This action might not be possible to undo. Are you sure you want to continue?
“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 am grateful to the Librarian of Excel Business Academy. whose constant guidance and encouragement crowned our efforts with success. Prof. I consider it my privilege to express gratitude and thanks to the Management – Excel Business Academy.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. I would also like to thank each and everyone especially all my friends for their cordiality & support during my project. I thank our Principal Prof. Yuvaraja S E. Last but not the least. Date: / / Place: Bangalore swapnil . I wish to express my heartfelt gratitude to Prof. for the encouragement and intellectual influence during the course of the project work. Thejaswi Naviloor. for their help and able guidance for the completion of the project successfully. Head – MBA & TPD and my Project Guide Prof. for his support during my study. Head – PGPM & Techno Management Studies. Bangalore for giving me the opportunity to conduct this study. Shreya K Rao. Gurutej.
2 Types of Organization 2.1 Meaning of Business 1. policies.1 Meaning of Organization 2.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA TABLE OF CONTENTS: CHAPTER NO.5 Organization Structure & it’s Types 2.3 Meaning of Business Administration 1. 1 1.3 Organizational Structure & Type of Amway 3.4 Type of Organization CONTENTS PAGE NO.3 Types of Ownership 2.4 Difference between Business Management & Business Administration 1.6 Functional Patterns – People.1 Introduction 3.5 Types of Business 2 Organizational System (General Study) 2.2 Vision. 2.7 SWOT Analysis 3 Organizational System with respect to Amway: 3. mission & Goals of the company 2.4 Vision. . problems if any.2 Meaning of Management 1. systems. Mission & Goals of the Amway 3.
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.7 SWOT Analysis 4 Summary of Findings & Conclusion 4.6 Type of Ownership 3.2 Conclusion 4.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 3. .1 Findings 4.5 Functional Patterns of Amway 3.
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. which is set up by the administration. Its one basic function is to reliably solve customer problems. The important factor important to study is Organization. Corporate vision describes aspirations for the future. Management in all business areas and organizational activities are the acts of getting people together to accomplish desired goals and objectives efficiently and effectively.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Executive Summary: This executive summary will give you key facts concerning the Amway. These facts will help to find out how well the Amway opportunity can match your business goals. The major outcome of strategic road-mapping and strategic planning. Organization is not an end it itself but a means to achieve an end. 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. The Mission of organization should represent the broadest perspective of the enterprise's mission. whereas management makes the decisions within the confines of the framework. Also Management is the act or function of putting into practice the policies and plans decided upon by the administration. Let’s start from main component that is business. It is the foundation upon which the whole structure of management is built. Hence Administration makes the important decisions of an enterprise in its entirety. . without specifying the means that will be used to achieve those desired ends. A business' purpose is to attract and keep customers.
skin and personal care products. The products are sold through Independent Business Owners (IBO). a subsidiary of Alticor. Using attraction marketing for Amway products is the fastest way to make steady retail profits. and for looking at the Opportunities and Threats you face. the support of a corporation with 50 years of experience and compassion. and a premier compensation plan. The Amway/Amway Global. Analysis by A SWOT Exercise is a powerful technique for uncovering and understanding your Strengths and Weaknesses. is the setting of goals for the organization based on its vision and mission statement. . The most important topic is an organizational structure is a mainly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim. is marketing nutritional supplements. a global community ready to offer support.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA after gathering all necessary information. today also known as attraction marketing. They're attracted by the unlimited potential of the opportunity. Amway already helped over 3 million people start on their path to success. The most effective strategy for this is direct marketing. air and water purifiers and a line of home cleaning products.
the exact definition of business. The problem with business today is that people think the meaning is about building a monument to you. 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. Management is the art and science . A business is a legally recognized organization designed to provide goods or services. The meaning of business is having an impact on people's lives. such as "the music business" and compound forms such as agribusiness. Businesses are predominant in capitalist economies. Anyone with vision should understand the problem they're solving.. A business is typically formed to earn profit that will increase the wealth of its owners and grow the business itself. It’s one basic function is to reliably solve customer problems. However. depending on the scope — the singular usage (above) to mean a particular company or corporation. Businesses can also be formed not-for-profit or be state-owned. or both. Meaning Of Management: Management is generally defined as the art and science of getting things done through others. doing commercially viable and profitable work.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. to consumers. the generalized usage to refer to a particular market sector. As managers have an awful lot of work to do. Some (cynical) individuals think that this means managers don’t have any work to do themselves. is a matter of debate and complexity of meanings. businesses and governmental entities. or the broadest meaning to include all activity by the community of suppliers of goods and services." My definition is close: A business' purpose is to attract and keep customers. like much else in the philosophy of business. This definition emphasizes that a manager plans and guides the work of other people.. Notable exceptions include cooperative enterprises and state-owned enterprises. The term "business" has at least three usages. The etymology of "business" relates to the state of being busy either as an individual or society as a whole. Most businesses are privately owned.
and study of this subject. • Organizing: (Implementation) making optimum use of the resources required to enable the successful carrying out of plans. human resource management. and natural resources. A manager is therefore someone who defines. a pre-requisite to attempting to manage others Management can also refer to the person or people who perform the act(s) of management. over the next 5 years. .) and generating plans for action. operation management. usually people for whom the manager is responsible in an organization. Management comprises planning. next week. generally by organizing and directing their activities on the job.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA of getting things done through others. leading or directing. plans. management1. 2. and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Management in all business areas and organizational activities are the acts of getting people together to accomplish desired goals and objectives efficiently and effectively. is called management”. next month. staffing. etc. Basic functions of management: • Planning: Deciding what needs to happen in the future (today. including design. The main branches of management are financial management. This view opens the opportunity to 'manage' oneself. next year. Resourcing encompasses the deployment and manipulation of human resources. service management and information technology management. The group of individuals who make decisions about how a business is run. technological resources. management can also be defined as human action. financial resources. Because organizations can be viewed as systems. assists. Management Define: “The efficient and effective operation of a business. marketing management. organizing. guides. The initiation and maintenance of an investment portfolio. and assesses the work of others. production management. strategic management. to facilitate the production of useful outcomes from a system.
Administration can be defined as: “The universal process of organizing people and resources efficiently so as to direct activities toward common goals and objectives”. then employees may not contribute to the other functions (which are usually set by top level management). The word is derived from the Middle English word administracioun. In other organizational analyses. employees cannot work effectively. management is viewed as a subset of administration. recruitment. specifically associated with the technical and mundane elements within an organization's operation. because without motivation. which is in turn derived from the French administration. • • Controlling/Monitoring: Checking progress against plans. In some organizational analyses. and hiring individuals for appropriate jobs. but. Personnel and management information systems services. itself derived from the Latin administratio — a compounding of ad ("to") and ministratio ("give service"). administration can refer to the bureaucratic or operational performance of mundane office tasks. This title is archaic. is what is intended when the term "the administration" is used. this function.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • • Staffing: Job analyzing. in many enterprises. Administrator can serve as the title of the general manager or company secretary who reports to a corporate board of directors. Leading/Directing: Determining what needs to be done in a situation and getting people to do it. It stands distinct from executive or strategic work. If motivation doesn't takes place in an organization. Motivation: Motivation is also a kind of basic function of management. . together with its associated Finance. Business Administration: Business administration consists of the performance or management of business operations and thus the making or implementing of major decisions. usually internally oriented and reactive rather than proactive.
the company's exposure in opting for this health plan instead of that one. the risk of an acquisition. stockholders. so too has the oversight of companies: their management. specifically with regard to personnel. Perhaps the best way to define business administration is to look at the types of courses offered in MBA curriculums and the specialties. 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. and that will involve understanding e-business and how it is rapidly evolving. Business administration will always include the intangible quality of leadership. business administration is going to include international and global business. as well as strategy and economics. The definition of business administration includes whatever knowledge is required to make all of these components work productively. This might include the risk of launching a new product. Along with leadership comes the task of negotiation and conflict resolution. A critical part of business administration is the awareness of risk. The definition of business administration will have to include marketing. their taxes and the role that taxes play in corporate economic strategy.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA As business has become more complex." that one can opt for in an MBA program. Behavioral psychology plays an important role in business administration: a misstep in an adversarial situation with a union can take a company under. Defining business administration then means defining oversight roles for the assortment of internal specialties that every business of any size has come to include. inventory and cash flow. Advertising has grown to include multiple media outlets and an assortment of targeted interest groups: new customers. their personnel issues. repeat customers. and all the other small matters that make a big difference to a new or small business. Business administration includes an understanding of entrepreneurship: tax structures for small businesses along with personnel issues at that level. Also included in business administration at this scale is the art and science of acquisition: when to buy a company or property and why. and the costs involved. investors and new geographic markets. as it did Continental Airlines some years ago. . For a large corporation. you won't have a business to administer unless you sell your products. the risk of a competitive strategy. or "majors. Marketing has become the term of choice for this entire strategically placed product exposure. their growth strategies. Ancillary to marketing is an understanding of the new tools available for product distribution. In this instance. the definition of business administration will include requirements of certain cultural differences and an acute understanding of the global economy and its current fluidity.
