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“A CONCEPTUAL STUDY OF BUSINESS MANAGEMENTAND ORGANIZATION SYSTEM”
SUBMITTED BY Swapnil S.V. Reg No.ESB/2010/AUG/MBA/011 Under the guidance of Prof. Yuvaraja S.E.
Excel Business Academy Ullal Main Road Bangalore.
EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School)
I hereby declare that the project report entitled “a conceptual study of business management and organization system –Amway.” Bangalore has been done by me under the guidance of Prof. Yuvaraj, Professor – MBA & PGPM, Excel Business Academy, and Bangalore. This project report has been submitted to Excel Business Academy, Bangalore as a part of partial fulfillment for the award of the degree of Post Graduate Program in Management from Excel Business Academy, Bangalore. I also hereby declare that this project report has not been submitted at any time to any other institute or university for the award of any degree.
Place: Bangalore Date: / / Swapnil.
EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School)
CERTIFICATE BY GUIDE
This is to certify that Swapnil V.S. bearing Reg No. ESB/2010/AUG/MBA/011, A student of 1st Trimester PGPM during the academic year 2010-2012 has successfully completed the project report “a conceptual study of business management and organization system – Amway”. Under the guidance of Prof. Yuvaraja S.E, Excel Business Academy, in partial fulfillment for the award of Post Graduate Program in Management from Excel Business Academy, Bangalore. His character and conduct was good during the study.
Place: Bangalore Date: / / Prof. Yuvaraja S. E.
I consider it my privilege to express gratitude and thanks to the Management – Excel Business Academy. Prof. Bangalore for giving me the opportunity to conduct this study. I thank our Principal Prof. Date: / / Place: Bangalore swapnil . Head – MBA & TPD and my Project Guide Prof. Yuvaraja S E. for the encouragement and intellectual influence during the course of the project work. Last but not the least. for their help and able guidance for the completion of the project successfully. Gurutej. I wish to express my heartfelt gratitude to Prof. Shreya K Rao. Head – PGPM & Techno Management Studies. I am grateful to the Librarian of Excel Business Academy. Thejaswi Naviloor.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA ACKNOWLEDGEMENT The satisfaction and euphoria that accompany the successful completion of any task would be but incomplete without the mention of the people who made it possible. for his support during my study. whose constant guidance and encouragement crowned our efforts with success. I would also like to thank each and everyone especially all my friends for their cordiality & support during my project.
3 Types of Ownership 2.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA TABLE OF CONTENTS: CHAPTER NO. mission & Goals of the company 2. Mission & Goals of the Amway 3.5 Types of Business 2 Organizational System (General Study) 2.3 Organizational Structure & Type of Amway 3. .7 SWOT Analysis 3 Organizational System with respect to Amway: 3. policies.4 Vision.2 Meaning of Management 1. problems if any.1 Introduction 3.2 Vision.5 Organization Structure & it’s Types 2.1 Meaning of Organization 2. 1 1.1 Meaning of Business 1.6 Functional Patterns – People. 2.4 Difference between Business Management & Business Administration 1.4 Type of Organization CONTENTS PAGE NO.2 Types of Organization 2.3 Meaning of Business Administration 1. systems.
.5 Functional Patterns of Amway 3.1 Findings 4.2 Conclusion 4.7 SWOT Analysis 4 Summary of Findings & Conclusion 4.3 suggestion LIST OF TABLES AND CHARTS: TABLE 1 2 3 CONTENTS Structure of Organization Alticor and Amway Sales Growth: 1960 to 2008 Amway sell data since 1960 to 1999 PAGE NO.6 Type of Ownership 3.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 3.
The major outcome of strategic road-mapping and strategic planning. which is set up by the administration. Corporate vision describes aspirations for the future. 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. Its one basic function is to reliably solve customer problems. It is the foundation upon which the whole structure of management is built. Also Management is the act or function of putting into practice the policies and plans decided upon by the administration. Organization is not an end it itself but a means to achieve an end. . without specifying the means that will be used to achieve those desired ends.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Executive Summary: This executive summary will give you key facts concerning the Amway. A business' purpose is to attract and keep customers. 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. Let’s start from main component that is business. These facts will help to find out how well the Amway opportunity can match your business goals. whereas management makes the decisions within the confines of the framework. The important factor important to study is Organization. The Mission of organization should represent the broadest perspective of the enterprise's mission. Hence Administration makes the important decisions of an enterprise in its entirety. Management in all business areas and organizational activities are the acts of getting people together to accomplish desired goals and objectives efficiently and effectively.
The most effective strategy for this is direct marketing. is the setting of goals for the organization based on its vision and mission statement. a global community ready to offer support. air and water purifiers and a line of home cleaning products. skin and personal care products. Amway already helped over 3 million people start on their path to success. a subsidiary of Alticor. Analysis by A SWOT Exercise is a powerful technique for uncovering and understanding your Strengths and Weaknesses.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA after gathering all necessary information. and for looking at the Opportunities and Threats you face. The Amway/Amway Global. They're attracted by the unlimited potential of the opportunity. today also known as attraction marketing. The products are sold through Independent Business Owners (IBO). the support of a corporation with 50 years of experience and compassion. is marketing nutritional supplements. . 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. Using attraction marketing for Amway products is the fastest way to make steady retail profits. and a premier compensation plan.
However. Management is the art and science . the generalized usage to refer to a particular market sector. The term "business" has at least three usages. Businesses can also be formed not-for-profit or be state-owned. depending on the scope — the singular usage (above) to mean a particular company or corporation. the exact definition of business. 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. The etymology of "business" relates to the state of being busy either as an individual or society as a whole. As managers have an awful lot of work to do." My definition is close: A business' purpose is to attract and keep customers. A business is typically formed to earn profit that will increase the wealth of its owners and grow the business itself. Notable exceptions include cooperative enterprises and state-owned enterprises. Some (cynical) individuals think that this means managers don’t have any work to do themselves. It’s one basic function is to reliably solve customer problems.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 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. like much else in the philosophy of business. Anyone with vision should understand the problem they're solving. businesses and governmental entities.. or the broadest meaning to include all activity by the community of suppliers of goods and services. such as "the music business" and compound forms such as agribusiness. Meaning Of Management: Management is generally defined as the art and science of getting things done through others. Most businesses are privately owned.. to consumers. The meaning of business is having an impact on people's lives. doing commercially viable and profitable work. The problem with business today is that people think the meaning is about building a monument to you. is a matter of debate and complexity of meanings. Businesses are predominant in capitalist economies. A business is a legally recognized organization designed to provide goods or services. This definition emphasizes that a manager plans and guides the work of other people. or both.
) and generating plans for action. is called management”. assists. 2. human resource management. next week. marketing management. The main branches of management are financial management. technological resources. This view opens the opportunity to 'manage' oneself. .EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA of getting things done through others. over the next 5 years. usually people for whom the manager is responsible in an organization. • Organizing: (Implementation) making optimum use of the resources required to enable the successful carrying out of plans. next year. including design. Management comprises planning. operation management. generally by organizing and directing their activities on the job. strategic management. Basic functions of management: • Planning: Deciding what needs to happen in the future (today. 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 Define: “The efficient and effective operation of a business. and assesses the work of others. management can also be defined as human action. Resourcing encompasses the deployment and manipulation of human resources. staffing. and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. organizing. to facilitate the production of useful outcomes from a system. Because organizations can be viewed as systems. A manager is therefore someone who defines. plans. leading or directing. The initiation and maintenance of an investment portfolio. and natural resources. etc. The group of individuals who make decisions about how a business is run. guides. financial resources. management1. service management and information technology management. production management. next month. and study of this subject. a pre-requisite to attempting to manage others Management can also refer to the person or people who perform the act(s) of management.
because without motivation. management is viewed as a subset of administration.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • • Staffing: Job analyzing. which is in turn derived from the French administration. this function. In some organizational analyses. itself derived from the Latin administratio — a compounding of ad ("to") and ministratio ("give service"). Business Administration: Business administration consists of the performance or management of business operations and thus the making or implementing of major decisions. If motivation doesn't takes place in an organization. The word is derived from the Middle English word administracioun. This title is archaic. together with its associated Finance. • • Controlling/Monitoring: Checking progress against plans. Administrator can serve as the title of the general manager or company secretary who reports to a corporate board of directors. Motivation: Motivation is also a kind of basic function of management. then employees may not contribute to the other functions (which are usually set by top level management). Leading/Directing: Determining what needs to be done in a situation and getting people to do it. usually internally oriented and reactive rather than proactive. specifically associated with the technical and mundane elements within an organization's operation. recruitment. employees cannot work effectively. It stands distinct from executive or strategic work. in many enterprises. Personnel and management information systems services. administration can refer to the bureaucratic or operational performance of mundane office tasks. Administration can be defined as: “The universal process of organizing people and resources efficiently so as to direct activities toward common goals and objectives”. . is what is intended when the term "the administration" is used. but. and hiring individuals for appropriate jobs. In other organizational analyses.
