1. The environment of agricultural activity
Modern management control systems must contemplate the evaluation and monitoring of the most significant variables that affect the economic activity carried out by the company without being constrained by the classic approaches focused on the analysis of financial magnitudes; This perspective acquires special importance in those areas where the intangible variables take on particular relevance.
This is the case of agricultural activities where it is necessary to evaluate aspects such as consumer satisfaction, the promotion of a healthy and healthy diet, the attention paid to sustainable growth, the level of respect for the environment and the environment and, of In particular, the degree of quality required of food products.
Even though in certain agrarian spheres the traditional smallholder structure is still preserved with added problems of aging of the population and flight of youth from the rural world, more and more units of activity managed in a rational way have implemented to a great extent the advances that today offers technology applied to farms.
The problems derived from the climatology frequently constitute a source of problems for the agrarian activity.
Even though drought affects a large part of the national cultivable area, technological development also currently offers viable solutions aimed at minimizing the uncertainty derived from this type of incident. However, the set of competitive advantages of certain agricultural areas of our country based on aspects of the terrain, the weather, the cost of labor or certain productive factors of the farms that enable the exit to the market of products is appreciable. high quality, high nutritional value and relatively low cost.
Community and national aid to the sector have been alleviating in recent years the imbalances in the income of certain producers that generate the specific conditions in which their farms operate; However, it is necessary to carry out a process of reconversion of those with low profitability in view of the foreseeable future cessation of a large part of said aid. Let us not lose sight of the fact that excessive smallholding is a decisive element in relation to the lack of profitability of a large number of small farms due to the under-utilization of certain production factors and, in particular, machinery and installations.
The fact of finding an activity that works with "live" materials carries a high risk in the handling and manufacturing processes, since, in the case of perishable products, they depend on the weather, they do not withstand long periods of storage and while the food supply it is subject to production and its specific conditions, demand is rigid, being limited to the immediate consumption capacity of the population, which has an unfavorable impact on price stability.
The low level of training of the personnel employed in this sector of the economy constitutes another of the endemic problems to which it is necessary to stand up, giving entrance to the participation of workers in management, maintaining an adequate level of communication that enables directive action linked to concrete strategies and that facilitate the evaluation of people and skills. Particularly relevant is the need to define and implement an agricultural company culture that reconciles aspects related to quality, responsibility and optimization of farms. The management systems must establish an adequate identification of the indicators of success or deviation in relation to the previously defined key success factors.
The agrarian economy is currently operating in an area where the application of new technologies, as well as product and process innovation, predominates. The concern for food quality is not only a commercial approach, but above all, a market imperative, as the health of consumers is at stake. In this sense, actions aimed at obtaining certified quality or the marketing of certain products within the "Denominations of Origin" are oriented.
Knowledge of the production process, as well as the behavior of supply and demand markets, allows minimizing the incidence of certain exogenous variables, such as weather factors or the seasonality of production. In any case, the quality of production is a key factor in counteracting the consequences of possible imports of similar products at excessively competitive prices.
The creation of value for the customer by offering products that are more attractive or with better food characteristics constitutes a boost to the competitiveness of the products themselves.
Technical solutions in relation to the adaptation of crops to the land, genetic engineering, the analysis and development of specific bionutrients, land amendments and other multiple applications in the field of biology allow for a considerable increase in the productivity of farms with direct repercussions on prices and profitability.
Regarding production costs, the problems arising from the cost of labor must be taken into account, since situations of excessive external competitiveness may arise due to marginal employment and human exploitation that will need to be countered with other types of actions that allow the company to position itself in the market, relying particularly on the application of technological innovations.
Finally, it will be necessary not to forget the problems related to environmental and sustainable development aspects so that, beyond constituting a factor that generates production costs, they become a competitive advantage by designing an adequate external image of the company, together with the integral use of waste and scrap within the actions related to the so-called "reverse logistics".
