Monthly Archives: January 2017

Limitations Of Management Information Systems

A Management Information System (MIS) is a precious technology that organizations use to measure the efficiency of their business operations as well as performance of their employees. The MIS endows with thorough insight of a company and supports management for making decisive business decisions. Though the MIS provides big number of advantages, but yet it also comes with a few limitations. In this article, we will be focusing on that part of management information system.

Security

This is the very significant area of management information system and it should be well secured. All the important as well as the secret data are there stored in an MIS and which is not supposed to seen by anyone outside the company or anyone who is not authorized to do so. However, it happens sometimes and the important data gets seep out of the organization. It affects the company a lot in business and hence the companies should focus more on this security part. Let’s discuss a few ways how the security of an MIS can be broken.

Hackers: At present, a number of people who have excellent IT knowledge hack this kind of system, maybe for money or for some other purposes.

Ex- employees: In some cases, it has been seen that the account of employees are active in MIS site even after they got out from there. Sometimes, these accounts can be used for some negative purposes.

Virus: While the employees of any organization use this system, they should make sure that their operating device or computer is virus free. If the device has dangerous viruses then these can be a concern for the security of the MIS.

Server

All the data are stored in a particular server, which is also known as the hosting server. The upload time of any server cannot be 100%. It may be 90% or 99%. But, never can be the fullest. So, the site can be down for anytime. Hence, this is another limitation for management information system.

Internet

Same as server, Internet is also a part where MIS has to be dependent. If someone cannot access the net services or the weather is cloudy or maybe the user is in remote or rural area where no network is, then he or she won’t be able to get access of management information system.

So, these are a few limitations that a management information system has to over come in future. However, with having those limitations, yet it helps a lot to the organization, the down line employees and top level managers to take proper decisions for the well of the company.

The Importance of Import and Export

No matter how rich a country is, how small or big it is, no nation is self-sufficient. It will never be totally independent from the rest and have everything it needs. Every country, no matter how powerful it is, needs raw materials from other countries to produce products that it needs or that is needed by other countries. In short, every country is involved in import export transactions.

Hundreds of years ago, Europe, the Far East and the United States were already importing and exporting goods between themselves and other countries. It had already set up a simple system of trading and global sourcing, albeit on a smaller scale. Today, import and export has become a very important part of the economy. This business has flourished into a more sophisticated but convenient, smoother and safer business. Risks are minimized with more international trading laws that aim to protect both importers and exporters. Regulating and governing bodies such as the World Trade Organization (WTO) has streamlined the export import system. Trade agreements like the North American Free Trade Agreement (NAFTA) have greatly contributed to the growth of the industry.

It is also now highly possible for small countries to go beyond the borders of their countries and reach out to a wider marketplace that can bring in products and supplies that they need. The businesses in these countries can benefit from having lower product costs and have a competitive edge over bigger countries. The demand for more imported products is growing exponentially and businesses are taking these import export opportunities seriously. There are new international markets open for both importers and exporters that have brought in a lot of opportunities for companies to lower production or buying costs and make higher profits.

Because of global sourcing, businesses have access to more product and technology choices that are up to international standards that are otherwise not available in that particular place. Importing products offers an alternative source of supply so there is reduced dependence on local suppliers for products that may have a limited supply. Exporting products give countries a chance to expand its market outside its territories.

With more information available to the businessmen following the advent of the internet and advancement of technology, all types of businesses can take advantage of the many import export business opportunities available. It is not so surprising for a processor to be exported from the Philippines to Taiwan for assembly into laptops.

Singapore then imports the laptop for Asian distribution then re-exports it back to other countries within its Asian sales territory.

Advanced trade systems have given businesses the assurance that transactions can flow smoothly and securely. Several companies have seamlessly integrated its import export business transactions with its operations by bringing in professional manpower that understands the intricacies of the business and who have undergone import export training courses.

With enough information and assistance from knowledgeable personnel, businesses are able to take advantage of the many import export business opportunities for both purchasing and marketing as well as make use of business systems that can help the company achieve maximum advantage in the international market.

The Importance of Credit Risk Management for Banking

The importance of credit risk management for banking is tremendous. Banks and other financial institutions are often faced with risks that are mostly of financial nature. These institutions must balance risks as well as returns. For a bank to have a large consumer base, it must offer loan products that are reasonable enough. However, if the interest rates in loan products are too low, the bank will suffer from losses. In terms of equity, a bank must have substantial amount of capital on its reserve, but not too much that it misses the investment revenue, and not too little that it leads itself to financial instability and to the risk of regulatory non-compliance.

Credit risk management, in finance terms, refers to the process of risk assessment that comes in an investment. Risk often comes in investing and in the allocation of capital. The risks must be assessed so as to derive a sound investment decision. Likewise, the assessment of risk is also crucial in coming up with the position to balance risks and returns.

Banks are constantly faced with risks. There are certain risks in the process of granting loans to certain clients. There can be more risks involved if the loan is extended to unworthy debtors. Certain risks may also come when banks offer securities and other forms of investments.

The risk of losses that result in the default of payment of the debtors is a kind of risk that must be expected. Because of the exposure of banks to many risks, it is only reasonable for a bank to keep substantial amount of capital to protect its solvency and to maintain its economic stability. The second Basel Accords provides statements of its rules regarding the regulation of the bank’s capital allocation in connection with the level of risks the bank is exposed to. The greater the bank is exposed to risks, the greater the amount of capital must be when it comes to its reserves, so as to maintain its solvency and stability. To determine the risks that come with lending and investment practices, banks must assess the risks. Credit risk management must play its role then to help banks be in compliance with Basel II Accord and other regulatory bodies.

To manage and assess the risks faced by banks, it is important to make certain estimates, conduct monitoring, and perform reviews of the performance of the bank. However, because banks are into lending and investing practices, it is relevant to make reviews on loans and to scrutinize and analyse portfolios. Loan reviews and portfolio analysis are crucial then in determining the credit and investment risks.

