MBA Projects » Management

Span of Management

Yogin Vora — Mon, 06 Feb 2012 19:56:04 +0000

The span of management indicates the no. of people that report to a particular manager. Hence it states that there is a limit to the no.of subordinates a manager can effectively supervise, but the exact number will depend on certain factors.

Factors That Influence Effective Span of Management are as follows:

1. Competence of supervisors and subordinates

(If there is more competence, there is a wider potential span)

2. Physical dispersion of subordinates

( If there is more dispersion, the potential span is narrow)

3. The Degree of non-supervisory work in manager job

( If there is greater non-supervisory work, the potential span is narrow)

4. The Extent of required interactions

(If the no. of required interactions are more, the potential span is wider)

5. The Degree of standardized procedures

(If the procedures are more standardized, the potential span is wider)

6. Similarity of task being supervised

(The more similar is the task, the potential span is wider)

7. Frequency of new problems

(If the frequency of new problems is high, the potential span is narrow)

8. Preferences of supervisors and subordinates

Principles of Management

Yogin Vora — Sat, 04 Feb 2012 18:45:26 +0000

Henry Fayol, a French industrialist, summarized the practice of management with fourteen principles.

1. Division of work: A high degree of specialization should result inefficiency. Both managerial and technical works are amenable to specialization.

2. Authority and responsibility: Henry Fayol finds authority and responsibility to be related, with the latter arising from the former. Authority is needed to carry out managerial responsibilities.

3. Discipline: People in the organization must respect the rules that govern the organization.

4. Unity of command: This means that, employees should receive orders from one superior and should report to one only.

5. Unity of directions: According to this principle, each group of activities with the some objective must have one head and one plan.

6. Subordination of individual to general interest: Interest of individuals should not be placed before the goals of the overall organization.

7. Remuneration: Remuneration and methods of payment should be f air and afford the maximum possible satisfaction to employees and employer.

8. Centralization: Power’ and authority should be concentrated at the upper levels of the organization as much as possible.

9. Scalar chain: A chain of authority should extend from the top to the bottom of the organization and should be followed at all times.

10. Order: Human and material resources should be coordinated so that they are in the required place at the required time.

11. Equity: Managers should be kind and fair when dealing with subordinates.

12. Stability of tenure: Finding unnecessary turnover to be both the cause and the effect of bad management. Fayol points out its dangers and cost.

13. Initiative: Subordinates should have the freedom to take initiative,

14. Unity is strength: Teamwork, team spirit and a sense of unity and togetherness should be fostered and maintained.

Source: http://www.scribd.com/doc/14658965/Leadership-and-Management-2003

9 Steps of Business Strategy

Harsh Thakkar — Tue, 06 Dec 2011 15:43:12 +0000

ABC of Business Strategy

A- Always put top priority on strategic moves

Strategy means where we are , where we want to go, by what time and how will we do it.

. The strategic adversary is fascism… the fascism in us all, in our heads and in our everyday behavior, the fascism that causes us to love power, to desire the very thing that dominates and exploits us. Every move we make affects us as well as the competitor thereby affecting the entire business environment

B- Be prompt to adapt to market conditions

The CEO of HP once passed a statement which meant that the biggest mistake one does is doing the same thing what one did a year ago. The business environment is very dynamic. What was applicable yesterday may not be applicable today and what is applicable today may not be applicable tomorrow

C- Consider that attacking competitor’s weakness is better that attacking competitor’s strength

The runner up firms often think of winning the battle of market share by imitating or attacking competitor’s strength. It’s a mistake. Competitor’r weakness is your strength. What a competitor fails to do is a niche pre-created

D- Don’t underestimate the reactions of rivals

Success is difficult but sustaining success is more difficult. The rival too waits for you to make a mistake. Observe a pattern in rival’s movements. If possible, look at the situation objectively. i.e. if X & Y are your rivals, how do they do business with one another

E- Ensure the strategy works in best of the circumstances

Test new strategy when everything appears to be going well. Experiment in best phase so that you know it will work when required or not. Experiment and keep it aside for future contingencies. This is because when you and your products are leading the market anything you do becomes a fashion. Its assumed to be a benchmark by rivals. You can also mislead them if required

F- Fair cutting in prices establishes cost advantage

Over the last two years, we have often talked about increase in purchasing power of consumers. However, inflation and GDP growth rate in India are almost similar. Considering global scenario, this figure matches the unemployment in USA. If cost wasn’t that important than why is it that every recruiter wants the best talent at the lowest cost possible?

