CHAPTER ONE

MEANING OF MANAGEMENT

Management is a universal phenomenon. It is a very popular and widely used term. All
organizations - business, political, cultural or social are involved in management because it is the
management which helps and directs the various efforts towards a definite purpose. According to
Harold Koontz, ―Management is an art of getting things done through and with the people in
formally organized groups. It is an art of creating an environment in which people can perform
and individuals and can co-operate towards attainment of group goals‖. According to F.W.
Taylor, ―Management is an art of knowing what to do, when to do and see that it is done in the
best and cheapest way‖. Management is a purposive activity. It is something that directs group
efforts towards the attainment of certain pre – determined goals. It is the process of working with
and through others to effectively achieve the goals of the organization, by efficiently using
limited resources in the changing world. Of course, these goals may vary from one enterprise to
another, e.g.: For one enterprise it may be launching of new products by conducting market
surveys and for other it may be profit maximization by minimizing cost.

Management is the process of guiding the development, maintenance, and allocation of resources
to attain organizational goals. Managers are the people in the organization responsible for
developing and carrying out this management process. Management is dynamic by nature and
evolves to meet needs and constraints in the organization’s internal and external environments.
In a global marketplace where the rate of change is rapidly increasing, flexibility and adaptability
are crucial to the managerial process. This process is based in for key functional areas of the
organization: planning, organization, leadership and control. The four functions are highly
interdependent, with managers often performing more than one of them at a time and each of
them many times over the course of a normal workday.

Features of Management

Management is an activity concerned with guiding human and physical resources such that
organizational goals can be achieved. Nature of management can be highlighted as: -

i) Management is Goal-Oriented: The success of any management activity is accessed by

its achievement of the predetermined goals or objective. Management is a purposeful
activity. It is a tool which helps use of human & physical resources to fulfill the pre-
determined goals. For example, the goal of an enterprise is maximum consumer
satisfaction by producing quality goods and at reasonable prices. This can be achieved by
employing efficient persons and making better use of scarce resources.
ii) ii) Management integrates Human, Physical and Financial Resources: In an
organization, human beings work with non-human resources like machines. Materials,
 financial assets, buildings etc. Management integrates human efforts to those resources.
It brings harmony among the human, physical and financial resources.
iii) iii) Management is Continuous: Management is an ongoing process. It involves
continuous handling of problems and issues. It is concerned with identifying the problem
and taking appropriate steps to solve it, e.g. the target of a company is maximum
production. For achieving this target various policies have to be framed but this is not the
end. Marketing and Advertising is also to be done. For this policies have to be again
framed. Hence this is an ongoing process.
iv) iv) Management is all Pervasive: Management is required in all types of organizations
whether it is political, social, cultural or business because it helps and directs various
efforts towards a definite purpose. Thus clubs, hospitals, political parties, colleges,
hospitals, business firms all require management. Whenever more than one person is
engaged in working for a common goal, management is necessary. Whether it is a small
business firm which may be engaged in trading or a large firm like Tata Iron & Steel,
management is required everywhere irrespective of size or type of activity.
v) v) Management is a Group Activity: Management is very much less concerned with
individual‘s efforts. It is more concerned with groups. It involves the use of group effort
to achieve predetermined goal of management of an organisation.

FUNCTIONS OF MANAGEMENT

The functions of Management are common to all alike; weather a business firm or a non-
business firm. Management‘s primary function is the satisfaction of the stakeholders. This
typically involves making a profit (for the shareholders), creating valued products at a reasonable
cost (for customers), and providing rewarding employment opportunities (for employees). This
can be achieved only when management accomplishes its functions. The following are the
common Functions of Management:

1. PLANNING:

Planning means looking ahead and chalking out future courses of action to be followed taking
into consideration available & prospective human and physical resources. It is a systematic
activity which determines when, how and who is going to perform a specific job. It is rightly said
―Well plan is half done‖. According to Koontz & O‘Donnell, ―Planning is deciding in advance
what to do, how to do and who is to do it. Planning bridges the gap between where we are to,
where we want to go. It makes possible things to occur which would not otherwise occur.

Planning requires administration to assess appropriate course of action to attain the company‘s
goals and objectives. For management to do this efficiently, it has to be very practical and
simple. Planning is important at all levels of management. However, its characteristics vary by
level of management.
2. ORGANIZING:

Organizing is the function of management which follows planning. It is a function in which the
synchronization and combination of human, physical and financial resources takes place. All the
three resources are important to get results. Therefore, organizational function helps in
achievement of results which in fact is important for the functioning of a concern. Hence, a
manager always has to organize in order to get results. A manager performs organizing function
with the help of following steps:-

1. Identification of activities - All the activities which have to be performed in a concern have to
be identified, grouped and classified into units.

2. Departmentally organizing the activities - dividing the whole concern into independent units
and departments is called departmentation.

3. Classifying the authority - Authorities bringing smoothness in a concern‘s working.

4. Co-ordination between authority and responsibility: Each individual is made aware of his
authority and knows whom they have to take orders from and to whom they are accountable and
to whom they have to report.

Thus an organization structure should be designed to clarify who is to do what tasks and who is
responsible for what results and to furnish decision-making and communications networks
reflecting.

3. STAFFING:

The managerial function of staffing involves manning the organization structure through proper
and effective selection, appraisal and development of the personals to fill the roles assigned to
the employers/workforce. Staffing pertains to recruitment, selection, development and
compensation of subordinates.

NATURE OF STAFFING FUNCTION:

i) Staffing is an important managerial function

ii) Staffing is a continuous activity

iii) The basis of staffing function is efficient management of personals. iv) Staffing helps in
placing right men at the right job

v) Staffing is performed by all managers depending upon the nature of business, size of the
company, qualifications and skills of managers, etc.
vi) Since, the success of the organization depends upon the performance of the individual,
staffing function of manager deserves sufficient care & attention of the management.

4. DIRECTING:

Directing is a process in which the managers instruct, guide and oversee the performance of the
workers to achieve predetermined goals. Planning, organizing, staffing has got no importance if
direction function does not take place.

