Management Functions And Family Economics Status

Economical status and family are among the most widely used terms in family economic and management, which have always been the focus of study, especially in recent years. However, these terms have been defined differently by different researchers. To define family, one needs to look at families in research-oriented ways; that can see a great deal of variation in how a family works, how they plan, and how they decide. Families today are expected to be more than just a bond between immediate blood relatives. Families are often seen including fictive kin and extended family members (Scott et al., 2003). Society’s current definition of family is completely different from that of the past. Nowadays, the nuclear family is seen as a novel situation that occurs with an ever decreasing frequency. Today’s norms include the single-parent household, the extended family household, and the blended family (Scott et al., 2003). Dealing with all of these new “types” of families brings about many interesting questions about how individuals within the family interact; feel about each other, who are family director, who controlled family and also other questions about the economic and educational situations of a family.

Family Economic Well-being status varies over the life span, from community to community, and within families. In the literature, researchers sometimes use family economic well-being to mean the macro economic situation of all families in the community and other times they use family economic well-being to describe specific micro family situations (Bauer and Braun, 2000). Family economic well-being deals with the ways in which families live and make a living. There are different ways of measuring economic well-being. When researchers use language and statistics to describe conditions such as living below poverty level, minority families, inner-city families, rural poor families, and single parents, they invoke and imply class, race, place, and family structure as the important aspects of living and working in communities. In reality researchers want to increase the stability of all families, over the life span, so that they have the ability to provide economical necessities for themselves and their families (Bauer, et al. 2000). To do this, we as researchers need to think more broadly about the economic well-being of families and what elements affect family economy.

Management practice is viewed as an investment in human capital. Income and earning potential is increased when people are used management and can work to get a result better than the past (Becker and Gary, 1991). On the other hand persons have less knowledge management will have one effect on family economy thus reducing financial resources in compare some body that has knowledge enjoying. More families who budgeted their money, compared to families who did not budget, believed that they could increase their satisfaction with financial management by planning expenditures (Beutler and Mason, 1987).

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In addition to the elements which affect economic status, the researchers need to clarify how they measure economic status. There have always been different agreements to measure economic status; some researchers believe that health and economic status are closely related. Moreover, there is a clear agreement that income is related to health. Many researchers prefer to use educational or occupational level, while others use income to measure economic status (“Editorial, 1996; Medical, 1996).

It goes without saying that considering all the above mentioned issues, researchers intend to measure economic status of families related to managerial functions. What is considered very important in family issue in today’s world, apart from traditional issue, is economic dimension of family. In recent decades family traditional tasks such as intercourse, marriage, and childbearing changed and can consider some new patterns that replaced family functions (Lundberg and Pollak, 2007), one of them is family economic dimension.

Looking more attentively to family changes, we realize that other family patterns, including work and education have also changed. These changes, however, are due to the changes in family economic status. Becker (1991) considers the evolution of the family from primitive societies to the late twentieth century and concludes that many of the functions that families performed in traditional societies are now performed by the market or the state. The market has largely displaced the family in some activities, such as food production, and continues to encroach on other activities, such as food preparation (Becker and Gary, 1991). So for family functions can consider other dimensions that one of these dimensions is family economic which in order to achieve to these, researchers need to have some other researches. To cause this reason current study wants to determine, do managerial functions have any effect on family economic status?

1.2 Statement of the problem

There are several issues regarding this study. First and for most, is the separation of poor families from mainstream societies due to economical problem. Many poor families are struggling to survive in communities that often exacerbate rather than mitigate the disadvantages of poverty-communities where a lack of public resources, economic investment, and political power, sometimes serve to separate and isolate families from mainstream society (Holmes, 2000). Successful, happy, healthy children require families that are strong-families that love them, and also provide, nurture, support and teach them. To be a strong family is tough in high-poverty neighborhoods that offer few of the opportunities, networks, and supports that all families need and most families take for granted (Mccoy, 2001)

The insufficiency of wages and salaries and the need to train families to manage their limited sources of income is another issue. Wages and salaries on the average have not kept up with the cost of living, especially for housing (Bauer, 2000). The Increasing gap between the people who earn the most and those who earn the least results in problems for communities (Bauer, 2000). More jobs are available, but without benefits (health insurance, retirement plans, savings plans, etc.) communities are left with issues to solve to support health and daily living for families. Demographics drive the shifts in the population characteristics (Bauer, 2000).

