Management, the Controller, and Cost Accounting
According to Henry Fayol's Industrial and General Administration, "to manage is to forecast and to plan, organize, to command, to co-ordinate and to control". To an organization, those various activity can be narrowed to Planning, Organizing and Control by three groups of management: operating management, middle management and executive management with different role in each level. Planning is the process of sensing external opportunities and threats, determining desirable objectives and employing resources to accomplish these objectives. Effective planning takes the company’s business (what, where, who), major policies (how), and timings (when) into account. Organizing is the establishment of the framework within which activities are to be performed. A company is usualy divided into two or more functional units/divisions suited to the company’s operation. Each units/divisions has specialized job/function, but still parts of an interdependent system that works as a whole, that’s where organizing takes place. All those objectives, all factors affecting them, and company’s activity are monitored, compared, and followed through a systematic effort or what you call “control” in management. Although management’s planning, organizing and control seems to be a separate processes, in reality they sync together and can dynamicaly affects each other. Especially planning and control, they occurs simultaneously at the same time, the planning of next cycle of activity is being done while the activity’s control takes place. Here’s an illustration of management’s planning done by different level of management, all while organizing and control the activities as materials for decisions of next cycle of planning. •
Executive management :
decides what type of business (product(s) and costumer) a company will run; -
what the company will be in the future
Middle management :
how to sustain company’s operation...
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