Management Franchises for successful execution of Business

The primary task of management franchises is to convert the inputs into outputs. It is done through managerial process like planning, organizing, directing and controlling. It is considered as human process because the focus of attention is on the individual human being who is working for the achievement of business objectives in a co-ordinate manner. It is a process as it involves several steps or the process starting from planning to the control.

Acquisition of funds, their allotment and effective utilization and maximization of profit and wealth has been accepted as the main objective of the firm in order to fulfill the short-term and long term needs of the firm. Some of the important primary or executive function of management franchises are identified below:

Financial planning- This function requires skilful planning. Therefore, such functions require specialized managerial capabilities and experience. Planning is the formulation of enterprises’ goals or objectives, the selection among alternative courses of action and the initiation of polices and programs to achieve the objectives. Financial plan is essential for the organization and operation of an enterprise and involves the following three steps:

•    Determine financial objectives, both short-term and long term.
•    Formulating financial policies such as capitalization, capital structure, sources of finance, investment of funds etc.
•    Making adjustments and re-adjustments i.e. re-planning for removing defects and ineffectiveness.

Financial Control- Financial control is required for the successful execution of objectives, policies and the programs established under the financial plan. It is an important function of management franchises. In exercising control, necessary directions are given to the subordinate staff achieving the objectives. Financial progress is evaluated from time to time and in case of deviation from planned targets, corrective measures are taken. Thus, there are three steps in controlling:

•    Development standards of performance.
•    Comparing actual performance with these standards.
•    Management applies budgetary control system for this purpose.


Allocation of funds- Allocation means effective distribution of the acquired funds to projects and services in accordance with the stated plans and agreed priorities. The technique of capital budgeting is useful in proper allocation of funds among fixed or long term assets. Investments in current or short term assets are made keeping in view the profitability and liquidity. When sufficient funds are not invested in current assets, there is possibility of illiquidity of the company. On the other hand, if sufficient funds are invested in current assets, the profitability would be the increase the possibilities of business success.