1. Management Control is the process by which managers influence other members of the organization to implement the organizations strategies.
Management control systems are tools to aid management for steering an organization toward its strategic objectives and competitive advantage. Activities in Management control are (a)Planning activities of an organisation (b) Coordination activities of an organisation (c) Communicating information to different hierarchical structure (d) Evaluation of performance (e) Initiate activities, direction (f) Influence people to work towards goals Management control systems use many techniques such as (Operational Controls) 2. The Balanced Scorecard (BSC). Proposed by Kaplan and Norton, itis a strategic performance management tool - a semi-standard structured report, supported by proven design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions.This approach works on the premise that What you measure is what you get. To cite an example, a company with accurate time keeping system will have a better record of timely attendance of employees than the company without it. Thus, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to achieve its goals.It is to be re-emphasized that the balanced scorecard is a future orientedmanagement system (not a measurement system). Even though it seemingly works through measurements, real thrust is not on measurement but strategy. It helps organizations to first formulate their vision and strategy and then to translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. The balanced scorecard suggests that we view the organization from fourperspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:
Four steps as being part of the Balanced Scorecard design process: 1. 2. 3. 4. Translating the vision into operational goals; Communicating the vision and link it to individual performance; Business planning; index setting Feedback and learning, and adjusting the strategy accordingly.
3. Total Quality Management or TQM is an integrative philosophy of management for continuously improving the quality of products and processes.TQM requires the involvement of management, workforce, suppliers, and customers, in order to meet or exceed customer expectations. Nine common TQM practices as: 1. 2. 3. 4. 5. 6. 7. 8. 9. cross-functional product design process management supplier quality management customer involvement information and feedback committed leadership strategic planning cross-functional training employee involvement
4. Just in time (JIT) is a production strategy that strives to improve a business return on investment by reducing in-process inventory and associated carrying costs. To meet JIT objectives, the process relies on signals or Kanban between different points in the process, which tell production when to make the next part. Kanban are usually
'tickets' but can be simple visual signals, such as the presence or absence of a part on a shelf. Implemented correctly, JIT focuses on continuous improvement and can improve a manufacturing organization's return on investment, quality, and efficiency. To achieve continuous improvement key areas of focus could be flow, employee involvement and quality. (a)Transaction cost approach. JIT reduces inventory in a firm. However, a firm may simply be outsourcing their input inventory to suppliers, even if those suppliers don't use Just-in-Time (b) Price volatility. JIT implicitly assumes a level of input price stability that obviates the need to buy parts in advance of price rises. Where input prices are expected to rise, storing inventory may be desirable. (c)Quality volatility. JIT implicitly assumes that input parts quality remains constant over time. If not, firms may hoard high-quality inputs. Benefits Main benefits of JIT include:
Reduced setup time. The flow of goods from warehouse to shelves improves. Employees with multiple skills are used more efficiently. Production scheduling and work hour consistency synchronized with demand. Increased emphasis on supplier relationships. Supplies come in at regular intervals throughout the production day. Minimizes storage space needed. Smaller chance of inventory breaking/expiring.
5. Target costinginvolves setting a target cost by subtracting a desired profit margin from a competitive market price. These concepts are supported by the four basic steps of Target Costing: (1) Define the Product (2) Set the Price and Cost Targets (3) Achieve the Targets (4) Maintain Competitive Costs. To compete effectively, organizations must continually redesign their products (or services) in order to shorten product life cycles. The planning, development and design stage of a product is therefore critical to an organization's cost management process. Considering possible cost reduction at this stage of a product's life cycle (rather than during the production process) is now one of the most important issues facing management accountants in industry. Here are some examples of decisions made at the design stage which impact on the cost of a product.
1. The number of different components 2. Whether the components are standard or not 3. The ease of changing over tools Japanese companies have developed target costing as a response to the problem of controlling and reducing costs over the product life cycle. 6. Activity-based costing (ABC) is a costing methodology that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each. Methodology of ABC focuses on cost allocation in operational management. ABC helps to segregate
Fixed cost Variable cost Overhead cost
Steps to implement Activity-Based costing
Identify and assess ABC needs - Determine viability of ABC method within an organization. Training requirements - Basic training for all employees and workshop sessions for senior managers. Define the project scope - Evaluate mission and objectives for the project. Identify activities and drivers - Determine what drives what activity. Create a cost and operational flow diagram How resources and activities are related to products and services. Collect data Collecting data where the diagram shows operational relationship. Build a software model, validate and reconcile. Interpret results and prepare management reports. Integrate data collection and reporting.
