Fayols Four Functions Of Management Management Essay

Fayols Four Functions Of Management Management Essay The first of Fayols functions is planning. The definition of planning is defining goals, establishing strategies for achieving goals and developing plans to coordinate activities. (Robbins, et al., 2008). Planning is to assess the future and make provision for it. (Fayol, 1949). It is taking the initiative for the plan of action that managers carry out the managerial function. Mr.Seets job involves planning function. Understandably, he is the top level manager, so he has to get involved in all the manufacturing process like designing, process planning and material planning. The purposes of planning is to provide directions, so that employees can coordinate activities and corporate with each other when they know where the organisation is going and what they have to contribute to reach the goals. Hence, Mr. Seets plan is operational plans that specify details of how the overall goals are to be achieved. Apparently, it is a short term plans that covering of one year or less, but it is a specific plan which all the plans are clearly defined. He set goals of the organisation and then broken down into sub goals of each level of the organisation. In addition, planning reduces uncertainly by forcing managers to look ahead, anticipate and consider the impact of change. Managers plan to anticipate changes and develop the most effective response to them. Other than that, planning also minimize waste and redundancy, when work activities are coordinated around established plans, wasted time and resources can be minimize. Inefficiency become obvious and can be corrected or eliminated. Thus, SMART (Specific, Measurable and quantifiable, Attainable, Realistic, Time frame) goals are to be enforce by the managers. Consequently, Fayol (1949) describes the general features of a product plan and the advantages and shortcomings of forecasts, noting that the best plans, make allowances for contingencies. Fayol (1949) asserts that it would be useful for those whose concern is manageme nt to know how experienced managers go about drawing up their plans and proceeds to identify the planning process. (Lamond, 2003). The next Fayols functions would be organising. According to Robbins, Bergman, Stagg Coulter (2008), organising is defined as determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom and where decisions are to be made. Organising is arranging and structuring work to accomplish the organisations goal. Mr.Seets job also involves organising function. He needs to manage and divide all the tasks equally to his workers in order to save time and increase efficiency. Mr. Seet divides all the work activities into separate jobs task to different department like functional department, product department, process department and customer department. He also holds meeting for every week to discuss current problems, motivate employees and appoint a team at committees. On top of that, if managers change the organisations strategy, the structure should change to support the new strategy. Structure is adapted based on increasing level of complexity and sophistication. The more routine the technology, the more mechanistic the structure can be. Hence, Fayol (1949) argues that to create an organisation it is not enough to group people and distribute duties, there must be knowledge of how to adapt the organic whole to requirement and how to find essential personnel. Thus, Fayol (1949) states that organising is to provide the undertaking with everything useful to its functioning. The other Fayols functions is leading. Based on Robbins, Bergman, Stagg Coulter (2008), leading is defined as motivating subordinates, influencing individuals or teams as they work, selecting the most effective communication channels, or dealing in any way with employee behaviour issues. The mission of leading is to set the organisation going. (Fayol, 1949). The objective of leading is to get the optimum return from all employees, while the art of leading rests on certain personal qualities and knowledge of general principles of management. (Fayol, 1949). Mr.Seets job includes leading function. He ensures all his workers are in a friendly and comfortable work environment. He also gives training and guidance to employees by counseling whenever necessary. This can relate to the Katzs human skills and Mintzbergs interpersonal skills. (Lamond, 2003). Mr.Seet has motivates his employees by offering sales commission and bonus. According to Katzs human skills, all level of management need human skills in order to interact and communicate with other people successfully. (Peterson Van Fleet, 2004). Thus, Mr.Seet reflects the requirement of leading functions and human skills needed as a top manager. The last Fayols functions is controlling. Controlling is defined as monitoring actual performance, comparing actual to standard, and taking action if necessary. (Robbins, et al., 2008). Controlling is verifying whether everything occurs in conformity with the plan adopted, the instructions issued and principles established. (Fayol, 1949). Mr.Seets job also includes controlling function. He has to make sure that the transportation or delivery of goods is safe and fast. Orders must also be taken correctly and accurately. Besides that, he also has to make sure that the monthly targeted sales are achieved