G- Go for bold steps of differentiation

Does your product/service have a distinct identity? Is it unique? How easily it can be copied? Is the differentiation adding too much cost. E.g. Ferrari gives a mileage of only 5kmpl but it’s a differentiated product for a distinct class. Thus, differentiation matters considering what the buyer needs and who is buying it

H- Ho-Hum strategy to be avoided

Ho-Hum stands for mental weariness. For instance, you are a market leader. A new entrant hits the market and is appreciated for its cost cutting and differentiation. E.g. Micromax came with a Rs. 2000 mobile phone specially for fishermen being waterproof, the so called market leaders lost their share as they reacted too late to their competitor’s initiative

I- Invest for sustainable competitive advantage

When competitive advantage gets copied its no longer a competitive advantage. Hence keep innovating, invest aggressively in R&D in order to sustain your success. Also, if you have innovative products ready, release them at regular intervals as this will build a reputation of yours in the market that you innovate regularly. Also, this reduces the threat of rival copying what you have done.

Management Graduates are good Managers but Poor Leaders

Harsh Thakkar — Fri, 25 Nov 2011 06:55:41 +0000

What is the difference ?

Management is an art of getting the things done from the people

Leadership is an act of influencing people to strive towards common goals

The difference is We, the people.

What are Management Graduates? Manager or Leader

Manager

Relies on control
Short Term Perspective
Asks How and When
Can imitate
Accepts Status Quo
Does things right

Leader

Inspires trust
Long Term Perspective
Asks What and Why
Originates
Challenges it
Does right things

Management Students’ Views

Every Management Graduate is a combination of both
Academically, he/she behaves as per his/her areas of interest ignoring the holistic view
Every person is a manager, however everyone cannot be a leader

Is the current syllabus too theoretical?

X no. of subjects are such where students behave as if they are made to study
The same applies to some professors also who are least bothered about spreading knowledge and just count their no. of hours
The first year in MBA is considered to be as common base for all the students. Does this require a change ?(e.g. Will an HR student ever use Kruskal Wallis Formula on the job)

Is the Voice of students considered?

Some institutions carry on with the same syllabus for years
The teacher (speaker) and the students(audience) changes, the concepts remain the same
Why is Marketing taught theoretically? Why not some live assignments compulsory?
In HR, the names of the theories are different. But the content is more or less similar
Do exams really test the students?

Why are differences observed?

Manager Type Management Graduate

Completes assignments and is stuck on Facebook
Ignores responsibility assuming that someone from the team will complete the work
Seeks rewards in terms of marks
Has a tendency to avoid experimenting
Initiates work with average enthusiasm
Most of them are ignorant about current affairs
Says ‘Not my Job’

Leader Type Management Graduate

Has a tendency to try new combinations
Initiates work with maximum enthusiasm
Makes an effort to keep himself updated
Takes additional responsibility from learning perspective
Thinks of new ideas, improvises upon the existing work further
Takes accountability for others as well as himself
Seeks rewards in terms of recognition

21 Qualities of a Leader, Can Management Education teach it?

1) Character – No

2) Charisma – Is possible

3) Commitment – No

4) Communication – Yes

5) Competence – Yes

6) Courage – No

7) Discernment – No

8) Focus – Is possible

9) Generosity – No

10) Initiative – No

11) Listening – Yes

12) Passion – No

13) Positive Attitude – No

14) Problem Solving – Yes

15) Relationships – Is possible

16) Responsibility – Yes

17) Security – Yes

18) Self Discipline – No

19) Servanthood – Yes

20) Teaching – Yes

21) Vision – Is possible

Everything is Numbers

- 9 out of 21 leadership qualities cannot be taught by management education

- 7 out of 21 leadership qualities can be taught by management education

- The remaining 5 are based upon the person and the situation

‘You cannot teach anyone, its the learner who learns’

