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DEMAND PLANNING & FORECASTING CONTENTS: UNIT – I

01-21

Management – Meaning and Definition – Management and Administration – Evolution of Management - Contributions of Henry Fayol, F.W. Taylor and Elton Mayo – Levels of Management – Is management a science or an Art or Profession? – Functions of Management. UNIT – II

22-34

Planning : Objectives, Importance, Types, Advantages and Limitations. Methods of Planning: Objectives, Policies, Procedures, Strategies, Programmes, Budgets – Decision Making – Forecasting. UNIT – III

35-42

Organising : Meaning, Objectives and principles of organization – Types of organization – Authority and Responsibility – Delegation – Departmentation – Decentralisation – Span of Management – Organisation chart and manual.

UNIT-IV

43-77

PRODUCTION CONTROL AND BEVARAGE CONTROL Introductions,Objectives,Aim of Production Forecasting,Fixing Of Standard,Definition of Standard Quantity,Standard Purchase Specification Definition And Objectives,Standard Portion Size,Various Equipments Used For Portioning,Menu Merchandising,Menu Control,Menu Structure,Menu Planning,Types of Menu,Pricing Of Menu,Menus as a Marketing Level,Menu Layouts,Constraints of Menu Planning

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UNIT - I MEANING, NATURE AND SCOPE OF MANAGEMENT DEFINITION OF MANAGEMENT “Management” is a wide term. It carries different meanings depending on the context in which it is used. It is variously described as an “activity”, a “process”, and a “group of people” vested with the authority to make decisions. Some important definitions Louis Allen

“Management is what a manager does”.

Henry Fayol

To manage is “to forecast and plan, to organize, to command to coordinate, and to control”.

John.F.Mee Management is the “art of securing maximum results with a minimum of effort so as to secure maximum prosperity for the employer and employee, and give the public the best possible service”. Koontz and O’Donnel Management is the “Creation and maintenance of an internal environment in an enterprise where individuals, working in groups, can perform efficiently and effectively toward the attainment of group goals. It is the art of getting the work done through and with people in formally organized groups”. Summing Up Management refers to all those activities which are concerned with (a) formulation of objectives; plans and policies of the collective enterprise; (b) assembling men, money, materials, machines and methods for their accomplishment; (c) directing and motivating the men at work; (d) coordinating the physical and human resources; (e) supervising and controlling performance; and (f) securing maximum satisfaction for both employer and employee and providing the public with the best possible services MEANING OF MANAGEMENT 1. Management as an activity Inter-personal role-working with and through people. Management is basically concerned with getting things done with and through other people. The ultimate responsibility of accomplishment of the organizational objectives belongs to management. This entails the performance of several tasks, such as, production of goods and services, marketing, financing, personnel administration, security and so on.

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Understandably, these tasks cannot be performed by a single individual or a small group of individuals. Others have necessarily to be involved in the carring out of these tasks.

The others, whose involvement is vital to the accomplishment management goals, will include the personnel working in the organization self and outsiders such as customers, suppliers, creditors, trade union leaders, Government officials, and so on. Inside the organization, management is concerned with creating a suitable environment such that the personnel working in it may be enabled to carry out production, marketing and sundry other activities. Employees of an organization are its supreme asset and they can perform only when management provides them effective assistance, guidance and motivation. This will necessitate creation of a suitable technological and socio-psychological environment within the organization.

Suitable technological

environment will promote job maturity among the workers such that they are able to accomplish their jobs with maximum efficiency. Suitable socio-psychological environment will promote psychological maturity among them such that they are keenly motivated and willingly involved with their jobs. Decision making role use and control of resources. Management is vested with authority to use and control all organizational resources including employees of the organization.

These resources

enable management to perform more and better work as compared to those who do not have access to such resources. But availability of resources creates both an obligation and a risk. The obligation is to make the most efficient use of these resources so as to justify oneâ&#x20AC;&#x2122;s existence in a society which is every afficted with scarcity of resources. The risk is that since management has necessarily to depend on others for the accomplishment of its goals, it may not be able to use its resources with the desired efficiency, such that it may not be able to survice long enough.

At any point of time, management will be hard put to allocate its resources between alternative goals and courses of action. Allocation of resources for the pursuit of any particular goal may mean giving up or slowing down as regards other goals which may be equality desirable. However, in an atmosphere of general scarcity, this cannot be avoided and management has to take decisions so as to ensure maximum utilization of the available resources. Communication â&#x20AC;&#x201C; Informational role. The management seeks and receives a wide variety of information from inside and outside the organization to understand the internal and external environment. It analyses and interprets this information and transmits it to the people inside and outside the organization in the shape of plans, policies actions, results, values, etc. 2. Management as a process A process means a systematic way of doing things. Management is described as a process because all managers, irrespective of their individual abilities and aptitudes, engage themselves in inter-

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related activities with a view to accomplishment of their desired goals. They convert diverse resources of people, machines materials, money, time and space into a useful productive enterprise. Integration of unrelated resources into a total system of objective accomplishment is referred to as that process of management which comprises planning, organizing, directing, controlling and coordinating of the organizational resources.

Planning

Controlling

Organising Men Money Machines Materials

Coordinating

Methods

Directing

Process of Management Planning management is concerned with planning of the goals, to be achieved and the ways and means of achieving them. In this sense, planning involves thinking about the goals and the actions in advance. Planning does not mean building castles in the air. It is a rational activity based on the capacity and capability of organizational resources, and how they are to be harnessed for the purpose of accomplishment of the stated goals.

Organising : it is concerned with marshalling the human and other resources of the organization for the purpose of accomplishment of the stated goals. An organization may have plenty of resources and yet it may not be able to use them effectively so as to accomplish its goals due to lack of proper organization. Thus, the success of any organization depends on how well it can coordinate the various resources at its disposal. Directing : It is concerned with influencing the workers behaviour at various work â&#x20AC;&#x201C; centres with a view to getting them to perform the necessary tasks. Establishment of a proper work environment is essential to direction. Workers will perform only when they are well adjusted technologically, socially and psychologically.

Also, they should have the benefit of effective leadership from management which

inspires them to realize organizational goals with a view to realize their individual goals ie., a decent remuneration, job security, status and opportunities for advancement in career. While planning and organizing represent abstract aspects of the management process, directing is quire tangible and concrete as it involves working with and through the people.

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Controlling It is concerned with ensuring that efforts of the members of the organization are in fact in the direction of accomplishment of the stated goals. The controlling function of the management process has three aspects, namely, (a) establishment of standards of performance; (b) measurement of the actual performance against the established standards; and (c) initiation of necessary action to correct wherever the performance is not as per the established standards.

The controlling function enables management to ensure that the organization as a whole moves in the right direction and does not deviate from the established standards.

Infact, the controlling function also has certain elements of the planning, function, because it involves not only establishment of standards but also modification or even alteration of the plans in the light of measurement of actual performance. Sometimes such modification or alteration may also have to be made in the organization and direction functions.

Coordination The tasks or activities of an organization are classified on the basis of their similarity. They are divided among different individuals and departments to achieve the benefits of specialization by way of increased productivity and efficiency. However, division of specialized work-activities among individuals and departments also requires an effective mechanism to ensure that the work â&#x20AC;&#x201C; activities are all integrated and aimed at achievement of the overall organizational objectives.

3. Management as an academic discipline Practice of management has an ancient origin.

As human beings realized the need and

importance of working in groups, the management process ie., acquiring and combining the necessary resources to achieve the group goals also came into existence. However, development of management as an academic discipline is a recent phenomenon.

A discipline may be defined as a branch of knowledge or subject of instructions. As a discipline, management refers to a field of study of the principles and practice of management. Attempts to have develop the principles and theories of management are relatively recent. However, since management essentially deals with human beings, there can be no verified general theory or set of laws for management that may be applied to all situations.

That explains the existence of several approaches to management, namely classical, behavioural, management science, systems and contingency approaches.

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An importance point to note is that through management is referred to as a separate discipline, it has drawn knowledge and concepts from several disciplines, such as, sociology, psychology, anthropology, economics, political science, history, operational research, ecology, and so on.

4. Management as a group It should be remembered that management is only an index, as such without physical existence. Like science or government, it is an abstraction. But people who carry out management activities and functions are not abstractions. They are human beings endowed with ability to lead and motivate and to bring out the hidden capabilities.

The management of a limited company is the Board of directors, consisting of both executive and non-executive directors. The executive directors assist in formulating policies with the other members of the board, but they also have day-to-day responsibility for efficient management of the affairs of the company. They do so with the help of their subordinates who are called functional managers such as production manager, sales manager, personnel manager and so on.

The functional managers are

assigned specific duties and are delegated necessary authority to carry out their duties. The functional managers on their part have their own subordinates who are assigned duties of specific areas or functions, and who report to their respective functional managers.

It may be said that all those who direct the work of others are part of management. Btu there may also be some managers who may not direct the work of others and yet be a part of management. These people are staff managers such as quality control manager, personnel manager, finance manager, and so on.

NATURE OF MANAGEMENT Though management was practiced ever since human being realized the need and importance of working in groups, its development as a formal body of knowledge is relatively of a recent origin. Over the yeas, the study and application of management techniques in the organizations has transformed the nature of management. The nature of modern management may be described as follows:

1. A Universal Process Management involves the coordination of human and material resources toward accomplishment of organizational objectives. Basically, it is mental work, concerned with thinking, feeling and intuiting. Wherever there is human activity â&#x20AC;&#x201C; whether individual or joint there is management. Management of a family requires the head of the family to identify objectives, assemble the necessary

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resources to achieve those objectives, supervise each family member’s performance and exercise control to check and correct and deviation form the planned path. Almost the same functions have to be performed to manage the affairs of any collective enterprise. The basic characteristics of management activity are the same whether the organization to be managed is a family, a club, a trade union, a trust, a municipality, a business concern, or the government variations in approach and style may be there but management activity is basically the same everywhere. As Socrates has put it, “over whatever a man may preside, he will be a good president if he known what he needs and is able to provide it, whether he has the direction of a chorus, a family a city or an army”.

2. Purposive or goal-directed Apparently, the objectives should to be accomplished are those of the organization. However, the fact is that the organizational objectives are determined by the people who create the organization and control and manage its affairs. Based on the value system and socio-cultural background of the management, as also environmental constraints, organizational goals may be in the areas of (a) profitability; (b) market standing;

(c)

productivity;

(d) innovation; (e) physical and financial resources; (f) managerial performance and development (g) workers’ performance and attitude; and (h) social responsibility.

Pursuit of organizational objectives

requires management to control performance by human and material resources so as to ensure that it is good enough or that something is being done to improve it. This involves setting of standards, measuring performance against standards, decision-making as to what level of performance is satisfactory and taking appropriate action to correct deviations from the standards.

3. An abstraction Management is only a word, an idea. It is non existent. It is only an abstraction, just as science or government is an abstraction. It is concerned with the effect of management, rather than management itself. However, the people in charge of management of an organization who are called managers, are not abstractions. They are human beings, rather a special kind of human beings who have the ability to lead and motivate other human beings and discover and put to good use their latent capacities.

They are the catalytic agents who convert the human and material resources of an organization into an effective system of objective - accomplishment. 4. Multi-disciplinary

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Though management has emerged as an essential and district institution to integrate human and material resources of an organization with a view to attainment of stated goals, it did not receive concerted attention till the twentieth century, accordingly, it would be too much to expect a well-developed body of knowledge of this fledgling discipline.

However, during a short time, important contributions have been made to the development of management theory and practice, such that it has acquired the attributes of a separate discipline.

However, since management is studied in the context of organizations of diverse characteristics and objectives, its theory has to be broadâ&#x20AC;&#x201C;based, comprising many aspects of relevant disciplines, such as sociology, psychology, anthropology, economics, political science, philosophy and mathematics.

It is true that management does not draw on all these discipline to the same degree, but it has liberally assimilated such areas of these disciplines which are relevant to the organizations to be managed.

Thus, researches in various disciplines provide a theoretical base for understanding

management. Experience gained in management practice also goes to modify or redefine management theory.

5. Dynamic Principles Practitioners of management were the first to formulate the principles of management based on their own experience. They made important contributions to the development of managerial theory and practice.

People engaged in the work of other disciplines have also concentrated attention on the

problems of organizations in society. And have contributed to development of management theory.

However, the principles of management are not rigid. They are flexible and liable to change with any significant change in the environment. For example, there was a time when management theorists believed that workers would work only when they were subjected to the fear of wage-cuts or dismissal. However over the years, researchers have found that treating workers with due consideration could also motivate them to put in greater effort.

6. Relative principles The principles of management cannot be blindly applied to all situations.

Every person or

organization has certain features which may not be found in others. This may be due to time, place, socio-cultural factors, and so on. Thus, while applications of a particular principle in one situation may produce the desired result, in a different situation it may throw up an altogether opposite outcome.

7. Management as a system of authority

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Management is concerned with performance in the pursuit of organizational objectives. The performance of the organization as a whole will determine its survival in society. The performance of a department will determine its survival within the organisation.

The performance of individuals will

determine their survival and advancement.

To ensure that performance at all levels is at a satisfactory level, management is vested with authority to plan, organize, direct, control and coordinate the activities of others.

This implies that

managers hold positions which are superior in status to their subordinates in the top positions have greater authority than those below. The subordinate in the hierarchy of authority have to comply with the decisions of their superiors, or else leave the organization.