Behavioral psychology plays an important role in business administration: a misstep in an adversarial situation with a union can take a company under. so too has the oversight of companies: their management." that one can opt for in an MBA program. Defining business administration then means defining oversight roles for the assortment of internal specialties that every business of any size has come to include. and the costs involved. inventory and cash flow. Perhaps the best way to define business administration is to look at the types of courses offered in MBA curriculums and the specialties. Business administration will always include the intangible quality of leadership. and all the other small matters that make a big difference to a new or small business. Marketing has become the term of choice for this entire strategically placed product exposure. as well as strategy and economics. The definition of business administration includes whatever knowledge is required to make all of these components work productively. business administration is going to include international and global business. The definition of business administration will have to include marketing. the risk of a competitive strategy. the company's exposure in opting for this health plan instead of that one. Business administration includes an understanding of entrepreneurship: tax structures for small businesses along with personnel issues at that level. Along with leadership comes the task of negotiation and conflict resolution. you won't have a business to administer unless you sell your products. the risk of an acquisition. or "majors. . 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. if not in complete harmony. Ancillary to marketing is an understanding of the new tools available for product distribution. Also included in business administration at this scale is the art and science of acquisition: when to buy a company or property and why.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA As business has become more complex. their taxes and the role that taxes play in corporate economic strategy. their growth strategies. repeat customers. and that will involve understanding e-business and how it is rapidly evolving. the definition of business administration will include requirements of certain cultural differences and an acute understanding of the global economy and its current fluidity. their personnel issues. A critical part of business administration is the awareness of risk. specifically with regard to personnel. Advertising has grown to include multiple media outlets and an assortment of targeted interest groups: new customers. This might include the risk of launching a new product. investors and new geographic markets. For a large corporation. In this instance. as it did Continental Airlines some years ago. stockholders.
Administration has to do with the setting up of objectives and crucial policies of every organization. 1) Administration is a determinative function. so as to make them successfully pursue and achieve common goals and objectives. 3) Administration is the top level. Administration: Management and administration may seem the same. whereas management is a middle level activity. . 4) Administrators are usually found in government. It may be defined as a system of efficiently organizing people and resources. If one were to decide the status. it involves motivating and controlling functions. In management. This is because administrators are ultimately judged by their performance. so far as management is concerned. the planning and organizing of functions are the key factors. one would find that it consists of owners who invest the capital. however. Management is used by business enterprises. is the act or function of putting into practice the policies and plans decided upon by the administration. such as finance . 5) In administration. whereas management makes the decisions within the confines of the framework. Administration is perhaps both an art and a science. or position of administration. while management is an executive function. which is set up by the administration. military. but there are differences between the two. and receive profits from an organization. and social and religious factors. Administration must incorporate both leadership and vision. 2) It also follows that administration makes the important decisions of an enterprise in its entirety. The decisions of an administration are shaped by public opinion. rather than technical qualities. one needs administrative qualities. whereas management decisions are shaped by the values. government policies. Management consists of a group of managerial persons. What is understood by management.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Management vs. whereas. religious and educational organizations. opinions and beliefs of the mangers. who leverage their specialist skills to fulfill the objectives of an organization. 6) Administration usually handles the business aspects. technical abilities and human relation management abilities are crucial. When it comes to the type of abilities required by an administrator.
2. Both these functions are crucial.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 7) Management is really a subset of administration. The study of agriculture is known as agricultural science.e. Summary: 1. Management is the act or function of putting into practice the policies and plans decided upon by the administration. Administration is a determinative function. Administrators are mainly found in government. Agriculture is also observed in certain species of ant and termite. each with their own set of functions. Therefore. military. 3. Management. is used by business enterprises. 1. in their own ways. . which has to do with the technical and mundane facets of an organization’s operation. which is set up by the administration. Administration makes the important decisions of an enterprise in its entirety. to the growth of an organization. with the husbandry of domesticated animals and plants (i. religious and educational organizations. Agriculture: Agriculture is the production of food and goods through farming. 4. Management deals with the employees. on the other hand. Types of business: The following are the types of business. Agriculture was the key development that led to the rise of human civilization. we can see that these two terms are distinct from one another. whereas management makes the decisions within the confines of the framework. Administration is above management. and exercises control over the finance and licensing of an organization. crops) creating food surpluses that enabled the development of more densely populated and stratified societies. It is different from executive or strategic work. while management is an executive function.
Finance: Finance is the science of funds management. and public finance. rock salt and potash .EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Agriculture encompasses a wide variety of specialties and techniques. personal finance. The general areas of finance are business finance. governments or charities. Materials recovered by mining include base metals . and risk and how they are interrelated. Cultivation of crops on arable land and the pastoral herding of livestock on rangeland remain at the foundation of agriculture. extraction of the desired materials and finally reclamation of the land to prepare it for other uses once the mine is closed. petroleum. Safety has long been a concern as well.Mining of stone and metal has been done since prospecting for times.. limestone’s . iron . Banks are the main facilitators of funding through the provision of credit.g. usually from an ore body. or created in a laboratory or factory. coal. vein or (coal) seam. Any material that cannot be grown through agriculture processes. by digging water-channels and other forms of irrigation. natural gas. perm culture or organic agriculture) and intensive farming (e. Mining in a wider sense comprises extraction of any non renewable resource (e. which deposit money in a bank. It also deals with how money is spent and budgeted. 2. 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. Mining: Mining is the extraction of valuable minerals or other geological materials from the earth. industrial agriculture). and charges interest on the loans. . This impact has led to most of the world's nations adopting regulations to moderate the negative effects of mining operations. Loans have become increasingly packaged for resale. The investor can then hold the debt and collect the interest or sell the debt on a secondary market. The bank then lends the money out to other individuals or corporations for investment. or even water). is usually mined. The field of finance deals with the concepts of time. although private equity. analysis of the Profit potential of a proposed mine.One aspect of finance is through individuals and business organizations. oil shale .g. Finance includes savings money and often includes lending money. In the developed world the range usually extends between sustainable agriculture (e. including ways to expand the lands suitable for plant raising. uranium . In the past century there has been increasing concern to identify and quantify various forms of agriculture.g. though modern practices have improved safety in mines significantly 3. diamonds. Modern mining processes involve e bodies. money. Bonds are debt instruments sold to investors for organizations such as companies. meaning that investers buy the loan (debt) from a bank or directly from a corporation.
The term may refer to a range of human activity. manufacturing is usually directed toward the mass production of products for sale to consumer at a profit. automobiles. Manufacturing takes turns under all types of economic system. 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. but is most commonly applied to industrial production. owners are granted certain exclusive property to a variety of intangible assets. or sold to Wholesalers. 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 . Financial assets. it was not until the 19th century that the term intellectual property began to be used. such as buildings. known as investments. and designs. such as musical. The British Statute tee 1710 is now seen as the origin of copyright and patent law respectively. Manufacturing: Manufacturing is the use of machines. Real estate: Real estate is a legal term (in some jurisdictions. more complex products. in which raw materials are transformed into finished goods on a large scale. who then sell them to end users – the “consumers”. and other organizations have become important as they invest in various forms of debt. USA and Bahamas ) that encompasses land along with improvements to the land. such as semiconductors and steel manufacturers use the term fabrication instead. wells and other site improvements that are fixed in location—immovable. In a free market economy. phrases. literary. such as aircraft. hedge funds. 6. trademarks. Common types of intellectual property include copyrights. Modern manufacturing includes all intermediate processes required for the production and integration of a product's components. such as the United Kingdom. and artistic works. Canada. patents. 4. are financially managed with careful attention to financial risk management to control financial risk. fences. and words.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA mutual funds. industrial right and trade secrets in some jurisdictions. Although many of the legal principles governing intellectual property have evolved over centuries. from handicraft to high tech. Some industries. Such finished goods may be used for manufacturing other. and not until the late 20th century that it became commonplace in the United States. Australia . 5. discoveries and inventions. Under intellectual property law. tools and labor to make things for use or sale. symbols. who in turn sell them to retailers.
trees. as distinguished from "real property". in contrast with personal property (sometimes called chattel or personality under chattel law or personal property law). road. trains. Transport: Transport or transportation is the movement of people and goods from one location to another. helicopters. in small or individual lots for direct consumption by the purchaser. bus stations. boutique. Transport infrastructure consists of the fixed installations necessary for transport. trucks. The term "retailer" is also applied where a service provider services the needs of a large number of individuals. Real property is typically considered to be Immovable property. minerals. pipelines and terminals such as airports. and seaports. and the interest. The field can be divided into infrastructure. and then sells smaller quantities to the end-user. Terminals may be used both for interchange of passengers and cargo and for maintenance. water. vehicles. people. and inherent rights thereof. including anything of a permanent nature such as structures. canals. Real estate is often considered synonymous with real property (sometimes called realty). trucking terminals. buses. refueling depots (including fueling docks and fuel stations). Mode of transportation includes air rail. In commerce. warehouses. and may be roads . or by mail. such as a department stores. in some situations the term "real estate" refers to the land and fixtures together.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA and residential real property transactions. benefits. railways. The terms real estate and real property are used primarily in common law. rail stations. such as a public utility. In the transport industry. such as delivery. . while civil law jurisdictions refer instead to immovable property. and aircrafts. either directly or through a wholesaler. a "retailer" buys goods or products in large quantities from manufacturers or Importers. referring to ownership of land and appurtenances. Vehicles traveling on these networks may include automobiles. and operations. Retailers are at the end of the supply chain. and the procedures set for this purpose including financing. Operations deal with the way the vehicles are operated. depending on the country and mode. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. like electric power. waterways. However. pipeline. Purchasers may be individuals or businesses. Retailing may include subordinated services. legalities and policies. bicycles. airways. 7. Retailing: Retailing consists of the sale of goods or merchandise from a fixed location. Retail establishments are often called shops or stores. 8. operations and ownership of infrastructure can be either public or private. and space. cable.
money and people to accomplish the various objectives. the term "institution" may be preferred.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Meaning of Organization: Organization is the foundation upon which the whole structure of management is built. Organization – functional: organization as a function of how entities like businesses or state authorities are used (organization as a permanent structure). an organization is a structure or machinery manned by group of individuals who are working together towards a common goal. organizations are the object of analysis for a number of disciplines. as a group of persons and as a system. as a structure of relationship. organizational behavior or organization analysis. Thus. economics. In the social sciences. itself derived from the better-known word ergon. A number of different theories and perspectives exist. • • Organization – process-related: an entity is being (re-)organized (organization as task or action). The word itself is derived from the Greek word organon. . and has a boundary separating it from its environment. Alike 'management'. In more specific contexts. In a static sense. • 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 given below: 1)Organization as a Process: In this first sense. An organization is a social arrangement which pursues collective goals. 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. such as sociology. psychology. organization is treated as a dynamic process and a managerial activity which is essential for planning the utilization of company's resources. and organizational communication. controls its own performance. political science. plant and equipment materials. the term 'organization' has also been used in a number of ways. organization is the structure or mechanism that enables living things to work together. some of which are compatible. particularly for sociologists. management. broadly speaking. The broader analysis of organizations is commonly referred to as organizational studies.
