Professional Documents
Culture Documents
Syllabus
Scheme of Assessment
Marketing Finance 50M
Marketing Finance
Impact of marketing policies on a firm’s working capital
Credit policy, credit rating, credit recovery & overall receivables management
Finished stock policy, stock out & loss of profit, optimal stock holding
Break Even Analysis and Marketing decisions like pricing, product mix, expansion etc
Brand Valuation
Personnel Finance
Job Evaluation as the basis of Wage and Salary Administration
Determining optimal fringe benefits and salary of executives in relation to profitability and size
of operations of a company using DCF techniques
Cost analysis for areas such as labour and executives turnover, cost of recruitment training and
development, cost of employment programmes
Motivational Accounting
Marketing Perspective
Understanding Terminology in Marketing
Markets
Traditionally market is a physical place where buyers & sellers gather to buy & sell goods.
Economist describe a Market as collection of buyers & sellers who transact over a particular product.
Seller hands over the goods to the buyer for some monetary consideration.
Marketing
Marketing in simplest form is meeting needs profitably.
Marketing deals with identifying & meeting human & social needs.
As per social definition Marketing is a societal process by which individuals / groups obtain what
they need & want through creating, offering & freely exchanging products & services of value
with others.
value to customers and for managing customer relationships in ways that benefit the
organization & its stake holders.
Exchange is the process of obtaining a desired product from someone by offering something in
return.
When two parties engaged in exchange reach an agreement, a transaction takes place.
To make successful exchange, marketer analyzes what each party expects from the transaction.
He seeks to elicit a behavioral response from another party called the prospect.
Marketer must try to understand the target market’s needs, wants & demands.
Needs become wants when they are directed to specific objects that might satisfy the need.
“ Wants “ of Mumbai youth, when hungry, may be Pizza & soft drink whereas those of village
youth may be ” Dal , rice, roti & vegetable.
Marketer’s job becomes difficult if the customer is not fully conscious of his needs & wants or is
not able to articulate them properly.
Value – The foundation of Marketing
Value is the price the person pays to perform a specific function in an efficient way.
Value can not be easily specified because it changes from person to person & time to time.
The buyer gets the best value when he incurs the least cost for an essential function or service
with the required quality & reliability.
The marketer endeavors to create, communicate & deliver value to his target customer.
Process of Marketing
• Wants list of a Prospect in Business Environment includes-
-Good quality product, Fair price, Timely delivery, Attractive financing terms, Reliable parts &
service
- Good price for the product, On time payment. +ve word of mouth.
If there is sufficient match or overlap in the want lists, a basis for transaction exists & may take place on
mutually acceptable terms.
• Win win situation is achieved for both the parties, when the solution is found to customer’s
needs economically & conveniently.
Selling concept
Selling concept aims at selling what the firm makes or produces & is used when there is overcapacity.
Their proponents try to sell more stuff to more people, more often, for more money in order to make
more profit.
Marketing Concept
As per this concept, Marketing job is not to hunt for the right customers for your products, but
to offer the right product to your customers.
He believes that if the company is more effective than its competitors in creating ,delivering &
communicating superior customer value to its chosen target markets, organizational goals will
be achieved by getting, keeping & growing customer base.
Selling involves preoccupation with the seller’s need of converting his product into cash.
Marketing is concerned with the idea of satisfying the needs & wants of the customer by means
of the products & whole cluster of things associated with creating, delivering & finally
consuming it.
Meeting expressed or stated needs of the customer is fairly simple but identifying his implied
needs & understanding his latent requirements is quite complex.
Marketing Policy
Marketing Policy includes developing action plans for
- connecting with customers
In short they aim at creating, communicating & delivering value to the target customer.
Marketing Mix
For implementation of Marketing Policy, the main focus of the Marketing manager is on
organizing value – enhancing marketing activities while keeping marketing costs to the
minimum.
Traditionally marketing activities are depicted through Marketing Mix which is defined as the set
of Marketing tools the firm uses to achieve its Marketing Objectives.
They are classified into four broad groups which are popularly known as four Ps of Marketing.
Viz. Product, Price, Promotion & Place .
Marketing Tools
Four P components of the Marketing Mix & variables under each P are-
Product
Variety, Quality, Design, Features, Brand Name, Packaging, Sizes, Services, Warranties, Returns.
