Literature relevant to finance management will be analysed in this chapter. This chapter will move from the emergence of management and its importance to finance management in universities. The literature will include the theory of development. A brief explanation of the method implemented in this study will conclude Chapter 2.
Companies or organizations are run by managers who are motors that drive the objectives thereof. The management process contains certain functions and work activities that are carried out by administrators, in order to achieve the objectives (Short & Graefe, 2003). Management or managers are essential elements for planning, directing and controlling organizations, in that the efficiency and effectiveness achieve the objectives sought for any organization. Today, they are the ones who run, monitor work and performance of other employees within organizations. Management is universal, as necessary, as a discipline, as a process, as a set of techniques and tools that are needed to study with all seriousness and depth. They are the political, economic, social and cultural rights that determine the success of the company. Management arrangements in general, are business problems which require practical solutions to the different events around the new era of globalization such as the Free Trade Technological trends, among others, from that dimension the need arises administration. Companies must now conduct an efficient administration, so that they can achieve excellent performance, since they depend how adequate is the use of the resources they have to make their operations (Servon & Kaestner, 2008).
2.2.1. Importance of management
Management is important because it helps companies large, medium or small to be efficient and effective in the use and management of resources. It is necessary to consider each of the elements: machinery, market, labour work, including, for greater productivity, it is now much importance that the company is very productive in the development of their activities, at the same time improve the quality of administration. It is very important to explain that management is essential in all types of company, for without an administrative function, the results are not logically good and effective. Therefore administrative process stages are essential keys to development, efficiency and effectiveness in the organization. The definitions set forth above which is leading to administration determine its importance due to the daily demands prevailing in this present time.
2.2.2. Management features
The purpose of the Administration refers to something specific, like a target where managers focus their attention and effort to produce actions successful in the management of individuals with common purposes. The administration is achieved through the efforts of all those involved in the actions or objectives of a given organization. To participate in administration is required to leave the tendency for self execute all and make tasks are met together, ie through the efforts of members of a particular group.
This indicates that management occurs wherever there is a organization, because this must always exist systematic coordination of all its component media. The administrative phenomenon occurs wherever there is a social organism, because in that there is provided means systematic coordination. The management is taken for the same in the state, in the military, in business, in a religious society among others. And the essential elements in all these classes administration will be the same, but obviously there are accidental variations. Finance, long considered as part of the economy, emerged as a separate field of study earlier this century. In its origin were associated only with documents, institutions and procedural aspects of capital markets. Financial management is one of the areas of management within an organization created for operational managers, which should highlight tools and techniques that will help achieve the objectives of the company and report the results to the owners, in order to take reasonable and sound financial decisions. External factors are increasingly influencing the financial manager: deregulation of financial services, competition between providers of capital and financial services providers, volatility of interest rates and inflation variability in currency exchange rates, reforms tax, global economic uncertainty, problems of external financing, speculative excesses and ethical problems of certain financial businesses(Marks, Dollahite & Dew, 2009). Then develop some definitions, significance, characteristics, principles and action areas of financial management.
2.3. Financial Management
Of all functions which the management company uses the finance function is unquestionably the dominant function and the likely to remain a long time, simply because it is the origin and the outcome of most economic processes: without money, there is not much, no income, it does not survive long. Ideally, everyone should pay close attention to these financial aspects which control is essential to the smooth running of companies. We observe instead that many people prefer- rent to stay away advancing excuses ranging from: "It's complicated," "It's too much responsibility", "I'm not done for that." Sometimes the refusal to know going to rejection and criticism the most unjustified "The financial have no heart," "should be preferred the long-term development for short-term profits, inter-decision is not made up only of numbers (Furnham, 1984). The principles and content of the financial management have not yet is causing such reactions. The important thing is first well understand what the financial issues are: they are relatively simple and they do not have a particular connotation. Then you have to make the effort to look at the instruments that allow tent to understand and measure: they are mostly accessible to a wide audience. Finally be able to make decisions in the financial sector, or only include those are taken by others, is usually a simple matter of common sense (Hanna & Lindamood, 2007).
