Chapter 8 Organizing the business

Organizing is the management functions of assigning activities and grouping people so that the
firm's objectives can be accomplished.

Formal Organization: This refers to the officially recognized structure, roles, procedures, and
communication channels within an organization. It is typically documented in organizational
charts, job descriptions, and formal policies.
Informal Organization: This refers to the unofficial, spontaneous networks, relationships, and
communication channels that exist within an organization. It emerges from the social interactions
and personal connections among employees, often outside the official hierarchy.

Centralization: Centralization refers to the concentration of decision-making authority at the top

levels of an organization's hierarchy. In a centralized structure, key decisions are typically made
by a small group of top-level managers or executives.
Decentralization: Decentralization refers to the distribution of decision-making authority
throughout the organization, pushing decision-making power down to lower levels of the
hierarchy. In a decentralized structure, authority is delegated to various departments, divisions, or
even individual employees, allowing for quicker responses to local issues and greater autonomy
in decision-making.

Here are the five principles of organizing

Division of Labor: Divide tasks into smaller, specialized jobs so that each employee can focus on
what they do best. This increases efficiency because people become experts at their specific
tasks.
Unity of Command: Each employee should receive instructions and guidance from only one
supervisor or manager. This ensures clarity and prevents confusion or conflicting orders.

Scalar Principle: Establish a clear hierarchy of authority within the organization, with each level
having a specific level of authority over those below. This helps maintain order and ensures that
decisions flow smoothly through the chain of command.
Downsizing: Streamline the organization by reducing the number of employees, departments, or
levels of management. This can improve efficiency and reduce costs but must be done carefully
to avoid negative impacts on morale and productivity.

Span of Control: Determine the optimal number of subordinates that a manager can effectively
supervise. Too many direct reports can lead to micromanagement and inefficiency, while too few
can result in underutilization of managerial talent.

How to organize a business

Here's a brief explanation of each type of organizing structure:
1.Functional Organizing Structure: This structure groups employees based on their specialized
skills or functions, such as marketing, finance, or operations. Each department focuses on its
specific area of expertise, promoting efficiency and expertise in each function.
2.Product Organizing Structure: In this structure, departments are organized around specific
products or product lines. Each department is responsible for all functions related to a particular
product or group of products, allowing for a clear focus on product development, marketing, and
sales.
3.Territorial Organizing Structure: Territories or geographic regions are the basis for organizing
departments or divisions in this structure. Each region has its own set of responsibilities and
resources, tailored to the needs and characteristics of the area it serves. This structure is common
in organizations with a widespread geographical presence.
4.Matrix Organizing Structure: A matrix structure combines functional and product structures,
where employees report to both functional managers and project/product managers
simultaneously. This allows for flexibility and collaboration across different functions, but it can
also lead to confusion and power struggles if not managed properly.
5.Mixed Organizing Structure: A mixed or hybrid structure combines elements of different
organizing structures to meet the specific needs of an organization. For example, an organization
might have a functional structure for its core operations but adopt a product-based structure for
its innovation or new product development department. This approach allows for customization
and adaptation to changing circumstances.
 Chapter 10 Human Relations and Motivation

Motivation is the internal drive or desire that energizes and directs an individual's behavior
towards achieving a goal or fulfilling a need.
Example: A salesperson being motivated by the prospect of earning a commission to exceed their
sales targets.

Maslow's Hierarchy of Needs is a psychological theory that categorizes human needs into a
hierarchical structure, where each level must be fulfilled before progressing to the next:
1. Physiological Needs: The most basic needs, such as food, water, shelter, and clothing,
which must be satisfied for survival. Example: A person working to earn a living wage to
afford basic necessities like food and housing.
2. Safety Needs: The need for physical and emotional security, stability, protection from
harm, and a predictable environment. Example: An individual purchasing home insurance
and installing security systems to feel safe and secure.
3. Social Needs: The need for belongingness, love, acceptance, and social interactions.
Example: Joining a social club or participating in team activities to build friendships and
establish a sense of community.
4. Esteem Needs: The need for self-esteem, recognition, achievement, and respect from
others. Example: An employee striving for a promotion or recognition within the
organization to enhance their self-worth and gain admiration from colleagues.
5. Self-Actualization Needs: The highest level, representing the fulfillment of one's full
potential, personal growth, and self-fulfillment. Example: An artist pursuing their passion
and creativity, striving to achieve their highest level of artistic expression.
In summary, Maslow's Hierarchy of Needs suggests that individuals progress through these
levels, seeking to fulfill their basic physiological needs first, followed by safety, social, esteem,
and ultimately self-actualization needs.

McGregor's Theory, also known as McGregor's Theory X and Theory Y, is a management theory
that proposes two contrasting assumptions about employee motivation and behavior. Theory X
assumes that employees are inherently lazy and require strict control, while Theory Y assumes
that employees are self-motivated and can be trusted to take responsibility for their work.

The Theory X management style is based on a pessimistic view of human nature and assumes the
following:
• The average person dislikes work and will avoid it if possible.
• Because people don’t like to work, they must be controlled, directed, or threatened with
punishment to get them to make an effort.
Example: A manager who believes in Theory X might closely monitor employees' every move,
set strict rules and regulations, and use punishments as motivators to ensure productivity.

