Shrichakradbar.com i ‘TS-3: Management In Tourism December, 2021 Note: () Answer any five questions in about 600 words each. GAL questions carry equa! maria, Q1. Define the concept of management. Elaborate various managerial roles and ¥ésponsibilities. Ans. The development of the concept and principles of management is,relatively a modern phenomenon. However, this does not mean that management isSomething very recent, In fact, since the pre- historic times humans have managed groups, communities and organisations. For exampleeven in the huntingand gathering stage people did followa leader ‘or a group of decision makers responsible for their welfare. The evolution from simple to complexsocietiesalso witnessed the emergence of specialised organisationsand departments of the governingauthority. Whether it was a city state, aikingdom or afepublic, the need and role of managers increased. There is ample historical evidence in this tegard. We find the attributes of a worthy king or a minister; the merchasit guilds -and:trading activities; the management of workshops and artisans etc. It was in the very recent past, say from the industrialrevolutionythat théneed fora systematic approach to management started gaining importance. Application of new technology, increasing work force, mass production and distribution,etc. néeded effective coordination. ‘Yet, management was not recognised asa@aj'iechnology' Between 1890's and 1930's Frederic \W. Taylor and certain others formulateda management approach which is described as the Scientific Management Theory. Thefour basic priticiples of Taylor's theory were: j) the developmentof true scigiiee of management, so that the best method for performing each task could be determined, ii) the scientificselection of Workers so that each Worker would be given responsibility for the task for which he or'she was best suited, iii) the scientificeducation and development of the worker, and iv) intimate, friendlycooperation betiveen management and labour. Taylor advocated that a complete mental revolution on the part of management and workers was required for thesuceessof thesepringiples. In fact Scientific Management was concemed with increasing the procuctivityof both, the shop as well as the individual worker. Soon there grew anothér theoryie, the Classical Organisations Theory. Managers: Roles, Tasks And Respdinsibilities: Waen you are anpiring ‘ be a professional manager the ianmediate concern is to understand the roles, tasks and responsibilities that you have to perform and shardlés.2 manager. All managers, depending on their level or range, plan, organise, head and conttoly Yet, ont has to go beyond these generalfumctions to have a proper understanding of one's job. Agfinager'sprimary concern is the organisation with which he or ehe works and has to keep the ovetallperspectiveo the organisation in mind, He or she is also responsible for the perfor:ance. Managerial Roles: A umber of times various scholars have conducted stuslies and surveys to understand managerial roles. The most accepted among these are the findings of Henry Mintzberg, which inchade: A) _Interpersonalroles : These are the relationsa manager has with othersinside and outside the organisation. These include : 1) Figure Head : This takes into account the role as symbolic head of the organisa- tion. For example, welcoming official visitors and duties of a legal navure.2 Question Paper 2) Leader: The manager guides, directs and motivates subordinatesand is account able for their actions. 3) Liaison: The manager has to establish linkages, relationships and networks, both inside and outside the organisation which would be useful in achieving organisa- tional goals. B) Informational roles : An important aspect of the Manager's job is receiving and communicating information. This further includes: © Decision Making Roles : A manager has four decision making roles: 4) Entrepreneur : A manager performs the role of an entrepreneur by initiating change. 2) Disturbance handler : A manager is expected to solve problems and handle disturbances in the organisation. 3) Resource allocator : The resources of an organiSatioa are always limited. A manager makes best use of them to achieve the stated goals and accordingly allocates them. 3) Resource allocator : The resources of an ofganisation are abways limited. A manager makes best use of them to achieve the)stated goalsiand acccrdingly allocates them. 4) Negotiator: A manager nesotiates with both insiders aswell aSjontsiders. Tasks Performance is the prime thing in a manager's rolesFoe this the managée bas to act, take certain steps and do certain task:. We list here some Of these tasks. A manager ‘© provides meaningful direction to the Company or Organisation, maintains efficiency for profit generation, meets the challenge of increasing competition, motivates the subordinates, attempts to retain talent in the Cofmpang inculcatesa sense of loyalty améhg thé employ@eB) keeps in mind the interest and Welfare of employeesin order to gain their confidence and asa leader demonstrates his/her leadership abilities, nainlains « balance beanie loping few Hive snd translating them into successful eeeene © Lakes initiative for the Spgradation of ills and Constant taining of the employees, and © keeps oneself updated gh isitormations Responsibilities: The Company in which’you work, or your own firm should have a harmonious relationship with other social segments, Thighbrings in the question of the responsibilities of a manager. Here we list some of the responcibilitg® whiclla manager has: © Ina service industry like tourism, eustomer satisfaction comes first. Hence, a manager must be responsible towards the customers regarding their needs, concerns, quality of the product, etc., © Incastofia Company or Firm, a manager is also responsible towards the employees by enstifing their salaries, provident fund, etc. © “Aimanager is also responsible towards the suppliers whose products are being used by the Company. For example, you will depend on the suppliers for regular supplies of a Specified quality and at an agreed price. In return, it is your responsibility as a manager to assure timely paymentsto the suppliers, etc. ‘© Iris the responsibility of the manager to ensure that the operations of the company are within the legal framework i.e. the existing laws framed by the Government. ‘his responsibiity also includes the payment of taxes, duties, etc. on time © Today, the manager is also responsible towards the society and this is a vast area of responsibiity. For example, you should take into account that by the actions/operations of your Company, the environment is not damaged or religious sentiments are not hurt, etc,Shrichakradhar.com 3 © Incase of a Company or a Firm, a manager is also responsible towards the employees by ensuring their salaries, provident fund, etc. © Similarly, a manager is also responsible towards the distributorsand retailers in terms of quality, timely supplies, etc. ‘© Itis the responsibility of the manager to ensure that the operations of the company are within the legal framework ic. the existing laws framed by the Government. ‘his responsibiity also includes the payment of taxes, duties, etc. on time A manager is also responsible towards the suppliers whose products are being used by the Company. For example, you will depend on the suppliers for regular supplies of a specified quality and at an agreed price. In return, it is your responsibility as 2 manager to assure timely paymentsto the supplicrs, cte. © Today, the manager is also responsible towards the society aid this