2.4. The financial operation of a company
The best approach to finance is undoubtedly that which is to observe the financial problems affecting the company(Dew, 2007). Financial management is a process whose fundamental objective is the optimization of financial and economic benefits of an investment. Although considered and managed as a processes, financial management involves many processes, including accounting financial, management accounting (and costs), asset accounting, the accounting cash and money market accounts, financial reporting, controls internal and internal audit, provided it is for the external audit accounts to report and express an opinion on the financial position and performance presented in the internal audit reports. Each of these processes, including the management financial itself, comprises the sub-processes and techniques intrinsic, including management, forecasting, strategic planning, planning and budgeting, organizing, procurement, disbursement, monitoring and communications (Garasky, Nielsen & Fletcher, 2008).
According to (Fitzsimmons, Hira, Bauer & Hafstrom, 1993), the finances are in charge of determining the value, as such, the question of how much something is worth?, continually arises. Finances also cover how the best decisions are made in terms of investment, financing and dividends. Meanwhile, (Grable, Park & Joo, 2009) defines finance, as the art and science of managing money. As a science, finance focuses on three important areas such as administration financial, investment and financial markets and intermediaries, are performed in the three financial transactions the same but with a different approach in each case. Specifically, the AF is the area of finance which adopts principles within an organization to create and maintain value through decision making and impeccable resource management. The gf is who has the duty to exercise AF within an organization; he will be responsible to actively manage all financial affairs of small, medium and large, public, private, profit and non profit (Dennis & McCready, 2009). The tasks are varied and can summarize plan financial Elcorito management, medium and long term, and how to be allocated, i.e., what resources will be invested to maximize the value obtained of the organization. It follows that to make key decisions by gf, in accordance with the traditional approach are those of investment, financing and distribution of dividends, profits or surpluses. According to (Hilgert, Hogarth & Beverly, 2003), the gf is addresses three key issues In general, the gf mechanisms should create value, which goes far beyond the maximization profit, i.e., maximize the market price per share. This means taking into account present and expected future profits for action, time duration and risk of such profits, the dividend policy of the company and other factors influencing in the stock price. FA in terms of time horizon, can differ in the short and long term, there is no universally accepted definition for finance short term, the main difference between the short and long term positioning in time of faith, regularly short-term financial decisions consider the inputs and outflows generated in the course of one year or less, while decisions involve long-term financial inflows and cash outflows expected in a year and commit to the company for a long period (five years or more) (Godwin & Koonce, 1992).
As an example of short-term financial decisions can mention buying raw materials and inputs in general, paid cash, sold products and expects to receive cash for the sale in the course of a year, in contrast, a financial decision long term is associated, for example, the purchase of a special machinery for production process or the expansion of installed capacity, which means finding the funds requirements (funding decision) for the acquisition of assets (investment decision) that will benefit the company for a long period. In connection with the conflict in March indicated by (Kaplan & Saccuzzo, 2009) as identified as problem of agency is one that arises the ownership and control in modern business, this situation creates potential conflicts between owners and managers, it may happen that the objectives of the latter differ from those of shareholders, it creates a situation in which the second act in favor of their own interests and not the shareholders. The function f is organized in different ways, depending on the characteristics company in terms of size, industry to which it belongs and objectives pursued in the chief financial corporations can be a member of the Board and reports to the CEO or president. According to (Comrey & Lee, 1992), the gf must supervise the functions of accounting, treasury, tax, and audit and also are often responsible for strategic planning, currency exchange, and its surveillance, risk management of volatile interest rates and levels production and inventories, among others.
According to (Mugenda, Hira & Fanslow, 1990), the field of finance is closely related to economics and accounting, therefore, should clearly understand the gf relationships between these areas. By analyzing the economy structure is obtained needed to make decisions in areas such as risk analysis, price theory through relations of supply and demand and comparative analysis of the return. (Davis, 1992), point to the importance for the gf to know very well the two areas economics: microeconomics that handles the economic decisions of individuals, households and businesses, and macroeconomics observing the set of the entire economy.