whereas management is a middle level activity. Management is used by business enterprises.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Management vs. however. one would find that it consists of owners who invest the capital. so as to make them successfully pursue and achieve common goals and objectives. Administration: Management and administration may seem the same. it involves motivating and controlling functions. 3) Administration is the top level. The decisions of an administration are shaped by public opinion. technical abilities and human relation management abilities are crucial. This is because administrators are ultimately judged by their performance. It may be defined as a system of efficiently organizing people and resources. military. Administration has to do with the setting up of objectives and crucial policies of every organization. while management is an executive function. whereas management decisions are shaped by the values. is the act or function of putting into practice the policies and plans decided upon by the administration. What is understood by management. 4) Administrators are usually found in government. Management consists of a group of managerial persons. or position of administration. such as finance . who leverage their specialist skills to fulfill the objectives of an organization. whereas management makes the decisions within the confines of the framework. one needs administrative qualities. Administration is perhaps both an art and a science. If one were to decide the status. but there are differences between the two. rather than technical qualities. which is set up by the administration. opinions and beliefs of the mangers. and social and religious factors. Administration must incorporate both leadership and vision. whereas. 1) Administration is a determinative function. 5) In administration. religious and educational organizations. 2) It also follows that administration makes the important decisions of an enterprise in its entirety. . the planning and organizing of functions are the key factors. In management. government policies. When it comes to the type of abilities required by an administrator. so far as management is concerned. and receive profits from an organization. 6) Administration usually handles the business aspects.
and exercises control over the finance and licensing of an organization. Management. Administration is a determinative function. is used by business enterprises. Administration is above management. crops) creating food surpluses that enabled the development of more densely populated and stratified societies. Administration makes the important decisions of an enterprise in its entirety. Summary: 1. Management is the act or function of putting into practice the policies and plans decided upon by the administration. It is different from executive or strategic work. which has to do with the technical and mundane facets of an organization’s operation. 4. in their own ways. .e. The study of agriculture is known as agricultural science. Both these functions are crucial. Therefore. Agriculture is also observed in certain species of ant and termite. to the growth of an organization. religious and educational organizations. while management is an executive function. each with their own set of functions. 1. Administrators are mainly found in government. Agriculture was the key development that led to the rise of human civilization.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 7) Management is really a subset of administration. which is set up by the administration. Types of business: The following are the types of business. whereas management makes the decisions within the confines of the framework. military. on the other hand. we can see that these two terms are distinct from one another. 2. with the husbandry of domesticated animals and plants (i. Agriculture: Agriculture is the production of food and goods through farming. Management deals with the employees. 3.
. vein or (coal) seam. and risk and how they are interrelated. meaning that investers buy the loan (debt) from a bank or directly from a corporation. Bonds are debt instruments sold to investors for organizations such as companies. oil shale . including ways to expand the lands suitable for plant raising. iron . Mining: Mining is the extraction of valuable minerals or other geological materials from the earth. Modern mining processes involve e bodies. or created in a laboratory or factory. uranium . personal finance. 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. industrial agriculture). Cultivation of crops on arable land and the pastoral herding of livestock on rangeland remain at the foundation of agriculture. by digging water-channels and other forms of irrigation. Any material that cannot be grown through agriculture processes. Finance: Finance is the science of funds management. usually from an ore body. Finance includes savings money and often includes lending money. The general areas of finance are business finance. The bank then lends the money out to other individuals or corporations for investment. coal. 2. or even water). Banks are the main facilitators of funding through the provision of credit. and public finance. limestone’s . governments or charities. Loans have become increasingly packaged for resale. though modern practices have improved safety in mines significantly 3. petroleum. analysis of the Profit potential of a proposed mine.g. diamonds. money. extraction of the desired materials and finally reclamation of the land to prepare it for other uses once the mine is closed. It also deals with how money is spent and budgeted. The investor can then hold the debt and collect the interest or sell the debt on a secondary market. Mining in a wider sense comprises extraction of any non renewable resource (e.g. although private equity. which deposit money in a bank. perm culture or organic agriculture) and intensive farming (e. Safety has long been a concern as well. In the developed world the range usually extends between sustainable agriculture (e.g.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Agriculture encompasses a wide variety of specialties and techniques. rock salt and potash . and charges interest on the loans.One aspect of finance is through individuals and business organizations. . In the past century there has been increasing concern to identify and quantify various forms of agriculture. The field of finance deals with the concepts of time. is usually mined.Mining of stone and metal has been done since prospecting for times. This impact has led to most of the world's nations adopting regulations to moderate the negative effects of mining operations. natural gas. Materials recovered by mining include base metals .
Under intellectual property law. Common types of intellectual property include copyrights. Although many of the legal principles governing intellectual property have evolved over centuries. Australia . USA and Bahamas ) that encompasses land along with improvements to the land. wells and other site improvements that are fixed in location—immovable. 5. known as investments. 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 . but is most commonly applied to industrial production. trademarks. hedge funds.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA mutual funds. symbols. and designs. Canada. it was not until the 19th century that the term intellectual property began to be used. 6. who in turn sell them to retailers. and not until the late 20th century that it became commonplace in the United States. fences. and artistic works. such as semiconductors and steel manufacturers use the term fabrication instead. patents. industrial right and trade secrets in some jurisdictions. Manufacturing: Manufacturing is the use of machines. Such finished goods may be used for manufacturing other. such as buildings. The term may refer to a range of human activity. who then sell them to end users – the “consumers”. in which raw materials are transformed into finished goods on a large scale. more complex products. phrases. Modern manufacturing includes all intermediate processes required for the production and integration of a product's components. or sold to Wholesalers. such as aircraft. such as the United Kingdom. In a free market economy. 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. 4. literary. owners are granted certain exclusive property to a variety of intangible assets. manufacturing is usually directed toward the mass production of products for sale to consumer at a profit. Manufacturing takes turns under all types of economic system. from handicraft to high tech. such as musical. and words. Financial assets. tools and labor to make things for use or sale. and other organizations have become important as they invest in various forms of debt. Real estate: Real estate is a legal term (in some jurisdictions. The British Statute tee 1710 is now seen as the origin of copyright and patent law respectively. are financially managed with careful attention to financial risk management to control financial risk. automobiles. discoveries and inventions. Some industries.
Operations deal with the way the vehicles are operated. Mode of transportation includes air rail. legalities and policies. or by mail. bus stations. Transport: Transport or transportation is the movement of people and goods from one location to another. vehicles. rail stations. Retailing: Retailing consists of the sale of goods or merchandise from a fixed location. Purchasers may be individuals or businesses. trucks. In commerce. Transport infrastructure consists of the fixed installations necessary for transport. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. such as delivery. such as a department stores. . Retailers are at the end of the supply chain. refueling depots (including fueling docks and fuel stations). trees. The terms real estate and real property are used primarily in common law. 7. and seaports. Real property is typically considered to be Immovable property. Retail establishments are often called shops or stores. The term "retailer" is also applied where a service provider services the needs of a large number of individuals. pipeline. railways. helicopters. and then sells smaller quantities to the end-user. buses. operations and ownership of infrastructure can be either public or private. In the transport industry. a "retailer" buys goods or products in large quantities from manufacturers or Importers. boutique. as distinguished from "real property". Real estate is often considered synonymous with real property (sometimes called realty). canals. and the interest. Retailing may include subordinated services. and may be roads . 8. trucking terminals. while civil law jurisdictions refer instead to immovable property. trains. and inherent rights thereof. road. waterways. cable. either directly or through a wholesaler. like electric power. depending on the country and mode.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA and residential real property transactions. minerals. and the procedures set for this purpose including financing. in contrast with personal property (sometimes called chattel or personality under chattel law or personal property law). The field can be divided into infrastructure. pipelines and terminals such as airports. water. and operations. and space. including anything of a permanent nature such as structures. However. such as a public utility. and aircrafts. bicycles. referring to ownership of land and appurtenances. in small or individual lots for direct consumption by the purchaser. Vehicles traveling on these networks may include automobiles. warehouses. benefits. people. Terminals may be used both for interchange of passengers and cargo and for maintenance. airways. in some situations the term "real estate" refers to the land and fixtures together.
