Executive Summry of Amway

EXCEL BUSINESS ACADEMY
(India’s Premium Techno Management B-School)

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Executive Summary:
This executive summary will give you key facts concerning the Amway. These facts
will help to find out how well the Amway opportunity can match your business goals. Let’s
start from main component that is business. A business' purpose is to attract and keep
customers. Its one basic function is to reliably solve customer problems. Management in all
business areas and organizational activities are the acts of getting people together to
accomplish desired goals and objectives efficiently and effectively. Also Management is the
act or function of putting into practice the policies and plans decided upon by the
administration. Hence Administration makes the important decisions of an enterprise in its
entirety, whereas management makes the decisions within the confines of the framework,
which is set up by the administration.
The important factor important to study is Organization. It is the foundation upon

which the whole structure of management is built. Organization is not an end it itself but a
means to achieve an end. Whether an organization is good or bad depends on the fact as to
how much efficiently and promptly it is in a position to achieve the objectives. Another
important topic is A Business ownership should be structured according to the needs of the
owners and potentially liability that the business could incur. Corporate vision describes
aspirations for the future, without specifying the means that will be used to achieve those
desired ends.
The Mission of organization should represent the broadest perspective of the

enterprise's mission. The major outcome of strategic road-mapping and strategic planning,
after gathering all necessary information, is the setting of goals for the organization based on
its vision and mission statement.
The most important topic is an organizational structure is a mainly hierarchical

concept of subordination of entities that collaborate and contribute to serve one common aim.
Analysis by A SWOT Exercise is a powerful technique for uncovering and understanding
your Strengths and Weaknesses, and for looking at the Opportunities and Threats you face.
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The Amway/Amway Global, a subsidiary of Alticor, is marketing nutritional

supplements, skin and personal care products, air and water purifiers and a line of home
cleaning products. The products are sold through Independent Business Owners (IBO). The
most effective strategy for this is direct marketing, today also known as attraction marketing.
Using attraction marketing for Amway products is the fastest way to make steady retail
profits.
Amway already helped over 3 million people start on their path to success. They're
attracted by the unlimited potential of the opportunity, the support of a corporation with 50
years of experience and compassion, a global community ready to offer support, and a
premier compensation plan.
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Bibliography:
1) www.worthwilemag.com
2) http://www.amway.in/
3) http://www.amway.in/Articles/Article.
4) http://en.wikipedia.org/wiki/Amway
5) http://www.authorstream.com/
6) http://www.nutrilite.com/
7) http://en.wikipedia.org/wiki/Organisation
8) http://en.wikipedia.org/wiki/Business
9) http://www.businessballs.com
10) http://en.wikipedia.org/wiki/Administration
11) http://www.business-standard.com
12) http://www.scribd.com
13) http://www.mouthshut.com
14) http://www.mouthshut.com
15) http://wiki.answers.com
16) http://dictionary.reference.com
17) http://www.thetruthaboutamway.com/
18) http://articles.bplans.com.
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Annexure:
Amway India plans 170 new branches by 2013
Eyes 25% y-o-y growth for the next five years.
Amway India Enterprises Pvt Ltd, a major direct selling FMCG Company in the country, is
planning to open 170 new branches across the country in the next three years (by the year
2013). The company is also eyeing 25 per cent year-on-year growth for the next five years.
Presently, the company has 130 branches across the country. The company offers 115
products in five categories- Personal care, Home care, Nutrition & Wellness, Cosmetics and
Great Value products. Nutrition & Wellness segment contributes around 50 per cent of
Amway India’s total turnover.
"With an aim to strengthen our network base, we are planning to increase the number
of touch points (branches) up to 300, by adding 170 new branches across the country in the
next two-three years. We are also planning to launch 6 to 8 new products every year,"
William S. Pinckney, MD & CEO, Amway India, said at a press conference during plant visit
of reporters to its Baddi facility in Himachal Pradesh.
With an aim to meet the market demand, the company has just tripled the capacity at
its contract manufacturing facility in Baddi (Himachal Pradesh) at an investment of Rs. 55
crore.
"Amway’s focus in the past 2-3 years was to improve consumer access and
awareness, which paid off handsomely. We have grown from Rs. 799 crore in 2007 to Rs.
1407 in 2009 crore over the past three years, essentially as the quality of the Amway pick-up
centre’s has undergone a sea change, and are more experiential for the consumers. We are
eyeing 25 per cent year-on-year growth for the next five years," Pinckney said.
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The Meaning of Business:
Great quote on Worthwhile by Mark Kaiser on the meaning of business:
"The simplest definition of business is you solve a customer's problem and create
sustainable profits over time. Anyone with vision should understand the problem they're
solving. The problem with business today is that people think the meaning is about building a
monument to you. The meaning of business is having an impact on people's lives."
My definition is close:
A business' purpose is to attract and keep customers. Its one basic function is to reliably solve
customer problems...
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A business is a legally recognized organization designed to provide goods or services,

or both, to consumers, businesses and governmental entities. Businesses are predominant in
capitalist economies. Most businesses are privately owned. A business is typically formed to
earn profit that will increase the wealth of its owners and grow the business itself. The
owners and operators of a business have as one of their main objectives the receipt or
generation of financial returns in exchange for work and acceptance of risk. Notable
exceptions include cooperative enterprises and state-owned enterprises. Businesses can also
be formed not-for-profit or be state-owned.
The etymology of "business" relates to the state of being busy either as an individual
or society as a whole, doing commercially viable and profitable work. The term "business"
has at least three usages, depending on the scope — the singular usage (above) to mean a
particular company or corporation, the generalized usage to refer to a particular market
sector, such as "the music business" and compound forms such as agribusiness, or the
broadest meaning to include all activity by the community of suppliers of goods and services.
However, the exact definition of business, like much else in the philosophy of business, is a
matter of debate and complexity of meanings.
Meaning Of Management:
Management is generally defined as the art and science of getting things done through
others. This definition emphasizes that a manager plans and guides the work of other people.
Some (cynical) individuals think that this means managers don’t have any work to do
themselves. As managers have an awful lot of work to do. Management is the art and science
of getting things done through others, generally by organizing and directing their activities on
the job. A manager is therefore someone who defines, plans, guides, assists, and assesses the
work of others, usually people for whom the manager is responsible in an organization.
Management Define:
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“The efficient and effective operation of a business, and study of this subject, is called
management”.
The main branches of management are financial management, marketing

management, human resource management, strategic management, production management,
operation management, service management and information technology management.
1. The group of individuals who make decisions about how a business is run.
2. The initiation and maintenance of an investment portfolio.
Management in all business areas and organizational activities are the acts of
getting people together to accomplish desired goals and objectives efficiently and effectively.
Management comprises planning, organizing, staffing, leading or directing, and controlling
an organization (a group of one or more people or entities) or effort for the purpose of
accomplishing a goal. Resourcing encompasses the deployment and manipulation of human
resources, financial resources, technological resources, and natural resources.
Because organizations can be viewed as systems, management can also be defined as

human action, including design, to facilitate the production of useful outcomes from a
system. This view opens the opportunity to 'manage' oneself, a pre-requisite to attempting to
manage others
Management can also refer to the person or people who perform the act(s) of management.
Basic functions of management:
 Planning: Deciding what needs to happen in the future (today, next week, next
month, next year, over the next 5 years, etc.) and generating plans for action.
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 Organizing: (Implementation) making optimum use of the resources required to