Additionally, the FG must understand the commercial banking system of the country and the interrelationships between different sectors of the economy, as well as reports of macroeconomic variables as to gross domestic production in the different areas, disposable income, inflation, interest rates, fiscal policies, statutory deductions, these skills will enable better decisions, and obtaining such credit allocation and investment and financing (Xiao, Tang & Shim, 2009). Sometimes, accounting is identified as the language of business due to providing information through the Basic Financial Statements (EFB) and further analysis and interpretation, identified as the balance sheet, the income statement, EFBs must be true to display the economic and financial situation of the company. Based on the above, the gf should enable the economy is connected with the accounting through sound financial management. It is important to clarify the scope of the Accounting and af, financial and accounting activities are closely related and, general, intersect, it is often difficult to differentiate af and accounting in business small is common to see the accountant performing the finance function and in some large the financial activity is often done many accountants, however there are two differences fundamental between finance and accounting, one has to do with the emphasis on faith and the other with decision making (Tang, 1995).
As the emphasis on faith that accounting is observed to measure the performance, evaluates financial assumptions and cancel taxes, such indicated, presents the situation of past events in the company through the EFB, based in Principle Accumulation. For this part, focuses gf in real faith, i.e., recognizes revenues and expenses in respect of faith only positive (inputs) and negative (outputs), so independent of income, as in accounting. Regarding decision making, the main difference between finance and accounting stability is based on that accountants spend most of their time collecting information for the preparation and presentation of the EFB, while the gf evaluates efb, produce additional data, making decisions based on the assessments made of the procedures and risks and generally displays the future of the company, then it means that emphasizes accounting information from the past while the administration prioritizes the future financial situation of the company (Perry & Morris, 2005). There are other areas fundamentally interrelated with internally af any company and identify the areas of production, marketing, human resources and methods all quantitative, which consider the use of statistics and calculus financial mathematics, plus various computational models (Joo, 2008). The gf should evaluate the financial impact of the development of new production processes, products and services production management, advertising plans and marketing promotion, wages, living rivers and incentives department of human resources and the use of quantitative techniques more appropriate for solving complex problems of different af.
2.5. Importance of financial Management
Financial management and management are of great importance to the work of auditors, in the sense that they control all operations in decision-making, in the pursuit of new sources of funding to maintain the effectiveness and operational efficiency in the reliability of financial reporting and compliance with laws and regulations. Financial management is closely related to decision making concerning the size and composition of assets, the level and structure of the financing and dividend policy focusing on two primary factors as profit maximization and wealth maximization, to achieve these objectives one of the most used tools for financial management is to be effective, management control (Sullivan, 1987), which guarantees a high achieving the targets set by the creators and implementers responsible financial plan. Financial management is very important because its main function is to fundraising, investment and optimal management for profit, this objective is certainly what every company pursues. In every company there is a constant flow of funds and administration Financial to be executed to achieve the planned purposes. The results financial statements should be evaluated for an administration that seeks to achieve objectives of the organization.
It's called managing financial (or managing movement of funds) to all processes that are to achieve, maintain and use money , whether physical (notes and coins) or through other instruments such as checks and cards of credit . Financial management is making the vision and mission in operating cash.
· Determining the needs of resources financial: the needs approach, description of available resources, forecast of the resources and calculation of the external financing needs.
· Achievement of funding as their most beneficial form: taking into account the cost, schedule and other terms, conditions and fiscal structure of financial company .
· Judicious application of financial resources, including cash surpluses: a way to get a balanced financial structure and appropriate levels of efficiency and profitability .
· The financial analysis : including good harvest, while the study of information so as to obtain definite answers on the financial situation of the company .
· The analysis regarding the economic and financial viability of the investment .
The form of the structure of a company has to do with its size. If the company is large, the importance of the financial system is critical, then it is contained in the chart the role of a manager or financial manager and financial administration . The financial manager is the one person who makes decisions on financial management set out in the strategy , based on the vision and mission of the company. This is your role as manager and strategist.