The complexity and emergence of various securities and derivatives is a factor banks must be active in managing the risks. The credit risk management system used by many banks today has complexity; however, it can help in the assessment of risks by analysing the credits and determining the probability of defaults and risks of losses.

Credit risk management for banking is a very useful system, especially if the risks are in line with the survival of banks in the business world.

Benefits of the One Plan Health Insurance Blue Plan

Health insurance is not just for those with a six figure income, and it should not be a right but rather it should be a privilege. This might not be reality in South Africa at the moment but this is the vision of One Plan Health Insurance, a newcomer to the South African health care industry.

With One Plan medical aid everyone can afford to have health care at a price that will fit their pockets. And with the most basic plan starting at R100 a month, this can truly become a reality.

One Plan Health Insurance offers valuable services and products ranging from hospital plans, to cover in case of death and also cover for dread disease and HIV/AIDS cover. This means that One Plan Health Insurance truly is a one stop shop for all your health care needs, for you and you loved ones. Here is a look at what their comprehensive and affordable Blue Plan can offer you in the time that you will need it most.

What the One Plan Health Insurance Blue Plan Offers You

With the One Plan medical aid Blue Plan as a primary member you will receive R 5 250 worth of medical cover per year, excluding hospitalization, dread disease cover, and other benefits. This means that R 5 250 will go towards your average medical needs, like visiting a doctor, receiving prescription medication, pathology, radiology and maternity care.

Besides just covering your day to day medical needs One Plan Health Insurance will cover other crucial medical needs, such as accident cover, illness in hospital, emergency illness and natural birth and emergency caesareans.

Furthermore you will also receive accidental disability cover for up to R 130 000 for the duration of the policy. You and your family, if they are members, will also be covered in case of death, both accidental and from natural causes.

Optometry needs will also be covered and you will be able to have a comprehensive eye test, frames and specially cut glasses for your frames at any Eyenet optometrist nationwide. What more could you want from a health care provider?

But there is still more. As a member of One Plan Health Insurance you will also be able to take hold of amazing deals and goodies on offer from their online shopping mall, OneLiifestyle. Through the exclusive offers on their website you will be able to get discounts on over 300 trusted brands. So what have you got to lose?

Who can benefit from the One Plan Health Insurance Blue Plan

Those looking to cover themselves and their family in case of any medical emergency that might arise will benefit from the One Plane Health Insurance Blue Plan. And with low monthly rates it is not just the rich that can afford to look after their health. And with great value added bonuses there is no reason why you should not SMS them on 31644, and they will call you back.

The 5R’s in Waste Management

The 5 R’s – The key factors that are to be remembered in respect of waste management are – Reduce, Reuse, Recycle, Recover and Replace.

1. Reduce – wherever possible reduce waste production. One can always reduce waste production by following these simple guidelines:

a. Use or buy only what is needed – when there is no waste generated, then there is no waste to be treated. Make a shopping list before going for shopping. This will ensure that you don’t buy things which are not needed. Don’t give in to temptation by buying random items.

b. Buy items that can be re-used like rechargeable batteries. This will create very less waste as they can be reused more than once.

c. Unsubscribe from paper mails and instead opt for emails.

d. Buy products with minimum packing. Flashy and fun packaging does not necessarily mean better product quality.

e. Say NO to plastic bags. Carry your own reusable shopping bags.

f. Spread the word on waste reduction at source – more people adopting waste reduction means less waste generated.

2. Reuse – if waste is produced, explore the feasibility of reusing the waste. Don’t throw away items that are reusable. Reduce waste by making full use of any item. Here are some useful ideas on how to reuse those everyday bits and pieces.

a. Re-use old clothes by stitching items like cloth bags, cushion covers, table / sofa covers etc. Those that cannot be reused as such can be used as waste cloth for cleaning.

b. Re-use old tires in the garden as swings or as pots for growing small plants.

c. Re-use glass bottles and jars as storage containers after cleaning and drying.

d. Re-use envelopes by sticking labels over the address.

e. Re-use plastic bags as waste bin bags.

3. Recycle – if reusing is not feasible, explore the next option of recycling the waste. As there are economic and environmental costs associated with waste collection and recycling, it should be considered only where reduction and reuse of waste is not practicable / feasible. Most of the household and work place items can be effectively recycled with a little effort. Here are some tips on adopting recycling:

a. Keep recyclable trash containers at strategic locations at home / work place. This will foster better participation in the recycling process from every one.

b. Don’t throw something out just because it is old or broken. Repair and repurpose it for use again.

c. Recycle food waste by composting using compost bins.

4. Recover – it may be possible to recover materials or energy from waste which cannot be reduced, reused or recycled. For instance, Sweden has been successfully generating biogas and fuel oil from waste and trash.

5. Replace – adopt eco-friendly goods or lifestyles, such as using handkerchiefs instead of tissues, travel by public transport instead of private cars, walk or cycle for short commuting distances, adopt car-pooling for long distance commuting instead of self-driving etc.

Habit is a powerful tool in our daily life. Most of the things we do in our daily life are a matter of habit. Buying unwanted items, using tissues instead of handkerchief / cloth napkins are all habits which have been ingrained into us. The trick lies in changing these habits into environmental friendly habits, a challenging task for anyone, but still necessary for a better world. In other words, the 5 Rs should be practised as a norm rather than as an exception.

In Summary – What Is Major Account Management All About?

Major Account Management Is a Long Term Process – It Takes Time:

We must recognise that we are in Major Account Management for the long term. It takes time to manage a major account and we will only receive a payback on our investment in time if we can have a long term result. In some of the organisations we have worked with this produces a tension because the whole culture is about creating a short term sales result in which product and profit are the main drivers and measures of success. We should not underestimate what a challenge Major Account Management can be to the corporate culture. It emphasises relationship more than product, profit more than volume, and team more than individual, long term more than short term. At the same time the practical short term realities of business life need to be recognised.

