According to Stoner (2015), there are three major operational techniques in managing an enterprise. They are;
- Assess all tasks
- Prioritize task
- Follow through/checks and balance
- Assess all tasks: In managing an enterprise, it is important for the manager to assess what the work is all about, how it is handled, and where the work will end up.
- First, identify the place from where it comes.
- Next, describe how it is processed.
- Finally, decide where the finished work goes
Once decisions have been made on how to handle the work, businesses can easily write job descriptions, training manuals, and processes for handling all jobs/assignments because managers know what has to be accomplished and who is responsible for each task.
Even though this method is a simple system for assessing tasks, it has to be utilized to be effective. New businesses need to analyze each step to ensure something has not been forgotten, and like any good system, the more you use it, the easier it becomes (Stoner, 2015).
- Prioritize tasks: All individuals (to avoid confusion) need to be responsible for this step.
- Prioritizing requires thinking through a sequence of tasks/jobs that occur within a day’s work; weekly (like payroll); or monthly (occasion tasks like reports), listing which is most important and the order they should be accomplished, and keeping the list close at hand.
- When employees (or the owner, for that matter) have a clear understanding of making lists, setting priorities (which items must be done first, so on), they can be more efficient in completing those tasks.
- Nothing wastes time like interruptions – people stopping in the office without an appointment, telephone calls, last minute orders, and crises. Plan in advance for that and instruct employees how to handle those interruptions.
- Follow through/checks and balance: Follow through requires making certain the project is complete to the customer’s satisfaction. Checks and balances requires a team effort so that one person is responsible for one aspect and the other person checks to see things are done to standard (Stoner, 2015).
Definition of management
Management (or managing) is the administration of an organization, whether it be a business, a not-for-profit organization, or government body. Management includes the activities of setting the strategy of an organization and coordinating the efforts of its employees (or of volunteers) to accomplish its objectives through the application of available resources, such as financial, natural, technological, and human resources. The term “management” may also refer to those people who manage an organization (Jean-Louis, 2015).
Definition of a manager
A manager is a person who manages or is in charge of something. Managers can control departments in companies, or guide the people who work for them. Managers must often make decisions about things. According to Henri Fayol, a French management theorist, managers must be able to carry out planning, organizing, leading, co-ordinating and controlling(Jean-Louis, 2015).
Jean-Louis (2015) also stated that larger organizations generally have three levels of managers, which are typically organized in a hierarchical, pyramid structure:
- Senior managers, such as members of a Board of Directors, a Chief Executive Officer (CEO) or a President of an organization, set the strategic goals of the organization and make decisions on how the overall organization will operate. Senior managers provide direction to the middle managers who report to them.
- Middle managers, examples of which would include branch managers, regional managers and section managers, provide direction to front-line managers. Middle managers communicate the strategic goals of senior management to the front-line managers.
- Lower managers, such as supervisors and front-line team leaders, oversee the work of regular employees (or volunteers, in some voluntary organizations) and provide direction on their work.
In smaller organizations, an individual manager may have a much wider scope. A single manager may perform several roles or even all of the roles commonly observed in a large organization.
Functions of a manager/management
Managers/management bodies just don’t go out and haphazardly perform their responsibilities. Khurana (2010) stated that good managers/management bodies discover how to master five basic functions: planning, organizing, staffing, leading, and controlling.
- Planning: This step involves mapping out exactly how to achieve a particular goal. Say, for example, that the organization’s goal is to improve company sales. The manager first needs to decide which steps are necessary to accomplish that goal. These steps may include increasing advertising, inventory, and sales staff. These necessary steps are developed into a plan. When the plan is in place, the manager can follow it to accomplish the goal of improving company sales (Khurana, 2010).
- Organizing: After a plan is in place, a manager needs to organize her team and materials according to her plan. Assigning work and granting authority are two important elements of organizing (Khurana, 2010).
- Staffing: After a manager discerns his area’s needs, he may decide to beef up his staffing by recruiting, selecting, training, and developing employees. A manager in a large organization often works with the company’s human resources department to accomplish this goal (Khurana, 2010).
- Leading: A manager needs to do more than just plan, organize, and staff her team to achieve a goal. She must also lead. Leading involves motivating, communicating, guiding, and encouraging. It requires the manager to coach, assist, and problem solve with employees (Khurana, 2010).
- Controlling: After the other elements are in place, a manager’s job is not finished. He needs to continuously check results against goals and take any corrective actions necessary to make sure that his area’s plans remain on track (Khurana, 2010).
All managers at all levels of every organization perform these functions, but the amount of time a manager spends on each one depends on both the level of management and the specific organization.
