Maslow's Hierarchy of Needs

Maslow's Hierarchy of Needs

If motivation is driven by the existence of unsatisfied needs, then it is worthwhile for a manager to understand which needs are the more important for individual employees. In this regard, Abraham Maslow developed a model in which basic, low-level needs such as physiological requirements and safety must be satisfied before higher-level needs such as self-fulfillment are pursued. In this hierarchical model, when a need is mostly satisfied it no longer motivates and the next higher need takes its place.

 Maslow's hierarchy of needs is shown in the following diagram:

Maslow's Hierarchy of Needs

                                               Physiological Needs

Physiological needs are those required to sustain life, such as:

• air
• water
• nourishment
• sleep

According to Maslow's theory, if such needs are not satisfied then one's motivation will arise from the quest to satisfy them. Higher needs such as social needs and esteem are not felt until one has met the needs basic to one's bodily functioning.

Safety Needs

Once physiological needs are met, one's attention turns to safety and security in order to be free from the threat of physical and emotional harm. Such needs might be fulfilled by:

• Living in a safe area
• Medical insurance
• Job security
• Financial reserves

According to Maslow's hierarchy, if a person feels that he or she is in harm's way, higher needs will not receive much attention.

Social Needs

Once a person has met the lower level physiological and safety needs, higher level needs become important, the first of which are social needs. Social needs are those related to interaction with other people and may include:

• Need for friends
• Need for belonging
• Need to give and receive love

Esteem Needs

Once a person feels a sense of "belonging", the need to feel important arises. Esteem needs may be classified as internal or external. Internal esteem needs are those related to self-esteem such as self respect and achievement. External esteem needs are those such as social status and recognition. Some esteem needs are:

• Self-respect
• Achievement
• Attention
• Recognition
• Reputation

Maslow later refined his model to include a level between esteem needs and self actualization: The need for knowledge and aesthetics.

Self-Actualization

Self-actualization is the summit of Maslow's hierarchy of needs. It is the quest of reaching one's full potential as a person. Unlike lower level needs, this need is never fully satisfied; as one grows psychologically there are always new opportunities to continue to grow. Self-actualized people tend to have needs such as:

• Truth
• Justice
• Wisdom
• Meaning

Self-actualized persons have frequent occurrences of peak experiences, which are energized moments of profound happiness and harmony. According to Maslow, only a small percentage of the population reaches the level of self-actualization.

Implications for Management

If Maslow's theory holds, there are some important implications for management. There are opportunities to motivate employees through management style, job design, company events, and compensation packages, some examples of which follow:

• Physiological needs: Provide lunch breaks, rest breaks, and wages that are sufficient to purchase the essentials of life.
• Safety Needs: Provide a safe working environment, retirement benefits, and job security.
• Social Needs: Create a sense of community via team-based projects and social events.
• Esteem Needs: Recognize achievements to make employees feel appreciated and valued. Offer job titles that convey the importance of the position.
• Self-Actualization: Provide employees a challenge and the opportunity to reach their full career potential.

However, not all people are driven by the same needs - at any time different people may be motivated by entirely different factors. It is important to understand the needs being pursued by each employee. To motivate an employee, the manager must be able to recognize the needs level at which the employee is operating, and use those needs as levers of motivation.

Limitations of Maslow's Hierarchy

While Maslow's hierarchy makes sense from an intuitive standpoint, there is little evidence to support its hierarchical aspect. In fact, there is evidence that contradicts the order of needs specified by the model. For example, some cultures appear to place social needs before any others. Maslow's hierarchy also has difficulty explaining cases such as the "starving artist" in which a person neglects lower needs in pursuit of higher ones. Finally, there is little evidence to suggest that people are motivated to satisfy only one need level at a time, except in situations where there is a conflict between needs.

Even though Maslow's hierarchy lacks scientific support, it is quite well-known and is the first theory of motivation to which many people they are exposed. To address some of the issues of Maslow's theory, Clayton Alderfer developed the ERG theory, a needs-based model that is more consistent with empirical findings.

REFERENCE : www.abahe.co.uk

SWOT Analysis / TOWS Matrix

The SWOT analysis used to outline goals for yourself or your business, for business planning, strategic planning, competitor evaluation, marketing, business and product development and research reports. SWOT analysis uses SWOT matrix (2 into 2 matrix) to assess both internal and external aspects, especially in business and marketing planning.

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats.

Strengths allow capitalizing on Opportunities in achieving objective. On the other hand, Weaknesses expose to Threats that hinder from achievement of objective.

2x2 matrix grid is consisted of a two-column with two rows.  Strengths and Weaknesses are internal factors and listed in the top two boxes. Opportunities and Threats are external factors.

Strengths include all the things business does best or better than its competitors and all positive product features within control of business.

Weaknesses are factors are under control but for some reason need improvement.

Opportunities include all factors that make up the reason for  business’s existence and set the path for the future.

Threats include all factors beyond control that could place business at risk by causing declining revenues or profits.