7. Business Process Re-engineering is a business management strategy, originally pioneered in the early 1990s, focusing on the analysis and design of workflows and processes within an organization. BPR aimed to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors. Business process re-engineering is also known as business process redesign, business transformation, or business process change management.. Some important BPR success factors, include following: 1. Organization wide commitment. 2. BPR team composition. 3. Business needs analysis. 4. Adequate IT infrastructure.
5. Effective change management. 6. Ongoing continuous improvement 8. Product life-cycle management (or PLCM) is the succession of strategies used by business management as a product goes through its life-cycle. The conditions in which a product is sold (advertising, saturation) changes over time and must be managed as it moves through its succession of stages. The goals of PLC management are to reduce time to market, improve product quality, reduce prototyping costs, identify potential sales opportunities and revenue contributions, and reduce environmental impacts.Characteristics of PLC stages The four main stages of a product's life cycle and the accompanying characteristics are: (a) Market introduction stage (b) Growth stage (c) Maturity stage (d) Saturation and decline stage 13. Budget. A budget is a forecast of all income and expenses, and helps a business identify future financial needs and plan based on expected profit, expenses and cash flow. If a business doesn't have the budget to support its strategic plan, the business needs to either modify its plan or find the financial means to support the plan. Budgeting Process. Budgets cover a certain period of time. Most businesses develop monthly, quarterly and annual budgets. Budgets can be periodically updated based on current information; steps involved are as follows:(a) Creating a budget department or appointing a budget controller (b) Developing guidelines for budget preparation (c) Developing guidelines for budget preparation (d) Developing budget for entire organisation (e) Determining the budget period and key budget factors (f) Benchmarking the budget (g) Budget review and approval (h) Monitoring progress and revising the budgets 11. Master Budget. It is a summary of company's plans that sets specific targets for sales, production, distribution and financing activities. It generally culminates in a cash budget, a budgeted income statement, and a budgeted balance sheet. In short, this budget represents a comprehensive expression of management's plans for future and how these plans are to be accomplished. One budget may be necessary before the other can be initiated. More one budget estimate effects other budget estimates
because the figures of one budget is usually used in the preparation of other budget. This is the reason why these budgets are called interdependent budgets. It usually consists of a number of separate but interdependent budgets. Following are the major components ofmaster budget. OPERATING BUDGET FINANCIAL BUDGET Budget P/L Account Production budget Materials budget Labour budget Admin. Budget Stocks budget 9. Variance Analysis, in budgeting (or management accounting in general), is a tool of budgetary control by evaluation of performance by means of variances between budgeted amount, planned amount or standard amount and the actual amount incurred/sold. Variance analysis can be carried out for both costs and revenues. Variances are normally calculated for all the cost components such as Materials, Labour and Overheads. There are two types of variances:
Cash budget Balance sheet Funds statement
When actual results are better than expected results given variance is described as favorable variance (F). When actual results are worse than expected results given variance is described as adverse variance, or unfavourable variance (A).
10. Zero-based budgeting In zero-based budgeting, every line item of the budget must be approved, rather than only changes. During the review process, no reference is made to the previous level of expenditure. Zero-based budgeting requires the budget request be re-evaluated thoroughly, starting from the zero-base. This process is independent of whether the total budget or specific line items are increasing or decreasing.In general there are three components that make up public sector ZBB: 1. Identify three alternate funding levels for each decision unit( zero-base level, a current funding level and an enhanced service level.) 2. Determine the impact of these funding levels on program (decision unit) operations using program performance metrics; and 3. Rank the program decision packages for the three funding levels. Advantages 1. Efficient allocation of resources, as it is based on needs and benefits rather than history. 2. Drives managers to find cost effective ways to improve operations. 3. Detects inflated budgets.
