Tag: Business Documents

Tasks of a Professional Manager

Specialization in every field, technological advancement, globalization of business results into appointment of qualified managers. They can be called as professional managers.

A professional manager is an expert, trained and experienced enough to adeptly manage any type of organization be it a manufacturing house, a service organization, a hospital or a government agency. Professional managers:

• Are objective, focussed and performance oriented.
• Help in meeting competitive challenges of business.
• Are creative and dynamic.
• Follow management practices based on world wide experiences and information.
• Apply theories of management to solve emerging organizational problems.

Providing direction to the firm: The first task, envisioning goals, is one of the tasks that should never be delegated. This is the ability to define overarching goals that serve to unify people and focus energies. It’s about effectively declaring what’s possible for the team to achieve and compelling them to accomplish more than they ever thought possible.

Managing survival and growth: Ensuring survival of the firm is a critical task of a manager. The manager must also seek growth. Two sets of factors impinge upon the firm’s survival and growth. The first is the set of factors which are internal to the firm and are largely controllable. These internal factors are choice of technology, efficiency of labour, competence of managerial staff, company image, financial resources, etc. The second set of factors are external to the firm like government policy, laws and regulations, changing customer tastes, attitudes and values, increasing competition, etc.

Maintaining firm’s efficiency: A manager has not only to perform and produce results, but to do so in the most efficient manner. The more output a manager can produce with the same input, the greater will be the profit.

Meeting the competition challenge: A manager must anticipate and prepare for the increasing competition. Competition is increasing in terms of more producers, products, better quality, etc.

Innovation: Innovation is finding new, different and better ways of doing existing tasks. To plan and manage for innovation is an on-going task of a manager. The manager must maintain close contact and relation with customers. Keeping track of competitor’s activities and moves can also be a source of innovation, as can improvements in technology.

Renewal: Managers are responsible for fostering the process of renewal. Renewing has to do with providing new processes and resources. The practices and strategy that got you where you are today may be inadequate for the challenges and opportunities you face tomorrow.

Building Human Organization: Man is by far the most critical resource of an organization. A good worker is a valuable asset to any company. Every manager must constantly look out for people with potential and attract them to join the company.

Leadership: Organizational success is determined by the quality of leadership that is exhibited. “A leader can be a manager, but a manager is not necessarily a leader,” says Gemmy Allen (1998). Leadership is the power of persuasion of one person over others to inspire actions towards achieving the goals of the company. Those in the leadership role must be able to influence/motivate workers to an elevated goal and direct themselves to the duties or responsibilities assigned during the planning process. Leadership involves the interpersonal characteristic of a manager’s position that includes communication and close contact with team members. The only way a manager can be acknowledged as a leader is by continually demonstrating his abilities.

Change management: A manager has to perform the task of a change agent. It’s the managers task to ensure that the change is introduced and incorporated in a smooth manner with the least disturbance and resistance.

Selection Information technology: Today’s managers are faced with a bewildering array of information technology choices that promise to change the way work gets done. Computers, the Internet, intranets, telecommunications, and a seemingly infinite range of software applications confront the modern manager with the challenge of using the best technology.

Role of a manager

Different managers perform at different levels and require different skills. To meet the demands of performing their functions, managers assume multiple roles. A role is an organized set of behaviors. Henry Mintzberg has identified ten roles common to the work of all managers. The ten roles are divided into three groups: interpersonal, informational, and decisional.

Interpersonal Roles

The three interpersonal roles are primarily concerned with interpersonal relationships. By assuming these roles, the manager also can perform informational roles, which, in turn, lead directly to the performance of decisional roles.

In the figurehead role, the manager represents the organization in all matters of formality. Some examples of the figurehead role include a college dean who hands out diplomas at graduation, a shop supervisor who attends the wedding of a subordinate’s daughter, and the CEO who cuts the ribbon on a new office building.

The leader role defines the relationships between the manger and employees. It involves directing and coordinating the activities of subordinates. It may involve; hiring, training, motivating, and encouraging employees. First-line managers, in particular, feel that effectiveness in this role is essential for successful job performance.

The liaison role involves managers in interpersonal relationships outside of their area of authority. This role may involve contacts both inside and outside the organization. The top-level manager uses the liaison role to gain favors and information, while the supervisor uses it to maintain the routine flow of work.

Informational Roles

Receiving and communicating information are perhaps the most important aspects of a manager’s job. There are three informational roles in which managers gather and disseminate information.

