MANAGEMENT'S ABILITY & COST

A Firm's Value Added is Solely Associated with the Management's Ability to Manage the Various Cost Centres

A Firm's Value Added is Solely Associated with the Management's Ability to manage the Cost Centres

Introduction

The present and future demand and position of the organization are closely linked to production capacity and this capacity is solely depend on the management's ability to manage the various cost centres.  To determine and to increase the value of a business, management can use quantitative and qualitative elements. Based on those quantifiable, such as: the Balance Sheet, the State Income and information on projected income and expenses, the valuation of a company can help answer questions such as: what is the worth of the business?, what has been the return on investment , and what you can do to improve profitability and create wealth?, and enables effective decision making in order to: acquisitions or sales of businesses, mergers , establishing purchase agreements, capitalization of a company , obtaining credit lines, asset valuations, trading shares and suspension of payments.

In this paper we will analyze that the firm's value added is solely associated with the management's ability to manage the various cost centres.

Discussion

In recent years, the organizational behaviour of firms has changed dramatically due to the effect of the changed conditions of competition, requiring ever more streamlined and responsive structures, both for the evolution of culture and society that led to the decline of the hierarchy as a tool coordination and control in relation to a growing demand for autonomy, innovation and learning by individuals. The ability of management to manage these changes and expectations is therefore an essential factor for survival and success of companies (www.akdn.org).

Management Skills and Utilization of Resources

The term refers to the ability of management skills, management functions such as planning , organizing , implementing and monitoring successful (in terms of the objectives of the organization, for example a company) to exercise. Consequently, leadership skills are the part of the area of management skills (documents.bmc.com/).

The term management has two meanings. One describes the functions (tasks) to meet the managers, especially planning, organization, leadership, coordination and control. Consequently, leadership is a part of management, although the two terms are often used interchangeably. The second meaning of the term describes the person performing these tasks and associated roles exercise. This may be analogous to the organizational pyramid divided into an “upper”, “medium” and “lower” management. For the implementation of management tasks necessary skills can, Katz (1977) and Stewart divide (1982), following the technical, social and analytical skills, for instances, the technical skills (in addition to technology skills) cost- and investment analysis, project planning, quality control and dealing with performance measurement systems. The social skills are among leadership, motivation, communication, conflict resolution or the fulfilment of a role model. Finally, managers need analytical skills such as problem solving, strategic thinking, risk assessment and a holistic understanding of the functioning of a company and the interdependence of its sectors (business functions), such as marketing, production, ...