Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Standard view
Full view
of .
Look up keyword
Like this
0 of .
Results for:
No results containing your search query
P. 1
CIMA_P2_Performance Management_Useful Articles_Ian Herbert_Empowerment

CIMA_P2_Performance Management_Useful Articles_Ian Herbert_Empowerment

Ratings: (0)|Views: 86|Likes:
Published by e_Nomad
Title: CIMA_P2_Performance Management_Useful Articles_Ian Herbert_Empowerment
Ref: www.cimaglobal.com
Purpose: With change in Sallaybus, material available on site is replaced. It would help to keep record of historical data regarding CIMA material for students
Title: CIMA_P2_Performance Management_Useful Articles_Ian Herbert_Empowerment
Ref: www.cimaglobal.com
Purpose: With change in Sallaybus, material available on site is replaced. It would help to keep record of historical data regarding CIMA material for students

More info:

Published by: e_Nomad on Mar 22, 2010
Copyright:Public Domain


Read on Scribd mobile: iPhone, iPad and Android.
download as PDF or read online from Scribd
See more
See less



fnancial management
The idea of allowing workers to take more
reponibilit for operational deciion eemto repreent the ver eence of the modern,dnamic organiation. Tom Peter, the authorof betelling buine book
In Search of Excellence
, put it thi wa: “If ou don’t knowwhere our people are toda, that’ probabla good ign. It mean that the’re workingbeond functional wall.”If a compan’ management tle moveawa from top-down command and controlto bottom-up empowerment, there areimplication for organiational deign,emploee motivation, management controltem, operational rik and informationreporting tem. But, while thi “wonder”approach ma be appropriate in omeituation, at other time manager might tillneed to upervie and control worker moredirectl. Element of thee iue alo appearin paper P2 and P5.Giving worker the authorit to do their job in the wa that’ mot appropriate totheir local circumtance ha been one of themot ignificant development in managementthinking over the pat 20 ear. The baicidea i that thoe on the front line are betplaced to undertand changing cutomer/ production requirement. The hould,therefore, have the dicretion to reactaccordingl. Other term to decribe thiempowered approach include “participation”,“autonom” and “entrepreneurhip” (in thelat cae, people are encouraged to thinkand act a though the buine were theirown). It contrat with the traditionalcommand-and-control approach, wherebenior manager are aumed to know betand their main tak i to decide what to doand tell their ubordinate how to do it.Both approache have pro and condepending on, for example, the complexitand variabilit of local condition/cutomerrequirement; the competence of theworkforce; the abilit of the compan’information and control tem to retaincontrol; the rik of thing going wrong; andthe overall trategic objective.Empowerment i primaril intended tomake the organiation more reponive tochanging conumer need and/or foteremploee-driven innovation. It i uuallaccompanied b a flattening of themanagerial hierarch o that the calar chain,and hence the communication time betweenthe bottom and the top of the organiation, ihortened. But ometime uch delaering idone impl to ave cot – andempowerment can become abandonment.Empowerment initiative have beenapplied widel, from car factorie to doctor’urgerie. In eence, the eek to promoteflexibilit of thought and action amongemploee. Often thi i an ideal to beworked toward, rather than an abolutetate. Mot people enthue about the notion.Giving power to thoe who face the problemat the harp end of the buine feel rightintuitivel. In m own reearch, a plantmanager explained that “empowerment i likepulling 200 mall lever rather than one bigone. It’ about the compan truting u.”But it can mean different thing to differentpeople – and there i cepticim. Anothermanager in the ame compan told me: “I amempowered to olve an problem, a long aI don’t pend an mone doing it.” In otherword, enior manager can ueempowerment a a convenient wa of hiftingreponibilit without a commenurateincreae in dicretion over reource. Othertudie have raied quetion about thiiue. According to Adrian Wilkinon(“Empowerment theor and practice”,
Personnel Review
, Vol 27, No 1, 1998), motempowerment initiative “are purpoefulldeigned not to give worker a verignificant role in deciion-making but ratherto enhance emploee contribution to theorganiation”. He went on to ugget that theterm “empowerment” could cover a range of tle (
 see panel 
 ).Empowerment ma involve flexibilit in whatworker do and how the do it, a long a the
Ian Herbert
analyses the pros and cons o employee empowermentand discusses the role o the management accounting unction.
ManageMent accounting PerforMance evaluation
D mpwm sys
  Thi motl entail downward communication – eg, briefing,newletter and buine plan – but it include upward andhorizontal communication, involving information-haring amongcro-functional team.
 Emploee have the power to refer problem to their managerto tackle (thi ma involve being empowered to halt production).