Price
Promotion
Buyer’s Perspective
From a marketer’s perspective, the four “P”s represent the marketing tools available for
influencing buyers.
From Buyer’s point of view, each Marketing tool is designed to deliver a benefit to the customer.
Against each “ P” of the marketer there is a corresponding “ C” which provides Value to the
customer & influences his buying decision.
Parameters in Transaction
Marketer Customer
Product ( Variety, Quality, Design, Features, Brand name, Packaging, Sizes, Customer Solution
Services, warranties, returns)
Price ( List price, Discounts, Allowances, Payment Period, Credit terms, ) Customer Cost
Promotion ( sales promotion, Advertising, ,sales Force, Public relations, Direct Communication
Marketing )
Finance Perspective
Impact of Marketing policy on Working Capital
The relevant constituents of Working Capital & functions responsible for their management &
control are –
- Debtors ( Marketing )
- Stocks
( R.M. - Materials,
W.I.P. – Manufacturing,
F.G. - Marketing )
- Cash - ( Operations)
- Creditors - Materials
One of the main aims is to reduce the amount of short-term finance that is needed to borrow
for day – to – day operations.
The more money that is tied up in current assets, the more capital is needed to finance those
current assets.
Essentially a company uses short-term borrowings to finance its stock, debtors or cash needs.
Internal Financing
• Efficiently managed companies try to minimize their levels of working capital so as to avoid
short-term borrowings.
• Each element or constituent of working capital needs to be monitored & controlled closely.
• Working capital largely depends on the section of industry the firm operates in.
• For restaurants, supermarkets, malls etc. where customer has to pay before he leaves the
premises, the working capital requirement may be negative & correspondingly the internal
financing needs may be near zero.
Cash
Cash is the lifeblood of a business.
Business needs cash to survive and will try to keep enough cash to manage its day-to-day
operations (e.g. purchase stock and pay creditors), but not to maintain excessive amounts of
cash.
Cash budgets are prepared which enable to forecast the levels of cash needed to finance the
operations.
Liquidity and quick ratios are used to assess the level of cash requirement.
Despite careful cash management if the short-term cash requirements are insufficient then the
business will have to borrow.
Debtors
For control of working capital debtors management is a key activity.
Careful monitoring of the receipts from debtors is essential to see that they are received in full
and on time.
In short marketing has to profile the age of the debts and old debts need to be quickly identified
before they turn bad.
Marketing Perspective
Out of 4 marketing tools, two have direct bearing on Current Assets or Gross Working Capital.
Here the term “Price” is used in generic manner & encompasses all its variables like discounts,
credit period, payment terms.
Price
Price is the major determinant of a buyer’s choice.
Although non price factors are also quite important at times, price by far remains the most
important factor in determining sales and profitability.
Pricing gets modified by discounts, credit terms, payment period etc. because of –
- Competitive pressures.
Each price leads to a different level of demand and therefore has a different impact on a
company’s marketing objectives.
The marketers draw demand curves to show relation between alternative prices and the
resulting current demand.
In the normal case, demand and price are inversely related i.e. the higher the price the lower
the demand.
The slope of the demand curve depends upon the elasticity (responsiveness ) of demand w,r,t,
price.
Price
Price
The demand curve having a very steep slope shows inelastic behavior of Demand w.r.t. price.
Demand for essential commodities is less price sensitive or inelastic.
Demand for luxury ( non essential ) goods is largely dependent on or over responsive to price
changes i.e. highly elastic.
The company wants to charge a price that covers its cost of producing, distributing, and selling
the product, including a fair return for its effort and risk.
To price intelligently management needs to know how its costs vary with different levels of
production.
Price determinants
The price demand curve provides the range within which the price needs to be fixed.
- Assessment of the unique features of the product establishes the price ceiling .
2) Cost
- The cost function sets the floor to the price. When the company tries to recover the full cost , the
net result is not necessarily the highest profitability.
3) Competitors’ prices –
The key to perceived value pricing is to deliver more value than the competitor and to
demonstrate this to prospective buyers.
Company has to deliver the value promised by its value proposition & the customer must
perceive this value.
It uses other marketing mix elements like advertising, sales force, discounts, credit period,
payment terms etc. to communicate & enhance perceived value in buyer’s mind.
Perceived value is made up of several elements such as the buyer’s image of the product
performance, the channel deliverables, the warranty quality, customer support, & other softer
attributes such as supplier’s reputation, trustworthiness, & esteem.
