Single Entry and Double Entry Accounting

Single entry accounting/Cash accounting. This system records only cash movement of transactions and that too up to the extent of recording one aspect of the transactions. This means that only receipt or payment of cash is recorded and no separate record is maintained (about the source of receipt and payment) as to from whom the cash was received or to whom it was paid. Double entry book keeping/Commercial accounting. Double entry or commercial accounting system records both aspects of transaction i.e. receipt or payment and source of receipt or payment. It also records credit transactions i.e. recording of Electricity Bill or accruals of Salary payment etc. This concept will be explained in detail in the next lectures but for the time being it should be noted that in cash accounting date of receipt / payment of actual cash is important while in commercial accounting the date on which the expense is caused (whether paid or not) as well as the spreading of the cost of c

2. Bureaucratic Management

GENERAL ADMINISTRATIVE THEORISTS
This group of writers focused on the entire organization. They’re important for developing more general theories of what managers do and what constitutes good management practice. 

The two most prominent theorists behind the general administrative approach were Henri Fayol and Max Weber.

1.  Henri Fayol wrote during the same time period as Frederick Taylor. Fayol was the managing director of a large French coal-mining firm.
a.  His attention was aimed at the activities of all managers.
b.  He described the practice of management as distinct from other typical business functions.
2.  Max Weber was a German sociologist who wrote in the early part of the 20th century.
a.  He developed a theory of authority structures and described organizational activity based on authority relations.
b.  He described the ideal form of organization—the bureaucracy, defined as a form of organization marked by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships

It emphasized the need for organizational rationality rather than the owner’s whims as a means for determining how work should be divided into individual work positions and how the work should be rewarded. Max Weber, the most important early advocate of this approach, argued that too often organizational decisions and rewards were made because of who the worker was (possibly a relative of the manager) or who the worker knew rather than on the performance of the worker. Scientific management focused on the work or the job and how to do it better. Bureaucratic management, on the other hand, focused on how to structure the organization better so that better overall performance might be achieved. 

Max Weber (1864-1920) a well known German sociologist coinedthe term “bureaucracy” to apply to the ideal of large organizations operating on a rational basis. Weber’s original definition was much different than the definition of government red tape and bungling usually associated with the term “bureaucracy” today.
 
Characteristics of Weber’s Ideal Bureaucracy
The major characteristics of Weber’s ideal bureaucracy include:
 
a.  Specialization of a labor
b.  Formalization of rules and procedures
c.  Impersonality in application of rules and sanctions
d.  Formalization of lines of authority into a hierarchical structure  
e.  Formalization of the career advancement process to be based on merit

The timing of Weber’s contributions is a little confusing. Although he was a contemporary of Taylor and others described as “classical contributors,” Weber’s works weren’t translated into English until the 1940s. Weber’s bureaucratic characteristics are still evident in many of today’s large organizations—even in highly flexible organizations of talented professionals where some bureaucratic mechanisms are necessary to ensure that resources are used efficiently and effectively.

Contribution of the classical viewpoint:

I.  Highlights the need for a scientific approach to management.
II.  Points out that work methods often can be improved through study.
III. Identifies a number of important principles thatare useful in running organization efficiently.

Comments

  1. Yes! just like in form of Local Government Organizations (Public sector)

    ReplyDelete
  2. Yes! just like in form of Local Government Organizations (Public sector)

    ReplyDelete

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