ORGANIZATIONAL DESIGN

Organizing is the process of identifying and grouping the work to be performed, defining and
delegating responsibility and authority, and establishing relationships for the purpose of enabling
people to work together in accomplishing common objective.

Organizational design is the overall set of structural elements and the relationships among those
elements used to manage the total organization.

Because technology, environment, size, life cycle, and strategy can influence organization
design, it should come as no surprise that organization adopt many different kinds of designs.
Most designs, however, fall into one or four basic categories. Others are hybrid based on two or
more of the basic forms.

A} FUNCTIONAL DESIGN:
The functional design is an arrangement based on the functional approach to
departmentalization. For the organization to operate efficiently in this design, there must be
considerable coordination across departments. This integration and coordination are most
commonly the responsibility of the CEO and members of senior management.

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B} DIVISIONAL DESIGN:
The divisional design is based on multiple businesses in related areas operating within a larger
organizational framework. The limited uses the multidivisional approach to organization design.
Although each unit operates with relative autonomy, all units function in the same general
market. This design resulted from a strategy of related diversification. Other firms that use this
designs include PepsiCo and Woolworth Corporation.

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C} MATRIX DESIGN:
The matrix design is based on two overlapping bases of departmentalization. The foundation of
matrix is a set of functional departments. A set of product groups, or temporary departments, is
then superimposed across the functional departments.

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HIERARCHY
There are different views about whether an organization should use the top-down or the bottom-
up approach in setting objectives. In the top-down approach, upper-level managers determine the
objectives for subordinates, while in the bottom-up approach, subordinates initiate the setting of
objectives for their positions and present them to their superior.

Proponents of the top-down approach suggest that the total organization needs direction through
corporate objectives provided by the chief executive officer. Proponents of the bottom-up
approach, on the other hand, argue that top management needs to have information from lower
levels in the form of objectives. In addition, subordinates are likely to be highly motivated by,

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and committed to, goals that they initiate. Personal experience has shown that the bottom-up
approach is underutilized but that either approach alone is insufficient.

FOLLOWING ARE THE LEVELS OF MANAGEMENT:

LE VEL
LE VEL
B TOP E
MIDDL
OTTOM

i) TOP LEVEL MANAGEMENT:

Also known as the corporate level of management. This level consists of senior most executives
like Chairman, CEO or President. This level consists people of different functional category.
Their basic tasks is to coordinate between different departments and ensure overall objective of
organization is satisfied. They formulate goals and strategies for the organization. They are also
responsible for the survival of the organization.

ii) MIDDLE LEVEL MANAGEMENT: also known as the business level of management. It
includes different department managers like Production manager, Sales manager, Purchase
manager, Personnel manager, Finance manager, Research manager, Office manager.

iii) BOTTOM LEVEL: also known as the functional or operating level of management. It
includes Superintendent, supervisors, foremen, workers. Operational management plays an
important role as it interacts with workers and provides feedback of the job to the middle
management. The responsibilities handled in this level are maintaining a quality output,
minimizing wastage and look after the loyalty and discipline of the firms.

ORGANIZATIONAL STRUCTURE:
An organization structure is a mainly hierarchical concept of subordination of the entities that
collaborate and contribute to serve one common aim.

Organizations are a variant of clustered entities. An organization can be structured in many

different ways and styles, depending on their objectives and ambiance. The structure of an
organization will determine the modes in which it operates and performs.

Organizational structure allows the expressed allocation of responsibilities for different functions
and processes to different entities such as the branch, department, workgroup and individual.

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Individuals in an organizational structure are normally hired under time-limited work contracts
or work orders, or under permanent employment contracts or program orders.

ORGANISATIONAL STRUCTURE OF A COMPANY:

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DEPARTMENTALIZATION
The process of grouping jobs according to some logical arrangement.

After reviewing the plans, usually the first step in the organizing process is departmentalization.
Once jobs have been classified through work specialization, they are grouped so those common
tasks can be coordinated. Departmentalization is the basis on which work or individuals are
grouped into manageable units. There are five traditional methods for grouping work activities.