• 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. political science. as a group of persons and as a system. The word itself is derived from the Greek word organon. and has a boundary separating it from its environment. money and people to accomplish the various objectives. itself derived from the better-known word ergon. the term 'organization' has also been used in a number of ways. psychology. and organizational communication. A number of different theories and perspectives exist. In the social sciences. plant and equipment materials. as given below: 1)Organization as a Process: In this first sense. Organization – functional: organization as a function of how entities like businesses or state authorities are used (organization as a permanent structure). The broader analysis of organizations is commonly referred to as organizational studies. Thus. broadly speaking. . an organization is a structure or machinery manned by group of individuals who are working together towards a common goal. organization is the structure or mechanism that enables living things to work together. economics. such as sociology. organization is treated as a dynamic process and a managerial activity which is essential for planning the utilization of company's resources. organizations are the object of analysis for a number of disciplines. as a structure of relationship. the term "institution" may be preferred. An organization is a social arrangement which pursues collective goals. In a static sense. 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. In more specific contexts.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. particularly for sociologists. some of which are compatible. • • Organization – process-related: an entity is being (re-)organized (organization as task or action). management. Alike 'management'. controls its own performance. organizational behavior or organization analysis.
Davis. organizing is the determining. System concepts recognize that organizations are made up of components each of which has unique properties.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. Definitions of Organization: Different authors have defined organization in different ways. Farland. Barnard has defined 'Organization' as an identifiable group of people contributing their efforts towards the attainment of goals. "Organization is the form of every human association for the attainment of a common purpose. Urwick. "Organization is a system of co-operative activities of two or more persons. The main definitions of organization are as follows: • According to keith Davis." • According to Chester I. capabilities and mutual relationship." . Northcourt. It is a universal truth that an individual is unable ability and resources. Organization begins when people combine their efforts for some common purpose.. organisation is very often viewed as a group of persons contributing their efforts towards certain goals. come under this group. The definitions of Henry. that is cooperating under the direction of executive leadership in accomplishment of certain common object. the assigning of people to those activities. "Organization may be defined as a group of individuals. Mooney and Reily etc. grouping and arranging of the various activities deemed necessary for the attainment of the objectives. Barnard." 3) Organization as a Group of persons: In the third sense. For example: According to Mooney and Reily. the organization is viewed as system. large of small. 4) Organization as a System: In the fourth sense. 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. 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. Lansburgh and Spriegel Breach. In short.
the functional duties should be allotted to particular individuals. and authority to carry out defined tasks.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • According to Louis A. It involves deciding who will act under whom. 3) Assigning the Duties: When activities have been grouped according to similarities and common purposes. the establishment of relationship is done. Allen. Besides these formal relationships. A close relationship between authority and responsibility should be established. "Organization is the process of identifying and grouping the work to be performed. some informal organizations should also be developed. Other objectives must be established by the administration from time to time to aid and support this main objective. what will be his span of control and what will be his status in the organization. they should be organized by a particular department." • According to Mooney and Railey. and establishing relationship for the purpose of enabling people to work most effectively together in accomplishing objectives. . "Organization is the form of every human association for the attainment of a common purpose. and subdivides and delegates roles. 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. 2) Identifying and Enumerating the Activities: After the objective is selected. who will be his subordinates. Within the department. 5) Creating Authority Relationship: After assigning the duties and delegations of authority. responsibilities." Social unit of people systematically arranged and managed to meet a need or to pursue collective goals on a continuing basis. defining and delegating responsibility and authority. 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. 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. 4) Defining and Granting the Authority: The authority and responsibility should be well defined and should correspond to each other. All organizations have a management structure that determines relationships between functions and positions.
Since a good organization demands that the duties be clearly assigned amongst workers. the organization should be divided in several department. Significance of Sound /Good Organization: Organization is not an end it itself but a means to achieve an end. expansion and diversifications of the enterprise. 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. avoids delay and duplication of work. increases promptness. such overlapping and duplication is totally eliminated. Sound organization prevents corruption by raising the morale of employees. The organizational process exerts its due and balanced emphasis on the co-ordination of various activities. sub-departments. For this purpose. Thus. a sound or good or ideal and result-oriented organization must possess the following characteristics. skills. honesty and devotion. 2) Harmonious Grouping of Functions etc: For achieving the organization objectives there must be harmonious grouping of functions. knowledge and viewpoints. consultation and co-ordination without any delay and difficulty. 4) It Stimulates Creativity: A sound and well-conceived organization structure is the source of creative thinking and initiation of new ideas. 3) It Ensures Optimum Use of Human Resources: Good organization establishes persons with different interests. 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. jobs and sub-jobs in such a way so that there is action. 2) It Help in the Growth of Enterprise: Good organization is helpful to the growth.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Sound organization increases efficiency. They are motivated to work with greater efficiency. increases managerial efficiency. branches and units etc. 6) Prevents Corruption: Usually corruption exists in those enterprises which lack sound organization. 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. and motivates employees to perform their responsibility. 7) Co-ordination in the Enterprises: Different jobs and positions are welded together by structural relationship of the organization. 1) Realization of Objectives: Organization is tool of achieving objectives of an enterprise. .
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. 10) Effective System of Communication: An ideal organization must possess effective system of communication. . 5) Promotion of Satisfaction: The most important element of any human organization is the promotion of satisfaction of workers. Every executive must know his scope of activities. They work with full capacity. 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. enthusiasm. and everybody must know to whom he reports and who reports to him. chaos and conflict. 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. otherwise it will lead to confusion. 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 ideal number is three. Further. Ordinarily. 9) Unity of Command: There must be unity of command. No one in any organization should report to more than one line supervisor. 8) Coordination and cooperation: In order to achieve the objectives of the enterprise. It will also assist in elimination the evil of red tapism. there must be close coordination and cooperation in the activities of everybody working in the organization.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. energy. No subordinate should get orders from more than one supervisor. devotion and sincerity. The inter-communication system should be clear and easier and there should be no ambiguity at and level. 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. a person (personnel) cannot control more than five or six subordinates.
• Grouping of Job and Departmentation The second step is to group similar or related jobs into larger units. The departments are linked together on the basis of interdependence. Publicity and Public relations. Production. cosmetic. divisions or sections. Sales. (4) Production Control and (5) Repairs and Maintenance. . Department may also be based on products. duplication or overlapping in the work. These departments may have different sections as per requirement. Accounts. • Division of work The main function is divided into sub-functions and entrusted to the different departmental heads. Grouping jobs or Departmentation aims at achieving coordination and facilitates unity of efforts. Grouping process is called departmentation. such as textiles. The division of the work is based upon the fact that specialization is keynote of efficient organization. arranging and integrating different elements of organization into efficient working order. The departments can be further classified just as production department into (1) Planning (2) Designing. 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. Steps in the Process of Organization: Organization means identifying. called departments. stationery etc. The result is the establishment of departments like Purchase.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. marketing and financing etc. (3) Operations. It requires the management to follow the following process of organization. Everyone must know what he is required to do in order to avoid any misunderstanding. The department may be based upon functions such as manufacturing. • Assigning duties The work to be performed by every individual is clearly defined and made known to him.
