Table of Contents

1. EFFECTIVENESS AND EFFICIENCY ORGANIZATION..............................................................

2. ROLE OF THE THREE LEVELS OF MANAGEMENT TOWARD EFFECTIVENESS

AND EFFICIENT OF AN ORGANIZATION...........................................................................................

3. Practical example of the major functions that help managers effectively manage
organizations................................................................................................................................................

4. the three steps of planning....................................................................................................................

5. IS MANAGEMENT AN ART OR SCIENCE?...................................................................................

6. Type of skill needed for each level of management.............................................................................

What is the meaning of planning, why managers need to plan and does planning improve
performance?...............................................................................................................................................

7. motivation and discuss Maslow’s hierarchy of needs..........................................................................

8. DECISION MAKING IS THE MOST BASIC AND FUNDAMENTAL OF ALL

MANAGERIAL ACTIVITIES,..................................................................................................................

9. Compare and contrast product structure with functional structure.......................................................

10. leader, leadership and leaders’ source of power...............................................................................

11. SITUATIONAL AND TRAIT LEADERSHIP................................................................................

12. COMPARE AND CONTRAST MACGREGOR’S THEORIES X AND Y WITH

HERZBERG’S MOTIVATION-HYGIENE THEORY............................................................................

13. SCIENTIFIC MANAGEMENT AND BUREAUCRATIC MANAGEMENT.............................

14. CHANGE IN ORGANIZATIONS.................................................................................................

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 MTS ASSIGNMENT
1. EFFECTIVENESS AND EFFICIENCY ORGANIZATION
Effectiveness and efficiency are two common words that professionals in business management
often use on their resumes and in their professional activities. Effective organizational and
efficient organization also used to measure an organization respect to its stated goal and
competitiveness as whole.
Effectiveness in management is the ability of professionals in a business organization to achieve
organizational targets by following the established process and Efficiency in management is the
ability of professionals to use the available resources, time, and money to achieve the company's
goals.
Organizational effectiveness is concerned with output, sales, quality, creation of value added,
innovation, cost reduction. It measures the degree to which a business achieves its goals or the
way outputs interact with the economic and social environment while, Organizational Efficiency
measures relationship between inputs and outputs or how successfully the inputs have been
transformed into outputs To maximize the output Porter’s Total Productive Maintenance system
suggests the elimination of six losses, which are: reduced yield – from start up to stable
production; process defects; reduced speed; idling and minor stoppages; set-up and adjustment;
and equipment failure. The fewer the inputs used to generate outputs, the greater the efficiency.
Effectiveness of ETHIO-TELECOM in 2022/23 In Ethiopia the CEO of ETHIO-TELECOM,
FREHIWOT TAMRU, according to the CEO, ETHIO TELECOM achieved 96 percent of its plan by
earning 33.8 billion Birr (632.99 million USD)
Efficient of ETHIO-TELECOM in 2022/23 In addition to expanding our revenue streams, our
company has devised a cost optimization strategy (DO2SAVE) and managed to save over 5.4
Billion ETB within the year.
Ineffectiveness of ETHIOPIAN ELECTRIC UTILITY
Despite electricity being the backbone of the economy, Busywork stated that they line up
together with individual importers to get foreign currency. He said they are forced to wait up to
six months to acquire forex from Banks, which is ultimately affecting the institution.
2. ROLE OF THE THREE LEVELS OF MANAGEMENT TOWARD EFFECTIVENESS
AND EFFICIENT OF AN ORGANIZATION
The three levels of management in most organizations are top-level management, mainly
responsible for overseeing all operations, middle-level management, responsible for executing
plans and policies, and low-level management, responsible for direct task execution and
deliverables. They are also called administrative management, executive management and
supervisory management, respectively. The exact set of tasks that each level of management is

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responsible for highly depends on the organization's size and scope, with proper coordination
between them usually being crucial to the success of the organization.
Top management contributes to the organization’s efficiency and effectiveness. In order for the
organization to be effective, the correct organizational structure must be created. This ensures
that employees with the correct skills are performing the correct tasks that will contribute to the
achievement of organizational goals. Employees that are performing irrelevant tasks are not
effective. Top management needs to interpret opportunities and threats in the environment and
determine what resources to utilize to gain a competitive advantage.