is a vast area of responsibiity. For example, you should take into account that by the actions/operations of your Company, the environment is not damaged oneligious sentiments are not hurt, etc. Work Patterns: ‘As has been mentioned earlier, there are different levels of'managers who perform different tasks in their jobs. It is very essential or you to understand the job'when you are performing managerial roles because the roles, tasks and responsibilities will be related to the nature of the level. At the same time you should also try to understand the)pattern of managerial working, which again may vary as per the levels, An/important aspect in the work pattern is to take into account the activities which you as a manager will:be performingon day-to-day basis. For example, you will have to make yourdaily schedule by distributing your tasks and responsibilities in a timeframe. There are cextain thingswhich you can schedule but there are situations when you have to go for unscheduled meetings or attend to telephone calls or face un-anticipated problems. Many of these require immediate action which you can not ignore. Among the scheduled'things, you should plan out for your next week's activitiesin advance like you might keep some time for meetings, some time for interacting with your employees, some time for reviewing and some time for operations etc, Q2. Define planning. Explaift the features anil typ@lof plan. Ans. Planning is a process that involves thie determination of any future course of action, i.e. why, take an action, what action, how to take action and when to take action. «These why. what, how and when aregelated with different aspects of the planning process. All these aspect are the parts of the process which determinesin advancethe furare accomplishmentsand the means to achieve them. For a manager it means, clearly putting down the actions which he or she intendgto take for achieving the organisational goals. For an entrepreneur it meant drawing a blueprint of the activities to be undertaken for establishing the business anticipated problems, etc.| However. the nature and scope of planning varies as per the leve of the manager, For example, an escort may pkin for the day (our or the group's (otal tow but dreour operator will plin for packaging the tour, marketing it and cateringto the group etc: Here, You should also remember that planning is needed primarily for vo reasons: iy Committing and allocating an organisation's (this can be your own business or the company you work in) available resources for achieving its stated goals, and fi) Anticipating the future problems and opportimities, Plaaning also implies: + making choices from the diverse available opportunities, and + atime limit for achieving the goals. For your own clarity you should take note of the features of planning. Planning is: © a process rather than behaviour at a given point of time. It is the process which determines the fumire course of action.Question Paper © concerned basically with the future and requires forecasting of the future situation, @ the process af selection of a suitable course of action keeping in view the available resources. © not restricted to certain section of the organisation but is undertaken atall levels. This is because all levels of management are concerned with the determinationof the future course of action. flexible as commitment is based on future conditions which are alwaysdynamnic. As such an adjustment is needed between the various factors and planning. © 2 pervasive and continuous management function involving complex processes of perception, analysis, conceptual thought, decision and action, ‘Types OF Plans: Planning is a vast area as all managers plan to achieve the stated goals of an organisation, Within that, every unit or department has its own plans ahd/$0 on, Generally, plans can be of two types: 4) Strategic plane ii) Operational or Tactical plans Strategic plans are devised to meet the organisational goaldwher@as, operational plang are devised to implement the steategic plans. However, above all these is the @iission statement which defines the organisation's goals. MISSION STATEMENT (ORGANISATIONAL GOATS) STRATEGIC PLANS: ] ‘OPERATIONAT. PLANS, For an organisation's growth itis imipérative that operational plans reflect the strategic plan. For example the various regional managers of the Department of tourism make promotional plans for their regions, but the, guiding factor for'them are the principles metioned in the strategicplan designed by the Department of tourism. However, it must be remembered here that strategic planshave a long span of time compared to operational plans. For example, as a tour operator youunmy have a strategicplan to cater to 100 groups of touristsin a five year time. To achieve this target you may have operational plans for cateringto 20 groupsin a year. Similarly. your strategic plan will covera broad range of organisationalactivities whereas your operational plan williave a limited seope. It is interesting to note that your simple strategic goal of 100 groupsleadsto complexoperational planuing, takiigintoaccount your marketing strategics, linkages, infrastructure, ete. Strategic plans decide the alms and policies of the organisation. Accordingly, the ethods for thelr fulfilment are alse detatted. Once tis is done, a any given lime, hike where the org: or where il miends 10 B0, are answered by the strategic plan But how the organisation will get there is answered by the opérationalplans. Fo#fornulating a strategic plan you can begin with asking the following questions: ©. What service is to be provided by you? What sort of competition do you have? ‘What are the resources and infrastructural needs? ‘What are the resourcesand infrastructural needs? ‘What kind of social, economic or political environment is there? eoeee What unique features you offer? etc.Shrichakradhar.com 5 (QS. Write an essay on supervisory behaviour. Ans. The supervisor occupies a place of prominence in the organisation as a--useful instrument in achieving organisational goals. Besides, he provides a lead to the workers and has an important role to play in motivating the workers because he is the one who by virtue of his duty, is very close to the ‘workers. In a mnishell, an effective supervisor should possess traits like, dominariee (Within limits), self - assurance, effective verbal communication, pleasing physical standards, pefeei¥ed occupational confidence, intelligence, perception of ability and personality, differentiation, scholarship, creativity, diplomacy, tactfulness, sympathy, extrovert nature, enthusiasmiitiative, responsibility, etc. An efficient and effective supervisor requires a set of skills, some of which are explained in the following Sub-sections. Handling people: The job of a supervisor, as we have discussed, is/to get things done through the people under him. It, therefore, follows that the effectiveness of the supervisor will largely depend upon the way he treats other people. That is, if the supervisonstespeéts people and treats them the way he himself would like to be treated. He is exeating the kind ob atmosphere in which the members of the group will be able to give their best. A supervisor shotild reebgnise that cadkyindividual has a contribution to make and ensure that full use is made (of the eombined wisom, knowledge and experience of the people within the group. A stipervisoemustiFegard hittsolfmot a8 a superior but as ‘a member of the group, having some extra responsibilities 6f achieving the group’s common aims. In fact, a supervisor as the leader of a group