Definition of HRM

• HRM is a management function involving the recruitment of suitable human resources, training,
developing and sustaining their competencies, motivating them, offering them rewards on a
rational and equitable basis, and ensuring their continued commitment to the organization for
achieving its overall objectives.

Genesis and Growth of Human Resource Management

1890–1910 – Fredrick W. Taylor formulated scientific management, which included a careful selection of
employees; finding out the best method of doing the job; systematic training of workers; provision of
suitable implements; and giving adequate rewards for good performance.

1910–1930 – Greater importance to welfare of workers, emergence of industrial psychology and

improvements in the mode of recruitment procedures.

1930–1945 – Principle of Hawthorne studies gains momentum in personnel management in an industrial

organization. Greater emphasis given to motivating factors affecting worker productivity.

1945–1965 – More emphasis on collective bargaining and labour relations. Compensation and benefits
gained importance as unions negotiated for and obtained paid vacations, paid holidays and insurance
coverage.

1965–1985 – Equal employment opportunity and affirmative action became crucial human resource
management responsibilities

1985–2005 – Increased diversity of the labour force, in terms of age, gender, race and ethnicity;
globalization of business and the accompanying technological revolution; focus on HRM as a “strategic
function”.

Big Scope of HRM

The vast scope of HRM can be summarized to include the following seven functions:

Determining human resource needs; Attracting potential employees; Choosing employees;

Teaching/preparing; Rewarding; Evaluating performance; and Creating a positive work environment.

Different Aspects of HRM

Recruitment ;Training and development; Learning organizations; Performance management; Pay; Team
work; Motivation

Emerging Challenges of HRM

Some of the challenges that confront HR professionals and their roles in organizations and the industrial
scenario are:
 a. Globalization of markets and intensification of competition has made employers and employees
conscious of their changing and strategic roles in organizations;

b. Corporate restructuring has become an absolute necessity for organizations;

c. Need for reconciling to multiple work ethos as a result of mergers and acquisitions;

d. e. Emphasis on total quality management;

e. f. Changing job profiles and the need for and ability to get adjusted to them;

f. g. Adoption to changing workforce profile consequent on structural changes;

g. Increasing role of women employees in organizations;

h. iIncreasing use of Information Technology that is altering the very nature of work delivery in
organizations; and

i. Increasing emphasis on knowledge management and the need for acquisition and use of
knowledge to keep pace with the fast changing world.

HR-related Ethical Issues

Discrimination issues; Suppression of democratization in the workplace ; Privacy issues ; Recruitment

and selection ; Performance tracking; Privacy issues of computerized employee records ; Electronic
surveillance ; Safety and health; Performance appraisals

Role of HRM in Creating an Ethical Organization

• The top management should be committed to ethical behaviour.

• They should be the role models to their employees.

• The organization should evolve codes of ethics for its employees and enforce them.

• Ethics committees should be formed with top executives as members to advice on ethical issues.

• Company journals to publish articles on ethical issues and pose hypothetical ethical dilemmas
and discussions on how to resolve these.

• An ethics office with ethics officers to oversee the process and help communicate policy to
employees.

• Organize employee ethics training which can play an integral role in ensuring compliance with
the ethics code.

• A disciplinary system to deal with ethical violations promptly and decisively.

•
Ethical issues in Operations

Quality ; Safety ; Workers; Users; Consumers ; Environment

Issues in ethical entrepreneurship

Product or service is useful to society; Morally correct , socially acceptable; Legal ; Green product –
materials , processes , users , life cycle environment impact; Stakeholders management; Employees;
Partners ; Customers;environment

introduction

Topic; entrepreneurship

• Objective: Value addition , quality of life , job creation

• Relevance: Difficulty in getting suitable jobs, applicable to all disciplines

• Prerequisite: Courage , ability to take risk

Mind set; Team work; Opportunities; perseverance

What do entrepreneur need ?

Tangibles : Land ; Building; Machinery; Manpower ; Materials ; Technology; Money; Management

Intangibles :Courage; Ability to take risk & take the road less travelled; Ability to get along with others;
Discipline; Perseverance; Vision & Intuition

Criteria for choice of product / service

1. Demand is growing

2. There is gap between supply & demand

3. Growth potential in future

4. Profitability of existing players

5. Expertise availability

6. The technology is proven

7. Personal choice / hunch

Entrepreneurs do not compete

• Parameters for competition are

Quality; Price; Delivery

 • Entrepreneurs are unable to compete; they know it

• Entrepreneurs do not compete

• When you follow the NAMASKAR model you don’t start with a product or service but you start
with people & their problem

• Problem is an opportunity for entrepreneur

Quality

• Existing players have gone through the learning curve.

