The basic nucleus of any social-economic system is made up of companies, which is why the responsibility falls on them to help improve the indicators of well-being in the society to which they belong. To achieve this objective, organizations must effectively fulfill their purpose. In this research, an instrument is proposed whose main objective is to contribute, based on the mission of the entities, to align their strategies according to their specific situation in the environment, in a way that enables them to achieve their goals, based on this fundamentally, in the control of its business management.
Key Words: MISSION, STRATEGY, MANAGEMENT CONTROL, DASHBOARD
ABSTRACT
The basic nucleus of all socio-economic system is the companies, which has the responsibility to improve the indicators of welfare from the society to which they belong. To materialize this objective the organizations should to accomplish their purpose with effectiveness. In the present investigation is presented an instrument whose main objective is to contribute, beginning for the mission of the entities, to align its strategies in function of its concrete situation in the environment, it facilitates them to reach the achievement of its goals, being based fundamentally, in the control of its managerial administration.
Key words: MISSION, STRATEGY, MANAGEMENT CONTROL, BALANCED SCORECARD
INTRODUCTION
Improving the quality of life is today one of the most pressing problems in the modern world, such is its importance that it is part of the objectives of the millennium. It must be achieved through the effect of a whole global process that channels current and potential efforts in this direction. There are currently several conceptual models of how to proceed to contribute to materializing this social goal, they have different points of contact in their approaches, but the recurring element is that this social goal is feasible to be achieved through a dialectical relationship with the effective combination and integration of the efforts of for-profit or non-profit organizations, governed by their specific goals consistent with the overall goal.The optimum of the system is neither precisely nor necessarily equal to the sum of the local optimum, it is in the effect of synergy where the greatest potential for development is found, but it is necessary to reach the individual maximum levels of the organizations in early stages in order to then proceed to the harmonious integration of the same.
The existence of various models to implement how to achieve these goals may lead to the formulation, among others, of the following questions: Are the goals of the organization well defined? Do the strategies they have adopted respond to their goals? Are organizations managing their resources in accordance with what is stated in their mission to contribute to achieving the social goal of the system of which they are part?
This publication proposes an instrument that helps to answer the above questions.
PROCEDURE FOR THE ANALYSIS OF STRATEGIC INTERRELATION IN THE MANAGEMENT CONTROL PROCESS
This procedure consists of five steps (see figure 1) and is based on the trilogy that exists between mission-strategies-limit situations, which in the author's opinion is the primary strategic interaction and interaction of any organization, and greatly influences the materialization of the entity's vision, as well as its comprehensive performance within the business environment. It then incorporates the basic analysis of this trilogy into management control, through the Balanced Scorecard (hereinafter CMI).
Proposed procedure CMI - Balanced Scorecard. Source: self made
Step 1: Mission analysis
Analyzing and evaluating the mission is a process that corresponds to each organization in particular, but there are different theoretical elements that must be reflected in professional practice.
The mission is a written formulation prepared by the entity itself that expresses the raison d'être of the organization or why it exists. It is an internal instrument of mobilization and clarification that guides all of its work1, it points out and directs its behavior, it provides a challenge and a standard with which to evaluate the individual, group and departmental performance of the entire system in its entirety. There is a consensus that it expresses the service it offers and not the product it sells, it must be oriented outwards, towards the customer and society in general, whose supreme interests determine all the actions of companies, as well as focus in the future, she does not respond to changes, she promotes them. It must define in broad terms the socio-economic purpose or purpose of the organization,specify how the entity assumes or understands in a comprehensive manner its responsibility to society and its direct beneficiaries. In general, it is necessary to point out that an organization has the goal of satisfying the owner's needs in an increasing and continuous way through the satisfaction of other people and organizations. This goal must be susceptible to measurement in order to understand the development of the organization2.
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1 (Vilariño Corella, 2007)
It should be borne in mind that these elements do not constitute a straitjacket, but rather a contextual framework within which the elements that make up the goal of each organization must be contained, and can be very helpful in executing the first step of the present. process.