Theory Y management style is based on a more optimistic view of human nature and assumes
the following:
• Work is as natural as play or rest. People want to and can be self-directed and self-controlled
and will try to achieve organizational goals they believe in.
• Workers can be motivated using positive incentives and will try hard to accomplish
organizational goals if they believe they will be rewarded for doing so.
Example: A manager who believes in Theory Y might empower employees, provide them with
autonomy, encourage creativity, and give them opportunities for personal and professional
growth.

Herzberg's Motivator-Hygiene Theory, also known as the Two-Factor Theory, suggests that job
satisfaction and dissatisfaction are influenced by different factors:
1. Motivators (Satisfiers): These factors are related to the nature of the work itself and have
the potential to create job satisfaction. They include factors such as achievement,
recognition, responsibility, growth, and the work itself. When these motivators are
present, they can lead to increased job satisfaction and motivation.
Example: An employee feels motivated and satisfied when they are given challenging tasks,
receive recognition for their achievements, and have opportunities for personal and professional
growth.
 2. Hygiene Factors (Dissatisfiers): These factors are related to the work environment and
the context in which work is performed. Their absence can cause dissatisfaction but their
presence alone does not necessarily lead to satisfaction. They include factors such as
salary, benefits, working conditions, company policies, and interpersonal relationships.
Example: An employee may become dissatisfied if they have poor working conditions, feel
unappreciated, or have a difficult relationship with their supervisor, even if they receive a high
salary.
Herzberg argued that managers should focus on enhancing motivators to promote job satisfaction
and intrinsic motivation, rather than solely relying on improving hygiene factors to prevent
dissatisfaction. By creating a positive work environment that offers meaningful work and
opportunities for growth, managers can help foster employee satisfaction and motivation
 Chapter 13
Marketing is a set of activities and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large. It
involves understanding customer needs and wants, developing products or services that satisfy
those needs, and promoting them effectively to target audiences.

What is utility?
Utility is the ability of a product to satisfy consumers' needs.There are four types of utility.
Form Utility is Adding value by changing the form of a product to make it more useful. Time
Utility is Creating value by offering a product at the right time when it's needed. Place Utility is
Providing value by making a product available at a convenient location.Possession Utility is
Generating value through the ownership or possession of a product.

Marketing concept The marketing concept is a managerial philosophy of customer orientation

with the goal of achieving long term success .There are five alternative concepts under which
organizations conduct their marketing activities:

​ How to Develop a marketing strategy

Marketing strategy refers to a company's plan of action to promote and sell its products or
services. It involves the identification of target markets and the development of a strategic
approach to reach and influence those markets.Two basic steps of developing a marketing
strategy are
Select a target market , Design a marketing mix

1. Select a Target Market:

● This step involves identifying and choosing a specific group of consumers, known as a
target market or target audience, that the company aims to reach with its products or
services.
 ● Criteria for selecting a target market may include demographics (age, gender, income),
psychographics (lifestyle, values, attitudes), geographic location, and behavioral factors
(buying habits, product usage).
● Understanding the needs, preferences, and characteristics of the target market helps tailor
marketing messages and strategies to resonate with that specific group.

2. Design a Marketing Mix (4Ps):

● Once the target market is identified, the next step is to design a marketing mix,
commonly known as the 4Ps:
● Product: Define the features and attributes of the product or service. Consider
aspects such as quality, design, branding, and packaging to meet the needs and
preferences of the target market.
● Price: Determine the pricing strategy that aligns with the perceived value of the
product or service in the eyes of the target market. Factors such as competition,
costs, and perceived value play a role in pricing decisions.
● Place (Distribution): Decide on the channels and methods through which the
product or service will be made available to the target market. This involves
considerations of distribution channels, logistics, and retail locations.
● Promotion: Develop strategies to promote and communicate the product or
service to the target market. This includes advertising, public relations, sales
promotions, and other promotional activities.

The consumer buying process, also known as the buyer's journey, consists of several stages that
individuals go through when making a purchase decision. Here's an overview of the key stages:
1. Need Recognition:
​ The process begins with the consumer recognizing a need or a problem that requires a
solution. This can be triggered by internal factors like personal desires or external factors
like advertisements, friends' recommendations, or environmental influences.
2. Information Search:
​ Once the need is identified, the consumer engages in information search to gather data
about potential solutions. This can involve seeking information from various sources,
such as online research, product reviews, personal experiences, or asking for
recommendations from friends and family.
3. Evaluation of Alternatives:
​ After gathering information, the consumer evaluates the available alternatives. This
involves comparing the features, benefits, prices, and other attributes of different
products or services. Consumers may also consider their past experiences and preferences
during this stage.
4. Purchase Decision:
​ Based on the evaluation, the consumer makes a purchase decision. This decision may be
influenced by various factors, including the perceived value of the product, brand loyalty,
promotional offers, or recommendations from trusted sources.
5. Post-Purchase Behavior:
​ After making a purchase, the consumer enters the post-purchase stage. This involves
assessing their satisfaction with the product or service. If the purchase meets or exceeds
expectations, it reinforces positive feelings. If there's dissatisfaction, it may lead to
post-purchase dissonance or regret.