• They made mistakes in the beginning and overcame the quality problems,

• Daughter in law cannot compete with mother in law in making chapati !

• Experienced workers over time

• Better choice of inputs & conversion processes

Price= cost + profits

• Existing players have lower cost of production because of

Economies of scale; Better purchase at low cost; Marginal cost is low due to machinery which is already
depreciated; Lower cost of land & building; Less defectives due to experience ; Credit availability in
market

Delivery

• Entrepreneurs can not compete in delivery also

Strategy of entrepreneurs

 Entrepreneurs know that they can not compete. So what do they do ?

 Entrepreneurs do not compete !

 How can you start an enterprise without competition ?

Case studies in entrepreneurship

• Two wheelers

Growing demand; Gap between supply & demand; Existing players making high profits; 34
entrepreneurs & only 3 survived; LPG gas cylinders; Growing demand; Shortage of cylinders; sale in
black market; Existing players making high profits; 145 entrepreneurs & only 5 survived; Irrigation pipes-
similar story
Problem/ crisis /opportunity in Chinese language

• Wei ji- problem-crisis & an opportunity

Steps in NAMASKAR model

• Identify the group of people

• Identify problems faced by the group

– ( if the problem is existing; it means that nobody has solved it so far )

• Identify a problem which you can solve in a creative manner

• Solve the problem

• Get paid

Directly; Indirectly

Technical skill approach to entrepreneurship

• Technical persons tend to start with a product or service in the narrow area of their knowledge
&

– they succeed if they are able to compete or

– fail if they cannot compete.

• Nootan …..,uniqueness , new , creative

• Manushya…….target group

• Samasysa………….problem

Objective; Subjective; Acute; emerging

• Kaal ………..appropriate time

• Rath……reaching out to target group

Location; Medium; What, how, when , where ?

Examples

Tools for left handed persons; Zanskaar valley; Food for students in Munirka village; Security for old
people; Problems of nuclear families in Delhi; Banking for students; Accounting for small shopkeepers;
Shopping for walthy seniors in Vasant Vihar; Mohan –IEMR; Grameen Bank Bangladesh; Dhirubhai
Ambani; Gujjarmal Modi
Characteristics of a Good Business Model- Mohan

• High gross margin---potatoes chips

• Capital light

• Monopoly

• Network effect—e-bay, visa card

• Inherent virality-hot mail, Face book, Amway

• Recurring revenue- HP Cartridge, Gillette blades

• Technology life cycle of product

Success factors

• Market opportunity-tail wind

• Value proposition is very strong

• Sustainable differentiation

• Strong and relevant management team

• Access to finance as needed

Own; Friends; Family; Venture capitalist; Angel investor

Advantages Of Entrepreneurship

1. Reduces un employment

2. Reduces poverty

3. Balanced regional development

4. Promotes capital formation and creates wealth

5. You are the boss and not a servant

6. Promotes equal distribution of power and wealth

7. Harness the vigour of youth

8. Substitute imports

9. Improve domestic and national competitiveness

Commercial and social entrepreneurship

social

1. Achieve large scale sustainable social change through innovation

2. Emphasis on social / environmental value creation

3. Solving social problems through products / services

4. Makes use of local tools, skills to solve local problems & implement on large scale

5. Aims to maximize society’s welfare

6. Social business is driven by a social cause

7. Success is measured by improvements made in the lives of people and society at large

commercial

8. Achieve large scale economic change through new business models

9. Emphasis on revenue generation and profit making

10. Innovates new products to Maximize revenue

11. They create entirely new industries through innovative ideas

12. Main aim is to survive, sustain and expand size and volume of profit

13. Commercial business is driven by profit

14. Success is measured by financial indicators, market share, customer satisfaction and quality

Forms of business ownership

Sole proprietorship; Partnership; Limited liability partnership; Private limited company; Public limited
company; Cooperatives; Franchise

Facilitators of business

• Access to sufficient finance

• Strong technological base in the country and technological capacity of the company

• Government policies

• Conducive cultural, political and economic conditions of a country / region

• Proper infrastructure
 • Availability qualified / trained manpower

• Strong backing of supporting institutions, for loans and licence etc.

• Personal factors

Inhibitors of business

• Changing customer expectation

• Weak backing by institutions

• Societal problems-corruption and poor governance

• Non conducive economic environment / infrastructure

• High intensity of competition.