One of the best ways of managing this tension is to have someone who acts as a mentor, conscience or guide to the account manager and account team. They are not involved in the day to day management of the account but are invited in to look at and comment on major proposals and presentations. Their main role is to be involved in reviewing the long term plan every few months to ensure that the relationship is as productive as possible and is reflecting the values of the organisation as a whole.

The role of the major account manager is to be responsible for the overall relationship. They influence all those involved in the account to ensure a co-ordinated, synchronised approach. The major account manager is responsible for drafting the account plan, gaining the agreement and commitment of the team and then monitoring implementation

Major Account Management Involves Relationships Not Just a Mechanical Approach:

Under this heading we should discuss three main aspects of major account management.

o The importance of relationships in Major Account Management.

o The complexity of relationships in Major Account Management.

o Mapping relationships in Major Account Management.

Importance:

In Major Account Management it is essential that we manage people as well as processes. Of course we must get the product pricing right. We need to be excellent at administration. Our customer service and product range need to be strong. But “people buy from people” and “we are in a people business”. To manage the complex range of relationships within a major account is difficult and demanding but our ability to manage relationships will define whether or not we sustain success.

Complexity:

In a reactive sale there is only one relationship – that between the seller and the buyer. In major accounts the situation is much more complex. There are often contacts going on at many levels and many locations. In one major account, we have identified 1000 relationships between the account team of ten people and individuals representing the client. But it is not just a problem of numbers, it is often a problem of politics. Some contacts do not want us to talk to people in other departments or at different levels. It can also be that the complexity is caused by product range. The users of one product rarely speak to the specifies for another product. In any complex relationship some people will like us more than others. This is to say nothing of inter-departmental tensions. All these things make major account relationships complex and we need to recognise their complexity.

Mapping:

If relationships are important and if relationships are complex then it is essential that we find a way of mapping, analysing, planning and monitoring those relationships. Over recent years we have found that an approach based on the game of chess allows a very practical way of identifying the key issues.

If we can answer these questions confidently and communicate our thinking across the account team simply and clearly then we will be half-way to success. This approach has given people across a broad spectrum of organisations a common language and way of working

It Can Only Be Done With Selected Customers:

The final word from this definition is selected. Choosing the right key accounts is of critical importance for three main reasons:

o We do not have the resources to treat every customer as a key account.

o Not every customer wants to be treated as a key account.

o Selection allows us to prioritise our activities in line with our overall business objectives.

Many organisations grade their major accounts simply by the size of sales for the year but the organisations we see that are really moving forward in Major Account Management take a number of other factors into account. They also make sure that everybody knows who the major accounts are and why they are major accounts. It is important to be rigorous with the selection criteria you use! You will also need to apply some form of weighting to reflect your priorities. The fact that a major account does not meet all your criteria will not disqualify it from being a major account. It will just need to score higher in other areas to qualify.

On the basis of this scoring, organisations can grade their accounts. They might be Premier, 1st and 2nd Division like a football league, or Gold, Silver and Bronze like Olympic medals or First Class, Club Class, Economy and Standby like an airline. The analogy of an airline is a good one because on one flight you can have people on Standby being entirely happy with the service they are getting, even though they know there are people getting “better” service in Club Class. Grading your accounts is not a matter of giving some customers better or worse service. It is a matter of giving all your customers appropriate service. When we select our major accounts and consistently deliver what we promise, we are managing our accounts professionally and effectively.

In Summary – Success Factors In Key Account Management:

o Successful Development Of The Role:

o Effective working relationships with other members of the team.

o A continuing drive to improve account team productivity.

o Management commitment to the account team’s role with opportunities for career progression.

o Re-enforcement of the role through authorised career structures, job descriptions and core training programmes.

o The Key Skills:

o Understanding the financial and legal requirements of the account.

o Understanding of the company’s business objectives.

o Understanding of the company’s commercial policies.

o Build high levels of product awareness.

o Understanding of the customer’s business objectives.

o Identify the decision makers.

o Understand the customer’s purchasing strategy.

o Assess competitive activities.

o Put together an account development plan.

o Ensure effective sales order processing.

o Build the right levels of revenue and profitability.

o The Core Skills:

o Delegation

o Interpersonal skills.

o Consultancy.

o Financial control & analysis.

o Project management.

o Man management.

o Initiative & creativity.

The Secondary Skills:

E.g. Industry knowledge, competitive knowledge, product knowledge etc.

Success Factors In Key Account Development:

o The Stages Of A Long Term Process

o Pre-sales.

o Contract negotiation.

o Implementation / Delivery.

o Review.

o Exploitation.

o Objectives For An Account Team

o Ensure that the customer is presented with a coherent and professional image of your Company as a business partner.

o Secure a long term business relationship with the customer as the basis for growing business.

o Penetrate the customer’s organisation and decision making unit creating new opportunities that can be exploited to accelerate account growth.

o Understand and document, on an ongoing basis, the customer organisations strategic business direction and organisation.

o Provide the company’s senior management team with feedback on the long term growth potential in the customer’s market sector and on critical success factors for exploiting it.

o Ensure that the company’s solutions are technically solid and based on a proper understanding of the current requirements and re-inforce the customer’s perception of the benefits of the company’s market focus.

o Ensure that the company’s total resource is delivered in a way that satisfies customer requirements and supports the objectives of the account plan.

Conclusion:

An effective Major Account Management strategy depends on selecting your major accounts intelligently, creating a strong, consistent, flexible way of working with both major accounts and other customers and then implementing the plan in a disciplined, effective, efficient manner.

One of the successes of the Major Account Management programme has been the creation of common models and language that facilitate discussion and planning across units and departments. It has also stimulated a commitment for our clients to plan long term for key relationships. Major Account Management has many implications for individuals, departments and the business as a whole. It will always be demanding, but done right it will be highly rewarding

Copyright © 2006 Jonathan Farrington. All rights reserved

Main Functions of Management

There are four main functions of management.

1. Planning.

2. Organizing.

3. Leading.

4. Controlling.

Planning.