" ." • According to Chester I. Definitions of Organization: Different authors have defined organization in different ways. Farland. For example: According to Mooney and Reily.. Urwick. large of small. 4) Organization as a System: In the fourth sense. Barnard has defined 'Organization' as an identifiable group of people contributing their efforts towards the attainment of goals. It is a universal truth that an individual is unable ability and resources. In short. Organization begins when people combine their efforts for some common purpose. come under this group. Lansburgh and Spriegel Breach. grouping and arranging of the various activities deemed necessary for the attainment of the objectives. Davis. 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. "Organization is a system of co-operative activities of two or more persons. capabilities and mutual relationship. System concepts recognize that organizations are made up of components each of which has unique properties. the assigning of people to those activities. "Organization may be defined as a group of individuals." 3) Organization as a Group of persons: In the third sense. Mooney and Reily etc. that is cooperating under the direction of executive leadership in accomplishment of certain common object. organisation is very often viewed as a group of persons contributing their efforts towards certain goals. Northcourt. The main definitions of organization are as follows: • According to keith Davis. "Organization is the form of every human association for the attainment of a common purpose.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 2) Organization as a Framework of Relationship: In the second sense organization refers to the structure of relationships and among position jobs which is created to release certain objectives. organizing is the determining. The definitions of Henry. The constituent elements of a system are linked together in such complex ways that actions taken by one producer have far reaching effect on others. the organization is viewed as system. Barnard.
defining and delegating responsibility and authority. and establishing relationship for the purpose of enabling people to work most effectively together in accomplishing objectives. the functional duties should be allotted to particular individuals. 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. they should be organized by a particular department. and authority to carry out defined tasks. what will be his span of control and what will be his status in the organization. . the establishment of relationship is done." • According to Mooney and Railey. some informal organizations should also be developed. 2) Identifying and Enumerating the Activities: After the objective is selected. 3) Assigning the Duties: When activities have been grouped according to similarities and common purposes. A close relationship between authority and responsibility should be established." Social unit of people systematically arranged and managed to meet a need or to pursue collective goals on a continuing basis. "Organization is the form of every human association for the attainment of a common purpose. Within the department. responsibilities.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • According to Louis A. and subdivides and delegates roles. 4) Defining and Granting the Authority: The authority and responsibility should be well defined and should correspond to each other. 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. Besides these formal relationships. Other objectives must be established by the administration from time to time to aid and support this main objective. It involves deciding who will act under whom. "Organization is the process of identifying and grouping the work to be performed. 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. All organizations have a management structure that determines relationships between functions and positions. 5) Creating Authority Relationship: After assigning the duties and delegations of authority. who will be his subordinates. Allen.
For this purpose. a sound or good or ideal and result-oriented organization must possess the following characteristics. 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. 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. Sound organization prevents corruption by raising the morale of employees. expansion and diversifications of the enterprise. 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. avoids delay and duplication of work. Since a good organization demands that the duties be clearly assigned amongst workers. jobs and sub-jobs in such a way so that there is action. knowledge and viewpoints. branches and units etc. Significance of Sound /Good Organization: Organization is not an end it itself but a means to achieve an end. consultation and co-ordination without any delay and difficulty. Thus. and motivates employees to perform their responsibility. increases promptness. 3) It Ensures Optimum Use of Human Resources: Good organization establishes persons with different interests. 2) Harmonious Grouping of Functions etc: For achieving the organization objectives there must be harmonious grouping of functions. 7) Co-ordination in the Enterprises: Different jobs and positions are welded together by structural relationship of the organization. honesty and devotion. 4) It Stimulates Creativity: A sound and well-conceived organization structure is the source of creative thinking and initiation of new ideas. They are motivated to work with greater efficiency. 2) It Help in the Growth of Enterprise: Good organization is helpful to the growth. skills. The organizational process exerts its due and balanced emphasis on the co-ordination of various activities. 6) Prevents Corruption: Usually corruption exists in those enterprises which lack sound organization. 1) Realization of Objectives: Organization is tool of achieving objectives of an enterprise. increases managerial efficiency. .EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Sound organization increases efficiency. the organization should be divided in several department. such overlapping and duplication is totally eliminated. sub-departments.
and everybody must know to whom he reports and who reports to him. 9) Unity of Command: There must be unity of command. energy. the ideal number is three. Ordinarily. 5) Promotion of Satisfaction: The most important element of any human organization is the promotion of satisfaction of workers. No one in any organization should report to more than one line supervisor. devotion and sincerity. 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. otherwise it will lead to confusion.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 3) Reasonable Span of Control: Another characteristic of organization is that it should have reasonable span of control. No subordinate should get orders from more than one supervisor. 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. 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. there must be close coordination and cooperation in the activities of everybody working in the organization. 10) Effective System of Communication: An ideal organization must possess effective system of communication. 8) Coordination and cooperation: In order to achieve the objectives of the enterprise. chaos and conflict. 4) Clear-cut allocation of Duties and Responsibilities: There must be clear-cut allocation of duties and responsibilities in any scheme of sound organization. The inter-communication system should be clear and easier and there should be no ambiguity at and level. . enthusiasm. It will also assist in elimination the evil of red tapism. a person (personnel) cannot control more than five or six subordinates. 11) High Morale: An ideal organization is that in which the workers possess high morale. there should also be active coordination and cooperation amongst the various departments an sub-departments. Further. They work with full capacity. Every executive must know his scope of activities.
The result is the establishment of departments like Purchase. stationery etc. divisions or sections. Accounts. The departments can be further classified just as production department into (1) Planning (2) Designing. such as textiles. Steps in the Process of Organization: Organization means identifying. duplication or overlapping in the work. The departments are linked together on the basis of interdependence. Department may also be based on products. .EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 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. Production. Everyone must know what he is required to do in order to avoid any misunderstanding. (4) Production Control and (5) Repairs and Maintenance. cosmetic. • Grouping of Job and Departmentation The second step is to group similar or related jobs into larger units. (3) Operations. 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. Grouping process is called departmentation. marketing and financing etc. The division of the work is based upon the fact that specialization is keynote of efficient organization. called departments. arranging and integrating different elements of organization into efficient working order. • Assigning duties The work to be performed by every individual is clearly defined and made known to him. Grouping jobs or Departmentation aims at achieving coordination and facilitates unity of efforts. Publicity and Public relations. The department may be based upon functions such as manufacturing. Sales. These departments may have different sections as per requirement. • Division of work The main function is divided into sub-functions and entrusted to the different departmental heads. It requires the management to follow the following process of organization.
• Effective communication Effective communication is the keynote of efficient organization. • Delegation of authority Those who are made responsible for specific tasks are given due authority. liable and accountable. what the authorities granted to him and for what and to whom he will be responsible.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • Granting authorities and fixing responsibilities Assigning of duties to individuals must coincide with the appropriate and relevant authorities. • Co-ordination of activities for common objectives Business activity is a team work or the group activity. Every employee must know. 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. Both responsibility and authority go hand in hand together. so the efforts of every employee must be co-ordinate effectively to achieve the common objectives of the enterprise. Types of organization: 1) Static Organizations: . Reasonable powers are delegated to heads and supervisory staff to enable them to do their work with ease and efficiency. There should be proper arrangement of communication messages from executives to subordinates and vice-versa.
They go through a single life cycle. Like complex adaptive systems. fixed size. even though their underlying practices don't change much. so that within a generation. creating new products. seeking the constant improvement that launches life cycle after life cycle. Like dynamic equations. the predecessors. and then declining as its competitors implement better practices that steal away its clients. variable size. these organizations have no variables. these organizations vary in size over time. and each shareholder in the corporation benefits. these organizations vary their practices. ISOPs ensure that the innovator. each growing rapidly as it occupies its niche. A Business Ownership: A Business ownership should be structured according to the needs of the owners and potentially liability that the business could incur. They will soon motivate employees to climb adaptation curves by using ISOPs to fairly share the wealth that each innovation creates. 3) Adaptive Organizations: Variable practices. most people will have learned to expect continual improvement in their life experience. and processes that hold on to clients generation after generation.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Static Organizations have fixed practices. services. They persist until some new organization occupies their niche. 2) Dynamic Organizations: Dynamic Organizations have Fixed practices. variable size. Like static equations. The different types of business ownership are: 1) Limited Partnerships 2) A Corporation 3) Limited Liability Corporations . They will displace dynamic and static organizations in economic competition. Time doesn't change them significantly. 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.