Top management needs to interpret opportunities and threats in the environment and determine
what resources are required to gain a competitive advantage. They must ensure that
organizational strategies are angled in a way that provides the organization with a competitive
advantage through the efficient use of resources. For example, if top management knows that
their competitors are not environmentally.
Middle-level management are responsible for functional areas of the organization. They execute
policies, plans and strategies of top management. These managers monitor the environment that
affect their own departments.
These managers have an equal amount of conceptual and technical skills. They need to be able to
see the organization as a whole to implement top management plans as well as understand the
technical activities their subordinates are involved in.
This level of management is responsible for tactical organizational plans. These are medium-
long term plans concerned with resource and time allocation as well as human commitments.
Middle management contributes to an organization’s efficiency and effectiveness. In order for
the organization to be effective there needs to be consistency. This level of management executes
the rules, procedures and policies to ensure that subordinates are all doing the right things and
following a uniform set of guidelines aimed at achieving the organizational goals and
maintaining corporate culture.
Resource allocation, time management and human commitments are how middle management
contribute to organizational efficiency. They must determine how to utilize the minimum amount
of resources to generate maximum outputs in a reasonable amount of time as expected by top
management. Certain tasks should be completed using the correct human resources.
Lower-level management holds supervisory roles. You may know them as line managers. They
deal with day-to-day operations and activities of the organization and maintain close control of
subordinates. The direct influence they have on subordinates puts them in a position to increase
or decrease levels of production. T and the role they play in implementing plans, policies,
procedures and rules of middle management. This level of management is responsible for

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 operational plans that set unit goals and operational standards. They require a high level of
technical skills to supervise the technical activities of their subordinates.
This level of management is responsible for organizational efficiency and effectiveness because
it ensures that workers are performing the correct tasks and under close supervision, utilizing
resources as intended by middle level management.
3.Practical example of the major functions that help managers effectively
manage organizations
Management is a social process that regulates an organization's operations towards set goals. It
consists of five main functions: planning, organizing, staffing, directing, and controlling. Top
managers ensure alignment with company objectives, forecasting futures, developing strategic
plans, organizing resources, hiring competent employees, directing, and taking corrective
measures. This essay analyzes Toyota Corporation's implementation of these management
practices in its operations.
Toyota, a global automotive leader, is known for its quality and continuous improvement. The
company's marketing strategy focuses on customer experience and product quality, while
pursuing a generic cost leadership strategy. Founded as a small family firm, Toyota has become
a global giant in lean manufacturing and is recognized for its commitment to continuous
improvement.
Planning is a crucial management function that forecasts future actions and decisions for
achieving organizational goals. Toyota's strategic plan guides long-term operations, focusing on
lean manufacturing, customer satisfaction, and quality. This strategy minimizes operational costs
while producing quality products. Toyota's marketing strategy emphasizes customer experience
and product quality to improve its image and maintain a competitive edge in globalization.
Organizing involves bringing together organizational resources and developing productive
relationships to achieve goals. It involves identifying business activities, classifying them,
assigning duties, creating responsibilities, delegating duties, and coordinating responsibilities.
Toyota ensures smooth operations by coordinating operations globally, minimizing costs and
transferring spare parts for assembly.
staffing is a crucial management function that involves acquiring and manning human resources
to achieve common goals. It involves effective selection, development, and appraisal, ensuring
the right people are given the right jobs. Toyota, for example, hires highly qualified and talented
employees through a competitive process, offering well-compensated and frequent training to
sharpen their skills.
Leading/Directing is a management function that develops effective working methods to meet
organizational goals. It involves influencing, motivating, and guiding subordinates towards
achieving objectives Toyota Corporation is a globally recognized company with a strong
leadership structure, involving family members of the founder. The CEO, Mr. Akio Toyoda, is
the grandson of the founder. Toyota encourages teamwork, creativity, and innovation to achieve