For price buyers it offers stripped down products and reduced services.
For value buyers it must keep innovating new value and aggressively reaffirming their value.
For loyal buyers it must invest in relationship building and customer intimacy.
Basically the company must understand the decision making process of the buyer.
Finance Perspective
Constituents of Current Assets & their control.
Debtors collection model balances the extra revenue generated by increased sales with the
increased costs associated with extra sales. (i.e. credit control costs, bad debts and the delay in
receiving money).
The model assumes that the more credit granted, greater are the sales.
However, these extra sales are offset by increased bad debts as the company sells to less
trustworthy customers.
Whether the delay in receipts means that the business receives less interest or pays out more
interest depends on whether or not the bank account is overdrawn.
Usually the cost of capital (i.e. effectively the company’s borrowing rate) is used to calculate the
financial costs of delayed receipts.
- FIFO
- LIFO
During inflationary growth period FIFO results into deflated cost of production & sales with
resultant higher margins but inflated stock valuation.
During recessionary decline phase LIFO tends to give the same effect.
Two common techniques associated with efficient stock control are the economic order
quantity model and just-in-time ( JIT ) stock management.
This stock control measure falls within the domain of materials or Supply chain management
function.
The EOQ model seeks to determine the optimal order quantity needed to minimize the costs of
ordering and holding stock.
These costs are the costs of placing the order and carrying costs.
Carrying costs are those costs incurred in keeping an item in stock, such as insurance,
obsolescence, interest on borrowed money or clerical / security costs.
The costs associated with ordering stocks are mainly the clerical costs, receiving & inspection
costs.
A key assumption underpinning the EOQ model is that the stock is used in production at a
steady rate.
Just –in-Time
It seeks to minimize stock holding costs by the careful timing of deliveries and efficient
organization of production schedules.
At its best, just-in-time works by delivering stock just before it is used. The amount of stock is
thus kept to a minimum and stock holding costs are also minimized.
In order to do this, there is a need for a very streamlined and efficient production and delivery
service.
Taken to its logical extreme, just-in-time means that no stocks of raw materials are needed at
all.
One potential problem with just-in-time is that if stock levels are kept at a minimum there is no
stock buffer to deal with unexpected emergencies.
External Financing
Cash
Company needs to borrow if it does not generate enough cash from selling.
Banks provide overdraft facility for a business as long as they are sure the business is viable. Overdrafts
are more flexible.
A bank overdraft is more flexible. It is a good way to tackle the fluctuating cash flows experienced by
many businesses.
The interest rate for a loan is normally lower than that of a bank overdraft.
Loans may be secured on specific business assets, such as stock or motor vehicles.
b)Debtors
Since debtors are an asset, it is possible to raise money against them. This is done by debt
factoring or invoice discounting.
i. Debt factoring
Debt factoring is in effect the subcontracting of debtors. Many department stores, for
example, find it convenient to subcontract their credit sales to debt factoring companies. The advantage
to the business is twofold.
The debt factoring company will charge a fee, for example 4% of sales, for its services. In
addition the debt factoring company will charge interest on any cash advances to the company.
Finally the company will lose the management of its customer database to an external party.
i. Invoice discounting
iii. The financial institution will grant an advance (for example 75%) on outstanding sales
invoices (i.e. debtors). Invoice discounting can be a one-off, or a continuing,
arrangement.
iv. An important advantage of invoice discounting over debt factoring is that the credit control
function is not contracting out.
The aim of debtors management is simply to collect money from debtors as soon as
possible .
For an optimal cash balance, with no considerations of fairness, a business will benefit if
it can accelerate its receipts and delay its payments. Receipts from customers and
payments to suppliers are measured using the debtors/creditors collection ratios.
c) Stock
As with debtors it is sometimes possible to borrow against stock. However the time period is
longer.
Stock needs to be sold, then the debtors need to pay. Stock is not , therefore , such an attractive
basis for lending for the financial institutions.
However in certain circumstances financial institutions may be prepared to buy the stock now
and then sell it back to the company at a later date.
The classic example of sale and buy back occurs in the wine and spirit business. It takes a long
time for a good whisky to mature. A finance company may therefore be prepared to buy the
stock from the whisky distillery and then sell it back at a higher price at a future time. In effect,
there is a loan secured against the whisky
Another example might be in the construction industry. Here the financial institution may be
prepared to loan the construction company money in advance. The money is secured on the
work-in-progress which the construction company has already completed. The construction
company repays the loan when it receives money from the customers.