5 % of the current Management system looks forward, 95% lives in past and present

- Leaders are born and not made is still a matter of debate

- Man + Age = Manage

Maslow’s Heirarchy of Needs

Yogin Vora — Sat, 24 Sep 2011 05:07:02 +0000

Biological and Physiological needs

Food, Clothing, Shelter, Sex, Sleep, Air, Food. These are the basic requirements as we say ‘ Roti, Kapda aur Makaan’. Any person will first fulfill these needs before trying to meet any other needs.

Safety needs

Safety is not an intellectual exercise to keep us in work. It is a matter of life and death. It is the sum of our contributions to safety management that determines whether the people we work with live or die. Here the needs are protection from elements, security, order, law, limits, stability, etc.

Belongingness and Love Needs

The feeling of not belonging, of not being entirely worthy, of being sometimes hostage to your own sensibilities kills like slow poison. ‘Pyar do, Pyar lo’ is what people like and so do employees. Here belongingness is belongingness to work group, family, relationships, etc

Esteem Needs

Every new adjustment is a crisis in self-esteem. Still people crave for it. Its being proud about what you do irrespective of the results expected. Its ‘Garv’

Self Actualization Needs

Its realising personal potential, self-fulfillment, seeking personal growth and peak experiences. As its rightly said ‘ Kamyaab mat bano, Kaabil bano’. However, the higher you go, the lesser is the oxygen as with great power comes great responsibilities

Initial steps to HR – Recruitment

Vidhi Gogri — Thu, 12 May 2011 20:16:43 +0000

We all have heard that, “Employees are assets of a company.” Every company claims to follow and understand this mantra. The function of HR is all about people- managing them, hiring them, etc. To carry out any function in a business, be it marketing, production, operations, you need people. HR brings the people to the organization and its business. It is said marketing is promoting your product in the market place. Similarly, HR is promoting and selling your company in the market. If you can promote your company efficiently you are sure to attract people to work for you.

Every firm whether small or large needs people to do even the minutest clerical work for them. And when there are employees they need to be managed. A small/medium firm may not have a devoted HR department. In that case, the owner or the manager plays the role of the HR head or the firm may hire specialized services of a HR Consultancy. Whereas, large organizations have their own HR department consisting of a head and staff that directly reports to the head. The HR department may have further bifurcations depending on the size of the firm and the number of employees.
When we say we require people for the functions of business, how do we acquire people for these functions? This is done by RECRUITMENT. For recruitment to happen the company has to do a Job Analysis of the job to be assigned to an eligible candidate. Job Analysis is further bifurcated into 2 sub-parts i.e.

JOB ANALYSIS:
This is not a book definition so to say but in layman’s language, Job Analysis means a process where the company analyses and defines the skills required to perform a particular job in the company.
• Job description is a written statement showing job title, tasks, duties and responsibilities involved in a job. It also prescribes the working conditions, hazards, stress and relationship with other jobs.
• Job specifications, also known as man or employee specifications, is prepared on the basis of job specification. It specifies the qualities required in a job incumbent for the effective performance of the job.
Once the Job Analysis is done the job vacancy can be posted on the Company Intranet, Classifieds, Job portals, Recruitment agencies etc.