rclieSion thélother peopl@’6f. the group for achieving the group's common goals, as well as the goals of the organisation. For doing $9, the supervisor should: © set and maintain the group's objectivessand standatds anid make sure that they are known and undersiood by every porSéty + involve the group as a tcam in the accomplishment of those Bbjectives, gain the commitment of group members to implementithe management's decisions, bbe accessible and be able to spend time with the group members, '* delegate authority andijresponsibility for/faking. decisions that directly effect their work situation, + keep the managementiformed about she groups reactions and requirements, ‘+ listen to the ideas and Suggestions presented by the group members, evaluate them and act where required, ‘communicaté t9 the group about achieving its targets, recommend good work for rewards or incentives to the management, and ‘© recognise sticcess lear figin failitres, review objectives and involve the group members in planning or planning for thesfuture. Leadership: In order to get thé besbout of cach member of the group, a supervisor aims at making full use of the, strengths. skillspand positive characteristics of the group members in addition to developing his/her own ability to lead, Effedtiveness of a leader depends on the ability to influence and be influenced, either by the team or thelindividuals who make up those teams, A supervisor has to ensure that the required tasks are complete satisfactorily without any danger or risk to the team identity. It must be recognised also that each person in the team is an individual first and who has his needs, hopes, ideas and so on, which must be realised if the individual is going to be effective. If too much concentration is on achieving the task, whatever the cost, then sooner or later the group will start disintegrating, In the same manner, if the individual needs are not recognised the team will disintegrate. A successful leader has to strike a balance between task needs, group needs and individual needs.6 Question Paper "To provide the right atmosphere and opportunities so that each individual member in the group can have job satisfaction, is probably the most difficult part of the job of a Teader/ supervisor. A. good supervisor could ensure this by way of: + helping subordinates to realise that work can be a satisfying and integeal part of life, + providing clear targets by which their performance can be assessed, + considering any incentive not necessarily financial, + giving praise where itis due, + keeping people informed of any changes etc. so that they feel securaifitheir jobs, + respecting the staff, and treating thems individual human beings * involving people in the overall job, so that they develop anvinterest in what they are doing, + keeping a close eye on working conditions, and + looking out for improved layouts, methods and systems,@tc. Communication Organisations are basically a human arrangement created for certaiul spetific goals. These goals can not be accomplished unless human efforts ake consciously coordinated and integrated, Consequently the activities of individuals in/an organisation arelfimnctionally inter- related and inter-dependent. The smooth working felationships aniong)individuals depend largely upon effective communication. In, fact, organisations cannot, exist without sound communication. An organisation has to lay emphasis on Downwwatd)Communication, Upward Communication, and Horizontal Communieation. Since 4 supervisor is an important link between the lower and the upper echelons of mianagement, he»plays a significant role in ensuring better communication. Communication is important for a variety Of reasofs: + Communication failures are expensive, For exarhplé, a group of foreign tourists were to go for a sight seeing tour in a codeh immediately after checking in at 12.30 pam. and their lunch. ‘was organised at the site. Improper commaiiication or no communication resulted in non- availabilily of the coach at the scheduled time for the tourists. The cost of this lack in communication can notibe caléulated only in terme of time hours lost but it upset the whole rhythm of productivity dervite to the éustoststs. * In case of any change! within jthe organisation, the full benefits of change can be achieved onli where there is an ddeqiite communication system for explaining directly. May be a written commilmication followed by face-to - face discussion with the employees can let them know Whatis required/9F them‘and why. + Improved productivity maysbe expected in case the communication is adequate. The employedscan directstheir efforts more effectively and cooperate with their leaders becatise of proper and adequate communication. * Tach individual is ambitious and is ing Wve to know about his future prospects in the gompany. Therefore, to avoid losing potential manpower it is important to communicate to the subordinates where they stand and what their future within the organisation is likely to be. + People will put in their best only when they fully understand the decisions that affect, them and the reasons behind those decisions, All the subordinates need to understand what they have to do and, how they are performing against the fixed norms and standards. Full proof and well spelt out communication will lead to better invol vement of workers with their work as expected. It will amount to greater efficiency, higher morale and improved cooperationShrichakradhar.com 7 ‘QU. Write short notes on the following: (a) Functions of an Airport Ans, An airport essentially works as a facilitator and its functions vary as per its size. However, looking at the various functions of an airport we ean broadly group them in three categories: © Essential operational services, © Traffichandlingservices, and © Commercial activities. Essential services include maintenance of runways, terminals, hangéfs) building, air traffic control system, telecommunications, security, fire and ambulance services. Different countries have different rules in providing these services depending on the nature of controlover the alrportauahorigy.Intndio, tllnowalllade faclitieenre provided and controlledby government through various agencies. ‘Traffic handling services include provision of loading and anloading of baggage, delivery of baggage through conveyer belts at the lounge, processing df passengers and providing required services to the passengers. Here also difference exists amongaizports in different countries. For example in many European countriestheseservices are provided by airlines ‘q special handling agents. In ladia these services are provided by the airport authorities. ‘Commercial activities include shops, duty free $hOps, restaurants) bats, car-hire booths, officesof travel agencies and airlines, tourist information centre, foreign currency exchange facility and other services for customers. Generally, either in the terminal building or in its vicinity these facilities are available. These facilities and servieesimmy be provided by airport authoritiesor by any public/private bodys At the same time, there are certain/other Agencies like the Customs, security (police), ‘emigration department, etc. which ate very much presentaat the airport but are not a part of the airport management. Each oné of these agencies has its own regulations, laws, roles and duties defined by the government. Yet, in publiceye they are part of airport regulationsand in most of the cases have a bearing on an airport's image. The forms of ownership and:management of airportargely determine the nature of s and