4. Increases staff motivation by providing greater initiative and responsibility in decision-making. 5. Increases communication and coordination within the organization. 6. Identifies and eliminates wasteful and obsolete operations. 7. Identifies opportunities for outsourcing. 8. Forces cost centers to identify their mission and their relationship to overall goals. 9. Helps in identifying areas of wasteful expenditure, and if desired, can also be used for suggesting alternative courses of action. Disadvantages 1. More time-consuming than incremental budgeting. 2. Justifying every line item can be problematic for departments with intangible outputs. 3. Requires specific training, due to increased complexity vs. incremental budgeting. 4. In a large organization, the amount of information backing up the budgeting process may be overwhelming. 5. its implement on big scale not on small scale industries 12. Participative or Self-imposed budgeting.The budgeting approach in which managers prepare their own budget estimates is called self-imposed budgeting or participatory budgeting. Managers at all levels participate and coordinate with each other in budgeting process. However, most companies deviate from this ideal budgetary process. Typically top managers initiate the budget process by issuing broad guidelines in terms of overall target profits or sales. Lower level managers are desired to prepare budgets that meet those targets. A number of advantages or benefits are cited for such self-imposed budgets. 1. Individuals at all level of organization are recognized as members of the team whose review and judgments are valued by top management. 2. Budget estimates prepared by front line managers can be more accurate and reliable than estimates prepared by top managers 3. Motivation is generally higher when an individual participates in setting his or her own goal then when the goals are imposed from above. 4. If a manager is not able to meet the budget and it has been imposed from above, the manager can always say that the budget was unreasonable or unrealistic to start and, therefore, was impossible to meet. With a self-imposed budget this excuse is not available.
Participative budget has following main disadvantages: 1. Time consuming and costly. 2. May foster budgetary gaming through budgetary slack 14. Strategic Planning. It is the process of deciding on programmes that the organisation will undertake and on the approx amount of resources that will be allocated to each programme over next several years. Many approaches to strategic planning are available. (a) Start with a strategic analysis of where the organization is now, including its strengths and weaknesses and the economic, social, political and technical environment in which the business operates. (b) next step is to decide what direction the business wants to head; this process may involve developing a mission statement or strategic philosophy and setting goals. (c) The next step is to identify tactics or action steps for achieving strategic goals. Types of Strategic planningVision-based or goals-based, Issues-based planning, The alignment model, Scenario planning, Self-organizing planningand Real-time planning Diff between Budget and Strategic planning.A business needs to have both a strategic plan and a budget. The strategic plan lays out the direction and goals of the business and guidelines for actions to achieve those goals, while the budget looks at the money needed to support achieving those goals. Budgeting is only one part of the strategic planning process.
13. Budget ControlOne generally accepted guideline for effective budgeting is to establish goals that are difficult but attainable. Therefore, skilled managers who understand budgets and how to use them have a powerful control tool with which to attain departmental and organizational goal Advantages. Some of these are: (a) The major strength of budgeting is that it coordinates activities across departments. (b) Budgets translate strategic plans into action. They specify the resources, revenues, and activities required to carry out the strategic plan for the coming year. (c)Budgets provide an excellent record of organizational activities. (d) Budgets improve communication with employees. (e) Budgets improve resources allocation, because all requests are clarified and justified. (f) Budgets provide a tool for corrective action through reallocations.
Disadvantages (a) The major problem occurs when budgets are applied mechanically and rigidly. (b) Budgets can demotivate employees because of lack of participation. If the budgets are arbitrarily imposed top down, employees will not understand the reason for budgeted expenditures, and will not be committed to them. Budgets can cause perceptions of unfairness. (d) Budgets can create competition for resources and politics. (e)A rigid budget structure reduces initiative and innovation at lower levels, making it impossible to obtain money for new ideas. (f) These dysfunctional aspects of budgets systems may interfere with the attainment of the organization's goals. 14. Standard Costing. It may be defined basically as a technique of cost accounting which compares the standard cost of each product or service with the actual cost, to determine the efficiency of the operation, so that any remedial action may be taken immediately. The standard cost is a predetermined cost which determines what each product or service should cost under given circumstances. Types of standard costs are Historical and Industry. Standard costing involves: (a) The setting of standards (b) Ascertaining actual results (c) Comparing standards and actual costs to determine the variances (d)Investigating the variances and taking appropriate action where necessary. 16. Responsibility CentresA responsibility centre is an organizational subsystem charged with a well-defined mission and headed by a manager accountable for the performance of the centre. "Responsibility centres constitute the primary building blocks for management control." It is also the fundamental unit of analysis of a budget control system. The key consideration in determining the responsibility centre are:(a) Ability to control cost and revenue (b) Determining the question of controllability Evaluation as per predetermined criteria There are four major types of (a) Cost Centre. A cost centre is a responsibility centre in which manager is held responsible for controlling cost inputs. There are two general types of cost centres: engineered expense centres and discretionary expense centres. Engineered costs are usually expressed as standard costs. A discretionary expense centre is a responsibility centre whose budgetary performance is based
