I.

STRATEGIC MANAGEMENT ACCOUNTING AND CONTROL

A. Definitions Strategic management accounting and control refers to the process of provision and analysis of management accounting data about a business and its competitors for use in developing and monitoring business strategy. It is a form of management accounting whereby emphasis is laid on information that are external to a business entity, nonfinancial factors and internally processed information. Moreover, it is concerned with the implementation of chosen strategies setting up control systems that drive through the chosen strategies. Common and well utilized strategic management accounting and control systems or techniques include the balanced scorecard, profit-linked performance measurement systems, and strategic variance analysis.

B. Characteristics of Strategic Management Accounting and Control 1. 2. 3. 4. Awareness of competitive conditions Continuous recognition of rivalry with competitors Coherent, internally and logically consistent business strategies Focus on the use of accounting data and related information regarding strategy and operations

C. Importance of Strategic Management Accounting and Control Strategic management accounting and control systems help managers select the best and appropriate choices through information support given the competitive, technological and organizational circumstances. It gives managers some freedom to choose which industry they operate in, in which technology is used, and how the organization is structured. It supports and assists an organizations strategy with a variety of financial and non-financial performance indicators. It is seen as involving organizational learning. It may be used as part of an interactive communication process both within the organization and between the organization and its clients and suppliers. It is a very useful tool in gathering and assessing external information that can be used to benchmark the internally processed information.

It responds to the modern sophisticated business environments that are increasingly dynamic and competitive.

II.

Time Management

Common misconception about time management is the notion that people can control time when in fact it is a fixed resource that everyone shares equal amount with. People cannot increase or decrease time, but they can change how they spend it. This is time management ones attitude and behavior with regard to spending his or her time. The fact remains that proper time management is a very useful tool in business policy and strategy. However, while it appears to be in a positive sense, it has also its downside.

A. Objectives of Time Management

1. Time management aims to develop skills and values in order for a person to effectively manage ones self in terms of planning, organization, priority setting, delegation, discipline and commitment. 2. Time management endeavors to help individuals improve their effectiveness at work and gain more control of daily tasks so they become more productive while being able to reduce stress. 3. Time management intends to help avoid or reduce time wasters such as telephone interruptions, drop-in visitors, lack of self-discipline, inability to say no, procrastination, meetings among others, which are the usual culprits behind poor productivity. 4. Time management seeks to teaches individuals how to handle interruptions and say no to additional work when they already have too much on their hands. 5. Time management is aimed at setting and clarifying goals and identifying priorities. 6. Time management wishes to develop a persons decision-making skills in relation to using his or her time efficiently.

B. Advantages of Time Management

1. Self-enhancement and improved self-management Time management hones ones skills and values in planning, organizing, and priority setting. 2. Discipline and commitment

Time management makes one more disciplined and committed as he or she follows and does tasks accordingly. 3. Effectiveness and productivity Time management makes the person more effective and productive in work as he becomes more disciplined and committed in managing his or her time efficiently. 4. Eliminates time-wasters Time management reduces time-wasters which are the usual reasons for low level of effectiveness and poor productivity. It teaches one how to handle interruptions and deal with unnecessary activities. 5. Wise decisions-making skills Time management makes a person wiser in making the right decisions and choosing the best course of action to take. 6. Leads a person with a vision Time management teaches a person where he or she should be, what he or she should do, and when he or she should do them. It gives a person a sense of direction and control of his or her actions.

C. Disadvantages of Time Management

1. Relationship breakdown Ones consciousness about the time he or she can spend can lead to relationship breakdown. It can leave people around slightly tensed all the time because they do not know how much time will have to be allocated to them. 2. Dishonesty to ones self Since time management can lead to relationship breakdown after one has become too focused on his or her work priorities, he or she will have to disguise him or herself to in order to keep up with social interactions.

3. Planning eats most of the time. Time management requires a lot of careful and thorough planning and preparation. Thus, more time is consumed in making up plans which could have been allotted in performing the tasks. Moreover, these plans may not turn out the way they were perceived. 4. It makes life too mechanical.