Managerial authority should be exercised properly and correctly. This requires well-defined lines of command and delegation of suitable authority and assignment of responsibility at all levels of decisionmaking. Unless there is proper balance between authority and responsibility at each level of decision â&#x20AC;&#x201C; making, the organization may not succeed he the task of accomplishment of its objectives.

The hierarchy of authority is often blamed for dominating the liberty of individuals, and stifling creativity and initiative.

However, since an organisationâ&#x20AC;&#x2122;s survival depends on the level of its

performance, it has little choice but to vest management with authority to secure satisfactory levels of performance from others in the organization. 8. Management : A Science or an art? There are different view points as to whether management should be regarded as a science or an art. The fact of the matter is that management is both an art and a science.

9. Management : Whether a Profession? There are different viewpoints on whether management has achieved the status of profession.

SCOPE OF MANAGEMENT Although it is difficult to precisely define the scope of management, yet the following may be included in it:

1. Subject matter of Management. Planning, Organisation, Direction, Co-ordination and control form the subject- matter of management. 2.

Functional Areas of Management. Functional areas of management include: ď&#x201A;¨

Financial

Management-,

which

includes

forecasting

cost

control,

management

accounting, budgetary control, statistical control, financial planning and management of

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earnings. 

Personal Management-, which includes recruitment , training, transfer, promotion, demotion, retirement, termination, labour- welfare and social security, industrial relations, etc.



Purchasing Management; which includes inviting tenders for raw materials placing orders, entering into contracts, material controls etc.



Production Management; which includes production planning, production control techniques, quality control and inspection, time and motion studies, etc



Maintenance Management-, which relates to proper care and maintenance of the buildings plant machinery, etc.



Transport Management; which includes packing, ware housing, transportation by rail, road, air etc.



Distribution Management ; which includes marketing, market- research, price – determination, market- risk and their –determination

, advertisement, publicity, sales

promotion, etc 

Office Management; which includes the proper lay out, staffing and equipment of the office.



Development Management; which relates to experimentation, research, etc.

3. Management is an inter-disciplinary approach. For the correct application of the management principles study of commerce, economics, sociology, psychology and mathematics is very essential. 4. The principles of management are of universal application. 5. Three essentials of management are: 

Scientific method,



Human relations, and



Quantitative technique.

6. Modern management is an agent of change. The techniques of management can be improved by proper research and development.

SCHOOLS OF MANAGEMENT THOUGHT Introduction Management as a science was developed only during the beginning of this century. It is an accepted fact that F.W. Taylor, considered to be that “ Father of Management” nurtured this subject. After him number of management writers came and gave different approaches to management. Each approach had something to offer differently on management. Hence below we find a discussion.

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1. Scientific Management school : Taylor led this group of management thinkers. His book â&#x20AC;&#x2DC; the principles of scientific management, published in 1911, became the basis for scientific approach to management. He gave three reasons for writing the book : 1.

To point out through simple examples, the great loss the country is suffering through inefficiency in almost all its daily acts.

To try to convince the readers that the cure lies in systematic management rather than searching your unusual men.

To prove that the best management is a true science based on clearly defined laws, rules and principles and to show that the principles of scientific management are applicable for all forms of human activities.

The Scientific school advocates the following : 1. An inquisitive mind that does not accept the prevalent practices as necessarily correct. 2. The jobs performed by rule of thumb method must be replaced by rationality and objectivity. 3. Casual and intuitional judgments to be replaced by decisions based on facts and objectives methodology. Fredrick Taylor offered four principles as basis for scientific management. These were : 1. Every job should be broken down into elements and a scientific method to perform each element should be established . 2. Workers should be scientifically selected with right attitudes for the job and ability and then properly trained to perform the work. 3. Management should cooperate with workers to ensure that all work is done in accordance with the scientific principles. 4. Scientific distribution of work and responsibility between workers and the managers. Management should design the work, set up and supervise the work, and the workers are free to perform the work.

Some of the other contributors to this approach were : Henry L. Gantt ( 1861-1919 ) , Frank Gilbreth (1868-1924) and Lillian Gilbreth (1878-1972). While Taylor emphasized organization, Gant insisted the importance of human element in productivity and approached the concept of motivation, Gillbreths as husband and wife team were primarily responsible for analysis of time and motion study of workers, thus improving upon time and motion elements by eliminating, unnecessary motion. This study laid foundations for areas of job simplifications work standards and incentive wage plans.

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This approach generally leads to the following specific applications : 1. Maximum utility of efforts thus eliminating waste. 2. More emphasis on fitting workers to particular tasks and training them further to best utilize abilities. 3. Greater specialization of activities , with proper design of jobs, specification of methods and set time and motion standards. 4. Establishment of standards of performance as average output and maximum output per capital. 5. The role of compensation and other incentives for increase in productivity.

2. FUNCTIONAL OR PROCESS APPROACH : This approach is based upon Henry Fayol (1841-1924) and it emphasizes the breaking of the complex management process into separate interdependent areas of responsibility or functions. Fayol believed that the management process was a teachable process and scientific methods could be applied to top administrative management. He devided the administrative activities into six groups, all of which were closely dependent on one another. These six areas are :

Technical Operations : This is concerned with producing and manufacturing products.

Commercial Operations : This areas deals in purchasing raw materials for the products and selling the finished products.

Financial operations : This involves acquiring capital and allocating it to various functions and keeping an overview control of the flow of capital.

Security operations : This involves taking steps for the protection and safety of goods and people.

Accounting operations : This area covers all accounting aspects of the organization, including recording and taking stock of costs, profits, assets, preparing balance sheets and compiling accounting statistics.

Managerial operations : These managerial functions were Fayolâ&#x20AC;&#x2122;s primary concern and he defined these operations in terms of five functions. These are planning organizing, command, coordination and control.

Fayol also proposed 14 principles of administration which he believed, would be most often applied. 3. HUMAN RELATIONS APPORACH : This school of thought is primarily based upon Elton Mayo (1880-1949) and his Hawthorne experiments. Hawthorne studies were conducted to determine the effect of between physical facilities on worker output.

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These studies showed that better physical environment on increased economic benefits in itself were not sufficient motivators in increasing productivity. In effect the emphasis shifted to psychological and social forces, in addition to economic forces. Mayo discovered that when workers are given special attention by the management, the productivity is likely to increase irrespective of actual changes in the working conditions.

Central to this approach was an increased understanding of the individual workers emphasis on motivation, needs, interpersonal relationships and group dymanics. These experiments suggested that an office of a factory is not only a work place but also a social environment in which the employees interact with each other. This gave rise to the concept of “ Social man” whose interaction with others would determine the quality and quantity of the work produced. This school concentrated on the “people part of management and results on the accomplish objectives ‘ People should understand and people. This school is a development from the application of the behavioural sciences especially psychology and social psychology to management.

4. BEHAVIOURAL APPROACH Behavioral approach is an extension of the human relations school advanced by Abraham Maslow, who presented a theory of individual needs. The basic aim of this approach is to increase the organizational effectiveness by increasing the effectiveness of its human resources, which could be achieved by properly taking

care of human needs. The human needs could be physiological or

psychological . According to maslow, these needs fall into a hierarchy. At the bottom of this hierarchy are the lower level needs such as physical and safety needs. At the topare higher level needs such as need for respect and self-fulfillment. In general, the lower level needs such as need for respect and higher level needs arise. Being aware of these needs able a manager to use different methods to motivate workers . This is important due to complexict of man’s nature. Different people will react differently to the same situation, or their reactions may be similar to different situations. Hence the management must be aware of these differences and react accordingly.

5. QUANTITIATIVE APPROACH : This approach emphasis the use of mathematical models in solving many complex management problems. These quantitative tools and methodologies, known as operations research techniques are designed to aid in decision making relating to operations and production. This generally the following four steps.

1. A mathematical model is constructed with variables reflecting the important factors in the situation to be analysed.

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2. The decision rules are established and some standards are set for the purpose of comparing the relative merits of possible courses of actions. 3. The empirical data is gathered which would relate to the parameters in the models. 4. The mathematical calculations are execited so as to find a course of action that will maximize the criterion functions.

These operational research techniques are extensively used in many fields some of these are 1. Capital budgeting 2. production scheduling 3. planning for manpower development programmes 4. Inventory control 5. Transportation and aircraft scheduling 6. Resource allocation 7. Queuing theory or waiting line and services problems 8. Competitive problems and problems of game theory.

6. SYSTEMS APPROACH ; A system is a collection of parts or subsystems that operate interpedently to achieve the goal of the entire system. It sees the whole system rather than examining separate variable of the organization. The system analysis study management by putting its parts together, and assuming that the whole is greater than the sum of its parts. Also a study of separate parts of the system cannot give a correct picture of the whole system.

A management system or an organizational system constitutes a relationship between parts of its system, but it also depends upon the outside environment for feedback and resources.

7. THE DECISION THEORY SCHOOL : The main approach of this school is on managerial decisions. Which is said to be the real job of a manager. The approach to decision making is the selection form among possible alternatives of a course of action. Most of the content, of this school is heavily oriented to model construction and mathematics. As such economic problems and analysis like utility maximization, indifference curves, marginal utility and economic behaviour under risks and uncertainties are covered under this area. SCIENTIFIC MANAGEMENT MOVEMENT Introduction Meaning of Scientific Management The term scientific management was coined by Louis Demfitz Brandies in 1910.

â&#x20AC;&#x2DC;Scientific

Managementâ&#x20AC;&#x2122;, also know as Taylorism, is the science of discovering the most efficient method of

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performing any job. It involves the systematic and scientific investigation of all the facts and elements concerned with the work being managed. For this purpose scientific management aims at developing and using scientific techniques and methods of work. The main aim of scientific management is to secure higher productivity by improving organizational efficiency.

According to Taylor, Scientific Management means 1. Science, not rule of thumb 2. Harmony, not discord 3. Co-operation, not individualism 4. Maximum output, in place of restricted output. 5. The development of each man to his greatest efficiency and prosperity. Taylor’s

scientific

management

concerned

with

three

basic

themes

(i) techniques and mechanisms (such as time and motion studies, the use of stop-watch slide rule etc). (ii) underlying principles, and (iii) the fundamental philosophy.

Core Principles of Scientific Management Taylor developed the following core principles of scientific management which embody the there three basic themes mentioned above:

1. The development of a science of work to replace the old rule of thumb method by which workmen operated. Taylor claimed that there was “one best way” to perform almost any task. He believed that intensive, empirical analyses of work processes at the level of the industrial shop and the individual worker would yield the “one best way” to design and execute tasks. He concentrated on the most efficient methods for performing tasks such as time and motion studies. The purpose of time-and-motion studies is to reduce the wastage of time in producing things. The other mechanisms of scientific management include standardization of methods, use of time saving devices, instruction cards for workmen, establishment of a separate planning department and differential piece-rate system of wages. 2. Scientific selection and progressive development of the worker : training to be ‘first-class’ at some task. It was management’s responsibility to implement appropriate selection and training systems and to see to it that the worker’s intellectual, psychological and physical traits matched the requirements of these jobs. 3. Bringing together the science of work and the scientifically selected and trained worker’s for best results. The application of efficient techniques of work by the worker would lead to increased

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productivity and consequently combine higher profits for the management and higher income for those who worker hard. This, therefore, would be beneficial for both the management and the workers. This common economic reward is what is known as the mutuality of interests.

4. Equal division of work and responsibility between management and workers. The management is responsible for task – planning, and designing work methods, work processes and work – flow. Workers are responsible for task implementation. To taylor, management is a distinct activity. He made it clear that management must plan ahead and organize tasks efficiently.

The

management should establish rules and formula which would replace the judgement of the worker. Thus, taylor argued for a management group or cadre serving as the intelligence or brains of the operation.

5. Taylor believed ardently in the task specialization. According to waldo, scientific management “views administration as a technical problem concerned basically with the division of labour and specialization of functions”.

In Taylor’s thinking, every task whether of worker or manager,

becomes discrete and specailised.

In its application to management, he described this as

“functional management or foremanship”. According to this concept, each worker receives orders from eight narrowly specialized supervisors. Each supervisor is in charge of a technical aspect of the individual’s work. He thus suggested the system of eight functional foremen guiding the functioning of a worker.

6. According to Taylor, workers are primarily motivated by economic incentives to make more money. He assumed that people are rational beings who would produce more to earn more. For this purpose, he placed emphasis on ‘piecerate’ pay systems, in which the worker would be payed according to how much be or she produced. Fulfilling optimum goals would earn higher wages; failure to do so would result in loss of earning. In Taylor’s thinking, piece-rate system, therefore, would sufficiently motivate a worker to work hard and to earn more.

Taylor also

recommended developing effective sanctions against workers who failed to achieve the tasks entrusted to them. 7. Taylor believed in one important principle above all, that “the principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity of each employee”. To this end he preached that management and workers were interdependent and relied on each other to achieve the common goal of higher prosperity. Friendly co-operation between management and workers would eliminate almost all causes of conflict between them and achieve harmony.

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Taylor urged a complete ‘mental revolution’ in the attitudes of managers and workers as to their duties, towards their fellow workers and towards all of their problems. Without this great mental revolution on both sides, scientific management does not exist.

Criticism Taylor’s scientific management has been criticized on various grounds. The most important of them are noted below: First, Taylor’s scientific management is a micro-level theory for the study of organizations or administration. It paid little attention to the overall administrative structures of organizations. Its focus was rather narrow as its concern was with how management could optimize output at the shop level. This is in contrast with weber’s macro-level bureaucratic theory which is concerned with higher authority levels in the organization.