and the company continues to make profit. In addition, he has to ensure the whole process is effective and efficient and also perfect product quality to satisfy customers. Thus, the objective of controlling is to point out weaknesses and errors in order to resolve them and prevent recurrence. Besides, the other objective is to contribute the smooth working of each department in particul ar and of the concern in general. (Fayol, 1949). Mr.Seet is involved in job like trouble shooting for rejected goods and work force shortage. He needs to think of a way to solve rejected goods by finding out the problems, minimize the loss and maintain customers trust towards the organisation. When there is work force shortage, he needs to make decision whether to hire more employee or working over time. This also can be relates to Mintzbergs decisional skills where he must have ideas to make the right decisions. (Mintzberg, 1975). Management is about opinions and view points that may vary among different individuals. This interview has shown that Fayols four functions were needed by a top manager. There are some exemptions on his theory depending on what type of organisation is the manager managing. As a matter of fact, Katzs theory stated that human skill is needed at all level of management. His theory is further explained by Mintzbergs 10 roles of management under the interpersonal role category. Hence, one theory cannot work without the other. Indeed, Fayols characterisation of management still represents the most useful way of conceptualizing the managers job. (Carroll and Gillen, 1987). References list: Carroll, S. Gillen, D., (1987). Are the Classical Management Functions Useful in Describing Managerial Work? The Academy of Management Review, 12(1), 38-51. Fayol, H. (1949). General and Industrial Management. London: Routledge. Lamond, D. (2003). Henry Mintzberg vs Henri Fayol: Of Lighthouses, Cubists and the Emperors New Clothes. Journal of Applied Management and Entrepreneurship, 8(4), 5-23. Mintzberg, H. (1975). The managers job: Folklore and fact, Harvard Business Review, 53(4), July August 49-61. Peterson, T. O. Van Fleet (2004). The ongoing legacy of R.L. Katz: An updated topology of management skills. Management Decision, 42(10), 1297-1308 Robbins, S., Bergman, R., Stagg, I., Coulter, M. (2008). Management (5th ed.). Frenchs Forest, N.S.W.: Pearson Education Australia.

Procedure Cost Control

Procedure for Cost Control | | | Table of Contents 1. Purpose 2. General 3. Responsibilities 4. Procedure 5. Flowchart 6. References 7. Attachments 1. PurposeTo establish a system whereby developments which affect the costs of the project are timely reported, thereby allowing for corrective action when adverse trends are detected, and to inform about funding requirements for the execution of the project. To establish a procedure to control flow of information which affects anticipated final project cost.This procedure shall be used in combination with the â€Å"Procedure for Project Variations† [1], the â€Å"Planning Procedure† [2] and the â€Å"Procedure for the Project execution Control system† [3]. 2. GeneralAt project start, generally a high level budget is available and in many cases underlaying details about estimated costs are also available. These documents, however, are in most cases not adequate for effective cost control. Therefore, this procedure req uires that in an early stage of the project a control budget is prepared, based on the available information and within the boundaries of the high level (AS SOLD) budget.Cost control within Company generally consists of the following categories:- Company Services (reimbursable Engineering, Procurement , Construction Management and outside services) also client cost reporting. – The investment cost reporting which includes all costs within the scope of the project (e. g. direct supplied materials, subcontracts, services including Company's services etc. ). – Company internal cost report which is limited to Company's services, including non reimbursable costs. The requirement for the first two categories largely depends on the scope of work for the project and the contract type.Regardless of the scope of work and the contract type, internal cost reporting will always be required. The cost reports shall as a minimum contain the following information:- Original budget. â⠂¬â€œ Current budget, being the sum of the original budget and the approved change orders. – Commitments to date. – Anticipated final, being the sum of the current budget, pending change orders and approved deviations from plan. Approved change notices which have not yet been converted into change orders are excluded from the anticipated final.They are reported in a change Order Register, which is part of the cost report. Cost forecasts shall be made regularly through sampling, trend analysis and bottoms up estimates to complete. Deviations from plan shall be made where cost forecasts at cost report line item level deviate from the current anticipated final. 2. 1 Company Services2. 1. 1 The Company services cost report includes manhours and costs of manhours, computer application, reproduction, communication, travel, outside services etc. The structure of the report has to be defined at the start of the project.Requirements for reporting in the client's code of account and grouping by client's work packages have to be carefully examined to determine the level of detail at which the costs are controlled. 