Characteristics of Direction

i) Pervasive Function - Directing is required at all levels of organization.

ii) Continuous Activity - Direction is a continuous activity as it continuous throughout the life
of organization.

iii) Human Factor - Since human factor is complex and behavior is unpredictable, direction
function becomes important.

iv) Creative Activity - Direction function helps in converting plans into performance

v) Executive Function - Direction function is carried out by all managers and executives at all
levels throughout the working of an enterprise;

To sum up, the plans may be the best feasible ones, the activities may be systematically
organized, the staff may be highly efficient, but the organization will not succeed, if there is no
proper direction. Mere planning, organizing and staffing are not sufficient to set the tasks in
motion. Directing involves not only instructing people what to do, but also ensuring that they
know what is expected from them.

5. CO-ORDINATION:

Co-ordination tries to achieve harmony between individual‘s efforts towards achievement of

group goals and is a key to success of management. Management seeks to achieve co-ordination
through its basic functions of planning, organizing, staffing, directing and controlling. Co-
ordination is achieved through planning, organizing, staffing, directing and controlling. Co-
ordination is life-line of management. It is required in each and every function and at each and
every stage and therefore it cannot be separated.

6. CONTROLLING:

Controlling is measuring and correcting individual or organizational performance to ensure that

event confirm to plans. It involves measuring performance against set goals and plans showing
where deviations from the standards exist and helping to correct those deviations. The control
process is cyclical which means it is never ending. Employees often view controlling negatively
No matter how positive the changes may be for the organization, Controlling is a four-step
process of establishing performance standards based on the firm's objectives, measuring and
reporting actual performance, comparing the two, and taking corrective or preventive action as
necessary.

IMPORTANCE OF MANAGEMENT

1. It helps in Achieving Group Goals – Management converts disorganized resources of men,

machines, money etc. into useful enterprise. It arranges, assembles, organizes and integrates the
factors of production. These resources are coordinated, directed and controlled in such a manner
that enterprise work towards attainment of goals.

2. Optimum Utilization of Resources – Management utilizes all the physical and human
resources productively. Management provides maximum utilization of scarce resources by
selecting its best possible alternate use in industry from out of various uses. This leads to
optimum utilization of resources and avoid wastage.

3. Reduces Costs – It gets maximum results through minimum input by proper planning and by
using minimum input and getting maximum output. Management uses physical, human and
financial resources in such a manner which results in best combination. This helps in cost
reduction. 4. Establishes Sound Organization –To establish sound organizational structure is
one of the objective of management which is in tune with objective of organization and for
fulfillment of this, it establishes effective authority and responsibility relationship i.e. who is
accountable to whom, who can give instructions to whom, who are superiors and who are
subordinates.

5. Establishes Equilibrium – It enables the organization to survive in changing environment. It

adapts organization to changing demand of market / changing needs of societies. It is responsible
for growth and survival of organization.

6. Essentials for Prosperity of Society – Efficient management leads to better economical

production which helps in turn to increase the welfare of people.. It improves standard of living,
increases the profit which is beneficial to business and society will get maximum output at
minimum cost by creating employment opportunities which generate income.

DIFFERENT LEVELS OF MANAGEMENT

Top-level Management

Top management of a company consists of owners/shareholders, Board of Directors, its

Chairman, Managing Director, or the Chief Executive, or the General Manager or Executive
Committee having key officers.
 • Top-level managers require an extensive knowledge of management roles and skills.

• They have to be very aware of external factors such as markets.

• Their decisions are generally of a long-term nature.

They are responsible for strategic decisions.

• They have to chalk out the plan and see that plan may be effective in future.

• They are executive in nature.

Middle Management

Middle management of a company consists of heads of functional departments viz. Purchase

Manager, Production Manager, Marketing Manager, Financial controller, etc. and Divisional and
Sectional Officers working under these Functional Heads.

 Mid-level managers have a specialized understanding of certain managerial tasks.

 They are responsible for and carrying out the decisions made by top-level management.

 They are responsible for tactical decisions.

Lower Management

Lower level or operative management of a company consists of Superintendents, Foremen,

Supervisors, etc.

 This level of management ensures that the decisions and plans taken by the other two are
carried out.

• Lower-level managers' decisions are generally short-term ones.

 CHAPTER TWO

MANAGING THE MEDIA

The term "media organization" means “a person or entity engaged in disseminating information
to the general public through a newspaper, magazine, other publication, radio, television, cable
television, or other medium of mass communication.”

Media Organization is a deceptively simple term encompassing a countless array of institutions

and individuals who differ in purpose, scope, method, and cultural context. Mass media include
all forms of information communicated to large groups of people, from a handmade sign to an
international news network. There is no standard for how large the audience needs to be before
communication becomes "mass" communication. There are also no constraints on the type of
information being presented.

Media management is seen as a business administration discipline that identifies and describes
strategic and operational phenomena and problems in the leadership of media enterprises.

Media management contains the functions strategic management, procurement management,

production management, organizational management and marketing of media enterprises.

Media Management includes the following:

• Running a media organization like a newspaper, Television channel, radio station, media
educational institute

• Marketing and advertising of Print and Electronic media

• Event promotion and production

• Print and web design

Media Management includes connecting all aspects of media like Promotion, Production,
Duplication, Marketing, Management, Graphic Design, Photography, Video, Audio, TV, Radio
and the Web.

NATURE, FUNCTIONS & FORMS OF DIFFERENT MEDIA ORGANIZATIONS

1. NEWS AGENCY

A news agency is an organization, which collects or gathers news and supplies it to different
newspapers, magazines, radio stations and television channels subscribing to its service. News
gathered/reported by reporters/correspondents is sent to newspapers via electronic teleprinters or
computers. These newspapers, in turn, pay a monthly subscription to use news agencies for the
news they receive.

A news agency office is always buzzing with activity, since it has to serve not only the print
media within the country, but also transmit news to All India Radio and Doordarshan. It also
supplies news to newspapers and other agencies all over the world. Thus, the news agency works
round the clock as there may be some newspapers somewhere in the world going to the press
about to be printed or some radio or TV bulletin about to go on air.

