Management system is defined as a systematic view of the entire organization from how it delivers and achieves business objectives.
What is a Management system?
A management system is a systematic view of the organization to define how it creates and retains customers. This is why, to define a management system, we have to look at the organization from a systematic perspective. Since multiple elements influence a management system, having a systematic perspective will help pick us out of those elements that influence the management system.
There are multiple parts of every business. There is a sales department, production, HR, finance, admin, customer support, back-office, etc. all of these offices have to be managed to achieve its objectives.
Since all of these are interrelated, there is a need for a management system that will take care of them while realizing its objectives. Organizational objectives can be of different types like achieving service quality, improving operational Excellence, increasing health and safety in the workplace, improving sales, etc.
Every organization will have a different level of complexity. It is to control these complexities and interrelated departments that the management system is necessary.
Management systems can be simple or complex, depending on the organization. They can also be ad hoc or ongoing, or they can be uniform for everyone or different for everyone. Different management systems will result in different effectiveness standards. This is because what works for one will not work for everyone.
Elements of the management system
There are different elements of the management system, depending on the organization.
Following are a few of the common elements:
1. Leadership, Involvement, and responsibility
Leadership is an important aspect. A leader is responsible for the overall development of the organization and leading it to achieve its objectives.
Along with leadership, responsibility and involvement are also crucial aspects of the management system. But employees are expected to take responsibility for their jobs.
2. Employee selection and placement
The selection of employees for relevant jobs is a crucial aspect. Depending on the skills of the employee, he is trained and put on for a suitable job.
3. Workforce involvement
The workforce should involve in day to day activities of the organization. Interacting with seniors or senior management, regular, clear, and precise communication with other colleagues all departments, providing inputs regarding daily activities, etc. is expected from the workforce.
An organization should have established lines of communication. This may be internal or external, depending on the need, the organization will utilize the communication channels. Communication with external and internal stakeholders is crucial since the entire organization depends on these two factors.
5. Documentation, knowledge management, and records
An organization should have a properly arranged documentation system along with a knowledge management database. Both are important for the employees And employee management.
Documentation in record-keeping is also important for the organization to maintain a database of customers. These are the ones who were, later on, followed up with business prospects.
6. Project monitoring
Monitoring the project as it progresses is essential for different departments. Behind every project, many resources are at stake, and the success of the project is crucial for everyone involved in it.
This is why the project is monitored as it progresses from stage one to the end-stage. Relevant inputs are provided by management to keep it on track.
7. Standards and practices
Maintaining organizational standards without compromise is a necessity. Everyone, irrespective of their position in the organization, should follow the practices and standard procedures established for certain tasks.
For example, while going into a manufacturing plant, depending on the manufactured product, it is essential to wear safety equipment to protect yourself and maintain the sterility of the premises. An organization that does not follow its ethics will have a questionable trust in the market and its employees.
8. Inspection and maintenance
Every organization requires inspection and maintenance. Facilities are used every day, and the wear and tear necessitate inspection to work correctly. Inspecting the facilities and daily routines is important to keep them on track.
Whenever required, maintenance should be done. Annual maintenance and preventive maintenance are part of the regular wear and tear.
9. Identification of potential failures
Regular wear and tear will cause potential breakdowns in the equipment. Apart from them, there could be potential features in systems, product strategy. As a part of the management system, it is important to recognize the potential failures and take necessary actions to prevent them.
As it is rightly said, a stitch in time saves nine. Thereby positions should ensure that potential failures are recognized and addressed in time.
10. Vendor selection and management
Vendors are an important part of every industry. Besides providing raw materials, they are also useful for providing competition information and updates in the industry. This can be very useful for an organization that is looking to get a competitive edge.
The importance of correct vendor selection cannot be emphasized enough. Apart from selection, vendor management is equally important.
11. Incident reporting and investigation
Many incidences are happening in the organization every day. They may be related to production, marketing, finance, HR, or any other function. The fact remains that incidences keep happening.
As a good management system, there should be a reporting system where anyone can report an incident. After the incident occurs, anyone should report it so that a proper investigation system can be put on work. Investigating an incident is equally important and should be made mandatory in every organization.
Reporting the incident can reveal flaws and possible errors in the system, which can be addressed.
12. Audit and intervention
Auditing is checking and confirming the data that is provided by the organization. Financial auditing is the most common which takes place in every organization. Financial auditors are assigned to implement it.
There may be internal auditors or external auditors. Apart from finance auditing, there are other types of auditing, which happens in common in every company.
For example, sales audit, accounts audit, marketing audit, HR audit, etc. if something inconsistent is found after auditing, there is intervention by the auditor to make the process smooth by removing the obstacle of addressing the problem.
Effective management system design
A company should be able to discuss, plan, and assign roles. This is done to provide good leadership, which is based on the management system. The management system should be documented and made known throughout the organization to understand its contribution to completing the organizational objectives.
Usually, management systems have these characteristics and involve the use of computer and network systems. The systems help each member to realize and access information as and when required.
The management system should also be able to provide information about the competition. Competition is what drives the initial strategy of the organization. Structure and design usually follow the strategy. Competition is important because the survival of the company in the market depends entirely on the competition. This is why the company should have an efficient system.
A reliable information system is needed to provide competitor information to the company. This information system should also provide market analysis, which is crucial for the company to launch a new product. The management system should collaborate with the external interfaces and be flexible to update the product line and market line.
The management system should be designed to balance stakeholders and show how different the needs of stakeholders affect the organization’s finances.
The end-users or customers of the company form the largest and most influential stakeholder group. Customers are inherently part of every organization and a driving force behind the management system.
This is because the organization should be able to retain and access customer information. Management system design and its effects on the organization are huge. This is true, especially in the case of large organizations. Companies are directly linked to their computer systems, and this database has to be protected by the organization.
Employees are the second most crucial part of an organization after customers. If the employees are not fulfilled and satisfied by the company, they will eventually lose their grip on the market.
The management system is an important thread that connects different parts of an organization. It is also responsible for coordinating and functioning through all of them as one homogenous unit.
The management systems of various organizations have different requirements, and the functioning is dependent on the nature of the industry.