Recruitment is the step towards Selection. Generally recruitments are either taken care by the HR Department Head or the manager (whoever is responsible for hiring). There is a process for hiring a candidate that is usually to be followed in large organizations. When there is a requirement, the HR department is communicated about the same. The HR department then goes through the database of candidates it has or it would send the requirements through Classifieds, Job portals, etc. By sending these requirements, the organization is likely to get feedback from eligible candidates in the form of CVs. The requirement advertisement should mention the Job Analysis (Job Description and Job Specification) so as to avoid attracting unnecessary applications. This also makes it easier for the HR department to shortlist from the applications and this will help reduce any bias from the HR resulting due to over examining the applications, boredom, etc.
Recruitment and Selection are two different terms even though they are always mentioned together. After the recruitment process is accomplished it gives way to the selection process. Selection process takes place after the HR department has shortlisted from among the received applications. The selection is not a lengthy procedure but depends from organization to organization.
The recruitment process is important in order to avoid any mistakes that would lead to future problems for the company from the candidate’s end. It’s a saying we have heard in our childhood, “one dirty fish pollutes the entire pond.” Similar is the case with employees. One wrong employee in the organization may hamper the growth of the entire organization.

Reliance Venture Capital

Milan Vazir — Sun, 10 Apr 2011 18:53:06 +0000

Reliance Venture Capital
Reliance Venture Asset Management Limited

Introduction
It was incorporated in 2006, as Reliance Technology Ventures Ltd. On March 3, 2010, company changed its name from Reliance Technology Ventures Ltd to Reliance Venture Asset Management Ltd.
As the worlds of finance, technology, markets and people expand and converge, Reliance Group’s horizons are constantly expanding. Reliance Venture Asset Management Limited (RVAM) has been promoted by the Reliance Group to leverage emerging and high growth potential technologies, business models, world class management teams and markets to look ahead at future opportunities that can be enriched and enhanced by taking advantage of the group and its ecosystem. The company was ranked 30th in the Red Herring Top 100 Global Venture Capital Firms in 2009-2010 and was the only India based corporate venture capital company to feature in the ranking.
The venture capital industry is hotting up, with opportunities opening up in new sectors. To be part of this new growth story, Reliance Venture Asset Management is looking at investments in sectors such as microfinance, education and clean tech but it want to direct their funds into ancillary businesses as compared to those that directly comprise these sectors. The VC firm has already invested in a number of growth stage startups such as Yatra.com, Dhama Innovations, Suvidhaa Infoserve and Reverse Logistics and is now keen to invest another $50 million this year in startups.
Recently on 24th March 2011 the company announced that it will Exit from Dhama Innovations and some other portfolios. The CEO stated that it had recorded more than triple-digit IRRs on Dhama, similar is the case with other portfolios, and at present it is looking for an exit option.
Reliance and other VC companies mostly look for the businesses which are directly or indirectly related to their own business which helps to earn good return.
To sum up, it can be seen that the need of Venture Capital is growing in the Indian Economy with more and more people obtaining to start their own Business, there is high potential of Venture Capital Companies to grow in such a pace. Aerospace and defense sectors, both of which have typically been considered as government domains have a lot to gain with private sector involvement, given the kind of demand enjoyed by these sectors. Education, micro finance and clean tech are already enjoying a lot of investor interest.

MATRIX PARTNERS – A Venture Capital Firm

Milan Vazir — Tue, 15 Mar 2011 21:40:23 +0000

Matrix Partners is a US based private equity investment firm focusing on venture capital investments. The firm invests in seed and early stage companies in the United States and India, particularly in the software, communications, semiconductors, data storage, Internet or wireless sectors. Some of the top companies Matrix has been associated with include Apple Computer, FedEx, Veritas and Sycamore Networks.

