Definition of management processes
Management processes are the methods that aid the structuring, investigation, analysis, decision-making and communication of business issues. Examples include the strategic planning process, talent planning, expense and capital budgeting, performance management systems, product planning and management cost accounting.
The purpose of a management process is to ensure a disciplined and consistent approach to analysis and decision making. They facilitate the use of a logical thought process that is consistent with the objectives of the firm. The capital budgeting process, for example, is based on financial market disciplines that encourage wise investment. Product planning is focused on both creating customer value and realising the benefits of new products for the firm’s investors, not one or the other.
Management processes should be seen as a support to and not a replacement for management judgment. These processes require the development of expectations about the future and provide guidance in light of the associated assumptions. The wise manager uses these tools as inputs to decision making which, when combined with business acumen, provide a solid basis for choice.
In most towns, restaurants come and go, but there are a few that manage to stay in business over long periods of time. Why do some succeed while so many others fail? Attention to customer-oriented product planning, service process effectiveness, workforce management, effective management accounting and other management processes are the likely differentiators.