• Rigid role of government

Entrepreneurial & enterprise related factors

• Personal traits

• Improper planning and goal setting

• Inappropriate technology

• Inadequate capital

• Lack of management skills

• Absence of business training and experience

• Lack of entrepreneurial skills & business sense

• Poor information on availability of opportunities

--------------------------------------------------------------------------

Hidden Taxation on Society

Dr Estes’ contention was that the profit and loss statements revealed only the costs companies had
internalized and not the uncompensated costs to society, namely, the external diseconomies. For the
persons affected, these represented “coerced assessments”, a form of hidden taxation.

Stakeholder Alliance

A North American Advocacy Group, The Stakeholder Alliance, is pressing corporations to become fully
accountable to their stakeholders. The alliance has come out with the Sunshine Standards with the
objective that corporations must provide information that stakeholders need in order to make rational,
informed decisions in a free market system, and to protect themselves from the negative consequences
of corporate actions. Disclosure must be complete, accurate, timely, objective, understandable and
public.

Customers’ Information Needs

The information needs of customers are:

Detailed legal records with reference to products and services, such as product liability, injury and
unsubstantiated death claims over all jurisdictions for five years; penalties inflicted and citations for
regulatory non-compliance, detailing each incident and corresponding penalty, settlement effected and
such related information.

Risks of injury from normal usage of product/service;

Noise, odour and other nuisances/problems associated with use of the product/service;

Design for recycling;

Biodegradability of products and packaging;

Unusual life cycle costs;nWarnings, with appropriate detail;

Content, additives and treatments of food and medicines, sufficient to allow reasonably-informed
consumers to make rational market decisions and to protect themselves and their families; and

Hidden characteristics.; Consumer and Consumer Protection

A consumer is any person who, or firm—Hindu undivided family (HUF), co-operative, or association—
which,

buys or hires (fully/partly paid for) any goods or service. the purpose of purchase of goods should not be
for resale or any commercial purpose (except self-employment). the services availed does not include
free service or services under a personal contract.

Consumer Protection refers to the steps necessary to be taken or measures required to be accepted to
protect consumers from business malpractices.

[arties to Consumer Protection

a. Consumers: Should know their rights and exercise them.

b. Businessmen: Producers, distributors, dealers, wholesalers as well as retailers should pay due
attention to consumer rights in their own interest, by ensuring supply of quality goods and
services at reasonable prices.
 c. Government: The government should enforce various laws and amend existing laws to protect
consumer interests.

History and Growth of Consumer Protection

• 1920s: Efforts in the US to reduce the exaggerated claims of advertisers of goods and services
and demands made for impartial testing of goods.

• 1930s: Growth of consumer co-operatives, the first federal consumer agency, food and drug
administration, demands for labelling of products and the introduction of USDA stamps.

• 1940s: 150 local consumer councils across the United States eventually drew together to form
the National Association of Consumers.

• 1950s: The American Council of Consumer Interests was established by 750 members from
universities, schools and consumer research organizations.

Ralph Nader’s Contribution to Consumer Protection

• He coined the term “consumer advocate”; He called for the accountability of carmakers; He
worked towards improved environment, healthcare, insurance, pension and disability rights.; He
is the founder of numerous non-profit organizations. ; He educated America’s consumers.; He
started the US Public Interest Group (PIRG).; He founded the Center for Study of Responsive
Law, Center for Auto Safety, the Disability Rights Center, the Pension Rights Center, the Project
for Corporate Responsibility, and the Clean Water Action Project.

Consumer Duties and Responsibilities

Substantiate the complaint; Listen to seller ; Cooperate with the seller if needed ; Avoid inconvenience
to others ; Not personalize issues ; Not lend self to others ; Be well informed ; Understand the
grievances redressal process ; Avoid impulsive buying ; Buy goods from authorized agents

How are Indian Consumers Exploited? (Contd.)

1) Exorbitant prices of products and services

2) Deceptive selling practices

3) False and misleading advertisements

4) Defective quality, higher prices

5) Sale of hazardous products to ignorant consumers

6) Suppression of material information

7) False product differentiation

8) Producers’/sellers’ collusion

9) Supply of adulterated and substandard products

10) Cheating consumers by giving lesser quantity for the price

11) Dishonoured guarantees and warranties

12) Poor redressal of customers’ genuine grievances

13) Creating a scare out of scarcity

14) Making consumer buy unwanted goods

15) Misleading representation on utility of products

16) Manipulating conditions of delivery

17) Customers pay for numerous intermediaries

18) Fall in prices never passed to consumers

19) Buying unaffordable goods

20) Advertisement cost

21) Counterfeits: These constitute a substantial quantity of goods on store shelves

22) Hoarding and blackmarketing

23) Tie-in-sales

24) Gifts for products/services

Legal Protection to Consumers

• A number of laws have been passed by the Government of India over the years to protect the
interest of consumers.