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). However. Because of this they are not personally liable for business debts or claims. A corporation is an independent legal and tax entity. Limited partnerships are usually created by one person or company. This sets it apart from other types of businesses. and are not recommended for the average small business owner. Any money drawn from the corporation in the form of salaries. they are not personally liable for business debts or claims. The owners do not use their personal tax returns to pay tax on corporate profits because the corporation itself pays these taxes." who will solicit investments from others -who will be the limited partners. It is not recommended for the average small business owner. Limited partners have minimal control over daily business decisions or operations and. 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. Limited partnerships are costly and complicated to set up and run. The general partner is in charge of the business's everyday operations. in return. Limited partnerships are usually created by one person or company who solicits investments from others. limited personal liability for business debts and claims.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 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. bonuses. LLCs resemble partnerships when it comes to taxes. 3) Limited Liability Corporations Limited Liability Corporations provide their owners just that. etc is paid by the owners in their personal income tax returns. the "general partner. They are personally liable for business dents. The people who invest are considered the limited partners. Limited partners have little control over daily business decisions or operations. The owners of an LLC pay taxes on their shares of the business income on their .
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). You create one just by going into business for yourself.a partnership. No paperwork needs to be filed to form a partnership. For example. They are also personally liable for any business debts or court decisions against the business. Here's a brief rundown of the most common forms of doing business: For many new businesses. A sole proprietorship is a one-person business that is not registered with the state as a limited liability company (LLC) or corporation. Legally. literary or scientific purpose. a sole proprietorship is inseparable from its owner. 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. 4) Sole Proprietorship and Partnership A sole proprietorship. Before you can decide on an ownership structure for your business. A nonprofit can raise much-needed funds by receiving public and private grant money and donations from individuals and companies. religious. You don't have to do anything special or file any papers to set up a sole proprietorship. As in a sole proprietorship. The business and the owner are one and the same. such as debts or court judgments. or partnership. Any business income is reported on the owner's personal income taxes. educational. 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. The arrangement begins as soon as you start a business with another person. the best initial ownership structure is either a sole proprietorship or -.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA personal tax returns. 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. 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.if more than one owner is involved -. you must learn at least a little bit about how each structure works. 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. . Similarly. is the ideal ownership structure for an up and coming business or the average small business. 5) Nonprofit Corporations A nonprofit corporation is a corporation formed to carry out a charitable. Sole proprietorships and partnerships make sense in a business where personal liability isn't a big worry.
The corporation.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 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. Most small businesses are (or at least start as) private corporations. great sources of funding. must pay taxes. While there are also public corporations. . These grassroots business organizers often refer to their businesses as a "group. An owner (stockholder) can only lose up to the amount s/he invested. 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. a consumer co-op could be formed to run a food store." "collective" or "co-op" but these are usually informal rather than legal labels. 6) Cooperatives Some people dream of forming a business of true equals. A private corporation is owned by a small group of people who are typically involved in managing the business. Advantages of a corporation include limited liability. Disadvantages include double taxation. 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. and ease of transfer of ownership. and then shareholders also pay taxes on any dividends received. Who stock (and ownership) is traded on a public stock exchange. For example. a corporation is charted to last forever unless its articles of incorporation state otherwise. a bookstore or any other retail business. as a legal entity. an organization owned and operated democratically by its members. unlimited lifespan.
and inspiring statement of what the organization intends to become and to achieve at some point in the future. It requires an open. a noted writer on leadership. capitalize on opportunities. an executive must have developed a mental image of the possible and desirable future state of the organization. handle the unexpected. Vision refers to the category of intentions that are broad. . Warren Bennis. It is the image that a business must have of its goals before it sets out to reach them." Core values include: Safety – Safety serves as a barometer of our company’s overall success and is a specific measure of our operating excellence. Confidence – Self-confident people take initiative. all-inclusive and forward-thinking. This image. Accountability – Being accountable means every employee assumes ownership and responsibility for his or her own work. Being accountable means making decisions and holding oneself responsible for the consequences of those choices. make sound decisions quickly. which we call a vision. Teamwork – Teamwork is personal involvement and collaboration in a team environment. creative actions. succinct. forthright manner. It describes aspirations for the future. honest. often stated in competitive terms. and mobilize the best resources for rapid action. Trust – Trust is the mutual respect for and confidence in people. may be as vague as a dream or as precise as a goal or a mission statement. innovative. Trust compels us to share information and encourage new ideas.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Company Vision: Corporate vision is a short. regardless of the job they perform. It includes setting a common goal in support of business objectives. stand behind their convictions and support the efforts of others. without specifying the means that will be used to achieve those desired ends. says: "To choose a direction. making an individual commitment to the team’s success and recognizing the success of the team. Trust recognizes the importance of individuals and appreciates their diverse opinions. They take bold.
business philosophy.. Cornerstone of all strategic planning. the geographic domain and expectations of . and having personal and professional integrity. and taking personal responsibility for your actions.done right.the first time. Mission statement: • • Provides thrust and direction to the organization. The mission statement should be a clear and succinct representation of the enterprise’s purpose for existence. In today’s increasingly competitive business environment. A mission statement should be a short and concise statement of goals and priorities.. In turn. The primary goal of any business is to increase stakeholder value. The most important stakeholders are shareholders who own the business. the target market..whether they know it or not. ethical. Quality – Quality is the primary determinant of customer satisfaction and loyalty. It should incorporate socially meaningful and measurable criteria addressing concepts such as the moral/ethical position of the enterprise. For example. employees who work for the business and clients or customers who purchase products and/or services from the business.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Doing What’s Right – Doing what’s right is being honest. goals are specific objectives that relate to specific time periods and are stated in terms of facts. An organization's mission describes its fundemental purpose and overall philosophy. better quality translates into better value for our customers and. It makes concrete the leader's view of the direction and purpose of the organization. It means consistently treating all people fairly. and it requires employees to continuously provide internal and external customers with the right product or service. 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 (what we are) is different than a vision statement (what we want to become). statement of purpose. delivering on promises. products/services. other names for a mission include: founder's philosophy. public image.. subsequently. Mission: Most businesses have some form of mission statement . A mission statement is an organization's vision translated into written form. better value for their customers-and this is the very essence of competitive differentiation.
The statement can range from a very simple to a very complex set of ideas. You may want to take the approach of being very specific. or is it enough to just make a living? What markets are you serving. and why you do it. Some company Goals may be as follows: . not product-oriented.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA growth and profitability. Other ways to think about a mission statement as you begin to write one include: • • • Answers the question. your company. The intent of the Mission Statement should be the first consideration for any employee who is evaluating a strategic decision. For instance. after gathering all necessary information. 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. Keep it short. and your ideals. A goal is a long-range aim for a specific period. is the setting of goals for the organization based on its vision and mission statement. Must be market-oriented (focusing on the problem the business is solving). Ask for input. It should tell your company story and ideals in less than 30 seconds: who your company is. Don’t “box” yourself in. Goals: The major outcome of strategic road-mapping and strategic planning. Basic guidelines in mission: • • • • Your mission statement is about you. Long-range goals set through strategic planning are translated into activities that will ensure reaching the goal through operational planning. “What business are we in?” Provides thrust and direction to the organization. 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. It must be specific and realistic. what you do. Specific: The Mission Statement should represent the broadest perspective of the enterprise's mission. what you stand for. Do you want to make a profit.
EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • 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. Structure of Organization: MANAGING DIRECTOR QUALITY MANAGER MAREKTING MANAGER OPERATION MGR FINANCE MANAGER OFFICE ADIMINSTRTOR PROJECT MANAGER ESTIMATOR . To increase the company's role in relations to social responsibility. To provide excellent customer service.
The structure of an organization will determine the modes in which it operates and performs. The structure undoubtedly provides basic framework for executive and employees to perform their task smoothly. depending on their objectives and ambience. Jobs should be designed in such fashion that every individual could contribute his maximum worth to the enterprise. Such departmentation will help in building coordination between different jobs and managers. The following points must be taken into consideration while building organizational structure: • Job design Jobs should be designed in such a way. Individuals in an organizational structure are normally hired under time-limited work contracts or work orders. Organizational structure. Organizations are a variant of clustered entities. It is specified that who will report .EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 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. The chain of command is also clearly stated. the number of employees and jobs managed by each manager is specified. sound and effective organizational structure is necessary. responsibility and task of every positions. as we know is the system of job positions. roles assigned to these positions and specifying authority. department. In order to achieve the desired goals. The major and related activities of the jobs should also be specified. It may have production. marketing and finance departments. An organization can be structured in many different ways and styles. Departments can be established on different basis. that job should have specified and defined task to be performed. • Departmentation or Grouping of Identical Jobs Identical and similar jobs should be grouped together in a department and placed under a departmental head. or under permanent employment contracts or program orders. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch. • Span of Control Under span of control. workgroup and individual. if it is based upon functions.
