CONCEPT OF ORGANISATION

• Organization is very often viewed as a group of persons contributing their efforts towards certain
goals.
• The evolution of organisation dates back to the early stages of human civilization when people
began to cooperate and combine together for fulfilling their basic needs of food, clothing, shelter
and protection of life.
• Organisation begins when people combine their efforts for some common purpose. It is a
universal truth that an individual is unable to fulfil his needs and desires alone because he lacks
strength, ability and resources. So he seeks the cooperation of other people who have similarity
of goals.
• A business organisation may be viewed as a system created to satisfy society's needs and desires
by the production and distribution of goods and services undertaken with a view to earn profits.
CONCEPT OF MANAGEMENT
• Management of an enterprise is represented by the group of people who perform managerial
functions for the accomplishment of organisational goals. These people are individually known as
Managers. In other words, a manager is a person who performs the managerial functions of
planning, organising, staffing, directing and controlling and is a member of the management
team of the organisation.
MANAGEMENT AS A PART OF ORGANISATION
Management is an integral part of the organisation. It can't have its existence in the absence of an
organisation. Further, every oragnisation requires some people to plan, organise and coordinate
its activities. Such people are known as managers. Generally, each organisation has a number of
levels representing hierarchy of positions. At each level there are managers to manage the
organisational activities. For the sake of convenience, we may divide managers according to their
position in the hierarchy of the organization:
• Top level managers
• Middle level managers
• Operation level managers
ROLE OF ORGANISATIONS
• People are exposed to organisations throughout their life. The examples include
hospitals, schools, retail stores, religious and social organistions, work organisations,
municipalities, banks, financial institutions and so on.
• On the basis of their objectives, organisations may be classified as (i) economic/profit/
business organisations, and (ii) non-economic/non-profit organisations.
• Economic organisations are basically engaged in performing economic activities of
production and distribution of goods and services for the satisfaction of human needs.
For example, industries, trading organisations and service oranisations like banks,
transport companies insurance companies, etc.
• Non-economic or non-profit organisations are engaged in generating and providing
services to its members or to the public at large without any motive of earning profit.
These organisations may operate for promoting social welfare, religion, etc. such as
educational institutions, hospitals and charitable institutions, etc.

ROLE OF MANAGEMENT
• There is no substitute for management in modern organisations.
• As remarked by Peter F. Drucker, 'Management is the dynamic life-giving element in
every business. Without it the resources of production remain resources and never
become production'
• An organisation may have raw materials, machines, human resources and other factors,
but these can't produce want satisfying products unless they are efficiently managed.
• Managers act as catalyst to make productive use of various resources for the
accomplishment of organisational objectives.
UNDERLYING DISCIPLINES
• Sociology : Sociology as an academic discipline utilizes scientific method in
accumulating knowledge about the social behaviour of groups. It specifically
studies social groups, social behaviour, society, customs, institutions, social
classes, status, social mobility and prestige. It also studies the behaviour of
people in relation to their fellow human beings. Sociologists have enriched
management through their contribution to the study of interpersonal dynamics
like leadership, group dynamics, communication, formal and informal
organisations and the like.
• Psychology : Managers can take the help of psychology to understand the
behaviour of individuals working in the organisation. The term 'psychology' is
derived from the Greek word 'psyche' which means 'soul' or 'spirit'. Modern
authors define psychology as the science of individual behaviour. Psychology has
had a great deal of influence on the field of organizational behaviour. The major
areas researched to understand the determinants of behaviour are attitudes,
motivation and learning.
• Social Psychology : Social psychology is an important branch of psychology which
blends concepts from both psychology and sociology. Its area of focus is on
influence of group members on one another. The contribution of social
psychology to OB lies in the study of overcoming resistance to change and
introduction of change in organisations. It also studies change in attitude and
behaviour of group, patterns of communication, group decision-making etc.
• Anthropology : Anthropology studies the origin and development of human
cultures, how those cultures have functioned in the past, how they continue
to function in the present. This information is very useful in understanding the
behaviour of individuals and group in organisations. Culture has significant
influence on human behaviour. It dictates what people learn and how they
behave. Thus, Anthropology contributes a lot in understanding the cultural
effect on OB Value systems, sentiments, interactions, group cohesiveness etc.
• Economics : Economic organisations run for earning profits. Its managers
must be well versed in principles of Economics. The contribution of Economics
to the study of management is reflected in topics like pricing theory, market
dynamics, cost benefit analysis, rationality in decision-making, etc. Size and
location of business organisation, competitive analysis, strategic, planning,
etc. are based on concepts and principles of economics.
• Law : Law lays down dos and don'ts for organisations. Economic organisations
are governed by various laws collectively known as business laws and also
regulatory legislations. Business laws include Contract Act, Partnership Act,
Companies Act, Cooperative Societies Act, Sale of Goods Act, Information
Technology Act, etc. Regulatory legislations include Foreign Exchange
Management Act, Securities and Exchange Board of India Act, Income Tax Act,
Goods and Services Act, and so on. Besides, organisations have to also fulfil
the requirements of various labour enactments and codes including Factories
Acts, Mines Act, Workmen Compensation Act, Employees State Insurance Act,
Provident fund act, Maternity Benefit Act, Trade Unions Act, etc.
Functions of Management