This management or leadership area depend Treasury , where they guard the funds that are in the power of the company (before they are applied as payment or deposit). Treasury area depends of Collections , producing all income .
There is also the area of payment or Accounts Payable , which is to receive the documentation required to make a payment, check and require appropriate authorizations.
It also tends to be an area of budget and finance Funds Management , which is the sector that makes financial management in a management strategy. This is where we analyze the company's financial position and the best options arise require funds or invest.
2.6.3. Distinction between economic and financial
The concept budget is related to the results, gains and losses, costs .
What business is all about movement specific fund, revenues (sources) or outflows (applications).
2.7. Financial Planning
Good financial management evaluates not only if you have money or not today: it comes to planning, to provide a good future management and the probable faults or excesses of money (deficit or surplus) (Rubin, 1987).
The primary tool for planning business is financial budget, which is part of a system called broader budget system . Within the budget system, the financial budget deficits likely to anticipate, develop strategies to cover them, while analyzing possible decisions of investment to be carried out in the case of surplus.
The banks perform various operations that are characterizing its management. To realize them must complete various forms .
2.7.2. Bank reconciliation
It is the analysis of the current account information. We compare the company's accounting information and analyzed the differences, making appropriate adjustments.
When a company starts, its sole owner or partners have to put money or goods to enable the development: this investment is the initial startup capital.
The capital is the sum of the contributions in cash and kind to the partners commit to make in the course of time to the company . At the time of starting a company , each partner agrees to make a particular contribution to society can begin and continue to develop. Each partner may make contributions of equity by different amounts, which means that when distributing the profits, if any, each receive their share in proportion to what they contributed (Xiao, 2008).
2.8. Financial Management Functions
The functions are key financial analysis and financial planning, the investment decisions and financing decisions. These functions financing must be executed in every organization from companies to business units or government agencies. Financial functions out below (Jorgensen, 2007):
2.8.1 Analysis or financial planning.
This function refers to the transformation of financial information so that can be used to monitor the financial condition of the company, evaluate need to increase production capacity and to determine the type of funding will be required.
2.8.2 Investment decisions.
Investment decisions determine both the mix and type of assets balance sheet. The mixture refers to the dollar amount of assets and fixed. Once the mixture is trying to maintain optimal levels or more appropriate for each type of asset to meet company objectives.
2.8.3 Funding Decisions.
This function is the decisions that have to do with the liabilities and capital balance sheet. It is necessary to establish the most suitable composition of financing in the short and long term more appropriate and then determine what the best sources of financing at a specific time.
2.9. Organisational Structure of the finance function.
The size and importance of the finance function for the administration depend on the size of the business. In small companies, the department accounting usually performs the function of finance. As a company grows, it becomes the responsibility of a separate department, linked directly to the President or CEO of the company. Generally, finance administers divide responsibility between the controller and treasurer. Normally, the treasurer is responsible for managing the activities financial and money management or cash, budget analysis, of financial planning, i.e. the acquisition of funds analysis credit and the pension fund or the management of contributions employees do. The comptroller usually directs accounting activities, such as accounting financial, involved in the preparation of financial statements, accounting costs, handling fees and data processing (Prochaska-Cue, 1993).
2.10. Specific activities of financial management.
The specific activities of the Financial Administration are very important; they describe the performance of the same, depending on the objectives organization. Here are the most important activities of the Administration Financial (Silva, 1993):
2.10.1. Financial Statement Analysis.
The basic financial statements for the financial analysis are the Balance Sheet and statement of income. Financial statement analysis allows identify the main strengths and weaknesses of a company can discover problems specific areas for corrective action in time. The financial analysis results can indicate certain facts and trends useful for planning and implementing a course of action.
2.10.2. Asset Management.
The Asset management refers to determining the effectiveness with which the company is managing its assets. The financial manager must determine and trying to maintain optimal levels of each certain type of circulating active. You must also determine the best assets that should purchase. You must know when fixed assets become obsolete and is need to be replaced or modified. The determination of the optimal structure of a business asset is not a simple process, requires insight and study past operations and future of the company, as well as understanding the long-term goals.