enable the successful carrying out of plans.
 Staffing: Job analyzing, recruitment, and hiring individuals for appropriate jobs.
 Leading/Directing: Determining what needs to be done in a situation and getting
people to do it.
 Controlling/Monitoring: Checking progress against plans.
 Motivation: Motivation is also a kind of basic function of management, because
without motivation, employees cannot work effectively. If motivation doesn't takes
place in an organization, then employees may not contribute to the other functions
(which are usually set by top level management).
Business Administration:
Business administration consists of the performance or management of business

operations and thus the making or implementing of major decisions. Administration can be
defined as:
“The universal process of organizing people and resources efficiently so as to direct

activities toward common goals and objectives”.
The word is derived from the Middle English word administracioun, which is in turn
derived from the French administration, itself derived from the Latin administratio — a
compounding of ad ("to") and ministratio ("give service").
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Administrator can serve as the title of the general manager or company secretary
who reports to a corporate board of directors. This title is archaic, but, in many enterprises,
this function, together with its associated Finance, Personnel and management information
systems services, is what is intended when the term "the administration" is used.
In some organizational analyses, management is viewed as a subset of administration,

specifically associated with the technical and mundane elements within an organization's
operation. It stands distinct from executive or strategic work. In other organizational
analyses, administration can refer to the bureaucratic or operational performance of mundane
office tasks, usually internally oriented and reactive rather than proactive.
As business has become more complex, so too has the oversight of companies: their
management, their growth strategies, their personnel issues, their taxes and the role that taxes
play in corporate economic strategy. Advertising has grown to include multiple media outlets
and an assortment of targeted interest groups: new customers, repeat customers, stockholders,
investors and new geographic markets. Marketing has become the term of choice for this
entire strategically placed product exposure.
Defining business administration then means defining oversight roles for the
assortment of internal specialties that every business of any size has come to include. Perhaps
the best way to define business administration is to look at the types of courses offered in
MBA curriculums and the specialties, or "majors," that one can opt for in an MBA program.
For a large corporation, business administration is going to include international and

global business, as well as strategy and economics. In this instance, the definition of business
administration will include requirements of certain cultural differences and an acute
understanding of the global economy and its current fluidity. Also included in business
administration at this scale is the art and science of acquisition: when to buy a company or
property and why.
Business administration will always include the intangible quality of leadership;

Along with leadership comes the task of negotiation and conflict resolution, specifically with
regard to personnel. Behavioral psychology plays an important role in business
administration: a misstep in an adversarial situation with a union can take a company under,
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as it did Continental Airlines some years ago. The definition of business administration will
have to include marketing; you won't have a business to administer unless you sell your
products. Ancillary to marketing is an understanding of the new tools available for product
distribution, and that will involve understanding e-business and how it is rapidly evolving.
Business administration includes an understanding of entrepreneurship: tax structures

for small businesses along with personnel issues at that level, inventory and cash flow, and all
the other small matters that make a big difference to a new or small business. A critical part
of business administration is the awareness of risk. This might include the risk of launching a
new product, and the costs involved; the risk of an acquisition, the risk of a competitive
strategy, the company's exposure in opting for this health plan instead of that one. There are
risks involved in other personnel decisions and this area is of tangible importance: company
morale is a key to productivity and the resultant profitability. The definition of business
administration includes whatever knowledge is required to make all of these components
work productively, if not in complete harmony.
Management vs. Administration:
Management and administration may seem the same, but there are differences
between the two. Administration has to do with the setting up of objectives and crucial
policies of every organization. What is understood by management, however, is the act or
function of putting into practice the policies and plans decided upon by the administration.
1) Administration is a determinative function, while management is an executive function.
2) It also follows that administration makes the important decisions of an enterprise in its
entirety, whereas management makes the decisions within the confines of the framework,
which is set up by the administration.
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3) Administration is the top level, whereas management is a middle level activity. If one were
to decide the status, or position of administration, one would find that it consists of owners
who invest the capital, and receive profits from an organization. Management consists of a
group of managerial persons, who leverage their specialist skills to fulfill the objectives of an
organization.
4) Administrators are usually found in government, military, religious and educational

organizations. Management is used by business enterprises. The decisions of an
administration are shaped by public opinion, government policies, and social and religious
factors, whereas management decisions are shaped by the values, opinions and beliefs of the
mangers.
5) In administration, the planning and organizing of functions are the key factors, whereas, so
far as management is concerned, it involves motivating and controlling functions. When it
comes to the type of abilities required by an administrator, one needs administrative qualities,
rather than technical qualities. In management, technical abilities and human relation
management abilities are crucial.
6) Administration usually handles the business aspects, such as finance . It may be defined as
a system of efficiently organizing people and resources, so as to make them successfully
pursue and achieve common goals and objectives. Administration is perhaps both an art and a
science. This is because administrators are ultimately judged by their performance.
Administration must incorporate both leadership and vision.
7) Management is really a subset of administration, which has to do with the technical and
mundane facets of an organization’s operation. It is different from executive or strategic
work. Management deals with the employees. Administration is above management, and
exercises control over the finance and licensing of an organization.
Therefore, we can see that these two terms are distinct from one another, each with their own
set of functions. Both these functions are crucial, in their own ways, to the growth of an
organization.
Summary:
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1. Management is the act or function of putting into practice the policies and plans decided
upon by the administration.
2. Administration is a determinative function, while management is an executive function.
3. Administration makes the important decisions of an enterprise in its entirety, whereas

management makes the decisions within the confines of the framework, which is set up by
the administration.
4. Administrators are mainly found in government, military, religious and educational

organizations. Management, on the other hand, is used by business enterprises.
Types of business:
The following are the types of business,
1. Agriculture:
Agriculture is the production of food and goods through farming. Agriculture was the
key development that led to the rise of human civilization; with the husbandry of
domesticated animals and plants (i.e. crops) creating food surpluses that enabled the
development of more densely populated and stratified societies. The study of agriculture is
known as agricultural science. Agriculture is also observed in certain species of ant and
termite.
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Agriculture encompasses a wide variety of specialties and techniques, including ways

to expand the lands suitable for plant raising, by digging water-channels and other forms of
irrigation. Cultivation of crops on arable land and the pastoral herding of livestock on
rangeland remain at the foundation of agriculture. In the past century there has been
increasing concern to identify and quantify various forms of agriculture. In the developed
world the range usually extends between sustainable agriculture (e.g. perm culture or organic
agriculture) and intensive farming (e.g. industrial agriculture).
2. Mining:
Mining is the extraction of valuable minerals or other geological materials from the
earth, usually from an ore body, vein or (coal) seam. Materials recovered by mining include
base metals , iron , uranium , coal, diamonds, limestone’s , oil shale , rock salt and potash .
Any material that cannot be grown through agriclucture processes, or created in a laboratory
or factory, is usually mined. Mining in a wider sense comprises extraction of any non
renewable resource (e.g., petroleum, natural gas, or even water).Mining of stone and metal
has been done since prospecting for times. Modern mining processes involve e bodies,
analysis of the Profit potential of a proposed mine, extraction of the desired materials and
finally reclamation of the land to prepare it for other uses once the mine is closed.
The nature of mining processes creates a potential negative impact on the