Secondly, scientific management took what may be called a mechanistic and economic view of human nature. It treated the individual worker as an appendage to a machine, a mere mechanical functioning individual.

It failed to take into account the social and psychological aspects of an

organization and the values held by the workers. It viewed workers as depersonalized resources. The social and psychological factors ignored by Taylor have now assumed great importance.

The

behaviouralists point out that Taylor’s scientific management approach sacrifices the initiative of the worker, individual freedom and the use of his intelligence and responsibility.

Thirdly, scientific management laid emphasis on the mechanical efficiency of an organization and contributed to the idea that good organization is one that efficiently produces what it is intended to do by the management. According to this view, the primary concern is output; what happens to the worker in the process-boredom, alienation, occupational disease – is of secondary concern. Work is to supply products and services, not to develop the full capability of workers. Fourthly, the scientific management’s

assumption that economic incentives were enough to

motivate people has proved at best in complete. This incentive system put forward by Taylor has not withstood subsequent tests of its adequacy. It was dealt a severe blow of Elton Mayo’s Hawthorne experiments and his human relations approach.

Mayo’s investigations established the fact that the

emotional attitudes of the worker towards his work and his colleagues was an important factors in securing increase in productivity and efficiency of the organization.

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From the preceding discussions it is clear that Taylor’s scientific management left huge gaps to be filled in our understanding of how organizations can be made to function efficiently as well as effectively. Lastly, Taylor’s scientific management was opposed by managers as well as workers. Managers did not like the substitution of the scientific methods for their own judgement and discretion. Workers opposed the time-study procedures and standardization of all aspects of their performance as they did not like to be treated as machines. Greatest resistance to Taylorism came from the labour leaders who found in it a threat to their role and to the growth of the trade union movement.

HUMAN RELATIONS MANAGEMENT MOVEMENT Classical theorists either ignored and over simplified human factors. Human relation school of management was developed as a result of findings of how throne experiments. It emerged from these researches that productivity, motivation to work and morale are related to social organisation at work and psychological factors and not to physical factors. It also showed that organization is indeed a social system, a system of grapevines, informal status system rituals and mixture of logicals, non-logical and illogical behaviour. Human behaviour approach This approach is the outcome of the thoughts developed by behaviours scientists who look at the organization as collectivity of people. It is also named as ;human relation’, leadership this brings to bear existing and newly developed theories and method of the relevant social sciences upon the study of human behaviour ranging personality dynamics of individuals at one extremes to the relations of culture at the other. The human relations approaches was born out of reaction to classical approach and during the last four decades, a lot of literature of human relations has developed. The essence of the human relations contributions is contained in two points a) organization situation should be viewed in social terms as well as in economic and technical terms b) the social process of group behaviour can be understood in terms of clinical method analogous to the doctors diagnosis of the human organization. Among human relations approach, there are many contributions more research are being carried on for the first time, an intensive and systematic analysis of human factor in organization was made in the form of how thorne experiments. There will be relatively lengthy discussion of the results and implications of the how thorne studies because of their historical importance to the behavioural approach to the analysis of management problems.

This school of thought is primarily based upon Elton Mayo (1880-1949) and his Hawthorne experiments. Hawthorne studies were conducted to determine the effect of better Physical facilities on worker output.

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These studies showed that better physical environment or increased economic benefits in itself were not sufficient motivators in increasing productivity. In effect the emphasis shifted to psychological and social forces, in addition to economic forces. Mayo discovered that when workers are given special attention by the management, the productivity is likely to increase irrespective of actual changes in the working conditions.

Central to this approach was an increased understanding of the. individual worker's emphasis on motivation, needs, interpersonal relationships and group dynamics. These experiments suggested that an office of a factory is not only a work place but also a social environment in which the employees interact with each other. This gave rise to the concept of " social man" whose interaction with others would determine the quality and quantity of the work produced. This school concentrated on the 'People ' part of management and results on the principles that, where people work together as groups in order to accomplish objectives ' people should understand people'. This school is a development from the application of the behavioural sciences especially psychology and social psychology to management.

HUMAN RELATIONS SCHOOL

Taylor, Fayol and other early management theorists only emphasised t he task of increasing the efficiency of the work place, i.e., the shop floor of the organisation as a whole. In other words, their propositions were mainly task oriented, focussing only on the jobs to be done by subordinates within the formal impersonal setting of the organisation. The complexity of human behaviour within the organsation received little attention. For example, it was assumed that workers always behaved in a rational manner and their primary goal was satisfaction of economic needs. As such, the managers were only required to provide suitable monetary incentives and good working conditions to ensure efficiency.

The assumptions of the Scientific Management and Classical School led to considerable research on the social conditions of work and their consequences on output. The experiments carried out at the Hawthorne plant of the Western Electric Company by the staff of the Harvard Business School constitute an important landmark in the exposition of this thesis. Elton Mayo, FJ. Rocl hlisberger and William J. Dickson may be regarded as the chief exponents of (fie Human Relations School.

While, according to Taylor, workers only worked for money, according to the Human Relations School each worker required group membership. The underlying assumption was that groups influence the behaviour, beliefs and attitudes of their members. Thus, productivity could be greatly increased -11 t lie supervisor could effectively handle the work groups within the organisation.

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The following are the main principles of the Human Relations School

An organisation is not merely a formal structure of functions in which h production is determined by the official prescription. It is also affected by the social factor. Workers are social beings and their social characteristics will naturally determine their output and efficiency.

Workers are social beings. They tend to create informal groups within the formal organisation. These informal groups determine how their members have to behave in the formal organisation.

There may be different between the goals of the formal organisation and those of the informal groups. There may also be lack of adjustment between workers and the formal organisation. These differences may create a conflict situation.

Leadership of a group goes to a person who identifies rumself with the group objectives. It Toes not always vest in the person who has official authority.

Friendly and attentive supervision of workers is more likely to result in greater productivity, than a supervision which is only concerned with maintaining control and order.

Efficient and effective communication between the management and workers will lead to a better understanding between the- two, thus resulting in improved productivity. Behavioural approach: Behavioural approach is an extension of the Human Relations School advanced by Abraham Maslow, who presented a theory of

individual needs. The basic aim of this approach is to increase the

organisational effectiveness by increasing the effectiveness of its human properly taking care of human resources, which could be achieved by properly taking needs. The human needs could be physiological or psychological According to Maslow, these needs fall into a hierarchy- At the bottom of this hierarchy are the lower level needs such as physical and safety needs. At the top are higher level needs such as need for respect and self-fulfillment. In general, the lower level needs must be satisfied before higher level needs arise. Being aware of these needs enables a manager to use different methods to motivate worker. This is important due to complexity of man's nature. Different people will react differently to the same situation, or, their reaction may be similar to different situations. Hence the management must be aware of these differences and react accordingly. BEHAVIOURAL SCHOOL Behavioural School

represents the synthesis of theories and methods of relevant social sciences

focussing on both individual and group behaviour. While the studies concerning individual human behaviour were aimed at making the employees better and more responsible persons, those concerning

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group behaviour focussed on social psychology or organisational. behaviour. Among the chief exponents of the Behavioural School, are Chester Barnard, Douglas McGregor, Keith Davis and David A. Buchanan.

According to Barnard, "An organisation is a system of consciously coordinated activities or forces of two or more persons. For efficient operations and, in fact, for the very survival of the organisation, a balance between inducements and contributions was essential." By inducements he meant the sum-total of financial and non-financial rewards available to the employees, and by employees towards acheivements of the

the efforts put in by the

organisational goals. Thus, an organisation could operate

efficiently and survive only when a neat balance was struck between the organisational goals and the needs and goals of individuals the working for it. Barnard also expounded what later came to be known as the acceptance theory of authority, i.e., an employee would accept an executive order only when he found it consistent with his own perception of the goals of the organisation and his personal interests and needs.

According to McGregor, managers could hold and practice two beliefs about human behaviour : Theory X and Theory Y. Theory X, based on the traditional view of management, held out negative assumptions, such as : (i) the average human being has an inherent tendency to shirk work ; (ii) he must therefore be coerced, controlled and directed to secure the desired performances ; and (iii) being unambitious and unenterprising, he avoids responsibility and seeks security above all else. Theory, Y, based on the principles of participation and a concern for the employee morale, is highly pragmatic as it assumes : (i) that work comes as naturally to a human being as play and rest ; (ii) that coercion and control are not the only means of securing desired performance from the workers and that workers willingly work for the accomplishment of the objects to which they arc committed ; (iii) that workers' commitment to the objectives is dependent on I fie rewards following their accomplishment ; (iv) that the average workers are imaginative, ingenuous and creative ; and (vi) that in the existing realities of industrial life, intellectual potentialities of the average workers are not utilised as they ought to be. Thus, in a nutshell, Theory Y seeks to introduce a qualitative change in the managerial attitudes, in that it advocates large-scale delegation, efforts to make the jobs at lower levels more interesting, free flow of communications within the organisation, and an increase in the level of responsibility on the part of each worker. Above all, it stresses that economic incentives alone are not enough to motivate the workers whose productivity is determined by a complex set of psychological needs. Organisational Behaviour

Pioneers of the Human Relations Movement only focussed on people at work and people in groups, to the exclusion of the organisation of which they were a part, and the environment. This led to

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the development of the concept of organisational behaviour which represented a more inter-disciplinary and multi dimensional analysis of worker-behaviour.

The distinguishing features of the field of organisational behaviour are (a) a scientific method base for predicting and explaining behaviour and performance ; (b) inter-disciplinary application of behavioural science knowledge in analysing and understanding behaviour and performance ; (c) equal emphasis on a scientific study of individuals, groups and the formal organisation ; (7 contingency orientation, based on the assumption that managerial behaviour must be in tune with the requirements of the situation and the people involved ; and (e) translation of the theories in a language such that the practicing managers may easily understand and apply them.

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UNIT - II PLANNING NATURE AND IMPORTANCE OF PLANNING A work organization is an open system. Its survival depends on a purposive interaction with its ever-charging environment. It draws its inputs such as capital, labour, equipment material and information from the society, it combines and transforms these inputs into finished output such as goods and services. Consumer acceptance of its outputs will result in financial return to the organization enabling it to resume the cycle. On the other hand, lack of consumer acceptance will force it either to change its inputs or the transformation process or both to make its outputs acceptable to the society or to go out unresponsive to its environment for long.

In the modern world, environmental changes have been mind-boggling both in their pace and intensity. One can easily discern changing social values, increasing competition, new product discoveries, changing social values, increasing competition, new product discoveries, changing customer demands, growing automation, and depleting energy sources. There is also increasing social and political intervention in the working of organizations. Management of an organization is thus required not only to identify the environmental changes but also to exploit them profitably by means of suitable adjustment and adaptation of its inputs and transformation process. Planning provides the key to accomplishment of this objective.

MEANING OF PLANNING : According to Koontz and O’ Donnel , “ Planning is deciding in advance what to do, how to do it, when to do it, and who is to do it, Planning bridges the gap from where we are to where we want to go. It makes to possible for things to occur which would not other wise happen. In the words of the Haimann “ Planning is the function that determines in advances what should be done,. It consists of selecting the enterprise objectives, policies, programmes, procedures and other means of achieving these objectives. In his planning, the manager must decide which of the alternative plans are to be followed and executed. Planning is intellectual in nature. It is mental work. It is looking ahead and preparing for the future.

McFarland describes planning as a concept of easy to identify the following characteristics :

1. A THINKING PROCESS : Planning is an intellectual exercise. It is concerned with thinking in a creative way as to how the existing combination to resources may be adjusted and adapted to match the emerging opportunities.

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Experiences shows that today’s opportunities if they are not discovered and profirably exploited in time, may turn into problems tomorrow. Planning enables the management to make decisions as regards (a) what is to be done : (b) how it is to be done (c) when it is to be done ; and (d) by whom it is to be done. Timely careful thinking today can save the organization from panic in future.

Planning can help an organization to maintain a dynamic equilibrium between the external environment and its own goals, values, and technical organizational and psycho-social sub – systems. It also enables decision – making as regards the problems to be tackled and opportunities to be exploited based on the urgency , importance and solvability of each.

2. FORECASTING V. PLANNING : Forecasting and planning have little in common. Forecasting describles what one expects to happen if not changes are made to eacape that happening. Planning describes what one wants to happen. Forecasting may encourage some people to do some planning, like forecasts of exhaustion of natural energy resources has led some countries to plan for conservation of coal and oil. Even So, forecasting cannot be equated with planning.

It is true that planning is based on assessments, estimates, assumptions and judgments. But these are based on availability of resources and time, taking in view the objectives to be accomplished. Moreover , planning provides for a regular review of performance towards the targeted goals and necessary corrective measures in case of deviations. In the modern context planning has become highly scientific as it is based on quantified data and information.

3. ACCOMPLISHMENT OF GROUP OBJECTIVES : A work organization is an assorted group of widely varied human beings, each with a difference personality, attitudes, learning motivation etc., It is unlikely that these people will work effectively, harmoniously and consistently unless they have a plan which they consider to be their common property. Planning is essential to any goal – directed activity. It enables people with divergent perceptions and motivations to work together to achieve common goals.