Every employee must know. There should be proper arrangement of communication messages from executives to subordinates and vice-versa. what the authorities granted to him and for what and to whom he will be responsible. Both responsibility and authority go hand in hand together.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. • Delegation of authority Those who are made responsible for specific tasks are given due authority. 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. Reasonable powers are delegated to heads and supervisory staff to enable them to do their work with ease and efficiency. • Co-ordination of activities for common objectives Business activity is a team work or the group activity. so the efforts of every employee must be co-ordinate effectively to achieve the common objectives of the enterprise. • Effective communication Effective communication is the keynote of efficient organization. liable and accountable. Types of organization: 1) Static Organizations: .
and each shareholder in the corporation benefits. so that within a generation. The different types of business ownership are: 1) Limited Partnerships 2) A Corporation 3) Limited Liability Corporations . and then declining as its competitors implement better practices that steal away its clients. A Business Ownership: A Business ownership should be structured according to the needs of the owners and potentially liability that the business could incur. these organizations vary their practices. the predecessors. variable size. 3) Adaptive Organizations: Variable practices. these organizations vary in size over time. 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. ISOPs ensure that the innovator. 2) Dynamic Organizations: Dynamic Organizations have Fixed practices. variable size. Time doesn't change them significantly. and processes that hold on to clients generation after generation. Like complex adaptive systems. They will displace dynamic and static organizations in economic competition. even though their underlying practices don't change much. seeking the constant improvement that launches life cycle after life cycle. creating new products. fixed size. each growing rapidly as it occupies its niche. Like static equations. most people will have learned to expect continual improvement in their life experience. services.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Static Organizations have fixed practices. these organizations have no variables. They will soon motivate employees to climb adaptation curves by using ISOPs to fairly share the wealth that each innovation creates. Like dynamic equations. They persist until some new organization occupies their niche. They go through a single life cycle.
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. The owners do not use their personal tax returns to pay tax on corporate profits because the corporation itself pays these taxes. The owners of an LLC pay taxes on their shares of the business income on their . bonuses. Limited partnerships are costly and complicated to set up and run. etc is paid by the owners in their personal income tax returns. limited personal liability for business debts and claims. They are personally liable for business dents. they are not personally liable for business debts or claims. LLCs resemble partnerships when it comes to taxes. Limited partnerships are usually created by one person or company who solicits investments from others. A corporation is an independent legal and tax entity. in return. This sets it apart from other types of businesses. Any money drawn from the corporation in the form of salaries. the "general partner. However. Because of this they are not personally liable for business debts or claims. The people who invest are considered the limited partners." who will solicit investments from others -who will be the limited partners. The general partner is in charge of the business's everyday operations. 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. It is not recommended for the average small business owner. Limited partners have little control over daily business decisions or operations. 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). 3) Limited Liability Corporations Limited Liability Corporations provide their owners just that. and are not recommended for the average small business owner. Limited partnerships are usually created by one person or company. Limited partners have minimal control over daily business decisions or operations and.
The business and the owner are one and the same. The arrangement begins as soon as you start a business with another person. Legally. religious. You create one just by going into business for yourself. the best initial ownership structure is either a sole proprietorship or -. 5) Nonprofit Corporations A nonprofit corporation is a corporation formed to carry out a charitable. They are also personally liable for any business debts or court decisions against the business. For example. Any business income is reported on the owner's personal income taxes.a partnership. is the ideal ownership structure for an up and coming business or the average small business. Here's a brief rundown of the most common forms of doing business: For many new businesses. 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. literary or scientific purpose. Before you can decide on an ownership structure for your business. Sole proprietorships and partnerships make sense in a business where personal liability isn't a big worry. Similarly. A nonprofit can raise much-needed funds by receiving public and private grant money and donations from individuals and companies. a sole proprietorship is inseparable from its owner. 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 -. such as debts or court judgments. No paperwork needs to be filed to form a partnership. As in a sole proprietorship. You don't have to do anything special or file any papers to set up a sole proprietorship. 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.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA personal tax returns. 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. A sole proprietorship is a one-person business that is not registered with the state as a limited liability company (LLC) or corporation. you must learn at least a little bit about how each structure works. 4) Sole Proprietorship and Partnership A sole proprietorship. or partnership. 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. educational. 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).
These grassroots business organizers often refer to their businesses as a "group. Advantages of a corporation include limited liability. and ease of transfer of ownership. Or a workers' co-op could be created to manufacture and sell arts and crafts. unlimited lifespan. Who stock (and ownership) is traded on a public stock exchange. . An owner (stockholder) can only lose up to the amount s/he invested. great sources of funding.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. must pay taxes. The corporation. a consumer co-op could be formed to run a food store. a corporation is charted to last forever unless its articles of incorporation state otherwise. an organization owned and operated democratically by its members. 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. Disadvantages include double taxation. For example. Most small businesses are (or at least start as) private corporations. 6) Cooperatives Some people dream of forming a business of true equals. 7) Private Corporation: A business that is a legal entity created by the state whose assets and liabilities are separate from its owners. A private corporation is owned by a small group of people who are typically involved in managing the business. because of the benefits they contribute to society." "collective" or "co-op" but these are usually informal rather than legal labels. a bookstore or any other retail business. as a legal entity. and then shareholders also pay taxes on any dividends received. While there are also public corporations.
innovative. succinct. It is the image that a business must have of its goals before it sets out to reach them. forthright manner. often stated in competitive terms. This image. It requires an open. Warren Bennis. and mobilize the best resources for rapid action. may be as vague as a dream or as precise as a goal or a mission statement. which we call a vision. honest. Confidence – Self-confident people take initiative. a noted writer on leadership. creative actions. It includes setting a common goal in support of business objectives. Vision refers to the category of intentions that are broad. They take bold. an executive must have developed a mental image of the possible and desirable future state of the organization. make sound decisions quickly. Being accountable means making decisions and holding oneself responsible for the consequences of those choices. all-inclusive and forward-thinking. Trust – Trust is the mutual respect for and confidence in people. says: "To choose a direction. . handle the unexpected. regardless of the job they perform. without specifying the means that will be used to achieve those desired ends. Teamwork – Teamwork is personal involvement and collaboration in a team environment. Trust recognizes the importance of individuals and appreciates their diverse opinions. capitalize on opportunities." Core values include: Safety – Safety serves as a barometer of our company’s overall success and is a specific measure of our operating excellence. Accountability – Being accountable means every employee assumes ownership and responsibility for his or her own work. and inspiring statement of what the organization intends to become and to achieve at some point in the future.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Company Vision: Corporate vision is a short. It describes aspirations for the future. Trust compels us to share information and encourage new ideas. making an individual commitment to the team’s success and recognizing the success of the team. stand behind their convictions and support the efforts of others.
. It means consistently treating all people fairly. In turn. The primary goal of any business is to increase stakeholder value. For many corporate leaders it is a vital element in any attempt to motivate employees and to give them a sense of priorities. goals are specific objectives that relate to specific time periods and are stated in terms of facts. Mission statement: • • Provides thrust and direction to the organization. ethical.the first time. other names for a mission include: founder's philosophy. products/services. An organization's mission describes its fundemental purpose and overall philosophy. The mission statement should be a clear and succinct representation of the enterprise’s purpose for existence. statement of purpose. Cornerstone of all strategic planning. and having personal and professional integrity. business philosophy.. A mission statement (what we are) is different than a vision statement (what we want to become). the geographic domain and expectations of . better value for their customers-and this is the very essence of competitive differentiation.. employees who work for the business and clients or customers who purchase products and/or services from the business. Mission: Most businesses have some form of mission statement .EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Doing What’s Right – Doing what’s right is being honest. delivering on promises. Quality – Quality is the primary determinant of customer satisfaction and loyalty. The most important stakeholders are shareholders who own the business. A mission statement is an organization's vision translated into written form. For example. In today’s increasingly competitive business environment. It makes concrete the leader's view of the direction and purpose of the organization. and taking personal responsibility for your actions. the target market. A mission statement should be a short and concise statement of goals and priorities. public image.done right.whether they know it or not. better quality translates into better value for our customers and. and it requires employees to continuously provide internal and external customers with the right product or service. subsequently.. It should incorporate socially meaningful and measurable criteria addressing concepts such as the moral/ethical position of the enterprise.
and your ideals. 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. The intent of the Mission Statement should be the first consideration for any employee who is evaluating a strategic decision. Basic guidelines in mission: • • • • Your mission statement is about you. It should tell your company story and ideals in less than 30 seconds: who your company is.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA growth and profitability. You may want to take the approach of being very specific. For instance. Some company Goals may be as follows: . 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. “What business are we in?” Provides thrust and direction to the organization. not product-oriented. Don’t “box” yourself in. or is it enough to just make a living? What markets are you serving. after gathering all necessary information. is the setting of goals for the organization based on its vision and mission statement. what you stand for. Goals: The major outcome of strategic road-mapping and strategic planning. The statement can range from a very simple to a very complex set of ideas. Ask for input. It must be specific and realistic. Long-range goals set through strategic planning are translated into activities that will ensure reaching the goal through operational planning. Must be market-oriented (focusing on the problem the business is solving). Other ways to think about a mission statement as you begin to write one include: • • • Answers the question. what you do. your company. Specific: The Mission Statement should represent the broadest perspective of the enterprise's mission. Keep it short. Do you want to make a profit. and why you do it. A goal is a long-range aim for a specific period.
