True managerial talent goes beyond just dealing with the problems at hand What

True managerial talent goes beyond just dealing with

This preview shows page 11 - 13 out of 130 pages.

organization that is moving from one crisis to another. True managerial talent goes beyond just dealing with the problems at hand. What does it mean to manage? Managing requires numerous skill sets. Among those skills are vision, leadership, and the ability to procure and mobilize financial and human resources. All of these tasks must be executed with an understanding of how actions influence human behavior within, and external to, the organization. Furthermore, good managers must have endurance to tolerate challenges and setbacks while trying to forge ahead. To successfully manage an operation also requires follow through and execution. But, each management action is predicated upon some specific decision. Thus, good decision making is crucial to being a successful manager. 2.1 Decision Making Some managers seem to have an intuitive sense of good decision making. The reality is that good decision making is rarely done by intuition. Consistently good decisions can only result from diligent accumulation and evaluation of information. This is where managerial accounting comes in -- providing the information needed to fuel the decision making process. Managerial decisions can be categorized according to three interrelated business processes: planning, directing, and controlling. Correct execution of each of these activities culminates in the creation of business value. Conversely, failure to plan, direct, or control is a roadmap to business failure. The central theme to focus on is this: (1) business value results from good management decisions, (2) decisions must occur across a spectrum of activities (planning, directing, and controlling), and (3) quality decision making can only consistently occur by reliance on information. Thus, I implore you to see the relevance of managerial accounting to your success as a business manager. Let’s now take a closer look at the components of planning, directing, and controlling.
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Managerial and Cost Accounting 12 Introduction to Managerial Accounting 2.2 Planning A business must plan for success. What does it mean to plan? It is about thinking ahead -- to decide on a course of action to reach desired outcomes. Planning must occur at all levels. First, it occurs at the high level of setting strategy. It then moves to broad-based thought about how to establish an optimum “position” to maximize the potential for realization of goals. Finally, planning must be undertaken from the perspective of thoughtful consideration of financial realities/constraints and anticipated monetary outcomes (budgets). You have perhaps undergone similar planning endeavors. For example, you decided that you desired more knowledge in business to improve your stake in life, you positioned yourself in a program of study, and you developed a model of costs (and future benefits). So, you are quite familiar with the notion of planning! But, you are an individual; you have easily captured and contained your plan within your own mind. A business organization is made up of many individuals. And, these individuals must be orchestrated to work together in harmony. They must share and understand the organizational plans. In short, “everyone needs to be on the same page.”
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