There are five main functional areas of management viz., human resource management, production management, finance management and marketing management; which have been discussed below.
Nowadays, some new and emerging dimensions are also considered areas of management as: time management, environment management, transport management, international management, forex management.
Human Resource Management
- Human resource development or personnel management or manpower management is concerned with obtaining and maintaining of a satisfactory and satisfied work force i.e., employees.
- It is a specialized branch of management concerned with ‘Man Management’.
- The recruitment, placement, induction, orientation, training, promotion, motivation, performance appraisal, wage and salary, retirement, transfer, merit-rating, industrial relations, working conditions, trade unions, safety and welfare schemes of employees are included in personnel management.
- The object of personnel management is to create and promote team spirit among workers and managers.
Following are the features of HRM:
- It views employees as important organizational resource that is committed to organizational needs and works towards its goals.
- It aims to satisfy individual needs by providing challenging, lucrative and meaningful jobs to employees.
- It follows the concept of ‘mutuality’ where managers focus on mutual goals, mutual respect, mutual rewards etc.
- It allows employees to participate in the decision-making processes.
- It caters to the interests of people internal (labor force) and external to the organization (customers, suppliers, shareholders etc.)
- Production management refers to planning, organization, direction, coordination and control of the production function in such a way that desired goods and services could be produced at the right time, in right quantity, and at the right cost.
- The term ‘production’ was closely associated with manufacturing physical goods and, therefore, production management was also known as manufacturing management.
- Today, goods are not only physical goods but also services.
functions of Production management:
- Plant location, layout and maintenance
- Ensuring effective production control
- Product planning and development
- Management of purchase and storage of materials
- Production systems and machines
- All activities (production, marketing or personnel) require constant flow of funds. Finance department takes care of financial requirements of the enterprise. It makes arrangements for acquisition and effective utilization of funds.
- The subject matter of financial management is: capital budgeting cost of capital, portfolio management, dividend policy, short and long term sources of finance.
Financial management involves mainly three decisions pertaining to:
Dividend decisions :
This decision affects the amount paid to shareholders and distribution of additional shares of stock.
Methods of financing :
A proper mix of short and long term financing is ensured in order to provide necessary funds for proposed ventures at a minimum risk to the enterprise.
Investment policies :
It dictates the process associated with capital budgeting and expenditures. All proposals to spend money are ranked and investment decisions are taken whether to sanction money for these proposed ventures or not.
- Traditionally, markets were a place for exchange of goods and services between sellers and buyers to the mutual benefit of both.
- Today, marketing is exchange of values between the seller and the buyer. Value implies worth related to the goods and services being exchanged.
- The course content of marketing management generally includes: marketing concept, consumer behavior, marketing mix, market segmentation, product and price decisions, promotion and physical distribution, marketing research and information, international marketing etc.
Marketing management involves the following functions:
Product mix :
It deals with physical attributes and benefits of the product. Ownership gives a sense of pride and satisfaction to the consumer and, therefore, the product should be properly designed, colored and packed.
Pricing mix :
Pricing is an important marketing decision. Pricing is affected by factors such as costs, legal framework, prices charged by competitors and the prices that consumers are ready to pay. Price should recover the costs and earn a reasonable return on capital. This ensures long-run survival and growth of the enterprise.
Promotion mix :
It refers to communication with the consumers regarding the product. It motivates them to buy the goods.