1. Agricultural Products (Grading and Marketing) Act, 1937

2. Industries (Development and Regulation) Act, 1951

3. Prevention of Food Adulteration Act, 1954

4. Essential Commodities Act, 1955

5. The Standards of Weights and Measures Act, 1956

6. Monopolies and Restrictive Trade Practices Act, 1969

 7. Prevention of Black-marketing and Maintenance of Essential Supplies Act, 1980

8. Bureau of Indian Standards Act, 1986

9. Consumer Protection Act, 1986

Consumer Protection Act 1986

• The Consumer Protection Act (COPRA), 1986, conferred a legal right to the individual consumer
to seek legal redress or recover costs and damages for injury or loans suffered by him/her as a
result of faulty, defective goods and services, bought or secured for valuable consideration.

Rights of Consumers Under COPRA

• The SIX RIGHTS of the consumer as enunciated under Section 6 of the COPRA are:

I. The Right to Safety ; The Right to be Informed; The Right to Choose; The Right to be Heard The
Right to Seek Redressal ; The Right to Consumer Education

The SIX RIGHTS of the consumer as enunciated under Section 6 of the COPRA are:

I. The Right to Safety

II. The Right to be Informed

III. The Right to Choose

IV. The Right to be Heard

V. The Right to Seek Redressal

VI. The Right to Consumer Education

Redressal agencies under COPRA

• Redressal agencies for settlement of consumer disputes:

• A Consumer Disputes Redressal Forum known as the District Forum has been established by the
State Government in each district of the State by notification.

• A Consumer Disputes Redressal Commission known as the State Commission has been
established in each state by the State Government by notification.

• A National Consumer Disputes Redressal Commission known as the National Commission

established by the Centre by notification.

Consumer Protection (Amendment) Act 2002

The main changes introduced by the Amendment Act are as follows:

The District Consumer Redressal Forums can now deal with complaints involving compensation amount
upto Rs 2 million

For the State Commission the limit is Rs 10 million

For the National Commission, the limit is more than Rs 10 million.

• Setting up of benches and increase in the number of members in the National and State
Commissions.

• A sitting judge of the High Court is to preside over selection committee when the president of
the State Commission is absent.

• In the absence of the incumbent president of the District Forum, State Commission or National
Commission, the senior member to act as president of the respective bodies.

• Minimum qualifications prescribed for members of all consumer courts.

Institutional Arrangements Under Copra

• Consumer protection councils—both as the centre and states

• THREE-TIER CONSUMER DISPUTE REDRESSAL SYSTEM

• District forums

• State Consumer Dispute Redressal Commission

• National Commission

Role and Initiatives of Voluntary Organizations

1) Consumer Associations or Councils

2) Consumer Co-operatives

3) Co-ordination at the National Level

Other Initiatives to Promote Consumer Protection

1) National Awards

2) Publicity measures

3) Customer Service Department of RBI

Perspectives of Corporate Social Responsibility

There are three perspectives that prompt corporate social responsibility. These are:
 • Business perspective

• Eco-social perspective

• Rights-based perspective

Why Social Responsibility of Business?

Accountability to Society

In a democratic society any kind of enterprise exists for the sake of society.

Corporations’ Debt to Society

A corporation has to behave as a good citizen. The corporation has to donate generously towards causes
of public welfare and must get itself directly involved in social welfare programmes.

Definitions of CSR

It is a set of obligations to pursue those policies, to make those decisions, or to follow those lines of
action which are desirable in terms of the objectives and values of our society.

It is the overall relationship of the corporate with all of its stakeholders.

Elements of social responsibility include investment in community outreach, employee relations,

creation and maintenance of employment, environmental stewardship and financial performance.

The classical economic model: Adam Smith believed that public interest was served best by individuals
pursuing their own self-interests.

The socio-economic model: Business is seen as one subsystem among many in a highly interdependent
society.

• It recognizes that companies have stakeholders other than their stockholders.

• Business has an obligation to respond to the needs of all stakeholders while pursuing its profit.

Today’s Corporate Social Responsibility

The corporate social responsibility of an organization today, is a set of obligations with which it has to
protect, enhance, and otherwise work to the betterment of the society in which it functions.

The concept of corporate social performance includes a business organization’s

configuration of principles of social responsibility; process of social responsiveness, and policies,

programmes, and observable outcomes as they relate to the firm’s societal relationships.

Implementation of CSR
The systematic implementation of CSR means:

● The adoption of strong organizational values and norms depicting behaviours that are
appropriate towards a variety of stakeholders.

● The continuous generation of intelligence about stakeholder issues, along with positive
responses to these issues.