4. CHOICE BETWEEN ALTERNATIVES : Modern business environment is marked by rapid and sweeping changes. The mix of resources which was worked out to meet business opportunities in the past may no longer be effective in the present. Similarly the present mix of resources may not produce the desired results tomorrow. Planning seeks to adjust and adapt the existing mix of resources to meet the emerging opportunities.

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The first choice to be made by management is with regards to objectives of the business, e.g. profitability, growth, consumer satisfaction, man power development, prestige, and so on.

The next choice is in respect of the strategy to be adopted to accomplish the objectives. Then comes the operational part. i.e., determining the time-frame, assignment of tasks and other resources for the accomplishment of the objectives.

5. PERVASIVENESS OF PLANNING : Planning is a basic condition for a goal directed organization. However, it would be wrong to regard planning as an exclusive occupation of the top-level managers only. It is true that top level managers have to devote considerable time and attention to planning for importance of planning by middle and lower level managers with in their areas of activities cannot be minimized.

The various steps in the planning process necessarily involve managers at all levels. The first task is determination of the objectives. This is the prerogative of the owners. The next step is determining how the objectives are to be achieved. This consists in defining the resources which to be developed, the opportunities to be exploited, or the problems to be talked. The last stage is concerned with operational details, namely, assignment of tasks allocation of resources, setting the time frame regular review of performance etc.

In fact, involvement of managers at all levels is essential to the success of planning, people at work are greatly motivated when they are offered involvement in meeting a challenge. Contribution to planning gives people psychological satisfaction and a stake in their own future.

6. FLEXIBILITY Successful running of an organization involves matching of its resources with the opportunities in the business, environment. This calls for a careful composing of the mix of resources consistently with the environmental needs. Only proper planning can enable it to adjust and adapt the resources as desired.

IMPORTANCE OF PLANNING The increasing pace of environmental changes has increased the need for anticipating the development and planning to meet them. A management that does not identify the emerging situations, nor prepares to meet them, will soon find the survival of the organization threatened from all sides. Like alice in wonderland, management has ever to â&#x20AC;&#x153;run fastâ&#x20AC;? to be even with the turbulent changes.

The following points highlight the importance of planning

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1. SELECTION OF “ OPTIUMUM” GOALS : Planning involves rational thinking and decision – making concerning a proposed courses of action. It also implies selection of one course of action and rejection of other possible courses of action.

The selected course of action is naturally the one that promotes the overall organizational goals within the framework of the resources availability and economic , social and political factors.

For the optimization of overall organizational operations, it may some times be necessary to sub optimize ( i.e, to reduce the efficiency of Some departments).

2. TACKLING INCREASING COMPLEXITIES : An organizations is a heterogeneous group of human beings who differ from one another in many respects. It is unlikely that they will work effectively and harmoniously in the interest of the organizations, unless they have a plan in the making of which they have had a share and which they regard as common property. Thus, planning is essential to any goal directed activity

3. MEETING ENVIRONMENTAL CHANGES : Business environment changes more rapidly and sweepingly than can be imagined. Change in social values, increase in competition, new product discoveries, changes in consumer tastes and preferences have each the potential to upset any organization. Management should discern and exploit the emerging situation by adjusting and adapting the inputs and transformation process to suit the environmental changes. Only proper and effective planning can help the management to do so.

4. SAFEGUARD AGAINST BUSINESS FAILURES : Often, business failures are blames on cut throat competition , unpredictability of consumer tastes and preferences, rapid technological changes and adrupt economic and political development. However, in many a case, failure of business is caused due to rash and unscientific decision-making, which is a direct result of lack of proper planning.

It is true that planning cannot avert all business failures. But it forces the management to assess and evaluate each emerging business opportunity and problem, and examine the various courses of action to meet it effectively. 5. UNITY OF ACTION : Planning enables the people within an organizations to work effectively and harmoniously for the accomplishement of common goals. It provides them a stake in their own future and thus induces them to do their utmost to meet the challenge.

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6. EFFECTIVE COORDINATION AND CONTROL : Planning makes it easily to exercise effective control and coordination. The work to be done, the persons and the departments which have to do it, time-limit within which it is to be completed and the costs to be incurred, are all determined in advances. This facilitates proper and timely measurement of actual performance and it comparison with the planned performance. In case actual performance is not as per the plans, factors responsible for the same can be ascertained. In the absence of planning there will be no scientific standards to measures and evaluate performance.

LIMITATION OF PLANNING Planning is an should be the primary function of management. It sets the frame for organization, direction, control and coordination of activities in any enterprises. However, it suffers from certain limitations . Important among which are as follows :

1. UNCERTAINTY : Planning concern the future and nothing about the future is certain, except that it must be different from the present. Assessment of future can only be in terms of success work, probabilities speculations, assumptions and conjectures.

A manager who sets goals based on planning also runs the risk of failure to achieve them. The goals may be based on scientific analysis or relevant information and facts and yet such analysis cannot be cent per cent correct. Most managers decide no to involve themselves with future, uncertainty ferring the certainty of the present and the past. 2. ACTION – PACKED ROUTINE Managers are ever preoccupied grappling with the day-to-day problems. This leaves them little time to think and plan about the problems of tomorrow. It is common to be over concerned with the issues at hand which, is left unattended might cause an immediate loss. Planning for the future does not appear to have the same urgencies can be conveniently post poned without fear of any loss for the present. James march and Herbert simon have spoken of a “ Gresham’s law” of planning, according to which daily routine drives out planning because the effects of lack of planning will take a long time to be felt.

3. ABSTRACTION : The planning process involves thinking about vague alternatives and concern with “ what if “ questions. Almost every conceivalble thing is included in the realm of possibility. There seems to be nothing hard and fast – just assumptions estimates, speculation and guesswork, which can be tested only when the thing to which they relate actually takes place. This often brings indistortion in planning.

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4. RIGIDITY : Planning involves setting or objectives, and determination of the ideals course of action for their implementation. It implies that there will be no deviation form the chosen path.

However, pursuit of vague, thought predetermined goals is against the very concept of business. A business is by nature a dynamic activity which is faced with new opportunities and challenges, any of which may torpedo best laid plans sticking to pre-determined objectives and action plan which had been framed in a different set of circumstances . But this may be quite a time-consuming and costly exercise , particularly where planning is practiced on a wide scale.

4. COSTLY : Planning is an expensive exercise, both in terms of time and moneys. It necessitates the formulation of estimates, collection of necessary information and facts, and a careful analysis and evaluation of the various courses of action so as to decide on the best and the most economical course of action for the enterprises departments.

ORGANISING

Introduction The terms organization has been defined and interpreted differently by different authors. It is a process of bringing and uniting people of achieve the objectives of the organization. It also implies the grouping of the staff achieve the common objectives. Harimann viewed that “organizing is the process of defining and grouping the activities of the enterprise and establishing the authority relationships among them. In performing the organizing function the manager defines, departmenalises and assigns so that they can be most effectively executed. Organisation is concerned with the building, developing and maintaining of a structure of working relationship in order to accomplish the objectives of the enterprises, organization means the determination and assignment of duties of people, and also the establishment and the maintenance of authority relationship among these grouped activities.

It is the structural

framework within which the various efforts are coordinated and relate to each other”. Knootaz and O’ Donnell explain that “organizing involves the establishment of an international structure of roles by identifying and listing the activities required to achieve purpose of an enterprise, the grouping of these activities, the assignment of such groups of activities to a manager, the delegation of authority to carry them out and provision for co-ordination of authority and informational relationships horizontally and vertically in the organization structure. Sometimes all these factors are included in the term ‘organisation structure’. Sometimes they are referred to as ‘managerial authority relationship’.

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Basic Factors in Organising Organising involves four basic factors namely the work, the people, the capital and the work place.

1. The work: The work of an organization is decided by the objectives of an organization. The work is split into various components. Organising requires grouping of activities by decision or departments. They are further subdivided into section and jobs.

2. The people Assigning various duties to people is the next important aspects. This job assignment first goes to the members of managerial groups, who in turn delegates work to their subordinates. The individual who is assigned the particular job is answerable for the results of his individual unit of assignment.

3. The capital This involves the capital and material needed to carryout the work assigned to groups and individuals.

4. The work place This denotes the place of work, the physical and psychological working conditions of an organization.

NEED FOR ORGANISATION 1. To define the role of the individual An individual employed in an enterprise must know his role, position and relationship with other personnel in his department and with others. Organisation becomes necessary so that the persons involved in the enterprise can identify themselves in the enterprise. It is through the organization that one can know his position and role in the unit.

He can relate his position with other members of the

enterprise.

2. Determination of authority: The assignment of a certain role proposes the granting of certain authority so that performance can be possible. Organisation is necessary to define the authority ie., the rights and powers of men in different positions which would help them to discharge their assigned roles.

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3. Fixation of responsibility Each individual is assigned a certain duty organizational structure defined what performance is expected of a member of the unit of the department of the enterprise. Absence or faulty determination of responsibility will lead to irresponsible functions, behaviour and attitudes.

4. Specialisation Modern production and management techniques are based on the idea of specialization which means the performance of different parts of a job by persons specifically suited for them. Organisation is basically required to promote specialization. Efficient and smooth functioning is possible when different elements of a job are performed by experts and their efforts are pooled to attain the desired and product.

5. Coordination Since the pattern of managerials operations is to be based on the division of labour, there arises the need of coordinating the activities of various individuals or that of different departments.

They

perform diverse, activities and these have to be woven into the main fabric.

6. Proper utilization of human resources The most important thing for an enterprises is to make the best possible use of its human resources. There must not be wastage or misapplication of human efforts. This is of great importance for economy as well as for the achievement of objectives. It can be possible only by suitable organization, which will avoid all bottlenecks â&#x20AC;&#x201C; chances of work being held up and allow smooth flow of performances. 7. Efficient functioning Efficiency is to be the watch ward of an enterprise. All the factors mentioned above will have a great impact on the efficient functioning of the enterprise. Organisation avoids all duplication in jobs, overlapping and wastage. It promotes speedy, smooth and efficient functioning of the enterprise.

BENEFITS OF GOOD ORGANISATION

There are numerous benefits of organizing. Those important include:

1. Clarity of functions in a well defined assignment An effective organization while well defining the assignment of each individual member working within an organization structure, clarifies what particular activities he has to perform within his assignment.

This enables him to perform his job devotedly and efficiently infulfillment of his pre-

determined goals.

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This avoids any chances of misunderstanding, conflict or confusion that arise between individuals over matters concerned with jurisdiction.

2. Establishing Co-operative Working Relationships Organising, while establishing co-operative working relationships â&#x20AC;&#x201C; between different segments of the organization structure, within jobs and positions, between individuals and work groups and the like, promises smoothness efficiency in the working.

Every member knows how he is placed in the organization set-up. There comes a feeling of freedom in working. There is established good relationship between the job and person doing it. Each person works best with others when he knows, for what he is responsible, to whom he is responsible and realizes the values of co-operatives relationships with others. With the responsibilities well-defined and made known to the persons and with the practicing of delegation, there comes feeling of freedom.

3. Best use of Human and Physical Resources Organising helps making best use of available human resources an physical resources in an enterprise.

4. Avoidance of Overlapping and Duplication Good organizing avoids overlapping and duplication of works in an enterprise.

5. Communication Rendered Effective It is through organizing that communication is rendered easier and more efficient.

6. Balancing of Work loads Organising helps considerably in balancing work loads in an undertaking.

7. Assimilation of Changes Good organization is competent to assimilate changes due to my environmental factors, in the structure.

8. Opening up of promotion avenues Organizing helps opening up promotional avenues useful for executive development. Organisation charts and position, descriptions as provided by organizing points to the position he can reach within the desired qualifications. Organising also tells if any training is needed to reach a superior position.

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9. Basis for Appraisal and Rating Organising provides a sound basis for appraisal and rating of individual performance and capabilities. With self-appraisal an individuals is able to judge for himself how he is doing and whether he is coming up to the mark according to his job requirements.

10. Aids, Wage, Compensation and Salary Administration Organising is a sure aid for wage compensation and salary administration. Elements of Organisation Allen has identified the following three elements of organization.

1. Division of labour In order to achieve the organizational goals, it is necessary to identify the work which is essential to achieve the objective. The work so identified is divided and subdivided so that sub-divided component could be entrusted to the person who possesses special competence for performing the task. By doing so, the organization brings in the principles of speclisation and motivation and the element of efficiency by eliminating wastages and overlapping of efforts.

2. Sources of Authority Every individual has to act as a hub in the wheel of organization. The effort of each individual has to bend towards the common objective of the organization, apart from the authority, responsibility, culture, and the consent of the governed superiorâ&#x20AC;&#x2122;s physical strength, intelligence or some other influence.

3. Relationship In every organizing structure, different types of relationship present a unified efforts for achieving the common objects. Such relationship may administer or operating vertical, horizontal or diagonal, formal or informal. In this process, some may be working at part with another, are expected to posses the equal quantum of authority whereas persons above them are expected to wield greater authority. Similarly, persons operating below them are expected to enjoy lower authority.

It is due to this

hierarchical relationship, persons bind working at different levels to continue their efforts towards the achievement of common goal of the organization.

4. Coordination Although allen has not mentioned coordination as one of the elements of organization, organisationâ&#x20AC;&#x2122;s objectives cannot be achieved without coordination is an on going process whereby a manager develops an integrated, orderly and synchronized pattern of group effort among the subordinates and tries to attain unity of effort in the pursuit of a common purpose. It involves balancing

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and keeping together the different activities so as to maintain a will-kind aggregate function and ensure that the various activities are smoothly carried out.