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organizational goals. The company values customers and provides excellent services, leading to
customer loyalty and a strong brand name. Toyota also maintains good relationships with
external stakeholders, such as governments, local communities, and shareholders, ensuring a
strong corporate image worldwide.
Controlling is the final management function, measuring performance against set standards and
correcting deviations. Toyota closely monitors operations and evaluates performance against
organizational targets. The company has clear targets and regular audits to ensure progress. Any
deviation from these standards is addressed through corrective measures. Toyota's handling of an
accelerator crisis, addressing the problem and restoring its reputation, demonstrates its
commitment to continuous improvement.
Management plays a crucial role in ensuring an organization's operations are efficient and
aligned with policies and practices. By utilizing the organization's blueprint, management can
control all activities and ensure alignment with the organization's goals.
Effective management involves planning, leading, organizing, staffing, and controlling, which
are essential for an organization's success. By focusing on the future and achieving set goals,
management helps gauge operations and gauge the organization's future goals. Toyota
Corporation's success in growth and global customer recognition is a testament to its importance
in effective management.
4. the three steps of planning
Planning is deciding in advance what to do, how to do it, when and who is to do it. It is the
process of thinking before doing. as follows Setting objectives: Objectives specify what an
organization wants to achieve. Therefore, the first step in planning is to set up clear objectives
for the organization as well as all the departments of the organization. Developing premises:
Premises are the base upon which plans are drawn. They may be forecasts, existing plans or past
information. Therefore, the manager is required to make certain assumptions about the future,
called premises. Identifying alternative counts of action: list of alternatives.
After the setting up of objectives, the managers make a list of alternatives through which the
organization can achieve its objectives as there can be many ways to achieve the objectives and
managers must know all those ways to reach these objectives.
5. IS MANAGEMENT AN ART OR SCIENCE?
To manage effectively, one must have not only the necessary abilities to lead but also a set of
critical skills acquired through time, experience, and practice. The art of managing is a personal
creative attribute of the manager, which is more often than not, enriched by education, training,
experience the art of managing involves the conception of a vision of an orderly whole created
from chaotic parts and the communication and achievement of this vision.
Management is art

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Managing is the “art of arts” because it organizes and uses human talent. Elements of art in
management Practical knowledge, personal skill, creativity, perfection through practice, goal-
oriented.
Practical Knowledge are requiring practical knowledge, learning of theory is not sufficient. Art
applies theory to the field. Art teaches the practical application of theoretical principles. Learning
how sing does not make you a musician; one must know all composition and be able to use them.
Similarly, A person may have a degree that says he knows what a manager does but it doesn’t
know how to apply management knowledge in real-life situations he will not be regarded as
manager.
Personal Skill a manager will not depend on his theoretical knowledge or solution alone. he or
she must have some qualities that make him or her unique.
Creativity an artist’s work is not limited to his practical knowledge. He thinks outside the box
and creates things extraordinary Management is also creative like any other art. Management is
all about finding a new way to be well different from others.
Perfection through practice Every artist becomes better through item and practice. They learn
from their mistakes. Similarly, managers become more expert as he spends more time in
management thought.
Goal-Oriented Art is result-oriented. Management works are also a goal or result-
oriented. Management takes steps for the attainment of the goal.
Management is a Science
Science is obtaining information about a particular object by a systematic pattern of observation,
study, practice, experiments, and investigation. The management process also follows the same
pattern. Gathering data and facts, analyzing them and making a decision based on analysis, are
the basic functions of the management. Management follows a systematic method to find a
possible solution for a problem. The science underlying managing is indeed inexact or a soft
science at best. It is not as “Science” as physical sciences such as chemistry or biology which
deal with non-human entities. The inclusion of the human element in managing makes this
discipline not only complex but also debatable as pure science.
Human behavior is unpredictable; people think, act or react differently under identical
circumstances.
And so, management can never become as pure science. However, the study of the scientific
foundations of management practice can improve one’s management skills. Managers who
attempt to manage without management science have to trust their intuition or luck at their peril
rather than their expertise or skill.
Thus, they have to turn for meaningful guidance to the accumulated knowledge of managing.

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Elements of Science in managing, Concepts, Methods and principles, Theories organized
knowledge
Practice Science presupposes the existence of organized knowledge.
The essence of science is the application of the scientific method to the development of
knowledge that proceeds through the stages discussed below:
Concepts the scientific approach requires a clear “concept” of mental images of anything formed
by generalization from particulars. Managing has concepts to deal with situations.
Methods and principles “Scientific method” involves the determination of facts through
observation.
This leads to the development of “principles” which have value in predicting what will happen in
similar circumstances. Similarly, management requires observation and sets standards or
principles according to it.
Theories any branch of science has theories. A ‘theory” is a systematic grouping of
interdependent concepts and principles that give a framework to, or ties together, a significant
area of knowledge. Management studies over the years developed many proved theories for
making management more realistic or scientific.
Organized knowledge science is organized knowledge. If we compare, management at the
present day is a distinct field of organized knowledge. Concepts, methods, principles, theories,
etc. are now the core of management.
Practice the theories of managing are the results of practice, and the role of such theories is to
provide a systematic grouping of interdependent concepts and principles that furnish a
framework to, or ties together significant pertinent management knowledge. The theories of
motivation, leadership, and so on may be cited/mentioned as examples. But it is to be borne in
mind that concepts, methods, principles of management are not as rigid as those of the physical
sciences. They may undergo revision and change under new sociopolitical and economic
circumstances.
Management is a Science as well as Art
To be successful, managers have to know and do things effectively and efficiently. This requires
a unique combination of both science and art of managing in them. It may, however, be said that
the art of managing begins where the science of managing stops. Since the science of managing
is imperfect, the manager must turn to the artistic managerial ability to perform a job
satisfactorily. Thus, it may be said that managing in practice is an art but the body of knowledge,
methods, principles, etc. underlying the practice is science.
Even some people might have a different opinion regarding this matter. But as a matter of fact,
the art and science of managing are not so much conflicting as complementary.