There is a vast difference in a newspaper organization and a news agency. Firstly, the news
agency does not publish any newspaper of its own. Whatever its reporters write/report is
transmitted to the newspapers and radio and television channels. It is then up to the newspaper to
use the news item sent by one news agency or that sent by another news agency, or use the report
prepared by its own reporter. In fact, at times, a newspaper may even prepare an item quoting
some paragraphs from one agency, and some from another agency.

The choice of what item to use will depend on which agency sends its copy faster and which
agency has sent a better written copy. Thus, there is a constant flow of news from the news
agency 24 hours a day, whereas a newspaper ‘goes to sleep’ the printing process after midnight
every night. There are two other significant differences. Every news agency report has to be
attributed to a source, unlike a newspaper story. Furthermore, there will be no comments,
editorializing or interpretation in a news agency report and it will be purely a factual report.

a. Financial Structure

Various newspapers and the electronic media, apart from government departments and private
entrepreneurs, buy the news from agencies. For this purpose, a teleprinter/computer is installed at
the office of the subscriber. This is maintained by the agency, just like the telephone department
maintains the telephone in our houses. Thus, the technicians of the agency concerned carry out
any repairs.

The newspapers and other subscribers pay a monthly subscription fee, plus rental charges for the
computer/teleprinter, apart from the installation charges paid when the subscription was first
taken. The rate of subscription is determined by specific criteria like circulation of a newspaper,
and it remains the same, irrespective of whether the newspaper uses the news items sent out by
the agency or not. The Government does not own the agencies, but like other subscribers, the
Government- All India Radio, Doordarshan, various Ministries, Ministerial offices and other
government departments-is also a subscriber. Ultimately, the Government is the largest
subscriber.

b. Organizational Structure
The Board does not interfere in the day-to-day functioning of the agency. A General-cum-Chief
Editor, who is assisted by Deputy General Managers or Deputy Editors, runs the agency.

The Editorial Desk, which we loosely refer to as the Desk, is under the charge of a news Editor,
while the reporting section is under the charge of a Chief of Bureau. The reporting staff is
divided into two groups: the Reporters who deal with day-today reporting and under a Chief
Reporter and the Correspondents who deal with Ministerial or Legislative reporting and under
the Chief of Bureau. Thus, the Chief Reporter is also answerable to the Chief of Bureau.

Apart for this, there are the transmission, technical, administration and account, from where it is
immediately sent to the subscribers. Meanwhile, one or two reporters rush to the scene, and
collect whatever facts they can get from eyewitnesses and police, and then either file the story by
telephone or rush back to give their stories. All reporters are expected to know how to type).
Thus, within two or three minutes of the phone call by the caller, the first report would go out to
the world. The other reports may also be on the wire within hours.

The agencies have offices in all the state capitals, and full-time or part-time stringers reporters
in almost all the districts. They also have correspondents in many world capitals and at the
United Nations. News agencies do not generally accept contribution from freelancers unless
commissioned by the agency for particular event.

The news agencies are generally the first to get wind of a newsbreak, be it disaster,
announcement, or election result. Each agency takes pride in being the first to break the news to
its subscribers, thus beating the other agency.

2. NEWSPAPER ORGANIZATION

In running the newspaper organizations effectively and successfully, the functions of newspaper
departments are vital and important. It is only with the help and effective coordination of all the
departments of a newspaper, an attractive, expressive and impressive newspapers can be brought
out and delivered to the readers timely with their successful feedbacks. Since time immemorial, a
newspaper organization has been defined as three-legged table, i.e., it has got three departments:
> Editorial Department
> Advertising Department
> Circulation Department
But today, it is much more than three-legged table. Though the above three departments are the
core departments often described as linchpins, yet many other relevant and important
departments have also emerged these days in this era of digitalisation which are none-the-less
significant.

These departments are as follows:

 > Printing/Production Department
> Administrative Department
> Accounting Department and
> Legal Department

Editorial Department

This department is the real think-tank of the newspaper organization. It is the epicenter of news,
views, reviews, previews, interviews, etc. Chief Editor or Editor-in-Chief or Editor heads this
department. It is divided into several sections like: News Section, Views Section, Photo Section,
Computer Section, etc.

The News Section is further divided into News Room and Reporter’s Room. News Editor heads
the News Room and it consists of many other staff like Deputy News Editors, Chief Sub Editors,
Senior Sub Editors and Sub Editors. They are all responsible for editing news under the
leadership of News Editor.

The Reporter’s Room is further divided into Reporting Wing and Bureau Wing. The Reporting
Wing is headed by Chief Reporter and it consists of staff like Senior Reporter, Sports Reporter,
City Reporter, Principal Correspondent, Senior Correspondents and Correspondents. On the
other hand, Chief of the Bureau heads the Bureau Wing and it also consists of Special
Correspondents. The job of all of them is collection of news.

The Views Section is further divided into Editorial Wing, Article Wing, Feature Wing and
Review Wing. The Editor, Resident Editor, Executive Editor, Associate Editors (or Deputy
Editors), and Assistant Editors look after these wings.

Chief Photographer heads the Photo Section and there are many other photographers and a few
photo editors also.

Computer In-charge heads the Computer Section and there are several other computer operators
to support him. Here a lot of digitalized activities are continuously and constantly emerging in
this modern era of online booms.

Advertising Department

This department is the most important source of revenue for newspapers. Here a lot of creative,
innovative and imaginative activities are carried out. Hence this department is often described as
creative brain storming platform.. The economy of the newspaper depends heavily on this
department. This department looks after the collection and publication of advertisements. There
can be several sections in this department. One section looks after local advertising, another
section looks after classified ads, another section looks after general/national advertising, another
section looks after legal advertising, yet another section looks after preparing copy and so on.

Circulation Department

This department is the final result producer. If a decent ,tasty and saviour food is prepared, but
not served to the guests, then it is a thoroughly futile exercise. Similarly ,if a wonderful
newspaper is produced, but not distributed or circulated to its readers timely and properly, then it
is just like love labour lost. Hence, this department is indispensable and sine qua non for the
basic existence of the newspaper organization.

In this way, this department is an integral part of a three-legged table and a triangular love story
with editorial department and advertising department. The staffs and their coordination with
transport section ,newspaper agencies and even hawkers are the most vital and important. This
department can make or mar the ultimate results of the newspaper organization.