Ratios
Debtors Collection Period
This ratio seeks to measure how long customers take to pay their debts.
Obviously the quicker a business collects and banks the money, the better it is for the company.
It is important to note that credit sales are needed for this ratio to be fully effective.
In many ways this is the mirror image of the debtors collection period.
It calculates how long it takes a business to pay its creditors.
The slower a business is to pay the longer the business has the money in the bank. As with
debtors collection period we can calculate this ratio either monthly, weekly or daily.
Cost of sales is used as the nearest equivalent to credit purchases (cost of sales is opening
stock+purchases –closing stock
It is Debtors collection period (in days) / creditors collection period (in days)
If this ratio is less than 50% it means the firm collects cash from debtors in 40% of the time that
it takes to pay its creditors. The management of working capital is effective.
Businesses whose debtors collection periods are much less than their creditors collection
periods are managing their working capital well. can you think of any businesses which might be
well placed to do this?
Businesses which sell direct to customers generally for cash would be prime examples. Pubs and
supermarkets operate on a cash basis or with short-term credit (cheques or credit cards). Their
debtor collection period is very low. However they lay well take their time to apy their suppliers.
If they have a high turnover of goods they may collect the money for their goods from
customers before they have even paid their suppliers.
This ratio effectively measures the speed with which stocks move through the business.
Current ratio
This ratio tests whether the short term assets cover the short term liabilities. If they do not then
there will be insufficient liquid funds immediately to pay the creditors.
Quick ratio
The quick ratio excludes the stock, the least liquid of the current assets to arrive at an
immediate test of a company’s liquidity. If the creditors come knocking on the door for their
money, can the business survive?
If this ratio is less than1 the firm will not be able to pay its suppliers in time.
Most producers do not sell their goods directly to the final users; between them stands a set of
intermediaries performing a variety of functions. These intermediaries constitute a marketing
channel (also called a trade channel or distribution channel).
Marketing channels are sets of interdependent organizations involved in the process of making a
product or service available for use or consumption. They are the set of pathways a product or
service follows after production, culminating in purchase and use by the final end user.
Some intermediaries – such as wholesalers and retailers – buy, take title to, and resell the
merchandise; they are called merchants.
Others – brokers, manufacturers’ representatives, sales agents – search for customers and may
negotiate on the producer’s behalf but do not take title to the goods; they are called agents.
Still others- transportation companies, independent warehouses, banks, advertising agencies-
assist in the distribution process but neither take title to goods nor negotiate purchases or
sales; they are called facilitators.
Importance of Channels
A marketing channel system is the particular set of marketing channels employed by a firm.
Marketing channels also represent a substantial opportunity cos. One of the chief roles of
marketing channels is to convert potential buyers into profitable orders. Marketing channels
must not just serve market, they must also make markets.
The channels chosen affect all other marketing decisions. The company’s pricing depends on
whether it uses mass merchandisers or high quality boutiques. The firm’s sales force and
advertising decisions depend on how much training and motivation dealers need.
In addition channel decisions involve relatively long term commitments to other firms as well as
a set of policies and procedures.
In managing its intermediaries, the firm must decide how much effort to devote to push versus
pull marketing.
A push strategy involves the manufacturer using its sales force and trade promotion money to
induce intermediaries to carry, promote and sell the product to end users.
Push strategy is appropriate where there is low brand loyalty in a category, brand choice is
made in the store, the product is an impulse item, and product benefits are well understood.
A pull strategy involves the manufacturer using advertising and promotion to persuade
customers to ask intermediaries for the product, thus inducing the intermediaries to order it.
Pull strategy is appropriate when there is high brand loyalty and high involvement in the
category, when people perceive differences between brands, and when people choose the
brand before they go to the store.
Channel Development
If the firm is successful it might branch into new markets and use different channels in different
markets.
In rural areas it might work with general-goods merchants; in urban areas with limited-line
merchants
In one part of the country it might grant exclusive franchises; in another it might sell through all
franchises; in another it might sell through all outlets willing to ahndle the merchandise.
In one country it might use international sales agents; in another it might partner with a local
firm.
In short the channel system evolves in response to local opportunities and conditions
Today’s successful companies are also multiplying the number of “go-to-market” or hybrid
channels in any one market area.