2.10.3. Liability management.
Passive administration determines the most appropriate composition short-term financing and long term, this is an important decision for as it affects the profitability and liquidity of the company overall. Discusses administration of investments financed with loans or credit. Wanted answers to questions Is the company able to meet its obligations?, what are the expected returns?.
2.10.4. Capital Management.
The capital management refers to the major components of capital: various types of debt, shares, retained earnings and new share issues. Activities should be designed to minimize costs for the company and increase the value of the investments of the owners of the company or directed to seek the maximum benefit for investors.
2.10.5. Other responsibilities.
Among other activities that are considered responsible for the financial management are: planning, monitoring and control costs for ensure that the objectives are met by the managers, have a close financial area ratio with the other areas of the company, analyze the factors economic environment, among others.
2.11.Financial Management in Universities
Today's society is undergoing a process of rapid change in which trends and undertake decisions overall socio cultural, economic and technology of its members. The training institution of higher education in this context must lay out its strategic plan to achieve sustainable development in time. Based on the mission or because of the existence of the institution, should raise the activities require the use of different tools, techniques and procedures involving all institutional actors. The design of an appropriate information system, which achieves adequate cost models characteristics of the processes, services and educational institutions, it is necessary to point to make decisions at strategic and operational level. The proper articulation between the various stakeholders in the educational institution and the interest in the participation of members facilitated the achievement of the desired objectives, to promote modern university, scientific, coherent and participatory (Silva, 1993).
Educational institutions recognized as open systems, and tensions displayed conflicts and seek alternative solutions. The structures and organizational forms of the institution must respond to the characteristics and needs of the people who make conceptions Shared and profiles, according to the levels and types of education. With this management area essentially occur the following processes: Financial and accounting Academic management support - pedagogical Managing physical resources Administration of the physical plant Complementary services Human talent In the process of financial and accounting aspects are addressed: Annual Budget educational services fund (ESF), which must respond to the needs of locations and levels, meeting the goals and activities set forth in the Plan Institutional Improvement. The instruments used to establish the budget, the plan of income, expenses, and cash flow, facilitate training and financial management. Accounting is another aspect that contributes to timely and relevant, According to current regulations. The collection of revenue and expenses are conducting clear processes, known to the education community to respond to the satisfaction learning needs and expectations (as) students and teachers. In this respect the processes leading executives Teachers training, based on culture of accountability, which means (Rosen & Granbois, 1983):
Budget adequate to the demands of PEI
Application of the current regulations
Explicit Recruitment System
Inventories allow adequate institutional use, and low maintenance equipment.
Using information technology to manage physical and financial resources
Accountability to the educational community
Minimize risk with inventory management
Transparency in the management of institutional resources
The administrative support - academic financial management - teaching is gives timely and agile processes implementing the enrolment process, management academic records and preparing report cards. These aspects evaluated periodically, improve care allow parents and mothers, the (as) students and (as) teachers, and optimize resources, time and improve the quality of administrative management - financial. Resource management attends physical aspects of resource acquisition learning, supplies and staffing, maintenance of equipment and resources for learning, safety and security, which are evaluated from the joint to the pedagogical, satisfaction (as) users and preventing risks. As support tools should have the user manuals for the equipment and learning resources and risk prevention plan. Others led processes (as) school administrators are managing the physical plant, which serves the maintenance, beautification, monitoring the use of spaces and all related services like transportation, restaurant, cafeteria, health, etc. Leadership in this administrative process - is based on financial engage the educational community to implement projects evaluation prevention and improvement of the physical plant, the use of timely and relevant spaces and providing quality services to the relevant (Domowitz & Sartain, 1999) supplementary demands (as) students. The talent management is essential to meet the educational purpose, rationale for educational institutions Processes that improve the quality of educational institutions have to do with the design and implementation of projects that optimize processes of induction, re-induction, education, training, monitoring, supervision, support and welfare of all the people who make the educational community.