As monitor, the manager constantly looks for information that can be used to advantage. The information gathered might be competitive moves that could influence the entire organization or the knowledge of whom to call if the usual supplier of an important part cannot fill an order.

In the disseminator role, the manager distributes to subordinates important information that would otherwise be inaccessible to them. Example: The president of a firm may learn during a lunch conversation that a large customer of the firm is on the verge of bankruptcy. Upon returning to the office, the president contacts the vice president of marketing, who in turn instructs the sales force not to sell anything on credit to the troubled company.

In the role of spokesperson, the manager disseminates the organization’s information into its environment. Thus, the top-level manager is seen as an industry expert, while the supervisor is seen as a unit or departmental expert.

Decisional Roles

According to Mintzberg, there are four decisional roles the manager adopts. In the role of entrepreneur, the manager tries to improve the unit. For example, when the manager receives a good idea, he or she launches a development project to make that idea a reality.

In the disturbance handler role, the manger deals with threats to the organization. Examples: An emergency room supervisor responds quickly to a local disaster, a plant supervisor reacts to a strike, etc.

The resource allocator role places a manager in the position of deciding who will get what resources. These resources include money, people, time, equipment, and information. This is one of the most critical decisional roles. Example: A college dean must decide which courses to offer next semester, based on available faculty.

Managers spend a great deal of their time as negotiators, because only they have the information and authority that negotiators require. The negotiations may concern work, performance, objectives, resources, or anything else influencing the unit. Examples: A company president works out a deal with a consulting firm; A front line supervisor may negotiate for new typewriters.

Skills of a Manager

A skill is the learnt capacity or talent to carry out pre-determined results often with the minimum outlay of time, energy, or both1. In other words, a skill is an ability or proficiency that a person possesses that permits him or her to perform a particular task.

Analytical Skills

These skills are the abilities to identify key factors and understand how they interrelate, and the roles they play in a situation. Analytical skills involve being able to think about how multiple complex variables interact, and to conceive of ways to make them act in desirable manner.

Technical Skills

Technical skill is the ability to use specific knowledge, techniques, and resources in performing tasks. Examples of technical skills are writing computer programs, completing accounting statements, analyzing marketing statistics, writing legal documents, or drafting a design for a new airfoil on an airplane. Technical skills are usually obtained through training programs that an organization may offer its managers or employees or may be obtained by way of a college degree. Indeed, many business schools throughout the country see their role as providing graduates with the technical skills necessary for them to be successful on the job.

Decision Making skills

These skills are present in the planning process. A manager’s effectiveness lies in making good and timely decisions and is greatly influenced by his or her analytical skills.

Digital Skills

These are important because using digital technology substantially increases a manager’s productivity. Computers can perform in minutes tasks in financial analysis, HRP, and other areas that otherwise take hours, even days to complete.

Human Skills

Human skill involves the ability to interact effectively with people. Managers interact and cooperate with employees. Human skills, therefore, relate to the individual’s expertise in interacting with others in a way that will enhance the successful completion of the task at hand.

Conceptual Skills

Conceptual skill is the ability to see the “big picture,” to recognize significant elements in a situation, and to understand the relationship among the elements. Examples of situations that require conceptual skills include the passage of laws that affect hiring patterns in an organization, a competitor’s change in marketing strategy, or the reorganization of one department which ultimately affects the activities of other departments in the organization.

Communications Skills

Effective communication is vital for effective managerial performance. The skill is critical to success in every field. Communication skills involve the ability to communicate in ways that other people understand, and to seek and use feedback from employees to ensure that one is understood.

Design Skills

It is the ability to solve problems in ways that will benefit the organization. To be effective, particularly at upper levels, mangers must be able to do more than see a problem. They must also be able to design a workable solution to the problem.

Goal setting involves the development of an action plan designed in order to motivate and guide a person or group toward a goal. Goals are more deliberate than desires and momentary intentions.

Goal-setting theory is a theory based on the idea that setting specific and measurable goals is more effective than setting unclear goals.

Therefore, setting goals means that a person has committed thought, emotion, and behavior towards attaining the goal. In doing so, the goal setter has established a desired future state which differs from their current state thus creating a mismatch which in turn spurs future actions. Goal setting can be guided by goal-setting criteria (or rules) such as SMART criteria. Goal setting is a major component of personal-development and management literature. Studies by Edwin A. Locke and his colleagues, most notably Gary Latham, have shown that more specific and ambitious goals lead to more performance improvement than easy or general goals. The goals should be specific, time constrained and difficult. Vague goals reduce limited attention resources; goals require realistic time restrictions, illogically short time limits, intensify the difficulty of the goal outside the intentional level and, disproportionate time limits are not encouraging.[4] Difficult goals should be set ideally at the 90th percentile of performance assuming that motivation and not ability is limiting attainment of that level of performance. As long as the person accepts the goal, has the ability to attain it, and does not have conflicting goals, there is a positive linear relationship between goal difficulty and task performance.