on achieving its goals by operating within predetermined expense constraints set through managerial judgment or discretion. (b) Revenue Centre. A revenue centre is a responsibility centre whose budgetary performance is measured primarily by its ability to generate a specified level of revenue. Sales department is a revenue centre. Sales budget are prepared for revenue centre and the budgeted figures are compared with actual sales. (c) Profit Centre. Is an organisational unit responsible for both revenues and costs. Managers are concerned with both production and marketing of the products. He has no control over the investment in the centres assets. (d) Investment Centre. An investment centre is a responsibility centre whose budgetary performance is based on return on ROI. It is responsible for production, marketing and investments in the assets. An investment centre manager decides on aspects such credit and inventory policies. 15. Transfer Pricing. The concept of transfer price started with divisionalisation of the large businesses. In the process of divisionalisation, each of the sections is treated as profit centre. The output of each division is priced and profit/loss of the section is calculated, which becomes the indicator of the performance of the division. Same price becomes the cost of the next division in the multistep production process. Since there is no exchange of cash between the divisions and only book entries are made, it is called transfer price.Profit of each division is thus affected by the transfer price of preceding division as well as its own. The objectives of TP are Goal congruence, Divisional Autonomy and Performance Appraisal Advantages of Transfer Pricing 1. 2. The system enables the top management to evaluate accurately the performance of each division viewed as independent entity. The system motivates divisional managers to act in a manner that furthers the larger interest of the organisation.
Fixing the Transfer Price Fixing the transfer price of products is a complex issue. While in some cases it is relatively easy due to availability of market price of the comparable product, it is often difficult in case of intermediate stages in production process. Various approaches have been developed to enable fixing of justifiable transfer prices. Main approaches are as follows: 1. Transfer prices at Market Prices Market based transfer prices are often considered ideal because the situation is similar to what divisional managers would face if they were managing independent companies. Here, the transfer price may reflect the price prevailing in an open, competitive market. The justification for using market prices is that when all divisions maximise their
profits on the basis of market prices for goods or services transferred between divisions, the profits of the company are maximised. The market price approach is designed for use in highly decentralisedorganisations. Following are the guidelines to be followed while using this method for fixing transfer prices: (a) (b) The buying division must purchase internally so long as the selling division meets all bonafide outside prices and wants to sell internally. If the selling division does not meet all the bonafide outside prices, the buying division should be free to source their requirements from outside. The selling division must have the option of not selling internally if it wants to sell outside. An impartial board must be established to arbitrate disputes over prices.
(c) (d) 2.
Transfer at Negotiated Market Price This method is a further refinement of Market Price approach since the price negotiation is the real life feature in any procurement. Most bulk customers are able to negotiate a better price due to bulk quantity discounts or other market factors. Thus, while Market Price is the upper limit of the price that can be charged between divisions, it is more often a lower price which may be justified. Take for instance, various overheads involved in selling to an outside party like, packing, marketing, transportation, credit period for payment, losses in transit, selling commission, bad debts, administration, duties, etc. Most of these overheads are not there in internal transfers. The benefits of these savings ought to be shared between two divisions. Quantity discount is another justification for lower than market transfer price. In some isolated cases, selling division may have substantial excess capacity, which may justify a price below the prevailing market price.In some cases, independent market price may not be available. Take the case of an intermediate product at a stage where it is not marketable and therefore no market price exists. The other extreme is when no other producer produces that product and therefore there is almost monopolistic situation for that division. Cost based transfer Pricing When reliable market prices are not available, then the natural tendency is look at the costs of the seller division to develop the transfer prices. Following are the circumstances when cost based transfer pricing is recommended: (a) No market price exists This happens mostly in case of intermediate stages of a multi-step production process. Products are normally not sold at those stages of production. Negotiations in market based approach cause disputes and reach a deadlock.
3.
(b)
(c)
Where the product contains a secret ingredient or production process which the company does not want to disclose to outsiders. So, the market price cannot be fixed.
