What is management?
Management is planning and coordinating of all activities involved in an organization. It is included as a factor of production involving machines, human beings and current assets such as money. Controlling everything in an organization is classified under this broad term. Integration of human intelligence and creativity in the business structure is the key element of management. Proper incorporation result to increased growth and performance hence maximizing the profit. Organizations direct their focus on exercising proper management skills to collectively benefit from potential endowed in their employees. The basic knowledge behind management is understanding the human resource and their relationship with capital. Human capital concept is the priority for the organizations since it is the determining factor for success. The motivation behind the workers is core hence exponential relationship exist between performance and management style employed by any supervisor. One element which clearly defines management is performance appraisal. This is continuous evaluation of the employee’s performance and its alignment with set goals and objectives. Channeling all the support toward encouraging the efforts of the workers elucidate their performance. A reflection of their performance is well imaged in output. The global perspective of this practice is viewed in a positive manner. Various strategies are employed to manage every activity within an organization. Assuredly, institutions which embrace this practice benefits widely. However, the attention is not only given to the business performance but also shifted to time and material management. Further, it interlocks corporate policy, directing and controlling of all resources. Notably, management teaches proper utilization of resources which are scarce. One of the problem facing businesses is lack of enough resources to sustain their operations. Ways to reduce the wastage are appreciated. Efficiency in avoiding wastage can only be witnessed when the senior staff have good managerial skills to achieve the same. Beside deployment of financial assets and human resources, this practice also involves storing of information and facts for future use. Data is pertinent to the organization since it is used to measure success. Well organized management system assist in retrieving critical information from the archives. Every member has some management representation and therefore not limited to the supervisors and top managers alone. Reporting of every progress is part of the job. While management trends can change very fast, the long term impacts have been defined by embracing diversity in the market. The supervisors and managers are destined to use more effectual measurement style which depicts charismatic leadership.
Objectives of Management.
1. Formulating future policies. Planning involves deciding in advance the future plans of an organization. It entails setting plan that would ensure all activities run in accordance to the set objectives. Framing the strategies to achieve the required goals is the major element of policy formulation.
2. Helps in control of performance. The measurement of output of every employee counts in the final performance of an organization. The role of management is to align the skills of the workers to the available opportunities. Consequently, regular advancement of their skills is required for maximum profit to be realized.
3. Management direct the path to be taken by the organization. This involves all activities that constitute the entire entity. Who to do the activity and at what time is purely controlled by the management.
4. Helps in solving strategic business problem. Whenever there is need to expand or diversify the operations of a business, strategic problems are encountered. Similarly, decisions to decide on what to export or sell locally is complex. Through exercising of management skills, the solution is arrived at in a more reliable manner.
5. Focuses on motivation of employees. Workers are an important asset for any organization. Determination of what they deserve is controlled by management system. Understanding the areas of weakness and strength is core and very essential.
Areas of management
This is planning for the financial assets of the organizations. The cash flow management are monitored and detailed to enable the performance of an organization. It also involves procedure for management of risks which could emanate from internal or external environment. Financial management provides a platform for internal disruption which is an indicator of creativity in a business.
Human resource Management.
It strikes an equilibrium between the human capital and the needs of an organization. The purpose of this is to ensure the employees absorbed in the organization meet the required standards. When well applied, it necessitate business growth with linear relationship to the input applied.
Ethics and business Law.
Applies to the conducts of the business as well as the employees. It details the ethical code of conduct and general responsibility for every employee. Business Law states the various policies which are paramount to the operation of a business. It is through this that an entrepreneur is able to learn regarding the policies governing activities in the country.
Considered as the management of the activities of a business in another country. The production or exports are managed by a representative form the organization with an aim of expanding the market share.
Management of Technology.
This involves updating with all available technological advancement. It also entails managing what the company own. With the changes in technology happening so rapidly, organizations are mandated to remain avast with the evolvement. The senior staff are encouraged to downstream the importance of embracing new technology in production and controlling other activities from the internal environment. Coming up with creative ways to improve service delivery is pegged to how well the technology management is enacted.
This discipline enables the people to understand various techniques which can be employed to increase movement of goods and service. The primary role is to lure customers to favor consumption of the products marketed. Additionally, it also involves understanding management of tools and resources employed in the marketing process. Marketing management often employs market research to analyze the nature of the economic environment. Some of the methods employed are quantitative research, qualitative and experimental research. It also employs economic and strategy competitive tools to establish viable market.