· Departmentalization by function organizes by the functions to be performed. The functions

reflect the nature of the business. The advantage of this type of grouping is obtaining efficiencies

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from consolidating similar specialties and people with common skills, knowledge and
orientations together in common units.

· Departmentalization by product assembles all functions needed to make and market a

particular product are placed under one executive. For instance, major department stores are
structured around product groups such as home accessories, appliances, women's clothing, men's
clothing, and children's clothing.

· Departmentalization by geographical regions groups jobs on the basis of territory or

geography. For example, Merck, a major pharmaceutical company, has its domestic sales
departmentalized by regions such as Northeast, Southeast, Midwest, Southwest, and Northwest.

· Departmentalization by process groups jobs on the basis of product or customer flow. Each

process requires particular skills and offers a basis for homogeneous categorizing of work
activities. A patient preparing for an operation would first engage in preliminary diagnostic tests,
then go through the admitting process, undergo a procedure in surgery, receive post operative
care, be discharged and perhaps receive out-patient attention. These services are each
administered by different departments.

· Departmentalization by customer groups jobs on the basis of a common set of needs or

problems of specific customers. For instance, a plumbing firm may group its work according to
whether it is serving private sector, public sector, government, or not-for-profit organizations. A
current departmentalization trend is to structure work according to customer, using cross-
functional teams. This group is chosen from different functions to work together across various
departments to interdependently create new products or services. For example, a cross-functional
team consisting of managers from accounting, finance, and marketing is created to prepare a
technology plan.

PRODUCTION:
Processes and methods employed in transformation of tangible inputs (raw materials, semi-
finished goods, or subassemblies) and intangible inputs (ideas, information, know how) into
goods or services.

PLANT LOCATION:
Every entrepreneur is faced with the problem of deciding the best site for location
of his plant or factory.

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What is plant location?
Plant location refers to the choice of region and the selection of a particular site
for setting up a business or factory.
But the choice is made only after considering cost and benefits of different
alternative sites. It is a strategic decision that cannot be changed once taken. If at
all changed only at considerable loss, the location should be selected as per its
own requirements and circumstances. Each individual plant is a case in itself.
Businessman should try to make an attempt for optimum or ideal location.

What is an ideal location?

An ideal location is one where the cost of the product is kept to minimum, with a
large market share, the least risk and the maximum social gain. It is the place of
maximum net advantage or which gives lowest unit cost of production and
distribution. For achieving this objective, small-scale entrepreneur can make use
of locational analysis for this purpose.

ANALYSIS FOR PLANT LOCATION:

Locational analysis is a dynamic process where entrepreneur analyses and

compares the appropriateness or otherwise of alternative sites with the aim of
selecting the best site for a given enterprise. It consists the following:
(a) Demographic Analysis: It involves study of population in the area in terms of
total population (in no.), age composition, per capita income, educational level,
Occupational structure etc.

(b) Trade Area Analysis: It is an analysis of the geographic area that provides
continued clientele to the firm. He would also see the feasibility of accessing the
trade area from alternative sites.

(c) Competitive Analysis: It helps to judge the nature, location, size and quality
of competition in a given trade area.

(d) Traffic analysis: To have a rough idea about the number of potential
customers passing by the proposed site during the working hours of the shop, the
traffic analysis aims at judging the alternative sites in terms of pedestrian and
vehicular traffic passing a site.

(e) Site economics: Alternative sites are evaluated in terms of establishment costs
and operational costs under this. Costs of establishment is basically cost incurred
for permanent physical facilities but operational costs are incurred for running
business on day to day basis, they are also called as running costs.

EXAMPLE:

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Two sites A and B are evaluated in terms of above mentioned two costs as follows:

Costs Site A Site B

Costs of establishment

Land and Building 350000 230000

Equipment 60000 60000

Transport facilities 20000 30000

Cost of operation:

Materials, freight and carriage 34000 24000

Taxes and insurance 10000 7500

Labour 100000 70000

Water, power and fuel 10000 8000

Total 584000 429500

The above cost statement indicates that site B is preferable to site A keeping in mind economic
considerations only although in some respects site A has lower costs. By applying the definition
of ideal location which is the place of maximum net advantage or which gives lowest unit cost of
production and distribution, site B would be preferred.