• • • • To increase the company's market share. To provide excellent customer service. To increase the company's role in relations to social responsibility.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • To promote a profitable and sustainable business activity that meets the customers’ needs. Structure of Organization: MANAGING DIRECTOR QUALITY MANAGER MAREKTING MANAGER OPERATION MGR FINANCE MANAGER OFFICE ADIMINSTRTOR PROJECT MANAGER ESTIMATOR . To gain the competitive edge.
marketing and finance departments. roles assigned to these positions and specifying authority. workgroup and individual. if it is based upon functions. It is specified that who will report . The structure undoubtedly provides basic framework for executive and employees to perform their task smoothly. The structure of an organization will determine the modes in which it operates and performs. Jobs should be designed in such fashion that every individual could contribute his maximum worth to the enterprise. that job should have specified and defined task to be performed. Departments can be established on different basis. as we know is the system of job positions. the number of employees and jobs managed by each manager is specified. The following points must be taken into consideration while building organizational structure: • Job design Jobs should be designed in such a way. The major and related activities of the jobs should also be specified. An organization can be structured in many different ways and styles. Organizational structure. • Departmentation or Grouping of Identical Jobs Identical and similar jobs should be grouped together in a department and placed under a departmental head.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. It may have production. The chain of command is also clearly stated. In order to achieve the desired goals. Individuals in an organizational structure are normally hired under time-limited work contracts or work orders. responsibility and task of every positions. Such departmentation will help in building coordination between different jobs and managers. depending on their objectives and ambience. Organizations are a variant of clustered entities. department. • Span of Control Under span of control. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch. sound and effective organizational structure is necessary. or under permanent employment contracts or program orders.
The structure is totally centralized. sharing task with requisite authority with subordinates. It is very much complex and useful for hierarchical structures organization. • Bureaucratic structures Bureaucratic structures have a certain degree of standardization. One generic and one much more specific. Effective span of control avoids overlapping. Delegation is no doubt. The authority empowers to know certain facts. They are usually based on traditional domination or charismatic domination in the sense of Max Weber's tripartite classification of authority. • Post-bureaucratic The term of post bureaucratic is used in two senses in the organizational literature. mostly in tall organizations. The strategic leader makes all key decisions and most communication is done by one on one conversations. 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. requisite authorities are granted to the managers. . This structure is most common in smaller organizations and is best used to solve simple tasks. They usually adopt a tall structure. As such the manger multiplies himself through delegation. Authority is the power to command employees and instruct them to do a piece of work. This may include total quality management. to enjoy privileged position and command respect and obedience from employees. Then tension between bureaucratic structures and non-bureaucratic is echoed in Burns and Stalker distinction between mechanistic and organic structures. It is particularly useful for new (entrepreneurial) business as it enables the founder to control growth and development. They are better suited for more complex or larger scale organizations. It is not the entire thing about bureaucratic structure.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA who is the smooth performance of his duties. • Delegation of Authority In order to get the job done properly and smoothly. Organizational structures types: • Pre-bureaucratic structures Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. duplication and confusion in the work.
Employees within the functional divisions of an organization tend to perform a specialized set of tasks. Hierarchies still exist. None of these however has left behind the core tenets of Bureaucracy. the organization is a network rather than a hierarchy. amongst others. Heckscher. efficiencies can further be realized as functional organizations integrate their activities vertically so that products are sold and distributed quickly and at low cost. for instance the engineering department would be staffed only with software engineers..EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA culture management and matrix management. open at the boundaries (in direct contrast to culture management). describes them as cleaned up bureaucracies. codification and enforcement of rules and regulations . However it could also lead to a lack of communication between the functional groups within an organization. This sort of horizontal decision making by consensus model is often used in housing cooperatives.. the divisional structure groups each organizational function into a division. in which decisions are based on dialogue and consensus rather than authority and command. This leads to operational efficiencies within that group. rather than a fundamental shift away from bureaucracy. which makes producing a limited amount of products or services efficient and predictable. Moreover.does not change in principle. But not only beneficial for organization but also for employees faiths. Charles Heckscher has developed an ideal type.. provide a detailed discussion which attempts to describe an organization that is fundamentally not bureaucratic. making the organization slow and inflexible. authority is still Weber's rational. As a whole. Another smaller group of theorists have developed the theory of the Post-Bureaucratic Organization. and the organization is still rule bound.the formalization.. the postbureaucratic organization. Each division within a divisional structure contains all the necessary .it shifts focus from organizational structure to the organization's culture”. Gideon Kunda. • Divisional structure Also called a "product structure". legal type. It is used in order to encourage participation and help to empower people who normally experience oppression in groups. in his classic study of culture management at 'Tech' argued that “the essence of bureaucratic control . other cooperatives and when running a non-profit or community organization. there is an emphasis on metadecision making rules rather than decision making rules. Coordination and specialization of tasks are centralized in a functional structure. a functional organization is best suited as a producer of standardized goods and services at large volume and low cost. a small business could start making the components it requires for production of its products instead of procuring it from an external organization. For instance. arguing along these lines.
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). and another division for sedans. Matrix structure is amongst the purest of organizational structures. of functional and decentralized forms. However.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA resources and functions within it. A matrix organization frequently uses teams of employees to accomplish work. Common success criteria for organizational structures are: • • • Decentralized reporting Flat hierarchy High transient speed . Each division would have its own sales. • Balanced/Functional Matrix: A project manager is assigned to oversee the project. Among these matrixes. • Strong/Project Matrix: A project manager is primarily responsible for the project. • Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross. • Matrix structure The matrix structure groups employees by both function and product. "product a" customer service department. Using the matrix structure. Power is shared equally between the project manager and the functional managers. there is no best format. implementation success always depends on organization's purpose and function. an automobile company with a divisional structure might have one division for SUVs. The functional managers maintain control over their resources and project areas. "product a" accounting. "product a" and "product b". another division for subcompact cars. Another example. An example would be a company that produces two products. engineering and marketing departments. "product b" customer service department. Functional managers provide technical expertise and assign resources as needed. Divisions can be categorized from different points of view. this company would organize functions within the company as follows: "product a" sales department. this is the most difficult system to maintain as the sharing power is delicate proposition. in order to take advantage of the strengths. a simple lattice emulating order and regularity demonstrated in nature. "product b" sales department. "product b" accounting department.functional aspects of the project. It brings the best aspects of functional and projectized organizations. as well as make up for the weaknesses. This structure can combine the best of both separate structures.
Finance The definition of finance is the provision of funds or loan supplied to an individual or company. Finance and accounts 2. Logistics 2. Often this term is used for the study of economics and how money is controlled. Treasury department. Marketing and Sales 3. Human resource and administration 4. Procurement 3. .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.sub dept of finance and accounts 1. It can be also defined as the management of funds and capital required by a business and private activities. like 1. Management of finance has also developed into a specialized branch within the financial sector and is carried out by finance managers. Technical / Operations Other departments depend on the size of the organization.
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. It also ensures that the corporate. It is for this very reason that finance managers are very careful with finance they agree too and where it is funded from. the result of this is depressed markets. problems occur with small businesses who fail to see the distinction between a business loan and a personal one. financial records comply with internal and external audit.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. and finding ways to establish and keep a customer base. Marketing: Marketing means informing your potential clients about your products or service. and cash flow forecasts Monitoring and managing financial plans Auditing and reporting financial condition 2. 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. capital plans. If to look through the activity of The Department. Finance department goal and services: The main goal of The Department is to provide the internal and external users of financial statements with relevant. 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. low production and a cash crisis. Printed advertisement. Finance managers are the pessimists whereas sales managers are the optimists who look to the future and not to the past! Often though. television . Bad debts are poor finance management where rules have not been followed. The Department takes care of finance flow to ensure that the company operates within its financial regulations and satisfies various external financial requirements. 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. radio air time. Advertising refers to the various media used to convey your message. Your target market is the specific group of people that consume your product or utilize your service.