It is one of the management category that control all the activities in an organization. The activities included here are the normal production process. Furthermore, labor is also part of operations. The central idea is to convert all the activities involved in production into tangible profit. Administration of business practices is highly regarded for any organization. High level of efficiency is the control guide when operations management is employed. Operational issues covered by this management are; one is size of the business. It entails determination of proper strategies that can be employed to expand the business. Second, it gives direction in project method to be used by establishing the raw materials that should be used and procedures to control quality.
This involves managing the budgets and controlling the activities that happen within an organization. It enables the staff to allocate time and funds required to achieve every step in a business. Implementation of business plan is well illustrated and guided by the project management. Execution of the projects and teamwork activities are considered paramount in projects.
Formulation of ideas,planning them and evaluating the right decision to achieve particular goals. This is one of the most valued aspect of a business since it gives focus to an organization. Emphasis is laid on creativity by brainstorming for ideas to forge the state of an organization ahead. Strategies are well designed and actualized in the required format. Through constant weighing of possible ideas, one is able to come up with the right one which suffices the intended work. Cross functional decisions are integrated to achieve quality output. Though managing the internal pressures, much can be achieved. Strategies could steer the business to the next level.
Supply Chain Management
This is the management of flow of goods and services. It also covers the storage and distribution of raw materials which are core element for an organization to run. It manages the activities of interconnected businesses. Essentially, movement of goods and services are controlled from one point to another up to the end user. The chain management of activities are normally detailed and recorded in the right format. Supply management is core to an organization and taken seriously for the operations to continue smoothly. This type of management controls the relevant departments in doing activities the right way.
It is a discipline which brings an interaction between knowledge and business technology. It deals with people in a business and also entails care of materials used in the process of production. The technical discipline is used to qualitatively establish the right plan to run the business. Moreover, it encompasses those aspects of the business that are necessary for its success. For example administration work, marketing and financial planning. The precursor of industrial management is clinged to factory management. It focused on managing the operations of an organization through protecting necessary assets. The terms of present day industry management involves bookkeeping.
Accounting Study Material
According to American institute of Certified Public accountant, classification of data and organizing it in terms of every transaction carried out in a business encompasses the entire process of accounting.
Attributes of Accounting.
This discipline possesses several characteristics which distinguishes it from other related subjects.
• Transactions which are related to money are recorded while those that are not in monetary value are ignored. The major purpose of accounting records is to trace the inflow and outflow of cash in an organization.
• The records should indicate the importance of every element and what it is used to satisfy. Any information that is entered in the books of accounts has a high significance. The recommendations which are encouraged is to ensure every activity that takes place can be described in the right order and format.
• Financial managements should be understood easily without much complexities. The content contained in the document should be clearly brought out without much explanations from the staff. Knowledge in accountancy is relevant in enabling to achieve this objective.
• Accounting should be reliable. This means that it should be verifiable and free from bias.
• Relevance is also a point of consideration. Timely reporting is essential for an organization. True financial reports have to be presented at the time required by the organization and other bodies such as the auditors.
Accounting is the form of communication employed in the business world. It relays the information which is needed by investors to evaluate the possibility of trusting their funds to another party. This is through presentation of important information in form of data. Data analysis precedes any calculation made in the documentation of the final financial year. Accounting records provides the customers with information on economic enterprise and effect of transactions. This portrays the bigger picture reflected by this field. If well-coordinated, it can propagate the business to the next level. Basically, the financial statement which are of importance for any business are; balance sheet. This is a document prepared to show the assets and liabilities of an organization. It reflects the financial position of the business by comparing the assets that constitute the business versus the liabilities. The second document is income statement. This summarizes the information concerning the incomes paid by the business to its workers. Finally cash flow statement is also considered.
The statements described above serves the following functions;
• Provide relevant information which is used in making critical decisions by the user. They are clearly recorded and every item described in regards to the recommended policies. Extraction of data from these statements are useful before choosing engaging with the business enterprise.
• Assist the people working in accounting section to execute their duties efficiently. They are able to steward any activity that pertains to financial movement.
• Help to project the financial position of the business. Ability to debunk the health of a business is not decided by mere observation. Data presentation provide a meaningful output which is used to speculate the possibility of the business to survive in the diverse market. The technicality of existing business structure calls for taking concerted effort in measuring performance. Determination of financial position help the business to manage competition.
