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What are top priorities in managing the future?
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What is the difference between a past oriented company and a future-oriented company?
Why is McDonald’s a success?
Who was McDonald’s Corporation founded by?
What has become a part of McDonald’s internal cultural fabric?
SCIENTIFIC MANAGEMENT
Frederic Winslow Taylor (1856-1915. F/W/Taylor called the Father of Scientific Management was an engineer by training. Taylor believed that management’s principal object should be secure the maximum prosperity for the employer, coupled with the maximum prosperity of each employee. The mutual interdependence of management and worker was a common message he expressed.
Taylor’s view of science insisted upon the systematic observation and measurement of worker activities. He was driven by the notion of applying science to answer questions about efficiency, cooperation and motivation. Taylor believed that inefficient rules of management inevitably lead to inefficiency, low productivity, and low-quality work. He recommended developing a science of management, the scientific selection and development of human resources, and personal cooperation between management and workers. Taylor believed that conflict among employees would obstruct productivity and so should be eliminated.
Taylor advocated maximum specialization of labour. He believed the person should become a specialist and master of specific tasks. Also, he assumes that increased efficiency would result from specialization. Taylor was unhappy with anything short of the one best way. He searched through the use of scientific methods for the one best way to manage.
Taylor tried to find a way to combine the interests of both management and labour to avoid the necessity for sweatshop management. He believed that the key to harmony was seeking to discover the one best way to do a job, determine the optimum work pace, train people to do the job, determine the optimum work pace, train people to do the job properly, and reward successful performance by using an incentive pay system. Taylor believed that cooperation would replace conflict if workers and managers knew what was expected and saw the positive benefits of achieving mutual expectations.
Answer the questions:
What common message did Taylor express?
What did Taylor’s view of “science” insist upon?
Why did Taylor try to find a way to combine the interests of both management and labour?
What was the key to harmony he believed in?
Why did Taylor advocate maximum specialization of labour?
FINANCIAL STATEMENTS
Companies are required by law to give their shareholders certain financial information. Most companies include three financial statements in their annual reports.
The profit and loss account shows revenue and expenditure. It gives figures for total sales or turnover (the amount of business done by the company during the year), and for costs and overheads.
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The balance sheet shows the financial situation of the company on a particular date, generally the last day of its financial year. It lists the company’s assets, its liabilities, and shareholders’ funds. A business’s assets consist of its cash investments and property (buildings, machines, and so on), and debtors - amounts of money owed by customers for goods or services purchased on credit. Liabilities consist of all the money that a company will have to pay to someone else, such as taxes, debts, interest and mortgage payments, as well as money owed to suppliers for purchases made on credit, which are grouped together on the balance sheet as creditors.
A third financial statement has several names: the source and application of funds statement, the sources and uses of funds statement, the funds flow statement, the cash flow statement, the movements of funds statement. As all these alternative names suggest, this statement shows the flow of cash in and out of the business between balance sheet dates. Sources of funds include trading profits, depreciation provisions, borrowing, the sale of assets, and the issuing of shares. Applications of funds include the purchase of fixed or financial assets, the payment of dividends and the repayment of loans, and, in a bad year, trading losses.
BOOKKEPING
Bookkeeping is a necessary part of accounting. Bookkeepers are responsible for recording (or keeping) the financial that the accounting system processes.
Bookkeepers record every purchase and sale that a business makes, in the order that they take place, in journals. At a later date, these temporary records are entered in or posted to the relevant account book or ledger. Of course the “books” these days are likely to be computer files. At the end of an accounting period, all the relevant totals are transferred to the profit and loss account. Double-entry bookkeeping records the dual effect of every transaction - a value both received and parted with. Payments made or debits are entered on the left-hand (debtor) side of an account, and payments received or credits on the right-hand side. Bookkeepers will periodically do a trial balance to test whether both sides of an account book match. In most business prospectus the seller of goods or services sends the buyer a bill or invoice and later a receipt acknowledging payment. Businesses are obliged to retain the documents — known as vouchers— that support or prove an item in an account, and make them available to the internal and external auditors who check the accounts. Bookkeepers are not to be confused with librarians, who also keep books, or with bookmakers, who “make books” in the sense that they accept bets (on horse races, etc.) and traditionally wrote them down in a book like a bookkeeper’s journal.
WHAT IS ACCOUNTING
Accounting has been called “the language of business” Perhaps a better term is “the language of financial decisions”. The better you understand the language, the better you can manage the financial aspects of living. Personal financial planning, investments, loans car payments, income taxes, and many other aspects of daily life are based on accounting. A recent survey indicates that business managers believe it is more important for college students to learn accounting than any other subject. Other surveys show that persons trained in accounting and finance make it to the top of their organizations in greater numbers than persons trained in any other field. Indeed, accounting is an important subject.
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Accounting is the system that measures business activities, processes that information into reports and communicates these findings to decision makers. Financial statements are the documents that report on an individual’s or an organization’s business in monetary accounts.
Is our business making a profit? Should we start up a new line of women’s clothing? Are sales strong enough to warrant opening a new branch outlet? The most intelligent answers to business questions like these use accounting information. Decision makers use the information to develop sound business plans. As new programs affect the business’s activities, accounting takes the company’s financial pulse beat. The cycle continues as the accounting system measures the results of activities and reports the results to decision makers.
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