BASIC MANAGEMENT CONCEPTS

• Management consultancy


  Primary purpose: to improve clients' use of its capabilities & resources to achieve the objectives of the organization
• Nature of management consultancy (SIR HEBIE)

  • Services are rendered in behalf of management
  • Involves problem solving
  • Relates to the future
  • Human relations play a vital role
  • Engagement requires highly qualified staff
  • Broad in scope
  • Involves various assignments
  • Engagements is non-recurring (non repetitive in nature)
• Consultant


  Outsource professional –not an employee<|>Catalyst of change (agent)<|>Professional attributes: Technical skills, Interpersonal skills, Consultancy skills
• Management accounting


  1. Planning

  2. Organizing/Directing

  3. Controlling

  4. Decision Making
• Planning


  Chalking out a future course of action<|>Deciding in advance the most appropriate course of actions for achievement of pre-determined goals
• Organizing/Directing


  Developing productive relationship amongst physical, financial and human resources for achievement of organizational goals<|>Actuates the organizational methods to work efficiently
• Controlling


  Performance evaluation<|>Actual vs Expectation (standard)<|>Correction of deviation
• Services provided by consultants

  • Consultation
  • Engagements
• Fees for consultants


  • Supervision
  • Motivation
  • Leadership
  • Communication
• Financial accounting


  Reporting standard: PFRS/PAS/GAAP<|>Users of info: Internal & External<|>Type of info: Financial/Monetary Only<|>Emphasis of reports: Reliability (Precision)<|>Source of info: Internal info<|>Focus of reporting: Business as a whole (Aggregated/Summarized)<|>Frequency of reporting: Periodical (at least annually) - mandatory<|>Time origination: Past /Historical
• Management accounting


  Reporting standard: None<|>Users of info: Internal (Exclusively)<|>Type of info: Monetary/Non-Monetary<|>Emphasis of reports: Relevance(Timeliness)<|>Source of info: Internal/External<|>Focus of reporting: Segments & Divisions (Detailed)<|>Frequency of reporting: Whenever needed<|>Time origination: Future
• Line (downward authority)


  Directly involved in the daily operations of a business<|>Production, operations, sales & marketing
• Staff (upward/lateral authority)


  Primary purpose: is to provide assistance and specialized advice and expertise to colleagues in line position
• Responsibilities of Treasurer


  • Provision of capital
  • Collection & Credit
  • Investment
  • Sourcing of capital(short-term financing)
  • Investor relations
• Responsibilities of Controller


  • Protection of Assets
  • Prep of FS
  • TAX administration
  • Gov't reporting
  • Audit (Reporting & Interpreting)
  • Insurance
  • Economic appraisal
  • Banking and Custody
  • Planning and Control
• Strategic decisions


  • Key to a company's success in creating value for customers while differentiating itself from its competitors
• Identifying and building resources and capabilities


  Building resources and capabilities requires efficient logistics to become successful<|>Logistics pertain to the movement of goods or services when needed and to whom it is needed
• Role in implementing strategy

  1. Planning

  2. Control
• Supporting managers


  Helping the collective decision of an organization
• Enhancing the value of management accounting system

  Guiding managers to focus on challenges: Customer Focus, Value-Chain and Supply chain
• Activities that add value

  • R&D
  • Design
  • Production
  • Marketing
  • Distribution
  • Customer Services
• Key success factors


  Directly affects the economic viability of an org<|>Includes: cost and efficiency, innovation, quality, and efficient time management
• Roles of management accountant for success

  • Attention-directing
  • Control Decision
  • Scorekeeping
  • Problem solving
  • Feedback – linking planning and controlling to help future decision making
• Implementation


  Involves choosing between two alternatives as possible solution to a problem
• Performance evaluation


  Gathering of actual information
• Continuous improvement and benchmarking


  Benchmarking – process of measuring the performance of a company's products, services, or processes against those of another business considered to be the best in the industry "best in class"
• Professional attributes of a consultant

  • Competence – fit to do the job
  • Integrity - straightforward
  • Confidentiality
  • Objectivity (Credibility) – report everything w/o bias