THE PROCESS OF ORGANISATION The process of organization may be described as the managerial function. It involves a rational division of work into groups of activities so as to achieve a rational, well coordinated and orderly structure for the accomplishment of goals. Important steps involved in this process include:

1. Determination of Objectives This is the first step in building up an organization. This process involves in deciding as to why the proposed organization is to be set up and what will be its nature of work to be accomplished through the organization.

2. Division of Activities Then the total work of the organization is sub-divided into essential activities, e.g the work of an industrial concern may be divided into the major functions like purchasing, marketing, production, finance, personal, advertising and publicity, etc.

3. Grouping of activities The activities that similarly related are grouped into divisions and departments, and the departmental activities are further sub-divided into small groups.

Functions like sales, production,

finance, etc. are made the basis of geographical areas, types of customers, equipments used, processes adopted, etc.

4. Job Assignments In this step, specific job assignments are made to different subordinates in accordance with their specialization and professional experience for ensuring on certainty of job performance. 5. Delegation of authority â&#x20AC;&#x201C; Delegation is the entrustment of responsibility and authority to another and the creation of accountability for performance.

Importance of Organisation 1. Organisation increases managerial efficiency in a number of ways It avoid delay, duplication or confusion in performance and removes friction or rivalry among personnel. By analyzing the enterprise objectives, all pertinent activities are spelled out in order of their importance. These activities in turn are allocated to definite individual as fixed duties. The assignment of

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fixed duties help to add certainty and promptness in the doing of work without any shirking of responsibilities by subordinates.

2. Organisation ensures an optimum use of human efforts through specialization Because of the detailed job specification, right persons are placed in the right positions on the basis of their knowledge, skill and experience. Men with outstanding abilities are not allowed to waste their time and energy over a minor job. By matching jobs with individuals and vice verse, organization enlists the benefits of both functional and occupational specialization.

3. Organisation places a proportionate and balanced emphasis on various activities By dividing activities into departments, sections and jobs, a greater attention can be focused on more important activities. Money and effort can be spent proportionately with the importance of activities, minor problems are incorporated in routine jobs so as to facilitate their handling at a lower-level. Important and serious problems are reversed for top jobs which are filled by senior-executives for enabling them to concentrate on major issues and challenging situations.

4. It facilitates co-ordination in the enterprise Different departments and sections, positions and jobs, functions and activities are welded together by structural relationships of the organization. Empire building in any segment of the enterprise is made difficult by sound organizing.

Common interests and enterprise objectives are kept at the

forefront of each segment or area of the business.

5. It provides scope for training and developing managers Management personnel are trained to acquire wide and varied experience indiverse activities by their placemen in different jobs through job rotation and thus they are prepared for top jobs which require generalists rather than specialists in a narrow sphere.

6. It helps to consolidate growth and expansion of the enterprise It is the organizing practice that has encouraged the business enterprises to expand their sizes to an ever-increasing level. With hundreds of employees and extensive ramifications of operations, giant enterprises are the direct outcome of the organizing function of management. No economic theory, no cult of the colossal could have dared to prescribe such mammoth sizes but for the development organisation practices.

7. Organisation prevents the growth of laggards, wire pullers intriguers or other forms of corrupters:

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Corruption can only thrive in those enterprises which have failed to set up a sound organization structure. Unsound organization becomes the breeding ground of dishonesty, whether in matter of effort or of money. With the passage of time, however, even a good organisation may be transformed into a bad one unless continual adjustments are made with varying circumstances. 8. It guarantees best use of human and physical resources Because every individual is allotted work according to his skill and ability. This makes sure of coordinated working, which avoids confusion, friction of conflict. It allows greater understanding among individuals.

9. It provides clarify and function Each individual is signed a specific job and clarifies the activities to be performed by him, This enables him to perform his job efficiently to fulfill his predetermined goals.

10. It makes communication effective It is through organizing that communication is recorded easier.

Confusions and mis-

understanding are avoided.

Theories of Organisation 1. Classical theory : It treats the workers as no better than a machine and lays more emphasis on the formal organization structure based on certain universal principles. It is associated with the names of weber, taylor, fayol, mooney, reiley, urwick and others.

2. Human relations theory : It looks upon the worker as a whole man, with his feelings, motives, aspirations and the like. It was profounded by Elton mayo, Kurt Lewin and others.

3. Systems theory : It regard the organization as a system, a complex of parts interacting among themselves and with the environment. General systems theory was emphasized by Bertalanffy and Kenneth Boulding.

4. Organisational Theory : It stresses the self-actualising, self-directing and self-controlling tendencies of individuals. Its exponts are Renis Likert, Douglas McGregor and Others.

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UNIT-III ORGANISING Introduction The terms organization has been defined and interpreted differently by different authors. It is a process of bringing and uniting people of achieve the objectives of the organization. It also implies the grouping of the staff achieve the common objectives. Harimann viewed that “organizing is the process of defining and grouping the activities of the enterprise and establishing the authority relationships among them. In performing the organizing function the manager defines, departmenalises and assigns so that they can be most effectively executed. Organisation is concerned with the building, developing and maintaining of a structure of working relationship in order to accomplish the objectives of the enterprises, organization means the determination and assignment of duties of people, and also the establishment and the maintenance of authority relationship among these grouped activities.

It is the structural

Basic Factors in Organising Organising involves four basic factors namely the work, the people, the capital and the work place.

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3. The capital This involves the capital and material needed to carryout the work assigned to groups and individuals.

4. The work place This denotes the place of work, the physical and psychological working conditions of an organization.

He can relate his position with other members of the

enterprise.

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They

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BENEFITS OF GOOD ORGANISATION

There are numerous benefits of organizing. Those important include:

This enables him to perform his job devotedly and efficiently infulfillment of his pre-

determined goals.

This avoids any chances of misunderstanding, conflict or confusion that arise between individuals over matters concerned with jurisdiction.

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3. Best use of Human and Physical Resources Organising helps making best use of available human resources an physical resources in an enterprise.

4. Avoidance of Overlapping and Duplication Good organizing avoids overlapping and duplication of works in an enterprise.

5. Communication Rendered Effective It is through organizing that communication is rendered easier and more efficient.

6. Balancing of Work loads Organising helps considerably in balancing work loads in an undertaking.

7. Assimilation of Changes Good organization is competent to assimilate changes due to my environmental factors, in the structure.

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so, the organization brings in the principles of speclisation and motivation and the element of efficiency by eliminating wastages and overlapping of efforts.

It is due to this

hierarchical relationship, persons bind working at different levels to continue their efforts towards the achievement of common goal of the organization.

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3. Grouping of activities The activities that similarly related are grouped into divisions and departments, and the departmental activities are further sub-divided into small groups.

Functions like sales, production,

finance, etc. are made the basis of geographical areas, types of customers, equipments used, processes adopted, etc.

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Important and serious problems are reversed for top jobs which are filled by senior-executives for enabling them to concentrate on major issues and challenging situations.

Common interests and enterprise objectives are kept at the

forefront of each segment or area of the business.

7. Organisation prevents the growth of laggards, wire pullers intriguers or other forms of corrupters: Corruption can only thrive in those enterprises which have failed to set up a sound organization structure. Unsound organization becomes the breeding ground of dishonesty, whether in matter of effort or of money. With the passage of time, however, even a good organisation may be transformed into a bad one unless continual adjustments are made with varying circumstances. 8. It guarantees best use of human and physical resources Because every individual is allotted work according to his skill and ability. This makes sure of coordinated working, which avoids confusion, friction of conflict. It allows greater understanding among individuals.

10. It makes communication effective

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DEMAND PLANNING & FORECASTING It is through organizing that communication is recorded easier.

42 Confusions and mis-

understanding are avoided.

2. Human relations theory : It looks upon the worker as a whole man, with his feelings, motives, aspirations and the like. It was profounded by Elton mayo, Kurt Lewin and others.

4. Organisational Theory : It stresses the self-actualising, self-directing and self-controlling tendencies of individuals. Its exponts are Renis Likert, Douglas McGregor and Others.

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UNIT-IV PRODUCTION CONTROL AND BEVARAGE CONTROL

INTRODUCTIONS: Production is the second major sub system in the transformation element in the food service system and is the managerial function of converting food items purchased in various state into menu items that are served as meals to customers. Ingredient control is a major component of quality and quantity control of the food production. The process of ingredient control actually begins with forecasting, purchasing, receiving and storage of foods. It continues through preparation production and service.

Adequate control at the stage of production is required to: 

Reduced waste (Specially left over)



Reduced higher cost than necessary from were production



Eliminate incorrect portion size



Elimination of over production

Beverage contributes significantly in the profit of the business, therefore it requires special attention of the operation. An effective control of beverage sales is essential.

OBJECTIVES: After studying this lesson, you could be able to understand.  The purpose of production control  Need for forecasting  Standard portion size  Use of portion control equipments  Menu and its uses as tool of control (Marketing and Merchandising)  The various records used for production control  The importance of sanitation and garbage disposal  The job description of executive chef AIMS OF PRODUCTION AND FORECASTING Production planning means, the forecasting of volume of sales for an establishment for a specific period. For example, a day, week, or a month. The aim and objective of production planning are:

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

To facilitate food cost control



To facilitate the purchasing of perishable items and ensure adequate stock level



The gear up production to demand by forecasting the number of meals



To enable comparison between actual and expected volume of sales

Forecasting is a technique of predicting the volume of sales of the restaurant for a specific future period. Basically every food and beverage outlet must estimate as possible, how many meals are to be produced, what ingredients (Raw Materials) are required for these meals and the standard size of the meals offered for sale.

Both over production and underproduction are hazards of production demand planning over production generates extra cost and under production raises the cost. In order to avoid these pitfalls, forecasting is required.

FIXING OF STANDARD Standardization is necessary for food cost control system standards may be defined as rule or measure established for making comparison and judgment.

In food and beverage business, standards are used for successful control over operation. Quality standards are used for the degree of excellence of raw materials and finished products. For example: Meat is generally available in number of different grades and it is important to establish which grade will be used for the preparation of particular menu item. Similarly, take beverage items; the management must decide which beverage items are appropriate quality to ensure customer satisfaction. Quality standards refer to members of weight or count or volume. In a restaurant the management must establish quality standards as portion size of menu items and drinks. For example: soup should be identified as to size of bowl or cup to be used. Vegetables should be served with certain size spoon or measured by count. In case of beverages, management must establish a standard quantity for each that of a liquor used. The bar operates with standard recipe indicating the qualities of ingredients to be used in the preparation of particular drink. Standard cost is useful tools in measuring the effectiveness of an operation and comparing standards cost with actual cost in order to determine the effectiveness of food and beverage materials.

There are four basic standards which must be in-corporate into food operations.

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Standards portions



Standards yield



Standards recipes



Standards purchase specification

DEFINITION OF STANDARD QUANTITY Standard recipes are followed to determine the quantity and quality of the ingredient to be used with preparation as a dish. A “Standard receipe” is a written schedule for producing a particular menu item. A Standard recipe is written formula for producing food items of specified quality and quantity. The Standard recipe shows the exact quantity of each ingredient, the cost of making the item, and the sequence of steps to be followed in preparation.

The main objectives of preparing standard recipes are: 

To determine the quality and quantity of the ingredient to be used



To determine the yield obtained from a recipe



To determine the food cost per portion



To determine the nutritional value of particular dish



To help in menu planning



To facilitate purchasing ingredients and store indenting



To facilitate portion control

All hotels and food beverage operations maintain a file known as “Standard recipe manual” where all menus are planned. The ingredients of these receipes are cost out and numbers of portion of each dish are fixed. All ingredients and quantities used in standard recipes must be strictly followed and the portions produced should not vary. As the prices of the ingredients, fluctuates, the costing is amended (changed) accordingly.

STANDARD PURCHASE SPECIFICATION DEFINITION AND OBJECTIVES The primary objective in the purchasing food is to obtain the best quality of commodities, based on specification, established by each hotel at the lowest price possible.

For proper and effective control, purchase specification should be used in all purchasing. It will bring uniformity and consistency in buying, which ultimately keep maintaining the required cost of the product. Each specification would be determined by the purchase officer, executive chef and food and beverage manager as per the catering policy, menu requirement and its price range. The copies of the specification should be kept by the purchase department, food production department, food and beverage department, receiving clerk, and send to all approval suppliers. A purchase specification may be within a standard form

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It must contain 

Name of the item

   

Grade or brand name of the item Weight, size or count Price Special note for the commodity

OBJECTIVES OF PURCHASE SPECIFICATION: 

To establish suitable buying standard for a particular commodity



To furnish to the supplier in writing in specific terms the requirement of the hotel



To help in setting the price of a commodity



To obtain standard materials

STANDARD PORTION SIZE A standard portion size represents the amount (Weight, Count, Size or Value) of each food item which is sold to the guest for a stated price and should be established for all items including appetizers, main course, vegetables, salads, desserts and beverage. Portion size charts, written in large legible letters and figures must be displayed in each working area (Butcher shop, bake shop etc) as a continuous remainder to the kitchen staff.

The size and portion must be determined by the management by reference to a number of factors: 

The type of customer or establishment when portioning the food , it has to be on the basis of customer to whom it cater for , In an industrial canteen , the portion for laborer has to be more than that for a lady stenographer. If the restaurant is offering, three course menu for Rs 50-/- the portion will be smaller than where restaurant which is charging Rs 75-/- for the same three course menu.