Theoretical Justification for CSR

● Trusteeship Model adopts a realistic and descriptive perspective in viewing the current
governing situation of a publicly held corporation, drawing from the continental European
conception of the corporation as a social institution with a corporate personality.

● Social entity theory: The social entity conception of the corporation regards the company not as
a private association united by individual property rights, but as a public association constituted
through political and legal processes and as a social entity for pursuing collective goals with
public objectives.

What are Corporations Expected to Do?

● Corporations need to erase the perception of the public that they accumulate wealth for their
own cause;

● They should participate in social welfare projects, which will improve their image in public
esteem;

● They also have to make quality products and stick to delivery schedules while importing and
exporting goods; and

● They should create employment opportunities for the disadvantaged.

Models for Implementation of CSR

-----(NOT WRITTEN)

Advantages of Corporate Social Responsibility

There are several advantages to corporations when they exhibit a sense of CSR and implement it, such
as:

Improved financial performance; Enhanced brand image and reputation ; Increased sales and customer
loyalty; Increased ability to attract and retain employees; Reduced regulatory oversight ; Innovation and
learning ; Risk management ; easier access to capital; Reduced operating costs

Scope of Corporate Social Responsibility

Three levels of social responsibility can be identified (evolution of areas of social responsibility)

Market forces ; Mandated actions ; Voluntary actions

Understanding Social Responsibility of Business

Protecting and promoting stakeholders’ interests

to consumers and community; social responsibilities of business towards employees

to owners and inter-business establishments; Promotion of common welfare programmes

Philanthropy ; Good corporate governance; Render social service ; Abiding by rules and regulations

Creation of wealth ; Ensure ecological balance ; Focus on the human element

Improve productivity ; Sponsor social and charitable causes ; Supplement state efforts

Steps to Corporate Social Responsibility

The International Chamber of Commerce recommends the following nine steps to attain Corporate
Social Responsibility:

Confirm CEO/Board commitment to prioritize responsible business conduct

1. State company purpose and agree on company values

2. Identify key stakeholders

3. Define business principles and policies

4. Establish implementation procedures and management systems

5. Benchmark against selected external codes and standards

6. Set up internal monitoring

7. Use language that everyone can understand

8. Set pragmatic and realistic objectives.

External Standards on CSR

9. The Caux Round Table (CRT)

10. Organization for Economic Cooperation and Development (OECD)

11. United Nations Global Compact

12. Asian-Pacific Economic Cooperation (APEC) Business Code of Conduct

 13. The Global Reporting Initiative (GRI)

14. AA1000 Accountability

15. Social Accountability 8000

16. Principles for Global Corporate Responsibility

17. The Global Sullivan Principles

18. The Keidanren Charter for Good Corporate Behaviour

India on the Ethical/CSR Matrix

19. Indian corporations consider business ethics, compliance with regulatory requirements and
consistency in value delivery as the three most important factors that impact their social
reputation.

Wider adoption of CSR in Indian companies will be enabled by:

• Provision of tax, duties and custom benefits.

• Inclusion of CSR performance of promoters as a parameter in according fast track clearance to

projects.

• Decreased government interventions.

• Depreciation benefits where asset investments are made.

• Development guidelines on estimation of socio-economic impacts.

• Ethics and Social Responsibility of Business

Business ethics in India today ; Why so much corruption? ; The license raj ; Black money

Future of Indian CSR

There is a clear need for

• Transition from the present compliance centric approach to the new paradigm

• Creation of an enabling environment and an array of support measures.

• Business schools teaching CSR to facilitate this process

• Industry associations to share experiences and reward best practice

• Need to incorporate public policies into the Indian CSR.

• International agencies to share cross-country experience.

History of Environmentalism: In the US

• Early 20th century: Establishment of National Parks by Teddy Roosevelt’s administration.

• 1960s: Increasing concern on human health risks posed by pollution.

• Environmental laws exacted by the US Congress

• Creation of the Environmental Protection Agency’s (EPA) community-led recycling programmes.

• Protests against polluting businesses in “Not in My Backyard” (NIMBY) campaigns.

Environmental Preservation: Role of Stakeholders

The stakeholders are:

The Public, The Media, Environmental Groups, Corporations, and The Government

Future Outlook on Environment

• Environmentalism in the 21st century can be characterized by three principles that serve as
bases for continued activism and policy formulation.