environment both during the mining operations and for years after the mine is closed. This
impact has led to most of the world's nations adopting regulations to moderate the negative
effects of mining operations. Safety has long been a concern as well, though modern practices
have improved safety in mines significantly
3. Finance:
Finance is the science of funds management. The general areas of finance are business
finance, personal finance, and public finance. Finance includes savings money and often
includes lending money. The field of finance deals with the concepts of time, money, and risk
and how they are interrelated. It also deals with how money is spent and budgeted.One aspect
of finance is through individuals and business organizations, which deposit money in a bank.
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The bank then lends the money out to other individuals or corporations for investment, and
charges interest on the loans.
Loans have become increasingly packaged for resale, meaning that investers buy the
loan (debt) from a bank or directly from a corporation. Bonds are debt instruments sold to
investors for organizations such as companies, governments or charities. The investor can
then hold the debt and collect the interest or sell the debt on a secondary market. Banks are
the main facilitators of funding through the provision of credit, although private equity,
mutual funds, hedge funds, and other organizations have become important as they invest in
various forms of debt. Financial assets, known as investments, are financially managed with
careful attention to financial risk management to control financial risk.
4. Intellectual property:
Intellectual property (IP) is a term referring to a number of distinct types of

creations of the mind for which property rights are recognized—and the corresponding fields
of law. Under intellectual property law, owners are granted certain exclusive property to a
variety of intangible assets, such as musical, literary, and artistic works; discoveries and
inventions; and words, phrases, symbols, and designs. Common types of intellectual property
include copyrights, trademarks, patents, industrial right and trade secrets in some
jurisdictions.
Although many of the legal principles governing intellectual property have evolved
over centuries, it was not until the 19th century that the term intellectual property began to be
used, and not until the late 20th century that it became commonplace in the United States.
The British Statute tee 1710 is now seen as the origin of copyright and patent law
respectively.
5. Manufacturing:
Manufacturing is the use of machines, tools and labor to make things for use or sale. The
term may refer to a range of human activity, from handicraft to high tech, but is most
commonly applied to industrial production, in which raw materials are transformed into
finished goods on a large scale. Such finished goods may be used for manufacturing other,
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more complex products, such as aircraft, automobiles, or sold to Wholesalers, who in turn sell
them to retailers, who then sell them to end users – the “consumers".Manufacturing takes
turns under all types of economic system. In a free market economy, manufacturing is usually
directed toward the mass production of products for sale to consumer at a profit.
Modern manufacturing includes all intermediate processes required for the production and
integration of a product's components. Some industries, such as semiconductors and steel
manufacturers use the term fabrication instead.
6. Real estate:
Real estate is a legal term (in some jurisdictions, such as the United Kingdom,
Canada, Australia , USA and Bahamas ) that encompasses land along with improvements to
the land, such as buildings, fences, wells and other site improvements that are fixed in
location—immovable. Real estate law is the body of regulations and legal codes which
pertain to such matters under a particular jurisdiction and include things such as commercial
and residential real property transactions. Real estate is often considered synonymous with
real property (sometimes called realty), in contrast with personal property (sometimes called
chattel or personality under chattel law or personal property law).
However, in some situations the term "real estate" refers to the land and fixtures together, as
distinguished from "real property", referring to ownership of land and appurtenances,
including anything of a permanent nature such as structures, trees, minerals, and the interest,
benefits, and inherent rights thereof. Real property is typically considered to be Immovable
property. The terms real estate and real property are used primarily in common law, while
civil law jurisdictions refer instead to immovable property.
7. Retailing:
Retailing consists of the sale of goods or merchandise from a fixed location, such as a
department stores, boutique, or by mail, in small or individual lots for direct consumption by
the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may
be individuals or businesses. In commerce, a "retailer" buys goods or products in large
quantities from manufacturers or Importers, either directly or through a wholesaler, and then
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sells smaller quantities to the end-user. Retail establishments are often called shops or stores.
Retailers are at the end of the supply chain. Manufacturing marketers see the process of
retailing as a necessary part of their overall distribution strategy. The term "retailer" is also
applied where a service provider services the needs of a large number of individuals, such as
a public utility, like electric power.
8. Transport:
Transport or transportation is the movement of people and goods from one location to
another. Mode of transportation includes air rail, road, water, cable, pipeline, and space. The
field can be divided into infrastructure, vehicles, and operations.Transport infrastructure
consists of the fixed installations necessary for transport, and may be roads , railways,
airways, waterways, canals, pipelines and and terminals such as airports, rail stations, bus
stations, warehouses, trucking terminals, refueling depots (including fueling docks and fuel
stations), and seaports. Terminals may be used both for interchange of passengers and cargo
and for maintenance.Vehicles traveling on these networks may include automobiles, bicycles,
buses, trains, trucks, people, helicopters, and aircrafts. Operations deal with the way the
vehicles are operated, and the procedures set for this purpose including financing, legalities
and policies. In the transport industry, operations and ownership of infrastructure can be
either public or private, depending on the country and mode.
Meaning of Organization:
Organization is the foundation upon which the whole structure of

management is built. Organization is related with developing a frame work where the total
work is divided into manageable components in order to facilitate the achievement of
objectives or goals. Thus, organization is the structure or mechanism that enables living
things to work together. In a static sense, an organization is a structure or machinery manned
by group of individuals who are working together towards a common goal. Alike
'management', the term 'organization' has also been used in a number of ways. broadly
speaking,
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An organization is a social arrangement which pursues collective goals, controls its

own performance, and has a boundary separating it from its environment. The word itself is
derived from the Greek word organon, itself derived from the better-known word ergon.
In the social sciences, organizations are the object of analysis for a number of disciplines,
such as sociology, economics, political science, psychology, management, and organizational
communication. In more specific contexts, particularly for sociologists, the term "institution"
may be preferred. The broader analysis of organizations is commonly referred to as
organizational studies, organizational behavior or organization analysis. A number of
different theories and perspectives exist, some of which are compatible,
 Organization – process-related: an entity is being (re-)organized (organization as task

or action).
 Organization – functional: organization as a function of how entities like businesses
or state authorities are used (organization as a permanent structure).
 Organization – institutional: an entity is an organization (organization as an actual
purposeful structure within a social context)
The 'organization' is used in four different senses: as a process, as a structure of relationship,

as a group of persons and as a system, as given below:
1)Organization as a Process: In this first sense, organisation is treated as a dynamic process

and a managerial activity which is essential for planning the utilization of company's
resources, plant and equipment materials, money and people to accomplish the various
objectives.
2) Organization as a Framework of Relationship: In the second sense organisation refers

to the structure of relationships and among position jobs which is created to release certain
objectives. The definitions of Henry, Urwick, Farland, Northcourt, Lansburgh and Spriegel
Breach, Davis, Mooney and Reily etc., come under this group. For example: According to
Mooney and Reily, "Organization is the form of every human association for the attainment
of a common purpose."
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3) Organization as a Group of persons: In the third sense, organisation is very often viewed
as a group of persons contributing their efforts towards certain goals. Organisation begins
when people combine their efforts for some common purpose. It is a universal truth that an
individual is unable ability and resources. Barnard has defined 'Organisation' as an
identifiable group of people contributing their efforts towards the attainment of goals.
4) Organization as a System: In the fourth sense, the organisation is viewed as system.