Planning is an important managerial function. It provides the design of a desired future state and the means of bringing about that future state to accomplish the organization’s objectives. In other words, planning is the process of thinking before doing. To solve the problems and take the advantages of the opportunities created by rapid change, managers must develop formal long- and short-range plans so that organizations can move toward their objectives.

It is the foundation area of management. It is the base upon which the all the areas of management should be built. Planning requires administration to assess; where the company is presently set, and where it would be in the upcoming. From there an appropriate course of action is determined and implemented to attain the company’s goals and objectives

Planning is unending course of action. There may be sudden strategies where companies have to face. Sometimes they are uncontrollable. You can say that they are external factors that constantly affect a company both optimistically and pessimistically. Depending on the conditions, a company may have to alter its course of action in accomplishing certain goals. This kind of preparation, arrangement is known as strategic planning. In strategic planning, management analyzes inside and outside factors that may affect the company and so objectives and goals. Here they should have a study of strengths and weaknesses, opportunities and threats. For management to do this efficiently, it has to be very practical and ample.

Characteristics of planning.

Ø Goal oriented.

Ø Primacy.

Ø Pervasive.

Ø Flexible.

Ø Continuous.

Ø Involves choice.

Ø Futuristic.

Ø Mental exercise.

Ø Planning premises.

Importance of planning.

* Make objectives clear and specific.

* Make activities meaningful.

* Reduce the risk of uncertainty.

* Facilitators coordination.

* Facilitators decision making.

* Promotes creativity.

* Provides basis of control.

* Leads to economy and efficiency.

* Improves adoptive behavior.

* Facilitates integration.

Formal and informal planning.

Formal planning usually forces managers to consider all the important factors and focus upon both short- and long-range consequences. Formal planning is a systematic planning process during which plans are coordinated throughout the organization and are usually recorded in writing. There are some advantages informal planning. First, formalized planning forces managers to plan because they are required to do so by their superior or by organizational rules. Second, managers are forced to examine all areas of the organization. Third, the formalization it self provides a set of common assumptions on which all managers can base their plans.

Planning that is unsystematic, lacks coordination, and involves only parts of the organizations called informal planning. It has three dangerous deficiencies. First, it may not account for all the important factors. Second, it frequency focuses only on short range consequences. Third, without coordination, plans in different parts of the organization may conflict.

Stages in planning.

The sequential nature of planning means that each stage must be completed before the following stage is begun. A systematic planning progress is a series of sequential activities that lead to the implementation of organizational plans.

  • The first step in planning is to develop organizational objectives.
  • Second, planning specialists and top management develop a strategic plan and communicate it to middle managers.
  • Third, use the strategic plans to coordinate the development of intermediate plans by middle managers.
  • Fourth, department managers and supervisors develop operating plans that are consistent with the intermediate plans.
  • Fifth, implementation involves making decisions and initiating actions to carry out the plans.
  • Sixth, the final stage, follow-up and control, which is critical.

The organizational planning system.

A coordinated organizational planning system requires that strategic, intermediate, and operating plans be developed in order of their importance to the organization. All three plans are interdependent with intermediate plans based on strategic plans and operating planes based on intermediate plans. Strategic plans are the first to be developed because they set the future direction of the organization and are crucial to the organization’s survival. Thus, strategic plans lay the foundation for the development of intermediate and operating plans. The next plans to be developed are the intermediate plans; intermediate plans cover major functional areas within an organization and are the steppingstones to operating plans. Last come operating plans; these provide specific guidelines for the activities within each department.

Organizing.

The second function of the management is getting prepared, getting organized. Management must organize all its resources well before in hand to put into practice the course of action to decide that has been planned in the base function. Through this process, management will now determine the inside directorial configuration; establish and maintain relationships, and also assign required resources.

While determining the inside directorial configuration, management ought to look at the different divisions or departments. They also see to the harmonization of staff, and try to find out the best way to handle the important tasks and expenditure of information within the company. Management determines the division of work according to its need. It also has to decide for suitable departments to hand over authority and responsibilities.

Importance of the organization process and organization structure.

  1. Promote specialization.
  2. Defines jobs.
  3. Classifies authority and power.
  4. Facilitators’ coordination.
  5. Act as a source of support security satisfaction.
  6. Facilitators’ adaptation.
  7. Facilitators’ growth.
  8. Stimulators creativity.

Directing (Leading).

Directing is the third function of the management. Working under this function helps the management to control and supervise the actions of the staff. This helps them to assist the staff in achieving the company’s goals and also accomplishing their personal or career goals which can be powered by motivation, communication, department dynamics, and department leadership.

Employees those which are highly provoked generally surpass in their job performance and also play important role in achieving the company’s goal. And here lies the reason why managers focus on motivating their employees. They come about with prize and incentive programs based on job performance and geared in the direction of the employees requirements.

It is very important to maintain a productive working environment, building positive interpersonal relationships, and problem solving. And this can be done only with Effective communication. Understanding the communication process and working on area that need improvement, help managers to become more effective communicators. The finest technique of finding the areas that requires improvement is to ask themselves and others at regular intervals, how well they are doing. This leads to better relationship and helps the managers for better directing plans.

Controlling.

Managerial control is the follow-up process of examining performance, comparing actual against planned actions, and taking corrective action as necessary. It is continual; it does not occur only at the end of specified periods. Even though owners or managers of small stores may evaluate performance at the end of the year, they also monitor performance throughout the year.

Types of managerial control:

* Preventive control.

Preventive controls are designed to prevent undesired performance before it occurs.

* Corrective control.

Corrective controls are designed to adjust situations in which actual performance has already deviated from planned performance.

Stages in the managerial control process.

The managerial control process is composed of several stages. These stages includes

  1. Determining performance standards.
  2. Measuring actual performance.
  3. Comparing actual performance against desired performance (performance standards) to determine deviations.
  4. Evaluating the deviations.
  5. Implementing corrective actions.