• 1. Public – Private partnerships

• 2. International cooperation

• 3. Sustainable development

Innovative Business Responses to Environmental Regulations

• There are several reasons why those managing business are becoming increasingly conscious of
environmental issues:

• For management morale

• To cut waste

• Benefits arising from pollution prevention

• Advantages of taking a proactive stance towards environmental regulation

• ‘Green design’ of products

• Production of environment-friendly products, packages and processes

• Eco-labelling

• Savings through pollution prevention measures

 • Increased fear of environmental damage

• Coordination with environmental advocacy groups and government regulators

Waste Management and Pollution Control

• Environmental damage through industrial activity can be of two types:

1. Depletion of natural resources

2. Degradation of the natural resources

Key Strategies for Industrial Pollution Prevention

1. Systematic waste reduction audit

2. Material balance

3. Economic balance

4. Identifying waste reduction

5. Use of newer, cleaner technologies

6. Life-cycle assessment

Managing Environmental Issues

• Reinhardt suggests five different approaches to managing environmental issues

1. Investing in environment friendly processes or products.

2. Managing environmental regulations.

3. Investing in environmental performance improvement, without increasing costs.

4. Combining all the three methods mentioned above to change the basis for competition.

5. Looking at environmental issues from a risk management perspective.

Charter for Voluntary Pollution Control

• The Ministry of Environment and Forests and the country’s industrial sector have entered into a
partnership on voluntary pollution control by releasing a Charter on Corporate Responsibility for
Environmental Protection in New Delhi on 13 March 2003.

• The Charter marks a shift from regulatory enforcement of pollution control norms to voluntary
compliance by the industry to significantly enhance the quality of environment.

India’s Environmental Policy

 • The Environment (Protection) Act, 1986 takes into account the following:

1. Water (Prevention and Control of Pollution) Act, 1974

2. Air (Prevention and Control of Pollution) Act, 1981

3. The Factories’ Amendment Act, 1987

4. The National Environmental Policy 2004

What is corporate governance?

• Corporate governance is typically perceived by academic literature as dealing with “ problems

that results from the separation of ownership and control”

Desiderata of Corporate governance

• Rights of shareholders

• Equitable treatment of shareholders

• Role of stakeholders in corporate governance

• Disclosure and transparency

• Responsibilities of the Board

4 priorities that developing countries should concentrate while practicing corporate governance

• Good and effective communication

• Ensure individual players maximum autonomy

• If there is a hierarchical set up to regulate private sector activities with a view to promote public
interest, new countervailing powers should be set-up to fill the role

• The role of state and how government officials are appointed to carry out the role, should be
clearly defined in the interest of sustainable development.

Functions of the board of a listed company has the following functions:

• Select, decide the remuneration and evaluate on a regular basis and if necessary, change the
CEO

• Oversee the conduct of company’s business to evaluate whether or not it is being correctly
managed
 • Review and where necessary approve company’s financial objectives and major corporate plans
and objectives

• Provide advice and counsel to top management

• Select and recommend candidates to shareholders for electing them to the board of directors

• Review the adequacy of systems to comply with all applicable laws and regulations

• Review any other function required by law to be performed

Major thrust of corporate governance.

• Call upon government to put in place an effective institutional and legal framework

• Call for a corporate governance framework that protect and facilitates the exercise of
shareholder’s rights

• Strongly support equitable treatment of all shareholders

• Recognize the importance of the role of stakeholders in corporate governance

• Stress the importance of timely, accurate and transparent disclosure mechanism

• Proper dealing with board structures, responsibilities and procedures

Strategies and techniques basic to sound corporate governance

• Corporation should cultivate values, develop codes of conduct, ethical behaviour and other
standards of appropriate practices

• A proper corporate strategy has to be built and against which success can be measured

• Well –defined responsibilities and assignment of decision making authorities also specifying the
hierarchy of required approvals from the level of employees to the board of directors.

• Setting up a system to ensure interaction and proper communication

• Establishing strong internal control system

• Ensuring system monitoring of risk exposures

• Instituting a scheme of financial and managerial incentives

• Ensuring required information flows internally and to the public at large

Benefits to the society:

 • In developing countries, where stocks of most firms are not actively traded on stock exchanges,
adopting standards for transparency in dealing with investors and creditors is a major benefit to
all stake holders

• Research had proved that, in countries where corporate governance is in place, then the rights
of the stakeholders is protected

• Strong corporate governance strengthens the market system for any business

• It is a effective instrument for combating corruption

• Better corporate governance can improve the management of the firm

• It also brings in improvement in the management and the way the system works

Recommendations by the Task force:

• Greater role and influence for non-executive, independent directors

• Stringent punishment for executives directors for failing to comply with listing and other
requirements

• Limitations on the nature and number of directorship of managing and whole-time dealers

• Proper disclosure to the shareholder and investing community

• Interested shareholders to obtain from voting on specified matters

• Tougher listing and compliance regimen through a centralized National listing authority

• Highest and toughest standards of corporate governance for listed companies

• A code of public behavior for public sector units

Why India falls behind in corporate governance?