Doing the tasks in accordance to priority in time management can eliminate excitement. Following schedules and priorities may lead to dull and boring way of life. 5. It affects personal routines and activities. Becoming too engrossed and focused to work may result in tension to complete the task as soon as possible. It may disrupt personal routines and make activities inflexible. III. Management by Objectives 1. Definition 2. Benefits and weaknesses 3. Advantages and disadvantage IV. Authocratic Management 1. Definition 2. Advantages and disadvantages V. Democratic Management 1. Definition 2. Advantages and Dissadvantages

Management by ObjectivesIt is an modern method of performance appraisal.in simple words management by objective is an process by which they see an organisational goals and one who do there work best is apprised not only the workers but management as well. So we can write process as: Set organisational goal - joint goal setting - performance review - set check posts - feed back. So in conclusion we may say it has three foundations: 1. Goal setting 1. feedback 2. participation

Advantages:
1.) Helps and increases employees motivation. 2.) Managers are more likely to compete with other manager. 3.) It reduces conflicts and ambiguity. 4.) It leads to good Planning. 5.) Identify problems. 6.) Develop leadership qualities. Disadvantages: 1.) Failure to give guidelines to goals. 2.) Danger of inflexibility. 3.)Failure to teach philosophy of MBO. 4.) Managers compitition may lead to tug of war.

What Is Management By Objectives (MBO)? What Are It's Benefits?

Benefits of Managements by Objectives
1. Improvements of managing: All the advantages of managements by objectives can be summarized by saying that is results is greatly improved management. Objectives cannot be established without planning is the only kind that makes sense. Management by objectives forces managers to think about planning for results, rather than merely planning activities or work. 2. Clarification of organization: Another major benefit of managing by objectives is that is forces managers to clarify organizational roles and structures. To the extent possible, positions should be built around the key results expected of the people occupying them. 3. Encouragement of personal commitment: One of the great advantages of management by objectives is that it encourages people to commit themselves to their goals. No longer are people just doing work, following instruction, and waiting for guidance and decisions; they are now individuals with clearly defined purposes. They have had a part in actually setting their objectives; they have had an opportunity to put their ideas into planning programs. 4. Development of effective controls: In they same way that management by objectives sparks more effective planning, it also aids in developing effectives controls. Control involves measuring results and taking action to correct deviations from plans in order to ensure that goals are reached.

What is Management by Objectives (MBO)? What are its advantages and disadvantages?
The use of management objectives was first widely advocated in the 1950s by the noted management theorist Peter Drucker. MBO (management by objectives) methods of performance appraisal are results-oriented seeks to measure employee performance be examining the extent to which predetermined work objectives have been met. Usually the objectives are established jointly by the supervisor and subordinate. An example of an objective for a sales manager might be: Increase the gross monthly sales volume to $250,000 by 30 June. Once an objective is agreed, the employee is usually expected to self-audit; that is, to identify the skills needed to achieve the objective. Typically they do not rely on others to locate and specify their strengths and weaknesses. They are expected to monitor their own development and progress.

What is MBO? Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources. It aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. Ideally, employees get strong input to identify their objectives, time lines for completion, etc. MBO includes ongoing tracking and feedback in the process to reach objectives. MBO Principles - Cascading of organizational goals and objectives - Specific objectives for each member - Participative decision making - Explicit time period - Performance evaluation and feedback The objectives must be: - Focused on a result, not an activity - Consistent - Specific - Measurable - Related to time - Attainable MBO Strategy: Three Basics - All individuals within an organization are assigned a special set of objectives that they try to reach during a normal operating period. These objectives are mutually set and agreed upon by individuals and their managers. - Performance reviews are conducted periodically to...

- Excels in visionary strategies - Writes in a positive manner to reflect favorably upon the organization - Possesses a large vocabulary - Is highly skilled in preparing reports and proposals The Process Of Management By Objectives (Mbo)

Concept of MBO Management by objectives is a process that has been developed to facilitate goal setting. Some books refer to it as management by results or management by goals. The concept of MBO was articulated by Peter Drucker, who saw MBO as an integrative management tool that could link the goals of the individuals to those of the firm as a whole. It is a collaborative goal setting process where the manager and the subordinate work together in setting the subordinate goals. The MBO system starts with goal setting at the top management level. These goals are reflected as the goal setting process progresses level by level (downward) throughout the organization. Koontz defines MBO as "a comprehensive managerial system that integrates many key managerial activities in a systematic manner consciously directed at the effective and efficient achievement of organizational and individual objectives (students need to note that there are several views about MBO, some see it as a planning tool and others as a performance appraisal tool). Being a collaborative goal setting between the manager and his subordinate, both willingly determine goals for the subordinate on the premises that the subordinates future rewards will depend on how well he attains the goals. It assumes that: Goals should start at the top and then flow down to each successive level until the bottom of the organization. Through the process of collaboration employees will become more committed to achieving organizational goals. They will take part in setting their own goals and will be rewarded in relation to their success in reaching those goals.