Companies that manage hybrid channels must make sure these channels work well together
and match each target customer’s preferred ways of doing business.
Intermediaries bring in pooled financial resources. About 250 plus dealers help Maruti Udyog
manage its capital better by investing in inventories, facilities and trained personnel.
They help break bulk and create assortment for the customer( imagine buying each monthly
grocery item from specialist direct marketers in bulk packs)
Many small value items like candies ,chewing gum and ball point pens with large volume
ambitions cannot be sold through direct marketing due to both assortment and cost problems
Intermediaries normally achieve superior efficiency in making goods widely available and
accessible to target markets.
Marketing channels also keep changing with the evolution of markets and the development of
new technologies. As the internet and other technologies advance, service industries suvh as
banking, insurance, travel and share trading operate through new online channels.
Bulky products such as building materials require channels that minimize the shipping distance
and the amount of handling.
Nonstandard products such as custom built machinery and specialized business forms are sold
directly by company sales representatives.
Products requiring installation or maintenance services such as heating and cooling systems are
usually sold and maintained by the company or by franchised dealers.
High-unit-value products such as generators and turbines are often sold through a company
sales force rather than intermediaries.
Channel design must take into account the strengths and weaknesses of different types of
intermediaries.
Companies can choose from a wide variety of channels for reaching customers – from sales
forces to agents, distributors, dealers, direct mail, telemarketing and the Internet.
Sales forces can handle complex products and transactions, but they are expensive. The Internet
is much less expensive, but t cannot handle complex products.
Distributors can create sales but the company loses direct contact with customers
The problem is further complicated by the fact that most companies now use a mix of channels.
Each channel hopefully reaches a different segment of buyers and delivers the right products to
each at the least cost.
Understanding Pricing
Price is the major determinant of a buyer’s choice.
Although non price factors have become quite important price still remains an important factor
in determining sales ad profitability.
Competitive pressures together with consumer and middle men behavior and short term
orientation of the companies have resulted in a marketplace characterized by heavy discounting
and sales promotion.
Each price will lead to a different level of demand and therefore have a different impact on a
company’s marketing objectives. The relation between alternative prices and the resulting
current demand is captured in a demand curve.
In the normal case, demand and price are inversely related :the higher the price the lower the
demand.
Price
Price
The company wants to charge a price that covers its cost of producing, distributing, and selling
the product, including afair return for its effort and risk.
Yet when companies price products to cover full costs the net result is not always profitability.
To price intelligently management needs to know how its costs vary with different levels of
production.
Within the range of possible prices determined by market demand and company costs, the firm
must take consider the nearest competitor’s price.
Given the three Cs – the customer’s demand schedule, the cost function, and competitors’
prices – the company is now ready to select a price.
They must deliver the value promised by their value proposition and the customer must
perceive this value.
They use other marketing-mix elements such as advertising and sales force, to communicate and
enhance perceived value in buyers’ minds
Perceived value is made up of several elements such as the buyer’s image of the product
performance, than channel deliverables, the warranty quality, customer support, and softer
attributes such as the supplier’s reputation, trustworthiness, and esteem.
Furthermore each potential customer places different weights on these different elements with
the result that some will be price buyers, others will be value buyers, and still others will be loyal
buyers.
For price buyers companies need to offer stripped down products and reduced services. For
value buyers companies must keep innovating new value and aggressively reaffirming their
value. For loyal buyers companies must invest in relationship building and customer intimacy.
The key to perceived value pricing is to deliver more value than the competitor and to
demonstrate this to prospective buyers.
Personnel Finance
Integration of the Accounting & Financial concepts with those of
Personnel Management is a set of activities focusing on the effective use of human resources in
an organization.
It is concerned with acquiring, developing, rewarding & maintaining human resources to meet
the organization’s economic & social objectives.
It plans, develops & administers policies & programs designed to make expeditious use of an
organization’s human resources.
P.M. – Coverage
Personnel Management encompasses the activities of –
- Recruitment & employment
-Applied human resource behavior areas like motivation, morale , communication etc.
Staffing
Employee development
Employee maintenance
The focus is to provide an adequate number of employees competent with the skills , abilities,
knowledge & experience to further the organizational goals.
P. M. - Responsibilities
Responsibilities assigned to personnel function depend upon the size, goals, philosophies, & structure of
the organization.
