Management Control Types There are three major types of management control over behavior in organizations. Each control has its own standards, its own monitoring system and its own system for corrective action when behavior does not meet standards. These three types of management controls are given below: Organizational Controls. The organizational controls refer to the formal rules and standard operating procedures that are communicated throughout the organization. Such controls are concerned with the total organization and may, therefore, be called administrative controls. The direction for organizational controls comes from the plans and purposes of the organization. In business organizations, this direction is often expressed in terms of market share, cost reduction, return on investment etc. These may be translated into specific performance measures such as sales quotation standard costs and budgets. Rewards for meeting standards, vary from a word of praise to salary increase and promotion. Social Controls. Social or Continue reading
Management Concepts
Essential Skills for Project Managers
To be a good project manager, it is important to possess several skills in order to manage the project in the organization. Project managers need to have a wide variety of skills which can help them to do the best in project management. All the skills that possess by the project manager is determinant of the success of the project in project management. It is to fulfill the responsibilities as the project manager. There are several major knowledge and skill categories for project manager. Skills requirement of the project manager divided into four categories. Below are the four major knowledge and skills categories of the project manager. Project management process skills: Project Management process skills are the knowledge and skills related to the mechanism of project management. The project manager should be knowledgeable about tools, techniques and process technology in project management as well able to apply them in real Continue reading
Importance of Planning in Management
One of the first and most important functions of management is planning. Planning consists of the process of evaluating the goals of an organization and creating a plan to meet these goals. Both Koontz and O’Donnell state that “planning is deciding in advance on what to do, when and how it will be done, and who will be doing it”. Therefore, planning is the foundation of the management role, and plays a critical part to the success of an organization by determining the means and the methods in order to achieve the objective. A key element and starting point of this process should include the development of a Mission and Vision Statement to which aids in the way an organization functions. The mission statement is the explanation of the organization’s existence, while the vision statement is the motivator in which defines the purpose and direction of the organization for not Continue reading
Delegation of Authority – Concept, Features, Advantages and Barriers
The process of assignment of specific work to individuals within the organization and giving them the right to perform those works is delegation. Delegation of authority is one of the most significant concepts in management practice, which affects managerial functions. Management is the art of getting things done through others and delegation means to get the results through the subordinates. The expansion of business volume and diversification of line of business makes it impracticable to handle all the business by a single manager. Therefore, the concept of delegation of some managerial authority to subordinates comes into practice in present day business organizations. Here, the manager delegates some of his authority to his subordinates. This helps in developing a feeling of dedication to the work among the subordinates. The top level management plays only the role of a supervisor and visits them to provide guidance, suggestions and instructions. It minimizes the Continue reading
Standard Costing as a Control Mechanism
Standard costing is technique of cost planning and control, based on scientific analysis of elements of cost in terms of standard input / output norms and standard rates / price per unit of input. The following process is involved in setting and practicing standard cost. Establish standard cost, component-wise, for each output Measure the actual cost, component-wise, for each output Their comparison with the actual costs and the measurement of variances. The location of responsibility for the variances and the corrective action to be taken. The analysis of variances for ascertaining the reasons for the same. Establishment of a Standard Costing System The installation of Standard Costing System in a manufacturing concern involves the following steps: Standardization of Functions: All activities should be standardized and the technical processes of operations should also be susceptible to planning. Establishment of Cost Center Classification of Accounts: The different accounts can be codified and Continue reading
Business Risk Management – Meaning, Stages, Benefits and Limitations
Risk is the combination of the probability of an event and its impacts. It is the possibility of an event and its effect that constitute benefits or impediments to success in an undertaking. In an enterprise, identification of a hazard has both a helpful and a harmful aspects. Consequently, both the benefits and threats to the success of business operations are considered in the assessment of risk. When focusing on safety, risk only takes the perspective of negative consequences. As a result, it focuses on the alleviation and avoidance of harm. Threat management is vital in organizations’ tactical management. It entails a process where organizations tackle the risks connected to their actions with the objective of attaining constant benefit within individual activities and across a range of all actions. Businesses are affected by both interior and exterior factors relating to risks. Some risks can be categorized as external, while others Continue reading