The fundamental aspect that must govern the mission, in the author's opinion, is effectiveness, that is, the impact of the entity on society, although it must show the elements that the company has to efficiently materialize that goal, or be, with a favorable relationship between the benefits obtained and the sacrifices necessary for it, so that the organizational goal contains the elements that make up effectiveness, understood as the sum of effectiveness and efficiency, and also as one of the fundamental premises to achieve competitiveness.
It is considered valid to summarize that the goal must guide the organization in an effective direction, the company exists to respond to something that the environment needs and (or) wants, and to what the entity can satisfy quantitatively and qualitatively in a certain portion, having to report for her any benefit of an economic and (or) social nature. If not, it is considered prudent to reformulate the mission.
Step 2: Analysis of the limit situations
After examining its mission, the organization must determine the dialectical units that relate it to its environment, that is, its borderline situations3
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2 (García Vidal, 2004)
3 (idem.)
(see figure 2). This is proposed to be done through a concrete analysis from the quantitative and qualitative points of view on the basis of their market relationships determined by the binomial: Necessity / Possibility in two directions, forward with respect to their customers, and backwards related to their providers. The first relation is called the Limit Situation of Result (hereinafter SLr), and the second Limit Situation of Underwriting (hereinafter SLa).
Limit Situations - CMI. Source: García Vidal, 2004
The first refers to the relationship between the organization and the market that it covers with its products or services, this situation defines the impact of the entity with respect to its specific demand, how it meets, in quantitative and qualitative terms, with its social mission. The second establishes the relationship between the organization and its suppliers, through the needs for the supply of resources that the company demands and the quota of supply that its suppliers supply based mainly on the quantity, variety, quality and opportunity that the organization can afford. These relationships are framed in two scenarios, the first of necessity greater than possibility and vice versa, although the possibility that an ideal state of equilibrium exists between both factors is not ruled out,but the probability of occurrence of this event has been shown in business practice to be quite low, so the analysis will focus on the first two situations initially exposed.
When what suppliers offer is greater than what the organization needs to satisfactorily fulfill its mission, companies can put pressure on their suppliers to increase the probability of obtaining competitive advantages that distinguish them in the market in this way. attributes or combination of them, that make up the comprehensive offer of products that the company demands from its suppliers in order to maximize the benefits of the organization.
Depending on the greater the relationship between what is offered to the company and what it demands, this could be the relationship with suppliers, being able to go from a high position from which pressure is exerted, to one of exchange where it can reconcile or agree with the bidders, until finally reaching equivalently beneficial relationships with the suppliers.
When the opposite happens, that is, when the demand for supplies from the company is greater than what is offered, then it is proposed to carry out the strategy of relating. This strategy is recognized as one of the most complex, it is aimed at achieving close commercial ties with suppliers, a type of integrative negotiation is proposed. Another action that the company can take in this situation is to try to attract new suppliers, since that would limit the bargaining power that they may have over the organization.
From the position of the SLr, which is the one that largely measures the fulfillment of the organization's mission, various situations of need / possibility can also arise.
When what the market demands is greater than what the company offers, cooperation strategies are proposedand its main output cannot be other than production, especially its increase to satisfy that potential demand, which would take the entity to a higher stage of improvement. The company must be diagnosed and analyzed inward, in order to seek greater efficiency and productivity, either by intensive means, where improvements focus on optimizing all of its available resources, or by extensive means where the feasibility of improving performance is analyzed. through investment. In summary, all actions should be aimed at trying to increase capacity by increasing market share progressively to the maximum possible, the organization being in a state of continuous improvement.
If the company is in the arduous scenario where what is demanded is less than what the entity offers or can offer, the strategy to adopt should be to compete. This situation is very common in the current market and constitutes another extremely difficult position for the entity, it necessarily imposes an effective orientation towards the client, carrying out an exhaustive market investigation to determine and attack the causes for which the company is in that situation. Studies have shown that these causes can be associated with two fundamental phenomena4:
- The market or certain important segments of it, do not fully or partially know the company's offer and the advantages it offers The market or certain segments of it are not satisfied with the offer compared to that of competitors
The strategic course of action in this situation should be focused on stimulating demand, once the causes have been identified and attacked with the different marketing strategies in coherence with the other business processes, this would lead to permanent improvement of the organization.