These practical problems require critical thinking, decision making, communication and action related to “what should be done?” in order to enable individuals and families to narrow the difference that exists between the ideal “quality of life” and “the reality of life situation”. The ways individuals and families seek to solve practical problems in their everyday lives are shaped by their values and available resources. There are no exact rules for solving such problems because each individual and family circumstance is different (Engberg, et al. 1996; Fox, 1997).

Another reason which is worth mentioning is the need to improve the economical status of families who fail to manage their budget due to high debts level and lack of personal savings. Inefficacy of family members to manage their budget present is serious economic and societal problems. There is a great need to improve the financial well-being of families. Since the mid-1980s, low rates of saving and high household debt have characterized the American family. Without adequate savings, many families will have too little money to face their current financial needs, as well as maintain their standard of living in retirement (Cruces, 2003).

Many Iranian families face serious financial challenges despite a booming economy for the past years. The personal saving rate has dropped. Spending and borrowing have increased. In case of this study, a mind boggling problem which needs to be solved is that there are many people in Arak city who are occupied in agriculture, services and industry sections. According to reported economic journal of Arak Province (Takalo zadeh, 2006). Rate of occupation in services section has been 28.5 percent in agriculture, 36.5 percent in industry 35 percent in Arak city in 2006. And 30 percent of occupation rate in Arak province is related to the agriculture section (Takalo zadeh, 2006). The problem goes more highlighted in families with a single annual income. These families such as farmers have less knowledge compared with other categories and have to plan for longer time period. These kinds of families gain money during a year after selling their products. But they run out of money before the end of the year. For example they can afford life expenditure just for ten months, so they face economical problems for the other two months. However this research attempts to answer the families about above mentioned issues. There are many families in Arak who have just a limited single monthly salary. For example employees, laborers, drivers, teachers etc. Wages for these categories of jobs are paid once a month. But these types of families have problem with how to spend money. These families are not aware of the strategies of keeping to their budget. They do not have enough knowledge about how to manage their money. And generally families do not know how to manage their money and use it in a better way. Also they do not know how to schedule their payments throughout the month.

However, limited resources and badly-paid jobs have not always been the main problems. Owning money by itself does not support family economic stability. Inability to manage the budget and make long term decisions for the future of the family is what really matters to guarantee stability of family. Despite the economic boom in the recent years for families, many families have not made the decisions necessary to provide for a more stable future (Bauer, 2000). It is obvious that there are financial difficulties in some families with high income. One of the reasons of this phenomenon is to ignore the use of management science in their spending. On the other hand, in Arak city’s families or even in almost all Iranian families little or no attention is paid to family or home management. It will be tried to express the degree of significance of relationship between management functions and family economics status and make justifiable opinions to fasten this relation with respect to the people’s income, culture and religions.

One of the most important reasons to discussed and study about family economics status by researchers on these days is that develop and improvement of countries in all dimensions will start from family. In Iran, at the state and national levels the accomplishment of programs relevant to the family economic and managerial functions education to the families and in the level of family has received little attention.

1.3 Research questions

Current research on base previous researches to want examines the relationship between managerial functions practice and family economic status. Given past research has very generally looked at the family economic status and functions of management, this study seek to answer the research questions:

1-What is the economic status of families’ in Arak?

2-What is the level of managerial functions involved by the families?

3-Are there any relationship between the levels of managerial functions involved by the family and economic status?

4- Which factors are affecting family economic status?

5- What can be done

1.4 Research Objectives

The primary objective of the current research is to determine the relationship between management functions practice and family’s economics status in Arak city. Also current research has several specific objectives:

1- To evaluate the economics status of families.

2- To determine the level of managerial functions practiced by the families.