2. The balanced scorecard as a control instrument
In its original version developed by Kaplan and Norton (1997), the balanced scorecard, as an integrated management system, aims to link the strategic vision of the company with day-to-day work, making it reach all its levels: shareholders, managers and workers, paying particular attention to these four axes of the control system:
a) The economic-financial perspective defines the expected performance by virtue of the strategy embodied in the financial objectives claimed by the shareholders or owners of the operation, such as maximizing the benefits and value of the company. At the same time, the economic-financial approach must bring together the rest of the objectives and indicators of the other perspectives. From this point of view, the growth objectives of the company, clients or markets must be considered, always linked to the evolution of the results and without losing sight of the behavior of the working capital and liquidity. The financing and liquidity requirements derived from the company's investment policy directly affect financial analysis and control.Particular attention will have to be paid to the financial cycle of agricultural activity, given its seasonality and the usual lack of temporal correlation between expenses and income.
b) The customer perspective analyzes the customer segments and markets where the products are going to be commercialized, impacting on the determination of the sales figures and their correlative income, gathering the strategies of marketing, operations, logistics, products and services. The preferences of the clients in relation to the variables of prices, quality, functionality, image, prestige, relationships or usefulness must be made explicit within the objectives of market strategies. The selected indicators will show the adequacy of the strategy with variables such as market share, the evolution of the number of clients, their level of satisfaction, the profitability obtained from them, punctuality in deliveries, the quality of the products, or its selling price.In particular, it will be necessary to highlight the analysis of the objectives in relation to obtaining nutritious, healthy, non-polluting and economic products.
c) The perspective of the production, commercial and management processes aims to explain the internal variables considered as critical, as well as to define the value chain generated by the internal processes of the company. It will be necessary to carry out the analysis of the innovation so that starting from the identification of the needs and demands of the clients, the ideal solutions are developed for their satisfaction.
The operational processes, from the receipt of the customer's order to the delivery of the product to it, are controlled by quality indicators, cycle times, costs and analysis of deviations. This perspective ends with the after-sales service that guarantees adequate customer care and maintenance. Special care will have to be taken with exogenous variables, such as climatology, which traditionally are beyond the control of the farmer, but which are being controlled with increasing frequency and intensity by the appropriate technology.
d) Finally, the perspective of learning and growth allows analyzing the capacity of employees to carry out continuous improvement processes, the performance of information systems and the organizational climate that enables motivation, delegation of responsibilities, coordination of the decision-making process and the internal coherence of the objectives.
Employee satisfaction and loyalty are the essential premises for increasing productivity and continually improving the system. The activities and expectations of the personnel must be aligned with the general objectives of the company, so that the achievement of the personal goals established for the workers goes parallel to the degree of achievement of the strategy. At the same time, the adequate attention paid to the research and development processes of new technologies and food products will allow the company to position itself advantageously in the market.
In this way, the balanced scorecard must make it possible to measure the management results in relation to intangible assets by means of the action drivers that make it possible to know in advance the evolution of the activity in relation to the strategy adopted. For this, it will be necessary to develop a series of financial and non-financial indicators that provide a clear and prompt vision of the situation at all times.
The selected indicators serve to carry out the monitoring and periodic evaluation of the key variables that are to be controlled, while reflecting the entity's position in relation to internal and external benchmarks1. At the same time they enable the vision of the company in its static aspects (knowledge of the situation at the time the analysis is carried out) and dynamic (study of the evolution over time of the variables considered). The comparison of the results obtained with those foreseen constitutes the starting motor of the improvement or correction actions to be undertaken.
The correct selection of the indicators is of particular importance, since they must explain the reasons for the success or failure of the business, as well as the impact of the variables analyzed on the results. They must also serve as an alarm to initiate immediate corrective actions in the face of certain detected changes; for this, the indicators must be affordable and easy to measure.
Both the work environment, customer satisfaction and production quality are key strategic factors. In practice, it will be necessary to design timely cause-effect diagrams that establish the link between the strategic objectives or the mission of the company, the key factors and the indicators that inform about the creation of value for consumers.