Strengths and weaknesses of MB Strengths: Better Managing MBO if well implemented can result in much improved managing. MBO forces managers to think planning for results. It also forces them to think of how the objectives will be accomplished, the resources necessary to achieve these objectives e.g. personnel needed. The goals set also act as a good incentive for control. MBO Clarifies Organizations Managers are forced to clarify organizational roles and structure. It clearly shows areas of delegation of authority in order to achieve the results. Personal Commitment It encourages employees to commit themselves to their goals. Goals which they themselves have set. Employees have a better understanding of their role and authority in the organization. Little time is wasted waiting for instructions. People know what they have to do and with what tools and they become enthusiastic masters of their own fate. Development of Effective Controls The goals that are set in the process of MBO serves as clear results against which performance can be measured. Infact even the employee is able on his own to gauge his own performance. 1. Under MBO organizational energies are focused on organizational goals. 2. MBO helps elevate morale. If the employee succeeds he is rewarded. Pay is a motivator. 3. MBO also aids in personnel development and can be a superior tool for evaluation than traits evaluation. Weaknesses: MBO is time consuming. Conditions in the environment change too frequently for MBO to work. Failure on the part of the management to teach the philosophy of MBO i.e. that it is built on self control and self direction. If not properly implemented it could be resented by subordinates especially because of the difficulties in setting goals (especially verifiable goals). Involves dangers of inflexibility, subordinates may stick to goals set even when conditions have changed.

Failure to give guidelines to goal setters - MBO like any other kind of planning cannot work if those expected to set goals are not given needed guidelines. If corporate goals are vague, unreal or inconsistent then it is impossible for managers to guide employees to set any meaningful goals. Other influences outside the control of management. Danger of managers forgetting that there is more to management than goal setting. The multiple goals faced by managers which are impossible to state in end results or to communicate e.g. favourable company image. Note: Despite all these weaknesses if used properly MBO can enhance motivation and communication and therefore lay the foundation for a more effective organization.

What Are The Weaknesses Of Management By Objectives?

1) Failure to teach the philosophy of MBO: As management by objectives may seem, managers who would put into practice must understand and appreciate a good deal about it. They, in turn, must explain to subordinates what it is, how it work, why it is being done, what part it will play in appraising performance, and above all, how participants can benefit. 2) Failure to give guidelines to goal setters: Management by objectives, like any other kind of planning, cannot work if those who are expected to set goals are not given needed guidelines. Managers must know what the corporate goals are and how their own activities fit in with them. 3) Difficulty of setting goals: Truly verifiable goals are difficult to set; particularly they are to have the right degree of stretch and pull, quarter in and quarter out, year in and year out. Goal setting may not be much more difficult than any other kind of effective planning, although it will probably take more study and work to establish verifiable objectives. 4) Emphasis on short run goals: In most MBO programs, managers set goals for the short term, seldom for more than a year and often for a quarter or less. There is clearly a danger of emphasizing the short run, perhaps at the expense of the longer range.

Myth of Autocratic Management Style

Autocratic Management Style has been taken as a non favorable style of management in todays modern business environment. However, in the Management Style theory, it is still in the discussion. There are several styles for which managers either learn, acquired or adopted and use one or more styles to manage their staffs and department. The common management styles are:-

1. 2. 3. 4.

Autocratic Democratic Participative Laissez-Faire

What is Autocratic Management Style?

Some basic understanding of the four management styles above is importable for you to adopt a situational management style. Listed below are some of the common traits, Pros and Cons of an Autocratic Management Style:Common traits of Autocratic Management Style Usually adopt a top-down approach and very directional. Managers project himself high authority power with uncompromising position. He project himself as knowledgeable and give solution for a situation and expect no question asked environment. He gets things done to the ways he wanted and listen to no one. Look at these traits and you may not find any wrong with them. If so, what are some pros and cons of an Autocratic Management Style?

Autocratic
An autocratic management style is one where the manager makes decisions unilaterally, and without much regard for subordinates. As a result, decisions will reflect the opinions and personality of the manager, which in turn can project an image of a confident, well managed business. On the other hand, strong and competent subordinates may chafe because of limits on decision-making freedom, the organization will get limited initiatives from those "on the front lines", and turnover among the best subordinates will be higher.