The education sector of a country primarily targets the human, technical and academic of individuals in a society, and the preservation, study, outreach, dissemination and enhancement of skills. These goals require a series of activities on which exercised or apply certain actions to be a graduate or graduate respond the graduate profile, as race and institutional project. In the process leading to "obtain a graduate with the skills required" the education system, in addition to arrogate to the transmission of knowledge, and training competencies should also take care to make proper planning of all resources and support essential to ensure learning outcomes. The Academic Unit and the University have been raised in recent times some challenges as it is to make a profile of competencies and revenue in the exit profile for skills, which must necessarily be linked to teacher training that allows achievement of these objectives. For this it is necessary to consider changes in the role to be played by the educators. The process involves teacher training and training in specific evidence competence and that this is part of the University's Strategic Plan. Institutional development plan is a projection into the future, and it is full important to have a management model to provide useful information, planning activities needed to achieve the proposed objectives, defining the resources to meet efficiently and developing indicators capable of measuring from different perspectives and in real time achievements.
2.12. The Education System
Human capital, conceived as the accumulation of knowledge, skills, attitudes and values (Competencies) that cause an individual can develop not only in the workplace, improving their employability, which is no small feat, as well as elements provides they build their cultural, emotional and social bonding. These skills acquired, then improve the quality of the person in many aspects, thus increasing their productivity. No doubt that the resources invested in education is an investment in human capital while representing the investment of time and income (opportunity cost over a number of expenses) done by people (or companies that train their staff) in education There are various theories about education that an individual acquires, ranging from the Human Capital, through other such: Consumption as function of Indoctrination Production Process, Socialization, filter or screening, credentials and Scale Positions. All conceptualize the importance of education in the subject from different angles recognizing the value creation means achieving different skills to operate in a determined (Drentea, 2000).
2.13. Educational System Features
The economic conceptualization Education Sector and the problems thereof, has intensified in recent times, deepening cost studies in education, because in largely to the public sector crisis and the emergence of a significant competition Institutions Private who have joined this business segment. The main characterizations that can be set in reference to this sector are: The good or service is offered educational and demanded in the market: supply decisions by the public or private sector and demand decisions are in the hands of makers of educational services. It is a service whose provision externalities: education, although such impacts directly on the individual, both in their level of academic, vocational and cultural, educated person transcends to impact on society. You can speak for both of a mixed good, as there is no private ownership of social benefits (Kim, Garman & Sorhaindo, 2003).
The demand can be justified on the basis of criteria of consumption or investment: Can demand for educational services or enhance the cultural competencies particular branch of knowledge, in which case it will be considered commodity. If instead, the aim is to obtain long-term benefits, and that are otherwise higher than private costs which must be incurred, measured and discounted at a rate relevant we face an investment criteria. From the point of view of supply, it can be considered a production process which involves providing an educational service. In this process through the application of a set actions and inputs, is intended to transform the learner in a graduate or student formed according to exit profile designed. The supply of education services may be performed by the public sector or the sector private. In the former case typically present the following disadvantages: Number of service provided Quality of service Technology Funding In case that the service providing the private sector, and adds the disadvantage of regulation of the provision of the service, with respect to entry into the market conditions service delivery and conditions on tuition, among other problems. It is essential in this context, the organization strategically analyzed considering a appropriate information system to analyze and make decisions based on the study of generation process allowing costs to monitor and control in real time.
2.14. Strategic Analysis
In today's world, convulsed by permanent changes to the operation and survival of the educational organization, there is a need to venture into the future and know a priori the consequences of today's decisions. It is developing a model comprised achieve objectives and policies to achieve mission established.
Within the framework of organizations can be defined as the strategy master plans describe how to act to achieve their goals. Develop strategic mission involves taking clear as it is and will be the configuration institution, in order to provide long-term direction, delineate what kind of community academic is trying to become and in still a sense of all purposeful actions determined. In the specific case of an educational institution, the University of Wales Newport, the definition of Mission is performed in the following terms: "The University's mission is scientific research, teaching, and extension, adapting processes constantly exchange and academic quality in its broadest sense and in the context of a concept humanistic, ethical and universal. " In a schematic expression institution must maintain a close connection of all levels to achieve its strategic positioning (Xiao, Shim, Barber & Lyons, 2008).