Management structure by enterprise
Companies can use a variety of management structures. However, a company’s management structure must be designed to effectively meet its goals and objectives. According to Gomez-Mejia, David and Robert (2008), types of management structure can include flat structures, functional, product and geographical-structured organizations.
Flat management structure
Many companies use a flat management structure, where very few levels of management separate executives from analysts, secretaries and lower-level employees. Flat management structure work best when a company has less than 20 employees, especially if the company employs one or two employees per department. One advantage of using a flat management structure for management is that decisions can be made relatively quickly. The flat management structure lacks the typical bureaucracy of taller management structures (those with many levels of management) (Gomez-Mejia, David & Robert, 2008).
Functional management structure
A functional management structure is centered on job functions, such as marketing, research and development and finance. Companies make use a functional management structure when they want to arrange their management structure by department. For example, a company may have a director, two managers and two analysts in the marketing department. The director would likely report to the Chief Executive Officer, or CEO, and both managers would report to the director. In addition, each manager may have an analyst reporting to them. A functional management structure works well when companies are heavily project-focused (Gomez-Mejia, David & Robert, 2008).
Product management structure
A product management structure has managers reporting to the president or head of the company by product type. Product management structures are primarily used by retail companies that have stores in various cities. However, stores in each city may still need a local human resources or marketing department to carry out functions locally. For example, a small department store company may have a vice president of sporting goods, housewares and general merchandise at the corporate office. One manager may report to each vice president. However, each manager may oversee the work of one or more field marketing employees who travel and handle local marketing stores in several states(Gomez-Mejia, David & Robert, 2008).
Geographical management structure
A geographical management structure is when companies decentralize the functional areas. For example, unlike the product management structure, there may be a local marketing, finance, accounting and research development person based in each region. For example, a small consumer products food company may be large enough to place a marketing research manager and analyst in each of six different regions. This can be important because consumers in various areas have different tastes. Hence, a geographical management structure will enable the company to better serve the local market (Gomez-Mejia, David & Robert, 2008).
Communication process in the management of an enterprise
Ferguson and Terrion (2014) stated that communication process in the management of an enterprise may be defined as a process concerning exchange of facts or ideas between persons holding different positions in an organisation to achieve mutual harmony.
There are seven major elements in the communication process in the management of an enterprise. They are: (1) sender (2) ideas (3) encoding (4) communication channel (5) receiver (6) decoding and (7) feedback.
The person who intends to convey the message with the intention of passing information and ideas to others is known as sender or communicator (Ferguson &Terrion, 2014).
This is the subject matter of the communication. This may be an opinion, attitude, feelings, views, orders, or suggestions (Ferguson &Terrion, 2014).
Since the subject matter of communication is theoretical and intangible, its further passing requires use of certain symbols such as words, actions or pictures etc. Conversion of subject matter into these symbols is the process of encoding (Ferguson &Terrion, 2014).
(4) Communication Channel:
The person who is interested in communicating has to choose the channel for sending the required information, ideas etc. This information is transmitted to the receiver through certain channels which may be either formal or informal (Ferguson &Terrion, 2014).
Receiver is the person who receives the message or for whom the message is meant for. It is the receiver who tries to understand the message in the best possible manner in achieving the desired objectives (Ferguson &Terrion, 2014).
The person who receives the message or symbol from the communicator tries to convert the same in such a way so that he may extract its meaning to his complete understanding (Ferguson &Terrion, 2014).
Feedback is the process of ensuring that the receiver has received the message and understood in the same sense as sender meant it (Ferguson &Terrion, 2014).
Techniques and skills of planning, organising, staffing, controlling and leading
Management has been described as a social process involving responsibility for economical and effective planning and regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities.
The most widely accepted are functions of management given by Koontz and O’Donnel i.e. Planning, Organizing, Staffing, Controlling and Leading (Jean-Louis, 2015).
For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other and each affects the performance of others.
It is the basic function of management. It deals with chalking out a future course of action and deciding in advance the most appropriate course of actions for achievement of pre-determined goals. According to Koontz, “Planning is deciding in advance – what to do, when to do and how to do. It bridges the gap from where we are and where we want to be”. A plan is a future course of actions. It is an exercise in problem solving and decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways and means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human and non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc. (Jean-Louis, 2015).
It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining and providing human and non-human resources to the organizational structure. Organizing as a process according to Jean-Louis (2015) involves:
- Identification of activities.
- Classification of grouping of activities.
- Assignment of duties.
- Delegation of authority and creation of responsibility.
- Coordinating authority and responsibility relationships.