In India, Matrix Partners are committed to building a long term relationships with the entrepreneurs who have the potential to grow and become industry leading companies. Many of its investment in new and innovative businesses have resulted into many companies going public and many going for M&A’s.
Matrix follows a sector based approach for investment which will above average returns. Their portfolios of sectors include consumer products and services, education, infrastructure, financial, healthcare, and internet and mobile.
Their style of management involves not interrupting the day-to-day operations on the business but only on the critical issues and top level decision making of the top management.
Some of the well renowned companies in India where Matrix has invested are:
• Yo!China
• FIITJEE
• Tree House
• Itz Cash
• Muthoot Finance
• Ace2Three
• Seventymm
• Asklaila
During the past year, Matrix has helped Muthoot Finance, one of the largest gold loan providing companies to go public i.e. come out with its Initial Public Offering (IPO) and also invested additional capital to the tune of INR 100 Crore in Tree House which is one of the fastest growing pre-school education providing companies in India.
One of the main focuses of Matrix Partners is to look for outstanding entrepreneurs to build industry technology companies, who have good business ideas and help them to develop their business ideas. Matrix Partners help the entrepreneurs to frame strategies, and being involved in top level management. It follows sector-agnostic investment strategy.It has developed an exceptionally strong network of contacts and entrepreneurial know-how.
It invests in companies primarily targeting the Indian domestic market with a sector independent investment strategy focused on generating exceptional returns.Companies that have gone public out of Matrix Portfolio have generated over $100 billion of market value. With having all the strategy’s in place it has been able to enjoy the highest return in the industry.

Source: http://en.wikipedia.org/wiki/Matrix_Partners

Piggybacking on the Religion that is Cricket

Prajakta Yeole — Mon, 07 Mar 2011 17:49:50 +0000

The crazy country of cricket fanatics – that is what will define India for the coming month. That is not to say that cricket fever will then subside, just normalize after its crescendo. During a time that everyone’s eyes are riveted to the television screen, and with the onset of summer, presents a nice opportunity to Cola manufacturers to capitalize on sales. And leading the vanguard is PepsiCo.
Pepsi has always been at the forefront of capturing advertising and image rights for all things Cricket. And it routinely comes out with special marketing campaigns and the like during the oft occurring cricket tournaments; case in point – the Indian Premier League. During IPL Season 2 in February 2009, PepsiCo joined hands with Team Chennai Super Kings, the winners of the inaugural IPL as their official beverage sponsors. Their image was significantly boosted by the appearance of the charismatic captain M S Dhoni in CSK’s and Pepsi’s adverts. Then during the last IPL, season 3, they came out with the ‘PEPSI YOUNGISTAAN WOW’ contest wherein fans could play a mini-game on a website or their cellphones. Star power was in the form of Ranbir Kapoor and Sanjay Dutt. PepsiCo flexed its muscles by emerging as the sole bidder for the IPL title rights. Thus, Pepsi will get exclusive rights from the BCCI for the next edition of the Indian Premier League.
Pepsi also used cricket as the launch platform for its new packaged nimbu-paani drink ‘Nimbooz’, by associating itself with the Kings XI Punjab. Everytime a player from KXIP hit a boundary cheerleaders would perform the bhangra and one lucky Nimbooz customer would win an all-expense paid trip to South Africa and also get to meet all the KXIP players. Cricket, nimbu-paani and cheerleaders – an explosive combination – and a match-winning one!
Being environmentally responsible is also on Pepsi’s list and it uses their achievements to good effect. In 2009 PepsiCo India recycled and gave back more water than they consumed through various initiatives like recharging, replenishing and reusing water. The green campaign won them many admirers and improved their image.
Another coveted campaign is the Pepsi ‘MyCan’. Here the Bollywood bigshots – King Khan SRK, the suave John Abraham, the svelte Deepika Padukone and the young Imran Khan featured for Pepsi to round off the veritable list of stars. The unique form factor of the can and the stylish packaging made it a great hit with the youth brigade. Unique concepts like Pepsi Diet for the health conscious, 2-litre bottles for the party animals and recyclable cola bottles for the environment-caring also positively affected their bottom-line.
‘Change the Game’ is their tagline as the Official Sponsors of the Cricket World Cup 2011. It features different cricketers in different short-films. Designed to address the Youngistaan crowd, you have the big-hitting Dhoni with his ‘Helicopter Shot’ and Kevin Pietersen with his ‘Switch Hit’. The selection of famous cricketers with an Indian setting to the ad films shall surely endear them to Indian fans. ‘Change the Game’ appeals to today’s Indian youth who wants to break free from the shackles of orthodox thinking and define their own rules.
Pepsi also has offers galore for one and all. They have a tie-up with Pizza Hut where consumers get a Pepsi free with each order of a Medium Pizza. Pizza Hut provides the marketing while Pepsi delivers the goods – a win-win for both.
Among all these advertisements during the World Cup, it shall be interesting to see what Coca-Cola’s reply shall be. I’m sorry, Coke-who?