2) Describe how this each function leads to attain the organizational objectives.

Planning

Whether the system is an organization, department, business, project, etc., the process of planning includes planners working backwards through the system. They start from the results (outcomes and outputs) they prefer and work backwards through the system to identify the processes needed to produce the results. Then they identify what inputs (or resources) are needed to carry out the processes.

* Quick Look at Some Basic Terms:

Planning typically includes use of the following basic terms.

NOTE: It is not critical to grasp completely accurate definitions of each of the following terms. It is more important for planners to have a basic sense for the difference between goals/objectives (results) and strategies/tasks (methods to achieve the results).

  • Goals

Goals are specific accomplishments that must be accomplished in total, or in some combination, in order to achieve some larger, overall result preferred from the system, for example, the mission of an organization. (Going back to our reference to systems, goals are outputs from the system.)

  • Strategies or Activities

These are the methods or processes required in total, or in some combination, to achieve the goals. (Going back to our reference to systems, strategies are processes in the system.)

  • Objectives

Objectives are specific accomplishments that must be accomplished in total, or in some combination, to achieve the goals in the plan. Objectives are usually “milestones” along the way when implementing the strategies.

  • Tasks

Particularly in small organizations, people are assigned various tasks required to implement the plan. If the scope of the plan is very small, tasks and activities are often essentially the same.

  • Resources (and Budgets)

Resources include the people, materials, technologies, money, etc., required to implement the strategies or processes. The costs of these resources are often depicted in the form of a budget. (Going back to our reference to systems, resources are input to the system.)

Basic Overview of Typical Phases in Planning

Whether the system is an organization, department, business, project, etc., the basic planning process typically includes similar nature of activities carried out in similar sequence. The phases are carried out carefully or — in some cases — intuitively, for example, when planning a very small, straightforward effort. The complexity of the various phases (and their duplication throughout the system) depends on the scope of the system. For example, in a large corporation, the following phases would be carried out in the corporate offices, in each division, in each department, in each group, etc.

1. Reference Overall Singular Purpose (“Mission”) or Desired Result from System.

During planning, planners have in mind (consciously or unconsciously) some overall purpose or result that the plan is to achieve. For example, during strategic planning, it is critical to reference the mission, or overall purpose, of the organization.

2. Take Stock Outside and Inside the System.

This “taking stock” is always done to some extent, whether consciously or unconsciously. For example, during strategic planning, it is important to conduct an environmental scan. This scan usually involves considering various driving forces, or major influences, that might effect the organization.

3. Analyze the Situation.

For example, during strategic planning, planners often conduct a “SWOT analysis”. (SWOT is an acronym for considering the organization’s strengths and weaknesses, and the opportunities and threats faced by the organization.) During this analysis, planners also can use a variety of assessments, or methods to “measure” the health of systems.

4. Establish Goals.

Based on the analysis and alignment to the overall mission of the system, planners establish a set of goals that build on strengths to take advantage of opportunities, while building up weaknesses and warding off threats.

5. Establish Strategies to Reach Goals.

The particular strategies (or methods to reach the goals) chosen depend on matters of affordability, practicality and efficiency.

6. Establish Objectives Along the Way to Achieving Goals.

Objectives are selected to be timely and indicative of progress toward goals.

7. Associate Responsibilities and Time Lines with Each Objective.

Responsibilities are assigned, including for implementation of the plan, and for achieving various goals and objectives. Ideally, deadlines are set for meeting each responsibility.

8. Write and Communicate a Plan Document.

The above information is organized and written in a document which is distributed around the system.

9. Acknowledge Completion and Celebrate Success.

This critical step is often ignored — which can eventually undermine the success of many of your future planning efforts. The purpose of a plan is to address a current problem or pursue a development goal. It seems simplistic to assert that you should acknowledge if the problem was solved or the goal met. However, this step in the planning process is often ignored in lieu of moving on the next problem to solve or goal to pursue. Skipping this step can cultivate apathy and skepticism — even cynicism — in your organization. Do not skip this step.

To Ensure Successful Planning and Implementation:

A common failure in many kinds of planning is that the plan is never really implemented. Instead, all focus is on writing a plan document. Too often, the plan sits collecting dust on a shelf. Therefore, most of the following guidelines help to ensure that the planning process is carried out completely and is implemented completely — or, deviations from the intended plan are recognized and managed accordingly.

  • Involve the Right People in the Planning Process

Going back to the reference to systems, it is critical that all parts of the system continue to exchange feedback in order to function effectively. This is true no matter what type of system. When planning, get input from everyone who will responsible to carry out parts of the plan, along with representative from groups who will be effected by the plan. Of course, people also should be involved in they will be responsible to review and authorize the plan.

  • Write Down the Planning Information and Communicate it Widely

New managers, in particular, often forget that others do not know what these managers know. Even if managers do communicate their intentions and plans verbally, chances are great that others will not completely hear or understand what the manager wants done. Also, as plans change, it is extremely difficult to remember who is supposed to be doing what and according to which version of the plan. Key stakeholders (employees, management, board members, founders, investor, customers, clients, etc.) may request copies of various types of plans. Therefore, it is critical to write plans down and communicate them widely.

  • Goals and Objectives Should Be SMARTER

SMARTER is an acronym, that is, a word composed by joining letters from different words in a phrase or set of words. In this case, a SMARTER goal or objective is:

Specific:

For example, it is difficult to know what someone should be doing if they are to pursue the goal to “work harder”. It is easier to recognize “Write a paper”.

Measurable:

It is difficult to know what the scope of “Writing a paper” really is. It is easier to appreciate that effort if the goal is “Write a 30-page paper”.

Acceptable:

If I am to take responsibility for pursuit of a goal, the goal should be acceptable to me. For example, I am not likely to follow the directions of someone telling me to write a 30-page paper when I also have to five other papers to write. However, if you involve me in setting the goal so I can change my other commitments or modify the goal, I am much more likely to accept pursuit of the goal as well.