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 6. Type of skill needed for each level of management
Types of skills will managers, first-line managers will require technical skills, probably in
operations and perhaps in accounting. Middle managers will need strong interpersonal skills to
maintain positive working relationships with subordinates and to motivate them. As president,
because you have to solve problems and come up with creative ways to keep the business
growing, you’ll need conceptual skills. And everyone will have to communicate effectively: after
all, because you’re in the business of selling written notes, it would look pretty bad if your
employees wrote poorly. Finally, everyone will have to use time efficiently and call on problem-
solving skills to handle the day-to-day crises that seem to plague every new company.
What is the meaning of planning, why managers need to plan and does
planning improve performance?
To be effective and develop its potential, a company should work towards a desired goal or
mission. But how can one know what is relevant to the goal and what’s no.
Planning in management is about what steps you need to take to reach the goal, what changes
and hurdles to anticipate, and how to utilize human resources and opportunities to reach the
expected outcome. The planning process involves a careful analysis of the current resources and
market trends and the prediction of emerging markets and future demand. terms, a goal is where
your company wants to be at a certain time and a plan provides directions for how you are going
to get there.

Planning is considered a basic function of management. It means that a plan is necessary for any
other managerial function, be it organizing, directing, staffing, or controlling:
Planning dictates how to effectively organize a business. It encompasses determining necessary
future activities, assigning them to the right personnel, delegating authority, providing tools and
raw material, etc.
Having a plan of action facilitates directing as it makes instructions, guidance, and motivation
grounded in a brand strategy. Planning informs staffing, as it shows what work-force a company
will need.
Establishment of standards and measurement of actual performance – controlling – is done
against the expectations that planning sets Informal planning gives a short-term focus, which
might be necessary for the business to operate. In an organization, various units can have their
own informal plans. However, if the company wants to grow and reach ambitious goals, the
process of planning should be formal, written, specific, and involve common organizational
goals.
7. motivation and discuss Maslow’s hierarchy of needs
Motivation is the desire to act in service of a goal. It's the crucial element in setting and attaining
our objectives. Motivation is one of the driving forces behind human behavior. It fuels

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 competition and sparks social connection. Motivation encompasses the desire to continue
striving toward meaning, purpose, and a life worth living.
Maslow's "needs hierarchy theory" is a widely used theory of motivation in organizations. It
suggests that people have a complex set of strong needs, and their behavior is usually determined
by their strongest need. Maslow's theory is based on two assumptions: biological needs at the
lower level (survival) and psychological needs at the upper extreme (growth). These needs occur
in an order of hierarchy, with lower level needs satisfying before higher level needs arise or
become motivators. This model explains human behavior dynamically and realistically, focusing
on people's inner states as a basis for motivation. Maslow postulates five basic needs, with the
first three being "deficiency" needs, which ensure existence and security, and the top two being
"growth" needs, which focus on personal growth, development, and potential realization.