The main job of Circulation Department is to increase the circulation and readership of the
newspaper, timely delivery of the newspapers to the readers and collection from them.

Printing/Production Department

This department is responsible for good and attractive printing including installation of
machines, plant layout, composing, processing, loading, scheduling, and maintenance of old
machines and hiring of latest printing technologies.

Administrative Department

The main task of this department is to administer the different types of work relating to training,
promotion, distribution, liaison with government departments and all those activities, which
facilitate the working of other departments.

Accounting Department

The primary job of this department is to monitor the accounting work like maintaining books of
accounts, preparing balance sheet and other financial statements, payment, receipt, preparation of
budget, financial management, etc.

Legal Department

In small and medium newspapers, generally the legal issues are looked after by the
Administrative Department. But mostly a separate Legal Department exists in a full-fledged big
newspaper.
3. ADVERTISING AGENCIES

Advertising agencies are basically intermediaries. Primarily they help advertisers plan and
produce advertisements and place them in appropriate media. We can define an advertising
agency as:

"An independent organization with creative and managerial expert who specializes in the
development and preparation of advertising plans, advertisements, and other promotional tools
and arranges for the selection and purchase of advertising space and time in the various
advertising media to reach the target audience with the relevant message".

REASONS BEHIND HIRING AD AGENCIES

Advertising is a highly complex business. It requires multifaceted expertise and experience. It

involves objectivity. It involves huge investments and many other things. So, let us discuss the
reasons why advertisers hire ad agencies.

1. Expertise and Experience: An advertising agency brings together people with the required
expertise and experience of the various sub-disciplines of advertising. So, we have copywriters,
visualizers, researchers, photographers, directors, planners and people who get into business and
deal with clients working in ad agencies. All these people have both expertise and varied
experience in their respective sub fields.

An agency turns all these people into a team and gives them a highly conducive work
atmosphere. The agency makes the best use of their talents and experience to deliver rapidly,
efficiently and in greater depth than a company or an organization could do on its own. An
advertising agency acquires experience by working with a variety of clients and in a variety of
market situations. The varied background of its employees provides a much broader perspective.

2. Objectivity and Professionalism: Advertising agencies are highly professional.

Objectivity is a major virtue of ad agencies. They operate in a strange way. While they take up
advertising for others, agencies hardly advertise themselves. What gets them business is their
reputation. And reputation is built up by their professionalism and objectivity.

If an organization hires some people to do its advertising, they cannot be objective all the time.
They have to work under a lot of constraints. However, ad agencies being outside intermediaries
can be objective. They offer independent and detached viewpoints and suggestions based on
objective analysis.

3. Cost Effectiveness: If an organization wants to hire people to do its advertising, it

cannot provide them work all through the year. Also, most experts in the field of advertising like
directors, musicians, photographers charge huge amounts and are often not affordable.
Moreover, hiring, organizing and managing all talents required to produce advertising campaigns
is not an easy job.

And the fact that 98 percent of advertisers the world over hire ad agencies is proof enough about
the cost effectiveness of the agencies. Also, the kind of consistent, powerful and compelling
advertising that can be created by using the expertise, experience, objectivity and
professionalism of ad agencies cannot be measured economically.

TYPES OF AD AGENCIES

Agencies, like advertisers, come in all sizes and styles. There is little standardization in form,
size, and range of services of ad agencies. Size-wise, agencies range from one man shows to
huge multinational agencies employing hundreds and thousands of people. In terms of the
services provided, ad agencies range from creative boutiques dealing with copy writing and
designing, and media planning and media buying agencies to big agencies that provide a wide
range of services.

Top international ad agencies like Young & Rubicam, Ted Bates Worldwide, Ogilvy & Mather,
J. Walter Thompson, McCann-Ericson, BBDO, Leo Burnett, Saatchi & Saatchi, Foot Cone &
Belding not only provide wide range of services, but are also equipped to handle huge
multinational accounts such as Pepsi, Coca Cola, Uni Lever, Philips, Sony, etc. Like the
companies they serve, ad agencies have branches all over the world.

Some advertising agencies specialize in particular types of advertising like financial, or

recruitment ads etc. Some agencies confine their services to a single medium - like print, TV, out
door, etc.

While there is no standardization in terms of size and range of services offered, agencies also
differ in organizational structure, attitude, and orientation. Some agencies are market-oriented
and are focused on sale figures. Such agencies do not bother much about creativity. Some other
agencies are creativity-focused and come up with entertaining and award-winning
advertisements. Most agencies, however, try to combine both market-orientation and creativity.

Now before discussing further about advertising agencies, let us see what options are available
before the advertisers. In fact, there are two broad options before an advertiser:

> An in-house agency, and

> Specialized service organizations.

An in-house agency is a full-fledged advertising agency that is owned by one advertiser and
which looks after all the advertising requirements of the owner. In some cases, the in-house
agency also takes up outside jobs. One example of this is 'Mudra'. It is the in-house agency of the
Reliance Group.

The second option available to advertisers is the specialized services organizations. These are
called "creative boutiques". There are many such organizations that offer specialized services
like copywriting, designing, media planning, etc. While these organizations provide excellent
out-put, it often becomes difficult to strike a balance among the output of such varying
organizations.

There is a third option available to advertisers - specialized agencies. Such agencies specialize in
specific areas like health care advertising, financial advertising, recruitment advertising, etc.
There are agencies, which specialize in media planning and media buying only.

ORGANIZATIONAL STRUCTURE OF AD AGENCIES

Advertising agencies vary in size and the type of services they provide. As we have discussed
earlier, there are full-service agencies, which provide the basic services of account management,
research, creative development and media services. Then there are specialized services that deal
with specific services. Some agencies specialize in certain specific areas of advertising like
financial advertising, television advertising, outdoor advertising, etc.