Realistic:

Even if I do accept responsibility to pursue a goal that is specific and measurable, the goal will not be useful to me or others if, for example, the goal is to “Write a 30-page paper in the next 10 seconds”.

Time frame:

It may mean more to others if I commit to a realistic goal to “Write a 30-page paper in one week”. However, it will mean more to others (particularly if they are planning to help me or guide me to reach the goal) if I specify that I will write one page a day for 30 days, rather than including the possibility that I will write all 30 pages in last day of the 30-day period.

Extending:

The goal should stretch the performer’s capabilities. For example, I might be more interested in writing a 30-page paper if the topic of the paper or the way that I write it will extend my capabilities.

Rewarding:

I am more inclined to write the paper if the paper will contribute to an effort in such a way that I might be rewarded for my effort.

  • Build in Accountability (Regularly Review Who is Doing What and By When?)

Plans should specify who is responsible for achieving each result, including goals and objectives. Dates should be set for completion of each result, as well. Responsible parties should regularly review status of the plan. Be sure to have someone of authority “sign off” on the plan, including putting their signature on the plan to indicate they agree with and support its contents. Include responsibilities in policies, procedures, job descriptions, performance review processes, etc.

  • Note Deviations from the Plan and Replan Accordingly

It is OK to deviate from the plan. The plan is not a set of rules. It is an overall guideline. As important as following the plan is noticing deviations and adjusting the plan accordingly.

  • Evaluate Planning Process and the Plan

During the planning process, regularly collect feedback from participants. Do they agree with the planning process? If not, what do not they like and how could it be done better? In large, ongoing planning processes (such as strategic planning, business planning, project planning, etc.), it is critical to collect this kind of feedback regularly.

During regular reviews of implementation of the plan, assess if goals are being achieved or not. If not, were goals realistic? Do responsible parties have the resources necessary to achieve the goals and objectives? Should goals be changed? Should more priority be placed on achieving the goals? What needs to be done?

Finally, take 10 minutes to write down how the planning process could have been done better. File it away and read it the next time you conduct the planning process.

  • Recurring Planning Process is at Least as Important as Plan Document

Far too often, primary emphasis is placed on the plan document. This is extremely unfortunate because the real treasure of planning is the planning process itself. During planning, planners learn a great deal from ongoing analysis, reflection, discussion, debates and dialogue around issues and goals in the system. Perhaps there is no better example of misplaced priorities in planning than in business ethics. Far too often, people put emphasis on written codes of ethics and codes of conduct. While these documents certainly are important, at least as important is conducting ongoing communications around these documents. The ongoing communications are what sensitize people to understanding and following the values and behaviors suggested in the codes.

  • Nature of the Process Should Be Compatible to Nature of Planners

A prominent example of this type of potential problem is when planners do not prefer the “top down” or “bottom up”, “linear” type of planning (for example, going from general to specific along the process of an environmental scan, SWOT analysis, mission/vision/values, issues and goals, strategies, objectives, timelines, etc.) There are other ways to conduct planning. For an overview of various methods, see (in the following, the models are applied to the strategic planning process, but generally are eligible for use elsewhere).

Critical — But Frequently Missing Step — Acknowledgement and Celebration of Results

It’s easy for planners to become tired and even cynical about the planning process. One of the reasons for this problem is very likely that far too often, emphasis is placed on achieving the results. Once the desired results are achieved, new ones are quickly established. The process can seem like having to solve one problem after another, with no real end in sight. Yet when one really thinks about it, it is a major accomplishment to carefully analyze a situation, involve others in a plan to do something about it, work together to carry out the plan and actually see some results.

Organizing.

Organizing can be viewed as the activities to collect and configure resources in order to implement plans in a highly effective and efficient fashion. Organizing is a broad set of activities, and often considered one of the major functions of management. Therefore, there are a wide variety of topics in organizing. The following are some of the major types of organizing required in a business organization.

A key issue in the design of organizations is the coordination of activities within the organization.

  • Coordination

Coordinating the activities of a wide range of people performing specialized jobs is critical if we wish avoid mass confusion. Likewise, various departments as grouping of specialized tasks must be coordinated. If the sales department sells on credit to anyone who wished it, sales are likely to increase but bad-debt losses may also increase. If the credit department approves sales only to customers with excellent credit records, sales may be lower. Thus there is a need to link or coordinate the activities of both departments (credits and sales) for the good of the total organization.

Coordination is the process of thinking several activities to achieve a functioning whole.

Leading

Leading is an activity that consists of influencing other people’s behavior, individually and as a group, toward the achievement of desired objectives. A number of factors affect leadership. To provide a better understanding of the relationship of these factors to leadership, a general model of leadership is presented.

The degree of leader’s influence on individuals and group effectiveness is affected by several energizing forces:

  1. Individual factors.
  2. Organizational factors.
  3. The interaction (match or conflict) between individual and organizational factors.

A leader’s influence over subordinates also affects and is affected by the effectiveness of the group.

* Group effectiveness.

The purpose of leadership is to enhance the group’s achievement. The energizing forces may directly affect the group’s effectiveness. The leader skills, the nature of the task, and the skills of each employee are all direct inputs into group achievement. If, for example, one member of the group is unskilled, the group will accomplish less. If the task is poorly designed, the group will achieve less.

These forces are also combined and modified by leader’s influence. The leader’s influence over subordinates acts as a catalyst to the task accomplishment by the group. And as the group becomes more effective, the leader’s influence over subordinates becomes greater.

There are times when the effectiveness of a group depends on the leader’s ability to exercise power over subordinates. A leader’s behavior may be motivating because it affects the way a subordinate views task goals and personal goals. The leader’s behavior also clarifies the paths by which the subordinate may reach those goals. Accordingly, several managerial strategies may be used.

First, the leader may partially determine which rewards (pay, promotion, recognition) to associate with a given task goal accomplishment. Then the leader uses the rewards that have the highest value for the employee. Giving sales representatives bonuses and commissions is an example of linking rewards to tasks. These bonuses and commissions generally are related to sales goals.