SELECTION CRITERIA

The important considerations for selecting a suitable location are given as

follows:
a) Natural or climatic conditions.
b) Availability and nearness to the sources of raw material.
c) Transport costs-in obtaining raw material and also distribution or marketing finished products
to the ultimate users.
d) Access to market: small businesses in retail or wholesale or services should be located within
the vicinity of densely populated areas.

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e) Availability of Infrastructural facilities such as developed industrial sheds or sites, link roads,
nearness to railway stations, airports or sea ports, availability of electricity, water, public utilities,
civil amenities and means of communication are important, especially for small scale businesses.
f) Availability of skilled and non-skilled labour and technically qualified and trained managers.
g) Banking and financial institutions are located nearby.
h) Locations with links: to develop industrial areas or business centers result in savings and cost
reductions in transport overheads, miscellaneous expenses.
i) Strategic considerations of safety and security should be given due importance.
j) Government influences: Both positive and negative incentives to motivate an entrepreneur to
choose a particular location are made available. Positive includes cheap overhead facilities like
electricity, banking transport, tax relief, subsidies and liberalization. Negative incentives are in
form of restrictions for setting up industries in urban areas for reasons of pollution control and
decentralization of industries.
k) Residence of small business entrepreneurs want to set up nearby their
homelands.

One study of locational considerations from small-scale units revealed that the native place or
homelands of the entrepreneur was the most important factor.
Heavy preference to homeland suggests that small-scale enterprise is not freely mobile. Low
preference for Government incentives suggests that concessions and incentives cannot
compensate for poor infrastructure.

SIGNIFICANCE
From the discussion above, we have already learnt that location of a plant is an important
entrepreneurial decision because it influences the cost of production and distribution to a great
extent. In some cases, you will find that location may contribute to even 10% of cost of
manufacturing and marketing. Therefore, an appropriate location is essential to the efficient and
economical working of a plant. A firm may fail due to bad location or its growth and efficiency
may be restricted.

QUALITY CONTROL:
Quality have become the major determinant of business success or failure today and are central
issues in managing organizations.

THE MEANING OF QUALITY:

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The American Society for Quality Control defines quality as the totality of features and
characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
Quality is relevant for both product or services. Although its importance for cars and computers
was perhaps recognize first, service firms ranging from airlines to restaurants have also come to
see that quality is virtually important determinant of their success or failure.

IMPORTANCE OF QUALITY:
Quality control is an important aspect for an individual manager and organization for three very
specific reasons:

1) COMPETITION:
Quality has become one of the most competitive points in business today. For example Ford,
Toyota etc each argues that its cars and trucks are higher in quality than of others.
And Air India, Kingfisher each claims that it provides the best and most reliable service. Thus a
business that fails to keep pace may find itself falling behind not only foreign competition but
also other firms.

2) PRODUCTIVITY:
Managers have come to recognize that quality and productivity are related. In the past, many
mangers thought that they could increase output(productivity) only by decreasing quality.
Managers today have learned the hard way that such an assumption is almost always wrong. If a
firm installs a meaningful quality enhancement program, three things are likely to result.
First, the number of defects is likely to decrease, causing fewer returns from customers.
Second, because of the number of defects goes down, resources(material and people) dedicated
to reworking flawed output will be decreased.
Third, because making employees responsible for quality reduces the need for quality inspectors,
the organization is able to produce more units with fewer resources.

3) COSTS:
Improved quality also lowers costs. Poor quality results in higher returns from customers, high
warranty costs, and lawsuits from customers injured by faulty products.

TOTAL QUALITY MANAGEMENT:

Quality is one of the most important issues facing organizations today. Total quality
management, or TQM, is a comprehensive effort to enhance an organization’s product or service
quality. TQM involves the five basic dimensions shown below. Here is important and must be
addressed effectively if the organization expects to truly increase quality.