3- To compare relationship between the level of managerial functions involved by the family and economics status.

4- To determine the factors effecting family economic status?

1.5 Research Hypothesis

As a part of this investigation, several hypotheses were employed to determine relationship between variables in this research.

1-There is a significant relationship between uses of management functions and family economic status.

2-There is significant difference between levels of managerial functions practice by families.

3-There is significant relationship between levels of managerial functions practiced and family economics status.

4-There is significant relationship between factors effecting on family economic status.

1.6 Scope of study

This research focuses on economical status of different types of families in Arak city that contributes towards enhanced management methodologies and how it affects the economy status of families.

This study will address the perceptions of families from economical and managerial dimensions. The information sought includes family manager attributes, family economic status, and level of education, kind of family expenditure, and finally attitude, knowledge of family managers about family economic programs, family administration, and family management toward economic dimension. This research also engages in participation-observation over two year’s period (2007-2009).

1.7Significance of study

Considering the above-mentioned problems, the results of this study will be of great importance to family units who will hopefully apply the managerial strategies to improve economical aspects of the family.

In addition, result of this study will be especially interesting to policy makers and managers at this time in societies because they will understand that improving family economics is a great help to societies economic development. Also, managers will be aware of managerial functions and their basic roles not only in families but also in organizations and societies. These functions can be important and fundamental.

The significant of study also arise from the fact that there has been little research performed on the relationship between managerial functions and family economics status. Empirically the findings product by this study will enlarge the knowledge concerning family economic and management functions

Last but not least, one of the most important implications of this study is that researchers and practitioners will be able to develop effective programs for families especially in economical aspects. It goes without saying that the researcher of this research can increase his knowledge using the results of this study, to maintain a better understanding of the managerial functions, how they work, and family economic status in Arak. The important study highlighted will reveal much about the long term impact of management in terms of economic development of the province. Iran is one of the few countries that have not shared in the global trade expansion. This is partly but significantly responsible for the country’s lackluster economic performance. Therefore, this research will actually dive into more complex issues that can lead to better solution family’s orientation for socio-economy improvement.

Society, families and individuals indeed need the knowledge, skills and attitudes developed in the study of family economics to enable them to cope effectively with unexpected and unfamiliar problems emerging in their everyday lives (Sumonchat, 2000).

One matter raised of this research is that it doesn’t seem logical to compare the effects of management functions on family economic status with different family’s income. The answer is that even poor families can employ the management policies to learn how to better use their budget and it will be useful for the poor family. On the other hand, new families are not even familiar with conventional family economics rules, because there is no close relationship in families in new modern societies. In fact, the family economic rules have been passed to children by parents. So this research also will be useful for new families in societies.

1.8 Literature review

1.1.8 Definition of terms

Economic status

Conceptual definition: The overall all degree of family’s economic situation.

Operational Definition: In this research, economic status of the family is measure by three indicators: family income, ownership or asset and family expenditure or consumption.

Family income

Conceptual Definition: this refers to the total income that earned by family members.

Operational Definition: The respondent was asked about the amount of monetary income in the month that received by each person in the sampled family, 15 years old and over. Total family income is the algebraic sum of amount reported separately for money wages or salary, rent land, rent house, money received from spouse, son, daughter, grandchildren and relatives, agricultural activity, pension, welfare, business, dividend, investment of shares, royalty and other specify income by family members.

Monthly expenditure

Conceptual Definition: This refers to the total amount paid for home expenditure per month.

Operational Definition: In the survey, the respondent was asking about the total amount of money that paid for all family expenditure used during the last months. The respondent was asked include food and materials, house rental, utilities, education and training, health care, clothing, travel, transportation, leisure, taxes, saving and other specify item that should spend during month in the family.

Ownership

Conceptual Definition: Refer to the total family asset, such as home, land, garden, factory, buildings and other financial valuable things that are immovable and transferred through generations.

Operational Definition: In the survey, the respondent was asked about owner of, house factory, private company and private garden for vacation home.