2.15. Information system in the educational process management
The establishment of the mission, objectives and strategies of the institution uses to address all involved. From the development of activities and setting level expected costs requires the implementation of a system to provide adequate information to meet formal obligations and decision-making at different levels. Planning is the process of translating the work programs that are desirable for maintain and meet the objectives. Planning includes management standards that provide the foundation that operates the control function. The information system should be able to express costs according to the objectives.
2.16. Analysis of educational information
Decisions now have a higher level of complexity and should not be taken isolation but within a strategic framework that responds to organizational goal. The information systems of the organization must be able to produce the "output" necessary to the purposes to be set in the strategy for each of the levels. The system must contain a focus on internal and external factors of the organization. This is assuming that value creation perspective containing the different needs of Information. The key is to make the management of information for decision-making processes appropriate.
Objects of educational costs Understanding the educational process (teaching or academic area) as flow, the product would be the qualified tuition, which can acquire different degrees or levels of refinement (subjects taken and passed, years taken and passed, etc.). If cost determination is made based on the generation of graduate students who do not complete their studies and using resources in the school, have costs Additional production process within the Graduate, increasing costs. Taking into account the partial formation of individuals, depending on different levels of training (similar to the concept of semi-finished products), should be considered a process of joint production obtained in the different types of products (graduates, students with given year approved or certain number of subjects passed) (Kim, Garman & Sorhaindo, 2003). The determination average cost is between all alumni with different levels of training. The problem of determining the product is essential for the treatment of costs to effects of decisions being an important aspect for determining the optimal level production. For different types of products exist therefore different optimal production levels. If the product is the graduate: enrolment that deserts represent a cost, and desertion is null become a goal in itself and a sign of efficiency. If the intermediates are also considered as such, the production level of each skill level should be optimal (marginal cost equals marginal benefit, measured both in social terms). Ultimately, graduates or enrolment, cost objects are normal in the measurement educational product. However, according to the management needs of the institutions education should be considered other cost-objects follow different objectives proposed by management.
2.17. The costs in the process of educational management
The concept of costs includes all financial resources generated by activities performed (in an academic unit cost or other object) in order to create value in the society. Knowledge is the most valuable product, therefore the university should "generate and communicate knowledge and culture "ie efforts aimed at achieving the objectives. Thus, the cost incurred in the generation of educational products (training of graduates, postgraduate courses, research, etc.) is the value of goods and services used certain period of time, depending on what the definition adopted as a unit.
The costing is not an end in itself, not a single but they cost calculated according to the purpose of the organization. Moreover cost information must meet in order to measure the internal performance and make them comparable with projected. All actions to improve economic and educational process management should focus on improving efficiency - reducing costs and improving production in quantitative and qualitative terms. The cost analysis in education is an important element in the process of resource management, allowing establishing a basic parameter for the efficiency and establishing goals or objectives pursued by the system. In this framework the formulations costs could be as follows: number of products to a certain cost or total cost for a given amount of product. The proper determination of costs in any activity, generates information that is relevant for the decision making process (Scannell, 1990). For specific costs in education, the field application of the results of the cost study is focused mainly on the following aspects Internal Efficiency: In absolute terms of an educational unit (school, college, university, college, career, etc.). For public institutions, this measure absolutely dependent on a budget. Additionally, the relative efficiency is a particularly important indicator for educational management, based on a comparison of costs between similar units in size, type of training, etc. The use of Standard costs locally and internationally, or defined for each academic unit, deviations provide information preset goals.
2.18. Strategic and Operational Planning
It is the use of cost information, it critical to strategic decision making. These decisions may be directed to altering the size of the facilities, opening new units or races, changes in curriculum, resource allocations between modalities of teaching, etc. Inter-institutional relations: The objective measurement of costs may favor the relationship between different study centers. The cost comparison, policies beyond inspire towards global sector, can provide the basis for successful policies detect cases or to be imitated by other educational institutions.