• Post-bureaucratic The term of post bureaucratic is used in two senses in the organizational literature. to enjoy privileged position and command respect and obedience from employees. sharing task with requisite authority with subordinates. mostly in tall organizations.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA who is the smooth performance of his duties. The authority empowers to know certain facts. The strategic leader makes all key decisions and most communication is done by one on one conversations. They are usually based on traditional domination or charismatic domination in the sense of Max Weber's tripartite classification of authority. It is particularly useful for new (entrepreneurial) business as it enables the founder to control growth and development. Organizational structures types: • Pre-bureaucratic structures Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. It is very much complex and useful for hierarchical structures organization. This may include total quality management. • Delegation of Authority In order to get the job done properly and smoothly. Effective span of control avoids overlapping. 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. duplication and confusion in the work. requisite authorities are granted to the managers. One generic and one much more specific. . As such the manger multiplies himself through delegation. Authority is the power to command employees and instruct them to do a piece of work. 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. Delegation is no doubt. The structure is totally centralized. This structure is most common in smaller organizations and is best used to solve simple tasks. • Bureaucratic structures Bureaucratic structures have a certain degree of standardization. They are better suited for more complex or larger scale organizations.
Heckscher. Moreover. authority is still Weber's rational. a small business could start making the components it requires for production of its products instead of procuring it from an external organization. a functional organization is best suited as a producer of standardized goods and services at large volume and low cost. codification and enforcement of rules and regulations . the postbureaucratic organization. • Divisional structure Also called a "product structure"..it shifts focus from organizational structure to the organization's culture”. the divisional structure groups each organizational function into a division. other cooperatives and when running a non-profit or community organization.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA culture management and matrix management. making the organization slow and inflexible. However it could also lead to a lack of communication between the functional groups within an organization. Coordination and specialization of tasks are centralized in a functional structure. As a whole. the organization is a network rather than a hierarchy. in which decisions are based on dialogue and consensus rather than authority and command. But not only beneficial for organization but also for employees faiths. Charles Heckscher has developed an ideal type. None of these however has left behind the core tenets of Bureaucracy. for instance the engineering department would be staffed only with software engineers. efficiencies can further be realized as functional organizations integrate their activities vertically so that products are sold and distributed quickly and at low cost. and the organization is still rule bound.the formalization. This sort of horizontal decision making by consensus model is often used in housing cooperatives. Hierarchies still exist. there is an emphasis on metadecision making rules rather than decision making rules. rather than a fundamental shift away from bureaucracy. Each division within a divisional structure contains all the necessary . open at the boundaries (in direct contrast to culture management). amongst others. 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. Another smaller group of theorists have developed the theory of the Post-Bureaucratic Organization.. which makes producing a limited amount of products or services efficient and predictable. describes them as cleaned up bureaucracies.does not change in principle. For instance.. arguing along these lines. in his classic study of culture management at 'Tech' argued that “the essence of bureaucratic control .. Gideon Kunda. This leads to operational efficiencies within that group. provide a detailed discussion which attempts to describe an organization that is fundamentally not bureaucratic. legal type.
It brings the best aspects of functional and projectized organizations. in order to take advantage of the strengths. • Strong/Project Matrix: A project manager is primarily responsible for the project. An example would be a company that produces two products. Common success criteria for organizational structures are: • • • Decentralized reporting Flat hierarchy High transient speed . this is the most difficult system to maintain as the sharing power is delicate proposition. Functional managers provide technical expertise and assign resources as needed. "product a" customer service department. • Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross. "product b" customer service department.functional aspects of the project. implementation success always depends on organization's purpose and function. However. This structure can combine the best of both separate structures. "product b" accounting department. Divisions can be categorized from different points of view. • Balanced/Functional Matrix: A project manager is assigned to oversee the project. Another example. "product a" and "product b".EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA resources and functions within it. "product a" accounting. Power is shared equally between the project manager and the functional managers. A matrix organization frequently uses teams of employees to accomplish work. a simple lattice emulating order and regularity demonstrated in nature. Using the matrix structure. this company would organize functions within the company as follows: "product a" sales department. an automobile company with a divisional structure might have one division for SUVs. 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 division for subcompact cars. and another division for sedans. engineering and marketing departments. The functional managers maintain control over their resources and project areas. Matrix structure is amongst the purest of organizational structures. there is no best format. Among these matrixes. "product b" sales department. Each division would have its own sales. • Matrix structure The matrix structure groups employees by both function and product. as well as make up for the weaknesses. of functional and decentralized forms.
Finance The definition of finance is the provision of funds or loan supplied to an individual or company.sub dept of finance and accounts 1. like 1.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • • • • • • High transparency Low residual mass Permanent monitoring Rapid response Shared reliability Matrix hierarchy Functional Pattern: Following are the main departments in any organization: 1. It can be also defined as the management of funds and capital required by a business and private activities. Procurement 3. Logistics 2. Technical / Operations Other departments depend on the size of the organization. Treasury department. Marketing and Sales 3. Human resource and administration 4. Finance and accounts 2. Often this term is used for the study of economics and how money is controlled. . Management of finance has also developed into a specialized branch within the financial sector and is carried out by finance managers.
low production and a cash crisis. Printed advertisement. financial records comply with internal and external audit. television . The Department takes care of finance flow to ensure that the company operates within its financial regulations and satisfies various external financial requirements. Advertising refers to the various media used to convey your message. Marketing: Marketing means informing your potential clients about your products or service. If to look through the activity of The Department. It is for this very reason that finance managers are very careful with finance they agree too and where it is funded from. capital plans. radio air time. problems occur with small businesses who fail to see the distinction between a business loan and a personal one. Finance managers are the pessimists whereas sales managers are the optimists who look to the future and not to the past! Often though. the result of this is depressed markets. Bad debts are poor finance management where rules have not been followed.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Managing this involves dealing with the optimization and allocation of funds to various areas either by borrowing or by using those available from internal resources. The word Optimizing may sound strange but it refers to taking measures that minimize the cost of financing while simultaneously attempting to maximize the profits out of the employed finance. Your target market is the specific group of people that consume your product or utilize your service. accurate and timely information and to guarantee that the required financial revision is closely adhered to in order to protect the assets of the company. there can be picked out the following main services it renders: • • • • • Payment of invoices and expenses Income collection and salary management Production and assignment of budgets. Finance department goal and services: The main goal of The Department is to provide the internal and external users of financial statements with relevant. It also ensures that the corporate. It is not uncommon to hear finance managers referred to as bean counters as they are looking at immediate returns and initial costs against the potential at a later stage. and finding ways to establish and keep a customer base. and cash flow forecasts Monitoring and managing financial plans Auditing and reporting financial condition 2.
Human resources progressively became the more usual name for this function.e. The origins of the function arose in organizations that introduced 'welfare management' practices and also in those that adopted the principles of 'scientific management'. Marketing department tasks: The Marketing office works to raise the awareness of the company and its prominence in the industry and market. business sectors or even whole nations. although it is also applied in labor economics to. Many people will join business associations. 8.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA commercials and the Internet are all part of advertising that conveys your business message to the public. you're promoting your business. Promotion refers to the various methods by which you convey your message to customers. The global aim of the department is promoting the product/service and increasing recognition of the company through researches and branding efforts. 3. 7. Human resource: Human resources is a term used to describe the individuals who comprise the workforce of an organization. co-coordinating a range of worker related processes and becoming known. Human resources is also the name of the function within an organization charged with the overall responsibility for implementing strategies and policies relating to the management of individuals (i. From these terms emerged a largely administrative management activity. This function title is often abbreviated to the initials 'HR'. When you communicate with the public. in the first instance in the United States as well as multinational corporations. * Advertising & Communication * Direct marketing * Conducting researches and market management * Service Marketing * Maintaining image and brand management * Developing new product * Promoting and professional sales * Retail management & technology. reflecting the adoption of a more quantitative as well as . 5. Typically. the major tasks of the marketing department are as follows: 1. 6. 3. or set up displays in malls and craft shows for promotional purposes. for example. The department's strengths should all be in proper understanding of consumer behavior and efficient decision-making process. the human resources). 4. in time as the 'personnel function'. 2.
”As an experienced entrepreneur. bookkeeping. which is a French word meaning "one who undertakes an endeavor". SWOT analysis: SWOT analysis is a strategic planning method used to evaluate the Strengths. It involves specifying the objective of the business venture or project and identifying the . virus scanning. payroll. hiring. motivating and conflict-resolution. • Administration: Includes sorting and/or reading mail and email. Accounting: Includes budgets. filing. The general purpose of Human Resource department is to establish proper staffing policy and implement it on practice. • • Correspondence: Includes writing advertisements. letters. advertising and special events. The main goals and tasks of HR department are: * organize appropriate system of staff selection and recruitment * organize system of effective staff training and development * ensure the competitiveness of the company within labor market * establish transparent system of staff assessment and promotion 4. Entrepreneurs assemble resources including innovations.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA strategic approach to workforce management. invoicing. you are most likely aware that there are daily duties involved with ensuring your business is successful. financial planning. bill payments. Weaknesses. and purchasing. promotions. finding customers. Entrepreneurship: “Entrepreneurship is the act of being an entrepreneur. firing. finance and business acumen in an effort to transform innovations into economic goods. • Computer: Includes such things as keeping your website up to date. answering inquiries. • Sales: Includes marketing. training. demanded by corporate management and the greater competitiveness for limited and highly skilled workers. Human Resources: Including interviewing. and credit management. press releases and articles. data entry. client retention. contact management. and Threats involved in a project or in a business venture. Opportunities. upgrading software and learning new software.
weaknesses. talents. • Opportunities: external conditions those are helpful to achieving the objective(s). opportunities and threats. • 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. the decision makers have to determine whether the objective is attainable. • SWOT Benefits. capabilities and opportunities. increasing buyin and resulting in a higher level of execution. And by understanding the weaknesses of your business. SWOT is a ground up approach allowing everyone in the exercises to have a voice thus. has been the subject of much research. • Weaknesses: attributes of the person or company that is harmful to achieving the objective(s). The SWOT analysis is often used in academia to highlight and identify strengths. SWOT builds alignment. What makes SWOT particularly powerful is that it helps you uncover opportunities that you are well.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA internal and external factors that are favorable and unfavorable to achieve that objective. First. The technique is credited to Albert Humphrey. If the objective is NOT attainable a different objective must be selected and the process repeated. A SWOT analysis must first start with defining a desired end state or objective. • Why SWOT? It helps you carve a sustainable niche in your market by taking the best advantage of your resources. given the SWOTs.placed to exploit. In general. Strategic Planning. It is particularly helpful in identifying areas for development. • What is SWOT Exercise? 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. you can manage and eliminate threats that could affect you negatively.[ • Strengths: attributes of the person or company those are helpful to achieving the objective(s). who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies. A SWOT analysis may be incorporated into the strategic planning model. Strengths and Weaknesses are internal to your organization while Opportunities and Threats often relate to external factors. Using the SWOT .