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 STRATEGIC COMMITMENT

EMPLOYEE MATERIALS TECHNOLOGY METHODS

INVOLVEMEN
T

QUALITY IMPROVEMENTS

STRATEGIC COMMITMENT:
The strategic point for TQM is a strategic commitment by top management. Such commitment is
important for several reasons.
1) For organizational culture
2) For a decision to pursue goal
Thus without commitment the quality improvement will prove to be just a slogan.

EMPLOYMENT INVOLVEMENT:
Employee involvement is a critical component in improving quality. Work teams are common
vehicles for increasing employee involvement.

MATERIALS:
Another important part of TQM is improving the quality of the materials that organization use.
Thus, many firms have increased the quality requirements they impose on their suppliers as a
way of improving the quality of their own product.

TECHNOLOGY:
New forms of technology are also useful in TQM programs. Automation and robots for example,
can often make the product with higher precision and better consistency than people. Investing in
higher-grade machines capable of doing jobs more precisely and reliably often improves quality.

METHODS:
Improved methods can improve product and service quality. Methods are operating systems used
by the organization during the actual transformation process.

TQM TOOLS AND TECHNIQUES:

Beyond the strategic context of quality, managers can also rely on several specific tools and
techniques for improving quality.
Following are the tools and techniques:
1) Value-added analysis: the comprehensive evaluation of all work activities, materials
flows, and paperwork to determine the value that they add for customers.
2) Benchmarking: the process of learning how other firms do things in an exceptionally high
quality manner.

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 3) Outsourcing: subcontracting services and operations to other firms that can perform them
cheaper or better
4) Reducing cycle time: the time needed by the organization to accomplish activities such as
developing, making, and distributing products or services.
5) ISO 9000:2000 AND ISO 14000:
ISO 9000:2000 :- A set of quality standards created by the international organization for
standardization and revised in 2000
ISO 14000 :- A set of standards for environmental performance.

6) Statistical Quality Control(SQC) : a set of specific statistical techniques that can be used
to monitor quality; includes acceptance sampling and in-process sampling.

MARKETING:
Marketing (or advertising) is the process by which companies advertise products or services to
potential customers. It is an integrated process through which companies create value for
customers and build strong customer relationships in order to capture value from customers in
return. The term marketing concept holds that achieving organizational goals depends on
knowing the needs and wants of target markets and delivering the desired satisfactions. It
proposes that in order to satisfy its organizational objectives, an organization should anticipate
the needs and wants of consumers and satisfy these more effectively than competitors.
Marketing is defined by the American Marketing Association [AMA] as "the activity, set of
institutions, and processes for creating, communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and society at large.
The marketing orientation is perhaps the most common orientation used in contemporary
marketing. It involves a firm essentially basing its marketing plans around the marketing
concept, and thus supplying products to suit new consumer tastes. As an example, a firm would
employ market research to gauge consumer desires, use R&D to develop a product attuned to the
revealed information, and then utilize promotion techniques to ensure persons know the product
exists.

4 P’s of Marketing
1) Product
It means the goods & services which are the quality to satisfy human want. It can range from
daily necessities to experience consumer durables. The concept of product does not relate to the
physical product but it also includes the benefit of consumer want from the product. Moreover
the product also includes the customer services like after sales services, maintenances,

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availability of accessories & these are all called as extended product. The important product
decisions are packaging, branding, labelling, & also its features & the quality.

2) Price
It is the amount that customer have to pay to buy a product. price affects the level of demand,
while setting price marketer needs to see that he is able to achieve marketing objectives of
satisfying consumers and earning profit. The price set is affected by the perceiver value of
customers, discount and other credit terms.

3) Promotion
It relates to communication between marketer and consumer. The marketer needs to pass
information about the features, merit, price and availability of a product convincing them to buy
it. Many business organizations spend a substantial amount of money on promotional activities
like advertising, sales promotion, publicity & personal selling. The promotional decision
involves the message to be passed, selection of media based on the target customer.

4) Place
It refers to the physical distribution of the product so that it is easily available to the target
customers. The decisions hear involve selecting appropriate dealers or distributors, providing
support to dealers by providing discount. These dealers in turn manage the stock, provides demo
& offer after sales services to increase the sales. The other decision includes warehousing,
transportation & setup of store.