Employee motivation is the inducer of quality in production, which in turn produces customer satisfaction with products that meet the expectations placed on them, thus resulting in their loyalty, contributing to the development of the image of the company. company, engine of sales growth. This form of action generates an increase in profitability, which in turn results in the satisfaction of shareholders and investors, becoming the most powerful engine of growth and survival of the company.
3. Strategic objectives of agricultural activity
The correct implementation of the balanced scorecard starts from the mission-vision of the Management, its purpose being the particular design of the future of the company. For this, it is necessary to start with the deepest possible knowledge of both the possibilities and limitations, as well as the characteristics of the environment. A “SWOT” analysis that highlights the strengths and weaknesses of the business network itself, as well as the environment in which the activity is carried out, allows us to deepen this knowledge and define the “key factors” of the business. This analysis can be based on the development of certain questionnaires and situation indicators that allow knowing the current state of the company.
Then, it is time to set the objectives for the future based on the key factors: leadership, innovation, production process, type of products to be manufactured and marketed, type of target customers, sales areas, product characteristics., etc.
The study of the appropriate size of the company goes hand in hand with the analysis of the sources of financing to which it is possible to go to start and develop the production process. The volume gives necessary capital, as well as its cost, explicit or implicit -opportunity cost in the case of the capital contributed by the shareholders or owners of the holding- must be correctly considered. This aspect is of particular relevance in an area where frequently both farmland and invested capital are privately owned by the entrepreneur without explicit awareness of their value and cost.
In any case, at the present time, governments are particularly sensitive to the financial situation of agrarian entrepreneurs, as they have “soft” sources of financing both in terms of interest rates and the terms of repayment of the principal.
Within the field of agricultural production, the key areas that must be controlled in a special way are those related to the process, the volume of production to be produced, the level of quality required, as well as the stock policy. The aspects related to both technical and economic productivity have a direct impact on the analysis of the optimal size of the company and the production that the possible markets are capable of absorbing. It is necessary to emphasize the importance of controlling the quality of the raw material, the basis of both the subsequent production process and the degree of quality that is intended to be incorporated into the product.
The climatic circumstances of the different geographical areas determine the exploitation systems, the production by season or season, the obtaining of one or several annual harvests, as well as the synchronization in the alternation of crops or joint productions.
The control of the specific risks (biological, chemical or physical) associated with food production in all its phases must allow analyzing the critical moments or points of the process and establish standardized control and surveillance systems that minimize possible risks, indicating the critical limits that each food must respect. In this regard, the correctly applied ARICPC (Risk Analysis and Critical Points Control) 2 system guarantees the quality of the process, as well as the final product.
Another source of business competitiveness comes from the operating costs. A brief view of them must allow the following aspects to be analyzed:
- Nature of production and marketing costs. Identification of their causes, determining the possible inducers or cost generators of the different activities carried out. Imputation of products, through the application of advanced cost systems. Analysis of the problems derived from automation. and size of farms. Optimization of inventory inventory levels. Rationalization of costs and elimination of activities that do not add value. Simplification of production, control, administrative and management processes. costs, as far as possible.
Customer relationships must be given special attention. Both aspects related to product quality and those derived from personal relationships with customers should be incorporated into the scorecard, by choosing the appropriate indicators. The analysis of the possible offer of new products with higher added value for consumers is another preferred objective. Due to the specific characteristics of agricultural products, it will often be possible to carry out a market segmentation according to the category and qualities of the product that is marketed.
One of the frequent functions to which the agricultural entrepreneur does not usually pay adequate attention lies in the study of possible horizontal integration processes, such as the creation of commercial networks for the acquisition of raw and auxiliary materials, as well as the marketing of own products through which significant economies of scale can be obtained. However, even though agrarian associationism, particularly through rural cooperatives, considerably facilitates the work, the permanent survey of the state of the market and its prices must not be neglected.
In any case, customer service is one of the pillars of the success of the agrarian company by offering optimal products at competitive prices. The vertical integration of the different phases of the processes of food production, elaboration of derivatives and commercialization of products frequently becomes an important competitive advantage.
