Functional Approach to Internal Analysis

14942 Words Sep 28th, 2011 60 Pages
FUNCTIONAL APPROACH TO INTERNAL ANALYSIS

INTRODUCTION
The purpose of the internal analysis is to evaluate how the company is doing, so that its efforts can be directed in the most effective and efficient way. It s a Decision making approach in which a problem is broken down into its component functions (accounting, marketing, manufacturing, etc.). These functions are further divided into sub-functions and sub-sub functions ... until the function level suitable for solving the problem is reached.

Every organization of a given type must perform certain jobs in order do its work. For example, key functions of a manufacturing company include production, purchasing, marketing, accounting, and personnel. The functions of a hospital include
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Fayol recognized that effective planning must also take into account unexpected contingencies that might arise and did not advocate rigid and inflexible plans. Fayol defined organizing as making provision for the structuring of activities and relationships within the firm and also the recruiting, evaluation, and training of personnel.

According to Fayol, commanding as a managerial function concerned the personal supervision of subordinates and involved inspiring them to put forth unified effort to achieve objectives. Fayol emphasized the importance of managers understanding the people who worked for them, setting a good example, treating subordinates in a manner consistent with firm policy, delegating, and communicating through meetings and conferences.

Fayol saw the function of coordination as harmonizing all of the various activities of the firm. Most later experts did not retain Fayol's coordination function as a separate function of management but regarded it as a necessary component of all the other management functions. Fayol defined the control function in terms of ensuring that everything occurs within the parameters of the plan and accompanying principles. The purpose of control was to identify deviations from objectives and plans and to take corrective action.

Fayol's work was not widely known outside Europe until 1949, when a translation of his work appeared in the

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