2. 1. 2 In general the level at which costs are controlled should be of sufficient detail to allow for consolidation in both Company's project cost codes and the combination of client defined work packages and code of accounts. The selected level of detail must allow for reliable progress reporting in combination with reporting of the expended manhours as required for trend analysis.Too much detail generally results in reduced quality and is a waste of effort. 2. 1. 3 An â€Å"end of project breakdown† should be considered when the client requires to know the project cost in more detail than the level at which effective cost control is done. 2. 1. 4 To ease time phased budgeting and forecasting at discipline level, the cost control system should follow the work breakdown structure of the planning and project execution Control (PEC) system. 2. 1. 5 Based on the available information (budget, progress, actuals, schedule etc. , the cost engineer makes a forecast on final manhours and costs and reviews this forecast with the parties involved. For line items where the forecast deviates from the anticipated final a deviation of Plan is prepared. Only deviations approved by the project manager are included in the cost report. 2. 2 Investment Cost2. 2. 1 The Investment cost Report includes costs of Company's services at a consolidated level, direct supplied materials, subcontracts and any other costs which fall within the cost control scope. The structure of the report has to be defined at the start of the project.Requirements for reporting in the client's code of account and grouping by client's work packages have to be carefully examined to determine the level of detail at which the cost details are maintained. 2. 2. 2 In general, the level at which the cost details are maintained should be of sufficient detail, to allow fo r consolidation in both Company's cost codes and the combination of client defined work packages and code of accounts. The selected level of detail must allow realistic allocation of commitments and development of forecasted finals.Too much detail generally results in reduced quality and is a waste of effort. 2. 2. 3 An â€Å"asset breakdown† at the end of the project should be considered when the client requires to know the project cost in more detail, than the level at which effective cost control is done. 2. 2. 4 To ease the development of commitment ; expenditure curves, the investment cost control system and the planning system are preferably integrated to the extend that scheduled and actual dates for commitments can be obtained from the planning system at budget line item level.Therefore, the investment cost control structure should largely follow the work breakdown structure of the planning and project execution control (PEC) system. 2. 2. 5 The design development all owances (DDA) for outstanding commitments are to be reviewed periodically and shall be reduced over time when it becomes more certain that there are no further developments expected (e. g. vendor documents approved, inspection reports received etc. ). Grouping DDA for budget line items of the same account group into one DDA line item for that group, rather than including a DDA for each line item, is recommended.The cost report should show the value of the DDA or a back up report should be available. 2. 2. 6 For main equipment and for bulk materials the cost code is at least at requisition level. For subcontracts, the cost code is for small subcontracts at subcontract level and for larger subcontracts (e. g. mechanical subcontract) the cost code is at main category (pay item) level. 2. 3 Internal Cost Report2. 3. 1 The internal cost report shall be limited to Company's scope of work and will include for reimbursable type contracts the non reimbursable costs.The level of detail for th e internal cost report shall be established at project start, taking internal reporting requirements, such as the current cost outlook (CCO), the monthly project status report (MPSR) and executive summary report (ESR), into account. 2. 4 Cost Engineering Scope Document2. 4. 1 At job start the cost engineer issues the â€Å"cost engineering scope† which contains at a minimum the following information: * Scope of â€Å"work† to be covered by the project cost engineer. * Cost engineering deliverables, together with their frequency and timing. Report layouts and level of detail. * Project reporting period cut off dates. * Cost engineering staffing plan and cost engineering manhours. * Computer programs and methods to be used. * Anticipated involvement of estimating for the preparation of bottoms up estimates to complete and for the development of the control budget. * Planned dates for the first issue of the control budgets. * Distribution schedules. * Currency exchange ra tes and reporting currency. 3. Responsibilities3. Each project team member shall immediately respond when their input is required for reporting physical progress and to determine the anticipated finals as required for the cost report preparation and shall work towards minimizing the duration for execution of this procedure. 3. 