services available at any airport. "Thoth iam ‘most of the countries airports are owned by government, there are also countries where airports are owned by public/private companies. In India, Nationala irports, Authority, an, autonomous body, under the Ministry of Civil ‘Aviation manages the airports and controls the various facilities and services provided by Indian airports. Majorairports indndia até located in Delhi, Bombay, Calcutta and Madras. Besides these all state capitals and important cities have airports. Functions of different airports depend on the number of aircraft movements, number of passengers and volume of freight. Thisoutline of functionsprovides a general idea of the different areas which should be the concer of airport managers. (b) Menu Anse food to be served in a restaurant is the basis of the restaurant operation. The type and -valiéty. of f66d to be offered will determine style of serviee, kitchen design, storage requirements and ‘eve interior decoration. ‘The mmémi lists the items or the alternative items from which a person may select to satisfy hhis need. The menu will vary in food service operations and will be affected by: © Thecustomer profile, © Nutritional requirements, Potential numbers to be served, @ Availabilityof skilled staff,a @ Area and equipment available for food preparation, © Food combination ie. variety in colour, texture, flavour, preparation method, etc, and Climate and seasonal availability of foods. Table Service Restaurants generally have longer and more complex menus. Generally these restaurants select a theme and create an image through menu design and content, interior decor, style of service, advertising etc. Three basic types of menus are possible, i) Table dhote - Set menus (such as Thaall) ii) Aka carte - are lists of alternatives for each meal_componesifl®r course where the customer selects the number of courses and specifies items he OF she wants to eat. iii) A combination of i) and ii), Cafetaria or Buffet Service Restaurant These are still in small numbers in India and are generally found in institutional feeding operationssuch as factory canteens. They offer a fixed number of items on the menu, which are on display, at a fixed cost to the customer. Thesmon-institutional operations offer untimited quantity to a customer at a fixed price. ‘Quick Service and Fast Food Restaurants ‘These restaurants generallyare open for long hours and offer the saifie mei throughout the day. The westem style cofiee shop peration isstill if limited numbers in India and generally such coffee shops havea limited varietysnack, lunch and dinner menualn the west the dianer menu is slightly more extensive than the funeh menu. Menu items choice is based on popularity, profitability and quick preduetion capability. Fast food restaurants provide very little service, generally have limited menus end offer quick production standardised items. Im most westérm fast food restaurants Items are not realy prepared to order. The most popular ones are produced continuously and the others at regular intervals to maintaina predetermined supply leve$ and then kept packed ready for service. Hence, menu variety has to be limited and that only to those items which can retain acceptable quality overa périod of tithe. Question Paper 5. What is Budget? Discuss{ts importance andvarious types. Ans. A budget is a systematie)plan for the utilisation of manpower and material resources. It representsan estimate of future costsand revenues and is quantified in financial terns. In simple words, budgets are writtemplans of businessactivity reduced to Rupees or any other monetary term. The main features of a budget are: © Itis prepared i advance'andiis derived from the long-termstrategy of the organisation, © Itisrelated to future plansfor which objectiveshave already been laid down, and © It isrélated toa specified period of time. ‘Youmafflask the question that What is the purpose of budget. Well a budget helps you in many ways like: © «lnclearly states expectations of your organisation and by doing this you can avoid confusion and ambiguity, eT is a method of communicating the plans and expectations,to everyone in the organisation so that the employees or the departments in an organisation understand, support and implement the policies, © Ithelps in maximising the use of organisationalresources, © Ithelps in reducing wastages and losses,Shrichakradhar.com 9 ‘@ Ithelps in taking timely corrective action and controlling ongoing operations, and © Itserves as a basis for both motivating and evaluating the manager's performance. ‘The process of budget preparation consists of certain steps like: ‘1D Establishing financial objectives - Generally, the major financial objective for any. organisation is, long-term profit maximisation. This is true of tourism industry where profits, start Gming, from second or third year only. At the same time, in hospitality and tourism entefpris6s certain other objectives are also included while determining the financial objectives of the organisation. ‘These include: © providing high quality services, © tobe the lead organisation, *in the area of business, © ~10 be recognised as having the best reputation, or © tobe the fastest growing organisation. 2) Forecasting revenues - For forecasting revenues in the tourism sector enterprises, one should have information regarding the economic eftvironment likeveconomic trends in the tourist generatingmarkets, expected inflationfortie budget year, expected variations in the costs of specific purchases, nature of competitive conditionsand.travel trends etc. 3) Estimating expenses - The expenses to be incurred for the budgeted period must be estimated and for this managers must‘Obtain information regarding expected cost increases for supplies and labour costs in ordento forecastitheir variable expenses. 4) Determining net income - Generally, reventnes minus expenses are equal to net income. Hence in the budget making process, the net incomedfor the budget time period should be determined. 5) Reviewing and approval - Once thé budget is made. it should be reviewed and approved by the competent authority in the organisation, Dhis,could be a Board of Directors, a Budget Committee or an owner manager of a sole-proprietorship business. Every organisation has a master budget i.cethe total comprehensive budget of that organisation. It sets out the plan of opérations for all'departments for the budget period. Out of this master budget, different types of budgetsiire prepared for various purposes like sales budget, production budget. purchasing budget, administrative expenses budget etc. Revenues are allocated to meet the estimated expenses of different departments. Budgets can be classifiedion the basis/of TimesFunction and Flexibility: 1) _In terms of time, a budgets cant be!long.term, short-term, current or a rolling budge. For example,an organisation may hayea long-term budget say for the next ten years, this can be further divided into/a short-term yearly budget which can further be sub-divided into a(eurrentymonthly budget, Whereas some organisations follow a practice of preparing arolling budgébwhere a budget for a year in advance is always there ic. immediately after a month or a quarter passes a new budget is prepared for the next 12 Types of Budgets Evety,organisation has a master budget i.e. the total comprehensive budget of that ‘organisation. It sets out the plan of operations for all departments for the budget period. Out (of thisimaster budget, different types of budgetsare prepared for various purposes like sales ‘budget, production