Recently, many agencies have come up which specialize in Internet advertising only. The size of
agencies ranges from one-person creative boutiques to large transnational agencies that employ
hundreds of people. Accordingly, there is no standard organizational structure for ad agencies.
The structure of an agency usually depends upon the type of services it offers and the number of
people it employs. A small or medium sized agency offering the basic services will have a basic
organizational structure like:

(Basic structure of a medium size full-service ad agency)

Depending on the type and number of services provided, some additional departments like
Research Dept., Production Dept. etc. can be added to the above structure. And for agencies that
offer additional services like Public Relations and Exhibitions, separate departments for their
additional services are created in the agency. A typical full-service agency with large number of
staff will have the following organizational structure.

(Organizational Structure of a Typical Ad Agency)

THE FULL-SERVICE ADVERTISING AGENCY

In simple words, a full service-advertising agency offers all the services required to execute the
client's advertising campaign. These services include account planning, research, and creation of
ads, production, placement and evaluation of ads.

If we go by this definition, then we shall find very few full-service agencies, as most agencies do
not offer all the services themselves.

For example, very few agencies provide complete research services. Similarly, very few agencies
have facilities to produce radio and TV ads. However, most full-service agencies get all these
things done for the clients - whether through their own expertise and facilities, or they get it done
by outside specialists.

Today, in fact, advertising agencies provide many extra services in addition to these basic
services. Now before discussing further let us discuss what are the services of an ad agency, what
are its functions and what are the basic departments of an ad agency
ACCOUNT MANAGEMENT

Account, in advertising language, means a piece of the client's business. So, in very simple
words, account management is managing or looking after the client's advertising business.

The Account Management department first gets the business or account by convincing the client
that their agency can deliver the goods. Usually agencies get the accounts through two ways -
pitching and empanelling. We shall discuss these in detail later.

It is said that people working in the Account Management Department (Account Managers,
Account Executives, Client Service Personnel), or account handlers as they are generally known
as, are the client's representative at the ad agency and the agency's representative to the client.

As the link between the client and the agency, the role of an account manager is to define what
kind of advertising the client needs and then coordinate all the resources of the agency to deliver
it to the client's satisfaction. An account manager needs to know all aspects of the advertising
process from start to finish in addition to a thorough understanding of the client's business. This
way the account manager can coordinate everything properly. So, what it takes to be an account
manager is:
> Jack-of-all-trades and master of some,
> Punctuality or delivering before the deadline,
> An eye for details,
> Quality consciousness,
> Ability to coordinate,
> Strong understanding of the advertising process,
> Strong communication skills,
> Team spirit and leadership,
> A sense of urgency,
> Excellent organizational skills,
> Ability to handle many things at one time, and
> Ability to remain calm under pressure.

Research Department

The basic raw material for creating good advertising campaigns is information. Ad agencies
require information about the product (brand) and its competitors, the company and its
competitors, the market place, the consumers (their latent needs, wants and their buying
behavior), the media (the circulation, readership, listener ship, viewer ship, rates, options and
prestige, etc.).

Client provides some of this information. But for rest of the information, agencies conduct
research. However, only a few agencies across the globe provide this research service on their
own. They usually depend on readymade material prepared by specialist research organizations
(IMRB, ORG-MARG, Nielson's, etc.) or ask these organizations to conduct the required
research.

Creative Department

Developing great selling ideas and advertising that is liked and acted upon is perhaps the very
objective that every agency aims for. The people who do it are the creative people. These people
take all the information collected by the account manager and the strategy developed by the
account planner. And they turn these information and strategy into perceptions. Next, they turn
the perceptions into words and pictures.

As words and pictures are like the heart and soul of advertising, usually copy writers (people
who write copy or the written text of the ads) and artists (who visualize and conceptualize the
visual part and also decide the layout) work together. Copywriters and artists working in pairs
complement each other.

Media Department

'Media' services in advertising language means selection, booking, purchase of media space or
time, and placement of advertisements according to the prepared schedule. This involves media
planning and media buying. And both these have emerged as highly specialized areas.

In fact, media planning and media buying have become independent areas and many specialized
organizations have come up which deal with media planning and media buying respectively.

Some full-service ad agencies do not have a media department at all. They depend on media
planning organizations to create the media plan or to select the media, the vehicles, and the
options and of course to prepare the schedule. Then accordingly they ask media buying
organizations to book advertising space and time in the relevant media. Some agencies do the
media planning on their own and leave the job of media buying to specialized organizations.

Production Department

Although this is a very important aspect of advertising many agencies do not have production
departments. A production department requires many experts in the field of production
(photographer, finishing artists, illustrators, computer experts, jingle writers, music directors,
musicians, directors, etc.). Also, highly expensive equipment is required.

Having all these technical experts and the equipment demands heavy investment.
Advertising agencies leave this part of advertising operation to organizations that specialize in
such fields. However, most of the agencies have functional art studios and sufficient computer
facilities.

ADDITIONAL SERVICES PROVIDED BY AGENCIES

Advertising agencies offer the following additional services. This list, however, does not include
all the additional services.
> Public Relations,
> Media relation,
> Election campaign management,
> Direct marketing,
> Exhibitions,
> Road shows and Event management,
> Marketing research,
> Brand nomenclature,
> Brand designing,
> Packaging,
> Training of sales force,
> Sales promotion, and
> Internet and on-line advertising.

AGENCY COMPENSATION

As in case of the size and the organizational structure, the ways the agencies are compensated
also vary. In fact, there are three ways of agency compensation:
> Flat Fee System,
> Retainership System, and
> Media Commissions.
Flat Fee System

Under this system, the agency estimates the total cost of handling the client's advertising for a
year (this is done for long duration campaigns, otherwise, calculations are made for one
campaign) and collects it in monthly installments. In this case the agency, does not get any
commission from the media. In fact, the client pays the media cost minus the usual agency
commission.

The fee is calculated by the total hours of work put in for the client's advertising, multiplied by
the standard hourly fee (agreed upon earlier by the client) and then a further 25 percent is added
for overheads and profit. Earlier this system was not very popular. But these days many agencies
are adopting it.

Retainer System

This system is mostly used for limited or short duration work done by the agency. This is similar
to what happens in the general consultancy business. This system is adopted mostly when the
primary function of the agency is to advice. Other instances include where there is no media
commission like in case of organizing exhibitions, sales force training, demonstrations, and road
shows, designing promotional literature or items.