It is recommended that when applying this step of the procedure, you start with a group work session, in which all the necessary specialists and personnel participate, to proceed to investigate the limit situations of assurance and result that the environment imposes on the organization. After carrying out this analysis, the situation of the company with its suppliers and claimants must be fully clarified, based on the elements that restrict it, it would be prudent to analyze not only those that constitute current restrictions, but those that are not now but can be in the future.
Step 3: Contrast strategies with mission analysis and borderline situations
4 (García Vidal, 2004)
Once the mission and the borderline situations of the organization have been analyzed, we proceed to contrast these elements with the company's strategies.
For this it is essential to start from a diagnosis of the strategic projection of the organization. On this basis, it is proposed then to contrast the coherence of these strategies with what is theoretically defined in the previous step.
When developing this comparison, the main thing to evaluate is whether there are significant differences between what is stated in this research and the actual strategies adopted by the entity. The working group should differentiate those strategies based on the following essential categories:
I : There are no significant differences
II : Yes there are significant differences
It should be noted that this is a qualitative contrast analysis of the characteristics and nature of the strategies adopted by the organization with respect to those declared very generically in the previous step; therefore, it is proposed to apply instruments to obtain the consensus of the members of the working group regarding the classification of the categories exposed above. Previous experiences have shown that the Delphi method can be very favorable to achieve this goal, which is why the author, without ruling out others, proposes it.
Step 4: Adjusting the interrelation and strategic interaction
Once the differences in the strategies have been contrasted and classified, the following analysis should be carried out.
For those in group II, it is recommended to start the adjustment with a group work session where the causes of these significant differences are assessed, in order to assess the feasibility and possibility of adjusting the strategic projection of the organization, guiding it, based on what is stated in its mission and the defined limit situations, to exploit all the potentials that the company has from the most effective combination of its human, material, financial, information and knowledge resources, within the socio-political and legal context in which the environment frames it. These new strategies should aim to maximize the positive effects of the organization both for the environment and for itself in the short, medium and long term.
For those corresponding to group I, it would be assessed whether the strategies that are in place, although being within a certain reliable margin, consistent with the mission and the borderline situations of the company, are the most appropriate, for which it would be favorable to consider, among others the following questions:
- Can other strategies be adopted? Are all those that exist necessary? Is it possible to integrate some of them? Are the strategies we have available the most appropriate for the organization in the current scenario? Will they also be so in the immediate future?
These questions are also advised them once the working group has drawn the corresponding adjustments to the strategies of the group I.
Step 5: Division of the mission according to the perspectives of the (WCC)
Prospects are the dimensions where the business of the company develops and at the time of its determination it is very necessary to know if the company is profitable or not, since it determines what the position of the prospects should be in the strategic course of the organization, reflected many times with the help of another management control tool: the Map
Strategic 5. "Strategy maps are a way to provide a macro vision of an organization's strategy, and provide a language to describe the strategy, before choosing metrics to evaluate its results" (Norton and Kaplan, 2004)
A lucrative company will link all the dimensions of the business to obtain benefits reflected in the profit of money. A non-profit company links all dimensions of the business to obtain reflected benefits to provide services that generally favor society and that are not directly linked to money earnings. The definition of the perspectives and their causal relationship between them is one of the main strengths of the WCC, its location shows how the company looks from a causal logic thus guaranteeing its alignment with the results and strategies6.
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5 (Soler González, 2009)
The CMI has been designed by Robert Kaplan and David Norton based on four basic perspectives:
- The financial company, where, as its name indicates, everything related to economic factors, profitability, profits, liquidity, investments, capital flows and the like is concentrated; that of clients, where everything related to them, their satisfaction, loyalty, retention is associated, market share of the company, among other related elements, that of internal processes, where technology, infrastructure, work organization, raw materials and materials are fundamentally linked to training and growth, to which is attached everything related to human capital and its learning and continuous competitive development for its definitive contribution to the growth of the company
It is the author's opinion that, given the importance of the environmental issue for life on our planet, the relevance of incorporating a fifth perspective with which several authors have already worked, could properly be called “ environmental ”, or as it has been defined in occasions " social responsibility ".
