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ENTREPRENEURSHIP DEVELOPMENT IIYr, STUDY NOTES- UNIT 5

UNIT 5 ENTERPRISE MANAGEMENT
5.1 Concept of Management
Management consists of different interconnected and interdependent activities or functions aimed at achieving the goals of the organisation. Management is an activity which is necessary whenever there is group of people working in an organization .Management aims at guiding their efforts towards achieving the common goal or objective.
Management may be defined as “the art of getting things done through others”.
Management may be defined as “ To manage is to forecast and to plan, to organize, to command, to coordinate and to control”.
5.2. Importance of Management
1. Management helps in achieving group goals. 2. It increases efficiency. 3.It creates a dynamic organisation.
4. Management helps in achieving personal objectives. 5. Helps in the development of the society.
6. Ensure optimum utilisation of resources.
5.3.Functions of Management:
Different experts have classified functions of management in different ways. The most widely accepted functions of management is one which is given by KOONTZ. According to him, functions of Management consist of;
1.Planning
Planning means to decide in advance what is to be done. It is setting objectives andtargets and formulating an action plan to achieve them efficiently and effectively.
Following are the Steps in Planning:
• Establishing objectives
• Developing the planning premises
• Development of alternatives.
• Formulating derivative plans.
• Selection of the best course of action.
2. Organising
Organising is the management function of assigning duties, grouping tasks, establishing authority and allocating resources required to carry out a specific plan. Organising involves bringing together the manpower and material resources to achieve the goals set by the enterprise.
3. Staffing
Staffing may be defined as the managerial function which deals with the recruitment, selection and appointment of suitable persons to the organisation. Finding the right people for the right job is known as Staffing.
4. Directing
Directing is concerned with instructing, guiding, and inspiring people in the organization to achieve its objectives. Directing involves leading, influencing and motivating employees to perform the tasks assigned to them.
There are Four elements of Directing:
1. Supervision 2. Motivation 3.Leadership 4. Communication.
5. Controlling
Controlling means ensuring the activities in an organization which are performed as per the plans and the resources are being used effectively and efficiently for the achievement of predetermined goals.
Controlling has the following steps:
a. Establishment of standard performance b. Measurement of actual performance
c. Comparison of actual performance with standards and find out deviations if any d. Taking corrective action
5.4.Principles of Management
Management principles are guidelines for the decision and action of management . Different management experts have explained different principles on the basis of their research. Henri Fayol, a famous industrialist of France, has described 14 principles of management in his book 'General and Industrial Management'. These are:
1. Division of work 2. Discipline 3. Unity of direction 4. Order 5. Stability of personnel 6. Espirit de corps
7. Subordination of individual interest to general interest 8. Centralisation and decentralization 9. Authority and
responsibility 10. Unity of command 11. Scalar chain 12. Equity 13. Initiative 14. Remuneration of employees.
5.5.Concept of Marketing Management
Marketing Management refers to planning, organising, directing, and controlling the activities which facilitate exchange
of goods and services between producers and consumers.
Marketing may be defined as "the performance of business activities that direct the flow of goods and services through
producers to consumers”
5.6 .Objectives of Marketing Management
1. Creation of demand 2.Market share 3. Increase employment opportunities 4. Earns profit
5.7. Marketing Functions
Functions of Exchange
Functions of Physical supply Facilitating Functions
• Buying
• Assembling
• Selling
• Storage
• Transportation
• Warehousing
• Financing
• Risk taking
• Market research
• Standardization
• Grading
• Packaging
• Branding
• Pricing
• Advertisement
• Salesmanship
1. Buying: -Buying means the purchase of raw materials for use in manufacturing of the purchase of finished
goods for the purpose of resale.
2. Assembling :-It involves collection of particular type of goods bought from different suppliers under a
common roof.
3. Selling :-Selling is the act of transferring the ownership of goods by the seller to the buyer in exchange o f
money . Selling helps the firm to achieve the objective of earning profits.
4. Storage and warehousing :-Storage is the process of holding and preserving goods from the place of
production to the place of consumption. The storage function is made possible by warehouses.
5. Transportation :-It refers to the physical movement of goods from the place of production to the place of
consumption. It helps in assembling and dispersing goods.
6. Financing :-Financing in marketing implies the provision of money and credit necessary for the producer
or seller to make goods available to the consumers.
7. Risk taking :-Marketing involves a number of risks owing to unforeseen circumstances. There can be loss
of goods due to fire, flood, earth quake, etc. All these risks are handled by the entrepreneur.
8. Marketing Research:- It means systematic collection, recording and analysing of data about problems
relating
to the marketing of goods and services.
9. Standardisation and Grading:-Standardisation refers to the process of setting certain standards of a
product on the basis of some desirable qualities. Grading refers to the division of products into different
classes made up of units possessing similar qualities like size, weight, shape, color and quality.
10. Branding
A brand is a name, sign or symbol o design of a combination of all these used to distinguish the product of
one firm from others.
5.8.Advertising
Advertising is the most commonly used tool of promotion. It is an impersonal form of communication which is paid for
by the marketers to promote some goods or services. Advertising may be defines as the “ mass communication of
information intended to persuade buyers as to maximise profits”.
5.9.Benefits of Advertising
1. Increases Sales 2. Creates demand 3. Helps in introducing new products 4. Controls product price 5. Helps analysing
consumers need 6. Easy purchasing 7. Educates the customers 8. Provide employment opportunities 9. Connecting link
10. Helps press
5.9.Salesmanship
Salesmanship or Personal Selling involves oral presentation of message in the form of conversation with one or more
prospective customers for the purpose of making sales. Salesmanship is an ability to remove ignorance, doubt, suspicion
and emotional objection concerning the usefulness of a product.
5.10.Qualities of a Salesman
1. A salesman should have educational background
2. He should have memory
3. He should be honest and loyal
4. He should be tactful and courteous in dealing with his customers
5. He must possess sound health
6. He should have great interest in his work
7. Personal qualities like personality, aptitude, patience and politeness
8. Knowledge about products
9. Good posture and friendliness
10. He should understand the problems of customers
5.11.Concept of Marketing Mix
Marketing Mix refers to the ingredients or the tools or the value of variables which themarketer mixes in order to interact
with a particular market. “Marketing Mix may be defined as the set of marketing tools that the firm uses to pursue its
marketing objectives in the target market”.
5.12.Elements or Components of Marketing Mix
The variables or elements of Marketing Mix have been classified into four categories,popularly called the “ the Four P’s
of Marketing Mix” ie Product, Price, Place and Promotion . These elements are combined to create an offer.
Product Price
• Colour and design • Price level
• Product quality • Margins
• New product design • Pricing policy
• Packaging • Pricing Strategies
• Labelling • Price change
• Branding
Elements of Marketing Mix
Place Promotion
• Channel strategy • Advertising
• Physical distribution • Personal selling
• Location • Sales promotion
• Layout of stores • Publicity
• Public relations
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