budget, purchasing budget, administrative expenses budget etc. ‘ReWenues are allocated to meet the estimated expenses of different departments. months. The figures for the month/quarter which has rolled down are dropped and figures for the next month/quarter are added.19 Question Paper 2) In terms of functions, the budgets can be classified into sales. production, purchase, research etc. For example, a sales budget will take into account the projected sales and thisis generally the starting point for budgeting. Thisis because productionand inventory levels are generally geared to the rate of sales activity. A production budget provides estimates of the total volume of production. A production budget is prepared on the basisof a sales budgetand then the purchasingbudget is based on the production budget because the total materials to be purchased depend on the level of production. Similarly, a cash budget is a summary statementof your organisation's expected cash inflows and outflows overa particular period of time. It involves projection of fature cash receipts and cash disbursements.It helps the management in determiningthe future cash needs, planning for financing of those needs and exercising controliover cash and liquidity of the firm. 3) terms of flexibility, we have two types of budgets Le, fiwed budget aii foxible budget i) Afixed budget is designed to remain unchangedirrespectivedt the level of activity and is prepared on the basis of a standard of fixed level of activity ii) A flexible budget is designed to change in accordaiice with'the level of activity attained. In the case of touriam organisations, a flexible budget is desirable becaure; © The nature of business and sales are largely diapredictable, © Itis difficult to foresee the demand in case of new ventures, © The business is subject to nature varietions, for example, a 6601 summer will affect the travel to hill stations. Q6. What do you understand by Profit and’ Loss, Account? Explain the relation between Profit nd Loss Account and Balance Sheet. ‘Ans. The Profitand Loss Account is on@ nf the important AnaaGlal statements. Itshows theme results of the business operations during ai aceolinting period. Heiietmerises all the revemues or incomes and all the expenses for earning thatld@venue. Tae nat difference reflects the profit or loss for that petiod, This account is one of the mnasbimportant indliéatore of financial health of the business. Let us first learn why do we preparalprofiband loss aféotint Why profit and Loss Account? ‘The major aim of the'biisiness entity isto eafn profit. Hence, profit and loss account is prepared to calculatethe net profit or net loss of the business. In specific termit is prepared for: i) Knowledge of nef profit or‘net loss; Profit and loss account provides information about the net/profito¥ net loss earned by the business duringa particular accounting period. ii) Compatisonwith previous year's profit : The profit figure ascertained by the profit and loss a¢count for a partictilar accountingperiod can be compared with that of the previous yeat's)profit. It helps in ascertaining the efficiency or goodwill of the business. 48) (Control over expenses: Am analysis of the various expenses included in the profit and Joss decount and their comparison with the expenses of the previous period helps in taking concrete steps for effective control over the expenses. Relation Between Profit And Loss account And Balance Sheet Profit and Loss Account or Income Statement and Balance Sheet are important financial statements of the business entity. They reflect the financial health of the firm.Shrichakrodbar.com 1 The BalanceSheet isan important document showing the financial conditions of a firm giving details about the assets, liabilities and owner's equity on a particular day. However the earning capacity of a firm through the business operations is shown in income statement or profit and loss account. The Income Statement shows the results of operations of a business for an accounting period. It shows whether a firm is making or losing money, In the income statementrevennies ofa certain period are compared with the cost of earningthose revenues. In other words, Profit and Loss account summarises the results of opefations Yor the given accounting period whereas Balance Sheet represents the financial status of an enterprise at a particular point of time. Therefore, the profit and loss account is a flow report whereas Balance Sheet is stock report. The Profit and Loss Account and Balance Sheet are related toach other. The Income Statement for an accounting period works as a link between the Balance Sheet at the beginning of and closing of accounting period, This is because Income Statement represents the inflow/ outflowof assets and liabilitigs for that period. ‘The simple accounting equation shows that toral claims ite, the claims of the outsidersand the proprictors are equal to the total asscts of the firm, ‘This means that the total claims include the owner's €apitabor equity and the liabilities. Assets = Equities (total etiams) or [Assets = Liabilities + Owner's equity ay or Owner's equity = Assets = Li ies ey ‘We may also define owner's equity as: Owner's equity = Contributed Capitil } Retained Barnings If there is no withdrawal from the business by the ofmers then: Retained Earnings = Revenue S Expenses 8 Elaborat ithe meaning ofjowher's cquity in@ljwe set = Assets = Liabililies +.Contributed Capital ‘+ Retained Earnings o Again we can wright trom): Assets — LinhitigiegPicontrituted Capital + Revenue — Expenses © The Promt = ReVenue — Expetises © If there is no withdrawal from the bustbess by the owners then: The accountifigsummarisation of Revenue and Expenses is shown in the Profit and Loss account. Hence, we can say that the Profit and Loss account is an integralpart of the Balance Sheet. Infact, it is an expansion of one of the terms of the Balance Sheet. Therefore, they are related (0 @ach other (O7/Diseuie the managerial skills required in tour Operations. Ans! Tw today's world of specialisation, ihe tour operatorsalso package different kinds of tours and accordingly acquire product krowledge lor packnging (ours. We have mentioned enrher that there are inbound (our operators as well 8s outbound and domestic tour operators. Within these categories, we can further divide the tour operators in two categories. 1) Mass Market Operators are.those who offer routine packages which include travel, accommodation, and some services.aR Question Paper 2) Specialist Tour Operators design their packages Keeping in view the market segmentation of the customers. For example, exclusive package tours are created for adventure tourism by some, others package wildlife tour packages or some design packages for a particular age group. Some tour operators go for geographical segmentation and operate in a specific region only. For example, certain local tour operators may organise tours in their catchment areas only or some maypdeal with business for one or two countries only. Among this category, there are also wur operators ‘which specialise in using specific types of accommodation, transport and entertainment. In fact, there is no end to imagination and creativity in designing special tours after analysing the demand trends and attitudes. Some tour operators specially design and package tours on the requests of the clients. A ‘typical examplein this regard could be the following: A group of 15 archaeologists from U.K. intends to visit India, They want to have a feel of prominent archaeological sites and they are in the age group of 35-45. They place their requests to a travel agency in U.K. and the travel agency. passes on this request to a tour operator in India. The first task for the tour operator is to asséss whether such a group can be handled by the company. ‘his may include: A group of 15 archaeologists fiom U.K. intends to yisil india. They! want @yhave a feel of prominent arcaaeological sites and they are in thé age group of 3545» They place their requests to a travel agency in UK. and the travel azeney passes 6a this tequest to a tour operator in India. The first task for the tour operator is to assess whether stich a group can be handled by the company. This may includes 1) The company has to get in touch with an/archaeologistin India for identification of the sites to be visited. 