• India still has poor bankruptcy laws and procedures

• Indian accounting standards still do not mandate consolidation

• Indian stock market are still inefficiently run

• The Indian bond market is in its infancy

Impetus for the growth of Corporate governance in India

• Competition: Competition will force companies to drastically restructure their ways of doing
business
 • New player’s professionalism: Companies should have professional boards and disclosure
standards that measure up to the best in the world.

• Growth in market capitalization: There is a phenomenal growth in market capitalization, which

triggered the growth of larger slices of small pie

• Foreign portfolio investor: Foreign investors had steadily raised their demands for better
corporate governance, more transparency and grater disclosure

• Media Influences: In the last five years, the press and financial analysts have induced a level of
disclosure that was inconceivable a decade ago.

• Influence of Banks and financial Institutions: Due to FI’s debt of Indian banks are getting
converted to equity and this will get intensified over a period time, especially with advent of
Universal Banking.

• Realization of the benefits of corporate governance: It makes good business sense to be

transparent, well governed company and incorporating internally accepted accounting
standards.

MARKETINGGGGGGGGGGG

SESSION 18

Designing and Managing Services

The Service Industry

• Agri: 15%; Industry: 26%; and Services: 49% contribution to GDP

• The government sector, with its courts, employment services, hospitals, loan agencies, military
services, police and fire departments, postal service, regulatory agencies, and schools, is in the
service business.

• The private nonprofit sector—museums, charities, churches, colleges, foundations, and

hospitals—is in the service business.

• A good part of the business sector, with its airlines, banks, hotels, insurance companies, law
firms, management consulting firms, medical practices, motion picture companies, plumbing
repair companies, and real estate firms, is in the service business.

• Many workers in the manufacturing sector, such as computer operators, accountants, and legal
staff, are really service providers.

The Nature of Services

• Service
 – Any act or performance one party can offer to another that is essentially intangible and
does not result in the ownership of anything

– Its production may or may not be tied to a physical product.

Categories Of Service Mix

• A pure tangible good (soap)

• A tangible good with accompanying services (car, computer)

• A hybrid (restaurant meal)

• A major service with accompanying minor goods/services (air travel)

• A pure service (babysitting, tax consultancy)

Service distinctions

Equipment- (automated car washes, vending machines) or people-based (maids)

Different processes of delivery (QSRs, waiter-dining, self-help buffet)

Some need client’s presence (haircut, heart op)

Meets personal (psychiatric counseling) or business need (tax planning)

Differs in objectives (NGOs) and ownership (pvt or public)

Characteristics of Services

Intangibility

Services cannot be seen, tasted, felt, heard, or smelled

Physical evidence and presentation tools:

Place People Equipment Communication material Symbols Price

Inseparability

• Services are typically produced and consumed simultaneously

Variability

• The quality of services depends on who provides them, when and where, and to whom

– As such, services are highly variable

New Services Realities

 • A shifting customer relationship

– Customer empowerment (internet-based) & coproduction (Customer failures)

– Satisfying employees as well as customers (Employees first, Customers second – Vineet

Nayyar)

Achieving Excellence In Services Marketing

• Technology and service delivery

– The Internet allows for true interactivity, customer-specific and situational

personalization, and real-time adjustments of the firm’s offerings

Managing Service Quality

Pricing Inconvenience Core service failure Service encounter failure Response to service failure

Competition Ethical problems involuntary switching

Improving Service Quality

Listening Reliability Basic service Service design Recovery

Surprising customers fair play

Teamwork

Employee research

Servant leadership

Servqual

Researchers identified five determinants of service quality, in descending order of importance:

• 1. Reliability—The ability to perform the promised service dependably and accurately.

• 2. Responsiveness—The willingness to help customers and provide prompt service.

• 3. Assurance—The knowledge and courtesy of employees and their ability to convey trust and
confidence.

• 4. Empathy—The provision of caring, individualized attention to customers.

• 5. Tangibles—The appearance of physical facilities, equipment, staff, and communication

materials.

Selling
What is Selling?

The last step in the chain of commerce where a buyer exchanges cash for a seller’s goods or
service, or the activity of trying to bring this about.

• It affects the bottom line of the company.

• In fact, it IS the bottom line of the company!!

• No selling = no buying = no products and services

• Thus, the ability to sell is one of the most vital skills

• Selling skills are important because….