Finally, when we are in a sector where technology is advancing by leaps and bounds, it is necessary to be aware of the innovations that are taking place to adapt farms to new objectives of growth, diversification, mechanization and automation that, ultimately, increase quality of products and processes, reducing production costs, while avoiding certain errors and failures. The investment in research and development constitutes one of the props of the evolution and growth of the companies inserted in this productive sector, multiplying their possibilities from day to day; in this way it is possible to develop new products and processes, which are the enriched, vitaminized or improved products, the green ranges that also presuppose a new image of the company,behind which lies a philosophy that respects the environment and sustainable growth. In the same way, the increase in the profitability of farms can come from investments aimed at energy cogeneration from slurry and organic waste, the search and exploitation of new food sources, the reduction of animal mortality rates, the increase in the number of production cycles, the decrease in cycle times, etc.the reduction of animal mortality rates, the increase in the number of production cycles, the decrease in cycle times, etc.the reduction of animal mortality rates, the increase in the number of production cycles, the decrease in cycle times, etc.
4. The design of the balanced scorecard
4.1. Target panel layout
As already mentioned, the development of the balanced scorecard begins with the correct planning of the strategic objectives and the adequate definition of the key factors that will set the guidelines for action and control of the company in the medium and long term.
At the same time, there must be and in fact there is usually an alignment of the strategic objectives set out towards the one that would represent the maximum aspiration of the company, its raison d'être in a market economy, the last reason why shareholders have contributed their capital. Thus, this primary objective, generally focused on maximizing shareholder satisfaction, is fanned out through the proposal of another series of second-level priority objectives, which in turn are correlated with the partial objectives by specific departments or areas of activity.
The elaboration of cause-effect diagrams allows, at first, to link the framework of objectives oriented to the ultimate goal and later to develop the system of indicators linked to them. The objective panel should, therefore, show to the extent that this causal link between them is feasible. Thus, in the case at hand, the link between the mission and the four basic guidelines of business management control can be configured in this way.
It is evident that the long-term global vision of the company in our current economic system must tend to optimize the expectations of the owners of the company's capital, although an objective of such magnitude becomes uncontrollable if it is not specified in specific aspects, Which are in this specific case that we propose the optimization of profitability from the financial point of view, the increase in production in relation to the processes, the improvement of quality in relation to customers, the satisfaction of employees with respect to his work in the company and the development of new technologies that enable sustainable growth. It is clear that the engine of mission fulfillment is based on the personnel that make up the company and makes it possible to achieve the objectives of the other levels,since it is the primary actor and therefore the driving force behind the remaining perspectives, both in research and development, as well as in the correct relations with clients and productive and management activities, which, ultimately, have a direct impact on financial indicators.
The pursued alignment of objectives must descend to lower levels of detail, taking into account the business structure and complexity; therefore, the development of the objective panel where the key business factors are configured could materialize in a similar way to that shown in figure 1.
Figure 1 Development of the objective panel
In this way, the financial objective of increasing the profitability of the business will materialize in three guidelines for action: the realization of the investment linked to the objectives of growth and increased results, the adaptation of the financial structure to new needs and the appropriate level of financial leverage by obtaining soft loans or preferential interest rates that optimize the possibilities of the investment-financing process.
The growth objective in relation to the production process in our case will be oriented towards the stock policy, given that we are dealing with perishable products whose life can be prolonged using the appropriate means, productive investment focused on increasing the quantity and quality of production and cost and performance control of the different activities.
The company's policy in relation to customers will be oriented around the three basic axes: sale price, time of obtaining the product in order to anticipate or defer its marketing, and its quality.
Staff satisfaction is achieved through an adequate system of remuneration and incentives, monitoring of the necessary actions related to occupational health and safety and the policy of securing valid people in their jobs.
