How to organize the business

The "traditional" management system is generally of a Tayloristic matrix and of objectives; it provides for a management centered on the functions and on the clear and defined supervision of their borders. Each manager or director is entrusted with the task of achieving a particular goal, for example: increase sales, reduce inventories, improve product quality, reduce credit recovery times, keep personnel costs constant. It focuses mainly on costs and efficiencies, giving rise to the so-called management by "cost centers". The "integrated" approach, giving priority to the mechanisms of value generation, gives more importance to the supervision of processes: the implication of this second model is having to redesign the company organization.

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Business administration models

What are the reasons that push a company to adopt a centralized or decentralized structure? Centralization is the most binding way to coordinate decision making. All decisions are made by one person, and subsequently implemented through direct supervision. On the other hand, a company adopts a decentralized structure simply because all decisions cannot be taken by a single center, by a single person. It may happen that decisions cannot be transmitted because they are too qualitative and therefore difficult to communicate or because the only decision-making center cannot understand them. Decentralization, on the other hand, is adopted both because it allows the company to respond promptly to local conditions and because of its ability to motivate.

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How to design a control system

The economic context, already turbulent in itself, of recent years, with the effects induced by globalization and industrial development in countries such as China and India, has made the need to equip themselves with systems for planning and control of management activities. Management control can be defined as the set of processes, methods, techniques and tools available to the various organizational levels that allow individuals, in relation to their role and duties, both preventively, concurrently and subsequently , to monitor the achievement of the specific objectives set in the strategic planning and operational programming.

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The role of the management consultant

By virtue of the different dynamics of the markets, the greater ease of circulation of know-how and the higher transparency of the actions of competitors, companies have acquired high skills to formulate a strategy, and management consultancy is increasingly asked for support for implement a strategy already developed internally. Continue reading the attached article ...

Management control: a need for SMEs

Management control is often confused, especially in small and medium-sized enterprises, with analytical or industrial accounting.

Management control, on the other hand, was born as management control, or rather as a tool to support the Management to control company management, essentially consisting of the following phases:

strategic planning and definition of objectives and indicators; analytical accounting; budgeting; data collection and final balance; reporting and analysis of variances; calculation of the cost of the product or service; financial analysis.

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Crisis prevention and turnaround

The first real criticality is to perceive the state of crisis in which the company finds itself and generate a deep awareness in management and shareholders that the situation needs a radical change. In this context, it is essential for the company to have a management control system that allows to evaluate the essential parameters (KPI) to monitor the economic-financial conditions and distinguish the symptoms of a possible crisis, first of all by identifying the internal causes and external. The key element of management control is the system of financial, management and other indicators which, subject to constant monitoring, can support the delicate process of reading the symptoms of crisis and the consequent identification of the related corrective actions.

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Solutions to restructure bank debts

Once the moment of difficulty has been recognized, it is necessary to consult a consultant, a professional or a company specialized in debt restructuring operations. In not too complicated cases, the recovery tool can also be unique: for example, a medium-term loan to consolidate short-term debts, or the securitization of credits, through which companies collect financial resources for the sale of their credits. Continue reading the attached article ...

The annual budget: aspects of theory and practice

Management software: an example model

A practical spreadsheet to draw up the budgets of costs, revenues, investments and financial requirements, as well as predict the progress of the balance sheet, income statement and cash flow statement, with a view to minimizing financial charges and maximizing profit: download for free the file !

Financial balance between income and expenses

With reference to the temporal variable, we distinguish two aspects of the financial equilibrium, linked to immediate short-term solvency and to the structural correlation of sources / uses (financial structure). The expected gap between cash inflows and outflows constitutes the forecast global cash flow and represents the summary forecast data of the entire financial branch of operations. Continue reading the attached article ...

How to calculate budget ratios

A practical spreadsheet to determine the main profitability ratios (ROE, ROI, ROA) and financial structure (primary and secondary liquidity): download the file for free!

Temporary Management: When and How

TM interventions are normally classified into five macro categories:

transitory management (management of phases of coverage of sudden and temporary managerial gaps); project management; management of corporate crises; management of skills; management of corporate changes.

In more specific terms, TM interventions can therefore have the objective of:

manage a turnaround situation; get a company or a business unit back on track before selling it; manage a change in culture, strategy, structure; launch new activities abroad; manage post merger situations; carry out the coaching of a permanent manager; managing the transition pending the entry of a permanent manager; helping to successfully manage the generational transition; managing a targeted project.

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