Пойгина Л.Б., Туринова Л.А. - English for Masters. Management Part 2 (Пойгина Л.Б., Туринова Л.А. - English for Masters. Management Part 2.pdf), страница 5

Then there are teams consisting of employees fromdifferent departments who tackle the larger issues needing attention. A team can also be a form of recognitionfor accurate performance by a number of employees. For instance, if an employee consistently makes noerrors over a specified time period, she may be honored by "making'' a team. This type of team is an honorgroup, so to speak, not a problem-solving group.A dozen employee teams-—one for each month— receive this recognition monthly and attend a banqueteach year."Our objective is to improve the quality of First Chicago's services, to recognize groups of employees whohave contributed to that improvement, and to further develop teamwork", says Holub.Each month's winning team receives a plaque and a paid group outing of its choice.

The outing is usuallydinner, the theater, or a sports event. The group decides on what type of event, and there is a maximum of$100 per person with a ceiling of $1,000 per group. Each team member also receives a certificate, andeveryone's name is entered in a grand prize drawing, held during the annual banquet. The grand prize is roundtrip airfare for two to anywhere in the United States plus $500 spending money.The winning team last year for the month of March was the Crossed Account Project team. This teamhandled the problem of deposits being credited to the wrong account.

When deposits are credited incorrectly,one account has too high a balance; the other, too low. This calls for float (uncollected funds) adjustments inboth accounts. In this situation, customers may make incorrect cash management choices if they accessbalance information before the adjustments can be made. Crossed accounts can become a common occurrenceif not corrected."Our customers were not pleased, and the problems caused our customer service area hours of unnecessaryresearch to rectify the accounts", says Elverage D.

Alien of check collection/production, who nominated thewinning team.The Crossed Account Project team identified the causes of crossed accounts, established procedures toeliminate them, and reduced these accounts and the corresponding float adjustments from 649 in May 1985 to37 the following March. That's a 94 percent decrease. Moreover, by the end of the year, the team had cut thenumber of crossed accounts to just eight."This is certainly proof that if you analyze what is causing a problem and initiate corrective action, theresult is substantial performance improvement".

Holub comments.The 1986 August performance award went to the Disbursement Services Error-Free team, which was anhonor team."They did it right every time", Holub says of the team. To be eligible for the team, employees in theproduction area of disbursement services had to be error free for at least 12 months. Employees were gradedon their accuracy in corporate check handling, corporate/official reconcilement, demand deposit services,information services, shipping, and sorting. Twenty-four of the 64 employees, or 38 percent, received theaward.

One person met the standard of 12 months, while 21 employees were error free for 13—24 months andtwo for 25—35 months.12"The sustained excellent performance of all these employees has helped us maintain a high quality ofservice to our customers", says Holub.A final winning team example is the Heritage of Woodridge Controlled Disbursement team. This teamconsisted of 13 employees in disbursement services and four in check collection. It won the 1986 Decemberperformance award by beating the check-clearing information delivery times of other major Chicago banks."Through their hard work and extraordinary efforts, we surpassed our major local competitors' deliverytimes by one half to one hour", boasts Holub. "This type of accomplishment makes First Chicago much morecompetitive in the marketplace and gives us an important point of differentiation".Why Quality Is Worth It at First Chicago.

The quality emphasis at the bank has had a measurable effecton performance. The quality initiatives are carefully planned, and the quality measurement program isenergetically supponed. As proof of improvement, back in 1982 one of the bank's operations experienced anaverage of one error in every 4,004) transactions. Today, the figure is one in 10,000."The success of the quality program within the noncredil services area alone is telling proof that providingexcellent products and services, and containing costs, can be mutually compatible efforts", says Richard L.Thomas, president of First Chicago. "In fact, we have learned firsthand that an emphasis on quality is one ofthe most effective ways to control costs".For example, Thomas says, it generally costs First Chicago j u s t under $10 to perform a money transfer.But that's a transfer done right the first time; if the money goes to the wrong place or doesn't make it onschedule, the cost of fixing an error can quickly rocket to $400 or more, depending on the amount of moneyinvolved, the complexity of the case, and so on.

So maybe it should be of no great shock that First Chicago'squality effort has saved millions of dollars.Another reason cost savings are critical is because more and more corporate treasurers are looking at thetotal costs of using one bank's cash-management service over another.

