Image via Wikipedia The word management used in context of a business involves many meanings. It refers to the act of management of the organization and the business to achieve its final goal. It also refers to an entity that is in charge of the day-to-day operations of the organization. A management audit involves verification of the hierarchy and distribution of power in the organization to determine whether it is best suited for achievement of the ultimate goal of the organization. A third-party must do the audit to avoid conflict of interest. The management conducting an audit of itself may come up with a self satisfying report that praises every decision taken and structure installed. On the other hand, opinion of a third-party may be completely different. The concept of management audit has become popular because people are realizing that having the right structure and procedure for management of the organization makes a huge difference to its productivity. There was a time when a firm with access to the cheapest source of raw material or labor would make the maximum profits in the past. Today, the firm that manages its resources best is the one that will make a profit. Considering the huge stakes that the masses have in the economy of the country and the fact that big corporations have a huge role to play in the overall economic development, it is not surprising that management audit is considered a social necessity. It ensures inefficiency in such corporations does not lead to losses for the entire country at large.         … [Read more...]