2) What will be the modes of transportationto these sites? 3) Where accommodation has to be provided ? 4) Identificationaf a tourist guide syho specialisesi archaeology. 5) ‘What typeof entertainment calle povided testi the crenings ? 6) What type of meals to be setyed and where? 7) Where to take them for shopping, etc. ? In fact, after assessing these ges only the tour operator will package the different componentsand accept the offer. The tour operator canalso think of providing value addition in this package by offeringa good book on archaeology to the group members, a visit to a museum where thé)finds from the arehasological sights are kept and shopping at a place where replicas of ancients artifacts could be bought It should be kept in mind that/stidh,réquests ask for special efforts on the part of tour operator to.package the tour and.in the coming future the number of such tours is going to increase. For the construction of any. type of holiday package, market research (see Unit-16) is an essential, component and onee adecisionis taken regarding the type of business to be done, the tour operator must take an account of the services that are to be packaged. At the same time, the tour operator must have a first-hand experience of the quality of the services which the principal suppliers offer, and this means field visits. In tourism, these are known as ‘Familiarisation (FAM) Tours. Generally, these tours are at the cost of the principal suppliers who themselves are looking for expanding their business. Let us take the following example in this regard.Shichekradher.com a Besides product knowledge, planning, organising, monitoring and controls should be an in-built exercise while packaging tours. While selling the tours. you may face such questions as (0 Whul are your aliernate or contingency plans for meeting the failure of any service that is offeredin the package. For example. ifthe flight is cancelled etc. Hence. it is necessary that the pace of operations, contingencyplans and controls are decidedat the initial stage itselt. Thoush, these may be for the internal consumption of Vour company employees. In fact a tour operatorshouldconstantly update the knowledgeabont the destiftationin order to improve and redesign the package (if necessary) every year. It must be remembered that For the construction of any type of holiday package, market researéfi(see Unit-16) is an essential component and once a decision is taken regarding the type of business to be done, the tour operator nmust take an account of the services that are tobe packaged. At the same time, the tour operator must have a first-hand experience of the quality of the services which the principal suppliers offer. and this means field visits. In tourism, these are known as Familiarisation (FAM) Tours. Generally, these tours are at,the cost of the principal suppliers who themselves are looking for expanding their business. Let us take the following example in this regard. A tour operator intends to package a tour from Delhi to'Goa. We know that atleast three airlines are operating their flights on this route and there are a number of hotels in Goa. A representativeof the company travels in a particulatairline to assess its Services. Further, he or she looks at the hotels in Panjim and assessesttheir facilitiesand services, location from the beach (generally people go to Goa for beach holidays) etc. The prices and commissions are also negotiated. The next thing the representative does'is.to deal with a local tourist transport operator for making sightseeing and excursion arrangements during the daytime and again pricesand commissionsare negotiated. The representativealso finds out the means of entertainmentavailable in the eveningsand decides which One from among them is to be packaged in the tout. Q8. Analyze various issues relévant £0 Eitirist taisp ont management. Ans . In your business of tourist transport operations nan utilisation of the bus/coach/car is loss, ‘You will eam profit only affer yaur sales cross the breakeven point. Hence the success of your company depends a lot on how well you can mathet your product and services. Competition in the markétiGialways there, But still some companies have better share of the market than others. Your target naturally should by, how you can have a better share of the available market ‘You have read aboutthe 4Psin marketing i.e,Product, Price, Promotion and Place or distibution. Itis the calculative mixing of ds whicit hel pe @ tompany in occupying a dominant position in the market Marketing ini fameport servicesneeds speeial focus on quality, punctuality, comfort and reassmable pricing, AU ifiese folir aspects play altrucial role in the selection of a transport service by tourists. In marketing Of Your company yal tims on these aspects which make your company different from others, Networking with hotels, government tourist departments and tourist generating agencies is very essential in marketing of tourist transport services,sit Question Paper Hotels ‘Tour Operators Tourism mares nn x Government Tourist ‘Departments In tourist transport marketing special consideration should be givea fo innovative packaging Particularly in modern marketing success of your serviceslproductdepends much on proper packaging. You have to be absolutely clear about the market segment whose requirements you tend to fullfil. For example, most of the transportoperatorssdeal only with the intermediaries and do not sell directly to the tourists, Atthe same tine theyare aware about the requirements of the intermediary company and the prolile of its clients. Improving the productand to an extenteven maintaining the quality ofthe product/service initially offered helps you significantly in promoting or selling your. product. You must have heard or commented yourself "Oh they are maintaining the quality of service". or "they are no more like the way they started.” Issues In Transport Management You should consider the following points when you are in tolsist ransport business: Vehicle Regulations: Tourist coaches are granted permission to ply provided they follow the following terms and conditions: @ the -vehicle should be used for specific routesar areas, unless modified or extended the vehicle is stritily prohibited to be used outside the specifiedarea, © carriage of passengefs can be on spécifiedioccasions or for a period or specified time and seasons, © fitness cettificateis to)be secured each year, knowledge about oetroi or vehicle entry tax and permits, and © knowledge of Motor VehicléAetarid Traffic rules. Other Aspects: You can méke)or break a/transport operation by securing jucrative routes. Routes are preferredidepending on the volume of traffic being generated between two points ie. the startingand the terminal, ‘Type6ot vehicle will depend on the demand and its suitability for