It is the function of employing workers in the organization structure. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes (Jean-Louis, 2015).
According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal and development of personnel to fill the roles designed un the structure”. Staffing involves:
- Manpower Planning (estimating manpower in terms of searching, choose the person and giving the right place).
- Recruitment, Selection and Placement.
- Training and Development.
- Performance Appraisal.
- Promotions and Transfer.
It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. According to Koontz and O’Donell “Controlling is the measurement and correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”. Therefore controlling has following steps:
- Establishment of standard performance.
- Measurement of actual performance.
- Comparison of actual performance with the standards and finding out deviation if any.
- Corrective action.
It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Leading is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. Leading has following elements:
- Supervision: Overseeing the work of subordinates by their superiors. It is the act of watching and directing work and workers.
- Motivation: Inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.
- Leadership: A process by which manager guides and influences the work of subordinates in desired direction.
- Communications: The process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.
Basic techniques in marketing, production and financial management in an enterprise
Marketing techniques in an enterprise
According to Drucker (2014), there are five (5) major marketing techniques in an enterprise. They are as follows:
- Adding something new
- Becoming a valuable resource
- Separate yourself from your competitors
- Promote the end result
- Anticipate change
- Adding something new
Every time you add something new to your business you create an opportunity to get more sales. For example, adding a new product or service to the list of those you already offer usually produces a big increase in sales. The added product increases your sales in 3 different ways:
- It attracts new customers who were not interested in your current products and services.
- It generates repeat sales from existing customers who also want to have your new product.
- It enables you to get bigger sales by combining 2 or more items into special package offers.
- Becoming a valuable resource
Look for ways you can be a resource for your prospects and customers. Supply them with free information. Help them do things faster, easier, less expensively. You get another opportunity to sell something every time they come back to you for help (Drucker, 2014).
- Separate yourself from your competitors
Find or create a reason for customers to do business with you instead of with someone else offering the same or similar products. For example, do you provide faster results, easier procedures, personal attention or a better guarantee (Drucker, 2014).
- Promote the end result
Your customers don’t really want your product or service. They want the benefit produced by using it. For example, car buyers want convenient transportation with a certain image. Dental patients want healthy and good-looking teeth without suffering any pain. Business opportunity seekers want personal and financial freedom for themselves and their family (Drucker, 2014).
- Anticipate change
Change is the biggest challenge to your business success. The days are gone when a business could constantly grow by simply repeating what it did successfully in the past …or even recently. Aggressive, innovative competitors and rapidly changing technology make it impossible. Expect change and prepare for it. Don’t wait until your income declines to take action. Develop the habit of looking for early signs that something is changing. Then confront it before you start to lose business (Drucker, 2014).
Production techniques in an enterprise
Organisations will adopt a variety of techniques to produce their goods or services. The technique adopted will depend on a number of factors including the product or service, quality of the product or service, quantity of the product or service, size of the organization, the type of organization, the organisation’s resources and legislation applicable to the organization. The most common methods of production according to Craig, and Harris (2013), include Line Production, Continuous flow production, Batch Production and Just in Time Production.
Just as the name suggests line production is producing goods along a line of production. The goods will be passed along a line containing different stages. At each stage in the line the goods will be altered. Often a person/group of people will be responsible for just one stage in the process. Car assembly often adopts line production as identical products are produced each day (Craig & Harris, 2013).
Continuous flow production (CFP)
This is simply adopting line production 24 hours day/seven days a week, using automatic equipment. The automatic equipment will operate in the same manner day in day out. The ability to work in this manner is another advantage robots/machinery have over humans. CFP does not involve humans so it is not used in the service industry unlike line production (Craig & Harris, 2013).
This is the method employed when the organisation needs to produce a fixed amount of each of the type of goods it produces. In this instance production technique and resources will be adapted, to produce the product required and to produce just the amount required (Craig & Harris, 2013).
Just in time production
This method of production generates goods/services just in time for them to be sold rather than preparing them months or weeks in advance. To save storage costs, the parts needed to make the end product will arrive just before they are used to manufacture the product. This means that the production process is carefully planned and organised. Production must be efficient and speedy otherwise the goods will not be manufactured for the customer. Conversely if there are no or few orders production will slow down or stop altogether (Craig & Harris, 2013).
Techniques in financial management in an enterprise
Financial management is an important concept for an enterprise. Nobanee and Abraham (2015) stated that several types of finance management techniques or tools available to an enterprise are:
- Financial statement
- Debt snowball
An enterprise financial statement lists all assets owned by the enterprise and any money owed to creditors, banks or lenders. Enterprise can use this information to assess their net worth and how much debt is owed to other people. The net worth of these items may be calculated by taking the appraised or current market value less money owed for these items. This analysis presents a net worth for all major assets owned by the enterprise (Nobanee & Abraham, 2015).
