality planning, control, and improvement The focus of this dimension is for organizations to continually improve their products, services, processes, and practices with an emphasis on reducing variation and reducing cycle time. This dimension implies extensive use of the quality management tools, including cost of quality, process management approaches, and measurement techniques. 3- Little q and Big Q Organizations focusing on quality control and inspection activities (little q) will fail to be fully effective they must transform their thinking to quality across organization (Big Q). 4- Quality is strategic Quality, or the absence of it, has a strategic impact on the organization. Consumers buy certain products and request services based on their knowledge and perception of the organization and what it provides. Few buyers knowingly buy poor quality. Accumulated experiences and perceptions of customers ultimately make or break an organization. The Baldrige Criteria doesnt mention the word quality because every activity
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and decision contained in the structure of the criteria must be a quality activity or decision. Under this assumption, quality is built in to the very fiber of the organization. This is the preferred way to conduct the business of the organization.

Quality important in business

Quality is one of the main criteria in any buying decision. Do you return to a supplier that provides a sub-standard service or to a restaurant if the service was poor. The problem may not even be the initial product but the service provided when the product is returned. Quality is of prime importance for any business. The quality of the product, the quality of the service and the quality of the after-sales service are major reasons why a customer will buy from one supplier rather than another. The traditional generic strategies were cost or quality leadership. These were thought to be mutually exclusive. But over the last thirty years a major paradigm shift has taken place. In the twenty-first century quality counts and a business that sells low quality goods or services is generally doomed to failure. Edwards Deming was a key influence in achieving the transformation of manufacturing processes and standards. His methods helped Japanese industry to become a dominant world player. The methods promoted greater efficiency coupled with statistical controls that by and large eliminated manufacturing defects and their cause as and when they occurred. A Japanese car was delivered to the customer at lower cost and with fewer defects than the US or European equivalent. This was a recipe for success and the west was forced to follow suit. The old division between quality and cost became a thing of the past. Companies such as Toyota demonstrated that it is possible to be both a cost and quality leader. The production methods and process controls introduced by Deming and other management gurus have resulted in huge gains in efficiency and the elimination of defects. Electronic goods produced to high standards are sold at ever decreasing prices. The world's cheapest car - the Tata Nano - is produced to high standards at the price of a toy. Quality is measured not only by the absence of defects but by the overall finish of the product, its durability and reliability. Although many low cost goods are of a high quality, there are often more expensive goods that have additional features, more luxury and so on. A
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Toyota Corolla is a high quality car, but the Lexus offers much more in terms of luxury, features and status. The days of buying 'cheap rubbish' as opposed to buying a quality product are almost gone. A business that markets inferior products is unlikely to stay in business for long. There is too much competition for that to happen. A failure in quality can often mean a failure of the business. Poor service drives customers away no matter what they charge.

The Importance Of Quality In Today's Business World

There are numerous factors that are involved when a potential customer decides from whom they will purchase goods or services. A decision may be price driven, or a product may be so unique that there is only a single source for it. In almost all cases, a customer will also consider the reputation of the vendor. If that supplier has a record of consistent quality and service, a potential customer is more likely to place their business into its hands.

The Importance of Quality Management

Quality management is centered around the management and control of producing fantastic products, and a business environment that will facilitate their production. Customer satisfaction is a very important part of quality control and this is an aspect of business that should definitely receive due consideration. Its all about quality management, control, and improvement. When these three aspects are met, products can be manufactured with value in mind that will benefit both the customer and the company in a major way. Control and improvement can be distinguished from in the following manner. Quality control is the ongoing effort to maintain the integrity of a process that will also help in maintaining the reliability of achieving a certain outcome. Quality improvement, on the other hand, is the purposeful change of a process that is designed to improve the reliability of achieving a specific outcome. Assurance is another important aspect and can be defined as the planned or systematic actions that are necessary to provide the confidence that a product or service will satisfy the given requirements that have already been set forth. Quality management is used in all areas of a company from the products that are manufactured to the customer services provided by the employees. Team members often work on projects designed to improve the overall companys value. It is an ongoing process, and is important to the success of a company. It can be implemented on several different levels. Companies must test the quality control of their products to make sure they are on par with what is expected. Customers who
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have purchased products or services from a given company for a period of time will expect a certain level of quality. That is why value management is a continual process that must be adhered to on a regular basis. It has also become a part of everyday operations for many businesses and is implemented into their normal agendas. The idea is that if products or services can continuously be improved upon, the longer the company who makes those products or services will remain in business. The growing importance of quality management systems With the global economy shrinking the world and the stressed economic conditions reducing the number of key players in many industries, it's becoming a necessity for companies to integrate a quality management system (QMS) into their business. If this is new to you, a QMS is the combined operational structure, processes, procedures, resources and implementation needed to produce quality management. Quality management is defined as a combination of high quality output, in the form of goods and services, and the quality control measures that ensure such goods and services are produced consistently. In a nutshell, a quality management system ensures consistent output of quality goods and services for customer consumption. Having a QMS in place is especially important for companies involved in manufacturing and technical sectors. Due to the increased precision the computer age has brought to manufacturing, products can be made to near perfection at a significantly lower price.As the global economy continues to evolve, we may reach a point where QMS certification is a requirement for survival. Only time will tell.

Conclusion
Quality does not mean that everyone will like the product. One company that comes to mind is a global fast food company that has opened branches on a franchise basis in every corner of the globe. A burger from this chain is identical whether purchased in New York, London, Tokyo or Johannesburg. Everyone knows what to expect. I first tried their products in London in 1976 and have been recovering ever since. I tried the product again in 2003 in Johannesburg to be reminded why I had not returned. Strangely, other people enjoy these burgers and return time and again. This product certainly does not meet my criteria of quality food. But the company has a policy of strict quality control and a regular customer will get
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exactly what they expect every time anywhere in the world. Dare I mention MacDonald's, and can a Big Mac really qualify as a quality product. There is a subjective quality to quality. One man's meat is another man's poison, but the poison must at least be manufactured to a certain standard. And perhaps there is still a dichotomy of cost versus quality leadership. Perhaps this varies according to the type of product. Electronic goods, appliances and motor vehicles have to be of high quality for the manufacturer to survive. Food and clothing are a little different. These are market segments where you get what you pay for. But the overriding trend in business is towards quality products accompanied by quality service.

References
1.

E. Obeng and S. Crainer S (1993)QUALITY MANAGEMENT Financial Times Prentice Hall Howard Smith and Peter Fingar (2003). Quality In Management. The Third Wave, MK Press Slack et al., edited by: David Barnes (2000) The Open University, Understanding Business In Quality.

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