The quality of food : If good quality or brand of food is purchased usually the number of portion will be more



Portion size depend on the price charged, The portion and its price must be reasonable with customer spending power



Finally the most essential factor for a restaurant to get a reasonable and satisfactory profit on the portion sold

VARIOUS EQUIPMENTS USED FOR PORTIONING 

Scoops- for ice-cream and mashed potatoes



Ladles- for soups and sauces



Butter pat machines- for butter portioning



Fruit juice glass- for measuring fruit juices

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Soup plates – for giving soups



Standard size baking tins



Pre – packed portions

MENU MERCHANDISING Menu plays an important role in portioning the sale of food beverage merchandising refers to the primary consideration in planning menus for commercial operations. Menu serves as the primary control of food service system. It controls the purchase and production system, and provides the frame work for the budget. To the production worker, the menu provides a brief description of the work to be done and to the service worker; it provides the food to be offered to the customer. The term “menu” refers to the list of items offered for service and to the card the list is printed for customers. In the commercial food service industry, the entire concept for an operation is frequently build around the menu including decor, the advertising and market segment identified as the target audience. Many different kinds and styles of menus are used in food service operation choices may be many or few within each of the menu items. Systematic procedure should be followed in planning menu as detailed below: 

Menus are planned and designed



Menus should reflect the policy



Menu should ensure profit



Menu should be suitable for market and the ability of the employers



Importance should be given for presentation of the menu



Menu card should be clean, legible and readable for the customer



The format of the menu should suit the content and different format should be used for different meals



Special items on the menu should be written under attractive headings



It is better not to have long menu



The language should be simple and effective description of the menu should be given in one or two lines.

MENU CONTROL The menu serves as the primary control of food service system; therefore the menu should be viewed as managerial tool for controlling cost and production. In designing menu, a number of management related factors must be considered such as food cost, production capability types of service and availability of food. Menu as a managerial tool of control helps to : Ensure availability of all necessary ingredients required

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Ensure appropriate level of stock of ingredients



To control food cost in relation to sales



To prepare staff Rota of duty days off, holidays etc



To reduce labor cost

MENU STRUCTURE Menus for either types of operation whether commercial or institutional should be designed to inform the guest of what items are available and in many instances, their cost, simple clear, and graphic and description of menu items should be used confusing or overstated terms should be avoided.

The main objective of designing a menu is to direct the customer attention to those items that the restaurant operation want to sell. The menu must be designed to increase the sales and profit. There are five main type of menu design:     

Single page Two panel Letter fold (vertical or horizontal) Three panel Multiple page

Single page menu: The area immediately above an imaginary line dividing the menu in half horizontally is the focal point of the menu. The area therefore should contain those items that are most profitable.

Two panel menu: The imaginary lines run from upper hand corner across entire menu to approximately three fourth of way down right panel. These two interior sides are the most desirable location for the items.

The letter fold menu: This is folded horizontally or vertically into three equal parts. This design permits you to use six panels - four inside and two outside is for logo identification, advertisement, food listing and description.

Three panel menu: The three panel menu has right and left panel that are folded to meet at the middle of the center panel. The left panel is one fourth with this menu, the eye tend to focus in the center concentration of sales therefore will be in the items located in this area.

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The multiple pages: The multiple page menus is a book style format used by restaurant with elaborate menu offering. This menu has some draw backs. It requires long time for the customer to take decisions and it can lower the table turn over rate in the restaurant. A six page menu is considered the maximum number of pages for a menu to be effective merchandising and cost control tool.

MENU PLANNING The main object of menu is to give a complete list of dishes and courses, eatables and beverages available at eating places. The main objectives of food service organization is to set up a situation in which prospective are induced to consume food items containing needed nutrients in satisfactory quantities. In this regard the primary function of menu is either to 

List the items that will be served



List the alternative items from which one may select items to satisfy one’s individual needs at variable prices.

The menu must be carefully planned. A wide range of factors should be considered in constructing menu, such as food preference as customers, nutritional qualities as food, operation demands for producing menus items and cost of food and labor.

The following factors have been considered before planning a menu:

TYPE OF ESTABLISHMENT: Menus will vary according to the type of establishment,  Hotels 

Restaurants



Hostels



Hospitals



Industrial canteen The menu for restaurant and hotels will be “ALA CARTE”, buffet banquet, or table de hote. On the

other hand the hostels, hospitals and canteen will have set pattern and will offer meals to provide nutritionally balanced diet within limited budget 

TYPE OF MEAL: Before planning the menu, type of meal to be served, should be taken into consideration. Menu is planned according to the meal (i.e) break fast, brunch, lunch or dinner.

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

TYPE OF CUSTOMER: Customers can affect the type as food served because of the following factors: Age, sex occupation. The young boys will need substantial meals, whereas young girls would prefer small portioned dishes. Groups as farmers who are used to eating well, need a good quantity. Business people or corporate customer, may prefer choice of dishes



OCCASION: Special dishes for certain days or time of the year should be considered. For ex: roast turkey at Christmas, special eggs for Easter, turkey briyani for deepavali etc…



CAPABILITIES OF KITCHEN STAFF: The kitchen staff capabilities have to be seen, whether they are experienced and have the skill and knowledge. If the staff is not capable it will be difficult to produce good meals.

Based on the

capabilities of kitchen staff the menu has to be planned. EQUIPMENT OF THE KITCHEN: While planning the menu it is important to see that the kitchen is equipped to prepare various dishes. For ex: without tandoor oven, tandoori dishes cannot be included in the menu. Care should be taken to see that the method of cooking is not repeated, otherwise certain equipment would be over loaded.



PRICE OF THE MENU: Always give value for the money. The food cost should not exceed Rs40 as the selling price at an average. Eg : if the food cost per head is Rs 20-/- then the suggested selling price would be: 5*100/40%=Rs 5



AVOID OVERBALANCE OF A MENU: If many courses are served then care must be taken to ensure that they are neither too light nor too heavy.



TEXTURE OF THE COURSE: Some food should be soft while other food require through chewing. Avoid menu with the same texture, offer food with varied texture.



SEASONING: Do not over season the food. If strong herbs are used is one dish, never repeat them in another dish in the same meal.



GARNISH: Must be correct. Garnish attractively and simply

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FOOD VALUE: Special attention should be paid to different requirement of different groups of the people. The manual worker requires more substantial food than an office worker.



THE BALANCE OF MENU: This is particularly important, when compiling menu. The following points should be considered while composing the menu.



REPETITION OF INGREDIENT: The basic ingredients (raw materials) used for preparing the dishes on the menu should never be repeated as it becomes monotonous. For ex, if the soup is of tomatoes then the tomatoes should not reappear in any other course on the same menu.



REPETITION OF COLOUR: Whenever it is possible this should be avoided to make menu exciting. If the menu consist of celery soup or creamed potato or vanilla ice cream which is all white, to look dull.



REPETITION OF WORDS: Avoid repeating the same word on the menu and makes the menu less interesting.

TYPES OF MENU Menus are classified into different types, they are, 

Table d’hote menu or table of the host menu



Ala carte or by the card



Carte de jour or daily card



Plat de jour or dish of the day



Cyclic menu



Static menu



Ethnic menu

ALA CARTE MENU OR BY THE CARD: This is an elaborate menu. Each dish is individually priced. The customer has a wide choice and should be prepared to wait for the service. The customer places the order from the menu according to his choice.

CARTE DE JOUR OR DAILY CARD: There are sometimes an insert in an ala carte menu which comprises a few dishes of the day some establishment have a set pattern for the carte de jour (eg) 

Roast chicken



Fish and chips - Tuesday



Curry and rice

- Monday

- Wednesday

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PLAT DE JOUR OR DISH OF THE DAY: This menu consist of special dishes prepared for the special occasions like Christmas, Ramzan, Deepavali, etc…. 

Eg: turkey biryani to Christmas

 

Lamb biryani to ramzan Special thali meals to deepavali

COMBINATION MENU: This menu combines the ala carte and table d’hote menus.

STATIC MENU: It is a fixed menu which is used for month or year like the menu in most restaurants. The restaurant that uses this menu either have a large variety of items within each course or where there is less frequency as repeated guest. Establishment like tourist, hotels, specialty restaurant, or weekend resorts may choose fixed menu because the guest are in for short visit.

CYCLIC MENU: These are designed to offer frequent guest, a variety of dishes. There menus are found in downtown lunch restaurant frequently visited by business people. Dedicated clients, need variety of dishes.

ETHNIC MENU: These are offered by specially restaurant that concentrate on a particular style of food. French, Japanese, Chinese, India, Italian restaurants will offer ethnic menu. PRICING OF MENU Proper fixation of selling price is very important since the gross profit should be able to cover the labor cost, overhead expenses and leave a reasonable profit. Menu planning is also an important part in the gross profit percentage not all the dishes will give the same percentage of profit. So the menu should be planned in such a way that it should contain many dishes which will produce higher percentage of gross profit. For each dish to be served, it is necessary to calculate the selling price so that caterer will have an idea about gross profit, which will leave a reasonable net profit after paying labor cost and over head expenses.

Kitchen profit or gross profit is defined as the difference between the total food sales and the cost of the materials used for producing a dish (food cost)

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Kitchen profit or Gross profit = Sales minus food cost or material cost Sales

= Kitchen profit plus food cost

Food cost

= Sales minus kitchen profit

Net profit

= Kitchen profit minus labor and over head cost

How to fix a selling price? To begin with is necessary to find out the company’s gross profit percentage which will cover labor and over head cost.

Let us assume that sales are Rs 100 and cost of producing (material cost) is

Rs 40. The

gross profit or kitchen profit is calculated as : Sales minus food cost

= gross profit

Rs 100 – Rs 40

= Rs 60

The gross profit percentage is = gross*100/sales = 60*100/100 Gross profit percentage is = 60% Find the amount of cost of a dish us assume the cost of preparing a dish (only raw materials) = Rs 40 Therefore the food cost

= Rs 40

Food cost percentage is

= sales- gross profit percentage

Food cost percentage is

= 100 – 60

Food cost percentage is

= 40%

Divide the amount of food cost by food cost percentage and multiply by 100 Food cost x 100 divided by food cost percentage Selling price = food cost*100/food cost percentage = 40x100 40 = 40*100/40 Selling price =Rs100/ FOR EXAMPLE: Let us assume that the cost for preparing an omelets comes to Rs 8/(food cost)

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The selling price for the omelets is fixed as = food cost*100/food cost percentage =Rs 8.00*100/40% =Rs 20%

The selling price is fixed as Rs 20/ per omelets (the food cost percentage is fixed by the management according to their policy)

Menu as a marketing level The menu is the best internal marketing tool, placed only next to well motivated sales staff in the form of service staff. Thus proper layout and design becomes essential ingredient for incurring profit.

The following techniques may be used to promote the menu.

COLOUR: if the menu is printed professionally at least three colors should be used with three Colors to work with, you will be able highlight the section header with one Color (like soup). The second color can be used for standard menu items names and description of the menu. The third color then can be used to draw the attention to a few Key menu items within each menu section

ICONS: Another way to focus on the more profitable items on your menu is by Using icons

TYPE FACE: A third option for calling attention to menu items is your choice of Type faces in much the same way as the three ink color options, previously mentioned. It will have similar effect in helping you to sell more profitable menu items

SEASONAL OFFERING: Change the menu at least twist a year to ensure that you are offering the most Cost effective ingredient during each season

PRICING: Use both the cost data over competitive data before you fix your menu Price PHOTOS : When you put a photography on a menu, you are creating, visual guarantee that your actual plate will match the photo on the menu. This is a great way to target attention on profitable items.

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LEGLIBILITY: This is the key. If the costumers cannot read your menu, the targeted Item will not sell. So importance should be given to color combination and lighting level of your dining hall to draw customer attention.

USER FRIENDLY: Menu should be easily readable and customer should be able to understand easily. Otherwise the customer simply won’t order.

Menu plays an important role in maximizing the sale and promotes items which are most profitable and unique to the hotel.

MENU LAYOUT The menu has a separate component that contributes to the overall effectiveness of the menu.

MENU COVER: Menu cover reflects the atmosphere of the restaurant. Menu cover is a major part of your overall advertising programme. The major function of the menu cover is to market and identify the restaurant.

DESCRIPTION COPY: The descriptive copy should explain the main items, preparation method and the accompaniment. A well written descriptive copy present each items is such a way that customer is encouraged to try the items.

The descriptive copy should be. 

Simple.



Use the words associated with food.



Do not use complicated words that are very difficult.



Over description should be avoided.

PLACEMENT OF THE PRICE: There is an art to the manner in which price of food are placed in menu.

The closer you can list the price to the description of the menu, the less psychological impact the price will have a customer. The use of dot and printing the price on the right hand margin of menu will level to call attention of customers.

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The price should not be printed close at the end of the description.

ARRANGEMENT OF COPY: It is important to remember that categories of food must arrange in order in which they are eaten. The location of items on the is critical aspect the menu or marketing tool. Survey and research indicates that any list of ten many items, those listed first, second and third are the one that will sell best. Do not list menu item in order of their price-that is lowest to highest. Price items is one on which you make most profit, list it either first or last.