• The statement are helpful in preparation of policies that guide every operation in the business. Ethical considerations are considered before any organization is set up. The best way to come up with more effectual system is guided by critically analyzing the available financial date in a more thoughtful manner.
• Taxation decision. The government impose tax based on the information shown on the financial statements. The more organized the statements are, the more convincing they become. They are used by entrepreneurs to convince the bank to allocate them loans for the purpose of growth and normal operations.
• Union bargaining power. Unions can use the information on the statements to request their needs. The performance of the organization can be used as the channel to access funds or even win contract for their best performance.
• Credit decisions. Before any form of loan is allowed by the bank, a business is required to present the statement showing their normal operations for a particular period of time.
Objectives of Accountancy
• Required for making succinct financial decisions. Account records are managed in a systematic manner since they are reviewed regularly to help in arriving at important decisions. They are used to cause internal disruption which is the background of business growth.
• Recording monetary values. Any asset that has money value does not go unrecorded in the accounts statement. It is used as a gauge to monitor the flow of assets and possible liabilities incurred for a specific period of time.
• They are required to be stored by relevant government bodies for the purpose of establishing the degree of compliance by the business owners in terms of set laws and policies. The most crucial part of consideration is tax. The statutory bodies are able to evaluate the tax payment by the business.
• Investors and leaders are mandated to prepare the statements. The secret behind this is choosing the viable project to invest in.
• Income statements are used to determine the returns generated by the company. This further helps in collecting revenues for the government. Tax evading is common when financial information is ill presented. Accountancy ensures that everything that goes into consumption is reliable.
Accounting operates in a multifaceted environment. The knowledge does not operates on its own. The conceptualization of accounting knowledge is viewed to integrate other disciplines. This means that an accountant should not only know the information and regulations regarding the practice but also understand the real issues. It is therefore difficult to discuss one area without considering the others. Ethical considerations form a part of accountancy. For proper information gathering, it is required to embrace the input of other disciplines such as management.
Areas of Accountancy
It introduces the very basic of accounting. This section cover the background of accountancy. The learners gets introduced to financial statements, cash flows and other concepts that pertains to the discipline.
Accounting Information System
Entails data collection as well as processing to give an output that is readily consumable to the end user. It details the procedures required to arrive at a particular set of objectives or outcome.
A crucial section of accounting. Initially, auditing was perceived to collect information concerning financial record of an organization. Recently, the trend has changed drastically. It also incorporates other non-financial aspects such as security, technology and also environmental concerns. Auditing aims to deconstruct complex information and brings it to a lighter note that can be understood by all people.
Regarded as the minute section of accountancy. It involves recording any single activity which happen every day. The process also involves tallying the transactions at the end of the day and month. Consolidation of all the transactions gives an overview of business performance. Evolvement of accountancy is facing out this area since advanced technology has replaced the monotonous work of daily tally. Barcodes have enabled automatic count whenever sales are made.
As the name suggest, it give information about the costs incurred in a business. The information is used by the management to make decision on the probable means to conduct the business. Costs are major injectors which draw the performance of an organization back. Striking the balance between cost of sales and purchases is the sure measure for business success. Ability to mitigate operational cost by diversifying investments can cut down the expenses. Cost accounting is therefore important to make such decisions. Accountants have an obligation to enlighten the managerial staff on the meaning of any information detailed here. It is done depending with the nature of business being operated.
Defined as choosing the best idea from a list of many alternative. This is not a simple process but involves constant evaluation of possible idea that can steer the business forward. Lack of alternatives indicates no decision is required. A good decision is the one that increases the revenue and at the same time reducing the cost.
Time value of Money
The current state of money is more than future dates. It is always speculated that the depreciation rate of ownership decreases with time. What someone holds today is more valuable than the same amount in one month’s time. This is what economist refers to as time value of money.
It details financial transactions of a business. Additionally, it gives a summary of all monetary activities which take place within the organization. Importantly, analysis of financial records are done here to ensure they are easily understood by any stakeholder who could be interested with the organization.
First in First Out method is applied to all entities that holds the principle of selling the first acquired good in an orderly manner. The goods manufactured first are dispatched first. It helps in recording transactions in chronological order for easy follow-up. Auditors have easy time going through the records since the arrangement consolidate the information in a compressed and understandable manner.