Second, the leader’s interaction with the subordinate can increase the subordinate’s expectations of receiving the rewards for achievement.

Third, by matching employee skills with task requirements and providing necessary support, the leader can increase the employee’s expectation that effort will lead to good performance. The supervisor can either select qualified employees or provide training for new employees. In some instances, providing other types of support, such as appropriate tools, may increase the probability that employee effort leads to task goal accomplishment.

Fourth, the leader may increase the subordinate’s personal satisfaction associated with doing a job and accomplishing job goals by

  1. Assigning meaningful tasks;
  2. Delegating additional authority;
  3. Setting meaningful goals;
  4. Allowing subordinates to help set goals;
  5. Reducing frustrating barriers;
  6. Being considerate of subordinates’ need.

With a leader who can motivate subordinates, a group is more likely to achieve goals; and therefore it is more likely to be affective.

Controlling.

Control, the last of four functions of management, includes establishing performance standards which are of course based on the company’s objectives. It also involves evaluating and reporting of actual job performance. When these points are studied by the management then it is necessary to compare both the things. This study on comparison of both decides further corrective and preventive actions.

In an effort of solving performance problems, management should higher standards. They should straightforwardly speak to the employee or department having problem. On the contrary, if there are inadequate resources or disallow other external factors standards from being attained, management had to lower their standards as per requirement. The controlling processes as in comparison with other three, is unending process or say continuous process. With this management can make out any probable problems. It helps them in taking necessary preventive measures against the consequences. Management can also recognize any further developing problems that need corrective actions.

Although the control process is an action oriented, some situations may require no corrective action. When the performance standard is appropriate and actual performance meets that standard, no changes are necessary. But when control actions are necessary, they must be carefully formulated.

An effective control system is one that accomplishes the purposes for which it was designed.

Controls are designed to affect individual actions in an organization. Therefore control systems have implications for employee behavior. Managers must recognize several behavioral implications and avoid behavior detrimental to the organization.

  • It is common for individuals to resist certain controls. Some controls are designed to constrain and restrict certain types of behavior. For example, Dress codes often evoke resistance.
  • Controls also carry certain status and power implications in organizations. Those responsible for controls placed on important performance areas frequently have more power to implement corrective actions.
  • Control actions may create intergroup or interpersonal conflict within organizations. As stated earlier, coordination is required for effective controls. No quantitative performance standards may be interpreted differently by individuals, introducing the possibility of conflict.
  • An excessive number of controls may limit flexibility and creativity. The lack of flexibility and creativity may lead to low levels of employee satisfaction and personal development, thus impairing the organization’s ability to adapt to a changing environment.

Managers can overcome most of these consequences through communication and proper implementation of control actions. All performance standards should be communicated and understood.

Control systems must be implemented with concern for their effect on people’s behavior in order to be in accord with organizational objectives. The control process generally focuses on increasing an organization’s ability to achieve its objectives.

Effective and efficient management leads to success, the success where it attains the objectives and goals of the organizations. Of course for achieving the ultimate goal and aim management need to work creatively in problem solving in all the four functions. Management not only has to see the needs of accomplishing the goals but also has to look in to the process that their way is feasible for the company.

Introduction to Investment Funds – The Principles of Fund Management

This article aims to aid in the education of novice investors and students of financial services by investigating the principles for the truly effective management of investment funds. The major considerations are looked at in terms of the role they play in ensuring that the standard of management of an investment fund is capable of delivering upon its objectives.

Good fund management is fundamental to providing an investment portfolio that is sufficiently diversified in order to mitigate investment risk, as well as stable and opportunistic enough to maximise the returns achieved.

There are many factors which influence whether or not an individual or company can successfully manage a fund and deliver upon its stated objectives. These include the following areas:

Technology

The ability to be able to use and understand all elements of state of the art quantitative analysis systems is vital to a successful fund manager. This facilitates informed and systematic investment to be made which is underpinned by comprehensive statistical analysis and historical data. The use of technological solutions is therefore vital to ensure efficiency in the research processes.

Investment Risk Management

Monitoring and identifying the existing and emerging risks that are attached to certain investment activity is crucial so that deductions can effectively inform investment strategy. State of the art risk management software, manual processes and individual expertise are all fundamental to ensuring that this is completed successfully and so those seeking a fund manager, or those who wish to become fund managers, must again treat risk management as a key priority.

Consistency and Transparency

When aiming to define realistic investment goals and objectives a fund manager should demonstrate a level of consistency in their investment activity. This is because it enables a valid picture of investment behaviour to be formed in the mind of the investor and also allows for historical success to be achieved, communicated and evaluated.

As such, commitment to a high level of transparent disclosure to investors is also of vital importance for a successful fund manager. Keeping investors informed with accurate information, whether it relates to the initial strategy or the results achieved, allows psychological barriers to be overcome and potentially damaging legal issues to be avoided.

Global Understanding

It is very important that a fund manager be able to demonstrate a detailed understanding of differing investment landscapes from a wide range of markets around the globe. The identification of global investment trends enables opportunities within other markets to be investigated and exploited as well as enabling the fund to avoid areas in which there are threats to investment stability and profit.

Discipline

This refers to the ability to implement an investment strategy which is able to persevere through varying market and economic conditions. Short-term gains in alternative investment areas can be understandably seductive to some fund managers but the pursuit of them can lead away from the defined investment strategy and will often lead to unstable or damaging returns.

Stability

A stable fund management team is important in order to develop a team who have a deep and detailed understanding of the areas in which investments are made to grow the expertise and increase the success of the fund. A stable team is also a marketable commodity to new investors looking for proven expertise and track record which is vital to the on-going health of the organisation.

Environmental, Social and Governance (ESG) Issues

In recent years, we have seen society and legislators take a greater focus on responsible investing. Which means fund managers require a thorough understanding of existing and emerging ESG (Environmental, Social, Governance) issues.