Finally, the development of new technologies linked to the growth strategy will materialize in specific actions in the field of research and development, the protection of the environment through the analysis of appropriate actions aimed at reducing pollution and the design of new products or the modification of the characteristics of the existing ones, such as the improvement of animal seeds or species or the study of the properties of arable land.
4.2. Design of the indicator system
The selection of the set of indicators adapted to the previously established strategic objectives constitutes a laborious process, since the indicator must accurately collect the content of the objective, seeking the cause-effect relationship between the two. The indicators, in addition to measuring the results obtained, should facilitate the search for the causes of inefficiency and indicate the orientation to be followed for solving the problems.
On the other hand, the sources of information required for its preparation must be available and easily accessible.
Below are some of the most relevant indicators in relation to the perspectives analyzed above. A total of 15 to 25 indicators per panel may be sufficient, although their relative importance varies, and those considered strategic should be highlighted. Likewise, the dashboards must be adapted to the level of decision for which they are designed, being different, as may be assumed from that of the general management of the firm, than that which serves as a decisional support for a specific department or area of the company. Each department should pay special attention to the indicators that are most related to its activity, although the entity's global vision should not be lost at any time,highlighting how the most important indicators are aligned with the general strategy of the company.
a) Financial perspective
As financial control is the most traditional and widely used by companies, even when it is not exclusive, it is interesting to highlight the relevant importance it holds and it must even be revealed how the indicators related to the remaining perspectives are ultimately aligned with the objectives of profitability and maximization of the value of the company.
Therefore, it will be necessary to start from the traditional indicators of liquidity, solvency and guarantee, efficiency and profitability3 to later focus on the previously defined Investment, Financial structure and leverage:
Liquidity and solvency:
- Short-term solvency: Current assets / Short-term callable Immediate liquidity: (Current assets - Stocks) / Short-term callable Treasury: Available / Short-term callable Long-term solvency: Total assets / External resources
Operating efficiency:
- Rotation of assets: Net sales / Total assets Rotation of fixed assets: Net sales / Fixed assets Rotation of inventories: Net sales / Average stocks
Economic profitability:
- BAIT * / Total assets Profit before interest and taxes.
Financial profit
- BAT * / Own resources Profit before tax Cash flow / Own resources
Profitability on sales:
- Gross margin / Sales BAIT / sales BAT / Sales
Self-financing:
- Self-financing on sales: (Net profit + Amortizations) / Sales Self-financing on assets: (Net profit + Amortizations) / Total assets
These indicators in the financial area must pay special attention to investment performance, economic added value, as well as shareholder value:
- Economic added value / Number of shares Quotation / Number of shares
The indicators related to the investment allow to know the effort in improvement and growth made by the company, particularly in those functional assets that facilitate the adaptation of the company to the new agrarian environment such as the improvement of the productive processes, use of resources and waste, etc..
Likewise, it is possible to incorporate indicators of the financial structure, paying attention to the optimal distribution of own and external financing (payable liabilities vs. non-payable liabilities), as well as the financial cost derived from it, taking advantage of the debt capacity of the company in the development of growth objectives.
The horizontal analysis allows to know the evolution over time of indicators such as the increase in income, the reduction of costs, the improvement in productivity or the reduction of risks. Similarly, it may be important to know the evolution of income (sales, subsidies, etc.), margins and results.
In the strategic analysis of financial indicators, it will be necessary to take into account the characteristics of the sector, which may be investments in productive fixed assets such as land and natural assets affected by agricultural and forestry activities, as well as the semi-moving assets typical of livestock and mixed activities; It will also be necessary to consider the peculiarities of inventories linked to a large number of agricultural activities, since they frequently require the maintenance of significant investments, especially when production cycles are long-lasting, requiring the immobilization of inventories in the medium or long term.
b) Process perspective
In relation to the production, commercial and management processes, it is worth highlighting preferably aspects related to productivity, quality, cost and the introduction of new products on the market.