Even small organizations also have to perform the basic personnel functions of hiring, training ,
compensation & benefits, record keeping etc.
With the increase in size & complexity of the organization, the requirement of people with different skill
sets & competencies goes up. The expectations from Personnel Department become more demanding.
To meet this challenge, this function also tends to branch out into different specialized areas with
different responsibilities.
2)Job Analysis
3)Staffing
4)Selection
5)Orientation
7) Performance Appraisal
8) Career Planning
9)Compensation
11)Labour Relations
13)Personnel Research
1) Manpower Planning -
Deals with determination of number & type of employees needed to accomplish organization’s
objectives.
2) Job Analysis -
It is the process of describing the nature of a job & specifying the human requirements like skill,
competencies, experience, knowledge required to perform it.
Job Analysis process leads to Job Description which spells out work duties & activities of the employee.
Job content has great influence on personnel programs & practices.
3) Staffing –
Includes recruitment & selection of the human resources. Human resource Planning precedes the actual
selection of people for positions in the organization. The emphasis is on attracting qualified applicants to
fill job vacancies.
4) Selection -
Most qualified applicants are selected for hiring from among those applications. Here the personnel
function is involved in developing & administering methods that enable the functional manager to
decide which applicants to be rejected & which are to be considered for the given job.
5) Orientation -
It is the first step towards helping a new employee adjust himself to the new job & the employer. It
involves acquainting the new employee with company rules, regulations & expectations, working hours,
grades, rewards, salary & other facilities as well as benefits.
The objective of T & D function is to impart the skills & knowledge to the employee to perform his job
effectively. It includes-
- re training experienced employees whose jobs are undergoing change or are being job rotated,
T & D is essential to ensure that the employees are capable of doing their jobs / performing their duties
at acceptable levels.
7) Performance Appraisal –
Personnel function monitors employee performance to ensure that it is at acceptable level. Personnel
function is responsible for developing & administering performance appraisal system. ( Actual appraisal
is done by concerned function as per the guidelines laid down in P.A. system by Personnel department)
P.A. system is essential for fair rewards & penalties as a motivational & performance improvement
tool.
8) Career Planning -
It deals with assessing individual employee’s potential for growth & advancement in the organization.
9) Compensation –
Provision of a rational method for determining the payment for different types of jobs is one of the
sensitive aspect of personnel function.
Pay structure is a major consideration in planning & maintenance of the human resources.
It directly affects staffing function ( inadequate compensation leads to high turnover of people.)
It is the most important incentive at lower & middle levels of the employees for motivating them to
higher levels of job performance & to shoulder greater responsibilities.
10) Benefits –
They are another form of compensation to employees other than the direct pay.
They include legally required items as well as those offered at employer’s discretion.
Since they provide for many basic employee needs, they are primarily related to the maintenance area.
However the cost of (fringe) benefits have risen to such an extent that they become an important
consideration in human resource planning.
11)Labour Relations -
Unions are organizations of employees who join together to obtain more voicein decision affecting
wages, benefits, working conditions, & other aspects of employment.
Here the responsibility of personnel function is primarily involved in negotiation with the union
regarding wages, service conditions, & to resolve disputes & grievances.
It involves recording, maintaining & retrieving employee related information for a variety of purposes.
Employee records cover the entire spectrum of the inputs right from job application to retirement
stage.
They include family background, educational qualifications, employment history ( experience) , medical
& health reports, & records of all job related parameters like skills, competencies, training, attendance,
output, leave, rewards , promotions, penalties etc.
Research in personnel related issues is essential to prevent fires rather than putting them out. The
objective is to get the facts & information about personnel related issues through pre-planning & post
reviewing.
In fact any survey on any of the personnel policies & practices is a good research.
The most common subjects for attitude survey or employee opinion include wages & salaries,
promotions, welfare services, working conditions, job security, leadership, industrial relations,
recruitment, employee turnover, training, terminations etc.
Though it is an outgrowth of older & traditional process, it is much more than its parent
discipline viz. Personnel Management & behavioral sciences.
It is a scientific process of continuously enabling the employees to improve their competency &
capability to play their present as well as future expected roles so that the goals of the
organization are achieved fully and at the same time the needs of the employees are also met to
an adequate extent.
PM & HRM
The traditional approach of Personnel Management is non strategic, separate from the business,
reactive, & of short term.
It is constrained by the limited definition of its role as dealing with mostly unionized & low level
employees.