2 The Project Manager is Responsible for:- Providing the cost engineer with information about the cost engineering scope of work, specific client and project requirements, â€Å"AS SOLD† budget and any underlaying estimate details and any other information required by the cost engineer to prepare the cost engineering scope document and the control budget(s). Approving the cost engineering scope, control budget(s), deviation from plans and cost reports(s). 3. 3 Lead Discipline Engineers are Responsible for:- Updating of material quantity forecasts after key engineering documents have been issued and for timely reporting of changes, in writing (â€Å"cha nge alert†), to the project manager. – Providing monthly updates on the physical progress of their discipline(s) and to review together with the project cost Engineer the manhour forecast. 3. 4 The Cost Engineer is Responsible for:- Maintaining the cost control system and for the timely preparation of the Period cost Reports. Expediting the Lead Discipline Engineers to ensure that they provide their timely input as required for cost control. – Comparison of vendor and subcontractor quotations with the control budget and underlaying detailed estimate and for detection of unit rate trends based on quotation and purchase order/subcontract unit rates. – Development and maintenance of planned and actual commitment versus expenditure reports from which the planned and actual cost Progress Curves are generated. . 5 The project buyer/subcontract engineer is responsible for timely input to the cost engineer of vendor quotations and purchase order/ subcontract Unit Rates. 3. 6 The project Accountant is responsible for informing the project cost Engineer about actual expenditures, currency exchange costs and invoice status. 4. Procedure4. 1 Company Services4. 1. 1 Provide Cost Engineer with the Required Information:At the project start, the project manager provides the cost ngineer with information about the cost engineering scope of work, specific client and project requirements, â€Å"AS SOLD† budget, any underlaying estimate details and any other information required by the cost engineer to prepare the cost engineering scope document and the control budget(s). 4. 1. 2 Prepare Cost Engineering Scope DocumentThe cost engineer prepares a document which lists the project requirements with respect to cost engineering and other relevant information as mentioned under item 2. 4. 1. 4. 1. Approved by Project ManagerThe approved cost engineering scope document shall be the basis for the work of the cost engineer for the remainder of the projec t. 4. 1. 4 Develop Control Budget(s) for Company ServicesThe project cost engineer converts with, when required, the support of the estimating department the detailed estimate into a control budget. The cost details are consolidated and amended as required at a control level. The control level shall be at sufficient detail to allow for meaningful control and shall allow for timely and cost effective trending, progress measurement and collection of actual costs.A general consensus with all parties involved about the work breakdown structure should exist prior to the actual conversion takes place. 4. 1. 5 Approved by Project ManagerThe project Manager shall approve the control budget which than becomes the â€Å"original budget† of the project. 4. 1. 6 Approved Change OrderAdjustments of the budget require an approved change order once the control budget has been approved. Details of each Approved change order are recorded separately at control budget level, thereby maintaining a complete back-up of the approved changes.The approved change orders together with the â€Å"original budget† form the â€Å"current budget†. 4. 1. 7 Company Services Expended Costs & Manhours and Invoice StatusFollowing the monthly cut off, the project accountant shall provide the cost engineer with information about all expended manhours, manhours costs and other costs of Company services. Preferably at control budget line item level, or at a more detailed level which allows for consolidation at control budget line item level. For reimbursable type projects, the project accountant shall not only provide internal costs, but also the costs to the client at the same level of detail.The project accountant shall inform the cost engineer in detail about any delayed cost bookings or provisional bookings. Furthermore, the project accountant provides the invoice status information as required for the executive summary report. 4. 1. 8 Physical Progress at Control Budget Leve lFollowing the monthly cut off, the planning engineer provides the cost engineer with physical progress information (percentage complete) at control budget line item level for engineering and subcontract work. The progress information must have been reviewed with the disciplines involved prior to passing it on to the cost engineer.It is preferred that the engineering physical progress is obtained from the â€Å"project execution control† system (PEC). 4. 1. 9 Cost ForecastByanalyzing the available information about budget, actuals and physical progress and using historical data, the cost engineer makes a forecast about the final project costs at budget line item level. When there are indications of major deviations from the current anticipated finals, a bottoms up detailed estimate to complete might be required to generate a reliable forecast.Towards the end of the project the forecast should be based on â€Å"punch list† items to be completed. The cost engineer shall review these forecasts with the disciplines involved. 4. 1. 