Miki Blue Eyes Weblog

by Ken Lund

Role of Management-part II

How interesting is to know the different roles of management. For any Organization as we saw that the general stages of any kind of production has to pass through certain definite steps. As in the previous article we saw that if an Organization wants to produce a product, it has to certainly go through different stages to at least decide about the witness of the product and now viable is the ideas. As the next step to bring an idea into a real concept is analysis, we will discuss how this stage and the related steps of this stage helps management to come with a concrete, solid and viable decision and how crucial this stage is.

When an Organization or its management wants to produce a product or bring an idea for any of its purpose, it certainly requires the analysis of the presented idea, with full information of all available option. Let us see what kind of information is required by the management to take certain decision. Lets go with previous example, that an Organization wants to bring an economic unit into its market, it will then definitely require information about the feasibility of the idea, the viability of the project and all the available options which could by any mean would serve as its competitive product and any of its desired market.

The information that now will have the concern of the Management is getting information about all available option in the market, which has either the same functioning as of the product, the management wants to bring, or else must have certain competitive advantage. Let us go one by one for each of these two particular situation. Let the management wants all the information about all the substitutes available in the market, which has the common purpose to serve to the customer i.e. the products having function or purpose similar to that of the product for which the management has bought an idea. Now, for this the management must want the information about,

i)                    The available substitutes in the defined market,

ii)                   The competitive advantages of all the substitutes

iii)                 The relative advantages of all the substitutes in relation to the product

iv)                 The past experience of these substitutes

v)                  The future of these substitutes

vi)                 The stages where these are in their life cycle

vii)               Government supports to the Organization producing these products.

viii)              Strengths and Weaknesses of the Organization already had bought or who wants to bring such products.

ix)                 Relative Competitiveness of the competitive Organization and their strength as well as weaknesses.

x)                  The projection of all the products which might come in the near future to serve the same purpose, and the relative competitive advantage of such Organization/Product to this Organization/Product

xi)                 Profitability movement of these products in past.

xii)               Price profitability break up of all available substitutes & if possible for future products also.

xiii)              Different other factors, of all available substitutes, there impact on making the market for the product & there impact on profitability of the product; if possible with proper movement & showing the direct impact.

xiv)             Projection about what the related products be in future & the degree of variation in their nature to the extent possible, for e.g. if a product is already in the market what kind of similar products may come in the future & what king of shift in their in any nature would one can expect to be visible in the forthcoming time.

xv)               What are the purposes already has served, being served & would serve if the product is in the market since long time. What are the trends of the product, market,customer,substitutes,relative forces. How these could best interpreted to find the actual projection to the extent possible for the product the organization has bought an idea.

                       In short all the information either to support the idea or else accept some other option,is requires to help the management in taking an effective decision. These are in general the concern of the management before taking such decisions.

                      The matters which else are required to be presented before management are few here:

As the management at this stage has to take the decision to meet the needs of the organization, maximizing the wealth of the shareholders, meet the purpose for which it has come, it must have to look some other things also.

The main responsibility of the management here is to take the exact decision to serve the purpose & to go through all the aspect which has impact on this all which might get affected by these decisions. For e.g.

i)                    The management or the finance people must have to look what the cost of capital of the organization is,

ii)                   What minimum return is required by the organization to make the cost of capital of the company & wealth of shareholders at least at its neutral state.

iii)                 What other best options are available.

iv)                 The projection of profitability of all these options with direct indication of its competitive advantage & the pros & cons of either accepting or rejecting a decision.

v)                  The criteria on which certain decisions are being supported.

vi)                 Management priorities.

vii)               Available fund with the management.

viii)              How long & upto what extent the decision could be made flexible to get the optimum result.

ix)                 What are the factors to decide & support in favour of the products, how these could best be evaluated to serve the purpose.

x)                  What are the critical factors which in condition must have to be taken care of.

xi)                 What, where, how & up to what extent the management could have the relaxation in taking their decision.

xii)               To what terms & up to what extent the idea itself is flexible.

xiii)              How the decision & other available options would be judged to see the figures that management has bought to support their decision.

.All these information would make the management to come with an effective decision in support of the idea they came earlier or else with some other decision which would serve the purpose more effectively as judged through the above mentioned paras to support that same decision.

In brief all these steps are required to be judged & come with a valuable solution by the management for the organization.

Related posts:

1. Role of Management-(part Ii)