The evaluation criteria will revolve around the following aspects:
- Yield or efficiency: measure of the consumption required by production:
Departures
products
O well
Tickets
Factors
- Economy: measure of the unit cost of the different factors:
Factor cost
Number of pcs of factor used
- Productivity or Efficacy: measure of the degree of achievement of the objectives:
Real production or, Real costs and also, Real yield
Expected production Expected costs Potential yield
The selection of the most important set of indicators requires the prior identification of the most critical processes developed by the company, as well as defining the complete value chain of the internal processes, from the determination of the cost of seeds, for example, to the delivery of the product to the customer in the market, once harvested and ready for shipment.
Some of the most important areas of analysis are those related to:
- Seeds and semen. Crops and livestock farms. Obtaining products, harvesting. Marketing of products.
In each of the areas subject to control, it will be necessary to define the standards for the consumption of the different production factors (materials, labor, use of the fixed assets, indirect production costs, etc.), taking into account their specific participation in agrarian processes 4. In this way, it will be possible to detect underused factors, as well as possible pockets of inefficiency.
Of particular relevance is the development of new products and processes based on innovation aimed at satisfying the needs and expectations of current and potential customers. The indicators will show the relative importance of these products in the company:
- % of sales of new products, brand products, etc.
as well as the recovery period of the investment made:
- Balance point moment:
Value of the investment made - Updated operational cash flow = 0.
or the necessary level of production and sale to obtain the profitability threshold:
- Fixed costs / unit contribution margin
The monitoring of operational processes from production planning to the delivery of products to customers requires the definition of specific indicators particularly related to:
- Quality (indicators of total quality control) 5. Cycle times (reduction of production times and delivery of products to customers). The measure of the degree of use of functional assets (control of subactivity). Control of efficiency. Analysis of the cost of activities. Elimination of activities that do not add value. Rotation of product inventories. Analysis of deviations.
The design, execution and control of the production process is key to guarantee and ensure the quality, safety and health of agricultural products. The actions to be carried out include the control of all the processes after the primary production, that is, not only the sowing, harvesting, breeding, slaughter, milking, etc., but also the preparation, processing, storage, transport, handling and sale. of the products.
Some of the cost indicators allow us to measure the main relevant variables, such as:
- Productivity The value chain Personnel costs The cost of land External services Commercial costs The cost of agricultural insurance The level of mechanization The incidence of weather The optimal size of the farm, etc.
In this sense, all the elements that make up the costs that allow the company to acquire or develop competitive advantages must be monitored in depth.
Likewise, it is necessary to pay particular attention to the after-sales service, controlling variables such as the added value received by the client (guarantees, compensation or return of defective or in poor condition products, forms of payment, etc.). The indicators will revolve around the key variables which are those related to: "time, quality and cost".
Given the type of highly perishable products with which it operates in the agricultural field, the processes of storage, cleaning, preparation, classification, transport, quality control, sterilization, packaging and packaging are of particular importance, as are the design processes. thereof.
Likewise, efforts to implement automated quality control processes and computer data transmission systems must be controlled. The automation of agricultural production processes is currently gaining particular relevance and must be effectively controlled.
Finally, another aspect of the quality control of the processes under analysis consists in the implementation of indicators of the effort made in the sustainable evolution of farms, pollution control and environmental protection measures6. Some of the indicators of this perspective may be:
- Environmental costs / Total cost of production Energy consumption / Total cost of production Environmental assets / Total assets Consumption of recycled goods / Consumption of materials or value of production Value of waste materials / Consumption of materials or value of production
c) Customer perspective
From the point of view of customer expectations, the balanced scorecard must implement indicators related to measuring the level of satisfaction, retention and market share, as well as creating value from the point of view of consumers..
It is important to identify the customer segments and markets in which the products are to be commercialized, the “soft” or “ligth” product ranges, the ecological or “green” product lines or the differentiation of the same product commercialized in different types of markets.. Similarly, attention must be paid to indicators that reveal the impact of customer preferences on consumption.
Some of the indicators to implement are:
- Market share. Evolution of clients. Structure of clients. Satisfaction of clients. Retention of clients. Profitability by sections of clients.