Distribution Network
Network of distribution are set of individual or business times that help in transforming the title.
The channels refer to a team of agents, merchants and business institution that combines for the
physical movement of the good. This group makes economic of effort, saves time, help in
storage and makes the product popular.

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Components of Physical distribution
 Order Processing:

The first step to establish a buyer – seller relationship is placing the order. The order of flow is
from consumer to manufacture. As per the order the channel is selected to make the product at
the right time & right place.

 Transportation:

It means the mode of carrying goods from a point of production to the point of sale. The more
depends upon the nature of goods, distance to be travelled without a proper transportation system
the sale cannot be competited.

 Warehousing:

It refers to the act of storing & assorting the goods. The need for warehousing arises because
there may be a difference between the time of production & consumption. Generally, larger the
number of warehouse lesser could be the time required for serving customer. This would result in
low transportation cost but high warehousing cost. Thus the firm needs to make a balance
between the warehousing & the level of customer service.

 Inventory Control:

Inventory management is related to warehousing. The important decision in respect of inventory

is deciding its level. Higher the level of inventory better will be the customer service but it will
also increase the cost of warehousing & transportation. It requires the proper balance between
cost & customer satisfactions. With the introduction of computer stock management is getting
efficient & there need for keeping high stock is reducing with the new concept JUST-IN-TIME
(J.I.T)

Defining the Target Customer

Organizations exist for one purpose – to meet human needs.  Thriving organizations do that
exceedingly well.  Venerated organizations have managed to meet evolving human needs over a
long period of time.  All of an organization’s revenues and profits result from one thing –
customers who are willing to pay money for products and services that meet their needs.  Any
brand management initiative, any marketing initiative, and indeed any business or organizational
initiative must start with a solid understanding of the customer.

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Focus is an important part of a brand’s success.  Brands focus on a target customer and often
narrow their focus to a particular customer need segment.  As I've mentioned here before on BSI,
customer targeting is the first step in brand design.  Everything else emanates from that.  So let's
start with how to identify your brand’s target customers.

Look for customers that meet the following criteria:

•    They have an important need and your brand meets that need.  
•    Your brand has the potential to be preferred by them.
•    There is something about your brand that they admire.
•    They have the potential to provide your organization with the ample revenues and profits
over the long run.
•    Your organization can grow by building a long-term relationship with and increasingly
fulfilling the evolving needs of these customers.
At a minimum, you should identify and understand the following target customer attributes:
•    Demographics
•    Lifestyle
•    Needs/desires
•    Hopes/aspirations
•    Fears/concerns
•    Product purchase behavior
•    Product usage behavior

Finance:
i) Sources of Finance

Introduction
For many businesses, the issue about where to get funds from for starting up, development and
expansion can be crucial for the success of the business. It is important, therefore, that you
understand the various sources of finance open to a business and are able to assess how

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appropriate these sources are in relation to the needs of the business. The latter point regarding
'assessment' is particularly important at A2 level where you are expected to make judgements.

Internal Sources
Traditionally, the major sources of finance for a limited company were internal sources:

 Personal savings
 Retained profit
 Working capital
 Sale of assets

External Sources

Ownership Capital

In this context, 'owners' refers to those people/institutions who are shareholders. Sole traders and
partnerships do not have shareholders - the individual or the partners are the owners of the
business but do not hold shares. Shares are units of investment in a limited company, whether it
be a public or private limited company. Shares are generally broken down into two categories:

 Ordinary shares
 Preference shares

Non-Ownership Capital

Whilst the following sources of finance are important, they are not classed as Ownership Capital
- Debenture holders are not shareholders, nor are banks who lend money or creditors. Only
shareholders are owners of the company.

 Debentures
 Other loans
 Overdraft facilities
 Hire purchase
 Lines of credit from creditors
 Financial structures of four well known British companies
 Grants
 Venture capital

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  Factoring and invoice discounting:
o Factoring
o Invoice discounting
 Leasing

ii) CAPITAL STRUCTURE:

It is one of the most important decision under financial management. It decides about different
sources and their proportion in the total capital of the business. The capital can be classified into
two categories as per ownership:
a) Owner capital/owner fund
b) Debt capital/ borrowed capital

a) Owners capital: it is also termed as equity and consists of equity and preference
share capital and reserves & surplus.
b) Debt capital: it consists of loan , debentures and public deposit.