Here the fee is usually decided well in advance. This method is also used by agencies that are not
accredited and thus are not eligible for commissions.

Commission System

This is the most commonly used method. In fact, the earliest ad agencies also worked in a
commission business. But there was no standardization and the commission percentages varied
according to availability of space and demand for it. Francis Ayer who fixed the commission at
15 per cent standardized this system. What happens in this system is that a client employs an
agency. The agency plans, prepares and places ads in media. The media bills are sent to the
agencies, which are then forwarded to the client. The client pays the full amount to the agency.
But the agency pays the media only 85 per cent of the billed amount keeping 15 per cent for
itself.

Variations of this system also exist. For example, in case of outdoor advertising, where there are
no recurring media costs and it is a one-time expenditure, the commission is fixed at 16.5 per
cent. In the New Zealand, agencies change 20 per cent instead of the regular 15 per cent. In USA
and many other countries, the regular 15 per cent comes down to 12.5 or even 10 per cent
depending on the total amount of the media costs.

While this system is the most widely used, it has got some disadvantages. These include over-
payment and under-payment to agencies. Over-payment occurs in the high volume (quantity
wise) advertising world of consumer nondurables, which involve large number of advertising
exposures or repeated media inserts. Underpayment occurs in the low volume advertising of
industrial goods.

Here the number of exposures is less, as is the cost of media. Also, there is a tendency by
agencies to plan more expenses in media costs, which leads to more profit for the agencies.

To overcome these problems, many newer methods have been devised. One such method
involves prior negotiation of payment on the basis of risks involved. Clients adopt an incentive-
based payment system that links performance (in terms of success of the ad campaign) to pay or
compensation.

4. PUBLIC RELATIONS AGENCIES

In a world of increasing complexities, chaos and cutthroat competition, it becomes imperative

for organizations, companies, and institutions to stay ahead in the race for success. One good
way of doing this is to perform well and better than the competitors. Performing well is not
enough. So, organizations and companies try to maintain good and mutually beneficial
relationships with all their publics through the practice of public relations. PR has been defined
by many in different ways.

Public Relations help an organization and its publics adapt mutually to each other. Public
Relations is an organization’s efforts to win the cooperation of its publics. Public Relations
include the deliberate, planned and sustained efforts to win the good will of the publics through
mutually beneficial, two-way communication.

FUNCTIONS OF PUBLIC RELATIONS

John Marston, a professor of communication, has identified four functions of PR. These include
Research, Action, Communication and Evaluation (RACE). 'Research' involves finding out what
the various publics want from the organization. This basically involves finding out the attitudes
of the publics on a particular issue. 'Action' means planning and finalizing programmes to
address this particular issue. 'Communication' involves reaching the publics with messages
designed to gain understanding, acceptance and goodwill. Finally, 'evaluation' means finding out
the effects of the communication efforts on the publics.

Public Relations Professor Sheila Clough Crifasi has extended the R-A-C-E formula into the R-
O- S-I-E formula. While the 'R' and 'E' in this formula stand for research and evaluation
respectively, the other functions included here are objectives, strategies, and implementation. PR
practitioners set clear objectives (as in case of advertising) on the basis of the attitudinal research
conducted. Strategies are devised to achieve these objectives, which are duly implemented.
On the basis of the R-A-C-E and R-O-S-I-E formula, Denny Griswold has given the following
definition, which encompasses the functions of PR.

Public Relations is the management function which evaluates (researches) public attitudes,
identifies the policies and procedures of an individual or organization, and plans and executes
(implements) a program of action to earn public understanding and acceptance.

PR plays the role of a 'harmonizer' of long-term relationships among individuals and

organizations. Professor Melvin Sharpe has identified that good Public Relations works by way
of:

> Honest communication for credibility,

> Openness and consistency of actions for confidence, or Fairness of action for reciprocity
and goodwill,

> Continuous two-way communication to prevent alienation and to build long term
relationship, and

> Periodical research and evaluation to determine the actions or adjustments needed for
social harmony (between the organization and its publics).

Here, the goal of Public Relations is to harmonize internal and external relationships. This way
the specific functions of Public Relations fall under two broad categories of building internal
relationships and external relationships. Internal relations includes employee relations. External
relations includes client or customer relations, shareholder relations, financier or investor
relationship, trade relations, government relations, media relations, industry relations,
community relations, etc.

In another sense, the functions of PR fall under three categories: man management, issue
management and crisis management.

PR DEPARTMENTS AND PR CONSULTANCIES

While PR has grown in leaps and bounds in the West, particularly in the USA, it still has to do a
lot of catching up in a country like India. PR is still practiced in a rudimentary form in many
organizations in India. However, most major organizations- government or private- have got PR
departments.

In fact, the Government of India has the biggest PR set up, although it is not practiced in the
name of PR. The Central Government, under the Ministry of Information and Broadcasting, has
got two of the biggest government mouthpieces in Doordarshan and All India Radio. Then there
are a host of other organizations. The Press Information Bureau (PIB) works as a clearinghouse
for government information to various media. The Directorate of Advertising and Visual
Publicity (DAVP) is the clearinghouse for all government advertising except for the Railways
Ministry. It also looks after visual publicity of the government's plan, policies and programmes.

The Directorate of Field Publicity (DFP) is armed with mobile vans and publicizes government
activities in the remote areas. The Photo Division has the largest network of photographers and
largest collection of still photos. The Research and Reference Division (RRD) procures
information on all aspects and provides them to various ministries and departments. The other
divisions of the Ministry of Information and Broadcasting include the Song and Drama Division,
the Publication Division, the Registrar of Newspapers of India (RNI), and the Indian Institute of
Mass Communication (IIMC).

Similarly, the state governments also have ministries, departments or directorates of Information
and Public relations, which look after the Public Relations of the states.

Most organizations in the country have PR departments and these are developed to a great extent.
However, the concept of PR consultancies has not caught up in India in a big way. There are
only a few dozens of PR consultancies while there are thousands and thousands of ad agencies.
However, many advertising agencies provide PR services.

