managers survival kit , india

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Systems Approach To Salon & Spa Management

Managers Survival Kit

The bottom lineReduction of 5% of defective customers may result in 80% increase in profitability

60% to 80% of lost customers were satisfied (King, 1996)

90% of customers who love a company will repeat but only 30% of customers who like the company will repeat (Opinion Research Corp.)

20-40% of your customers bring 80% of your profits

Radial organisation

Functional Structure

Departmental Structure

Unit StructureMarketing Exec

Hierarchy of UnitBusiness ManagerCustomer Service AssociateApprenticeMarketing Exec

Reporting Structure Marketing Exec




The Four Functions of Management


Management FunctionsGet the job doneOn timeWithin budgetSatisfactorilyUsing available resourcesPlanningDevise short-range and long-range plans and set goals to help achieve the plansOrganizingHow to use resourcesStaffingDirectingGuiding employees to perform their workControllingMonitoring progress towards goals

Management Levels

Flattening the pyramid

Basic Decision Making Structure

Information SystemsMISManagement Information SystemDSSDecision Support SystemsEISExecutive Information Systems

Decision making models - Rational ChoiceRecogniseproblem &exploresituationDefineproblemTest forcausesIdentify OptionsExamineoptionconsequencesSet objectives & evaluation criteriaCompare Options to criteria for best fitPlan forimplementation& contingenciesMonitor &control

AssumesLogical steps for optimal outcome Dispassionate, neutral, not politicalEmpirical, data and information basedRisk minimisationCriticismsDoes not explain how many decisions are made in practiceDo I know what I want? What is available? Uncertainty. Risk and political balancing.Hunches and intuition. Perception and pressureDecision maker's own limitations - time, energy, processing power. 'Good enough' over optimal.

Steering Wheel Structure

Traditional vs Entrepreneur StylesAcceptanceAvoidanceView toward mistakesModerateLowRisk tendencyDirect involvementDelegationActivity5-10 year growth of businessShort-term goalsTime orientationIndependenceCorporate rewards Primary motivationEntrepreneurTraditional Manager

Customer-Focused Organizational Chart





Determining ABusiness-Level StrategyDifferentiationCostLeadershipFocus


The other theory of strategy formulation was developed by Michael Porter at Harvard Business School. He basically stated that organizations needed to only develop a competitive strategy and that there were only 3 possibilities.The organization could be a cost leader--producing the product or service at the lowest cost. Or the organization could distinguish itself in same way--a small niche market that buyers highly value. And the distinction could be on service surrounding the actual product.Lastly, Porter stated that a company could have a focused strategy--one either focused on cost or distinction but in a very narrow market segment. For example, an auto parts supplier for a certain make of car.


Starting theProcessStrategiesMissionObjectives

Specific Plans

Directional PlansClearGeneralLowHighFlexibility



Specific plans may appear to be preferable over directional plans as they have clearly defined objectives and leave no room for misinterpretation. However, specific plans may require clarity and predictability that often does not exist. When uncertainty is high and flexibility is needed, directional plans are preferable. Directional plans provide general guidelines, and therefore do not lock managers into specific objectives or courses of action. An example is using a map to get from Point A to Point B as is shown in Exhibit5-2 in your text. The directional plan merely states that you want to go from Point A to Point B and you are provided the flexibility to get there in a manner that you feel best fits the desired outcome. However, if you were to follow a specific plan, you would go from Point A to Point B along the exact streets as indicated. This would be fine unless there was a problem on one of the streets that prevented you from getting to Point B.

Single-Use vs. Standing PlansUniqueSituationsOngoingOperations


Some plans are meant to be used only once while others are used repeatedly. A single-use plan is used to meet the needs for a particular or unique situation. A standing plan is ongoing and guides for actions that are performed repeatedly in an organization.An example of a single-use plan would be the students planning a special event during orientation week. Likewise, if you are graduating this year, your institution probably uses a standing plan to execute the graduation ceremonies.


What Is Management by Objectives?


Management by objectives (MBO)is a system of allowing employees to work with their supervisors in setting performance objectives in an effort to achieve organizational outcomes. It emphasizes participation to set goals that are tangible, verifiable, and measurable. MBOs appeal lies in its emphasis on converting overall organizational objectives into specific objectives for units and members of the organization. As the figure above shows, the organizations overall objectives are translated into specific objectives for each succeeding level (divisional, departmental, or individual) in the organization. But because lower-unit managers jointly participate in setting their own goals, MBO works from the bottom-up as well as from the top down. The result is a hierarchy of objectives that links objectives at one level to those at the next level. And for the individual worker, MBO provides specific personal performance objectives. So each person has an identified specific contribution to make to his or her units performance. If all individuals achieve their goals, then their units goals will be attained and the overall objectives of the organization will become a reality.

More DifficultGoals LeadTo HigherPerformance Does MBOWork?Specific GoalsLead toBetter Results

Support fromTop ManagementIs Critical ParticipationIs Key


Research indicates that MBO is most effective if goals are difficult enough to require an employee to stretch. While MBO promotes participative goal setting, when goal difficulty is held constant, assigned goals often work just as well. But, participative goal setting does induce individuals to set more difficult goals. Studies of actual MBO programs confirm that MBO effectively increases employee performance and organizational productivity. A review of 70 programs, for example, found organizational productivity gains in 68 of them. The same review indicated that top management commitment is critical for MBO to reach its potential. When top management was committed to MBO, the average productivity gain was 56 percent.

Identify CurrentMission, Objectives& StrategyThe StrategicManagement ProcessReassessMission


1AnalyzeResourcesNote Weaknessesand Strengths

AnalyzeEnvironmentNoteThreats andOpportunities


34567 & 89



The strategic management process is a 9-step process involves strategic planning, implementation and evaluation. This process is typically undertaken by the senior management in the organization.

Determining the nature of ones business is as important for not-for-profit organizations as it is for business firms. Hospitals, government agencies, and educational institutions must also identify their missions. What is the mission of your institution?

Requirements for a service culture Developing a service strategy:Business mission & service visionService concepts (what, where and how?)Human resource managementDeveloping the organisational structureRelatively flat structure with few heirarchical levels (decisions made close to the customer)Operational systems, routines & work flows

Developing a service culture (cont.)Developing leadership:Service-oriented leadershipClear and unambiguousDriven by senior managementMeasurement and monitoringService training programs:Technical skills, service skills & communication


Continuous improvement is more a leadership declaration than a working principle Working Principles Continuous improvement

Continuous improvement process (CIP)

Kick off CIP

Analyse Situation

Define targets

Develop measures

Plan measures/ conduct

Control results



Quality Management

Leadership is responsibleCustomer satisfactionLegal consistence

Ensure quality on a regular basisUse IT

Involve employeesImprove processes/ organizationClear Quality policy

Regard environmental aspects

Service Process Control ResourcesIdentify reasonfor nonconformanceEstablish measure of performanceMonitorconformance torequirementsTake correctiveactionService conceptCustomer inputCustomer outputService process

Determinants of Perceived Service QualityExpectedServicePerceivedService


Word ofMouthPersonalNeedsPastExperienc