10 Approved Deviation from PlanThe cost engineer prepares a deviation from plan for budget line items which forecasted costs deviate from the current anticipated finals and for which the project manager expects that management action will not result in maintaining the current anticipated finals. 4. 1. 1 Update Anticipated FinalsThe cost engineer updates the current anticipated finals only based on approved deviations from plan, approved change orders and pending change orders for which the client has already approved the change notice. 4. 1. 12 Investment and Company Services Cost Report(s), Project Cost Report and Cost NarrativesThe cost engineer prepares following the period (monthly) cut off the Company services cost reports (internal and client reports) and the investment cost report, taking the latest information into account.The combined reports, together with the commitment versus expenditure report, the currency con version table and any other reports or curves that are required for the project from the project cost report. Together with the report, the cost engineer provides a narrative which describes the period highlights. Furthermore, the narratives should include major developments which have come to light during the last period, but for which time did not allow for the preparation of a deviation from Plan. These late developments are to be included in accordance with the procedure in the next cost report. . 1. 13 Approved by Project Manager and Cost Reports Issued. The project manager approves the project cost report after which it is distributed by the cost Engineer in accordance with the distribution schedule as defined in the cost engineering scope. 4. 2 Investment Cost4. 2. 1 Develop Control Budget for Investment Cost. The project cost engineer converts with, when required, the support of the Estimating department the detailed estimate into a control budget. The cost details are conso lidated and amended as required at a control level.The control level shall be at sufficient detail to allow for meaningful control and shall allow for timely and cost effective trending, allocation of commitments and assessment of estimates to complete. A general consensus with all parties involved about the work breakdown structure should exist prior to issuing the control budget for approval to the project manager. 4. 2. 2 Approved by Project Manager. The project Manager shall approve the control budget which than becomes the â€Å"original budget† of the project. 4. 2. Approved Change Order, Update Current Budget and Anticipated FinalsAdjustments of the budget require an approved change order once the control budget has been approved. Details of each approved change Order are recorded separately at control budget line item level, thereby maintaining a complete back-up of the approved changes. The approved change orders together with the â€Å"original budget† form t he â€Å"current budget†. The anticipated finals are updated to reflect the effect of the change order. Note that the anticipated finals may already have been updated at the time that the change order was issued for approval. 4. 2. Purchase Order/Subcontract PlacedPurchase Order and subcontract details at control budget level shall be made available for the cost engineer by the project buyer and the subcontracts manager. In particular information about options and other relevant information which will influence the final commitments is to be highlighted. 4. 2. 5 Update Commitment versus Expenditure Report and Forecast FinalThe cost Engineer shall regularly update the commitments versus expenditure report with purchase order and subcontract details. Furthermore, the project cost engineer shall evaluate the forecast finals to reflect the effect of the commitments.A design development allowance for outstanding commitments has to be included in the forecast finals at the time of commitment and subsequently reduced over time. 4. 2. 6 Issue of Key Engineering DocumentsThe lead discipline engineer shall review the material quantity requirements when key engineering documents (e. g. P&ID's, equipment summary sheets, MTO's, requisitions) are issued to determine whether forecasts require to be updated. Generally it will not be required to have documents which cover the complete scope of work.Comparing samples with the detailed estimate will generally be an adequate basis to determine trends in material and installation requirements. 4. 2. 7 Revised Quantity Forecast/Prepare Change AlertThe lead discipline engineer prepares a change alert and issues it to the project manager when he determines the need to revise the current material and/or installation requirement forecast. 4. 2. 8 Vendor Quotations/Purchase Order Unit RatesThe project cost engineer shall compare the unit rates obtained from vendor quotations and purchase orders with the unit rates in the detailed estimate. . 2. 9 Revised Unit Rates/Prepare Change AlertThe project cost engineer shall prepare a change alert and issue it to the project manager when he determines the need to change the current forecast finals as a result of change in the unit rates. 4. 2. 10 Approved by Project Manager – Approved Deviation from PlanUpon approval of the change Alert by the project manager, the cost engineer prepares a deviation from plan which reflects the changed unit rates or the changed material and/or installation requirements.This deviation from plan is approved by the project manager prior to incorporating it into the cost report. 