Task autonomy
 Emploee take on wider reponibilit for procee, uuall aelf-directed team. Thi aid delaering and a reduction inexternal inpection routine a peer preure become the maincontrol mechanim.
 Attitudinal shaping
 Empowerment i een a a pchological proce where there ilittle change in work or organiational tructure but emploeelearn to feel empowered (a tate of mind) and become moreconfident in their interaction with cutomer.
  Thi hould involve the eroion of diviion between managerand worker. Deciion, rule and authorit would no longer beet b the few for the man.
   G   E   T   T   y   I   M   A   G   E   s
fnancial management
output criteria are met. But there ma alo betime when trong central control i required –for example, when the organiation ha toproduce cheaper good than the compeititionor when a regulator regime demandconformit to et procedure. In manindutrie both approache might exit, whichcan be confuing. In thee circumtance themanager’ job i to guide emploee o thatthe can work within what at time might eemconflicting demand for both flexibilit andcontrol. On an airliner, for example, the crewma have coniderable dicretion over howthe deal with paenger during a flight. Thima range from upgrading a digruntledpaenger to firt-cla accommodation rightup to making an emergenc landing – whichcould cot ten of thouand of pound.Coniderable authorit ma be given to theaircrew, but overall reponibilit till ret withthe airline’ director. In other apect, thecrew ha little dicretion over what the do, athe indutr i trictl regulated. If the manualtate “follow thi procedure”, then that mutbe done, no matter if individual crew memberee a better wa of doing it.Changing from a top-down, bureaucraticregime to an empowered organiation i likelto have ignificant implication for the tleand procee of management control. Ledirect uperviion hould be necear, butthe unleahing of entrepreneurial flair mightexpoe the compan to exceive rik orcompromie it operational integrit.Change in the management control regimewill have implication for managementaccounting, which ha tended to develop aan intrument of the vertical,command-and-control tle of management – ie, reportingupward to a mallnumber of eniormanager rather thandownward to a largernumber of juniormanager and worker.Indeed, both the methodand the outlook of themanagement accountingfunction are likel to bedifferent under anempowered tem,where deciion-makingi ditributed and the emphai of control i onelf-monitoring b worker. For example, theformat of accounting information, the tle of communication and the objective of themanagement accounting control tem willprobabl differ if the recipient are juniormanager and worker who want detailedinformation that’ relevant to their individualarea in real time, rather than enior manager,who prefer ummar information aggregatedacro the organiation.Management accountant need toappreciate that thee different requirementare likel to co-exit. The alo have to beenitive when deigning accounting andcontrol tem, ince the information theproduce need to be tailored to the recipient.In the cae of the airline, it would not behelpful to highlight to manager how muchthe aircrew might have cot the compan bupgrading unhapp paenger if otherfactor are not balanced againt that cot orat leat linked to it. Perhap the flight wadelaed b maintenance problem. Perhapthe catering budget had been reduced bcentral management and there weren’tenough meal on board. Managementaccountant have to be able to ee theiue behind the number and be careful inthe wa that the preent information.Rodne Cote (
The Role of Management Accounting in the Emerging Approach toTeamwork 
, IFAC, 1995) uggeted thatmanagement accountant can help to developelf-directed work team b providing“reource concioune” including:
More timel meaure and differentcommunication media, together with theinterperonal kill needed to aid thetranfer of ke performance information tofront-line emploee.
The facilitation of direct data collection andit ue b operation manager and taff,rather than repone to requet forinformation. (Note that improvement inenterprie reource planning temince the mid-ninetie have greatl helpedoperational emploee to take ownerhipof their data.)Robert simon (“Control in an age of empowerment”,
Harvard Business Review
,March-April 1995) propoed that the eniormanager in an empowered organiationhould eek to retain control uing four tool:diagnotic control tem (detailedoperational performance data);interactive control tem(trategic monitoring); boundartem (limit toempowerment); and belief tem (core value/culture).Management accountanthave a particular role to plain deigning diagnotictem and boundarparameter through thebudgeting and capitalappraial procee.While uch tem mighteem to reflect the

Activity (12)

You've already reviewed this. Edit your review.
1 hundred reads
bindhya_sundaram liked this
chandrasekariyer liked this
chandrasekariyer liked this
kiransook liked this
kiransook liked this
dmomsd liked this
dmomsd liked this

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->