Management Functions

Management is not as simple as many entrepreneurs interpret it to be. Every aspect of human life, whether individually done or in a group requires a kind of function that brings about coordination and seamlessness that is referred to as management (Normann, 1977). There are many definitions of the term that are usually dependent on the underlying functions that need to be carried out to achieve predetermined outcomes.

Amanda Smith is a qualified accountant as she worked for one of the big accounting firms for six years and has an accounting degree in addition to passing the CPA exam on her first attempt. She has strong technical skills and has considerable experience as she was given management responsibilities for audits and tax services for two or three years. When she started her business, she had the right impetus as well as an idea of what she wanted to exemplify. She started by developing a mission and a strategy for her business and she wanted to be the accounting office of choice for small business owners who needed accounting services, and the tax service of choice for small businesses and individuals in her community. This was a simple enough plan as it had the mission statement and the target clientele. She had so much faith in the mission and the motto that she thought that her employees knew what was expected of them by using it as the benchmark. It was meant to give directions in their day-to-day activities. The first important function of management is planning. No doubt, due to her considerable skills and experience, Amanda already knew this. However, her approach was wrong. A comprehensive plan must have a vision, a mission, objectives and goals. The vision is the overall motivational and directional guidance for the business. For example: To be the best small accounting business in the area. The mission varies with the vision in that it encapsulates the specific reason for existence as well as the values and culture that the business stands for. This is very clear in Amanda’s outline. However, the mission must have subsequent objectives that the business wishes to meet. These are key issues such as; the specific, quantifiable products and services to be provided, the envisaged standing in the market, opportunities for innovativeness, profitability, the expected performance of workers and the layout of management. From here, Amanda then should develop SMART goals. These should be Specific, Measurable, Attainable, Rewarding and Timed. For example: the business will have 100 clients for tax returns and 100 accounting clients by the end of the first six months with 5 staff members and will break even in the first 3 months on course to realizing a 30% profit in that year. If Amanda gets 70 clients on each service, then the plan could be considered to be 70% effective. The major point here is that the plan should be strategic to guarantee that the investment of funds will yield a profit. This is the reason why a market feasibility study is usually conducted prior to any investment being made.

Currently, the Smith’s Accounting and Tax Service has an informal structure. This is despite the fact that there is a manager, an assistant and three employees. An important management function overlooked by the business is organization. It is commendable that Lisa, Amanda’s good friend is a Gal Friday. The fact that she does bookkeeping and secretarial work, answers the phone, sets appointments, places advertisements, makes sure the office is clean and presentable, and does a host of other things to keep the business moving in the right direction suggests that there is no clear organization. The hierarchy of the organization should have a clear structure and distribution of authority that is in tandem with the predetermined goals, objectives, mission and vision of the business. There should be a clear division of labor. Currently, Amanda, Lisa and the other employees are so overwhelmed that neither has the time to check on who is making any mistakes; or simply oversee the smooth running of the business and coordinate matters. Division of labor is usually depicted in a pictorial version with each level having different functions from the other (Schein, 2010). The first sign that there is trouble is when Lisa is on the phone repeatedly telling clients that she would check on the status of their tax returns and get back to them. However, Amanda takes no steps to remedy the situation as she is overwhelmed by her own work as an accountant. It is recommended that Amanda reconsider having the sizeable accounting and tax returns load that she currently bears and instead concentrate on ensuring that she goes through those done by her employees to ensure that they are properly done. Giving the other accountants the power to file tax returns and ensure that they are perfect, regardless of their qualifications, is creating unnecessary loopholes for laxity. Additionally, the workload that Lisa bears is also too great. She is involved in recruiting people with better credentials and more experience than herself. There should be a clear hierarchy, clear delegation of authority and coherent departmentalization. It is not clear to the employed accountants, for example, that they are responsible for bringing in new clients.

The business functions determine the number of resources that are required in that business such that the function of management is to ensure that desired and predetermined outcomes are effectively achieved through various resources, including people, with no waste (Griffin, 2010). Plans help decide the number of staff required. Therefore, a comprehensive means of recruiting, screening, hiring, training and managing has to be in place. Amanda has not invested in this as she starts by hiring Lisa because she is her friend and due to their familiarity. Although Lisa looks excellent at multitasking, she is nonetheless not qualified to do recruiting and screening of accountants. Amanda delegates this function to her as she is overwhelmed with an avalanche of other different tasks. Poor screening could be the reason why there are so many errors in the tax returns. This is because there was inadequate interviewing, testing and background checking. Amanda simply relied on the word of her friend, her assistant that the candidates selected were the best. That oversight cost the opportunity to expand her business as she had to go back and diagnose the problem so that it did not recur. Additionally, she stands the chance to lose repeat business due to low quality work. She should reevaluate her employees to ensure that they are what she requires and train those that she retains. In future, she should ensure that she is involved in the process of recruiting the right staff.

One other important function of management is providing direction for the business. This involves making decisions and solving problems (Martin, 2005). In seems that Amanda has delegated much of these functions to Lisa. The productivity of the business and staff is usually dependant on these two factors where Amanda fails at. When she hears repeated calls between Lisa and the clients, she does not offer any direction and leaves her assistant to do it. Leadership is one aspect of direction that is thoroughly lacking in the business. It is not enough not to micromanage. Rather, managers must be seen to be interested in the work done by their employees so that they can give positive criticism where due. Supervising people usually does not work but working hand in hand with them gives them a sense of worth which also helps in motivation (Ord, 2013). Amanda should demonstrate leadership that is strong, decisive and fair where directions are effectively communicated. Communication should be another area where Amanda should improve. Currently, there seems to be little communication between all employees as client complaints take too long to reach Amanda which is part of the reason for failure. While little has been said about the rewards that the employees get, only Lisa received tokens at the beginning. Amanda should associate more with her employees in order to figure out what their needs are so that she satisfies them.

There must be control in every aspect of Amanda’s business to ensure profitability. Control usually begins by establishing performance standards. There does not seem to be clear standards of how performance is gauged. For example, while all the four accountants had each filed between 100 and 175 extensions, with Amanda filing about 165, there seems to be slack as one accountant asked Lisa whether she could file about 50 online extensions. There needs to be fixed figures between which employees should file within a specific period. These should be accurately measured and reported in real-time so that Amanda is aware of what is happening at all times. The main reason for the control function to have a measurement method is to ensure that real-time performance is measured against the business’s predicted position in order to assess whether goals are being met (Gomez-Mejia, Balkin & Cardy, 2008). In case the figures do not match, then, there should be an assessment of either the predicted company position or the limits set for employees. From here, corrective action is taken even where the deviation is minor so as to ensure conformance. There are two distinct characteristics of control. First, it should be anticipatory and second, it must be retrospective. In the end, this function is cyclical meaning that it does not end at any time but is continuous.

References

Gomez-Mejia, L.R., Balkin, D.B. & Cardy, R.L., (2008). Management: People, Performance, Change, 3rd edition. New York: McGraw-Hill.

Griffin, R.W., (2010). Fundamentals of Management. London: Cengage Learning

Martin, J., (2005). Organizational Behaviour and Management. London: Cengage Learning

Normann, R., (1977). Management for Growth. New York: John Wiley & Sons

Ord, J., (2013). Critical Issues in Youth Work Management. Oxford: Routledge

Schein, E.H., (2010). Organizational Culture and Leadership. New York: John Wiley & Sons

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