Пойгина Л.Б., Туринова Л.А. - English for Masters. Management Part 1 (1175658), страница 11
Текст из файла (страница 11)
These indicators, combined with the indicators that focus on efficiency, work toinsure that R&D efforts are not only efficient but effective.33 The second stage of the control process is comparing actual performance to thestandards established. In this phase the manager determines how well results have lived up toexpectations.
He or she also makes another crucial decision: how much variation fromstandards is permissible or relatively safe. The second stage concludes with an evaluationthat should lead to an action decision. The several activities involved in the second phaseoften are the most visible aspect of a managerial control system. They are the establishmentof the range of deviation, measurement, communication, and evaluation.Range deviation and the Exception Principle.
A performance indicator providesthe members of an organization with a clear, distinct target for their efforts. However, exceptin a few specialized instances, it seldom is necessary for the organization to hit the targetprecisely. In fact, one of the characteristics of a good control standard is a realistic safetymargin.Consider a large department store such as Macy's in New York that has sales in thehundreds of millions. For convenience, let us assume that Macy's goal for the coming year is$365 mi l l i o n in sales, which equals $7 million a week. If sales for the second week inMarch are only $6.8 million.
Macy's has li t tl e cause for alarm. Even though $200,000 is ashortfall that might bankrupt the average retailer, to Macy's it is a minor deviation fromstandards. Chances are that next week's sales will exceed the budget by that amount or more.What matters is that the average sales week is $7 million, not every week. If Macy's had acontrol system that caused it to react to small variations in weekly sales, say, by a majorpromotion or firing a few salespeople, it would be impossible for management to concentrateon anything but controlling.
Top management therefore establishes a range of deviation, anamount by which performance may deviate from plans without cause for concern. The ownerof a small business can do the same, but the range will be less.What the range of deviation should be is a critical decision. If too much deviation isallowed, problems could reach crisis dimensions. On the other hand, reacting to every minorvariation would be so time consuming and costly that the control system would overwhelmand disrupt the organization, preventing rather than facilitating attainment of objectives. Insuch situations there would be a high degree of control, but the control process would beineffective. A typical example of this is almost any situation where one has to go through aninordinate amount of red tape to get anything accomplished.
Many government programshave been judged ineffective because more money is spent administering the system, makingsure it is controlled, than on the services themselves.To be effective, controls must be economical. The benefits must exceed the costs ofthe control system. Costs of control include the time it takes managers and nonmanagers tocollect. communicate, and analyze the information, any equipment used for control, and thecosts for storage, transmission, and retrieval of control-related information. In the case of abusiness, if the profits realized from the investment in control do not exceed its costs, thecontrols would be uneconomical and counterproductive.
One way management can increasethe economic efficiency of its control system is by practicing management by exception.Often called the exception principle, this holds that only significant variations from standardsshould trigger the control system. By extension, operations that are inherently trivial shouldnot even be measured.The problem, of course, is to determine what a truly important deviation is.Immediate dollar value, the most obvious guideline, is not always sound. What is trivial inone situation may be drastic in another. For example, it would not really hurt General Motorsfor sales to be $1 mi l l i on below projections in any given week. But failing to controltightly the quality of a 50-cent part could force GM to recall hundreds of thousands of autosat a later date.34 Measurement of Results.
Measuring results, determining how much progress towardmeeting standards has been made, is usually the most troublesome and expensive aspect ofcontrolling. To be effective, the system of measurement must be congruent with the activitybeing controlled. To begin, management must select a unit of measure that can be convertedinto the units in which the standard is expressed. Thus, if the standard is profit, measurementwould be in the form of dollars or a percentage, depending on how the standard was stated. Ifabsenteeism or turnover is being controlled, the measurement would be in the form of apercentage. As a general rule, the standard will specifically state what should later bemeasured.Selecting an appropriate unit is often the easiest part of making measurementcontribute to attaining objectives, the true purpose of control.
It is equally important for thespeed, frequency, and accuracy of measurement to match the activity being measured. Apharmaceutical firm, for example, must exert exceptionally precise control over the quality ofits products. Even a minuscule amount of contaminant could literally k i l l a customer.Therefore, a drug manufacturer's quality control measuring system must be externallyaccurate and at least last enough to catch a bad batch before it leaves the plant. However,despite the need for high-quality measurement, a drug manufacturer cannot measure a highpercentage of its output because testing destroys the medicine. Excessively frequentmeasurement would be so costly that few people would be able to afford the product Thiseffect would be contrary to the social and profit objectives of the pharmaceutical house.
Thecompany therefore fully tests only a random sample from each batch. In other words, itmeasures only frequently enough to ensure a high probability of safety.Similarly, most organizations conduct audits (a control technique discussed later) andinventories of materials at infrequent intervals. If a manufacturer physically counted itsmaterials every day, it would know, for example, exact theft losses But the company wouldhave no time to make anything! Therefore, most manufacturers conduct major inventoriesapproximately every six months. They know from experience that this in period over whichlosses due to theft probably will fall within an acceptable range of deviation.
Banks, on theother hand, count all of their "merchandise" every day because money is an unusuallytempting target for theft. But they thoroughly audit their records only at wide intervals, whichis why embezzlers have sometimes been able to steal fortunes before detection.Special applications of the computer have made measurement for control purposesmuch faster, cheaper, and more accurate.
Computerized cash registers currently used bySears and J. C. Penney now measure and tabulate both cash flow and inventory at themoment of purchase. Provided volume is high enough, this is a lot less expensive than the oldmethod of record keeping and information processing.However, any system of gathering and processing information is relatively expensive.The cost of measurement is often the single largest expense factor in the control process. Itoften determines whether a control is worthwhile.
The manager thus must avoid thetemptation to measure everything as accurately as possible. Doing so, by making the controlstoo expensive, would result in a control system whose costs outweigh its benefits. (In abusiness the purpose of measurement is to increase profits, not to find out exactly what ishappening).Communication. Communication plays a key role in making control effective.
For acontrol system to operate effectively, both standards and results must be communicated toappropriate people in the organization. This information must be accurate and timely and hasto reach responsible people in a form that lends itself to decision making and action. It also isdesirable to be sure the standards are well understood when they are set. This requires35 effective communication between those who set the standards and those who are to attainthem.The major stumbling blocks in gathering and transmitting control information arevarious communication problems discussed earlier. While some information can be gatheredand reported by machine, most involves some human interpretation. The human elementintroduces the potential for distortion of the information on which control decisions will bebased.
Distortion may become an acute problem when subjective assessments areunavoidable. Appraising management performance is a good example. The organizationneeds to know which of its managers are good and bad performers. But it is difficult todetermine this effectively, particularly for lower-level managers who do not have profit andloss responsibility. However, by formulating specific objectives, managerial performance canbe appraised with less distortion and more objectivity.Once again, there is ample evidence to indicate that actively seeking the participationof people affected improves trust and communication, thereby making the control systemmore effective. Management by objectives is currently a popular way of involving managersin control.Participation also can be effective on lower organizational levels.
A paper productcompany with which one of the authors is familiar trained production workers lo understandbasic accounting and manufacturing economics concepts so that they would appreciate andcomprehend the importance of meeting standards. The workers also learned about thestandards of their competitors and why it was critical for them to be efficient and productive.Sometimes it is even desirable to secure subordinate participation in the actual setting ofstandards, usually a management prerogative.
![](https://s.studizba.com/z.php?f=/templates/si/i/noavatar.png&w=100&h=100&t=1"){kind=avatar}