4. 2. 11 Invoice Paid? Update Commitments Versus Expenditure Report. The cost engineer updates the commitment versus expenditure report with the expended amounts. Furthermore, the cost engineer ensures that any design development allowances for the corresponding budget line item is removed from the cost forecast when final payments have been made.All parti es involved, in particular, the project manager, the construction manager, the project buyer and the subcontracts manager, shall inform the cost engineer about (potential) claims or other costs for which the cost engineer might have to make reservations. 4. 2. 12 Cost ForecastBy analyzing the available information about budget, commitments and forecasts to complete and using historical data, the cost engineer makes a forecast about the final project costs at budget line item level. When there are indications of major deviations from the current anticipated finals, a bottoms up detailed estimate to complete might be equired to generate a reliable forecast. Towards the end of the project the forecast should be based on â€Å"punch list† items to be completed. The cost engineer shall review these forecasts with the disciplines involved. 4. 2. 13 Deviation form Anticipated Final? The cost engineer prepares a deviation from plan for budget line items which forecasted cost deviate from the current anticipated finals and for which the project manager expects that management action will not result in maintaining the current anticipated finals. 4. 2. 4 ContinuationThe Investment cost section of this procedure joins the Company services section at item 4. 1. 12. 5. FlowchartThe Cost Control Flowchart consist of the following interlinked sections:6. References | Document Number| Description| | 6. 1| CM-PE-313| Control of Project Variations| 2| 6. 2| CM-PE-910| Planning Procedure| 2| 6. 3| | Procedure for the Project Execution Control System (Later)| | | | | No Iframes | | | | Gadgets powered by Google| | ‘reliability is yet to become the most important characterstic of modern companies' home | privacy | legal

Philosophy of Knowledge Essay

David Hume’s â€Å"The Origin of Our Ideas and Skepticism about Causal Reasoning† states his beliefs about knowledge and his idea that we can only have relative certainty of truth. Skeptics concur that there is not enough evidence to predict the future or prove truth. In â€Å"An Argument Against Skepticism,† John Hospers argues that we can have absolute certainty because there is enough evidence from the past and from our own experiences to prove an argument to be true. Although both Hume and Hospers make strong arguments, Hospers’ philosophical beliefs on different levels of knowledge and evidence are more convincing than Hume’s concepts on knowledge and truth. Hume’s argument is based on the idea that we can only be certain of analytical truths, such as mathematics; synthetic truths, or â€Å"matters of fact† are only and can only be probable, not truth. He believes that induction cannot be rationally justified because the premises support but do not guarantee the conclusion to the argument. Hume states that through experience, people assume that the future will represent the past, and that similar things will be coupled with similar qualities. Skeptics, like Hume, believe it is not an absolute truth that the sun will rise every day; it is merely supposed that history will repeat itself. If there is any suspicion that nature will change, experience becomes useless in predicting the future. Hume questions why we should accept the uniformity of nature, and anyone who argues this point is said to be â€Å"begging the question.† He comes to the conclusion that there is no real evidence to prove that inductive arguments are true or false, and accepting them is just routine but can’t be justified. Hospers believes that because there are different amounts of evidence needed to find certain truths, there are different levels of knowledge. In daily life, we use the weak sense of know, and therefore we do not need absolute proof. Why should people be so skeptical of propositions that are not relevant to everyday life? Hospers also poses an argument to Hume’s idea that synthetic truths are probable and can never be actual truths. Hospers believes that an argument that has a probable conclusion can become a certainty, or truth, if evidence permits it. He argues that these â€Å"matters of fact† are probable until time and evidence make them certainties. Because we use the â€Å"weak sense of know† in our everyday lives, why wouldn’t we accept the uniformity of nature, and the idea that the past outlines the future? The sun will rise everyday in my lifetime, because it always has, and there’s no logical reason that it would cease to do so. If, as far as we know, nature’s past has always shown a vision of nature’s future, there is no reason to be skeptical about it. Hume’s point that induction cannot be justified makes sense but is arguable. If the premises support but do not guarantee the conclusion to the argument, it can still be easily justified with little evidence. Hospers’ view on the amount of evidence needed to prove that something will happen in the future, is much more reasonable and realistic in everyday life.

Taking a Look at the Structuralism Movement - 590 Words

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