OBM meaning in Accounts and Finance ?

Answer: What is Open Book Management mean?

Open-book management (OBM) is a management phrase coined by John Case of Inc. magazine, who began using the term in 1993. The concept's most visible success has been achieved by Jack Stack and his team at SRC Holdings.

The basis of open-book management is that the information received by employees should not only help them do their jobs effectively but help them understand how the company is doing as a whole. According to Case, "a company performs best when its people see themselves as partners in the business rather than as hired hands" (Case,1998 as cited in Pascarella, 1998). The technique is to give employees all relevant financial information about the company so they can make better decisions as workers. This information includes, but is not limited to, revenue, profit, cost of goods, cash flow and expenses.

Stack and Case conceptualize open-book principles in similar ways.

Stack uses three basic principles in his management practice called, The Great Game of Business. His basic rules for open-book management are:

Know and teach the rules: every employee should be given the measures of business success and taught to understand themFollow the Action & Keep Score: Every employee should be expected and enabled to use their knowledge to improve performanceProvide a Stake in the Outcome: Every employee should have a direct stake in the company's success-and in the risk of failure

Similarly, in 1995, Case made sense of open-book with three main points:

The company should share finances as well as critical data with all employeesEmployees are challenged to move the numbers in a direction that improves the companyEmployees share in company prosperity

In a company fully employing open-book management employees at all levels are very knowledgeable about how their job fits into the financial plan for the company. However taking a company from "normal" to open is not as easy as just sharing financial statements with employees. Open-book management is considered to be a success when companies allow improvements on their financial numbers to come from the bottom tier of employee rather than pressure exerted by a traditional top-down management system. (Johnson, 1992 as cited in Aggarwal & Simkins, 2001). While employees need to be trained to understand income statements and balance sheets; open-book management aims to achieve a level of understanding of company finances between all employees to the degree that they are able to report predictions to upper management. In order to motivate employees to strive for change, open-book management focuses on a "Critical Number". The number is different for every company but it is a number that represents a prime indicator of profitability or break-even point. Discovering this Critical Number is a key component of creating an open-book company. Once this is discovered, a "Scoreboard" is developed that brings together all the numbers needed to calculate the critical number. The Scoreboard is open for all to see and meetings take place to discuss how individuals can influence the direction of the "Score" and therefore, ultimately, the performance against the Critical Number. Finally a Stake in the Outcome is provided which can be a bonus plan that is tied to Critical Number performance or it can include Equity sharing or both.

reference

Full Form	Category
Ocean Blue Management	Academic & Science
Open Book Management	Accounts and Finance
Morobe	Airport Code
Open Business Management	Business
Organizational Behavior Management	Business
Our Business Machines, Inc.	Business
Own Brand Manufacturer	Business
Official Board Markets	Business
October Business Month	Business
Ohio Business Machines	Business
Open Business Models	Business
Online Business Manager	Business
Occasion Based Marketing	Business
Own Business Management	Business
Out of Band Management	Business
Oxford Benefit Management	Business Management
Office of Budget Management	Business Management
Overlapping Boxes Management	Business Management
Of Blessed Memory	Community
Optimized Bandwidth Management	Computing
Operations Business Management	Computing
Operations Bridge Manager	Computing
Object- Behavior Model	Computing
Oil-based Mud	Earth Science
On Board Measurement	General
On Board Monitoring	General
Obsidian Black Metallic	General
Oxford Bus Museum	General
Ocean Blue Metallic	General
Original By Motul	General
Original Brand Manufacturing	General
Only Best Model	General
Olimpíada Brasileira de Matemática	General
Ocean Bay Middle	General
Own Branding and Manufacturing	General
Old Brewery Mission	General
Old Black Mare	General
Overlapping Boxes Managment	General
Ontario Basic Mapping	General
Organized By Mint	General
Own Brand Manufacturing	General
Ocean Bridge Media	General
Official Board Market	General
Oussama Ben Mahmoud	General
Olive Branch Middle	General
Origin Blade Maker	General
Oil Base Mud	General
Ocean Burlington Monmouth	General
Outside Bracket Mounting	General
Office of Budget and Management	Governmental
OBALAPURAM	Indian Railway Station
Over-the-barrier Model	Physics Related
Online boxing manager	Sports