ORGANIZATIONAL STRUCTURE OF PR DEPARTMENTS AND PR

CONSULTANCIES

Every organization today has a PR department. We have already discussed about the
government. Public sector organizations also have PR departments, as do private organizations-
be it business houses, educational institutes, voluntary organizations or religious institutions.
Public Relations departments do not have much direct authority. But they assist, advise, and
stimulate other departments to carry out PR activities towards increasing the public acceptance
of the organization as a whole.

A Public Relations department is organized on the basis of the functions to be carried out, on the
basis of the staff, or on the basis of the 'media of communication', 'publics', 'geographic areas'
etc. When organized on the basis of media of communication, a PR department has different
divisions for print media, radio, TV, films, exhibitions, advertising, etc.

The second type divides the PR department on the basis of publics. PR departments of many
organizations - particularly private sector organizations - have such divisions as Employee
Relations, Shareholder Relations, Investors Relations, Media Relations, Government Relations,
Community Relations, etc.

Some very big organizations which have branches in many parts (of the country or the globe)
have PR divisions in various geographic locations as part of the PR department.

Sometimes organizations have a mixed organizational pattern. Some manufacturing

organizations have PR divisions for the different products or brands they manufacture.

The organizational structure of PR departments differs on the basis of the size of the parent
organization, the management philosophy, and the policies and also the areas of operation. The
size and structure of the PR department depends on the degree of importance given to PR by the
organization.

REMUNERATION TO PR CONSULTANCIES:

The type of assignment handled by a consultancy usually determines the payment would be.
Normally any of the following four methods may be adopted for fixation and payment of fee of
the consulting agencies:

By the Day: Consultants charge on per-day basis, which varies from company to company. It
may vary between Rs. 2,000 to even Rs. 15,000 a day.

By Project: This mode of payment is normally agreed upon when the involvement of consultant
is for a specific and well-identified project. He quotes a fee for the whole project irrespective of
number of days he is going to take to complete the project.

By the Hour: This method is adopted when the assignment is very short or and very complicated
requiring the specialized skills of highly experienced consultants. The consultant makes a rough
estimate of the amount of time he is going to charge to complete the project and the degree of
complexity involved, based on which he quotes his hourly rate. In our country, the rate varies
from N2000 to N10,000 per hour whereas in America and the other European countries it varies
from $ 50 to $ 100.

Retainership: In this system, a token amount is paid to the consultant every month irrespective
of the fact whether his services were availed or not. This is done in order to have his services on
preferential terms as and when company needs his services.

Normally the small telephone advices or consultations are not charged separately by consultants
but for undertaking any assignment, he charges over and above the monthly retainership fee.

The system is more suitable for small companies which do not have sufficient work to establish
their own Public Relations department or who cannot afford the burden of a full-fledged PR
consultancy and yet need the services of a senior PR professional from time to time to guide
them.
The concept of retainer fee was introduced with a view to reimburse the consultant partly
towards maintenance of his fixed cost and to ensure availability of his services on a priority basis
in preference to other clients as and when needed by the organization. The idea is to benefit both:
the engaging company as well as the consultant by avoiding unnecessary cost for the company
when it does not require the consultant with liability of payment of his fee and by providing
freedom of other assignments to the consultant.
 CHAPTER THREE

HUMAN RESOURCE PLANNING & PROCESS

Human resources is a term with which many organizations describe the combination of
traditionally administrative personnel functions with performance management, employee
relations and resource planning. The field draws upon concepts developed in
Industrial/Organizational Psychology. Human resources has at least two related interpretations
depending on context. The original usage derives from political economy and economics, where
it was traditionally called labor, one of four factors of production. The more common usage
within corporations and businesses refers to the individuals within the firm, and to the portion of
the firm's organization that deals with hiring, firing, training, and other personnel issues.

The objective of Human Resources is to maximize the return on investment from the
organization's human capital and minimize financial risk. It is the responsibility of human
resource managers to conduct these activities in an effective, legal, fair, and consistent manner.
Human resource management serves these key functions:

1. Recruitment Strategy Planning

2. Hiring Processes recruitment
3. Performance Evaluation and Management
4. Promotions
5. Redundancy
6. Industrial and Employee Relations
7. Record keeping of all personal data
8. Compensation, pensions, bonuses etc in liaison with Payroll
9. Confidential advice to internal 'customers' in relation to problems at work

Modern analysis emphasizes that human beings are not "commodities" or "resources", but are
creative and social beings that make class contributions beyond 'labor' to a society and to
civilization. The broad term human capital has evolved to contain some of this complexity, and
in micro-economics the term "firm-specific human capital" has come to represent a meaning of
the term "human resources."

Advocating the central role of "human resources" or human capital in enterprises and societies
has been a traditional role of Human Resource socialist parties, who claim that value is primarily
created by their activity, and accordingly justify a larger claim of profits or relief from these
enterprises or societies. Critics say this is just a bargaining tactic which grew out of various
practices of medieval European guilds into the modern trade union and collective bargaining
unit.
A contrary view, common to capitalist parties, is that it is the infrastructural capital and what
they call intellectual capital owned and fused by "management" that provides most value in
financial capital terms. This likewise justifies a bargaining position and a general view that
"human resources" are interchangeable.
 CHAPTER FOUR

MANAGEMENT THEORY
Theories are perspectives with which people make sense of their world experiences. Theory is a
systematic grouping of interdependent concepts (mental images of anything formed by
generalization from particulars) and principles (are generalizations or hypotheses that are tested
for accuracy and appear to be true to reflect or explain reality) that give a framework to, or tie
together, a significant area of knowledge.

Management theories are concepts surrounding recommended management strategies, which

may include tools such as frameworks and guidelines that can be implemented in modern
organizations. Generally, professionals will not rely solely on one management theory alone, but
instead, introduce several concepts from different management theories that best suit their
workforce and company culture.

Scientific Management Theory

The first management theory is what is popularly referred to as Frederick Taylor’s Scientific
Management. Frederick Taylor started the era of modern management which adopted the careful
specification and measurement of all organizational tasks.. It is the use of the scientific method
to define the "one best way" for a job to be done. At the turn of the century, the most notable
organizations were large and industrialized. Often they included ongoing, routine tasks that
manufactured a variety of products. Tasks were standardized as much as possible. Workers were
rewarded and punished. This approach appeared to work well for organizations with assembly
lines and other mechanistic, routine activities.
Taylor wanted to create a mental revolution among the workers and management by
defining clear guidelines for improving production efficiency.

