Creating a business is a dream for every young entrepreneur minded individual. It is to many a way to financial freedom. Businesses have been a means to a very bright future for those who have managed to pull it off well. Individuals such as Sir Richard Branson and Bill Gates have become business veterans. It has enabled them become among the richest people on the planet. The desire to pursue this course of action is fuelled by the need to attain higher amounts of income and prestige of owning a business. Amanda has seen this as a venture to not only make huge sums of money but also impact on the lives of people in her community.
Managing a business can be a tricky affair for new entrepreneurs. Amanda is young and fuelled by the desire to grow her own company has ventured into business. She is experienced in accounting having worked for 6 years for a big accounting firm. She has an accounting degree and passed her CPA, as well. Her strong technical skills stand out.
Amanda is well aware of the risks that are involved in businesses. She goes well ahead to beat the first by having a mission statement and a strategy in what she refers to as being an accounting office for small businesses and individuals. She does well to hire a good and committed secretary. She starts small but soon employs more personnel. She hires the best accountants to help her work.
Problems emerge as the business progresses. She forgets the entire business management process and functions. She neglects to take care of the interests of the business management interests of the company. Several problems result from this. An analysis into this helped bring the recommendations highlighted below.
ABC Management Consultant,
P.O. Box …,
October 17, 2011
To the Director
Smith’s Accounting and Tax Service,
P.O. Box …,
RE: Recommendations for your Accounting and Tax Service businness managemet using the four functions of management.
The four foundations of management will be used extensively to bring out recommendations that would be used to bring the business back to profitability.
Planning, the first function of management refers to the ability to foresee the future and make a detailed analysis of what it would be like (Lane 2009). Planning involves among other things creating a mission statement and strategy. A plan should be able to give the business a forecast of what the future would be. It also entails getting a goal and creating a sketch of how such a goal would be achieved. Planning involves taking factors such as human resources, financial resources and time into focus.
As the firm’s director, you did a commendable thing coming up with a mission statement and a strategy. However, you did not bring out the strategy in a way to cater for the needs of the business several years down the line. You present yourself as a hands-on person who wants to have to do all the work. You hire more accountants without planning out a strategy under which they would be managed.
Essentially, you were not prepared for the sudden business expansion coming from the exiting of a major accounting firm in the area. Without a plan, the business is neglected as there was no original plan of action. This kind of attitude towards business cost you time as your work turned to controlling damage instead of getting more clients. Thus, it is the reason why you eventually fired employees one after the other.
It is important that you realize the importance of planning. Planning on the use of resources, time, the expansion programme and finances could have saved you firm from falling. Currently, you should carefully plan out the firm’s growth strategy for the next year, five years and even ten years. This will enable the business to have a clear framework of events that would guide it.
Organizing is the second function of management. Organizing involves putting all the factors of production together to achieve desired outcomes. The management has a responsibility of assigning duties, designing tasks, jobs and roles. It also involves staffing. Managers are required to assign resources and tasks to staff as well as ensuring that the staff in a position to do such work allocated to them. This means that managers get mixed up with the real activities of the organisation.
As the firm director you fail in this as you let the employees run wild with the work assigned to them. You forget your role to oversee the implementation of such jobs. The staff members fail to accomplish the tasks allocated to them. This has a negative impact on the company many months later with complaints arising from the clients.
It is recommended that you reassert yourself as a manager and go ahead to help the employees in whatever business they are doing. You should go through some of the work that the accountants are doing to help them where necessary.
The third function of management is leading. Leading refers to the ability of a manager to take part in the daily activities of the company. It indicates a willingness to show direction to the employees. It involves encouraging staff, approving and criticizing. It also involves formulating ideas and ensuring that such ideas are implemented. It follows the goals of the organisation.
Leading helps management identify areas of weakness in the system. It thus allows the management to attend to such weak areas, strengthen them for the better of the system. Neglecting this responsibility will make it hard for the management to realize such weaknesses eventually the company goes down without the knowledge of the management. You did not guide the company through to achieving its objectives because you operated like an employee of the business rather than the manager. Also, you took little interest in the way business was being conducted. You were more considerate of your clients and did not observe the other accountants’ clients. This style of leadership satisfied your clients whereas clients belonging to the other accountants were not attended to well. You did not give the accountants a leader to emulate.
I would advise you to be a leader first to the business and its employees. You are supposed to understand more of what goes on in the business and guide the way the business goes to achieving its objectives.
The fourth function of management is controlling. Controlling implies that the management has a role in checking the working of the business operations. This ensures that the business takes course of its actions in terms of checking for errors in the system. It means being able to set standards, measuring the performance of the business and taking corrective measures. Budgetary expenditure, cost effectiveness and utilization of other resources should be taken into account to help the business attain its objectives.
You did a commendable job at trying to rescue the business by going into mitigating errors caused in filing tax returns. This is a medieval control system which works to correct already made mistakes. Current control methods require that the management be there at all times to foresee what problems the business may face and alter the situation before hand.
I would advise you to take the current trend in business control and management. You are required to foresee such errors before they come into being. This will enable you to find lasting solutions to common problems that affect the business.
It is recommended that you reduce the amount of time which you go out to attend to clients and let your employees handle that. This will give you more time to take charge of the management issues of the business.
You are also required to draw up a strategic plan, share it with your employees to ensure that it is what all of them associate themselves with. Lastly, you should carry out consistent reviews of how far the business is at achieving such short-term and long-term goals.
John M. Jones,
Lane P. et al. (2009). Management. Cengage Learning