System concepts recognize that organizations are made up of components each of which has
unique properties, capabilities and mutual relationship. The constituent element of a system
are linked together in such complex ways that actions taken by one producer have far
reaching effect on others.
In short, organizing is the determining, grouping and arranging of the various

activities deemed necessary for the attainment of the objectives, the assigning of people to
those activities, the providing of suitable physical factors of environment and the indicating
of the relative authority delegated to each individual charged with the execution of each
respective activity.
Definitions of Organization:
Different authors have defined organization in different ways. The main definitions
of organization are as follows:
 According to keith Davis, "Organization may be defined as a group of individuals,

large of small, that is cooperating under the direction of executive leadership in
accomplishment of certain common object."
 According to Chester I. Barnard, "Organization is a system of co-operative activities
of two or more persons."
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 According to Louis A. Allen, "Organization is the process of identifying and grouping

the work to be performed, defining and delegating responsibility and authority, and
establishing relationship for the purpose of enabling people to work most effectively
together in accomplishing objectives."
 According to Mooney and Railey, "Organization is the form of every human
association for the attainment of a common purpose."
Social unit of people systematically arranged and managed to meet a need or to

pursue collective goals on a continuing basis. All organizations have a management structure
that determines relationships between functions and positions, and subdivides and delegates
roles, responsibilities, and authority to carry out defined tasks. Organizations are open
systems in that they affect and are affected by the environment beyond their boundaries
Characteristics of Organization:
1) Outlining the Objectives: Born with the enterprise are its long-life objectives of
profitable manufacturing and selling its products. Other objectives must be
established by the administration from time to time to aid and support this main
objective.
2) Identifying and Enumerating the Activities: After the objective is selected, the
management has to identify total task involved and its break-up closely related
component activities that are to be performed by and individual or division or a
department.
3) Assigning the Duties: When activities have been grouped according to similarities
and common purposes, they should be organized by a particular department. Within
the department, the functional duties should be allotted to particular individuals.
4) Defining and Granting the Authority: The authority and responsibility should be
well defined and should correspond to each other. A close relationship between
authority and responsibility should be established.
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5) Creating Authority Relationship: After assigning the duties and delegations of

authority, the establishment of relationship is done. It involves deciding who will act
under whom, who will be his subordinates, what will be his span of control and what
will be his status in the organization. Besides these formal relationships, some
informal organizations should also be developed.
Significance of Organization:
1) It Facilitated Administration and management: Organization is an important and the

only tool to achieve enterprise goals set b administration and explained by management.
Sound organization increases efficiency, avoids delay and duplication of work, increases
managerial efficiency, increases promptness, and motivates employees to perform their
responsibility.
2) It Help in the Growth of Enterprise: Good organization is helpful to the growth,

expansion and diversifications of the enterprise.
3) It Ensures Optimum Use of Human Resources: Good organization establishes persons

with different interests, skills, knowledge and viewpoints.
4) It Stimulates Creativity: A sound and well-conceived organization structure is the source

of creative thinking and initiation of new ideas.
5) A Tool of Achieving Objectives: Organization is a vital tool in the hands of the

management for achieving set objectives of the business enterprise.
6) Prevents Corruption: Usually corruption exists in those enterprises which lack sound
organization. Sound organization prevents corruption by raising the morale of employees.
They are motivated to work with greater efficiency, honesty and devotion.
7) Co-ordination in the Enterprises: Different jobs and positions are welded together by
structural relationship of the organization. The organizational process exerts its due and
balanced emphasis on the co-ordination of various activities.
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8) Eliminates Overlapping and Duplication or work: Over lapping and duplication of

work exists when the work distribution is not clearly identified and the work is performed in
a haphazard and disorganized way. Since a good organization demands that the duties be
clearly assigned amongst workers, such overlapping and duplication is totally eliminated.
Significance of Sound /Good Organization:
Organization is not an end it itself but a means to achieve an end. Whether an

organization is good or bad depends on the fact as to how much efficiently and promptly it is
in a position to achieve the objectives. Thus, a sound or good or ideal and result-oriented
organization must possess the following characteristics.
1) Realization of Objectives: Organization is tool of achieving objectives of an

enterprise. For this purpose, the organization should be divided in several department,
sub-departments, branches and units etc.
2) Harmonious Grouping of Functions etc: For achieving the organization objectives

there must be harmonious grouping of functions, jobs and sub-jobs in such a way so
that there is action, consultation and co-ordination without any delay and difficulty.
3) Reasonable Span of Control: Another characteristic of organization is that it should

have reasonable span of control. Ordinarily, a person (personnel) cannot control more
than five or six subordinates.
4) Clear-cut allocation of Duties and Responsibilities: There must be clear-cut

allocation of duties and responsibilities in any scheme of sound organization. Every
executive must know his scope of activities, the ideal number is three.
5) Promotion of Satisfaction: The most important element of any human organization

is the promotion of satisfaction of workers. Man works in a group or in an
organization and hence the success or failure of any organization depends on as to
how much the organization is in a position to provide satisfaction to individuals or
group working under him.
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6) Fullest Utilization of Manpower: Another important characteristic of an ideal

organization is as to how far it is successful in making fullest and economical
utilization of the available manpower.
7) Provision and Development and Expansion: Another important of an ideal

organization is that there exists the necessary provision for development and
expansion so that it is possible to expand and develop any organisation according to
needs and requirements and necessary changes an alternatives may be made.
8) Coordination and cooperation: In order to achieve the objectives of the enterprise,

there must be close coordination and cooperation in the activities of everybody
working in the organization. Further, there should also be active coordination and
cooperation amongst the various departments an sub-departments. It will also assist in
elimination the evil of red tapism.
9) Unity of Command: There must be unity of command. No one in any organization

should report to more than one line supervisor, and everybody must know to whom he
reports and who reports to him. No subordinate should get orders from more than one
supervisor; otherwise it will lead to confusion, chaos and conflict.
10) Effective System of Communication: An ideal organization must possess effective

system of communication. The inter-communication system should be clear and
easier and there should be no ambiguity at and level.
11) High Morale: An ideal organization is that in which the workers possess high morale.
They work with full capacity, energy, enthusiasm, devotion and sincerity.
12) Flexibility: The last but not the least important characteristic of an ideal organization
is that it should be flexible so that necessary changes an modifications in the the size
of the organization as well as technology could be easily and conveniently effected.
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Steps in the Process of Organization:
Organization means identifying, arranging and integrating different elements of

organization into efficient working order. It requires the management to follow the following
process of organization.
 Division of work
The main function is divided into sub-functions and entrusted to the different
departmental heads. The result is the establishment of departments like Purchase, Sales,
Production, Accounts, Publicity and Public relations. The departments can be further
classified just as production department into (1) Planning (2) Designing, (3) Operations, (4)
Production Control and (5) Repairs and Maintenance. The division of the work is based upon
the fact that specialization is keynote of efficient organization.
 Grouping of Job and Departmentation
The second step is to group similar or related jobs into larger units, called departments,
divisions or sections. Grouping process is called departmentation. The department may be
based upon functions such as manufacturing, marketing and financing etc. Department may
also be based on products, such as textiles, cosmetic, stationery etc. These departments may
have different sections as per requirement. Grouping jobs or Departmentation aims at
achieving coordination and facilitates unity of efforts. The departments are linked together on
the basis of interdependence. The divided task is assigned to specific individual or group of
individuals who are supposed to be the most qualified and specialized persons for the task.
 Assigning duties
The work to be performed by every individual is clearly defined and made known to him.
Everyone must know what he is required to do in order to avoid any misunderstanding,
duplication or overlapping in the work.
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 Granting authorities and fixing responsibilities
Assigning of duties to individuals must coincide with the appropriate and relevant
authorities. Every employee must know, what the authorities granted to him and for what and
to whom he will be responsible, liable and accountable.
 Delegation of authority
Those who are made responsible for specific tasks are given due authority. Both
responsibility and authority go hand in hand together. Reasonable powers are delegated to
heads and supervisory staff to enable them to do their work with ease and efficiency.
 Effective communication
Effective communication is the keynote of efficient organization. There should be proper