The research was funded by the fortune 500 companies to find out what could be done about this failure. : SWOT essentially tells you what is good and bad about a business or a particular proposition. ownership assigned and tasks executed that will get you to the next level in performance. .opportunities (prioritize and optimize) . • SWOT Categories. threats (counter) into actions (each within one of the six categories) that can be agreed and owned by a team or number of teams. SWOT analysis came from the research conducted at Stanford research Institute from 19601970. then work on translating: strengths (maintain. weaknesses (remedy or exit) . The Research Team was Marion Dosher.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA framework to assess your strengths and that of your competitors’. Robert Stewart. so that you can compete successfully in your market. and Birger Lie. Albert Humphrey. build and leverage) . Dr Otis Benepe. The background to SWOT stemmed from the need to find out why corporate planning failed. • Origins of SWOT. costs and investments?) 6) Administration (and how do we manage all this?) • How can SWOT help me? SWOT identifies critical-to-mission objectives. Once identified. • SWOT Results. 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. and the aim is to improve it. If it's a business. you can analyze the competitive landscape and develop a strategy that helps you differentiate yourself from your competitors. strategy is then defined.
EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Type Industry Founded Founder(s) Headquarters Area served Private.4 billion (2009) 13. 1959 Rich DeVos Jay Van Andel Ada.000 Alticor . United States Worldwide Steve Van Andel (Chairman) Key people Doug DeVos (President) Al Koop (Chief Executive) Russell Evan (CFO) Revenue Employees Parent USD 8. Direct selling. Michigan.
EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Introduction: Amway is the largest direct selling company and manufacturer in the world that uses network marketing to sell a variety of products. primarily in the health. beauty. and home care markets. reaching US$8. Michigan. Amway was founded in 1959 by Jay Van Andel and Richard DeVos. the company and family of companies under Alticor reported sales growth of 2. 2009.Its product lines .3%. Based in Ada.4 billion for the year ending December 31.
and then allowing a network of IBOs. The idea came when two Nutralite® salesmen. the three arms of Amway were all merged into a single entity . Amway continued to grow under the co-ownership of Van Andel and Devos. the pair purchased Nutralite outright .Amway Corporation.a solid opportunity where anyone with motivation could excel. Nutrilite dietary supplements. This was the 1950s. Amway conducts business through a number of affiliated companies in more than ninety countries and territories around the world. They purchased the rights to Frisk. bought a controlling share in the manufacturing facility in Michigan where LOC was made.approximately five thousand distributors were in their Both Mr.they now owned the company they had started as employees with. Nutralite was a single entity company. Van Andel knew how to move product . now Amway. Rich DeVos and Jay Van Andel were at the very top of a very successful MLM at the time. and Amway is no exception. Amway Services did business related tasks (like insurance for distributors) and Amway manufacturing. In 1959. In 2004. insurance and cosmetics. This is a main part of Amway's business philosophy.build on relationships. personal care products. By 1964. jewelry. This seemed like the only way to offer what Jay and Rich originally envisioned . electronics. In 1960.). In 1972. and by the end of the decade. which produced LOC.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA include home care products. the American Way Association was formed. The Amway Sales handled product and distribution. Nutralite was sold door to door. the American Way Association. But what was needed was a way to expand.C. Great companies start with great ideas.O. This would be the chance to grow and set the direction of a new entity. It is ranked by Forbes as one of the largest private companies in the United States and by Deloitte as one of the largest retailers in the world. Meaning and the History of Amway: What does the word Amway mean? Amway is an abbreviation for "American Way". regardless of their background and status. air purifiers. DeVos and Mr. Health & Beauty products accounted for nearly 60% of worldwide sales. a household cleaner (which was later renamed Liquid Organic Concentrate or L. Not just products and not just sales. but a way to a better life. A way that would allow them to multiply the efforts of what they alone could accomplish. water purifiers. The idea was by handling the manufacturing and distribution of a product line. What this meant is that there were 3 companies all using the Amway name. Rich and Jay immediately set out to find an initial product to add to the line. Jay and Rich had built a respectable business of their own . .
The company is in 58 markets worldwide and manufactures more than 450 products. "Pyramid scheme!" Fifty years of steady growth has shown this criticism has no basis in fact. MLM is a proven business model that produces massive success for individuals.Africa . The company is still thriving and still offers opportunity to individuals who have the desire to build their own business.India .Latin America .Europe and parts of Asia . Rich DeVos is still alive. They cried.2008 Critics argued that the model wasn't sustainable and that growth was mathematically limited. 2009 by ibofightback Posted in Amway News . Andel's place at Amway Global is now held by his son Steve. In 2008. reaching past the borders of the US to offer the same opportunities in other countries: . At his death.1998 .2005 .EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Amway continued to expand.Jay Van Andel passed away at age 80 in 2004.4 billion dollars. although he has passed the Presidency of Amway to his son Dick.Australia .1985 . Amway (now technically. DeVos was named one of the richest men in America by Forbes magazine. DeVos owns the Orlando Magic basketball team among other assets.2 billion dollars in personal wealth (2009).Vietnam -.1979 . • Alticor and Amway Sales Growth: 1960 to 2008: February 5th. Amway Global does business in more than 98 countries. with an estimated 4. Van Andel's net worth was estimated to be 2.1997 .1995 .China .Japan . Mr.1974 .1971 . Amway Global) reported sales of 8 billion.Russia .
Alticor reports actual revenue – sales at the base IBO price I’ve converted the figures so they can be properly compared. not at the price they were sold to distributors/IBOs. In 2007 this was reported as around $100 million. so by far the majority of the sales are through the Amway business opportunity. Amway Sales Data: . Note however that Alticor sales includes revenues from other sources such Access Business Group and Amway Grand Plaza. It’s important to be aware of this as many critics of the business (including some former Diamonds who you would think know about this) have in the past conveniently ignored the change in reporting standards and tried to claim Amway’s sales peaked in 1998.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Amway global sales were reported at “estimated retail” until 2000 when the holding company of Alticor was formed. This means they’re valued assuming that they were all sold at the full retail price.
3 billion 1995 $6.2 billion 1986 $1. With the founding of Alticor.5 million 1961 ? 1962 ? 1963 $21 million 1964 $25 million 1965 $38 million 1966 $40 million 1967 $50 million 1968 $65 million 1969 $85 million 1970 $120 million 1971 $165 million 1972 $180 million 1973 $210 million 1974 $230 million 1975 $250 million 1976 $300 million 1977 $375 million 1978 $500 million 1979 $800 million 1980 $1.13 billion 1984 $1.3 billion 1987 $1.0 billion 1992 $3.8 billion 1997 $7. we offer all people the opportunity to .5 billion 1983 $1.7 billion 1999 $5. Taking the sales data published in 2001 report into account.5 billion 1994 $5.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Year Estimated Retail Sales Year Estimated Retail Sales Year Estimated Retail Sales Year Estimated Retail Sales 1960 $0.8 billion 1989 $1.5 billion 1988 $1. Its historic sales data at estimated retail prices is provided below from 1959 to 2000 (in 2000 Amway switch over to Alticor. MISSION OF AMWAY: • Through the partnering of Distributors.2 billion 1991 $3.2 billion 1985 $1. Employees. The actual sales to distributors are marked with *.0 billion 1998 $5.9 billion 1993 $4. the ERS values are about 32% higher than sales to distributors. VISION OF AMWAY: • • Helping people live better lives. At its peak in 1997 Amway estimated retail sales worldwide at 7 Billion USD. Showing where the business wishes to be in the future.3 billion 1996 $6.4 billion 1982 $1.9 billion 1990 $2.1 billion 1981 $1.0 billion Amway has grown fairly quickly since its inception. Until 1999 sales were reported at Estimated Retail. the report methodology was changed and the actual sales to distributors instead of estimated retail sales (ERS) have been reported since 2001. and the Founding Families and the support of quality products and service. This is approximately 32% higher than actual sales revenues from sales made to Amway distributors.
