Application of Management Contract: A Study on Some Companies

Ans: There are several advantages of management contract, here, organizational

management or leadership team takes functional authority to build the contract, it

works on building written agreement in between owner of the organization and

External parties, we require such contract, as through implementing such contract,

we could meet the objective of organization, we could fulfill financial performance

requirements of the organization, we could minimize several risks and transfer

various risks to specific risk owner. Following are the applications as stated below

with example:
1. For example we can say 7 up. The origin of 7 up is USA. But in Bangladesh

Transcom Beverages Limited manufacture. Not only 7 up TBL also owns

and operates modern plants in Dhaka and Chittagong for bottling the

renowned soft drink brands such as, Pepsi, 7UP, Mirinda, Slice, Mountain

Dew, Pepsi Diet and 7UP Light. The company is emerging with the motto to

deliver sustained growth in Bangladesh and move towards dominant

Beverage Company, delighting & nourishing every Bangladeshi, by best

meeting their everyday beverages needs & stakeholders by delivering

performance with purpose, through talented people.

2. Another example is Philip. It’s a brand from Netherland. Esquire

Electronics Ltd. is an authorized distributor of Philips products

in Bangladesh. From a single showroom in 1974 has now grown into one

of the most widely trusted and highly respected companies in Bangladesh.

In the 40 years since its inception, Esquire Electronics Ltd. has specialized

in consumer electronics and honed it’s services through perseverance and

hard earned experience.

With the help of Management contract, we could implement standardized

practices and hence, we could be more committed to meeting the goals or

objectives, further, we could also improve the performance level of the supply

chain area. For one organization XYZ, we should develop management contracts

with vendors or suppliers that could retain long term business relationships and

they could collaborate with each other to fulfill organizational requirements.

Organization could improve spend visibility, they can regulate terms and

conditions over time, risk management process gets sufficient strengthening, so,

organization could get success in taking business forwards for long years.

Organization could work on the system that is fully compliant with the internal

guidelines and legal practices and regulations, further buyers, vendors and other

stakeholders could receive the changes and updates in each contract, so, related

stakeholders could take discussion forward or they can take suitable actions, such

management contract could bring more trust in the mind of related stakeholders,

so, they can perform better with the full efforts.