In this research, an instrument is applied to analyze the strategic interrelation in a technical services company with the aim of contributing, based on its organizational mission, to align its strategies based on its specific situation in the environment, analyzing relationships with its clients and its suppliers, in a way that enables it to make effective decisions to achieve its goals through the control of its business management. The results obtained are favorable, achieving the objectives set and with a positive impact on the entity under study.
ABSTRACT
In this investigation is applied an instrument for the analysis of the strategic interrelation in a technical services's enterprise with the objective to colaborate taken like point of begining the mission of the entity to align it strategies in function of it concrete situation in the environment, analyzing the relationships with it clients and it suppliers, facilitating the taking of effectiveness decisions to reach the achievement the goals in the enterprise. It has been made through the focus of its management control. The obtained results are favorable, being reached the outlined objectives and with a positive impact in the entity studied.
Key Words: MISSION, STRATEGY, MANAGEMENT CONTROL
COMPREHENSIVE CONTROL PANEL
Keywords: MISSION, STRATEGY, MANAGEMENT CONTROL, BALANCED SCORECARD
INTRODUCTION
Throughout history, man has materialized methods and instruments to develop and improve performance standards for his benefit, and gradually he has introduced models that allow the organization's performance to be regulated and evaluated. With the evolution of these models and techniques, it has become a real and prevailing need to talk about aspects related to quality improvement as well as its most recent trend, which is the process approach that transits to continuous improvement.
This global phenomenon encompasses all fields of modern life linking the sectors of the economy and social development, whether national or international. To achieve an effective and positive correlation between the processes that take place in the entities, it is necessary to merge all the elements that globally channel the nature of the organization to exploit its potential in a more efficient way, for which it is necessary to conduct the critical analysis of organizations, based on their projections in terms of goals, strategies, objectives, management and resources, for this it is important to research and apply methodologies, models and procedures that enable a situational presentation and analysis of objective.
The following project implements a procedure to help provide solutions to the aspects discussed above.
1. APPLIED PROCEDURE
The applied procedure consists of five steps (Figure 1) and is based on the trilogy that exists between mission-strategies-limit situations, which in the opinion of the authors is the primary strategic interaction and interaction of any organization, and greatly influences in the materialization of the entity's vision, as well as in its comprehensive performance within the business environment. Then the basic analysis of this trilogy is incorporated into management control, through the Primary Matrix of Organizational Alignment as an initial phase for the development of the Balanced Scorecard (hereinafter CMI).
Applied Procedure for Management Control
1.2 Characterization of the entity under study
The company belongs to the iron and steel industry, it is a leader in its market, with only two competitors in the province, it serves clients from more than a dozen municipalities from the same unit, all of them are state organizations, in their Most with different dependencies called Base Units.
The entity under study provides the wide range of services shown below:
- Provide diagnostic services, assembly, commissioning, repair, maintenance, recovery of spare parts and accessories to steam generation and refrigeration systems, thermal fluid boilers, waste and water treatment plants, cooling towers, swimming pools and accessories, technological networks and pressure vessels, assembly and installation of kitchens, laundries and their technological networks. Produce and commercialize wholesale boilers, equipment and associated parts for technological assembly, as well as formulas and chemical reagents for treatment of waters.
2. INSTRUMENTATION OF THE PROCEDURE
Step 1: Mission analysis
The mission, in a very synthetic way, can be assumed as a formulation elaborated by the entity itself that expresses the raison d'être of the organization or why it exists.
The mission of the company under study is defined and expressed as follows:
It can be pointed out within the positive aspects that it is oriented towards the exterior, towards the client whose supreme interests determine all the actions of the company and is considered focused on the future. Among the aspects susceptible to improvement, it is pointed out that it lacks originality, which prevents the organization from being uniquely identified, it does not clearly express the service it offers, it does not show its operation by locating it geographically, it is not motivating enough for the collective, as well as not explicitly expressing, the values of the entity, limiting that the organizational culture is shared, understood and assumed by all its members.