arrangement of communication messages from executives to subordinates and vice-versa.
Proper communication system establishes harmonious relationship between employees and
enables execution of work in the right manner at the appropriate time and in an atmosphere of
perfect mutual adjustment.
 Co-ordination of activities for common objectives
Business activity is a team work or the group activity, so the efforts of every employee
must be co-ordinate effectively to achieve the common objectives of the enterprise.
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Types of organization:
1) Static Organizations:
Fixed practices, fixed size. Like static equations, these organizations have no
variables. time doesn't change them significantly. They persist until some new organization
occupies their niche.
2) Dynamic Organizations:
Fixed practices, variable size. Like dynamic equations, these organizations vary in
size over time, even though their underlying practices don't change much. They go through a
single life cycle, each growing rapidly as it occupies its niche, then declining as its
competitors implement better practices that steal away its clients.
3) Adaptive Organizations:
Variable practices, variable size. Like complex adaptive systems, these organizations
vary their practices, seeking the constant improvement that launches life cycle after life cycle,
creating new products, services, and processes that hold on to clients generation after
generation.
They will soon motivate employees to climb adaptation curves by using ISOPs to
fairly share the wealth that each innovation creates. ISOPs ensure that the innovator, the
predecessors, and each shareholder in the corporation benefits.
They will displace dynamic and static organizations in economic competition, so that
within a generation, most people will have learned to expect continual improvement in their
life experience. The fact that their ancestors once worked at the same job in the same way for
an entire lifetime will seem almost as incredible as the fact that people used to stay at jobs
they didn't thoroughly enjoy.
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A Business Ownership:
A Business ownership should be structured according to the needs of the owners and
potentially liability that the business could incur. The different types of business ownership
are:
1) Limited Partnerships
2) A Corporation
3) Limited Liability Corporations
4) Sole Proprietorship and Partnership
5) Nonprofit Corporations
6) Cooperatives
7) Private Corporation:
1) Limited Partnerships:
This type of business organization is costly and complicated to prepare. It is not

recommended for the average small business owner. Limited partnerships are usually created
by one person or company who solicits investments from others. The people who invest are
considered the limited partners. The general partner is in charge of the business's everyday
operations. They are personally liable for business dents. Limited partners have little control
over daily business decisions or operations. Because of this they are not personally liable for
business debts or claims.
Limited partnerships are costly and complicated to set up and run, and are not
recommended for the average small business owner. Limited partnerships are usually created
by one person or company, the "general partner," who will solicit investments from others --
who will be the limited partners.
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The general partner controls the limited partnership's day-to-day operations and is
personally liable for business debts (unless the general partner is a corporation or an LLC).
Limited partners have minimal control over daily business decisions or operations and, in
return, they are not personally liable for business debts or claims. Consult a limited
partnership expert if you're interested in creating this type of business
2) A Corporation
The most significant benefit to forming a corporation is that it limits the owners'
personal liability for business dents and any court judgments against the business. A
corporation is an independent legal and tax entity. This sets it apart from other types of
businesses. The owners do not use their personal tax returns to pay tax on corporate profits
because the corporation itself pays these taxes. Any money drawn from the corporation in the
form of salaries, bonuses, etc is paid by the owners in their personal income tax returns.
3) Limited Liability Corporations
Limited Liability Corporations provide their owners just that, limited personal
liability for business debts and claims. However, LLCs resemble partnerships when it comes
to taxes. The owners of an LLC pay taxes on their shares of the business income on their
personal tax returns. This type of organization is good for business owners who either Could
be sued by customers run the risk of piling up a lot of debt have substantial personal assets
they want to protect.
4) Sole Proprietorship and Partnership
A sole proprietorship, or partnership, is the ideal ownership structure for an up and

coming business or the average small business. They do not have to be registered with the
state and go into effect as soon as one person goes into business with themselves or two or
more people go into business together. Any business income is reported on the owner's
personal income taxes. They are also personally liable for any business debts or court
decisions against the business.
Before you can decide on an ownership structure for your business, you must learn at
least a little bit about how each structure works. Here's a brief rundown of the most common
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forms of doing business: For many new businesses, the best initial ownership structure is
either a sole proprietorship or -- if more than one owner is involved -- a partnership.
A sole proprietorship is a one-person business that is not registered with the state as a
limited liability company (LLC) or corporation. You don't have to do anything special or file
any papers to set up a sole proprietorship. You create one just by going into business for
yourself. Legally, a sole proprietorship is inseparable from its owner. The business and the
owner are one and the same. This means the owner of the business reports business income
and losses on her personal tax return and is personally liable for any business-related
obligations, such as debts or court judgments.
Similarly, a partnership is simply a business owned by two or more people that hasn't
filed papers to become a corporation or a limited liability company (LLC). No paperwork
needs to be filed to form a partnership. The arrangement begins as soon as you start a
business with another person. As in a sole proprietorship, the partnership's owners pay taxes
on their shares of the business income on their personal tax returns and they are each
personally liable for the entire amount of any business debts and claims.
Sole proprietorships and partnerships make sense in a business where personal

liability isn't a big worry. For example, A small service business in which you are unlikely to
be sued and for which you won't be borrowing much money for inventory or other costs.
5) Nonprofit Corporations
A nonprofit corporation is a corporation formed to carry out a charitable, educational,

religious, literary or scientific purpose. A nonprofit can raise much-needed funds by receiving
public and private grant money and donations from individuals and companies. The federal
and state governments do not generally tax nonprofit corporations on money they make that
is related to their nonprofit purpose, because of the benefits they contribute to society.
6) Cooperatives
Some people dream of forming a business of true equals. an organization owned and
operated democratically by its members. These grassroots business organizers often refer to
their businesses as a "group," "collective" or "co-op" but these are usually informal rather
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than legal labels. For example, a consumer co-op could be formed to run a food store, a
bookstore or any other retail business. Or a workers' co-op could be created to manufacture
and sell arts and crafts.
7) Private Corporation:
A business that is a legal entity created by the state whose assets and liabilities are
separate from its owners. While there are also public corporations. Who stock (and
ownership) is traded on a public stock exchange. Most small businesses are (or at least start
as) private corporations. A private corporation is owned by a small group of people who are
typically involved in managing the business. Forming a corporation requires developing a
legal document called the "Articles of Incorporation" and submitting them to the state in
which the corporation wishes to reside. Advantages of a corporation include limited liability.
An owner (stockholder) can only lose up to the amount s/he invested; unlimited lifespan. a
corporation is charted to last forever unless its articles of incorporation state otherwise; great
sources of funding; and ease of transfer of ownership. Disadvantages include double taxation.
The corporation, as a legal entity, must pay taxes, and then shareholders also pay taxes on
any dividends received.
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Company Vision:
Corporate vision is a short, succinct, and inspiring statement of what the organization
intends to become and to achieve at some point in the future, often stated in competitive
terms. Vision refers to the category of intentions that are broad, all-inclusive and forward-
thinking. It is the image that a business must have of its goals before it sets out to reach
them. It describes aspirations for the future, without specifying the means that will be used to
achieve those desired ends.
Warren Bennis, a noted writer on leadership, says: "To choose a direction, an

