Principles of Management (BFT 109/3)

A business develops in curse of time with complexities. With the increasing of complexities, managing the business concern becomes a difficult one. The need of existence of management has increased tremendously. Management is not only essential to busin~ss concerns but also essential to Banks, Schools, Colleges, Hospitals, Hotels, Religious bodies, Charitable trusts etc. Every business unit has objectives of its own. These objectives can be achieved with the co-operative efforts of several personnel.

Management accounting relates to the use of financial and cost data for laying down new policies, preparing future plans and making management decisions for the efficient running of business and maximizing profits. It is used to evaluate the performance of the business as a whole and of various segments (departments) in relation to predetermined targets. It also helps in reviewing existing polices. Various institutions and authors have defined management Accounting. Management accounting system, unlike financial accounting system, provides information for management for decision making purpose. The rules of management accounting are tailor-made developed by each organization on the basis of its needs; conditioned by cost-benefit considerations. For the success of management accounting system in an organization, it is essential that the top management and department-heads have full faith in planning and objective ~valuation of results and the chief of management accounting system possesses a broader outlook and knowledge; he is aware that he only recommends and not decides.