Likewise, as already indicated, the indicators related to:
- The attributes of the products and services: price, delivery time, quality. The relationship with customers. The image and prestige of the company. The creation of value for the customer.
The study of the possibilities of advance or delay of the delivery of the products to the market on the terms of other producers and the times of massive production obtaining can become an important competitive advantage, taking into account the corresponding supply and demand curves.. Investing efforts in this regard are often highly rewarded.
Total quality systems start from the premise of providing excellent customer service, be it a manufacturer, an intermediary, a large area, a merchant, an exporter or a final consumer, their needs and expectations being different in each case. Total quality is synonymous with competitiveness and its fundamental characteristics are harmonization, certification and quality7, not only in relation to products, as previously defined, but also in relation to the optimization of all the functions performed by the business.
Quality indicators allow a quality measurement that can be objective or subjective when applied to variables such as behavior, attitudes or customer perception in relation to the degree of satisfaction or dissatisfaction with the product, the treatment provided or the attentions received. As already mentioned, customer satisfaction is of particular importance in agricultural production, since the products consumed can affect their health and degree of well-being.
d) Training perspective
The possibility of reaching ambitious goals in the financial, customer, internal processes or growth areas depends on the learning capacity of the organization. Therefore, it is of paramount importance to establish a climate of satisfaction among employees based on the internal environment and on the effectiveness of information and motivation systems.
The learning inductors show the effort made in the training of employees, as well as their degree of training to carry out optimum quality production.
Similarly, the correct relationships with customers are based on the skills and attitudes of employees who must be held responsible for improving processes and customer service. To do this, information systems must provide employees with sufficient knowledge about customers, internal processes and the financial consequences of their decisions.
In order to establish optimal labor relations in the company, the staff must be and feel motivated, the main sources of motivation being the delegation of power, together with the coherence between individual objectives and those of the organization and teamwork. The implemented organizational climate must have a series of characteristics, among which we must highlight flexibility, responsibility, an adequate level of demand, the reward for a job well done, the recognition of the values and attitudes of the staff, the clarity of the objectives. and team spirit.
The system of indicators to be implemented must therefore be consistent with the previous approaches. Some of the most commonly used indicators are the following:
- Salary level (average salary, salary range). Staff qualification level. Employee satisfaction. Staff absenteeism level. Employee productivity. Occupational safety and hygiene level (number of accidents at work…). training (measured in hours and total costs and per employee). Job promotion. Stability of employees (average seniority, retention…). Number of suggestions from employees.
e) Growth outlook
The survival of the agrarian company requires the exercise of actions aimed at the strategic planning of future activity, especially within the current situation where the maintenance of an important part of the farms depends on official subsidies.
It is, therefore, of particular importance to estimate the necessary investment in the future both to provide the operation with an adequate dimension that enables its independent activity, and to enable the necessary resources in personnel infrastructures, systems, production processes and procedures.
Sustainable growth particularly affects agricultural activities permanently affected by the weather and linked to the ecosystem. For this reason, the indicators should be oriented to the analysis of the effort made in order to keep the company in the market and ensure its growth.
Some of the indicators focused on this may be:
- Design of new products and of enriched products (number of designs, investment made). Investment in growth of the operation. Information processing systems (extension of the implementation, number of improvements, cost). Information distribution systems (number of users, number of consultation points). Investments in research and development (amount, R&D expenses on sales). Hours spent on R&D. R&D results (number of investigations with positive results, number of developments implemented, amount of investments in R&D implemented, number of actions to improve products, processes and costs). Percentage of new products launched on the market. Number of new references in the catalog. Actions to protect the environment (number, investment amount,investment on sales value).
In any case, it is convenient to have relative information that allows comparing your own performance with that of the most relevant companies of similar activity or with those of the sector itself regarding the size, technological level or innovations implemented by the competition.
5. The control system
A good control system starts from the correct definition of the budgets and standards linked to each of the magnitudes previously defined as variables that are the object of specific control. The collection of information has to be carried out quickly, easily and in a timely manner so that the analysis of the deviations and their causes, as well as the possible subsequent corrective actions can be deployed effectively. Likewise, it will be necessary to establish a control system for the effectiveness of the modifications implemented.
