Management contract

Management contract

A management contract is an arrangement under which operational control of an enterprise is vested by contract in a separate enterprise which performs the necessary managerial functions in return for a fee. Management contracts involve not just selling a method of doing things (as with franchising or licensing) but involves actually doing them. A management contract can involve a wide range of functions, such as technical operation of a production facility, management of personnel, accounting, marketing services and training.

In Asia, many hotels operate under management contract arrangements, as they can more easily obtain economies of scale, a global reservation systems, brand recognition etc. It is not unusual for contracts to be signed for 25 years, and having a fee as high as 3.5% of total revenues and 6-10% of gross operating profit. The Marriott International Corporation operates solely on management contracts.

Management contracts have been used to a wide extent in the airline industry, and when foreign government action restricts other entry methods. Management contracts are often formed where there is a lack of local skills to run a project. It is an alternative to foreign direct investment as it does not involve as high risk and can yield higher returns for the company. The first recorded management contract was initiated by Qantas and Mr Duncan Upton in 1978[1].

See also



Wikimedia Foundation. 2010.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • management contract — контракт на управление contract form форма контракта contract price договорная цена value contract договорная цена draft contract проект контракта root of contract суть контракта …   English-Russian travelling dictionary

  • management contract — A contract for the management, agency, or representation of an actor, musician, dancer, or other professional artist or entertainer. Anno: 175 ALR 621 …   Ballentine's law dictionary

  • management contract — An agreement by which a company will provide its organizational and management expertise in the form of services. Bloomberg Financial Dictionary …   Financial and business terms

  • Contract management — or contract administration is the management of contracts made with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions,… …   Wikipedia

  • management — the role of conducting and supervising a business. Glossary of Business Terms The people who administer a company, create policies, and provide the support necessary to implement the owners business objectives. Bloomberg Financial Dictionary * *… …   Financial and business terms

  • Contract management software — allows organizations to effectively manage the various types of contracts they engage in, including: buy side, sell side, and non monetary. This type of software can help an organization: create boiler plate templates that would help in ensuring… …   Wikipedia

  • Contract Grading — is a form of grading which results from an instructor to student cooperation, and entails contracted number of assignments of specified quality that correspond to specific letter grades. Contract grading may be contrasted with other grading… …   Wikipedia

  • Contract farming — is agricultural production carried out according to an agreement between a buyer and farmers, which establishes conditions for the production and marketing of a farm product or products.[1] Typically, the farmer agrees to provide established… …   Wikipedia

  • Management Dynamics — Type Private Industry Supply Chain Management Enterprise Software Founded 1990 Headquar …   Wikipedia

  • Contract Manager — is a construction accounting software suite developed by Explorer Software out of Vancouver, British Columbia. The software is modular based and can run on top of a Microsoft SQL Server. Contract Manager is best known for their international… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”