In this last step of the instrument, each of the constituent elements of the organization's mission is derived based on the perspectives of the WCC and its position on the strategic map based on its causal relationships, according to whether the company is for profit or not.
If it is for profit, it is based on the perspective of training and growth, which would be the basis for the effective realization of internal processes, which would give way to the prospect of clients giving favorable results qualitatively and quantitatively, guaranteeing that they improve results. financial.
If the organization is non-profit, it would start from the financial perspective that limits the budget margin available, this would be the basis for the training and growth of human resources that would contribute greatly to the effectiveness of the execution of processes. internal which would generate a favorable impact on the company's customers.
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6 (idem.)
To carry out this step, it is proposed as a tool to use the primary matrix of organizational alignment (see figure 3), where in the first column are located, for each perspective, the management indicators and their relationships with the fractions of the mission and the strategic objectives, to have, in a last column, the planned and actual values of each of those indicators that measure organizational performance. It has been narrowed down to the name of primary matrix because at a deeper moment of the investigation it is proposed to integrate the other elements that can make up the WCC, among the traditional ones are the following:
Decision levels. Classified into three categories; senior management, middle management and operational core
Indicators impact: Efficiency or effectiveness
Processes to which each of the designed indicators measures, this relationship specifically offers many advantages to favor effective management of business processes.
| PERSPECTIVE: «X» | Fractions of the Mission | Strategic Goals | Values | |||||
| Indicators | I | II | M | TO | B | Z | Plan | Real |
| one | ||||||||
| two | ||||||||
| N |
Figure 3. Primary Matrix of Organizational Alignment
Source: self made
CONCLUSIONS
The proposed procedure contributes to perfecting organizational performance through an alignment of the company's mission with the strategies that derive from a specific situation with its suppliers and applicants, based on the elements that restrict it in these relationships. This is largely due to the fact that it makes it possible to incorporate the mission, through its fractions, into the WCC for each of its perspectives, in coherence with the entity's strategic map, relating them to the management indicators that measure performance and allow the decision-making preferably proactively in the face of deviations in business performance with respect to what is defined in its strategies. This procedure is considered to be broadly generalizable to any type of organization.
BIBLIOGRAPHY
- García Vidal, G. (2004) Epistemological Contribution for the Administration. Universidad de Oriente, Cuba. Thesis presented as an option to the scientific degree of Doctor of Technical Sciences Kaplan, RS (1996) The Balanced Scorecard / Kaplan, RS, Norton, DP Barcelona, 2.Ed. Management Editions..Kaplan, RS and Norton, D. (2004). Strategic Maps, Barcelona, Ediciones Gestión 2000. p. 34Medina León, A. & Nogueira Rivera, D. (2002). Business analysis techniques in certainty and uncertainty. Faculty of Accounting and Administrative Sciences of the Universidad Michoacana de San Nicolás de Hidalgo. FeGoSa Editorial. Morelia, Michoacán, México, Nogueira Rivera, D. (2002 / b /). Conceptual model and support tools to enhance Management Control in Cuban companies.Thesis presented to opt for the degree of Doctor of Technical Sciences. University of Matanzas "Camilo Cienfuegos". Cuba.Pérez Campaña, M. (2005) Contribution to Management Control in Elements of the Supply Chain. Model and Procedure for Commercial Organizations. Central University "Martha Abreu". Las Villas, Cuba. Thesis presented as an option to the scientific degree of Doctor of Technical Sciences. pp. 20-38Soler González, RH (2009) Procedure for the implementation of the Balanced Scorecard as a management model in Cuban companies. Higher Polytechnic Institute "José Antonio Echeverría". Havana Cuba. Thesis presented to opt for the scientific degree of Doctor of Technical Sciences. pp. 32-36 Vilariño Corella, CM (2007). The mission, vision, policies and strategic objectives. Center for Business Management Studies.University "Oscar Lucero Moya" Holguín, Cuba. pp. 2-4