In addition, although it is shown in the same, which in the authors' opinion is the fundamental aspect that must govern the mission: effectiveness; In other words, the entity's impact on society does not explicitly and clearly state the characteristics of the basic elements that the company possesses in order to materialize that goal efficiently, that is, with a favorable relationship between the benefits obtained and the sacrifices necessary for it. Noting that the elements that make up effectiveness are not adequately contained in the organizational goal, understood as the sum of effectiveness and efficiency and one of the fundamental premises to achieve competitiveness.
Based on the above, from work sessions with managers and other staff of the entity, and the review of audit and advisory reports, the following mission is proposed:
Step 2: Analysis of limit situations
After examining the mission, we proceed to determine the dialectical units that relate the organization to its environment, that is, its borderline situations. This was done through a concrete analysis from the quantitative and qualitative points of view based on their market relationships determined by the binomial: Necessity / Possibility in two directions, forward with respect to their customers, and backwards related to their suppliers.. The first relationship is called the Result Limit Situation (hereinafter SLr), and the second Assurance Limit Situation (hereinafter SLa).
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.
The analysis was performed in the reverse direction of the supply chain, that is, from the customer to the supplier, so it starts with the SLr.
It was verified that the situation of the company with its claimants was of greater demand than supply, which placed it in a scenario that offers many business opportunities, since power is in the hands of the organization. This situation was verified by reviewing customer service requests, where it was found that the demands for services exceeded the response capacity of the entity, failing to meet several requests. For this, the level of service offered (NSof) by the entity was evaluated for the quarters of the last 4 years (Graph 1), for the quantity variable , which reflects the relationship between the total number of requests for services made by customers and those that were actually met by the company, and those requests that were not met by the entity under study were called “failures”, for which the formula was used following:
The values of this indicator in the company under study (Graph 3), show that in all cases, for the first and fourth quarters, more inventory was always secured than required, which translates into immobilized resources, causing a unfavorable effect on profitability, since storage costs are affected above all, the situation being totally inverse for the other quarters, where the necessary is not assured.
Behavior of the underwriting coefficient
Graph 3. Behavior of the underwriting coefficient
Source: self made
Due to the very similar behavior between the service level and the insurance coefficient, it was checked whether there was any relationship between them. For this, a simple regression analysis was performed where the Kaseg was declared as an independent variable, in order to determine if it has any influence with the NSof (dependent variable) by the company under study in the period analyzed. Regression analysis using the linear model yielded a P-value of less than 0.01; showing that there is a statistically significant relationship of 82% between NSof and Kaseg for a confidence level of 99%. Which means that, according to the effectiveness with which the assurances are managed, the level of service that the organization offers to its clients will depend.
The study carried out in this step of the procedure shows that there is a situation of the company with respect to its customers with greater demand than supply, and it can be concluded that the limitation is that the entity does not have sufficient capacity to respond to the requirements of the market. From the entity's perspective with respect to its suppliers, it can be summarized that the scenario is one of less demand than supply, with the assurance limit situation in the application of an inadequate inventory management system that affects the efficiency of the company. So the organization is in a scenario of maximum power, both over its claimants and over its suppliers.
Step 3: Contrast strategies with mission analysis and borderline situations
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 proceed to show the strategies of the entity under study for the next three years:
Master strategy:
Increase economic profitability by raising the efficiency of comprehensive organizational management.
Generic strategies:
- Increase market share by at least 15% Achieve the implementation of the Quality Management System according to the NC: ISO: 9001/2001 at the end of 201X Start the implementation of the Integrated Human Capital Management System according to the NC: ISOO:3000 / 2007Expansion of the access of the company's services to other non-state clientsObtain the category of outstanding in the triennial emulation of the MinistryEnsure that the needs and expectations of our clients are determined and their maximum satisfaction is achievedIncrease the level of service of the company in 2% through compliance with the efficiency indicators and continuous improvement of the organization's processes. Refine the Economic-Financial Management System with the aim of achieving accreditation with the category of "Excellence" according to current branch regulations.
The comparison was used through consultation with experts, applying the Delphy method as an instrument to achieve their consensus (Annex 1). The working group should differentiate those strategies based on the following essential categories:
I : There are no significant differences. That it was awarded to those that the experts considered as “very adequate” (MA) or “quite adequate” (BA). Generic strategies were classified in this category 1,2; 3; 4; 6; 7 and 8.