Age

Conceptual Definition: this refers to the respondent’s age.

Operational Definition: the respondent’s age was obtained through completion of the roster section of the questionnaire.

Educational level

Conceptual Definition: this refers to the level of education achieved by individual.

Operational Definition: the respondent was asked to indicate the highest grade, level of schooling completed. Allowable values include, (0) unread (1) No formal education, (2) Primary school, (3) Secondary school, (4) High school, (5) Diploma graduate, (6) Associate’s degree, (7) Bachelor degree, (8) Master’s degree, (9) PhD or professional degree, (10) Islamic school.

Economic well-being (subjective)

Conceptual Definition: The overall all degree of family’s economic situation.

Operational Definition: in the survey, economic well-being of the family is measured by these indicators: family income, household expenditure in food materials, clothes, transportation, and non food materials.

Management functions

Conceptual Definition: The functions that make up management are planning, organization, direction, coordination, controlling (supervision and evaluation). (Hurst K. and S, 1991; Lauri and Salantera, 1995; Marquis, 1998; Marquis and Huston, 1996).

Operational Definition: in this research, management functions of the family supervisor (householder) are measured by five indicators (functions): planning, coordinating, organizing, directing and control.

Family

Conceptual Definition: There are many definitions of the family in the literature. But one of the reasons to chosen these definition is that the below definition is clear, complete and deep, so researcher chosen from the Vanier institution to the family (Pauline Vanier, 2005).

Any combination of two or more persons who are bound together over time by ties of mutual consent, birth and/or adoption or placement and who, together, assume responsibilities for variant combinations of some of the following:

Physical maintenance and care of group members

Addition of new members through procreation or adoption

Socialization of children

Social control of members

Production, consumption, distribution of goods and services, and

Affective nurturance-love. (Pauline Vanier, 2005)

Family size

Conceptual definition: Refer to the number of people live at home.

Operational Definition: in the survey, family size was ask from respondents and it included, husband, wife, children, and another relative that live with family members at one home.

The economic family

Concept is use to describe a census family. An economic family consists of all persons in a household who are related to each other by blood, marriage, common-law or adoption.

Family Economics

It is concerned with the determinants of levels of living for families and individuals and with the possibilities for changing these levels to better meet personal resources in productive activity and end uses by families and individuals as they interact with other social and economic systems to achieve their standards of living. (Reynolds and Abdel-Ghany, 2001).

Household Management

It has been defined by Berger as an applied field aimed at helping individuals and families improve their quality of life through effective decision making and resource use(Berger, 1994).

Family financial planning and counseling

It is defined by the Financial Planning Association as the process of establishing personal and financial goals and creating a way to reach them. A plan must be implemented, monitored, and reviewed periodically so that adjustments can be made, if necessary, to assure that it continues to move one toward his or her financial goals.

1.9 Limitation of research

Two or the three fields together are linked to one another, namely economics, sociology and the management fields. The most important problem in this research is that two big fields in science must be combined and put together. This research will be joint management, economic and sociology. So the research is a new one in this regard, and moreover, it is very difficult to conduct.

The other limited in this research is that  there are several economic different observations (point of view) in one side and then there are several kinds of families and these are very broad,  such as, connected family (continually), broken family (torn family) divorced  family and etc, from another side.  So, different kinds of families must be distinguished and this is an important and required part of this research.

Cultural variation in different families such as rules and customs, values, norms, religious beliefs, economical, political, and social approaches, their accents and clothing are very different from one another.    

The other limited in current research is that researcher use a variety of families to do a comparative research and compare families’ income dimensions.

Another limited is that, there is a variety of families in rural and urban area.  Researcher must first distinguish what kind of families will be investigated? (Urban or rural families). Because of the role of men in two kinds of families is very different. For example in rural families, the role of men is more important than women.

The last limited in this research is enlargement (development) of restricted areas. That must be limited and distinguished in the future. Getting the information about economic status of families is not an easy job and cannot be clearly represented, especially when they are asked to tell about their real income and quality of their life.

So it is important to ensure the unawareness of families about the research.