use. A demand may exist for sophisticated modem vehicles but if the roads on the route are bad the vehicle owner will find ita losing proposition to 2m the vehicle because of high maintenance and workshop costs,Shrichakeadhar.com 15 Drivers hours of work should be restricted to 5 hours of continuous driving with 1/2 an hour rest. Totalnumbers of driving hours should not exceed 8 hours in a day or 48 hours ina week. ‘The driver should be familiar with the route and addresses. At the same time he should be good in communication skills. Knowledge about the culture, history, customs and arts etc. adds value to the quality of service by the drivers and you must pay attentiomin providing themsuch knowledge. They should aiso know the procedures and regulations at airports or railway stations etc. There is a general complaint from tourists that transporters fal to provid@ services as per commitment, may in terms of quality of servicesor schedules, Herene should be clear that creating credibility in the markets an asset for acompany. If you provide satisfactoryservice to your customers then when they go back they share their expefiences among mary others: This acts asa promotion of your company to future tourists Q9. Deseribe various constituents of convention industry. How would you plan a convention? Ans. By convedtion organiser, we mean a person or an Organisation who wants to organise a convention/meeting. For the suppliers of the convention industry, this person/organisation is the customer. You are also aware that today there’are professional convention organisers or consultants who advise the customers in relationtto their convention/meeting demands. From the organiser’s point of view, certain planning steps have £6 be)undertaken for holding a convention and in the following Sub-sections, We)will discuss them in detail. AIMS AND OBJECTIVES You have to be very clear in deciding the aitms and objéctives of the convention you want to host. Different organisations hold conventions for different reasons. Information sharing with members, feedback for future programmes, problem sdlving, election of office bearers etc. can be any one of the purpose for the convention. Whatever may be the programme, it must envisage and define the aims,and objectives ofa Gonvention, For example, recently, Indira Gandhi National Open University established a Centre for Extension Education (CEE) and it was decided that a convention should be organised with the following objectives : © to get a feedback regarding'the requirements in the arca of Extension Education that could be met through the distance learning, © toknow about the experiences ofthe non- government organisations working in different parts of the country, © to demarcate thé areas in whichIGNOU can develop extension education programmes, © to devise méthods for sharing information amongst NGOs, public sector undertakings, local bodies and the Centre for Extension Education, and © to identify the experts/organigations which can collaborate with IGNOU in its efforts, DEMARCATING/ADENTIFYING TASKS Once, the Objectives were stated, the next step is to demarcate or identify the various tasks related to the convention. The basic tasks to be undertaken for any convention include : '@ decisions about the lead time i.e. from the planning stage to the actual date of the event, © decisions on the dates and venue of the convention, accommodation and food frrangements. This should take into account the number of participants, hall and meeting room requirements, © identifying the participants (individuals/organisations) to be invited, devising the invitation letter and asking for their concurrence (for this the objectives of the convention have to be clearly stated along with the datcs and time),16 Question Paper ‘deciding about the exhibits or displays, deciding about the secretarial and technological requirements (secretaries, xerox and data processing facilities, visual aids, ctc.), deciding 6n transportation requirements, deciding on receiving the participants at airport/railway station, budgeting for the convention, deciding about the type of bags, literature, etc. to be provided to thé delegates, devising registration and feedback forms from the participants, etey ‘© to take care of publicity prior to, during and after the convention, Forming Committees Keeping in view the above mentioned tasks, a Convention Committee/and its Sub-committees or functional committees like registration committee, reception and transport committee, accommodation committee, food committee, secretarial committee, etc. should be formed to carry out these tasks. Similarly, the office bearers of the convention should also be appointed. This, in fact, is the organisation structure for the’ planning and,carrying out of corivention operations. The following is helpful in this regard : 1) The organisation has to appoint a convention coordinator whoWill be wholly responsible for the entire planning, organising and operations of the convention, 2) No individual can carry on such tasks)by its)own and hence it i necessary to have a Steering Committee/Organising Committee also. The size of this committee may depend upon the nature and requirements of the convention. This committee gets back up support from the Secretariat for correspondence, preparing reports, secretarial assistance ete. In some cases, a document processing unitis created within the secretariat if so required. Generally, each member of thé Steering Committee is assigned with a responsibility like one member may be made incharge of accommodation, another of reception and registration, another of transportation and so on. The incharge of an area then forms a smalligroup/committec to plan and look after that area. Generally, 3-6 members are thefe in such committee. However, again this depends on the workload and scope of that committee. This committee further takes the belp of volunteers who would be directly handling the operations or performing the dutics assigned to them. 3) There has tobe constant interaction and perfect coordination amongst these committees alongwith information sharing. Itis necessary that the functions ofeach committee aresclearly stated and the line of authority should be established properly alongwith the delegation of powers to carry out the tasks. Each of these committees miist plan for their activities, should identify and evaluate various alternatives before making a choice in relation to the tasks and at the same time formulate supportive plans and establish the sequence of activities. The Stcering Committee, no doubt, keeps monitoring the entire aspect. For example, the registration committee will plan the ‘contents of the registration forms and how to manage the activities related to registration. ‘The transport committee will plan the nature of the vehicles to be used (depending on the number of delegates), assign duties to the volunteers regarding reception of delegates etc. In fact, these committees have to workin a coordinated way sharing information with each other. For example, the transport committee must have information about the arrival timings and mode of travel of the delegates and they in turn must pass on this information to the accommodation committee for the arrangements to be made by them. PLANNING SCHEDULE eeShrichakeadhar.com 7 ‘Another crucial step in planningis to work out the timetable or the schedule of the convention and set deadlines for certain activities. For example look at the following formats: 1) Time Table (Sample) Ist cireular 1) Invitation letter to participants 2) Concurrence to be received by 3) Ind circular to be sent on 4) Final circular 5) Receipt of travel plans (arrival & departure) of participants 308.96 6) Confirmation of receiving travel plans As and when to be sent on they arrive 2) Conference Schedule (Sample) 900 a.m.