Scientific Management consisted of four basic principles

 Each person’s job should be broken down into elements and a scientific way to perform
each clement should be determined.
 Workers should be scientifically selected and trained to do the work in the designed and
trained manner.
 There should be good cooperation between management and workers so that tasks are
performed in the designed manner.
 There should be a division of labour between managers and workers. Managers should take
over the work of supervising and setting up instructions and designing the work and the
workers should be free to perform the work himself. Thus, the scientific method provides a
logical framework for the analysis of problems.
Administrative Management Theory

Henri Fayol, a senior executive and mining engineer, developed this theory when he examined
an organization through the perspective of the managers and situations they might encounter. He
believed that leaders had six main functions, to forecast, plan, coordinate, command and control,
and he developed principles that outlined how leaders should organize and interact with their
teams. He suggested that the principles should not be rigid but that it should be left up to the
manager to determine how they use them to manage efficiently and effectively. The principles he
outlined are:

 Initiative: This refers to the level of freedom employees should have to carry out their
responsibilities without being forced or ordered.

 Equity: This principle implies everyone in the organization should be treated equally and
that it should be an environment of kindness.

 Scalar chain: This principle says there should be a chain of supervisors from the top
level of management to the lower level and that communication generally flows from top
to bottom. He emphasized that there is no hard rule regarding the communication process
through the chain of command.

 Remuneration of personnel: This principle refers to the assertion that there should be
both monetary and non-monetary remuneration based on performance levels to create a
bond between the employee and the organization.

 Unity of direction: This principle asserts that there should be only one manager per
department who is in charge of coordinating the group activity to attain a single goal.

 Discipline: According to this principle, employees should be respectful and obedient, and
an organization should outline rules and regulations that clarify rules, good supervision
and a reward-punishment system.

 Division of work: This principle asserts that the overall action of management should be
divided and that team members should be given responsibilities based on their skills and
interests to make them more effective and efficient.

 Authority and responsibility: According to this principle, there should be a balance

between authority—the right to give commands and make decisions—and responsibility
—the obligation of an employee to perform the tasks they’re designated.

 Unity of command: This refers to the assertion that employees must get orders from
only one immediate supervisor and be accountable to that person only.
  Subordination of individual interest to general interests: There must be harmony
between the interests of the individual and the organization, although the organizational
interest should be given priority since it will bring rewards for the individual.
 Centralization: According to this principle, the topmost level of authority should be
centralized to the top level of management, who has the power to make the most
important decisions in an organization.

 Order: This principle asserts that for an organization to run smoothly, the right person
must be in the right job and that, therefore, every material and employee should be given
a proper place.

 Stability of tenure: According to this principle, employees must have job security to be
efficient.

 Espirit de corps: This refers to the belief that there must be a unified team contribution
and that cooperation is always greater than the aggregate of individual performances.

Bureaucratic Management Theory

Max Weber (1864-1920) took a more sociological approach when creating his bureaucratic
management theory. Weber’s ideas revolve around the importance of structuring an organization
in a hierarchical manner with clear rules and roles.

Unlike today’s interpretation of the word, Weber believed that bureaucracy meant carefully
developing and spelling out company objectives and divisions of labor. While this included
developing a hierarchy of command within the company, it also included supporting and
developing employees.

According to Weber, the ideal business structure (or bureaucratic system) is based on:

 Clear division of labor

 Separation of the owner’s personal and organizational assets
 Hierarchical chain of command
 Accurate record keeping
 Hiring and promotion based on qualifications and performance, not personal relationships
 Consistent regulations

Many today see Bureaucratic Management as an impersonal style that can become overwhelmed
by rules and formalities. That said, it can be very useful for new businesses that are in need of
standards, procedures, and structure.
Systems Management Theory

Systems management offers an alternative approach to the planning and management of

organizations. The systems management theory proposes that businesses, like the human body,
consists of multiple components that work harmoniously so that the larger system can function
optimally. According to the theory, the success of an organization depends on several key
elements: synergy, interdependence, and interrelations between various subsystems.

Employees are one of the most important components of a company. Other elements crucial to
the success of a business are departments, workgroups, and business units. In practice, managers
are required to evaluate patterns and events in their companies so as to determine the best
management approach. This way, they are able to collaborate on different programs so that they
can work as a collective whole rather than as isolated units.

Human Relations Theory

This theory was developed by Elton Mayo, who conducted experiments designed to improve
productivity that laid the foundation for the human relations movement. His focus was on
changing working conditions like lighting, break times and the length of the workday. Every
change he tested was met with an improvement in performance. Ultimately, he concluded that
the improvements weren’t due to the changes but the result of the researchers paying attention to
the employees and making them feel valued.

These experiments gave rise to the theory that employees are more motivated by personal
attention and being part of a group than they are by money or even working conditions.

Theory X and Theory Y

Douglas McGregor is the theorist credited with developing these two contrasting concepts. More
specifically, these theories refer to two management styles: the authoritarian (Theory X) and
participative (Theory Y).

In an organization where team members show little passion for their work, leaders are likely to
employ the authoritarian style of management. But if employees demonstrate a willingness to
learn and are enthusiastic about what they do, their leader is likely to use participative
management. The management style that a manager adopts will influence just how well he can
keep his team members motivated.

Theory X holds a pessimistic view of employees in the sense that they cannot work in the
absence of incentives. Theory Y, on the other hand, holds an optimistic opinion of employees.
The latter theory proposes that employees and managers can achieve a collaborative and trust-
based relationship.
Managers who assume employees are apathetic or dislike their work use theory X, which is
authoritarian. Theory Y is used by managers who believe employees are responsible, committed
and self-motivated. This is a participative management style that gives rise to a more
collaborative work environment, whereas theory X leads to micromanaging.

Still, there are a couple of instances where Theory X can be applied. For instance, large
corporations that hire thousands of employees for routine work may find adopting this form of
management ideal.