Pros

Instruction is forceful Can make fast decision Get moving fast No unexpected side track due to lack communication among staffs I know best feeling boost personal morale Implement decided new policy

Cons

staff feel useless as they are not consulted no new ideas from staff as it will not be considered anyway Lack team work among staff due to lack discussion Wait for instruction thus causing delays No initiative from staff Manager are alone

Autocratic Management style is best suit what environment?

In any of the management styles we talked about, there is not one best style. Although in todays business environment, participative or consultative approaches are common adopted as their day to day management, there bound to have a place for Autocratic Management Style. If you look around closely, certain type of industries are fond to adopt this tyle while there are situation in today s modern business environment has a place for it. What are the most suitable environment for Autocratic Management Style? 1. 2. 3. 4. military during natural disasters crisis management such as fire fighting, lifeguard etc Traffic control such as airport, ship etc

Democratic Management Style

Democratic Management Style is yet another Management Style. It is one of the four most common management styles currently practiced in the social as well as business environment. How is this Democratic Management Style different from all the other three Management Styles? Lets take a look at the democratic management style with a different perspective.

Democratic Management Style Explained

A Democratic Management Style has moderate approach to a situation whether at work or in a social places. The way things are get done is to seek opinion from your staffs as opposed to giving a direct instruction. In the case of a social place example a community meeting, your tend to seek opinions and points of view from those turn up for the community meeting. As a democratic manager, you still need to give instruction but before you do that, you will solicits ideas and opinion from your staffs and you allow the voice of your staffs and make your own decision based on those feedback. Sometimes the decision made are similar to the feedback but not always the case in the case of a Democratic Management Style.

Traits of a Democratic Management Style

A Democratic Management Style manager has some common traits. In contrast to the Autocratic Management Style, he or she is seen as a mild approach personnel in term of control and sometimes indecisive. Managers of this Democratic Management Style are considered someone do not want to make his own decision. He is perceived to be someone who play safe in carry out new task since decision has gone through one more layer of consideration i.e. the staffs.

Pros 1. 2. 3. 4. Encourage group decision Look more friendly Value opinion from staff Reduce implementation conflicts

Cons 1. 2. 3. 4. decision made may not be the best for the company time consuming Conflict among support and non-support group (about the) Staff may not have enough knowledge about the decision

There are situation where a democratic management style is most appropriate. Below are some examples:=

When the manager is new to the job Unpopular decision affecting the benefits of the staffs Management seek new ideas Different interest group election board meetings social activities

Laissez Faire Management style

The forth management style from my previous articles is the Laissez Faire Management Style. Similar to other three management styles, you get your job done through people. The difference is you do not make decision and leave the task include make decision to the people you assign to. You pay very little attention to the progress and you do not interfere. The tendency of this management style is sometime taken as a style of irresponsibility because you are not really on top of the situation. Sometimes, it is a style of let the nature take its own course

The common traits of a Laissez Faire Management style is take it easy, let them decide. The entire decision process is left to the staffs and you pay no attention to it. Pros 1. 2. 3. 4. 5. Cons 1. Time consuming 2. Decision made usually skewed away from company interest When to allow or adopt this Laissez Faire Management style determine by the importance and the degree of company in the situation. Below are some examples :

Maximum delegation Manger has more time for other things Staff has amber chance to develop their knowledge Seen as empowering his staffs May be able to discover informal leaders

Sports activities Internal committee election Union affairs non destructive conflicts among groups

since there are four management style, which style your should adopt? This is a question tends to bother you especially when you are in your early career employment. You want to use the best style to gain competence and capabilities to climb the corporate ladders. After having close examinations to all the four management styles, you will realized there is no one bill cure all management style. You need to learn all of them and master one to suit your personality for your normal application. Then master the rest of the styles to apply whenever situation warrants it. Then you are able to get the best of all world.

Participative Management Style

My previous Management Style articles quote four types management styles. Each management style has their own set of characteristics. A Participative Management Style is one that has its own unique characteristics and application issues. Lets examine the Participative Management style for a minute:-

Participative Management Style Explained

A Participative Management Style is sometimes refer to a Consultative management style. While it has some similarities with other management styles but it has own uniqueness in implementation. From the name itself, it implied that a Participative style of management seeks participation from members who are going to be affective by a decision. You consult people around include your superior to get opinion, seek ideas and perhaps suggested solution to a situation. However, you take back the decision to yourself as opposed to letting the group make a popular decision. There are article on Participative Management Style in Ezinearticles.

