A management review is the study of a company’s operations used to determine how efficient and effective the business uses economic resources. Companies commonly use a management review process for carefully examining their business operations. This process can help companies make changes to current business functions or processes and improve the company’s ability to accept or bring on new opportunities for increasing profit. Most companies develop a review process that is specific to their internal business operations. Companies may also develop multiple layers of management review that evaluate various management styles in the company.
A common management review process involves the use of strategic management principles when designing or creating an evaluation function. Strategic management principles include setting missions and objectives based on a company’s business plan and reviewing and analyzing the current economic market to determine the feasibility of specific business opportunities. The principles also include formulating a business strategy for accomplishing the set goals or objectives, implementing a strategy within current business operations to achieve the goals, and evaluating the effectiveness of the business strategy. These principles are often translated into the management review process for evaluating business operations.
Companies may also use a performance management review system for evaluating the individual tasks or functions completed by employees. Performance management often includes giving employees a specific description of a job and the goals or objectives each employee must meet when working for the company. Employees may be rewarded through additional compensation, one-time bonuses, plaques or rewards and additional time off for completing projects in a timely and efficient manner. This review process can also foster a positive working relationship between the company and its employees to ensure that employees have a clear understanding how they should conduct themselves when working for the company.
Management reviews may also be used when companies follow up on an external report or audit of business operations. Companies often use external audits to ensure outside business stakeholders, such as banks, lenders, investors or the general public, that the company is operating according to all government guidelines in the business environment. If an external audit indicates a company is operating at a less-than-acceptable business range, company managers may focus on implementing performance measures for improving business operations. These reviews or audits may also be used to ensure companies remain compliant with third-party organization requirements or contractual agreements with other companies. Companies failing to use a strong management review process may find themselves with declining profit from inefficient operations and the inability to generate new business contracts in the business environment.