COLOUR IN THE MENU: Color may be used in menu to call attention to specify menu items, but it is also used on the menu cover to employing to restaurant theme and décor. A small amount of color used in printing or design a menu result in considerable effect whereas excess amount of color can distract customer attention.

MENU PAPER AND INK: Menu usually printed on paper. The quality and type of

paper used depend

upon the permanency of menu. The character and line of restaurant reflect the quality of paper. If the menu is changed relatively often, a lower quality can be used. Fast food operation on the other hand often prefers coated (laminated paper because of the menu’s long term constant use.

The menu should not amount to more than 15 percent of total menu cost.

CONSTRAINTS OF MENU PLANNING: (LIMITATIONS): 

Menu should be planned according to type of establishment.

They should suit the type of

establishment. (ex.)

commercial

restaurant

need

elaborate

whereas

fast

food

restaurant,

requires fast food menus. 

Menu should be planned according to the space available Elaborate menu menu’s needs more space for preparation of dishes.



Menu should be planned according to the capability to the staff Labor skill should be assessed and the menu should plan accordingly.



Available of kitchen equipment should be taken in to consideration, while



Type of service should be offered. Staffing should be considered otherwise it will affect the sale of

planning menu.

the establishment. 

Availability of ingredient must be taken in to consideration while planning menu. Non-availability of ingredients will result in the cancellation of dishes which will affect the reputation of the hotel.

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The menu must be developed from the perspective of both management and the consumer. Through it is very difficult, it should be done.



The first and the most critical step is the menu pricing. Menu pricing is based on product cost and anticipated sales mixes. One cannot price menu items independently of each other: each item price description and placement affect the sales of other product on the menu.



The customer should be satisfied with the food and service which the pay for.



People’s food habits and performances are shaped by their ethnical, social

cultural background

and their educational level as well as their dining motives. Therefore the type of food offered, the service environment and the pricing should differ greatly.

SELF ASSIGNMENT QUESTION-I

1. Production planning means forecasting of volume of sales for specific period - (True / False) 2. Standardization is necessary for food cost control system

- (True / False)

3. Portion control equipments are used for serving the food - (True / False) 4. Menu card is used only to give a complete list of dishes available at eating place - (True / False) 5. An Alacarte menu is individually priced and has more choice for dishes - (True / False)

DUTIES OF CHEF DE CUISINE: 

The chef carries the full responsibilities for his kitchen.



He must be both cook and administrator.



He must have a strict sense of economy and efficiency



He should be fully acquainted with prices, marketing trends, commodity season and customer requirement



His main function is to plan organize and supervise the work of kitchen. He prepares a pre determined percentage of profit and work in accordance with the policy of the establishment.



He is responsible for staffing and selection and dismissal in accordance of the personal department.



He notes the customer complaints and take immediate action to rectify them and at the same time bringing this to the notice of the staff.



He is responsible for staffing of the kitchen and for the organization of duty roasters.



He is concerned with the quality of food and its presentation.



He is department head and is responsible to the management.



He is responsible for overall for the correct preparation, presentation and quality of all dishes both hot and cold which are served to customer.

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He should maintain good standard of safety and hygiene, maintain good relation with his staff and with other head of department and management.



Maintain the deserved kitchen percentage of profit.



Produce annual budget for his department and operates within it.



Ensure that there is no unnecessary waste and ensure that regular stock taking is carried out.

RECORD MAINTAINED BY CHEF DE CUISINE (Executive chef) 

Issue Analysis Sheet: For proper control no food stuff should be issued without proper Requisitions. Requisitions are written authority for goods to be removed from stores in to the preparation area, signed by an authorized person such as executive chef.

Requisitions are priced out, extend by store clerk. They are verified by chef de cuisine or food and beverages controller. Any difference must be investigated as this may cause wrong arithmetic computation, which can significantly short the store room reconciliation.

A weekly analyzed summary sheet is prepared by store clerk. The total value of issue from stores should agree with the total received by individual department. Any discrepancies will call for investigations. Moreover control can be kept over the total expenditure by each department. This summary sheet is used by the chef for control purpose.

Specimen of weekly issues analysis sheet: ABC Hotels Weekly Issue Analysis Sheet Date ………………

Date

Requisition Number

Value Rs.

Outlets/Departments P

Kitchen

Grill Room

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HYGIENE AND CLEANLINESS: The hygiene and cleanliness concerns, keeping uneasy surroundings clean to prevent disease. The government has passed strict legislation to ensure place are clean and safe. This is because people consume food and beverage that directly influence health.

Hygiene and cleanliness start with food production 

Raw vegetables and fruits must be washed before use.



Sensory test should be used regulated to evaluate the quality of food.



All items for dish must be assembled to introduce at the right time in the food preparation.



Food production should strictly follow the standard recipe instruction try not to bring food into multiple temperature changes.



Thaw foremen food in cold refrigerator first, drastic reduction in temperature can be dangerous. Never thaw food at room temperature.



All preparation surfaces must be sanitized after each preparation.



Rusty tools and equipments should be discarded.



Staff must wear clean uniform use caps to cover hair, insist the habit of washing hands frequently. Use gloves to while handling foods and have a high standard of personal hygiene.



Kitchen equipments should be properly cleaned at the end of each shift



Kitchen floors must be frequently mopped clean.



Staff must be trained to reduce risk. Training should include the use of standard recipe, time temperature combination sensory test, hygiene, safe food handling and the proper use of equipments.

The once prepared should be served immediately sometimes this may not be possible in quantity food production. Some tips at this critical points are. 

Hot food must not allowed to cool but kept in hot cases at 60˚C and above.



Left over food must be 60˚Cto 21˚C within two hours.



Left over food must be chilled for future use in pans. To avoid contamination pots must be properly sealed.



When heating, the food must attain a minimum internal temperature of 74˚C for 15 seconds.



The establishment should ensure purchase of proper holding equipment with temperature gauges such as Bain Marie for warming, cupboard for breads, infrared lamps to keep pre plated food warm cold holding equipment for salads and desserts and hot cases



Proper tools like plastic gloves, ladles scoops etc must be used when portioning food.



Holding equipments must be cleaned and sanitized immediately after use.

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HYGIENE AND CLEANLINESS (Continued) The handling of food and services ware is another issue for servers. Servers are required to follow certain precaution during services therefore set the following guidelines to ensure the staff hygiene. 

Hair must be short. Men and women with long hair must be it and cover it with hair netting.



Hand must be washed frequently.



Nails must be well manicured and clean



Uniform must be immaculately clean and pressed as physical evidence of hygiene and standard of establishment.



Shoe must be polished and clean



Server must bathe before coming toe duty.



Minor wounds must be covered with water proof band aid to prevent blood borne pathogens.



Servers who are ill or have cough or sneeze should not be allowed to handle food and serve guest.



Servers must avoid smoking / chewing gum in kitchen and service area. The following forms should be followed while handling food.



Servers must avoid contact with food with bare handle. They must use gloves, togs and services spoons to handle.



Food and cutlery fallen on the floor should be replaced with fresh immediately.



Service ware and table ware must be properly polished and sanitized before use.



Server must never touch service ware that comes direct contact with guest mouth.



The bottom of trays or dishes must be clean to prevent soiling tables clothes and uniform.



The cooked food must be served immediately.



Soiled crockery, cutlery and glassware must be removed from table immediately.



Table ware must be laid just before service.



Server must make sure that all glasses are held against the light check for finger prints and watermarks.



The tips of bottles of proprietary sauce like Ketchup, Soya sauce Tabasco or meat sauce must be clean.



Side station must be kept clean always and soiled linens should be dumped in the appropriate hamper.



Furniture, equipments, carpets and draperies must be cleaned before services.



Room services trolleys must be cleaned before services.



Room services trolleys must have hot cases to serve the food hot and out of temperature dangerous zone.



It is advisable to use plate warmers while serving food to keep food warm

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SANITARY REQUIREMENT

Food contamination in food service operation is continual potential hazard because; food must often be prepared a head of service and may be exposed to a variety of sources of contamination. The major type of food spoilage is microbiological biochemical, physical and chemical with most of the food borne illness are the results of bacterial contamination. The two types of food borne illness are food borne intoxication and food borne infection. Intoxication are caused by loath (poisonous substance) formed in the food before consumption. Infection is caused by activity of large number of bacteria cells within the gastro intestinal system of the victim. The ultimate goal of sanitation program in food service organization is to protect the customer from food borne illness.

Reducing the effect of contamination can be largely achieved by proper generating and time control in the storage, production and service of food.

Trained staffs who have good personal hygiene, habit and follow recommended food handing practices, are a primary factor in an effective sanitation program. Personal training in sanitation is the responsibility of the management of a food service operation.

DISPOSAL OF GARBAGE: Cleanliness and sanitation in catering establishment include adequate treatment and safe disposal of all waste arising from the kitchen, area, wash up area, etc., without endangering human life of polluting environment.

In the food industry waste must be disposed of regularly and efficiently to prevent contamination of any food product. ď&#x201A;§

Classification Of Waste: Waste arise from catering establishment are broadly classified into three groups,.

1. Solid waste - garbage or refuse. 2. Liquid waste - sewage. 3. Gaseous waste â&#x20AC;&#x201C; smoke and fumes.

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1. SOLID WASTE: Garbage waste resulting from the preparation, cooking and consumption of food. It includes all inedible spoilt and scrapes of food which need to be disposed waste matter from preparation includes, vegetables skin, fruits skin, vegetables trimmings, rotten food stuffs, spoiled canned food plate waste also included.

Non food waste from the kitchen which includes all empty cans, bottles, paper bags, polythene bags, lids, car board boxes etc.,

From the service area, single service items such as paper napkins, drinking straws, tooth picks, also include in solid waste.

Accumulation of waste is dangerous to health because: 

Solid waste ferments and gives bad odors.



It favors breeding of insect and rodent, especially flies.



Harmful germs present in the waste may be transferred to human through pests and dust.



It may pollute water.



It may pollute air.



It may create ugly sight.

Method of disposal: The waste collected from catering establishment is mainly composed bio-degradable or organic matter. The waste need disposal because it is perishable and decompose rapidly giving fowl odor (bad smell) and encourage the growth of organism and pest. The garbage can be disposal by the method: 

Land filling.



Burial.



Compositing.



Sericulture.



Incineration.



Mechanically disposing



Bio-gas plant.



Re cycling.



Land Filling: The garbage is dumped in empty pit, quarries etc. dumping is done till the level reaches above the ground level.



Burial: A trench is prepared to collect the garbage. At the end, the garbage is covered with mud.

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Compositing: This is a combined disposal of sludge and refuge. Sludge is a solid particle in the sewage tank which settles at the bottom. The waste is decomposed and established by bacteria and fungi to form material called compost. Compost is rich in nutrient and fertilizers soil.



Incineration: it is a hygiene method of burning refuse and converting into harmful waste.



Mechanical Disposer: Mechanical disposer include pulpier or disintegrator and mechanical compactor. This is the latest way of disposing kitchen waste as soon as it is produced through an automatic garbage disposal machine. This is the quickest and most hygiene way garbage disposal.



Sericulture: Sericulture is a cheap, practical, innovative technology which conserves the human content of the soil. This achieved with the help of earthworms.



Bio-gas: Human wastes, animal dropping and plant agricultural waste can be processed into a biogas or Go bar gas plant to produce fuel gas and rich manure.

Specimen of purchase order (Beverages) Date :…………..

ABC Hotels Ltd. Purchase order

To ………………………….. ………………………….. ………………………….. Please supply the following supplies S.No.

Items

Unit

Price

Amount

Specimen of purchase request form ABC Hotels Date : ………………. Qty

Item

Unit Sign

Supplier

Unit

Total Price

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Requested by ……………………

Approved by ………………………

Beverage control The term beverage refers to all alcoholic and non alcoholic beverages.

Beverages contribute

significantly in the profit of the business and require less staff therefore it requires special attention of the operation.

Beverage sales in an important function and a valuable source of income in hotel and

restaurant business, an effective control of beverage sales is essential.

3:7:1 Purchasing, Receiving and Storing Purchasing: The purchasing of beverages aims to purchase the best quality items at lower price for specific purpose. The job of purchasing beverages is assigned to the purchasing manager, Food and Beverage manager and Head wine waiter.

A standard purchasing procedure ensure supply of ingredients for producing beverage product, appropriate quality of ingredient and each item is purchased at the optimum price. Basically there are three types of alcoholic beverages, wine, spirits and bear. The requirement for each will differ from place to place depending on the guest and nature of operation. A market study can be conducted to analyze the taste of potential customers. It will help the management to identify slow moving items and restrict or eliminate the purchase.

All beverages are purchased in sealed containers so that the content will not spoil, if stored in proper temperature. Storage life of beverages vary from item to item. The life of bear is short for wine is many years and for whisky ,it is indefinitely. Unlike food items, beverages are purchased for use on the day received. The beverages are purchased periodically and are held in storage until needed.

Quality determination is very important factor in

beverage operation. The quality for alcoholic beverages is a function of several factors including price, customer preference, age, advertising etc.,

Each food and beverage establishment has well established purchasing procedure. A purchase request is prepared at the beginning of the month. This is known as purchase request form. A specification of this form is given below.

There are a few legal restriction imposed on handling liquor.

In India we have central and state

regulation. There is variation in state liquor laws. Some state prohibits the sale of liquor. Some allow it if

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certain state requirement are met. Some state prohibit selling beverage more than certain percentage of alcohol find out exactly what is legal and do accordingly.