The Vital Ingredient

• Business knowledge

• Industry knowledge

• Company knowledge

• Product knowledge

• Selling knowledge

• The Right Attitude

RULES OF PROFESSIONAL SEELING-----NOTWRITTEN

The Importance of Questioning Skills

• Questioning is the art of probing

• It is the science of getting to know what the prospect actually wants

• If done properly it will teach you to not go by assumptions

• There are different kinds of questioning

• It makes the prospect feel that you are genuinely interested in solving their problem

• Ask more open questions

• They encourage other people to talk

• We get opinions and ideas from others

• Questions help us determine if people have interpreted correctly what we say

 • Questions help us arrive at consensus much more readily.

• Be careful of ‘why’ questions becoming accusatory

Is there a ‘Sales Process’?

• Professional sales people realize that there is indeed a sales process

• How many of us here have thought about a sales process for your company/products?

• What do we do with the knowledge of a sales process?

• How is it going to benefit our company, and then us?

What Is Action Selling?

• Action Selling breaks a sales call into nine important components, sequenced in the order of the
five buying decisions that every customer makes.

• Action Selling shows salespeople when to plan, when to establish rapport, when to present the
company and product/service capabilities, when to ask for commitment, how to confirm the
sale and continually improve.

Benefits of Action Selling

• When a consistent procedure like this is used, there are specific benefits:

• Sales presentation is focused on specific, high-priority needs

• It is given when the customer is ready to hear it - after trust and rapport have been established.

• With Action Selling, both the relationship and the solution are viewed as a unique value to the
customer.

• That means you win more business, at the right price.

Rules of B2B Sales

• Reality: B2B Marketers Experience Longer Sales Cycles: It is an extended process, lasting several
months

• Rule: Determine what stage of the buying cycle the customer is in and then decide what action
to take

• Reality: B2B Products and Services are More Complex with many of the benefits or hurdles not
readily apparent

• Rule: B2B marketing needs to take the technical, the subtle, the intricate, and make it clear,
understandable, and persuasive.
• Reality: There are Fewer Identifiable Buyers

• Rule: Spend a lot of time on excellent prospecting –of companies, of the right people who will
buy or influence purchase of your products

• Reality: Corporate brands are more important

• Rule: Product selection is based on practical considerations. But the deal is normally closed on
the basis of corporate brand strength.

• Reality: B2B Sales Rely Heavily on Personal Interactions

• Rule: B2B marketing doesn’t happen through tightly controlled, highly crafted communications
vehicles like television commercials or other mass media.

• One-to-one customer relationship building, through personal interaction demands sophisticated

sales management and an educated, knowledgeable, trained staff whose words and actions are
aligned with corporate brand objectives.

Negotiation Skills

This is a skill that is absolutely essential for the survival of any salesperson, anywhere in the
world, in any industry, at all times of his or her career, without fail.

------LEFT IN THE MIDDLEE------SEE SLIDES

# 1 : Accommodators

Solving problems, preserving personal relationships, sensitive to the emotional states, body
language, and verbal signals of the other parties, sometimes feel taken advantage of in situations
when the other party places little emphasis on the relationship.

# 2: Avoiders They do not like to negotiate, tend to defer and dodge the confrontational
aspects, often ending up with results that are below satisfactory level

# 3: Collaborators Enjoy negotiations that involve solving tough problems in creative ways.
Collaborators are good at using negotiations to understand the concerns and interests of the other
parties

# 4: Competers Solving tough problems in creative ways, understanding the concerns and
interests of the other parties

# 5: Compromisers Close the deal by doing what is fair and equal for all parties, often unnecessarily
rush the negotiation process and make concessions too quickly.

• Non Verbal Behavior & Negotiations

• 7% of the meaning is derived from the words spoken

• 38% from paralinguistic channels, that is, tone of voice, loudness, and other aspects of how
things are said

• 55% from facial expressions & body language

Negotiation Essentials

Prepare. Preparation is 80% of negotiating success.

Gather as much information as you can about the other party.

Know your own hot buttons. What makes you react?

Figure out your Walking Away Point (WAP) and Best Alternatives to a Negotiated
Agreement (BATNA).

Situational Simulation

– One person is an Insurance Adjuster

– Another person is a car owner whose car has just got completely damaged.

– Situation: the car owner and the insurance adjuster must negotiate.

– Objective of car owner: get a fair price so that he can buy another car of
equivalent current value.

– Objective of Insurance Adjuster: Minimize the payout.

Sales Presentation Skills

Presentation skills are essential for the following reasons:

– It is an essential way of telling the prospect that you are aware of his needs

– That you have understand his interests, his doubts, his worries and

– You are presenting your company’s solutions to his company’s problems

The value of personal selling

• Flexible in style

• Two way dialogue

• Great for pitching complex products

• Useful for long gestation period products

• Helpful when relationships are important

• Handy when negotiations are involved

• Fosters the human touch

• Builds networks