How to organize the business

The "traditional" management system is generally Tayloristic and objective-based; it provides for management focused on functions and the clear and defined control of their boundaries. Each manager or director is assigned the task of achieving a particular objective, for example: increasing sales, reducing inventory, improving product quality, reducing debt collection times, maintaining personnel costs constant. It focuses mainly on costs and efficiencies, giving rise to the so-called "cost center" management. The "integrated" approach, giving priority to value generation mechanisms, gives more importance to process control: 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 then implemented through direct supervision. On the other hand, a company adopts a decentralized structure simply because all decisions cannot be made 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 single 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 for its ability to motivate.

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How to design a control system

The already turbulent economic context of recent years, with the effects induced by globalization and the industrial development of countries such as China and India, has made the need to equip themselves with management planning and control systems stronger and more evident in small and medium-sized businesses. 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, concomitantly and subsequently, to monitor the achievement of the specific objectives set during 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 greater transparency of the actions of competitors, companies have acquired high skills to formulate a strategy, and increasingly often management consultancy is asked for support to 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 cost accounting or industrial accounting.

Management control was born as a management control, or as a tool to support the Management in controlling the company management, essentially divided into the following phases:

• strategic planning and definition of objectives and indicators;
• cost accounting;
• budgeting;
• data collection and reporting;
• reporting and variance analysis;
• 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 requires a radical change. In this context, it is essential for the company to have a management control system that allows it to evaluate the essential parameters (KPIs) to monitor the economic-financial conditions and distinguish the symptoms of a possible crisis, first of all by identifying the internal and external causes. The cornerstone of management control is the system of financial, management and other indicators that, 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 for restructuring bank debts

Once the moment of difficulty has been recognized, it is necessary to turn to a consultant, a professional or a company specialized in debt restructuring operations. In cases that are not too complicated, the restructuring 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 in exchange for the transfer of their credits. Continue reading the attached article ...

The Annual Budget: Theory and Practice

Management software: an example model

A handy spreadsheet to draw up budgets for costs, revenues, investments and financial requirements, as well as forecast the performance of the balance sheet, income statement and cash flow statement, with a view to minimising financial charges and maximising profits: download the file for free!

Financial balance between income and expenditure

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

How to calculate balance sheet ratios

A handy 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:

1. transitional management (management of phases to cover sudden and temporary managerial gaps);
2. project management;
3. corporate crisis management;
4. skills management;
5. business change management.

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

• manage a turnaround situation;
• get a company or business unit back on track before selling it;
• manage a change, of culture, of strategy, of structure;
• launch new businesses abroad;
• manage post-merger situations;
• coaching a permanent manager;
• manage the transition while waiting for a permanent manager to come in;
• contribute to successfully managing the generational transition;
• manage a targeted project.

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