7. 6.e. From these terms emerged a largely administrative management activity. in time as the 'personnel function'. * 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. the major tasks of the marketing department are as follows: 1. in the first instance in the United States as well as multinational corporations. Promotion refers to the various methods by which you convey your message to customers. for example. 2. although it is also applied in labor economics to. the human resources). When you communicate with the public.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. 3. business sectors or even whole nations. Many people will join business associations. 5. 4. Typically. reflecting the adoption of a more quantitative as well as . Human resource: Human resources is a term used to describe the individuals who comprise the workforce of an organization. 3. The origins of the function arose in organizations that introduced 'welfare management' practices and also in those that adopted the principles of 'scientific management'. or set up displays in malls and craft shows for promotional purposes. 8. The global aim of the department is promoting the product/service and increasing recognition of the company through researches and branding efforts. Human resources progressively became the more usual name for this function. you're promoting your business. This function title is often abbreviated to the initials 'HR'. Marketing department tasks: The Marketing office works to raise the awareness of the company and its prominence in the industry and market. 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. co-coordinating a range of worker related processes and becoming known. The department's strengths should all be in proper understanding of consumer behavior and efficient decision-making process.
firing. upgrading software and learning new software. Human Resources: Including interviewing.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA strategic approach to workforce management. filing. • Computer: Includes such things as keeping your website up to date. data entry. bookkeeping. contact management. bill payments. • Administration: Includes sorting and/or reading mail and email. advertising and special events.”As an experienced entrepreneur. motivating and conflict-resolution. promotions. press releases and articles. SWOT analysis: SWOT analysis is a strategic planning method used to evaluate the Strengths. client retention. you are most likely aware that there are daily duties involved with ensuring your business is successful. Opportunities. Accounting: Includes budgets. Entrepreneurship: “Entrepreneurship is the act of being an entrepreneur. finance and business acumen in an effort to transform innovations into economic goods. and Threats involved in a project or in a business venture. hiring. • • Correspondence: Includes writing advertisements. The general purpose of Human Resource department is to establish proper staffing policy and implement it on practice. financial planning. payroll. Entrepreneurs assemble resources including innovations. invoicing. finding customers. and credit management. It involves specifying the objective of the business venture or project and identifying the . and purchasing. demanded by corporate management and the greater competitiveness for limited and highly skilled workers. training. 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. • Sales: Includes marketing. which is a French word meaning "one who undertakes an endeavor". answering inquiries. Weaknesses. virus scanning. letters.
• Threats: external conditions which could do damage to the objective(s). Strengths and Weaknesses are internal to your organization while Opportunities and Threats often relate to external factors. SWOT builds alignment. In general. capabilities and opportunities. you can manage and eliminate threats that could affect you negatively. weaknesses. SWOT is a ground up approach allowing everyone in the exercises to have a voice thus. • What is SWOT Exercise? A SWOT Exercise is a powerful technique for uncovering and understanding your Strengths and Weaknesses. The technique is credited to Albert Humphrey. given the SWOTs. Using the SWOT . and for looking at the Opportunities and Threats you face. If the objective is NOT attainable a different objective must be selected and the process repeated. The SWOT analysis is often used in academia to highlight and identify strengths. First. who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies.[ • Strengths: attributes of the person or company those are helpful to achieving the objective(s). 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. • SWOT Benefits. • Opportunities: external conditions those are helpful to achieving the objective(s). A SWOT analysis must first start with defining a desired end state or objective. has been the subject of much research. • Why SWOT? It helps you carve a sustainable niche in your market by taking the best advantage of your resources. the decision makers have to determine whether the objective is attainable. It is particularly helpful in identifying areas for development. Strategic Planning.placed to exploit. talents. opportunities and threats. 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. • Weaknesses: attributes of the person or company that is harmful to achieving the objective(s). And by understanding the weaknesses of your business. increasing buyin and resulting in a higher level of execution. A SWOT analysis may be incorporated into the strategic planning model.
The background to SWOT stemmed from the need to find out why corporate planning failed. build and leverage) . : SWOT essentially tells you what is good and bad about a business or a particular proposition. • Origins of SWOT. Albert Humphrey. and Birger Lie. The Research Team was Marion Dosher. • SWOT Results. weaknesses (remedy or exit) .EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA framework to assess your strengths and that of your competitors’. you can analyze the competitive landscape and develop a strategy that helps you differentiate yourself from your competitors. costs and investments?) 6) Administration (and how do we manage all this?) • How can SWOT help me? SWOT identifies critical-to-mission objectives. The research was funded by the fortune 500 companies to find out what could be done about this failure. Robert Stewart. If it's a business. Dr Otis Benepe. • SWOT Categories. . then work on translating: strengths (maintain. SWOT analysis came from the research conducted at Stanford research Institute from 19601970. threats (counter) into actions (each within one of the six categories) that can be agreed and owned by a team or number of teams.opportunities (prioritize and optimize) . and the aim is to improve it. so that you can compete successfully in your market. strategy is then defined. ownership assigned and tasks executed that will get you to the next level in performance. 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. Once identified.
1959 Rich DeVos Jay Van Andel Ada. Michigan. United States Worldwide Steve Van Andel (Chairman) Key people Doug DeVos (President) Al Koop (Chief Executive) Russell Evan (CFO) Revenue Employees Parent USD 8.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Type Industry Founded Founder(s) Headquarters Area served Private. Direct selling.000 Alticor .4 billion (2009) 13.
Amway was founded in 1959 by Jay Van Andel and Richard DeVos.3%. and home care markets. primarily in the health. Michigan.Its product lines .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.4 billion for the year ending December 31. the company and family of companies under Alticor reported sales growth of 2. Based in Ada. beauty. reaching US$8. 2009.
The idea came when two Nutralite® salesmen. Rich and Jay immediately set out to find an initial product to add to the line. They purchased the rights to Frisk. Van Andel knew how to move product . jewelry.O.Amway Corporation.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA include home care products. Nutrilite dietary supplements. This would be the chance to grow and set the direction of a new entity. Not just products and not just sales. bought a controlling share in the manufacturing facility in Michigan where LOC was made. In 2004. the pair purchased Nutralite outright . This seemed like the only way to offer what Jay and Rich originally envisioned . Jay and Rich had built a respectable business of their own . This is a main part of Amway's business philosophy. In 1960. Nutralite was sold door to door. Rich DeVos and Jay Van Andel were at the very top of a very successful MLM at the time. and by the end of the decade. In 1959.build on relationships.). a household cleaner (which was later renamed Liquid Organic Concentrate or L. Meaning and the History of Amway: What does the word Amway mean? Amway is an abbreviation for "American Way". water purifiers. Great companies start with great ideas. which produced LOC. Amway Services did business related tasks (like insurance for distributors) and Amway manufacturing. 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.they now owned the company they had started as employees with. electronics. DeVos and Mr. but a way to a better life. What this meant is that there were 3 companies all using the Amway name. the American Way Association was formed. regardless of their background and status. air purifiers. In 1972. now Amway. This was the 1950s. the three arms of Amway were all merged into a single entity .a solid opportunity where anyone with motivation could excel. the American Way Association. A way that would allow them to multiply the efforts of what they alone could accomplish. and then allowing a network of IBOs. The Amway Sales handled product and distribution. But what was needed was a way to expand. The idea was by handling the manufacturing and distribution of a product line. insurance and cosmetics. . personal care products. Nutralite was a single entity company. and Amway is no exception. Amway continued to grow under the co-ownership of Van Andel and Devos. Amway conducts business through a number of affiliated companies in more than ninety countries and territories around the world.C.approximately five thousand distributors were in their Both Mr. By 1964. Health & Beauty products accounted for nearly 60% of worldwide sales.