Some Strengths, Weaknesses, Opportunities, and Threats for a company is given as :

Strengths of a company	Weaknesses of a company
·         Advantages of proposition? ·         Capabilities? ·         Competitive advantages? ·         USP's (unique selling points)? ·         Resources, Assets, People? ·         Experience, knowledge, data? ·         Financial reserves, likely returns? ·         Marketing - reach, distribution, awareness? ·         Innovative aspects? ·         Location and geographical? ·         Price, value, quality? ·         Accreditations, qualifications, certifications? ·         Processes, systems, IT, communications? ·         Cultural, attitudinal, behavioural? ·         Management cover, succession	·         Disadvantages of proposition? ·         Gaps in capabilities? ·         Lack of competitive strength? ·         Reputation, presence and reach? ·         Financials? ·         Own known vulnerabilities? ·         Timescales, deadlines and pressures? ·         Cashflow, start-up cash-drain? ·         Continuity, supply chain robustness? ·         Effects on core activities, distraction? ·         Reliability of data, plan predictability? ·         Morale, commitment, leadership? ·         Accreditations, etc? ·         Processes and systems, etc? ·         Management cover, succession?
Opportunities for a company	Threats for a company
·         Competitors' vulnerabilities? ·         Industry or lifestyle trends? ·         Technology development and innovation? ·         Global influences? ·         New markets, vertical, horizontal? ·         Niche target markets? ·         Geographical, export, import? ·         Market need for new USP's? ·         Market response to tactics, e.g., surprise? ·         Major contracts, tenders? ·         Business and product development? ·         Information and research? ·         Partnerships, agencies, distribution? ·         Market volume demand trends? ·         Seasonal, weather, fashion influences?	·         Political effects? ·         Legislative effects? ·         Environmental effects? ·         IT developments? ·         Competitor intentions - various? ·         Market demand? ·         New technologies, services, ideas? ·         Vital contracts and partners? ·         Obstacles faced? ·         Insurmountable weaknesses? ·         Employment market? ·         Financial and credit pressures? ·         Economy - home, abroad? ·         Seasonality, weather effects?

BCG Matrix

The Boston Consulting Group (BCG) Matrix is a simple tool to assess a company’s position in terms of its product range. It helps a company think about its products and services and make decisions about which it should keep, which it should let go and which it should invest in further.

That model was developed by Boston consulting group in 1970’s. That matrix also incorporates the product life cycle concept. That model can be used to access the position of strategic business units and very helpful for the organizations operating in number of different markets.

BCG MATRIX

Brands or items can be referred to as strategic business units (SBUs) because each is viewed as a separate entity with its own set of market conditions and competitors. BCG matrix shows various SBU on graph of Market growth Vs Market share. It has four cells and cells within the matrix are classified using the SBU’s ability to act as a source of funds (e.g., relative market share or competitive position) and its need for funds based on future growth potential (e.g., market growth rate or industry attractiveness). Placing products in the BCG matrix results in 4 categories in a portfolio of a company. To use the chart, analysts plot a scatter graph to rank the business units (or products) on the basis of their relative market share and growth rates.

The BCG matrix’s’ four cells based on two axes. The horizontal axis is labeled relative market share. Relative market share refers to a firm’s market share relative to its largest competitor. The vertical axis is labeled market growth. The market growth rate is usually based on average annual growth rate over the last few years, depending on the age of the industry or category.

Two other factors are important in evaluating SBUs: the size of the circle and the placement within the cell.

The size of the circle representing each SBU gives an indication as to the actual size of the unit measured in sales or volume. This is important because some SBUs may generate a good deal of revenue based on absolute volume but not look as attractive in terms of relative market share and market growth rate.

The SBU’s placement within the cell is also important because the axes represent a continuous scale even though there are only two labels. Two SBUs could be on opposite sides of the same cell and should be viewed differently.

Four categories are as following

Stars	(high growth, high market share)
	These products generate high amounts of income as they are in high growth markets with a relatively high share of that market. However, they require large amounts of investment because of their high growth rate. These are normally known are raising star. When the market growth rate decree ses, a star will become a cash cow, if it maintains its large market share. A diversified company should have stars that have the potential to become the next cash cows in their portfolio to ensure future cash generation.
Basic Strategic Rule	· Maintaining relative market share · Keeping sufficient funding available
Cash Cow	(low growth, high market share)
	These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a "mature" market, and every corporation would be thrilled to own as many as possible. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth. Cash cows provide the cash required to turn the question marks into market leaders , to cover the administrative cost of the company, to fund research and development, to service the corporate debt and to pay dividends to share holders. Because the cash cow generates a relatively stable cash flow, its value can be determined with reasonable accuracy by calculating the present value of its cash stream using a discounted cash flow analysis.
Basic Strategic Rule	Gaining relative market share Accepting losses · Profits and cash generation should be high , and because of the low growth, investments needed should be low. Keep profits high · Foundation of a company
Question Mark	(high growth, low market share)
	These products have low market shares and do not generate much cash. However, these products are in a rapidly growing stage and thus consume large amounts of cash. A question mark (also known as a "problem child") A question mark has the capability to gain market share when the market growth slows, and can thus become a star and finally a cash cow. Before making the investment required to grow the market share. Question marks must be analyzed carefully in order to determine their potential.
Basic Strategic Rule	· Maintaining relative market share · Exploiting cost-cutting potential · Releasing funds
Dog	(low growth, low market share)
	Dogs, or more charitably called pets, are units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the business's market share. The products that fall in this cell are the ones with a low share of a low growth market. These products do not generate revenues for the company. Firms should get rid of the products that fall in this cell as they tend to require huge investments from time to time.
Basic Strategic Rule	Abandoning hopeless products    Minimizing losses · Avoid and minimize the number of dogs in a company. · Beware of expensive ‘turn around plans’. · Deliver cash, otherwise liquidate

Limitations of BCG Matrix

• High Market Share is not the only factor to measure competitive advantage. The matrix is just based on one factor each in industry attractiveness and competitive advantage. It tends to ignore a number of highly important factors as determinants of profitability. Similarly, Market growth rate is not the only factor to measure industry attractiveness.
• The framework is based on the assumption that each business unit is independent of the others and their activities are mutually exclusive. Sometime a dog SBU used as synergy to other SBUs. However, in practicality, a business unit that is “dog” may be helping other business units gain a competitive advantage. Sometimes Dogs [of a huge market] can earn even more cash as Cash Cows.