Presidency University.

Bangalore

Paper on Applied Management Principles in practice

Governance, Management, Oversight and Outcomes are closely linked developmental concepts. So
much so the activities pertaining to each of these four concepts feed into one another for achieving the
planned end results. In practice, each of these concepts and activities spiral into separate universes and
stretch into a milky way. It is essential to appreciate this continuum of the conceptual framework and
their inter connectivity with a common goal. Let’s de-construct the four concepts to understand better.

Governance designs the basic sketch of people’s welfare and citizen goods in a geographical domain to
result in maximum happiness for maximum number of people. Governance is thus a collaboration of
political concurrence and administrative acumen. Sources and scale of funding for the welfare goals are
matched with calibrated streams of expenditure. For ease of execution, governance is divided into
distinct pillars to deliver end results that can help stich a harmonious, homogeneous and happy society.

Management is a collective of several functions within the verticals of governance. Each differentiated
function within the pillar of governance focuses on the realization of planned outcomes with time and
cost effectiveness. International, national & professional standards of governance, unique to each pillar
of governance, shape the downstream institutional business processes for each of these functions.
These standard operating processes path light the progress to the common goal of citizen welfare. Both
knowledge based and skill honed agents of delivery in different rungs of each entity and for each activity
are released as the army of change management with specific charter of activity and a financial
boundary,

Accountability function cross walks and compares the application of decided inputs and realization of
desired results.The reasons for divergence between actual results and anticipated results relatable to
factors of economy, efficiency and effectiveness are unraveled within the accountability function. Also,
accountability concept over arches the current context to embrace future sustainability.Hence there is
oversight of ethicality of practices and preservation of environment to afford the entity the character of
a going concern.

Accountability is primarily a management responsibility to enable delivery of good governance. An

umpire institution is invariably configured into the scheme of things for impartial assessment. This
external oversight agency provides assurance to stake holders on the competence of management and
correctness of approach for particular outcomes and tasks.. This helps governance to step back and spot
weld weak links in governance design or in management chain and charter of activities.

The external oversight function traces the path traversed by management in delivery of results, on a
selective basis to locate hurdles and missteps.. In other words the external oversight function embraces
applied management tools and repeats the management processes. This we can discern from the
following example drawn from audit of program effectiveness .
In respect of both private and public sector, outcome assessment and to promote better performance,
governance, management and accountability, oversight responsibility examines whether the
Program/activity has been well prepared and delineated in a project proposal.

 Entity has legal mandate and regulatory authorities approves the action plan.
 Planning, Budget, Finance. Internal control and Reporting functions in the entity are structurally
placed and are considered adequate enough to measure the Standards, Systems, Procedures
and ensures that they are well in place and are complied with.
 Strategic corporate and annual operational plans lay down the path to the goals.
 Vertical and horizontal capacity building plans are initiated for any new program or product.
 Operational economy, efficiency and effectiveness of all activities are honored.
 Acquisition and utilization of property, equipment, plant, inventory etc are ethical and
transparent.
 Result – oriented or Problem - oriented or System-oriented solutions are sought after in
executions
 Trade and business practices, professional guidelines and international bench marks guide
production or implementation.
 Monitoring, Supervision, Ratio Analysis, bench marks for performance, quality control and
quality assurance, risk management and weightages, IT aided studies are all the processess and
decision tools lies in the hands of both managerial hierarchy and performance audit protocol.
 Extensive consultations and engagement of subject specialists in advisory roles is resorted to
both by management brass and performance audit personnel.
 Leadership apply a structured input-outcome model of sequence, risk assessment in planning,
and design matrix (ADM) in conducting performance and service delivery reviews .
 The objective of both private sector management and public sector auditors has this
convergence-Citizens or Clients who have received value for money or value for tax paid.
An illustrative diagrammatic example is given below:

II
In the early 1970s the role of government auditors started to expand. This change began in the USA,
Canada and some European countries where Parliamentarians of these countries asked for information
on the efficiency and effectiveness of public expenditure. They expressed dissatisfaction with the
traditional role of audit, which focused on compliance with rules and regularity of expenditure. Law
makers expected a greater accountability for the collection, spending and management of public funds.
The auditors of the developed countries responded by conducting Performance Audit.

The Lima Declaration (INCOSAI 1977) points out at section 4.2, “ Performance audit, which is oriented
towards examining the performance, economy, efficiency and effectiveness of public administration.
Performance audit covers not only specific financial operations, but the full range of government activity
including organizational and administrative systems.

Hitherto Economy Efficiency and Effectiveness constituted the touchstone for public expenditure Lately
Equityin public expenditure has assumed significance.. Equity principle recognizes the difference among
individuals and circumstances and the need for differential treatment. Equity in public expenditure
reinforces Effectiveness of expenditure. To provide genuine equality of opportunity society must cater
more to those born with fewer skills and those born in socially disadvantaged areas. Unequal treatment
is fair when it benefits the neediest individual - fair inequality. (SAI Brazil)-

All through the evolution of management principles and emergence of performance audit techniques
Ethicality has been a sub text.Good Governance is the result of Ethical principles and transparency
guidelines help establish ethical regime.

Performance Audit which has emerged as the modern oversight tool for deeper and wider analysis of
public expenditure promotes good governance and accountability

• efficient and effective implementation of decisions made by the legislature, or the executive
authorities,

• examines whether taxpayers or citizens have received value for money

• Identifies possible shortcomings in the laws and regulations which impacts total achievement

• improves quality of service delivery from public entities

• to improve better planning, control and management

The process diagram for a performance audit plan mirrors the steps taken by management when they
embark upon a new product. From the diagram below it is clear that performance audit deploys
applied management techniques to assess the economy, efficiency and effectiveness of project
performance and the outcomes of the program or project to benefit the citizen.