4 billion dollars.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Amway continued to expand. • Alticor and Amway Sales Growth: 1960 to 2008: February 5th. Amway Global does business in more than 98 countries. DeVos was named one of the richest men in America by Forbes magazine.2 billion dollars in personal wealth (2009). Amway (now technically. reaching past the borders of the US to offer the same opportunities in other countries: .1979 .Europe and parts of Asia .Africa . The company is still thriving and still offers opportunity to individuals who have the desire to build their own business. with an estimated 4.Latin America . They cried. Van Andel's net worth was estimated to be 2. Andel's place at Amway Global is now held by his son Steve.Jay Van Andel passed away at age 80 in 2004. In 2008.2008 Critics argued that the model wasn't sustainable and that growth was mathematically limited.1985 . 2009 by ibofightback Posted in Amway News .Russia . "Pyramid scheme!" Fifty years of steady growth has shown this criticism has no basis in fact. At his death.India .1995 .2005 .1998 .China . DeVos owns the Orlando Magic basketball team among other assets.Australia . Mr. Amway Global) reported sales of 8 billion.1974 .Japan . Rich DeVos is still alive.1997 . The company is in 58 markets worldwide and manufactures more than 450 products. MLM is a proven business model that produces massive success for individuals. although he has passed the Presidency of Amway to his son Dick.1971 .Vietnam -.
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. This means they’re valued assuming that they were all sold at the full retail price. In 2007 this was reported as around $100 million.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. Amway Sales Data: . not at the price they were sold to distributors/IBOs. Alticor reports actual revenue – sales at the base IBO price I’ve converted the figures so they can be properly compared. Note however that Alticor sales includes revenues from other sources such Access Business Group and Amway Grand Plaza. so by far the majority of the sales are through the Amway business opportunity.
The actual sales to distributors are marked with *.0 billion 1998 $5. Until 1999 sales were reported at Estimated Retail.2 billion 1985 $1. Taking the sales data published in 2001 report into account.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 $0.1 billion 1981 $1.5 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. Showing where the business wishes to be in the future. Employees.9 billion 1993 $4.0 billion 1992 $3.8 billion 1997 $7.8 billion 1989 $1.5 billion 1983 $1.4 billion 1982 $1. and the Founding Families and the support of quality products and service.7 billion 1999 $5.9 billion 1990 $2.3 billion 1987 $1.3 billion 1995 $6. Its historic sales data at estimated retail prices is provided below from 1959 to 2000 (in 2000 Amway switch over to Alticor. With the founding of Alticor.0 billion Amway has grown fairly quickly since its inception.2 billion 1991 $3. At its peak in 1997 Amway estimated retail sales worldwide at 7 Billion USD.5 billion 1988 $1. the report methodology was changed and the actual sales to distributors instead of estimated retail sales (ERS) have been reported since 2001.5 billion 1994 $5.2 billion 1986 $1.3 billion 1996 $6. MISSION OF AMWAY: • Through the partnering of Distributors.13 billion 1984 $1. the ERS values are about 32% higher than sales to distributors. This is approximately 32% higher than actual sales revenues from sales made to Amway distributors. VISION OF AMWAY: • • Helping people live better lives. we offer all people the opportunity to .
personal care. Orissa awarded AOF a memento & certificate for conducting a mega-Blood Donation camp of 816 units on 4th May. GOAL OF AMWAY: • • • The development of new business opportunities. • The Surat Raktdaan Kendra felicitated Amway India at their annual function on 5th Oct. Awards and Recognition: • Presented the Millennium Outstanding Service Award 2000. To provide excellent customer service. On-going assistance to be provided in education. 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). • The Indian Red Cross Society. • • To facilitate best business opportunities. 2003. for the largest number of donors at a Blood Donation Camp (BDC) held by any financial and commercial institution and industry. home tech. healthcare and vocational training under the following heads: · Health care · Education and vocational training · Safe drinking water . cosmetics and wellness. To deliver high-quality products to semi-urban and urban homes in diverse areas of insurance. 2003. by the Confederation for the Blind (AICB).presented a trophy and a certificate of appreciation. Broad over riding statement of purpose. The Mayor of Surat Snehlata Chouhan . home care.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA achieve their goals through the Amway Sales and Marketing Plan. To increase the company's role in relations to social responsibility. in recognition for work carried out for the visually challenged.
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
Recommended retail markup ranges from 20%-35%. . • • Distributor . • Emerald a distributor with at least three legs generating Silver Producer volume for at least 6 months of a year. In India it ranges from 6%-21%. They are collectively also known as group • • Leg refers to a personally sponsored IBO and all of their downline. 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. • • Upline is the term used to refer all the IBOs up in the line of sponsorship of an IBO. In other markets it ranges from 3% to 21%.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA market and distribute products and services available from Amway. • Platinum or direct is an IBO who has reached the maximum bonus level for six months.000 in sales volume per month. Silver Producer is an IBO who has reached the maximum bonus level for one month. the greater the percentage earned. Downline is the term used to refer all the IBOs down in the line of sponsorship of an IBO. An IBOs monthly performance bonus bracket depends on total PV in a month. either personally or through an Amway website. In North America a Platinum is generating a minimum of approximately $30. • Performance bonus is the monthly bonus paid by Amway to IBO's. • Gold Producer is an IBO who has reached the maximum bonus level for three months. Different names are used in different markets. • Diamond a distributor with at least six legs generating Silver Producer volume for at least 6 months of a year. The higher the PV. Performance bonuses are multiplied by the groups total BV. • Sponsor is an IBO who refers (sponsors) a new IBO to Amway. • BV — Business Volume is typically the wholesale cost of the product or service sold by Amway.an older term for IBO PV — Point Value is a value assigned to each product or service sold by Amway. • Q-12 is a Platinum or higher IBO that qualifies every month for 12 months of a year. although IBO's do not get paid to sponsor.
It is the primary advocacy organization for IBOs in North America. the IBOAI Board listens to ideas. proposes improvements. As independent business men and women. they bring positive change to this business. and they make many of the same daily business decisions other business executives make. Working closely with Corporate staff. The IBOAI (or IBOA International) is one example. IBOs are the CEOs of their own businesses. With IBO input. as it has for 50 years. A trade association is an organization of business people who share common interests or concerns. formerly Quixtar.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • Independent Business Owner (IBO): An IBO is. and participation. the Board advises Amway on every facet of the business. Chairman Brad Duncan. they are not employees of Amway North America or Amway Corporation. As independent business owners. literally. Together. what hours to keep. formerly Quixtar. and other important decisions. which is powered by Amway North America. what products to sell and at what prices. and who educate and represent their members. and advises Amway on the best way to move the business forward. Alberto Aguilera . Past Chairman • Other important directors: 1. Vice Chairman Bob Andrews. Role of the IBOAI Board: The IBOAI Board is the representative body of the Association acting on behalf of all IBOs. to keep it moving forward and make certain the business is better for every generation. IBOs decide how active to be in their 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. IBOs are independent contractors. • 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. 2010 IBOAI Board and Governance & Oversight Committee: • • Steve Woods. who to sponsor. IBOs are free to make decisions many others in business are not free to make. support.
with over 40 years of experience. allowing you the flexibility to work where and when you want. Leif Johnson 11. They have a sponsor. giving you time for family and friends as well as the opportunity to earn a good income. Doug Weir 14. Mike Bundy 4. Pedro Lizardi 13. By passing your sales and marketing knowledge to your developing team. John Crowe 5. Bert Gulick 10. a line of sponsorship. offering you all the personal support and assistance you require to become the Business Owner you want to be. Glen Baker 3. can retail products and offer the business opportunity to others. Supported by great products and people who will help you succeed. Jody Dutt 8. Howie Danzik 6. Shivaram Kumar 12. in turn. Organization type and Business Opportunity: The Amway is private co operative organization. It adapts easily to your needs and ambitions. you not only build your own business network but also enable others to build one of their own. Jim Dornan 7. low start-up cost business opportunity that is open to everyone. Dan Yuen IBOs are never alone. . Kanti Gala 9. and the IBOAI – their primary advocacy organization – behind them all the way. With Amway you are Connected to the global leader in multilevel marketing. and finally In Control of your life. Sales and Marketing Plan: The Amway Sales and Marketing Plan is a low risk.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 2. and grows with them. It allows you to build your business through retailing products and sponsoring other people who. The Amway Sales and Marketing Plan put you in control. Doyle Yager 15.
Amway needed to set out the key objectives it wanted to achieve. 3. Amway Global provides you with support like: . 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. Marketing and Sales. Finance and accounts. Human resource and administration.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. In creating a marketing strategy for the Super Concentrated Cleaning System. 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.
