First, there are some characteristics that differentiate leaders from nonleaders, although experts disagree on whether these traits are inherent or can be learned. However, there is little disagreement that certain types of leadership are better suited to certain working situations. Furthermore, successful organizations are those who manage to find a way to match up leaders to their most appropriate working situation. In addition, different approaches to management need varying levels of leadership. Also, some organizations rely on a group leadership approach, which de-emphasizes the role of any single leader.
One of the most interesting aspects of OB is that a proper understanding of it can help one determine who will make a successful leader. In fact, the five components of EI, self-awareness, self-management, self-motivation, empathy, and social skills, help determine who will become a leader. According to Robbins, "the higher the rank of a person considered to be a star performer, the more EI capabilities surface as the reason for their effectiveness." (Robbins, 2005, p. 368).
Finally, anyone who wishes to truly understand OB must understand the politics of the organization. One must first understand the sources of power. Then one must understand how power is used and who is affected by the use of power. Not only do successful managers need to understand power, but they also must be able to make successful use of that power without exploiting it.
Web Technology Has Benefited Human Resource Management
It is relatively easy to understand how web technology has impacted most areas of organizations. However, the area that may have been most impacted by web technology is not always visible to those outside of the organization; human resource management (HRM). In order to understand how technology has impacted HRM, it is important for one to understand the variety of different technologies that fall under the HRM umbrella. Basically, any computer technology that is used to "gather, analyze, and distribute information about the people in an organization," falls under the HRM umbrella. (Jackson & Schuler, 2003, p. 65-66).
One of the major technological transformations in the HRM field is that human resource information systems (HRIM) have made easy access to HR information possible throughout the organization. Furthermore, some believe that the web-based HRM information portal have had a significant impact on HR technology. (Perrin & Walker, 2001, p. xiv). This impact can be attributed to the fact that HRM portals bring together internal and external information.
Another significant change ushered in by web technology is self-service HR services. Employees can get direct access to information and forms, which makes it easier for employees and for HR. One of the benefits of self-service is that when employees are responsible for entering their own data, the information in the systems tends to be more accurate.
One of the initial concerns about web-based HRIM systems was that they would not be secure. Those security concerns have largely been addressed by modern security technologies. One way to minimize security risks is to allow access to HR only from internal computers. Another possibility is to limit outside access to only those computers that have been registered. Registering involves assigning a certificate that recognizes each external computer's media access control (MAC) number. (Kaufman, Perlman, & Speciner, 2002). Only registered computers can access the system. Whatever solution is selected, a conscientious manager will ensure that HRM keeps up with any changes in web-based security issues.
In fact, web technology can provide a significant advantage to an organization even before it has hired an employee. For example, many organizations engage in web-based hiring practices, using Internet recruiting companies like monster.com, careerbuilder.com, and dice.com. Not only do these recruiting companies provide organizations with a huge target audience, but they also allow organizations greater control than traditional recruiting practices.
However, it is important to keep in mind that major technological changes do not occur overnight. While web-based self-service HR administration provides a tremendous opportunity for companies, these changes are not going to occur painlessly or immediately. Johnston argues that, to be successful, self-service HR needs to take an approach similar to the approach taken by banks when customers initially resisted using automatic teller machines (ATMs). (2002). Like banks convinced their customers of the benefits of having 24/7 access to their money, companies need to educate their employees of the benefits of having 24/7 access to their HR benefits and information. Furthermore, organizations need to make sure that the systems are easy for employees to use. In addition, organizations need to implement employment-practices compliance systems (EPCS), which are online tools that allow management to increase the level of compliance. EPCS "allow HR professionals to visibly demonstrate the core competencies that allow them to leverage their role and contribution to business strategy." (Thrasher, 2003, p. 63).
Financial Management Benefits Organizations
One need only see today's headlines to see how improper financial management or accounting can destroy an organization. Management accounting involves the use of accounting information by managers to make both long-term and short-term management decisions. While some aspects of accounting have been in use for generations, innovative management accounting involves relatively new practices. For example, traditional accounting used variance analysis to determine the difference between actual and projected costs. While modern managerial accounting still uses variance analysis, it also uses activity-based costing. Financial management involves more than simply accounting. For example, a finance department would be in charge of insurance, risk management, pricing, auditing, investor relations, cash management, bank relations, investments, mergers, acquisitions, and the internal management of public stock offerings. (Cooke, 2004).
The actual accounting process is relatively straightforward, involving the recording of transactions and compiling of reports so that people can understand the impact of those transactions. Technology impacts accounting through the use of accounting software, which makes it easier for accountants to keep the ledger and to prepare reports. Most reports are prepared according to generally accepted accounting principles (GAAP), which make them easy to understand. Accounting systems are referred to as the chart of account, which is a systematic listing of all ledger account names and associated numbers used by a company. (Cooke, 2004). Furthermore, for companies that use double-entry bookkeeping, the general ledger is the main accounting record. The general ledger is taken directly from the general journal and includes items like assets, liabilities, revenue, expenses, and additional equity. In turn, the balance sheet ad the profit/loss statement are prepared from the general ledger. One of the principles of financial accounting is that total assets must always equal the sum of total liabilities and total stock holder's equity. There are several different types of internal accounting methods: accrual basis accounting, cost accounting, and activity-based costing (ABC).
ABC may be the most useful accounting method for organizations because it allows organizations to easily determine the profitability of different departments or products. In addition, ABC accounting reflects modern technology. While traditional accounting inaccurately allocates costs, ABC allows for a more accurate cost allocation because it assigns costs to activities based on the resources used by those activities, and then assigns costs to objects based on their use of those activities. Because ABC permits a manager to identify areas of inflated overhead, it encourages managers to find ways to reduce costs.
There are three main types of financial statements: the balance sheet, the income statement, and the statement of cash flows. The balance sheet shows the companies assets and liabilities, revealing the company's financial condition on a certain date. The income statement shows the amount of sales, the costs to make those sales, and overhead. The statement of cash flows show all transactions that involved or influenced the company's cash flow, but that did not appear on the company's income statement. Organizations may also compile other reports, such as accounts receivable reports, accounts payable reports, or inventory reports. One of the benefits of computerized accounting is that the same raw data can be used to compile a wide variety of reports.
By looking at their financial reports, organizations can understand their past performance and engage in business planning. Business plans often involve operating plans, which guide daily work; short-term plans, which involve goals over a period of a year or less; and strategic plans, which reveal an organization's long-term goals. Managers then use the business plans to determine whether they have the financial resources to meet stated goals and engage in the budgeting process. The budget is basically an estimate that allows managers to use projected revenue to determine the amount of money available for a project or department.
Managerial Economic Toolkit
There are several economic tools that managers can use to ensure business success. These tools will permit managers to identify problems and opportunities, analyze alternatives, and make the choices that are best for their organization. (Truett & Truett, 2004, p.3). Marginal analysis allows one to determine how to obtain the most value from each unit of a particular resource. Another tool that managers can use is the demand function, which shows how demand is affected by variables…