8.DECISION MAKING IS THE MOST BASIC AND FUNDAMENTAL OF ALL

MANAGERIAL ACTIVITIES,
Decision-making as a manager is crucial because it allows you to make informed decisions that
help you and your team succeed. In addition, it enables you to identify problems and solutions
and take action to achieve team goals. Besides, decision-making helps you stay motivated and
focused when faced with uncertainty. As such, making decisions is an essential facet of
leadership that managers must master. By understanding the importance of decision-making,
critical characteristics of effective decision-making, and tips for making better decisions,
managers can enhance their abilities and make choices that drive success for their teams. Take
these insights to heart, put them into practice, and see their positive impact on your decision-
making abilities
9. Compare and contrast product structure with functional structure
In a functional structure, organizations are divided into specialized groups with specific roles and
duties. A functional structure is also known as a bureaucratic organizational structure and is
commonly found in small to medium-sized businesses. Most people in the workforce have
experience working in this type of organizational structure. For example, many companies divide
their organization into various departments such as finance, marketing and human resources.
Each of these departments then has a manager who oversees it. This manager is then supervised
by an administrator or executive who oversees multiple departments.
In a product structure, various teams work alongside each other toward a single, common goal.
Each of these divisions has an executive who manages how that branch operates, controls its
budgets and allocates its resources. Large companies employ this type of organizational
structure. One example of the divisional structure is a car company that separates its company
into SUV, electric or sedan vehicle branches. While each branch has its own function, they all
work toward the same goal of making a sale. This is also known as the multi-divisional structure.

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In functional structure in small to medium-sized businesses is common with a single overview
manager can supervise the multiple departments. in functional structure employee grouped with
same skill. And has greater teamwork, but there is luck of communication with other department,
harmful competitions and management issues are the drawback but in diversion from the
ultimate goal of the organization. In product structure is important for large organization because
focus in single goal and more centralized leadership. In contrary to functional structure the poor
communication among division can cause severe damage to whole organization like producing
1000 seat for four cars Competition between divisions, and Potential tax implications are
characteristics of product structure.

10. leader, leadership and leaders’ source of power

Leadership is the ability of an individual or a group of people to influence and guide followers or
members of an organization, society or team. Leadership often is an attribute tied to a person's
title, seniority or ranking in a hierarchy.
A leader is someone with a vision and the path to realizing it and inspires passion and motivation
in followers to ensures their team has support and tools to achieve their goals.
The sources of power in leadership can vary depending on the context and characteristics of the
individual. Sometimes, leaders have power because they are in a position of authority. For
example, a manager might have power over subordinates because of the manager's position in
the organization. In other cases, leaders might have power because they have expertise or
knowledge that others do not have. For example, a doctor might have power over her patients
because of the doctor's medical knowledge. Additionally, leaders can have power because they
have personal qualities that make them influential or respected.
One of the most important sources of power is leaders' legitimacy in their position. This means
that people recognize the leader's authority to lead and are willing to follow the leader's
directives. Legitimacy can be based on factors such as election or appointment to a position, rank
within an organization, or experience and expertise.
It is important to remember that power is not static. The amount of power that a leader has can
vary depending on the situation. For example, a leader might have more power in a crisis than in
a routine situation. Additionally, the power of a leader can vary depending on the people being
led. For example, a leader may have significantly more power over subordinates than peers.
11. SITUATIONAL AND TRAIT LEADERSHIP
Strong leadership is vitally important to the success of any small business. There are numerous
leadership styles that business owners and managers can use, each with a different focus. Two

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very different styles are the trait approach and the situational approach. Many leaders combine
styles, and you may find that a combination of the two approaches fits your style. Or, you may
combine either one with a totally different leadership style.
The trait theory of leadership focuses on the leader and the traits he exhibits. Certain types of
traits make leaders more effective. For example, the late Steve Jobs was known for his charisma.
His ability to passionately articulate his visions made people want to follow his lead. Some other
examples of traits that make an effective leader include intelligence, self-confidence, integrity
and determination. Leadership candidates often take personality assessment tests to pinpoint their
traits.
The trait leadership approach embodies the idea that leaders are exceptional individuals who
possess a combination of valuable traits. This fits in with society's idea that leaders are set apart
from the rest of the group – or leaders are born, not made. The role of personality traits in the
leadership process has a large body of research to support it. No other leadership approach can
make this claim of credibility.
One major problem with the trait approach to leadership is that no definitive list of leadership
traits exists. Due to the large body of research, countless traits are present, making it difficult to
determine which traits make the most effective leader. Also, the trait approach does not take the
situation into consideration. In this form of leadership, the focus is solely on the traits of the
leader. When the focus is partly on the situation, defining the specific traits for a successful
leader proves easier.
Situational leadership, based on a 1977 theory that was developed Paul Hersey and Ken
Blanchard, focuses on more than the leader. Instead, a leader's actions depend on the situation
and the followers. Four styles of leadership are used in the situational approach: delegating,
supporting, coaching and directing. The leader selects the appropriate style according to the
situation and readiness level of the followers for a particular style of leadership. For example, if
the subordinates have a low level of knowledge, the directing style of leadership – where the
leader tells the followers exactly what to do is appropriate.
The situational approach to leadership is widely used by companies due to its adaptability and
credibility. Managers use this style to address various work situations, such as dealing with
customers who are upset about late orders. They adapt their approach to each situation, ensuring
that employees have a positive and dynamic phone presence. For instance, a manager might
recommend researching the issue and scheduling a face-to-face meeting with the customer to
demonstrate the company's concern for their business and make a positive impression.
Education, age, experience and gender influence each subordinate's preference for certain forms
of leadership. Yet, demographic characteristics are not considered in the situational-leadership
approach. Limited research exists to support the theories behind the situational leadership
approach. No guidelines exist on applying this type of leadership to groups. The guidelines
concern only one-to-one interactions.