"Management is a distinct process consisting of planning, organising, staffing,

directing and controlling, performed to determine and accomplish stated
objectives with the effective and efficient utilisation of human beings and other
resources”
The elements of functions of management are stated as follows:
1. Planning: It means determining the objective of the unit or activity. It also
involves deciding in advance as to what is to be done, how and when.
2. Organising: It refers to identification of activities to be carried out. grouping
of similar activities and creation of departments. Organisation also leads to
creation of authority and responsibility relationships throughout the
enterprise.
3. Staffing: It involves manpower planning, employment of personnel and their
training, appraisal, remuneration, etc
4. Directing: It is a very broad function concerned with the interpersonal
relations. It includes communication with subordinated, providing them
leadership and also motivating them.
5. Controlling: It refers to comparing the actual performance with the plans or
standards. Corrective steps are taken when the actual performance is not up
to the mark.
FORMATS OF BUSINESS
Bricks and Mortar Business : It is the traditional mode of business with physical
presence. It has a building, machines and equipment, people, structure, supply
chain, and distribution facilities. Retail stores in the neighborhood are the most
popular examples of bricks and mortar business. Bricks and mortar business has a
physical presence such as store, factory, or workplace and it offers face-to-face
consumer experience. It often allows the customers to see, feel, and inspect the
goods before they decide to purchase the same.

Click or Pure Online Business : A pure online business operates all activities online and
it has no physical presence like a traditional business. The famous examples are
ebay.com, amazon.com and they are also known as e-commerce companies. They
operate online and don't have any physical stores. Pure online businesses have
emerged and grown as a result of revolution in Information Technology.

Bricks and Click Business : It is a combined mode of doing business as it integrates

both bricks (offline) and clicks (online) presence. A bricks and click business has the
benefits of both the traditional channels and the Internet Channel. A bricks and
mortar firm may acquire online capabilities to sell its products to customers. On
acquisition of such facilities, it will become a bricks and click firm. For instance, a
furniture store has displays at a local store which can be visited by the customers for
purchasing the required furniture. It may also have online presence through its
website to allow customers to place orders online.
e-Commerce and e-Business
• Electronic commerce is the process of carrying out of
business activities through the internet. It involves buying
and selling products, services and information via computer
networks including the internet.
• e-Business includes buying and selling of goods and
services and also servicing customers and collaborating
with business partners through electronic means.
• There is a difference in the scope of both e-Commerce and
e-Business. It should be noted that the term e-Commerce
has a narrower scope than e-business. e-Commerce
signifies using the Internet to place an order and pay for
products or services. Thus, e-Commerce is a sub-set of e-
business which involves not only buying and selling of
goods, but also having dealings with suppliers, distributors,
banks and other partners.
 Micro, Small and Medium Enterprises

• Micro Enterprise : A micro enterprise is one whose investment in plant and

machinery does not exceed rupees twenty five lakh if engaged in manufacturing and
rupees ten lakh if engaged in providing services.
• Small Scale Enterprise : A small scale enterprise is defined as one in which the
investment in fixed assets of plant and machinery does not exceed rupees five crore
if engaged in manufacturing and rupees two crore if engaged in rendering of
services.
• Medium Enterprise :
Manufacturing Sector: It is an enterprise engaged in production or processing of
goods with investment of more than rupees 5 crore but not exceeding rupees 10
crore in plant and machinery excluding investment in land and building.
Service Sector: It is an enterprise providing or rendering of services with an
investment of more than rupees 2 crore, but not exceeding rupees 5 crore in
equipment excluding cost of land and building.
• Large Enterprise
Manufacturing Sector: It is an enterprise engaged in production, processing or
preservation of goods with investment of more than rupees 10 crore in plant and
machinery excluding cost of land and building.
Service Sector: It is an entreprise engaged in providing or rendering of services
with investment of more than rupees 5 crores in equipment excluding cost of land
and building.
RECENT MEASURES FOR THE GROWTH OF SMALL, MEDIUM AND LARGE ENTERPRISES

• Make in India : 'Make in India’ is a major national programme designed to

facilitate investment, foster innovation, enhance skill development, protect
intellectual property and build best-in-class infrastructure. It was launched on
25th September 2014 by the Prime Minister, Mr. Narendra Modi, who termed
this initiative a lion step to usher in increased manufacturing in the country.

• Goods and Services Tax (GST) : The launch of the GST (Goods and Services Tax)
with effect from 1 July 2017 represents an historic, economic and political
achievement, unprecedented in the Indian tax and economic reforms. It is a
game changing reform introduced by the government. It will facilitate the
creation of one common market in the whole of India by removing tax harriers.

• MSMED Act, 2006 : Micro, Small and Medium Enterprises Development

(MSMED) Act was enacted in 2006. It provides the first-ever legal framework
for recognition of the concept of 'enterprises' (comprising both manufacturing
and services) and integrating the three tiers of these enterprises, viz., micro,
small and medium. It also provides for a statutory consultative mechanism at
the national level with wide representation of all sections of stakeholders,
particularly the three classes of enterprises.