executive must have developed a mental image of the possible and desirable future state of
the organization. This image, which we call a vision, may be as vague as a dream or as
precise as a goal or a mission statement."
Core values include:
Safety – Safety serves as a barometer of our company’s overall success and is a specific
measure of our operating excellence.
Trust – Trust is the mutual respect for and confidence in people. Trust recognizes the
importance of individuals and appreciates their diverse opinions. Trust compels us to share
information and encourage new ideas. It requires an open, honest, forthright manner.
Confidence – Self-confident people take initiative, handle the unexpected, stand behind their
convictions and support the efforts of others. They take bold, innovative, creative actions,
capitalize on opportunities, make sound decisions quickly, and mobilize the best resources for
rapid action.
Teamwork – Teamwork is personal involvement and collaboration in a team environment. It

includes setting a common goal in support of business objectives, making an individual
commitment to the team’s success and recognizing the success of the team.
Accountability – Being accountable means every employee assumes ownership and

responsibility for his or her own work, regardless of the job they perform. Being accountable
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means making decisions and holding oneself responsible for the consequences of those
choices.
Doing What’s Right – Doing what’s right is being honest, ethical, and having personal and
professional integrity. It means consistently treating all people fairly, delivering on promises,
and taking personal responsibility for your actions.
Quality – Quality is the primary determinant of customer satisfaction and loyalty, and it
requires employees to continuously provide internal and external customers with the right
product or service...done right...the first time. In today’s increasingly competitive business
environment, better quality translates into better value for our customers and, subsequently,
better value for their customers-and this is the very essence of competitive differentiation.
Mission:
Most businesses have some form of mission statement ,whether they know it or not.
For example, other names for a mission include: founder's philosophy, statement of purpose,
business philosophy. An organization's mission describes its fundemental purpose and overall
philosophy. A mission statement (what we are) is different than a vision statement (what we
want to become).
Mission statement:
 Provides thrust and direction to the organization.

 Cornerstone of all strategic planning.
A mission statement is an organization's vision translated into written form. It makes

concrete the leader's view of the direction and purpose of the organization. For many
corporate leaders it is a vital element in any attempt to motivate employees and to give them
a sense of priorities.
A mission statement should be a short and concise statement of goals and priorities.
In turn, goals are specific objectives that relate to specific time periods and are stated in
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terms of facts. The primary goal of any business is to increase stakeholder value. The most
important stakeholders are shareholders who own the business, employees who work for the
business and clients or customers who purchase products and/or services from the business.
The mission statement should be a clear and succinct representation of the enterprise’s
purpose for existence. It should incorporate socially meaningful and measurable criteria
addressing concepts such as the moral/ethical position of the enterprise, public image, the
target market, products/services, the geographic domain and expectations of growth and
profitability.
The intent of the Mission Statement should be the first consideration for any
employee who is evaluating a strategic decision. The statement can range from a very simple
to a very complex set of ideas.
Specific:
The Mission Statement should represent the broadest perspective of the enterprise's
mission. You may want to take the approach of being very specific. For instance, a Mission
Statement for a fictitious airline could be worded as follows: Your mission statement is an
opportunity to define your business at the most basic level. It should tell your company story
and ideals in less than 30 seconds: who your company is, what you do, what you stand for,
and why you do it. Do you want to make a profit, or is it enough to just make a living? What
markets are you serving, and what benefits do you offer them? Do you solve a problem for
your customers? What kind of internal work environment do you want for your employees?
All of these issues may be addressed in a mission statement.
Other ways to think about a mission statement as you begin to write one include:
 Answers the question, “What business are we in?”

 Provides thrust and direction to the organization.
 Must be market-oriented (focusing on the problem the business is solving), not
product-oriented.
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Basic guidelines in mission:
 Your mission statement is about you, your company, and your ideals.
 Don’t “box” yourself in.
 Keep it short.
 Ask for input.
Goals:
The major outcome of strategic road-mapping and strategic planning, after gathering
all necessary information, is the setting of goals for the organization based on its vision and
mission statement. A goal is a long-range aim for a specific period. It must be specific and
realistic. Long-range goals set through strategic planning are translated into activities that
will ensure reaching the goal through operational planning.
Some company Goals may be as follows:
 To promote a profitable and sustainable business activity that meets the customers
needs.
 To increase the company's market share.
 To gain the competitive edge.
 To increase the company's role in relations to social responsibility.
 To provide excellent customer service.

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Structure of Organization:
MANAGING DIRECTOR
QUALITY MANAGER
OPERATION MGR
MAREKTING MANAGER FINANCE MANAGER
OFFICE ADIMINSTRTOR
PROJECT MANAGER ESTIMATOR
BULDING CADETS SITE FOREMEN
An organizational structure is a mainly hierarchical concept of subordination of

entities that collaborate and contribute to serve one common aim. Organizations are a variant
of clustered entities. An organization can be structured in many different ways and styles,
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depending on their objectives and ambience. The structure of an organization will determine
the modes in which it operates and performs. Organizational structure allows the expressed
allocation of responsibilities for different functions and processes to different entities such as
the branch, department, workgroup and individual. Individuals in an organizational structure
are normally hired under time-limited work contracts or work orders, or under permanent
employment contracts or program orders.
In order to achieve the desired goals, sound and effective organizational structure is
necessary. Organizational structure, as we know is the system of job positions, roles assigned
to these positions and specifying authority, responsibility and task of every positions. The
structure undoubtedly provides basic framework for executive and employees to perform
their task smoothly.
The following points must be taken into consideration while building organizational
structure:
 Job design
Jobs should be designed in such a way, that job should have specified and defined task to
be performed. Jobs should be designed in such fashion that every individual could contribute
his maximum worth to the enterprise. The major and related activities of the jobs should also
be specified.
 Departmentation or Grouping of Identical Jobs
Identical and similar jobs should be grouped together in a department and placed under a
departmental head. Such departmentation will help in building coordination between different
jobs and managers. Departments can be established on different basis. It may have
production, marketing and finance departments, if it is based upon functions.
 Span of Control
Under span of control, the number of employees and jobs managed by each manager is
specified. The chain of command is also clearly stated. It is specified that who will report
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who is the smooth performance of his duties. Effective span of control avoids overlapping,
duplication and confusion in the work.
 Delegation of Authority
In order to get the job done properly and smoothly, requisite authorities are granted to the
managers. Authority is the power to command employees and instruct them to do a piece of
work. The authority empowers to know certain facts, to enjoy privileged position and
command respect and obedience from employees. Delegation is no doubt, sharing task with
requisite authority with subordinates. As such the manger multiplies himself through
delegation.
Organizational structures types:
 Pre-bureaucratic structures
Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. This structure