2003.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA achieve their goals through the Amway Sales and Marketing Plan. Orissa awarded AOF a memento & certificate for conducting a mega-Blood Donation camp of 816 units on 4th May. Broad over riding statement of purpose. home care. Awards and Recognition: • Presented the Millennium Outstanding Service Award 2000.presented a trophy and a certificate of appreciation. in recognition for work carried out for the visually challenged. by the Confederation for the Blind (AICB). GOAL OF AMWAY: • • • The development of new business opportunities. • The Indian Red Cross Society. On-going assistance to be provided in education. 2003. Social responsibilities performed by AMWAY: • • • One by One Campaign for Children Amway Opportunity Foundation (AOF) National Project for the Blind: Project Sunrise: The objective is to identify one orphanage/institution at each location where Amway has a modestly-large office (52 cities). healthcare and vocational training under the following heads: · Health care · Education and vocational training · Safe drinking water . cosmetics and wellness. To provide excellent customer service. To increase the company's role in relations to social responsibility. home tech. for the largest number of donors at a Blood Donation Camp (BDC) held by any financial and commercial institution and industry. • • To facilitate best business opportunities. To deliver high-quality products to semi-urban and urban homes in diverse areas of insurance. personal care. The Mayor of Surat Snehlata Chouhan . • The Surat Raktdaan Kendra felicitated Amway India at their annual function on 5th Oct.
EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School)
· Children’s Day and AOF Day celebration with Amway staff & Amway Amway Products: Amway offers a range of exclusive, competitive brands that meet proven customer needs around the world. From nutritional supplements to water treatment, cosmetics to cleaning products, these brands are the solid foundation for a successful, independent Retail business. Active Lifestyle • Artistry • Atmosphere • Beautycycle • Body Series • Boutique • Dish Drops • Eddie Funkhouser • Emma Page • eSpring • L.O.C. • Gensona • Glister • Hymm • iCook • LifeStyle Balanced Solutions • NAO Cosmetics • Moiskin Skin Care • Nutrilite • Nutriway • XS Energy • Ocean Essentials • Personalized Health • Peter Island • Protique • Positrim • Satinique • SA8 • Time Defiance • Tolsom • Trim Amway Personal Care Products
Nutrilite® is the world’s leading brand of vitamin, mineral, and dietary supplements, grown harvested and processed on its own certified organic farms.
Artistry® is one of the world’s top five largest-selling prestige brands of facial skin care and colour cosmetics. Our scientists and formulators have developed the complete line of cosmetics,
All products of Attitude contain Skin Vitalising Complex that synergistically combine to cleanse, Replenish & Moisturise the skin making it soft & supple.
EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School)
Dynamite's range of male grooming products, formulated internationally is designed to deliver the ultimate grooming experience.
Glister Toothpaste is a revolutionary Multi-Action Toothpaste with Sylodent that offers seven benefits.
Persona Premium 3 in 1 Soap is a complete soap for the entire family promises refreshing confidence.
Satinique Advanced Range with unique Ceramide Infusion System uses nature's own renewing technology to rejuvenate, strengthen and protect your hair.
SA8 Gelzyme is India's only 3-in-1 laundry detergent which pretreats, cleans and softens.
EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School)
G&H Range enriched with the goodness of Glycerine and Honey, deeply nourishes and hydrates the skin for a healthy glow.
LOC High Suds is a multipurpose household liquid cleaner.
Dish Drops is a concentrated hand dishwashing liquid with a powerful "Triadic Detergency System".
Great Value Product Range offers you Great Quality, Great Performance, Great Price and a Money Back Guarantee!
1) Direct competitors: • • •
AVON MARY KAY SUNRIDER Local INDIAN companies. Changing Political & Economic Atmosphere Products used as samples to persuade relatives and friends to join Amway Focus shifted from selling products to recruiting.
2) Indirect competitors: • •
Organizational structure of Amway: Terms used in Amway:
IBO/ABO/AIE-Independent Business Owner/Amway Business Owner/Amway Independent Entrepreneur is a business partner of Amway who is authorized to
• Platinum or direct is an IBO who has reached the maximum bonus level for six months.an older term for IBO PV — Point Value is a value assigned to each product or service sold by Amway. Recommended retail markup ranges from 20%-35%. • Diamond a distributor with at least six legs generating Silver Producer volume for at least 6 months of a year. • Sponsor is an IBO who refers (sponsors) a new IBO to Amway. either personally or through an Amway website. Different names are used in different markets. • Performance bonus is the monthly bonus paid by Amway to IBO's. Silver Producer is an IBO who has reached the maximum bonus level for one month. An IBOs monthly performance bonus bracket depends on total PV in a month. • Gold Producer is an IBO who has reached the maximum bonus level for three months. although IBO's do not get paid to sponsor. • BV — Business Volume is typically the wholesale cost of the product or service sold by Amway. . • • Upline is the term used to refer all the IBOs up in the line of sponsorship of an IBO. • Q-12 is a Platinum or higher IBO that qualifies every month for 12 months of a year. In North America a Platinum is generating a minimum of approximately $30. • Emerald a distributor with at least three legs generating Silver Producer volume for at least 6 months of a year. In North America the Performance bonus ranges from 3% to 25%. • Retail Profit is the markup earned by an IBO when they sell a product to a consumer. In India it ranges from 6%-21%. Downline is the term used to refer all the IBOs down in the line of sponsorship of an IBO. • • Distributor .000 in sales volume per month. They are collectively also known as group • • Leg refers to a personally sponsored IBO and all of their downline. In other markets it ranges from 3% to 21%. Performance bonuses are multiplied by the groups total BV. the greater the percentage earned. The higher the PV.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA market and distribute products and services available from Amway.
2010 IBOAI Board and Governance & Oversight Committee: • • Steve Woods. IBOs are free to make decisions many others in business are not free to make. Alberto Aguilera . formerly Quixtar. and participation. As independent business owners. as it has for 50 years. As independent business men and women. • Independent Business Owners Association International (IBOAI) : The IBOAI (IBOA International or Independent Business Owners Association International) is a trade association representing Independent Business Owners affiliated with Amway North America. The IBOAI (or IBOA International) is one example. and who educate and represent their members. Vice Chairman Bob Andrews. the IBOAI Board listens to ideas. IBOs are the CEOs of their own businesses. With IBO input. literally. proposes improvements.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • Independent Business Owner (IBO): An IBO is. Role of the IBOAI Board: The IBOAI Board is the representative body of the Association acting on behalf of all IBOs. A trade association is an organization of business people who share common interests or concerns. and other important decisions. what products to sell and at what prices. IBOs decide how active to be in their business. It is the primary advocacy organization for IBOs in North America. Working closely with Corporate staff. they are not employees of Amway North America or Amway Corporation. Past Chairman • Other important directors: 1. which is powered by Amway North America. what hours to keep. and they make many of the same daily business decisions other business executives make. support. Together. formerly Quixtar. and advises Amway on the best way to move the business forward. to keep it moving forward and make certain the business is better for every generation. Chairman Brad Duncan. IBOs are independent contractors. the Board advises Amway on every facet of the business. they bring positive change to this business. from products and promotions to operations and business guidelines. an Independent Business Owner: an individual or individuals who own and operate their own business. who to sponsor.
offering you all the personal support and assistance you require to become the Business Owner you want to be. Shivaram Kumar 12. in turn. allowing you the flexibility to work where and when you want. It allows you to build your business through retailing products and sponsoring other people who. and the IBOAI – their primary advocacy organization – behind them all the way. Jody Dutt 8. with over 40 years of experience. and grows with them. Leif Johnson 11. Howie Danzik 6. Kanti Gala 9. can retail products and offer the business opportunity to others. Mike Bundy 4. Sales and Marketing Plan: The Amway Sales and Marketing Plan is a low risk. Jim Dornan 7. Dan Yuen IBOs are never alone. a line of sponsorship. Bert Gulick 10. It adapts easily to your needs and ambitions. Pedro Lizardi 13. Doyle Yager 15. you not only build your own business network but also enable others to build one of their own. Supported by great products and people who will help you succeed. and finally In Control of your life. The Amway Sales and Marketing Plan put you in control. giving you time for family and friends as well as the opportunity to earn a good income. Organization type and Business Opportunity: The Amway is private co operative organization. low start-up cost business opportunity that is open to everyone. They have a sponsor. With Amway you are Connected to the global leader in multilevel marketing. Doug Weir 14. .EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 2. John Crowe 5. Glen Baker 3. By passing your sales and marketing knowledge to your developing team.