Budgets outline all money received or other cash-generating assets and all expenditures made during a specific time frame. Budgets provide an enterprise with a cash management tool for analyzing income and expenditures. Understanding where and how cash is spent is an important part of managing an enterprise finances (Nobanee & Abraham, 2015).
An increasingly popular enterprise financial management technique is the debt snowball. The debt snowball presents an enterprise with a plan for repaying these amounts owned in a logical manner. Once a budget is created and an enterprise carefully follow the spending plan associated with the budget, the enterprise can focus on repaying their debt. Starting with the smallest debt and working their way toward the largest debt usually provides an enterprise with a sense of accomplishment when repaying loans. Once the smallest debt is paid off, an enterprise should have more money for repaying the next debt. This process will often continue until the final debt is paid off (Nobanee & Abraham, 2015).
The principles of record keeping, auditing and taxation
Record keeping is a systematic procedure by which the records of an organization are created, captured, maintained, and disposed of. This system also ensures their preservation for evidential purposes, accurate and efficient updating, timely availability, and control of access to the them only by authorized personnel (Yeo, 2007).
Good record keeping can helps to protect your business, measure your performance and maximise profits. Records are the source documents, both physical and electronic, that specify transaction dates and amounts, legal agreements, and private customer and business details. According to Yeo (2007), developing a system to log, store and dispose of records can benefit your business by allowing you to:
- plan and work more efficiently
- meet legal and tax requirements
- measure profit and performance
- generate meaningful reports
- protect your rights
- manage potential risks.
Most businesses use an electronic record keeping system to make it easier to capture information, generate reports, and meet tax and legal reporting requirements.
According to Derek (2010), auditing is an objective examination and evaluation of the financial statements of an organization to make sure that the records are a fair and accurate representation of the transactions they claim to represent. It can be done internally by employees of the organization, or externally by an outside firm.
Purposes of audits
An auditor may specialize in types of audits based on the audit purpose, such as to verify compliance, conformance, or performance. Some audits have special administrative purposes such as auditing documents, risk, or performance or following up on completed corrective actions (Derek, 2010).
Atkinson (2007), defines taxation as a compulsory money collection by a levying authority, usually a government. The term “taxation” applies to all types of involuntary levies, from income to capital gains to estate taxes.
Taxation is differentiated from other forms of payment, such as market exchanges, in that taxation does not require consent and is not directly tied to any services rendered. Tax systems have varied considerably across jurisdictions and time. In most modern systems, taxation occurs on both physical assets, such as property, and specific events, such as a sales transaction (Atkinson, 2007).
Purposes and justifications for taxation
The most basic function of taxation is to fund government expenditures. Varying justifications and explanations for taxes have been offered throughout history. Early taxes were used to support ruling classes, raise armies and build defenses.
Later justifications have been offered across utilitarian, economic or moral considerations. Proponents of progressive levels of taxation on high income earners argue that taxes encourage a more equitable society. Higher taxes on specific products and services, such as tobacco or gasoline, have been justified as a deterrent on consumption (Atkinson, 2007).
Atkinson, A. B. (2007). “Optimal Taxation and the Direct Versus Indirect Tax Controversy”. Can. J. Econ. 590: 592
Craig, C. & Harris, R. (2013). “Total Productivity Measurement at the Firm Level”. Sloan Management Review (Spring 1973): 13–28.
Derek M. (2010). History of Auditing. The changing audit process from the 19th century till date. Routledge-Taylor & Francis Group
Drucker, P. (2014). The practice of management. New York: Harper and Row Publishers.
Ferguson, S. & Terrion, J., (2014). Communication in Everyday Life, Personal and Professional Contexts, Oxford University Press.
Gomez-Mejia, L. R.; David B. & Robert L. C. (2008). Management: People, Performance, Change, 3rd edition. New York: McGraw-Hill.
Jean-Louis P. (2015). Henri Fayol, the Manager. Routledge.
Khurana, R. (2010). From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession. Princeton University Press.
Nobanee, H. & Abraham, J. (2015). “Current assets management of small enterprises”. Journal of Economic Studie.
Stoner, A. F. (2015). Management (6th ed.)., New Jersey: Prentice Hall, Inc
Yeo, G. (2007). “Concepts of Record (1): Evidence, Information, and Persistent Representations”. American Archivist. 70 (2): 315–343.