Capital structure refers to mix between owner fund and borrowed fund. It can be calculated using
(
the debt equity ratio debt equity= long term debt/ equity . )
This ratio influences the capital structure decision, it is also influenced by the cost and risk of
both the fund.

Lenders risk is less than the equity shareholders risk, since the lenders are assured of fixed
returns every year in the form of interest and also the repayment of the principle amount.
Whereas as the risk is more for debt capital, any default in paying the interest and repaying the
amount may force the business to go into liquidation. There is no such compulsion for equity.
But the expense will be more as the dividend to the shareholders re paid after paying the tax. But
interest on debt is paid before the tax. Hence the capital structure decision affects both
(
profitability and financial risk financial risk:- it the chance that a firm would fail to pay off the
)
interest on debt capital. . a capital structure is said to be optimal(best combination) when the
proportion of debt and equity is such that it increases the value of equity shares that is increasing
the shareholders wealth.

The proportion of data in the overall capital is called financial average. It can be calculated by
the following formula debt/equity, also known as debtors turnover ratio. The financial leverage
increases with the increase in debt as well as it increases financial risk. If business will increase
its debt capital so long the cost of debt (interest) is lower than the return on investment. This is a
situation of favourable financial leverage and the company rises more of debt. This practice is
termed as trading on equity. On the other hand higher rate of interest on debt capital compared to
ROI(return on investments) results in unfavourable financial leverage and the trading on equity
is not suggested in this situation.

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iii) BASIC RATIOS:

Leverage Financial Ratios

Those financial ratios that show the percentage of a company’s capital structure that is made up
on debt or liabilities owed to external parties

Liquidity Financial Ratios

Those financial ratios that show the solvency of a company based on its assets versus its
liabilities. In other words, it lets you know the resources available for a firm to use in order to
pay its bills, keep the lights on, and pay the staff.

Operating Financial Ratios

These financial ratios show the efficiency of management and a company’s operations in
utilizing its capital. In the retail industry, this would include metrics such as inventory turnover,
accounts receivable turnover, etc.

Profitability Financial Ratios

These financial ratios measure the return earned on a company’s capital and the financial cushion
relative to each dollar of sales. A firm that has high gross profit margins, for instance, is going to
be much harder to put out of business when the economy turns down than one that has razor-thin
margins. Likewise, a company with high returns on capital, even with smaller margins, is going
to have a better chance of survival because it is so much more profitable relative to the
shareholders’ contributed investment.

PERSONNEL
i) RECRUITMENT:

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It is the process of attracting qualified persons to apply for jobs that are open. The
main objective of recruitment is to attract potential employees, short list them and
invite them for interview.
The sources of recruitment are broadly classified into 2 groups namely:
 Internal source:
This refers to the source within the businesses, the vacancy is filled up with an
existing employees. Different types of internal sources are as follows:
a) Transfer:
It refers to shifting of an employees from one place to another. It means
horizontal movement of employees, where there is no extra responsibility,
only there is change in the department or branch. It helps in proper staffing
as workers from one department can be satisfied to another where there is
shortage of labour supply. In case of transfer it is to be noted that the
person is capable of performing the new task assign to him.

b) Promotion: many organization follow the policy of vacancy by performing

a from lower level of hierarchy. It refers to vertical movement of
employees. It carries a higher position, better status, more responsibility
and higher pay. It improves the level of motivation and employees loyalty.