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 12. COMPARE AND CONTRAST MACGREGOR’S THEORIES X AND
Y WITH HERZBERG’S MOTIVATION-HYGIENE THEORY
Motivation is crucial for a company's development and success, as it drives goal-directed
behavior. Motivation refers to factors that activate, direct, and sustain goal-directed behavior.
Psychological studies have explored motivation, with three main theories: Frederick Herzberg's
theory of "motivators and satisfiers" and Douglas McGregor's X and Y Theories.
Abraham Maslow's hierarchy of needs divided into physiological, safety, love, belonging,
esteem, and self-actualization. However, he later criticized his theory, recognizing that it missed
the highest level, the transcendence. McGregor's Y Theory, on the other hand, focuses on
pessimistic and positive approaches to workers, while Herzberg emphasizes the consideration of
what motivates people.
McGregor's theory has gained popularity among managers, and it is still applied in almost all
companies. Different strategies are used by different players, depending on their genetic
material. People's tendency to change their choices after punishment depends on the serotonin
gene variant they inherit from their parents, while the dopamine gene variant exerts influence on
decision-making. Overall, effective management of a company is essential for employee
efficiency and success.
13. SCIENTIFIC MANAGEMENT AND BUREAUCRATIC
MANAGEMENT
Classical Theorists' ideas still apply to modern organizational management, with some
modifications. Managers face internal challenges similar to those in earlier periods, and
managers share Taylor's concern for worker productivity. Scientific Management theory remains
relevant, but its job design has made industrial work repetitive, tedious, and depressing.
Examples include fast-food restaurants like KFC and McDonald's, automobile assembly lines,
and surgeon training.
Armies have continued to use the Scientific Management theory, focusing on selecting workers
with appropriate skills, standard methods, training, eliminating interruptions, and wage
incentives for increased output. Wage incentives are typically skill bonuses. Industrial engineers
are also taught Scientific Management methods, including job-task analysis, time and motion
studies, and production planning.
In Ethiopia Bureaucratic Management is still used by service-based governmental administrative
organizations. Piece rate and mass production line systems are still being used in the
manufacturing and garment industries of industrial zones is another industry where the Classical
Management Theories are also applied.
The work of Weber and Fayol forms the basis of management theory and practice still in use
today and in future. Weber’s rules for bureaucracy govern most large organizations, from

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multinational organizations to armies, hospitals, and universities. Fayol’s duties of management
help us understand the functions of managers in any type of organization.

14. CHANGE IN ORGANIZATIONS

I was working in a private bank I was feel of being irrelevant, it was completely unexpected that
different way of report the accounting information because I think it would change everything
upside down. Now it was for good .IFRS is multipurpose report it is not only for accounting
Based on this Ethiopian banks are the one and the first which are required to adopt IFRS from
July, 2016 and expected to issue IFRS based financial statements for the year ending June 30,
2018. To this end, Ethiopian private banks are now in conducting activities which are required
by stated under IFRS1. As a first-time adopter it is inevitable that many factors will likely
influence the probabilities of the adoption of IFRS by private banks positively or negatively.
that weak corporate governance, poor quality of education and training, lack of supports from
accountancy professional bodies, weak enforcements of regulatory body, inadequacy of
transition period, improper planning, Non-availability of transparent market information, High
cost of implementation and weak management support are the major challenges of private banks
to implement IFRS successfully. Unless the challenges faced by private banks gets an immediate
attention of the government, the regulators, professional bodies, higher institutes, academicians,
preparers of financial statements, auditors and reporting entities itself the national transition
process may take longer than expected.

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