Within the scope of agricultural activities, the aforementioned ARICPC system of risk analysis and control of critical points constitutes an ideal instrument for quality control. Likewise, it will be necessary to take into account the control of compliance with the legal regulations on hygiene in food handling, the use of guidelines for correct hygiene practices or the application of ISO 9000 standards. This constitutes the first level of control of quality, which is the one of the forced quality.
Above these minimum requirements, it is possible to establish homogeneity and control specifications for processes and products that are standardized and generally implemented. Business excellence in relation to total quality is a last step that implies a change of attitude in all company personnel that allows identifying and satisfying the needs of customers, beyond their demands.
In summary, an integrated control system must take into account the following key aspects:
- Definition of the variables object of analysis in each area (key factors and indicators). Quantification of the variables. Comparison of the real values obtained with the forecasts and objectives. Analysis of the causes of the deviations. Solution of the deviations.
Continuous improvement processes must take into account the order in the tasks to be undertaken; For this, it is highly illustrative to present the accumulated frequency distribution curve (Pareto) in the commission of failures, in the loss of income, the increase in costs or the reduction of the results in order to rank the deviations on the objectives in order of importance and thus select the most opportune, necessary or convenient action as it will be the one that will try to avoid the most negative repercussions on the system.
In short, the integrated management control, through the use of the balanced scorecard, facilitates the search for products with greater added value, the achievement of the objectives of increasing efficiency, productivity and profitability, optimizing factor performance and of the production process as a whole, obtaining total quality, particularly in relation to customer service, achieving the objectives of sustainable growth, as well as evaluating the performance of people.
6. Conclusions
Undoubtedly, the environment in which farms operate today depends on numerous exogenous factors, both physical, political and social. Therefore, the need for the implementation of the balanced scorecard is evident, in addition to constituting a competitive advantage, since among other possible benefits, the following should be highlighted:
- Defines and clarifies the strategy. Provides an image of the future showing the path that leads to it. Communicates the strategy to the entire organization. Allows personal goals to be aligned with departmental objectives. It facilitates the link between the short and long term. Simplicity of the most important variables under control. It constitutes an instrument of control and continuous improvement.
The balanced scorecard, as already mentioned, is not a single document valid for all levels of the company, but rather different charts must be prepared, adapted to each of the departments or decision levels of the entity. The management has to coordinate the activities of the departments, gathering its scorecard a synthesis of the objectives and specific indicators of each area of business action.
It should be borne in mind that strategic planning must lead to the preparation of annual budgets to which special attention must be paid; These, to the extent possible, must be based on the technically and economically calculated standards that will serve as a guideline for action, integrating an important part of the indicators incorporated into the scorecards.
Human resources are of prime strategic importance. The loss of specialized labor is a limitation of unforeseeable consequences. This is not the time to turn to history, but let us remember how the expulsion of the Moors in our country at the beginning of the 17th century meant the disappearance of important sectors of agrarian activity, causing a heavy slab to fall on the national economy, the consequences of which were left feel throughout the subsequent centuries.
The integration of the different processes in the company facilitates the vision of it as a whole; This global vision allows the structuring of the scorecards to be carried out, as well as the coordination of the activities carried out by the different levels of the company.
Although it goes beyond the approaches of the present work, it is not superfluous to comment on the growing importance that fuzzy logic is acquiring in the sphere of uncertain decision-making. Both expert systems and computer support based on fuzzi technology are very useful tools in decision-making environments with a significant load of uncertainty, which are typical of agricultural activity.
At the end of this study, it is worth posing one last reflection regarding what the agrarian economy of our country has been and what can become, where from an ancestral perspective based on the survival economy it is possible today, and from the hand in hand with technology, making the leap to another type of economy based on the well-being of producers and consumers and thus contributing to the implantation of globalized and competitive sustainable growth.