Cost based transfer pricing has four variances which depend on the type of product and the type of accounting system employed by the organisation: Actual Cost Full Cost Variable Cost 1 3 Standard Cost 2 4
15. ROI/EVA. ROI a metric that requires you to state projected costs and benefits explicitly. It provides a standard of comparison to other demands on the companys resources. It makes you think like a business decision-maker. ROI has a fatal flaw - it assumes that the funds that make up the I are endlessly available. And free. In the real world, funds are limited. Cash comes with a price-tag - what it costs your company to borrow the money. Alternatively, the price of money (cost of capital to your CFO) approximates what you could get from investing the funds outside of the company (which youd presumably do if you didnt have better investments inside).Your companys cost of capital is related to how risky investors think it to loan you money, your bond or credit rating, and the availability of investment capital in the economy. Economic Value Added, EVA for short, is a measure of ROI that takes the cost of funds into account. Unlike ROI, EVA is an absolute amount, not a ratio. EVA is based on the idea that business must cover both cost of operation as well as cost of capital employed. Assume youre making the case for a new program that you expect to return $32,000 for your $200,000 investment in its first year. Your ROI would be 32,000/200,000 = 16%.The EVA for this project deducts the cost of using the $200,000 ( x 10% = $20,000). Your EVA is based on your return less what you must pay for tying up the companys capital, $32,000 - $20,000 = $12,000. Your EVA ratio is 12,000/200,000 = 6%. 1. EVA may lead you to outsource activities that would otherwise tie up your resources. 2. EVA recognizes that theres no free ride. Projects dont get funded because they have a hefty ROI. They get funded when they are the best use of funds available. 3. EVA gets everyone thinking like owners. The carrying cost of excess inventory gripes the manager whod like to use those funds for a new project.
4.
The
formula
for
calculating
EVA
is
as
follows:
= Net Operating Profit After Taxes (NOPAT) - (Capital * Cost of Capital) 5. Shareholders of the company will receive a positive value added when the return from the capital employed in the business operations is greater than the cost of that capital 16. Organisational structure. Functional organisation was advocated by F.W. Taylor. In this form of organisation, all activities of the enterprise are grouped and divided according to functions like production, marketing, finance and others. Each department is in the charge of a specialist who is called functional manager. In this organisation activities of foreman are classified into eight sub-divisions which are again included in two broad groups.At planning level, the specialists are known as route clerk, time and cost clerk, instruction card clerk ,a shop disciplinarian. A route clerk is meant to lay down steps, time, cost clerk calculates time, cost, instruction card clerk prepares instructions, and the shop disciplinarian is in the charge of observing rules.At the shop level, the specialists are called gang boss, speed boss, repair boss and the inspector. The gang boss is the in charge of tools, speed boss cares for the speed of the machines, repair boss attends break down of the machines and inspector checks the quality of the products. 17. Matrix Organisation was introduced in USA in the early 1960's. It was used to solve management problems in the Aerospace industry. Matrix Organisation is a combination of two or more organisation structures. For example, Functional Organisation and Project Organisation.The matrix organizational structure is one in which functional and staff personnel are assigned to both a basic functional area and to a project or product manager .The matrix form is intended to make the best use of talented people within a firm by combining the advantages of functional specialization and product-project specialization.Theorganisation is divided into different functions, e.g. Purchase, Production, R & D, etc. Each function has a Functional (Departmental) Manager, e.g. Purchase Manager, Production Manager, etc. The organisation is also divided on the basis of projects e.g. Project A, Project B, etc. Each project has a Project Manager e.g. Project A Manager, Project B Manager, etc. The employee has to work under two authorities (bosses). The authority of the Functional Manager flows downwards while the authority of the Project Manager flows across (side wards). So, the authority flows downwards and across. Therefore, it is called " Matrix Organisation".