is most common in smaller organizations and is best used to solve simple tasks. The structure
is totally centralized. The strategic leader makes all key decisions and most communication is
done by one on one conversations. It is particularly useful for new (entrepreneurial) business
as it enables the founder to control growth and development.
They are usually based on traditional domination or charismatic domination in the sense
of Max Weber's tripartite classification of authority.
 Bureaucratic structures
Bureaucratic structures have a certain degree of standardization. They are better suited for
more complex or larger scale organizations. They usually adopt a tall structure. Then tension
between bureaucratic structures and non-bureaucratic is echoed in Burns and Stalker
distinction between mechanistic and organic structures. It is not the entire thing about
bureaucratic structure. It is very much complex and useful for hierarchical structures
organization, mostly in tall organizations.
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 Post-bureaucratic
The term of post bureaucratic is used in two senses in the organizational literature. One
generic and one much more specific. In the generic sense the term post bureaucratic is often
used to describe a range of ideas developed since the 1980s that specifically contrast
themselves with Weber's ideal type bureaucracy. This may include total quality management,
culture management and matrix management, amongst others. None of these however has left
behind the core tenets of Bureaucracy. Hierarchies still exist, authority is still Weber's
rational, legal type, and the organization is still rule bound. Heckscher, arguing along these
lines, describes them as cleaned up bureaucracies, rather than a fundamental shift away from
bureaucracy.
Gideon Kunda, in his classic study of culture management at 'Tech' argued that “the
essence of bureaucratic control - the formalization, codification and enforcement of rules and
regulations - does not change in principle.....it shifts focus from organizational structure to the
organization's culture”.
Another smaller group of theorists have developed the theory of the Post-Bureaucratic
Organization; provide a detailed discussion which attempts to describe an organization that is
fundamentally not bureaucratic. Charles Heckscher has developed an ideal type, the post-
bureaucratic organization, in which decisions are based on dialogue and consensus rather
than authority and command, the organization is a network rather than a hierarchy, open at
the boundaries (in direct contrast to culture management); there is an emphasis on meta-
decision making rules rather than decision making rules. This sort of horizontal decision
making by consensus model is often used in housing cooperatives, other cooperatives and
when running a non-profit or community organization. It is used in order to encourage
participation and help to empower people who normally experience oppression in groups.
Employees within the functional divisions of an organization tend to perform a

specialized set of tasks, for instance the engineering department would be staffed only with
software engineers. This leads to operational efficiencies within that group. However it could
also lead to a lack of communication between the functional groups within an organization,
making the organization slow and inflexible.
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As a whole, a functional organization is best suited as a producer of standardized goods

and services at large volume and low cost. Coordination and specialization of tasks are
centralized in a functional structure, which makes producing a limited amount of products or
services efficient and predictable. Moreover, efficiencies can further be realized as functional
organizations integrate their activities vertically so that products are sold and distributed
quickly and at low cost. For instance, a small business could start making the components it
requires for production of its products instead of procuring it from an external organization.
But not only beneficial for organization but also for employees faiths.
 Divisional structure
Also called a "product structure", the divisional structure groups each organizational
function into a division. Each division within a divisional structure contains all the necessary
resources and functions within it. Divisions can be categorized from different points of view.
There can be made a distinction on geographical basis (a US division and an EU division) or
on product/service basis (different products for different customers: households or
companies). Another example, an automobile company with a divisional structure might have
one division for SUVs, another division for subcompact cars, and another division for sedans.
Each division would have its own sales, engineering and marketing departments.
 Matrix structure
The matrix structure groups employees by both function and product. This structure can
combine the best of both separate structures. A matrix organization frequently uses teams of
employees to accomplish work, in order to take advantage of the strengths, as well as make
up for the weaknesses, of functional and decentralized forms. An example would be a
company that produces two products, "product a" and "product b". Using the matrix structure,
this company would organize functions within the company as follows: "product a" sales
department, "product a" customer service department, "product a" accounting, "product b"
sales department, "product b" customer service department, "product b" accounting
department.
Matrix structure is amongst the purest of organizational structures, a simple lattice

emulating order and regularity demonstrated in nature.
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 Weak/Functional Matrix: A project manager with only limited authority is assigned

to oversee the cross- functional aspects of the project. The functional managers
maintain control over their resources and project areas.
 Balanced/Functional Matrix: A project manager is assigned to oversee the project.
Power is shared equally between the project manager and the functional managers. It
brings the best aspects of functional and projectized organizations. However, this is
the most difficult system to maintain as the sharing power is delicate proposition.
 Strong/Project Matrix: A project manager is primarily responsible for the project.
Functional managers provide technical expertise and assign resources as needed.
Among these matrixes, there is no best format; implementation success always depends on
organization's purpose and function.
Common success criteria for organizational structures are:
 Decentralized reporting
 Flat hierarchy
 High transient speed
 High transparency
 Low residual mass
 Permanent monitoring
 Rapid response
 Shared reliability
 Matrix hierarchy
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Functional Pattern:
Following are the main departments in any organization:
1. Finance and accounts
2. Marketing and Sales
3. Human resource and administration
4. Technical / Operations
Other departments depend on the size of the organization, like
1. Logistics
2. Procurement
3. Treasury department- sub dept of finance and accounts
 System:
Systems have inputs, processes, outputs and outcomes. To explain, inputs to the system
include resources such as raw materials, money, technologies and people. These inputs go
through a process where they're aligned, moved along and carefully coordinated, ultimately
to achieve the goals set for the system. Outputs are tangible results produced by processes in
the system, such as products or services for consumers. Another kind of result is outcomes, or
benefits for consumers, e.g., jobs for workers, enhanced quality of life for customers, etc.
Systems can be the entire organization, or its departments, groups, processes, etc.
 Policy:
Usually, a documented set of broad guidelines, formulated after an analysis of all

internal and external factors that can affect a firm's objectives, operations, and plans.
Formulated by the firm's board of directors, corporate policy lays down the firm's response to
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known and knowable situations and circumstances. It also determines the formulation and
implementation of strategy, and directs and restricts the plans, decisions, and actions of the
firm's officers in achievement of its objectives.
 People:
People management can be defined as the process of controlling and monitoring

individuals. The concept of people management is widely used in organizations where the
manager's most important task is to manage people. In order to increase the efficiency of the
people the manager has to lead, motivate and inspire people. Sometimes rules are defined to
manage people like time lines, duties etc. In order to manage the people Human Resource
Departments are established in the organizations. These departments are specifically
responsible to deal with people of organization.
We can, however, classify people into 4 main roles within a business.
Employer:
The role of people as employer means that an individual may represent a business and
hire workers for the business. The employer has a number of responsibilities which include
providing a safe and healthy working environment and at least the National Minimum Wage.
Employee:
The vast majority of people in business are employees. An employee is recruited to

provide a service for the business in one or more of the functional areas of a business. This
might be in administration, accounts, marketing, sales, and production and so on. The service
might be physical (for example the contribution made by miners extracting coal or an
individual employed to clean the streets) or mental (for example the work carried out by a
solicitor). In return for the service they offer to the business the employee expects to receive a
payment in the form of a wage or salary.
Employees provide a wide range of different services to a business. People are hired
because of the contribution that they make to the business. This can be the skills that the
worker brings to the job, their creativity, effort, personality and so on. What does the person
who operates this machine bring to a business? Copyright: Adrian Adrian, from stock.xchng.
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Manager:
Because there are lots of resources that are needed to carry out production, someone
or a group of people, have to take some responsibility to manage all these resources. A
manager is a person who carries out some form of direction and control of resources in a
business or organization. In many cases they may also be owners of a business or employees.
Management can be found in business organizations at different levels. Managers might

come in for some criticism at times but without their skills, many businesses would not
survive. Copyright: Constantine Kemmerer, from stock.xchng.
Shareholder/Owner:
Some people take on the role of business owners. They might be in a position of setting
up their own small business and taking a very direct role in running the business or they can
be a shareholder in a large business organization and have very little to do with the day to day
running of the business. Shareholders in private limited companies might not only be owners
but might also be heavily involved in running the business
 Problem:
An effective service organization is made up of people who are basically all pointing
in the same direction – that is, they are in agreement about the reason for the organization to
exist, and what they would like to see the organization achieve. If there are very basic
disagreements about such matters, it is likely that the organization will not be effective, and
will spend its time arguing and posturing.
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SWOT analysis:
SWOT analysis is a strategic planning method used to evaluate the Strengths,

Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It
involves specifying the objective of the business venture or project and identifying the
internal and external factors that are favorable and unfavorable to achieve that objective. The
technique is credited to Albert Humphrey, who led a convention at Stanford University in the
1960s and 1970s using data from Fortune 500 companies.
A SWOT analysis must first start with defining a desired end state or objective. A SWOT
analysis may be incorporated into the strategic planning model. Strategic Planning, has been
the subject of much research.[
 Strengths: attributes of the person or company those are helpful to achieving

the objective(s).
 Weaknesses: attributes of the person or company that is harmful to achieving
the objective(s).
 Opportunities: external conditions those are helpful to achieving the
objective(s).
 Threats: external conditions which could do damage to the objective(s).
Identification of SWOTs is essential because subsequent steps in the process of planning

for achievement of the selected objective may be derived from the SWOTs.
First, the decision makers have to determine whether the objective is attainable, given the
SWOTs. If the objective is NOT attainable a different objective must be selected and the
process repeated. The SWOT analysis is often used in academia to highlight and identify
strengths, weaknesses, opportunities and threats. It is particularly helpful in identifying areas
for development.
 What is SWOT Exercise?

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A SWOT Exercise is a powerful technique for uncovering and understanding your

Strengths and Weaknesses, and for looking at the Opportunities and Threats you face.
 Why SWOT?
It helps you carve a sustainable niche in your market by taking the best advantage of your
resources, talents, capabilities and opportunities. SWOT builds alignment. SWOT is a ground
up approach allowing everyone in the exercises to have a voice thus, increasing buy-in and
resulting in a higher level of execution. In general, Strengths and Weaknesses are internal to
your organization while Opportunities and Threats often relate to external factors.
 SWOT Benefits.
What makes SWOT particularly powerful is that it helps you uncover opportunities that
you are well- placed to exploit. And by understanding the weaknesses of your business, you
can manage and eliminate threats that could affect you negatively. Using the SWOT
framework to assess your strengths and that of your competitors’, you can analyze the
competitive landscape and develop a strategy that helps you differentiate yourself from your
competitors, so that you can compete successfully in your market.
 SWOT Categories.
1) Product (what are we selling?)
2) Process (how are we selling it?)
3) Customer (to whom are we selling it?)
4) Distribution (how does it reach them?)
5) Finance (what are the prices, costs and investments?)
6) Administration (and how do we manage all this?)

AAA
 How can SWOT help me?
SWOT identifies critical-to-mission objectives. Once identified, strategy is then defined,

ownership assigned and tasks executed that will get you to the next level in performance.
 SWOT Results. :
SWOT essentially tells you what is good and bad about a business or a particular
proposition. If it's a business, and the aim is to improve it, then work on translating: strengths
(maintain, build and leverage) , opportunities (prioritize and optimize) , weaknesses (remedy
or exit) , threats (counter) into actions (each within one of the six categories) that can be
agreed and owned by a team or number of teams.
 Origins of SWOT.
SWOT analysis came from the research conducted at Stanford research Institute from 1960-
1970. The background to SWOT stemmed from the need to find out why corporate planning
failed. The research was funded by the fortune 500 companies to find out what could be done
about this failure. The Research Team was Marion Dosher, Dr Otis Benepe, Albert
Humphrey, Robert Stewart, and Birger Lie.

Executive Summry of Amway

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EXCEL BUSINESS ACADEMY

(India’s Premium Techno Management B-School)

The important factor important to study is Organization. It is the foundation upon

The Mission of organization should represent the broadest perspective of the

The most important topic is an organizational structure is a mainly hierarchical

The Amway/Amway Global, a subsidiary of Alticor, is marketing nutritional

Amway India plans 170 new branches by 2013

Eyes 25% y-o-y growth for the next five years.

The Meaning of Business:

Great quote on Worthwhile by Mark Kaiser on the meaning of business:

A business is a legally recognized organization designed to provide goods or services,

The main branches of management are financial management, marketing

2. The initiation and maintenance of an investment portfolio.

Because organizations can be viewed as systems, management can also be defined as

Basic functions of management:

 Organizing: (Implementation) making optimum use of the resources required to

Business administration consists of the performance or management of business

“The universal process of organizing people and resources efficiently so as to direct

In some organizational analyses, management is viewed as a subset of administration,

For a large corporation, business administration is going to include international and

Business administration will always include the intangible quality of leadership;

Business administration includes an understanding of entrepreneurship: tax structures

Management vs. Administration:

1) Administration is a determinative function, while management is an executive function.

4) Administrators are usually found in government, military, religious and educational

2. Administration is a determinative function, while management is an executive function.

3. Administration makes the important decisions of an enterprise in its entirety, whereas

4. Administrators are mainly found in government, military, religious and educational

The following are the types of business,

Agriculture encompasses a wide variety of specialties and techniques, including ways

The nature of mining processes creates a potential negative impact on the

Intellectual property (IP) is a term referring to a number of distinct types of

Organization is the foundation upon which the whole structure of

An organization is a social arrangement which pursues collective goals, controls its

 Organization – process-related: an entity is being (re-)organized (organization as task

The 'organization' is used in four different senses: as a process, as a structure of relationship,

1)Organization as a Process: In this first sense, organisation is treated as a dynamic process

2) Organization as a Framework of Relationship: In the second sense organisation refers

4) Organization as a System: In the fourth sense, the organisation is viewed as system.

In short, organizing is the determining, grouping and arranging of the various

 According to keith Davis, "Organization may be defined as a group of individuals,

 According to Louis A. Allen, "Organization is the process of identifying and grouping

Social unit of people systematically arranged and managed to meet a need or to

5) Creating Authority Relationship: After assigning the duties and delegations of

1) It Facilitated Administration and management: Organization is an important and the

2) It Help in the Growth of Enterprise: Good organization is helpful to the growth,

3) It Ensures Optimum Use of Human Resources: Good organization establishes persons

4) It Stimulates Creativity: A sound and well-conceived organization structure is the source

5) A Tool of Achieving Objectives: Organization is a vital tool in the hands of the

8) Eliminates Overlapping and Duplication or work: Over lapping and duplication of

Significance of Sound /Good Organization:

Organization is not an end it itself but a means to achieve an end. Whether an

1) Realization of Objectives: Organization is tool of achieving objectives of an

2) Harmonious Grouping of Functions etc: For achieving the organization objectives

3) Reasonable Span of Control: Another characteristic of organization is that it should

4) Clear-cut allocation of Duties and Responsibilities: There must be clear-cut

5) Promotion of Satisfaction: The most important element of any human organization

6) Fullest Utilization of Manpower: Another important characteristic of an ideal

7) Provision and Development and Expansion: Another important of an ideal

8) Coordination and cooperation: In order to achieve the objectives of the enterprise,

9) Unity of Command: There must be unity of command. No one in any organization

10) Effective System of Communication: An ideal organization must possess effective