The UN Principles for Responsible Investment (UNPRI) provide a framework to ensure that individuals and organisations can adhere to a code of best practice for ethical and responsible investing and should be investigated and clearly understood by investors and investment professionals.

Conclusion

There are many major considerations for novice investors and aspiring investment fund managers, factors that have significant influence over investment success. However, if each of these factors is either in place or adhered to at all stages of the investment lifecycle then the management of a fund is far more likely to become more efficient and profitable over the long-term. As such each factor should be considered as vital to future success by novice investors and aspiring fund managers alike.

Management – 8 Key Competencies of Successful Managers

Management is a diverse role with a range of responsibilities and challenges that need to be addressed. Competency as a manager is an important part of achieving. So what 8 key competencies do successful managers have?

Competency 1: Results Focus

Successful managers know that at the end of the day it is not what you do but what you deliver that matters. Having a results focus is about knowing what outcomes are required and focusing yourself and those that you manage on delivering the results. This results focus keeps you on track and reduces the scope for distractions.

Competency 2: Making Change

Leaders regularly set out requirements for change. It might be in terms of process, people, service, ways of doing things to name just a few. While leaders will set out the overall direction, managers are the people who need to make the change happen on the ground. This requires them to overcome the obstacles that without doubt will appear as they try to make change.

Competency 3: Planning

Managers do not have the luxury of just having one thing to do. They have to manage money, people, processes, projects, customer relationships and themselves. This requires them to be able to plan effectively so that they get the best results possible.

Competency 4: Team Development

Managers cannot do everything on their own. They need a team around them that can help them to deliver results. Successful managers recognise that team development is an ongoing activity. People come and go from teams and the dynamics that this creates need to be managed. Many team members want to progress and so creating opportunities for growth and development is important.

Competency 5: Risk Management

All areas of business face threats and managers need to become competent at identifying and responding to risk. These risks can range from losing key staff to health and safety issues. Successful managers recognise the importance of identifying and proactively responding to risk.

Competency 6: Decision Making

Until a decision is taken, nothing happens. Managers who procrastinate are a source of frustration to staff. The staff might not always like or agree with the decision that you have made but they will prefer you to take a decision rather than procrastinate.

Competency 7: Communication

Successful managers are effective communicators in 3 areas. They are effective speakers and can put their points forward clearly. They are also effective at getting their message across in writhing whether it is an e-mail or report. Finally, they are effective listeners.

Competency 8: Customer Service Focus

Successful managers recognise that they have customers, even if they are not working directly with the end consumer or user of the product or service. Successful IT Managers see the users of the systems as customers. Accounts Department Managers see budget holders, employees whose salaries they process and suppliers they pay as customers.

Successful management requires you to have a range of competencies. So where are you highly successful and where do you need to develop to be an even more successful manager?

People Management – The Objectives in Managing People

The new Manager will generally have great expertise in the technical side of the role, and high performance here will have gained them the promotion to people manager or supervisor. However, in every walk of life the newly appointed supervisor will have less developed people management, communication and people skills. Whether the work is in the shop floor, a hospital, an office or a business, the new Manager will have technical expertise but will require to build their people management and team building skills.

The Objectives of People Management

Identifying clear objectives will help any Manager begin to build the competencies they need to manage people effectively. These objectives are:

1. To Achieve through the Results of Others. Up to now, the Manager has been responsible for his or her own performance and results. Now, you will be measured on the results of your team members. Success in people management is having team members that outperform the best of the best, and they do it without the Manager’s help.

2. To Win Followers. It is the job of the leader to win the respect of the followers and to show them the direction forward. An effective people manager does not want to be liked, but they do want to show respect and to gain respect. Success is when the Team Members trust that they have a captain of the ship who will both keep them safe, and who will build the high performing team that will succeed.

3. To Build Personal Leadership. You cannot lead others if you cannot lead yourself. Before being a Manager, you could be loose cannon. Now you must control everything you do to ensure you win the respect of others and motivate them to achieve their goals. Appreciate that your attitude and behaviour will influence your team members either positively or negatively. Use your behaviour positively to encourage others to improve and achieve.

4. To Structure and Organise the World Load Effectively. People management involves knowing the strengths of your people and ensuring that you use those strengths effectively to achieve high results. That does not necessarily mean building a team of individual specialists, quite the reverse. Effective people management means building the right team to achieve your team’s objectives. You may need to build flexible people who can step in to each other’s role, or a team who can brainstorm and problem solve any aspect of the team’s workload. Start with the end in mind. Identify what type of team you want, and work out how you will train individuals and the team to get there.

5. To Build Effective Team Processes. Team processes are the systems we use to enable the team to achieve its goals. How do we solve problems, address issues, generate new ideas, monitor throughput of work or review how we are working together as a team? Think in terms of process as the solution to most work issues is to have the right process to deal with this. Success is when the team have an identifiable process they can call on to removing any block or implement any improvement. A high performing team will use this without the leader being present.

6. To Build Positive Working Relationships with Senior Management and other Colleagues. People Management involves not just managing your own people, and yourself, but managing your relationships with everyone. It is the role of the Manager to be capable of drawing down resources for the Team and ensuring that we work productively with other departments. Your team will want a leader who can influence and persuade others. A Manager must know what type of relationship is effective and they will go about building positive working relationships with a network of people throughout the organisation. Success is when everyone wants to do business with you and others will listen to your viewpoint.

7. To Build the Habit of Setting Short-term Goals to Achieve Long-term Objectives. An effective People Manager takes steps forward every week and every month. Those steps are in identifiable goals, and those goals must be foundation bricks so that further goals will be more achievable. Managers walk and talk goals and goal achievement. Goals are motivational for the team members and for the Manager.

8. Celebrate Success. Good people management is about recognising milestones, goal achievements or individual breakthroughs, and celebrating these with the team. Life should be fun, and the best celebrations are small, personal recognitions. A homemade cake is more powerful that an insignificant bonus! Managing people is about knowing people, and knowing what will be rewarding for each.