Purchase order: This is used for placing order to the supplier.

A purchaser order is prepared in

quadruplicate (Four copies) Original – to the supplier or company from which the beverage have been ordered Second copy – Wine head waiter to confirm that offer have been placed Third copy – Receiving clerk to know what deliveries to expect and check the quality, quantity and brand delivered Fourth copy – Kept by the purchasing officer

BEVERAGES RECEIVING: A well organized receiving procedure for beverages ensures that the hotel is obtaining the beverage of the correct quality and quantity at the agreed price. The quantity inspection is done by receiving clerk/head cellar man. Most beverage items comes in crates. There are counted and the contents are checked to ensure that there are missing or empty bottles check the sign of the bottle against the delivery note. As regard to quality unspecific all beverages are purchased by brand names check the label of the producer to ensure that correct goods have been delivered.

The objective of beverage receiving is almost the same as that of food receiving. The main objective is: 

To check and match the quantity of beverages delivered with the items order as purchase order and delivery note Each crates/Cases should be opened check for such things as empty, missing broken bottles etc.



To do the quality inspection by checking the brand name and label an each item.



To check the price.



To prepare request for credit note incase of difference in quality or quantity.



To prepare record in Goods received report.



To maintain an accurate record of all chargeable empties delivered and returned.

Beverage Receiving Procedure 

All goods are received at the centralized receiving department.



Delivers of beverages should be accompanied by invoice.



Goods must be checked against invoice and carefully checked for quantity and brand.

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

The receiving clerk must stamp and sign invoice in order to acknowledge proper receipt of goods.



Invoices should be sent food and beverage controller.



Any broken units should be returned for credit with seal intact.

Beverage receiving report On receipt of deliveries, all invoices are entered and recorded on receiving report on the same day. It has a clear list of beverage received with the help of this the beverage controller can compare the beverages ordered and received.

Specimen of Daily receiving report

ABC Hotels Distributor or supplier

Item

Unit

Case size

Unit cost

Case cost

Total

Beverage Storing As soon as the beverage areas are received in the receiving area, the receiving clerk or wine steward should be notified of deliveries and removal of all storage items should be done at once. All beverages should be stored securely locked area to avoid the possibility of pilferage the beverage store should be located near the bar. All units should be stored on appropriate shelves. Control should be kept empty cartons.

The physical arrangement of storage area should be laid down in such a manner that all scotch whiskies at one place, rye whiskies in another area, and all gins on third place. At the same time proper temperature control should be maintained to minimize the chances of spoilage.

In addition to temperature condition the following point must be observed regarding beverages. 

Rotate all beverages – First in first out basis.



All wines should be laid down

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All spirits and liquor to be kept upright.



Port and sherry must kept upright



Separate bin card should be maintained for each item.



Maintain a record of all beverages with appropriate evidence.



Un wrap all bottle (Remove the bottle after the packages)



The entrance to the cellar (Store) should be strictly controlled.



The key should the kept in a secured place.

The beverage store could be separated in to five areas: 

Main store area – for storing spirits and Red wine at temperature of 55ºC - 60ºCF



Refrigerated area – for white and sparkling wine at temperature of 50ºF (10ºC)



55ºF (13ºC) for storage of bottle bears and soft drinks.



Storage of empty bottle and crates

Beverage Bin card : These bin cards are affixed to the shelf, servicing as label the bin card contains the following information such as : 

Type of beverage



Band name



Bottle size



A number to identify the particular item of shelf



Code number

Uses: 

It ensures that each items will be formed in the same location



The wine list are prepared and printed with bin number



The number stamped on each bottle identifies the bottle as the property of the hotel. Empty bottles can early be checked for number before they are replaced by full bottles to ensure that to one is bringing empties after outside.



It helps to maintain perpetual inventory record.



The card may be used to record all items in stock, the No of units received, no of units issued. The closing balance can be determined without counting the bottle.

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Specimen of Bin Card ABC HOTELS BIN CARD Item ……………….. Date

No. of Bottles opening balance

Stock No…………… Received NO of bottles in

Out

Balance

Date

Out

Balance

Cellar Ledger: Cellar record is maintained for recording and controlling all the beverage items. Each individual items usage and stock is recorded daily in this ledger. The following information’s are entered: 

Name of the item



Size



Price and date



Delivery advice



Code No of the item



Date of issue



Name of the department which it is issued



Reference, number of department concerned



Quantity and value of deliveries, stock, balance and issues



The Unit cost rate



Other information such as :



Suppliers name, address and telephone number



Maximum level, Minimum level, and record level



Past price records



Stock taking and discrepancies

The stocks of items is checked by physical stock taking each day. In case, if discrepancies are noted, this must be immediately investigated by referring to Bin card requisition and delivery note.

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Specimen of cellar ledger

ABC Hotels Specimen of Beverage receiving report Distributors

Items

Cases size

Units

Unit cost

Case cost

Total

Specimen of cellar stock ledger

Date

Name

Bin

Opening

of the

No.

Balance

drink

Received

Total

Closing Balance

Consumption

Price

Total

per unit

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ISSUING AND PRODUCTION CONTROL The main selling area of beverage in the hotels is: 

Bar



Dispense bars



Floor service



Banquets

Issues from the cellar area distributed to the above mentioned selling area. The bar staff collect their requirement from the cellar at the predetermined hours and sign for the items. All issues from cellar are made against signed requisition the beverage requisitions are color coded with different color note for each of the selling unit. The requisition notes are prepared in duplicate. The original is retained by the cellar man. On the basis of this requisition, he makes entry in the cellar stock register and subsequently passes this requisition to the account or control office. The duplicate copy (second copy) is retained by the bar man and handed with daily sales.

Accounting for all beverage held in cellar like accounting for money in a bank require two record, a record of what goes in and a record of what goes out. This will help in determining current inventories and value of stock on out. This will help in determining current inventories and value of stock on hand which can be checked by means of physical inventory.

Production control (preparation of beverage for sale)

The preparation of beverages does not involve any processing stage basically it is a retail operation to increase the volume of sale Beverage are offered for sale to customer in bottle or offering a portion of it except in the preparation of cocktail or punch, where a few standard items are mixed together to specific ratio and served to the customer.

The much of attention in the preparation of beverages is paid to the following points. 

Method of presentations of Beverages



Service of beverages

Although the preparation of beverages is sample it involves same system as adopted for food.

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Beverage volume forecasting



Standard Yield



Standard beverage received



Standard portions size

Beverage volume forecasting : Decide the par stock for all selling outlets. A per stock is the predetermined quantity for each item on the inventory. The predetermined quantity is decided by taking the quantity required for a typical busy day and plus provision for safety (Reserve stock) This is decided for par stock. Empty bottles are returned to the cellar along with each requisitions No processing of preparation is done, until drink is ordered by customer. The volume forecasting (Expected sales) is done on basis of study of the sales analysis.

Standard Yield The number of portions obtainable from a bottle will depend upon the size of the drink portion and bottle size. The yield obtainable from all kind of beverages should be determined as it will help in calculating potential sales per bottle. For the purpose of accuracy of portion size, the staff is provided special hand measures (Peg measure) and automated dispensing equipment. The selling price of a bottle differ according to it is quantity, sold as full bottle or sold in portions.

Standard drink Recipe The preparation of standard drink recipe for beverages helps in obtaining consistency in quality, quantity, and the taste for the customers. It also helps in working out the cost and stand potentials for all drink used.

Standard portion size The standard portion size is determined by the management.

The standard portion size

represents the number of fluid ounzes of a drink to be served to customer. This is divided in relates to the cost of each individual beverage and the selling of the drink.

3:8 Standard recipe and standard yield Standard recipe: The preparation of standard drink recipe for beverage helps in obtaining, and taste for the customer. It also assists in the cost and standard sales potential for all drinks used at the time of preparation of standard beverage preparation. The standard portion size represents the quantity to be served to the customer. This is decided in relation to the cost of each individual beverages and the selling price of the drink.

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Standard yield The size of the portion of drink sold must be displayed in each selling outlet. The number of portions obtainable from a bottle will depend upon the size of the drink portion and bottle size. The yield obtainable from all kinds of beverage should be determined as it will helps in calculating potential sales per bottle. For the purpose of accuracy of portion size, the staff is provided special hand measures, and automated dispensing equipments. Standard glassware marked clearly the quantity of liquid in fluid ounces, also helps a great deal in serving standard size drinks. The selling price of a bottle differs according to its mode of sale (i.e.) sold as full bottle or sold in portions.

Bar frauds Since profit is the margin of sales over cost, the profit plans setup two pronged effort.

(a) To maximize sales (b) Minimize the cost

Pricing is of strategic importance in maximizing profit per drink without inhibiting demand and reducing volume.

On the cost side, while every expenses must be watched and the primary focus is on controlling beverages loss. There are two major ways to do this. Minimize, the opportunity for pilferage and set up control system for measuring and pin pointing loses and table profit action to stop them.

There are some common practice that makes cash disappear some common frauds committed

The bar tender 

Fail to give account for sales and put the money in the pocket



Over charges and put the differences in the pocket.



Felling the customer, No changes and keep the changes.



Bring in own liquor and sells it



Bring in empty bottles, turns it in to store room, them sells from bottle that replaces it and pockets the money.



Short-pours a series of drinks, then sells others from the same bottle keep the money with him.



Sells liquor form one bottle without accounting and then fill with water to cover theft.

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Substitute less quality liquor for expensive brand and change for expensive brand. Pockets the difference of the money.



Smuggle full bottle

Fraud by the waiter  Re uses the check (bill) already paid and keep money for own use 

Over charges for drinks and pocket the differences.



Make mistakes in the bill purposely in totaling and keep the excess amount charged.



Intentionally omits items from check to increase tip



Changes item and prices on the checks (bill) after customer pays the bill.



Gives too little changes and pockets the balance.

Fraud by the cashier 

Gives too little changes and pockets balances



Fails to enter the check already received and pocket the money puts the balance on the water.

3:10 Books maintained during beverage control o Purchase request form: In large hotels the wine steward who is in charge of maintaining inventory and stock room makes purchase request just at the beginning of the month. This is known as purchase request form. o

Purchase Order : The purchase order is prepared by food and beverage controller and forwarded to the purchase officer. The purchase officer submit them to the management for approval and send it to the supplier. A purchase order is prepared in four copies. The first copy – to the supplier The second copy – wine steward to conform that offer have been placed. Third copy – Receiving clerk to known what deliveries to expect and determine the correctness of the qualities and brand delivered. Fourth Copy – kept by purchasing officer

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Daily receiving report : After receiving the deliveries from the supplier, all the invoices are entered and recorded on daily receiving report on the same day. It has a clear list of beverages received with help of this report the beverage controller can compare the beverage ordered and received

Bin card: The bin cards are fixed to the shelf, serving as label. They ensure that each item will always be found in the same location. It serves as a perpetual inventory record. It contains the name of the stock, the number of unit received, and the number of unit issued. It is easy to find out the balance on hand without counting the bottles. It by seeing the card it is easy to find gets the number of bottles missing.

Cellar ledger: It is maintained for recording and controlling all the beverage items. Each individual items usage and stock is recorded daily in the ledger. Following information are entered. 

Name of the product/Item



Size of the unit



Price



Delivery advice



Code number of the product/item



Date of issue



Name of the department to which it is issued



Quantity, value of deliveries, stock, balances and issues



Unit cost



Other information such as o

Suppliers name, address, and telephone number

Maximum level, minimum level and re-order level.

Cellar control Book: It contains all daily deliveries to the cellar and the daily issue of each beverage from the cellar to the various bars. It should be cross checked with the entries in the bin card and the perpetual inventory ledger held in the control or Account office. Beverage perpetual inventory ledger: It is a master ledger maintained in the accounts and control office.

It is prepared for each

individual of beverage for each item recorded in this ledger. The information for this ledger are collected

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from : invoices, credit note, daily beverage requisition from different bars. The perpetual inventory figure of this ledger must tally with physical stock taking of the cellar. Breakage or ullage book Beverage of bottled beverages occurs by mishandling by cellar and bar staff. The ullage covers all standard beverages such as bottles of weeping (Leakage) wine, bottle of wine with faulty corks etc which would be returned to the supplier for replacement.

A record of all the above items with an

explanation and cerenter signied by food and beverage manager is prepared in this standard format.

Summary Cost is generally defined as reduction, in the value of an asset for the purpose of securing benefit or gain, however in the food and beverage business, it means the price to the hotel or restaurant of goods and service when the goods are consumed or the service rendered.

Food represents the largest

expenses in most hotels, therefore it is essential to control and all the items sold are accountable.

Various records are used as a tool of control to reduce the food cost and maximize the profit. Menu serve as a tool of control as well as tool of marketing, food and Beverage.

The food and Beverage control starts from purchasing, receiving, storing issuing, production, portioning and sales. Strict control has to be exercised in all the above stages in order to achieve the objectives.

Unit questions 1. Explain the aim and objectives of production forecasting 2. What is standard purchase specification and what are its objectives 3. Explain menu merchandising 4. List out the constraints of menu planning 5. Explain the duties and responsibilities of chef de cuisine.

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DEMAND PLANNING & FORECASTING Answer of self assignment questions:

I. Self assignment question-I 1. True. 2. True. 3. False. 4. True.

II. Self assignment question-II 1. True. 2. False. 3. True. 4. False. 5. True.

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