 External source:
When a business enterprise fills up the vacancy externally that is, from the
society with proper job ad’s is term as external recruitment.
Different external sources are as follows:
a) Direct recruitment: the vacancy is displayed on the notice board or main
entrance of the organization. It is mainly used to recruit unskilled workers
who are paid daily wages. The selection is made on the spot and is
efficient as the job need not to be advertised in different medias.
b) Casual callers: when job seekers submit their bio-data or cv and
enterprises maintain a database of the applicants and whenever there is
vacancy the list is screened and offer letters are issued to the suitable
candidate.
c) Advertising: senior position and vacancy for skilled job are usually by job
advertisement. The vacancy is advertise in the print media like newspaper,
magazine and electronic media like TV channel. It gives the full detail of
the vacancy, responsibilities to be handled, qualification and experience
required for the job. It also states the pay and perks associate with job.
d) Employment exchange: government employees exchanges are useful
sources of external recruitment. This exchanges maintain the record of
different job seekers, the employees also provides.
e) Placement agencies: this are private agencies that complies the bio-data
and provides important information of candidates to the employer. This
agencies are efficient then government employment exchanges providing

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 service all over the country in few occasion agencies carry out preliminary
screening and charges of fee for their service.
f) Campus recruitment: management and technical institutes have the system
of campus recruitment, they have a close relation with large business
organization and the business enterprises arranges test and interview
within the institute campus and competent candidates are selected on the
spot.
g) Recommendation of employees: this is system where new candidates are
introduced by present employees. It is cheap and quick source of external
recruitment candidate selected through this process proves to be loyal and
honest as their background is known to employer.
h) Labour contractor: the labour contractor act as an agent between labourers
and employer. He can provide large number of unskilled at short notice.
The limitation of this sources, if labour contractor decides to leave the
business the other workers recruited by him does the same.
i) Web publishing: this is modern source of external recruitment where
internet plays a vital role. There are some job website like monster.com,
timejob.com, that are specially design to help job seeker and employer.
They maintain up to date information of candidates on one hand and
vacancies on the other.
j) Advertisement on TV: vacancies are advertised on TV for jobs like news
reader, editor on channels. It provides detail information about job profile
giving the address and date to communicating.

ii) TRAINING AND DEVELOPMENT :

Training usually refers to teaching operational or technical employees how to do the job for
which they were hired.
Development refers to teaching managers and professionals the skills needed for both present
and future jobs.

NEED FOR TRAINING AND DEVELOPMENT:

With the complex working environment and technical development it is important for the
employees to upgrade themselves. In order to teach new skills training section are organized
which helps both the employees and the organization.

ADVANTAGES OF TRAINING FOR THE ORGANIZATION:

i) As the employees are trained they acquire better skill and superior methods of doing
the work so time and money is saved.
ii) It improves efficiency and productivity along with quality and product. It leads to
better goodwill and more profit for the business.
iii) Trained workers are self confidence, hence business is able to get manager for future.
iv) Training increases the level of motivation and reduces absentism and high labour
turnover.

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 v) The trained workers are able to adjust quickly with the changing business
environment, thus saving time for the organization.

ADVANTAGES OF THE TRAINING FOR EMPLOYEES:

i) With improved skill and knowledge after training section employees can look for
better career.
ii) Training improve the performance of employees and makes themselves confidence
giving them a chance to earn more.
iii) Training reduces chance of accident that workers are taught to do the work safely.
iv) It leads to satisfaction, motivation and high morale for the employees.

REWARD SYSTEM:

Why reward system?

The only way employees will fulfill your dream is to share in the dream. Reward systems are the
mechanisms that make this happen. "However, reward systems are much more than just bonus
plans and stock options. While they often include both of these incentives, they can also include
awards and other recognition, promotions, reassignment, non-monetary bonuses (e.g., vacations),
or a simple thank-you.

SOCIAL RESPONSIBILITY AND ENVIRONMENTAL PROTECTION MEASURES:

The set of obligations an organization has to protect and enhance the societal context in which it
functions.

Following are the areas of social responsibility:

i) Organizational stakeholder: Organizational stakeholder person or organization who is

directly affected by the practices of an organization and has a stake in its
performance.
ii) The natural environment: a second critical area of social responsibility relates to the
natural environment. Companies need to develop economically feasible ways to avoid
contributing to acid rain, global warming, and depletion of the ozone layer, and to
develop alternative methods of handling sewage, hazardous wastes, and ordinary
garbage.
iii) General social welfare: it includes making contributions to charities, philanthropic
organizations, and not-for-profit foundation and associations; supporting museums,

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symphonies, and public radio and TV; and taking a role in improving public health
and education.

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