Management Principles: Supervision, Needs & Finance
Supervision and Control Benefits
- Facilitates Control: A supervisor facilitates control by monitoring work in progress against the planned schedule, checking the methods being used, evaluating actual performance at regular intervals, and taking corrective action if necessary.
- Optimum Utilization of Resources: Supervising work while it is in progress leads to minimum wastage of time and resources. It ensures time and plan schedules are adhered to, and if there are any deviations, immediate remedial measures can be taken. This results in the efficient utilization of resources.
- Improves Communication: Issuing clear orders and instructions ensures subordinates understand what needs to be done. During monitoring, supervisors gather feedback on work progress and the conditions under which work is carried out. This improves communication and leads to a better understanding of the needs, aspirations, and problems of individuals at different levels of the organization.
Hierarchy of Human Needs
Physiological Needs
These include basic needs required for the survival and maintenance of human life, such as food, clothing, shelter, water, and other necessities.
Security Needs
People desire physical, economic, and social security. They want safety for themselves, their property, and a secure environment to live in.
- Physical Security: Includes protection against fire, accidents, disease, crime, etc.
- Economic Security: Includes having a permanent job and sufficient income to fulfill basic needs consistently.
- Social Security: Includes the need for security in old age, illness, disability, etc.
Social Needs
These include the desire to give and receive love and affection and the need to be accepted by peers. These needs are satisfied through friendship, family, and community relations outside the workplace.
Esteem Needs
These include a desire for a positive self-image and self-respect, as well as respect and recognition from others. These needs are satisfied by recognizing employees’ good performance, providing challenging job assignments, offering good job titles, providing a pleasant office environment, granting extra authority, etc.
Core Objectives of Financial Management
Acquiring Sufficient Funds
The primary objective of financial management is to arrange the necessary funds for the business as required. This involves assessing the financial needs of an enterprise and identifying suitable sources for raising them, ensuring the sources align with the business’s needs.
Proper Utilization of Funds
While raising funds is important, their effective utilization is crucial. Funds should be used in a way that maximizes benefits, ensuring returns exceed costs. Funds committed to various operations must be used effectively.
Increasing Profitability
Also known as profit maximization, a key objective for any business is to earn adequate profits. This allows for reasonable dividend payments and retaining a portion of profits to face future uncertainties. Profit maximization focuses on maximizing the firm’s monetary income and earnings per share.
Wealth Maximization
In contemporary financial management, the primary objective is wealth maximization. Wealth, in this context, refers to shareholder wealth as reflected by the market price of their shares. Therefore, wealth maximization aims to maximize the market price of the company’s equity shares. The overall goal is to provide maximum returns to the owners on their investment, which occurs when the initially invested capital increases over time. In short, wealth maximization means maximizing the market value of the investment in the company’s shares.