The theory of Locke and colleagues states that the simplest most direct motivational explanation of why some people perform better than others is because they have different performance goals. The essence of the theory is:

• Difficult specific goals lead to significantly higher performance than easy goals, no goals, or even the setting of an abstract goal such as urging people to do their best.
• Holding ability constant, and given that there is goal commitment, the higher the goal the higher the performance.
• Variables such as praise, feedback, or the participation of people in decision-making about the goal only influence behavior to the extent that they lead to the setting of and subsequent commitment to a specific difficult goal.

Principles of the Goal-setting theory

According to Locke’s goal-setting theory, there are five main principles of setting effective goals:

Challenge: Goals should be sufficiently challenging to keep employees engaged and focused while performing the tasks needed to reach each goal. Goals that are too tedious or easy have a demotivating effect and will, therefore, result in less achievement satisfaction.

Clarity: Goals must be clear and specific. When employees understand project objectives and deadlines, there is much less risk for misunderstandings.

Commitment: Employees need to understand and support the goal they are being assigned from the beginning. If employees don’t feel committed to the goal, they are less likely to enjoy the process and ultimately achieve the goal.

Task Complexity: Goals should be broken down into smaller goals. Once each smaller goal is reached, a review should be performed to update the employee on the overall progress towards the larger goal.

Feedback: Feedback is an important component of the goal-setting theory. Regular feedback should be provided throughout the goal-achieving process to ensure tasks stay on track to reach the goal.

Advantages of Goal Setting Theory

• Goal setting leads to better performance by increasing motivation and efforts, but also through increasing and improving the feedback quality.
• Goal setting theory is a technique used to raise incentives for employees to complete work quickly and effectively.

Limitations of Goal Setting Theory

• Very difficult and complex goals stimulate riskier behaviour.
• At times, the organizational goals are in conflict with the managerial goals. Goal conflict has a detrimental effect on the performance if it motivates incompatible action drift.
• If the employee lacks skills and competencies to perform actions essential for goal, then the goal-setting can fail and lead to undermining of performance.
• There is no evidence to prove that goal-setting improves job satisfaction.

Inflation accounting comprises a range of accounting models designed to correct problems arising from historical cost accounting in the presence of high inflation and hyperinflation. For example, in countries experiencing hyperinflation the International Accounting Standards Board requires corporations to implement financial capital maintenance in units of constant purchasing power in terms of the monthly published Consumer Price Index. This does not result in capital maintenance in units of constant purchasing power since that can only be achieved in terms of a daily index.

Inflation Accounting Methods

There are two main methods used as inflationary accounting methods. The first is current purchasing power (CCP), and the second, being current cost accounting (CCA).

The current purchasing power method involves adjusting the financial statements and associated numbers to the current price. For non-monetary items, this is done by taking the historical figures and applying a specific conversion rate based on a price index.

The conversion rate is found by dividing the index price at the end of the period by the index price at the beginning of the period. Monetary items are subject to a net gain or loss during adjustment.

The current cost accounting method takes the fair market value (FMV) instead of the historical cost. With this method, all monetary and non-monetary assets must be adjusted to their current values.

Current Purchasing Power (CPP)

Under the CPP method, monetary items and non-monetary items are separated. The accounting adjustment for monetary items is subject to the recording of a net gain or loss. Non-monetary items (those that do not carry a fixed value) are updated into figures with a conversion factor equivalent to price index at the end of the period divided by price index at the date of transaction.

Current Cost Accounting (CCA)

The CCA approach values assets at their fair market value (FMV) rather than historical cost, the price incurred during the purchase of the fixed asset. Under the CCA, both monetary and non-monetary items are restated to current values.

The Inflation Accounting Process

The measurement of income from continuing operations on a current cost basis requires the accountant to complete the following steps:

• Measure the cost of goods sold as of the date sold, using either its current cost or lower recoverable amount, or when those resources are used on or at least committed to a designated contract.
• Measure depreciation, amortization, and depletion based on either the average current cost of the service potential of the underlying fixed assets or their lower recoverable amount during the usage period.