18. Functional organizational structureis one on which the tasks, people, and technologies necessary to do the work of the business are divided into separate functional groups (such as marketing, operations, and finance) with increasingly formal procedures for coordinating and integrating their activities to provide the businesss products and services
19. A divisional organizational structure is one in which a set of relatively autonomous units, or divisions, are governed by a central corporate office but where each operating division has its own functional specialists who provide products or services different from those of other divisions This expedites decision making in response to varied competitive environments The division usually is given profit responsibility 20. The Product Organisation seeks to simplify and amplify the focus of resources on a narrow but strategically important product, project, market, customer, or innovation. The product-team structure assigns functional managers and specialists to a new product, project, or process team that is empowered to make major decisions about their product
The strategic business unit (SBU) is an adaptation of the divisional structure whereby various divisions or parts of divisions are grouped together based on
some common strategic elements, usually linked to distinct product/market differences The advantages and disadvantages of the SBU form are very similar to those identified for divisional structures
21. Organisational structure - Centralisation v Decentralisation. Decisionmaking is about authority. A key question is whether authority should rest with senior management at the centre of a business (centralised), or whether it should be delegated further down the hierarchy, away from the centre ( decentralised). Centralised structures Businesses that have a centralised structure keep decision-making firmly at the top of the hierarchy (amongst the most senior management). Fast-food businesses like Burger King, Pizza Hut and McDonalds use a predominantly centralised structure to ensure that control is maintained over their many thousands of outlets. The need to ensure consistency of customer experience and quality at every location is the main reason. The main advantages and disadvantages of centralisation are: Advantages Easier to implement common policies and practices for the business as a whole Prevents other parts of the business from becoming too independent Easier to co-ordinate and control from the centre e.g. with budgets Economies of scale and overhead savings easier to achieve Greater use of specialization Quicker decision-making (usually) easier to show strong leadership Disadvantages More bureaucratic often extra layers in the hierarchy Local or junior managers are likely to much closer to customer needs Lack of authority down the hierarchy may reduce manager motivation Customer service does not benefit from flexibility and speed in local decision-making
Decentralisation In a decentralised structure, decision-making is spread out to include more junior managers in the hierarchy, as well as individual business units or trading locations. Good examples of businesses which use a decentralised structure include the major supermarket chains like WM Morrison and Tesco. Each supermarket has a store manager who can make certain decisions concerning areas like staffing, sales promotions. The store manager is responsible to a regional or area manager. Hotel chains are particularly keen on using decentralised structures so that local hotel managers are empowered to make on-the-spot decisions to handle customer problems or complaints. The main advantages and disadvantages of this approach are: Advantages Decisions are made closer to the customer Better able circumstances to respond to local Disadvantages Decision-making is not necessarily strategic More difficult to ensure consistent practices and policies (customers might prefer consistency from location to location) May be some diseconomies of scale e.g. duplication of roles flatter Who provides strong leadership when needed (e.g. in a crisis)? Harder to achieve tight financial control risk of cost-overruns
Improved level of customer service
Consistent hierarchy
with
aiming
for
Good way of training and developing junior management Should improve staff motivation
22. Formal systems include explicit rules, procedures, performance measures, and incentive plans that guide the behavior of its managers and other employees Informal systems include shared values, loyalties, and mutual commitments among members of the company, corporate culture, and unwritten norms about acceptable behavior (read goal congruence and types of control systems from slides)
23. Design of MCS.(Read from slides)
24.
What is a Vision Statement?
A Vision Statement:
Defines the mental picture of what an organization wants to achieve over time of 5 to 10 years Is written succinctly in an inspirational manner that makes it easy for all employees to repeat it at any given time. Provide long term direction and give firm identity Decide WHO we are, WHAT we do and Where we are headed Examples of effective Vision statements include: Alzheimer's Association: "Our Vision is a world without Alzheimer's disease." Avon: "To be the company that best understands and satisfies the product, service and self-fulfillment needs of women - globally." Microsoft: "Empower people through great software anytime, anyplace, and on any device."
What is a Mission Statement? (a) A Mission statement: Reflects managements vision of what firm seeks to do and become (b) Provides clear view of what firm is trying to accomplish for its customers (c) Indicates intent to stake out a particular business position
Answers three questions about why an organization exists -
WHAT it does; WHO it does it for; and HOW it does what it does. Some businesses may refine their Mission statement based on changing economic realities or unexpected responses from consumers. Understanding the Mission gives employees a better perspective on how their job contributes to achieving it, which can increase engagement, retention, and productivity.Having a clearly defined Mission statement also helps employees better understand things like company-wide decisions, organizational changes, and resource allocation, thereby lessening resistance and workplace conflicts. Examples of effective Mission statements include: Rent-a Car. Our Business is renting cars. Our mission is total customer satisfaction. Walmart to offer all of the fine customers in our territories all of their household needs in a manner in which they continue to think of us fondly. 25. A Project is a temporary endeavor undertaken to create a unique product or service. Project Management is the application of knowledge, skills, tools, and techniques to project activities, in order to meet project requirements, and meet or exceed stakeholder needs and expectations from a project. It involves balancing scope, time, cost and quality. A methodology is a model which project managers employ for the design, planning, implementation and achievement of their project objectives. There are different project management methodologies to benefit different projects.For example, there is a specific methodology which NASA uses to build a space station while the Navy employs a different methodology to build submarines. Hence there are different project management methodologies that cater to the needs of different projects, span across different business domains. Following are the most frequently used project management methodologies in the project management practice. (a)Adaptive Project Framework (b)Agile software development
(c) XP Extreme programming (d) Dynamic systems development model (e) Waterfall (f) SDLC System development Lifecycle (g) RAD Rapid Application Development