The bank with the lowest per-itemprice might actually be more expensive to use if its error rate is high. So when a bank reduces its error rate.the overall cost a customer pays is reduced. And high quality, customer satisfaction, and competitive pricesalso mean repeat business, referrals, and new business, which makes the quality effort even more attractive.First Chicago also realized the importance of communicating the quality commitment to its customers. Soannually, the bank puts together a comprehensive booklet of key performance measurement charts forcustomers to see what the bank monitors and how it performs in those areas."We recognize that when we make errors, both we and our customers have to spend time and moneytracking and solving problems".

Holub says. "By creating a quality program based on customer-sensitiveissues, and backing it up with real, quantifiable measurements, we have made a genuine commitment toprovide service excellence".(from "Fundamental Management")Glossaryto measure quality in service industriesservice environmentquality providercorporate cash management servicescorporate checkingfunds transfershareholder serviceto respond to competitionto control costsquality programprimary capital ratioissuer of bank credit cardscommon stockglobal corporate bankingconsumer bankingmiddle-market bankingcost centernoncredit servicescorporate loan area13trade servicesmoney market fundsrequired return on equitykey controllable buying determinantscustomer responsivenesscustomer loyalty to productscustomers' standardslaunching the quality effortspecialized customer service personnelquality measurementcustomer's perspectiveminimum acceptable performance (MAP)to the performance-measurement programa management bonus systemquality circlesQuestions for discussion:a) Would you consider what first National Bank has done to be an illustration of total qualitymanagement? Give reasons.b) In what ways would MRP.

and economic order quantity techniques be useful in assisting FirstChicago to achieve its operations and quality goals'?Text 21. Pre-reading exercise Skim through the textto find the following:1)2)3)4)The concept of management's involvement in statement preparation;Four types of auditor's opinion;The concept of comparative analysis;The major aspects of a company's operations in accordance with major categories ofratios reflection.Sequential steps of financial statement analysisThe fashioning of a financial statement analysis starts with a preliminary investigation of a company andmoves to an in-depth examination of its operating performance and financial structure as evidenced by itshistorical and projected financial statements.

Most banks have a systematic approach for obtaining the variousdocuments, organizing and presenting the information contained therein, and then-evaluating and interpretingthe data using the standard analytical techniques. The basic steps in financial statement analysis are presentedin detail in the following text in the order in which they are normally considered. A brief overview of theentire financial statement analysis process follows.Obtaining and Spreading the StatementBanks always ask prospective commercial borrowers to submit detailed financial data, usually prepared inconformity to GAAP, in support of their loan requests. Most banks have established guidelines as to the typeand number of financial statements, that should be obtained to do a comprehensive examination.

Generally, abank requires three or more year-end income statements; balance sheets, and statements of cash flows as wellas comparable interim statements available since the year end. The lender may also specify one to five yearsof forecast 'financial statements (sometimes called pro forma statements) and. especially for seasonal14lending, a monthly cash budget. Other financial data that lenders may ask commercial borrowers to submit insupport of their loan requests include: a business or marketing plan, lax returns. operating and capital budgets, inventory summary or listing, accounts receivable agings, backlog and contract status reports, accounts payable agings, and 4 sales and expense breakdowns.If any of this documentation is not readily available, it will usually be prepared at the loan officer'srequest.

In some cases, the credit analyst may have to construct some of the items-such as the statement ofcash flows or sash budget-on the basis of available data.Management's Involvement in Statement PreparationThere are different goals among various users of financial statements, and these goals can shape theappearance of the financial statements. The interests of entrepreneurial owners versus those of nonowningmanagers is a prime example of how these goals can conflict.Entrepreneurial owners want the financial statement prepared so as to confirm their own understanding ofthe firm's performance for the year and to meet certain requirements for paying taxes to the Internal RevenueService. Outside of conforming to the tax rules, the information in the financial statements is useful essentially for the owners' purposes. Even if the financial statements do not show much income or liquidity andshow only the historical purchase price of fixed assets, the entrepreneurs' shrewd understanding of theirbusiness and that of their competitors allows them to discern how well they are doing and their chances forcontinued success.In contrast to these motivations are those of the professional managers.