2.19. Types of costs
Costs can be classified in several ways to respond to the different requirements in fixed or variable, direct or indirect, marginal short and long term, incurred and opportunity, Total, average and marginal strategic, operational or tactical, controllable and uncontrollable, by activities, etc. The information should be developed in ways that serve different purposes for establishing the address; one must provide different types of costs that suit the needs of the situations changing which must, being necessary to address the following aspects at least: - Measurement of revenue - cost - benefit. - Information for planning. - Information control. - Information for decision-making. - Information about the various activities that make up the value chain and the inducers or bases that reflect causation thereof. To meet the information needs generated by these different purposes, are needed costs, showing a clear and relevant and what should be decided rationally in each time (Davis & Weber, 1990)
2.20. Marginal Analysis
According to specific requirements for management decision making in the short term, marginal analysis represents the gateway in the analysis of information for decision making, is a tool that lets you know the status of the organization, project results, planning strategies and perform sensitivity analysis. Through the distinction of variable and fixed costs, we try to explain the process of generating profits within an organization. This analysis is also called Focus Contribution, arriving at operating income considering the physical or monetary units of revenues. Marginal analysis also allows for the segmentation analysis of revenues and costs, can be segmented all or part of the organization and with different criteria, depending on the type of information to be obtained and the level of disaggregation to be achieved. Possible successive segmentations, each of which in its lower levels, give more detailed and accurate information for certain cost items (Xiao, Shim, Barber & Lyons, 2008). When uses segmentation, each segment will be allocated according to "specific responsibility principle" those revenues and costs, which were not generated if there had been the segment. Thus the difference between income and expenses Segment own it, will be considered a segmental contribution, with which one can segment profitability analysis. In the present case, the split could be made according to various criteria or criteria and undertaking combining tiered. In order to determine the minimum number that should participate in the training course for teachers are analyzed to generate revenues and costs that course.
2.21. Activity Based Management
With the goal of creating value increase, the activity-based management manages the way to introduce efficiency and effectiveness in the activities that are conducted in different educational processes. It is a way of managing the organization, through the analysis of activities, identification of the resources they consume, the search for better ways of doing to improve each of the processes involved. Establish management guidelines relying on information provided by the method of activity-based costing (Davis & Weber, 1990).
2.22. Activity Based Cost
In general, the performance of this method involves concentrating the costs represented by the use of economic resources on activities that generate them, for subsequent transfer to cost objects that have been used. Relationships may acquire forms of direct or indirect assignment as the ability to measure with varying degrees of certainty that each receptor usage has made the item being moved. This methodology is applicable to all economic units, so it is appropriate to be developed in those providing educational services. Event Determination general criteria established by most specialized doctrine that primarily advises features such as having a specific purpose. Provide or consume resources. Enabling the measurement of the relationship between them bounded in magnitude inducers contain homogeneous. From these premises, each structural unit of activity is "broken" in the various activities in principle justified. In this it is necessary and appropriate action by all staff "bottom-up" in order to achieve greater accuracy in the determination of these activities.
The challenge for universities is large: Tackling the human, technical and academic individuals in a society, deepening, dissemination and enhancement of skills, conducting outreach activities, research and extension. This requires skilled human resources have to lead any reform process and trained to moderate its action against changes, identify changes early enough and develop strategies in the context of an Institutional Development Plan. This plan includes not only a future projection but should outline a management model to provide useful information, planning activities necessary to achieve the proposed objectives, defining the resources to meet efficiently and developing indicators capable of measuring from different perspectives and in real time, the achievements. In this planning, the role to be fulfilled by a university professor in knowledge management must be renewed to accompany the changes that have already been generated and to come. The teacher training process involves evidence and form in certain skills (including knowledge) and that this is part of the University's Strategic Plan As expected outcome of the work it is intended to serve as a guide to the direction of the sector by identifying the concepts terminology and its application to develop an information system that allows the determination of costs as a component without which the long-term approach cannot be successfully track and make decisions through the analysis of different management tools with in order to achieve sustainable strategic planning in time (Xiao, Shim, Barber & Lyons, 2008).