Phoenix Mills Ltd (Stock Analysis)

Nishit Chokshi — Sun, 06 Mar 2011 18:00:11 +0000

March 06, 2011

(CMP: Rs. 172.35)
Buy
Target Price: Rs 260
(nishit@managementfunda.com)
________________________________________

Company Profile:

• Phoenix Mills Ltd. (PML) began operations as a textile manufacturing company in 1905, on 17.3 acres of land in Lower Parel, Mumbai.
• In 1987, the company entered Mumbai’s real estate market through development of High Street Phoenix (HSP) on the textile mill property in Lower Parel (involving development of ~3 msf [million square feet] of retail, entertainment, commercial and residential space).
• Besides HSP, the company is developing 4 market cities in Kurla (Mumbai), Bangalore, Chennai and Pune. Moreover, the company has ventured into hospitality business through its subsidiary – Phoenix Hospitality – that is currently developing five hotels across five cities.
• In 2008, PML acquired 40% stake (currently 33% pre-IPO) in Entertainment World Developers (EWDPL), operating under Treasure Island Brand in tier II cities. PML has also acquired 73% stake in Big Apple Real Estate (BARE) that develops malls under the brand name ‘Phoenix United’ across North India.

Q3 FY11 Updates:

• During the quarter, PML registered 49.32% growth in its net income over Q3 FY10 to Rs. 45.07 crores
• De-leveraging helped the company reduce its interest burden which resulted into stunning 133.28% jump in its profit after tax to Rs. 23.77 crores from Rs. 10.19 crores in Q3 FY10.
• Earnings Per Share (EPS) of PML in this quarter stood at Rs. 1.64 compared to Rs. 1.53 in Q2 FY11 (increase of 7.1%).

Palladium’s rental to HSP will increase:
• PML average rentals for HSP increased to Rs166-170psf in 9MFY11, 20% higher than the FY10.
• Going ahead with renewal of 0.15 msf in FY11 we expect average rental income to increase to Rs175-180 psf. Estimated rental income will be in the range of Rs. 200-220 crores for FY12.

Three Market City projects to be operational in Q4 FY11 & One in Q1 FY12:
• Market City projects at Kurla, Bangalore and Pune are in the final stages of completion and would generate rentals from Q1 FY12 onwards. The one in Chennai will be generating rentals from Q2 FY12.
• Leasing status for Market City Projects is expected to improve further before they become operational. PML has increased its stake in the Bangalore project (to 32.7% from 28.1% earlier) and Pune project (to 58.5% from 50% earlier). Both stakes increases are value-accretive.

Three residential & the hotel projects to be launched in FY12:
• PML expects to launch two Bangalore & one Chennai residential projects in late Q4FY11 (or early FY12). This will help the company generate cash flows. This launch will also help it enhance its brand value in the Bangalore market.
• The hotel project in Lower Parel of 410 keys (+23 service apartments) which will be operated by Shangri-La is expected to be launched in Q1 FY12.

Outlook and Conclusion:
• At the current market price of Rs. 172.35, the stock is trading at 20.8 x FY11E and 12 x FY12E respectively.
• Price to Book Value of the stock is expected to be at 1.4 x and 1.3 x respectively for FY11E and FY12E.

I expect that the company will generate substantial cash flows & keep its growth story in the coming quarters also. I recommend ‘BUY’ in this particular scrip with a target price of Rs. 260 for Medium to Long term investment.

(Disclaimer: As per SEBI requirements it is stated that, the writer and/or individuals thereof may have positions in securities referred herein and may make purchases or sale while report is in circulation.)