Formatted: Font: (Default) Times New Roman, 12 pt, Font color: Blue

Traits of a Participative Management Style

A Participative Management Style has it s common traits Takes a moderate approach in controls and giving directions. A Participative Managers are normally friendly, mix around and excellent in networking. He tends to reach out to many people for opinion, seek input and let the staffs have good feel about themselves since they are consulted. Pros 1. 2. 3. 4. 5. Cons 1. Time consuming 2. Staff feel offended if their idea not implemented 3. Sometimes consultation look artificial and not genuine Situation where a Participative Management Style is best implemented are listed below below:

Boost staff morale Able to get more ideas Good networking Look friendly Reduce implementation conflicts

Seeking new ideas Reducing conflict among groups Change of policy board meetings Election

With the example of pros, cons and where to apply for a Participative Management Style, it is easy for you to decide which management style you like to adopt. Explore more of them for your own knowledge gain and apply it to your own Participative Management Style

Democratic Management Style

Democratic Management Style is yet another Management Style. It is one of the four most common management styles currently practiced in the social as well as business environment. How is this Democratic Management Style different from all the other three M anagement Styles? Lets take a look at the democratic management style with a different perspective.

Democratic Management Style Explained

A Democratic Management Style has moderate approach to a situation whether at work or in a social places. The way things are get done is to seek opinion from your staffs as opposed to giving a direct instruction. In the case of a social place example a community meeting, your tend to seek opinions and points of view from those turn up for the community meeting. As a democratic manager, you still need to give instruction but before you do that, you will solicits ideas and opinion from your staffs and you allow the voice of your staffs and make your own decision based on those feedback. Sometimes the decision made are similar to the feedback but not always the case in the case of a Democratic Management Style.

Formatted: Font: (Default) Times New Roman, 12 pt, Font color: Blue

Traits of a Democratic Management Style

A Democratic Management Style manager has some common traits. In contrast to the Autocratic Management Style, he or she is seen as a mild approach personnel in term of control and sometimes indecisive. Managers of this Democratic Management Style are considered someone do not want to make his own decision. He is perceived to be someone who play safe in carry out new task since decision has gone through one more layer of consideration i.e. the staffs.

Pros 1. 2. 3. 4. Encourage group decision Look more friendly Value opinion from staff Reduce implementation conflicts

Cons 1. 2. 3. 4. decision made may not be the best for the company time consuming Conflict among support and non-support group (about the) Staff may not have enough knowledge about the decision

There are situation where a democratic management style is most appropriate. Below are some examples:=

When the manager is new to the job Unpopular decision affecting the benefits of the staffs Management seek new ideas Different interest group election board meetings social activities

There are many more pros, cons that your can explore yourself and customize it to you own. You can research into other literature on Democratic Management Style or other Management Styles like and whenever possible, apply it to your democratic management style.

Which Management Style is Best

The management style four common types been well articulated in the previous posts. Which style of management is most suitable you? What are some of the considerations if you apply a typical style? Before you decide to adopt to any of the four types, be sure that you fully understand their differences, application aspects and pros and cons. In my many years of experience in worked as a manager in several different industries and under several leaders who has very different leadership style. I realised the important of the four common management styles and appreciate each of them. Now that I am writing this article, I am not able to single out any one of the style is most suitable for any manager. The best I could say is A manager is a Autocratic Style Manager or A Democratic Style Manager or A Participative Style Manager or A Laissez Faire Manager but none of them can escape to learn and understand all of the four types. Even you are a participative style manager as an example, is it practical to seek opinion from your secretary to make coffee for your visitor ? Or ask the secretary when she is free to type an urgent quotation? If you do so, maybe the secretary is suspicious of you wanted to get something.

Well, if you are a smart manager, you should uphold all the four management styles and practices them on the right occasion whenever possible. Be sure that not to over do any of the style otherwise, you may loose your effectiveness as a manager.
Democratic Management Democratic Management is the style of management in which all the power is held by the people involved. In this kind of management, the employees choose what is best for them and their decision is respected by the management. Advantages: The advantages of this style of management are: - It is more participative. - The orders are delegated by the managers. - The sub-ordinates are entrusted with responsibilities by the managers. - Managers are the links between departments and top management. - Acceptable work conditions are created by managers. - There is great employee motivation. - People are more satisfied.

Disadvantages: The disadvantages are as follows: - Employees might take advantage of the situation. - Decision making can be slow because of participation of all.