-10:00 a.m. Registration of delegates 10:15 a.m. Inaugural session 11:00 a.m. Tea 11:15 am. First session 1:00 p.m. Launch These schedules have to be further worked it on each éession basis and the following format gives you an idea about that : 11:15 am. First session u Introductory remarks by the organiser 1:20am, Key note address by the Chief Speaker 12:00 noon First speaker 12:20 pm. Second speaker 12:40 pm. Discussion 1:00 p.m. Lunch In fact, these schedules have to be planned much in advance and not only the speakers but even the delegates and convention committees have ta be made aware about them. This is the reason wity for all conventions/mectings, such schedules are mailed to the participants much earlier and also provided ia printed form during the convention. 010/Wirite a short note on the following: (a)Bood Services Management ‘Ans! ‘According to J.R.Pickworth, a service delivery system (SDS) is an "Operation in which product/services axe created and delivered to the customer almost simultaneously". The Food Service Delivery System (FDS) is one such specific SDS.18 Question Paper Eating out, once a luxury, is today considered by many in the urban areas as a necessity. Domestic attendents are getting expensive and fewer. Even for upper middle class income levels, it is now much easier to eat out at times than to maintain a full-time cook at home. Large segments of the population have had income increases which permit them to eat out more often, not only as a means of relaxation and escape from the monotonous chores of house keeping. but also as a form of pleasure, fashion or entertainment. Certaimtrends are noticeable in this regard. For example: © There isa definite trend toward somebasic types of food service opetations. The growth of fast, minimum service restaurants is very noticeable. Catering primarily to the shopper, young men and women employed in offices and shops, these restaurants satisfy their customers need to save time and to eat reasonable quality foodiat moderate prices. @ Therearealso the rapidly growing highway restaurants all@verthe country. As people travel more within the country and are away from home a greater part of the time, eating out has tobe a necessity. © Thethird type operation that has and will continue to gain inpopularityis theatmosphere restaurant. Eating out need not be merely an escape from routine housekeeping. Glamour, stimulation of all the senses, excitement,adeelingof satisfaction and well being are“all part of the package that a good atmosphere restaurant sellin addition to food. Location is virtually thie most important factor for the sticcessiof a restaurant. The type of restaurant its location, and its market areinextricably linked. For some types of restaurants: it is essential tobe located in the middle of a market. A\ restaurant devoted to business lunches needs to be surrounded by business organisations, and a fast-food counter must be located in a site where a large number of people constantly pass by. There are certain unique aspects inthe food semices in India: © ‘There isa very large number of small units» © These sill units offer’a diverse variety of products and services, capable of satisfying the guests immediate requirements. i © The product thayisjsold is highly perishable. If you miss today’s meal, then that particular salé can never be made a®ain as today is gone forever. Tomorrow, we will satisfy your requirement for tomorow. © There is a very high service\Component in the product. The human factor is a crucial aspect of this product. The requirement of having imman production staff and servers has not been done away with. Tlence, there is a very high labour requirement both in the ‘manufaeturingot food and for ils service. © Most Of the raw materialised is mom standardized. [lence, staff IL requirement in evaltiation Cf raw material fo be used i of primary importance. © Pikcise €o-ordination in ai! operational functions is absolutely critical as the guests have to be met within a Umited time. Lhe guest ts also always in direct ‘contact with the food service staff who get constant feedback on their performance. ‘© The customer, whom we reler to as a guest, knows immediately how well he or she has enjoyed the meal experience, unlike other products where it takes time to evaluate the quality of the product. © The product in a restaurant is really the whole experience of food service, atmosphere and other facilities. Quality is evaluated by individuals on the basis of the level of importance given by them to different componentsof this experience. ‘You are already aware of the basic management concepts and functions. these are equally applicable in the case of food services. For example you have to:Shrichakradhar.com 19 Plan in all areas, ie, to start a new business or yearly, monthly, weekly or daily operations, costs, capacity etc. © Organise not only the operations but decide on the organisational strii¢tire, spans of control, design jobs and delegate authority. © Provide leadershipas.a manager. Nosingle profile can be there of asucce&sful manager in FDS. However, According to Rober B.Lane: the most susccessful managers, certainlythe leaders, have been successful not because of their-fechnical back grounds or depth of experience they offer, butmore so for theirlovefor thé busineess,asexhibited by their affirmity for their employees and guests, their penéhant, for detail, and their absolute disire to provide quality, value and service to their market niche’ He further sitessed that "If there was one test to be given to those consideringa serious food service career, it should determine whether, and to what extent, they have an inborn desire to serveotherrs. If not, then they don't belong in the business". © monitor and control operations. (b) Management Issues in Hotels ‘There is a tendency to depend on the conventionalmmethods. Thii$ not wrong and in many cases itis appropriate also but in certain services like ticketing, hotels and reservations, etc one has to accept the role of technology. Atthe sme time people are not familiar with the application and usage of technology. This is another aspect whieh has to be considered in order to keep pace with technological development. For,example, computers have come in a big way for travel and hotel reservationsand any ageney using them will be better placed in the market, . Dealing with crisis situations is sométhiaginot uncommon to tourism. Many a times a crisis situation emerges with no fault on the part of those managing the service but because of external factors. There can be many exainplescited.in thisregard: You are handlinga group of tourists and suddenly you find that the flight has been cancelled: there is a break down of the coachand your group has.to eafeh the train, Some epidemic has broken and suddenly you find cancellations; civil disorder has brokensand your group cant move; the hotel has cancelled your reservationséte, Similarly, because of the influx of the business traveller, you find that no roomsare available for th tourists in the metropolitan cities whichalso happen to be the gateways for international toutists. Another situation, particularly in the accommodation and trenSportationsectorsis that of handling rejections. AIL these are issues which are to be;handled with great tact and sensitivity according to the situations which emerge.