Amway needed to set out the key objectives it wanted to achieve. Amway Global provides you with support like: . Human resource and administration. Finance and accounts. A New Strategy of Amway: • • • • • • • • • • Agreement with the government and company resumed operations Goods will be sold in retail outlets and through sales representatives Income of sales distributors will be based on direct selling done by them Same Distribution centers served as retail outlets for the company Localization of employees Localization of production and Raw Material Localization of research and development Transparency and Credibility of company’s management Functional pattern of Amway: Following are the main departments of Amway: 1. The following objectives for the brand were set: • • • To increase distribute or profitability and productivity by providing a new and exciting business opportunity To optimize consumer convenience and value through enhanced product differentiation with this exclusive and revolutionary cleaning system To provide innovative and unique products to enhance the image of Amway Home Care. 3. Marketing and Sales. In creating a marketing strategy for the Super Concentrated Cleaning System.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Marketing strategy: A strategy is a plan of action designed to achieve the goals of the organisation. 2.
our Customer Care Associates can help you. and we'll do the rest. and instructor-led training are some of the ways we can share with you the knowledge to grow a successful independent business. through which they engage in person-to-person marketing. and then decides how best to utilize this in their town or city. The LIC also plays a lead role in raising funds they wish to utilize. This type of direct selling involves matching a consumer's needs with the goods and services on offer. Amway has helped millions of people around the world to start their own independent business. the more lasting the relationship between the seller and the buyer. AOF has formed a team of 6 or more distributors and employees to form a Local Implementation Committee (LIC). check customer Volume.000 people worldwide.com. form a project. and free websites you can personalize. Amway believe that quality improvement happens when people come together.000 Amway distributors and 450 full-time employees are all considered AOF volunteers. promotions. Strategic analysis to overcome problems: Today it is a global business that. along with its parent and sister companies.like registration. and event sponsorship. online sites. They identify potential partners. like process the order. video. or product information . Amway (UK) began operations in 1973 and has its own distribution and Product Selection Centers. brochures. The business also operates strategically at a Global. At 56 Amway offices across India. European and National level. Ownership of Amway: • IBOs and Customers: . and renew your business. And we help Build awareness of your products and brands with national advertising. all at Amway Global. This core belief is what all AOF initiatives are based upon and it holds true time and again. directly employs 10. With a passionate and vigorous workforce ready to contribute their bit to the well-being of society. and implement this with other volunteers. order products. manages your customer accounts. renewal.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • • • • • Customer care: If you have a question about anything . The beauty of this system is that the LIC raises the funds. Business management: You can manage your business. Business. and handles the shipping details. LIC takes ownership of being the face of Amway’s CSR at the location. volunteering becomes a way of life in Amway. The better the match. Marketing: We support your sales efforts with DVDs. The 550. Training: Online. Magazines. Order management: You sell the products.
since IBOs are rewarded only when their efforts actually result in product sales. beauty. • Business Systems: IBOs employ many different approaches to build their businesses.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Amway services the needs of both Independent Business Owners and customers. typically involving training systems. friends. and time-tested tactics to approach people and interest them in the business opportunity and products. Some companies spend millions on strategies intended to get people to spread the word about their products. Personal referrals have proven to be much more effective. Members. Amway will assign them one. Through its Independent Business Ownership Plan. home care.. while 42% trusted information obtained from family. and Clients. This is a much targeted market spend. it is the result of a personal referral by an IBO -not as a result of some advertisement they saw on TV. motivational meetings and tools. IBOs build businesses that allow them to earn income based on sales made resulting from their efforts. individuals must register with an existing IBO. The biggest chunk of Amway's marketing budget goes directly to rewarding IBOs for sales volume resulting from their efforts. Products are shipped to their homes and covered by Amway's Customer Satisfaction Guarantee. and colleagues. When a person registers with . Customers must register with the identification number of their servicing IBO. resulting in product sales. Only 8% of respondents in the Edelman 2005Annual Trust Barometer study indicated that information obtained in advertising was credible. • Personal Referrals: Unlike most other companies. and other topics. Am-way does the same by rewarding IBOs for spreading the word about the business opportunity and the exclusive products available through Amway. If a new registrant Does not have a servicing IBO. Amway's sales are not the result of advertising. • Buzz Marketing: Alticor pioneered buzz marketing through its person-to-person referral model. Customers pay no fee to shop from a large selection of products and learn from expert advice on health. To launch an Amway-powered business. Those efforts include registration of new Ibos. When people visit Amway's site. Amway's tiered compensation plan rewards the movement of product through an IBO's sales organization and their ability to train others to create their own successful organizations.
It’s easy to get admission in Amway with easy rout like intent. If you're into health. • • A business with national and international scope gives more opportunity to the costumers. Products are easy to sell. The person who wants do something can be make profit with investment of low cost. The possibility of financial security and freedom of time to enjoy life. Have good customer service system. Hence it can be A home based business. Initially high entry cost leads to somewhat restrictions for business development. it typically is the result of having been approached by an IBO already involved in one of several large organizations that provide training and support to IBOs. Almost no risk of money as world class quality Minimal start up costs gives strong base to the initiation of business. SWOT analysis of Amway: STRENGTH: • Based on direct selling operations. Backed by a 100% Customer Product Refund Policy produce faith and reselling attitude in customers. Every can participate in business. WEAKNESS: • More power to IBOs gives critical structure to organization. Often. Organize meetings and events time to time. • . a new IBO also will choose to attend optional and voluntary training sessions or purchase professional development materials provided by that organization . Quality Products that Inspire Confidence. Functions are performed by IBOs. you can focus on Nutrilit supplements and XS Energy Drinks. • Independence: The beauty of Amway's business model is that there can be as many ways of pursuing the business as there are IBOs.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Amway. • • • • • • Training to staff. So everyone can participate in business.all covered by a moneyback guarantee.
OPPURTUNITIES: • • • Setup a manufacturing plant in all countries leads to better platform for company. Focus shifted from selling products to recruiting.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • • Rumors for direct selling operations. Population of INDIA gives better opportunity to company to receive more profit. SUNRIDER creates lot of competition in market which leads to strong marketing competition in market. Competitors like AVON. THREATS: • • • Too much freedom to IBOs. As the company name itself gives reliance and faith for the customer and buyer produce greater opportunity for marketing which leads to decrease in total expenditure of company. Change in government policy may affect to the profit and freedom of company. . MARY KAY.
confirmable sources. chances are you’ve encountered people who claim Amway is some kind of scam business. Skim through these finding and decide for yourself whether those kinds of opinions really have a lot of credibility in the face of all of these facts. each with different ways of doing things that may not all appeal to everyone? Or perhaps their opinions driven by business interests working or being paid by competitors or potential competitors to Amway? CONCLUSION: . it’s illegal. or some other information that has made you think twice about being involved.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Finding: I’ve written about Amway based entirely on factual. Have all these major companies and organizations that have recognized Amway for excellence been conned? For fifty years? Or perhaps the opinions you read on the internet have been formed from limited or even no experience – from encountering some new or inexperienced Amway rep that never bothered to learn how to act professionally or properly explain the concept. especially on the Internet. Or perhaps the experience was with just one of dozens and dozens of different Amway affiliated organizations. and probably never did much more than dabble for a few months. the products are poor quality. If you’re researching Amway.
Successful business today depends upon a company's ability to quickly adapt to changes in the marketplace. the products are costly as compared to other branded products available in market but if we compare the quantity while using the products require less amount and thus can be used for longer time. and daily use products etc. This knowledge. tale and instant purchasing. There must be multiple options for purchasing the products for distributers like online. The products of Amway are world class product quality. has enabled us to become one of the industry's technological leaders. They are made up of natural a thing that’s why they are good for health and environment. If you're looking for high quality products and solid customer support at rock-bottom prices. Amway covers a wide range of products from beauty care. then choosing Amway really does make sense. and its willingness to act upon it. and by consistently refining our existing product line.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Amway is which is one of the largest direct selling company in the world. Health care. Through they continued pursuit of new product ideas. Once customer gets idea about product he comes to know advantages of products. they pride it selves on knowledge of the dynamic networking market that is quickly becoming central to modern business. At Amway. The main objectives of Amway are to profit there distributers by eliminating the middlemen and provide the products to the distributers in cheaper price. The products should be cheap the home delivery system takes at least two days to deliver the products so the delivery should be instant. to clothing. they have become one of the top providers of cutting-edge networking products in the global market. SUGGESTIONS: • • • Trial packs should be used because customer must have to introduce the product. .
mouthshut.com 2) http://www.wikipedia.wikipedia.worthwilemag.com 12) http://www. 4) http://en. Bibliography: 1) www.org/wiki/Organisation 8) http://en.business-standard.com/ 6) http://www.businessballs.in/Articles/Article.scribd.wikipedia.org/wiki/Amway 5) http://www.com/ 7) http://en.com 13) http://www.org/wiki/Administration 11) http://www.amway.com 14) http://www.org/wiki/Business 9) http://www.com .com 10) http://en.authorstream.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • In every city.in/ 3) http://www.amway. the Amway office should be situated in such a location so that it is in reach of all distributers.wikipedia.nutrilite.mouthshut.
a major direct selling FMCG Company in the country. by adding 170 new branches across the country in the next two-three years. Cosmetics and Great Value products.com/ 18) http://articles.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 15)http://wiki.com 16)http://dictionary. Amway India. We are also planning to launch 6 to 8 new products every year.thetruthaboutamway. Nutrition & Wellness. Presently. Home care. The company offers 115 products in five categories. Amway India Enterprises Pvt Ltd. . "With an aim to strengthen our network base." William S.Personal care.com 17) http://www. we are planning to increase the number of touch points (branches) up to 300. said at a press conference during plant visit of reporters to its Baddi facility in Himachal Pradesh. Nutrition & Wellness segment contributes around 50 per cent of Amway India’s total turnover. Annexure: Amway India plans 170 new branches by 2013 Eyes 25% y-o-y growth for the next five years.bplans.answers. MD & CEO. The company is also eyeing 25 per cent year-on-year growth for the next five years. is planning to open 170 new branches across the country in the next three years (by the year 2013).com. the company has 130 branches across the country. Pinckney.reference.
1407 in 2009 crore over the past three years. 55 crore. the company has just tripled the capacity at its contract manufacturing facility in Baddi (Himachal Pradesh) at an investment of Rs. and are more experiential for the consumers. We are eyeing 25 per cent year-on-year growth for the next five years. essentially as the quality of the Amway pick-up centre’s has undergone a sea change. We have grown from Rs. "Amway’s focus in the past 2-3 years was to improve consumer access and awareness.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA With an aim to meet the market demand. . which paid off handsomely. 799 crore in 2007 to Rs." Pinckney said.
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