This type of direct selling involves matching a consumer's needs with the goods and services on offer. Amway believe that quality improvement happens when people come together. along with its parent and sister companies. The beauty of this system is that the LIC raises the funds. and renew your business. and implement this with other volunteers. LIC takes ownership of being the face of Amway’s CSR at the location. renewal. Training: Online.000 people worldwide. all at Amway Global. The better the match. and free websites you can personalize.like registration. Amway (UK) began operations in 1973 and has its own distribution and Product Selection Centers. like process the order. brochures. Business management: You can manage your business.000 Amway distributors and 450 full-time employees are all considered AOF volunteers. The business also operates strategically at a Global. volunteering becomes a way of life in Amway. Marketing: We support your sales efforts with DVDs. Amway has helped millions of people around the world to start their own independent business. Business. and event sponsorship. This core belief is what all AOF initiatives are based upon and it holds true time and again. through which they engage in person-to-person marketing. Order management: You sell the products. Ownership of Amway: • IBOs and Customers: . promotions. form a project. The 550.our Customer Care Associates can help you. And we help Build awareness of your products and brands with national advertising. and instructor-led training are some of the ways we can share with you the knowledge to grow a successful independent business.com. Magazines. AOF has formed a team of 6 or more distributors and employees to form a Local Implementation Committee (LIC). order products. and then decides how best to utilize this in their town or city. Strategic analysis to overcome problems: Today it is a global business that. and handles the shipping details. online sites. European and National level. directly employs 10. With a passionate and vigorous workforce ready to contribute their bit to the well-being of society. The LIC also plays a lead role in raising funds they wish to utilize. At 56 Amway offices across India. the more lasting the relationship between the seller and the buyer. or product information . manages your customer accounts. They identify potential partners. video. and we'll do the rest.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • • • • • Customer care: If you have a question about anything . check customer Volume.
Only 8% of respondents in the Edelman 2005Annual Trust Barometer study indicated that information obtained in advertising was credible. beauty. Members. To launch an Amway-powered business. since IBOs are rewarded only when their efforts actually result in product sales. motivational meetings and tools. • Buzz Marketing: Alticor pioneered buzz marketing through its person-to-person referral model. Personal referrals have proven to be much more effective. • 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. home care. it is the result of a personal referral by an IBO -not as a result of some advertisement they saw on TV. Products are shipped to their homes and covered by Amway's Customer Satisfaction Guarantee. and time-tested tactics to approach people and interest them in the business opportunity and products. 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. and colleagues. Amway's sales are not the result of advertising. resulting in product sales. Through its Independent Business Ownership Plan. friends. Customers must register with the identification number of their servicing IBO. Some companies spend millions on strategies intended to get people to spread the word about their products. typically involving training systems. The biggest chunk of Amway's marketing budget goes directly to rewarding IBOs for sales volume resulting from their efforts. 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. When people visit Amway's site. Customers pay no fee to shop from a large selection of products and learn from expert advice on health. Amway will assign them one.. Those efforts include registration of new Ibos. • Personal Referrals: Unlike most other companies. This is a much targeted market spend. If a new registrant Does not have a servicing IBO. individuals must register with an existing IBO. When a person registers with . IBOs build businesses that allow them to earn income based on sales made resulting from their efforts. while 42% trusted information obtained from family. and Clients.
Organize meetings and events time to time. 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. Initially high entry cost leads to somewhat restrictions for business development. Every can participate in business. Quality Products that Inspire Confidence. a new IBO also will choose to attend optional and voluntary training sessions or purchase professional development materials provided by that organization .all covered by a moneyback guarantee. Have good customer service system. • Independence: The beauty of Amway's business model is that there can be as many ways of pursuing the business as there are IBOs. It’s easy to get admission in Amway with easy rout like intent. So everyone can participate in business. If you're into health. SWOT analysis of Amway: STRENGTH: • Based on direct selling operations. The person who wants do something can be make profit with investment of low cost. Almost no risk of money as world class quality Minimal start up costs gives strong base to the initiation of business. Products are easy to sell. you can focus on Nutrilit supplements and XS Energy Drinks. The possibility of financial security and freedom of time to enjoy life. WEAKNESS: • More power to IBOs gives critical structure to organization. Hence it can be A home based business.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Amway. Backed by a 100% Customer Product Refund Policy produce faith and reselling attitude in customers. • • • • • • Training to staff. • . • • A business with national and international scope gives more opportunity to the costumers. Often. Functions are performed by IBOs.
MARY KAY. OPPURTUNITIES: • • • Setup a manufacturing plant in all countries leads to better platform for company. Change in government policy may affect to the profit and freedom of company. Competitors like AVON. 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. Focus shifted from selling products to recruiting. THREATS: • • • Too much freedom to IBOs. SUNRIDER creates lot of competition in market which leads to strong marketing competition in market. Population of INDIA gives better opportunity to company to receive more profit. .EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • • Rumors for direct selling operations.
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: . If you’re researching Amway.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA Finding: I’ve written about Amway based entirely on factual. it’s illegal. and probably never did much more than dabble for a few months. the products are poor quality. chances are you’ve encountered people who claim Amway is some kind of scam business. Or perhaps the experience was with just one of dozens and dozens of different Amway affiliated organizations. or some other information that has made you think twice about being involved. 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. confirmable sources.
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. If you're looking for high quality products and solid customer support at rock-bottom prices. Through they continued pursuit of new product ideas. The products of Amway are world class product quality. to clothing. At Amway. and by consistently refining our existing product line. 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. Successful business today depends upon a company's ability to quickly adapt to changes in the marketplace. tale and instant purchasing. . The products should be cheap the home delivery system takes at least two days to deliver the products so the delivery should be instant. This knowledge. There must be multiple options for purchasing the products for distributers like online. Once customer gets idea about product he comes to know advantages of products. The main objectives of Amway are to profit there distributers by eliminating the middlemen and provide the products to the distributers in cheaper price. They are made up of natural a thing that’s why they are good for health and environment. Health care. SUGGESTIONS: • • • Trial packs should be used because customer must have to introduce the product. then choosing Amway really does make sense. and daily use products etc. they pride it selves on knowledge of the dynamic networking market that is quickly becoming central to modern business. Amway covers a wide range of products from beauty care. and its willingness to act upon it. they have become one of the top providers of cutting-edge networking products in the global market. has enabled us to become one of the industry's technological leaders.
org/wiki/Amway 5) http://www.com/ 7) http://en.mouthshut.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA • In every city.businessballs.org/wiki/Organisation 8) http://en.wikipedia.com/ 6) http://www.scribd.wikipedia.wikipedia.in/Articles/Article.nutrilite.com 14) http://www.com 10) http://en. the Amway office should be situated in such a location so that it is in reach of all distributers. 4) http://en.com 12) http://www.business-standard.com 13) http://www.com 2) http://www.in/ 3) http://www.worthwilemag.mouthshut.authorstream.com .amway. Bibliography: 1) www.org/wiki/Administration 11) http://www.wikipedia.org/wiki/Business 9) http://www.amway.
reference. Presently. a major direct selling FMCG Company in the country. Nutrition & Wellness. Cosmetics and Great Value products.answers. Amway India Enterprises Pvt Ltd.EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA 15)http://wiki. "With an aim to strengthen our network base. The company is also eyeing 25 per cent year-on-year growth for the next five years.bplans." William S. we are planning to increase the number of touch points (branches) up to 300.com 16)http://dictionary. the company has 130 branches across the country. . Nutrition & Wellness segment contributes around 50 per cent of Amway India’s total turnover. MD & CEO. said at a press conference during plant visit of reporters to its Baddi facility in Himachal Pradesh. is planning to open 170 new branches across the country in the next three years (by the year 2013). The company offers 115 products in five categories.com.thetruthaboutamway.Personal care. Amway India.com 17) http://www. Home care. Pinckney.com/ 18) http://articles. Annexure: Amway India plans 170 new branches by 2013 Eyes 25% y-o-y growth for the next five years. by adding 170 new branches across the country in the next two-three years. We are also planning to launch 6 to 8 new products every year.
EXCEL BUSINESS ACADEMY (India’s Premium Techno Management B-School) AAA With an aim to meet the market demand. "Amway’s focus in the past 2-3 years was to improve consumer access and awareness. 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. and are more experiential for the consumers. 55 crore. 1407 in 2009 crore over the past three years. which paid off handsomely. We have grown from Rs. 799 crore in 2007 to Rs." Pinckney said. the company has just tripled the capacity at its contract manufacturing facility in Baddi (Himachal Pradesh) at an investment of Rs. .