II : There are significant differences. Category that is assigned to those strategies that the experts consider as “not very adequate” (AP) or “inadequate” (I). The fifth generic strategy was placed in this category; related to obtaining the category of outstanding in the Ministry's triennial emulation, it was cataloged by experts as PA.
The master strategy was considered “adequate” (A), making it necessary to carry out a more in-depth analysis with the working group.
Step 4: Adjusting the interrelation and strategic interaction
In this step of the procedure, which is conceived as an improvement phase, the strategies are adjusted so that they respond to the specific situation of the organization with respect to its environment.
It began with the analysis of the strategy considered with significant difference belonging to group I, determining to eliminate it, since that result should be one of the effects of achieving the master and generic strategies.
Then it was determined that the entity's master strategy should be focused on a constant and systematic improvement of the fundamental perspective of the organization: the economic one, based on it in the continuous improvement of the synergy effect of the efficiency and effectiveness of its integral behavior..
For those in Group II, it was decided, given the potential of the company and its favorable situation of maximum power with its suppliers, to increase the increase in its service level by 4%.
A new strategy was planned and organized: Design and implement an effective inventory management system; Because the company did not have any that made reference to its management in the supply logistics subsystem. It was conceived to implement a periodic review inventory management system, also known as a fixed frequency system or “P” system (Graph 4), characterized in that the supply frequency remains fixed therein, while the quantity requested in each order constitutes a variable quantity. This selection is based on the fact that many of the products that the company needs are not easy to account for, because several products are included in the same application and also since several of the main suppliers are located in relatively remote places.
Periodic review inventory management system
Summarizing that the entity's strategies after adjusting the interrelation and strategic interaction should be defined as follows:
Master strategy:
Achieve increased economic profitability through continuous improvement of organizational management Generic Strategies
- Increase market share by 15% Achieve the implementation of the Quality Management System according to NC: ISO: 9001/2001 at the end of 201X Achieve the implementation of the Integrated Human Capital Management System according to NC: ISOO: 3000 / 2007 at the end of the year 201Y (Y> X) Expansion of the access of the services of the company to other non-state clients Ensure that the needs and expectations of the clients are determined and their maximum satisfaction is achieved Increase the level of service of the company in 4% through compliance with the efficiency indicators and the continuous improvement of the organization's processes. Refine the Company's Economic-Financial Management System. Design and implement an effective inventory management system.
Step 5: Division of the mission according to the perspectives of the (WCC)
In this step, the perspectives of the organization and its order were determined, on the basis that it is classified as a for-profit entity, with this premise the strategic map was prepared (Annex 2).
Then the mission was divided into each of the perspectives declared in the WCC as follows: The company "X" of the province "Y" has as its mission:
Section 1: Provide high-quality technical and specialized services to steam generation systems in thermo-energy and industrial facilities.
Section 2: that they achieve the satisfaction of our clients with professionalism
Section 3: from having a competitive and committed human capital
Section 4: using technology and effective resources
Section 5: in a way that enables a high participation in the domestic market
Finally, the Primary Organizational Alignment Matrix was prepared
(Annex 3), as one of the initial phases for the preparation of the CMI or Balanced Scorecard, in it are located in the first column, for each perspective, the management indicators and their relationships with the fractions of the mission and generic strategies, to have, in a last column, the planned and real values of each of those indicators that measure organizational performance, favoring effective decision-making.
CONCLUSIONS
- The interrelation of the strategic factors can be analyzed through the control of the organizational management. The mission of the entity had insufficiencies that were overcome through its critical and constructive analysis. The organization under study is in a situation of maximum power both over its clients and its suppliers. identified and tested the limit situations of the company. Being that of result the capacity of the entity inferior to its demand in the market; and the assurance of the non-application of an effective inventory management system. The preparation of the Primary Matrix of Organizational Alignment favors effective decision-making for the company under study,which enables it to competitively enhance all its resources and capabilities to improve its relationships with both its suppliers and its applicants. The procedure developed demonstrated its feasibility and practical utility as an instrument that contributes to planning, implementing and controlling an effective strategic performance alignment. organizationalBIBLIOGRAPHY
- Cespón Castro, R. & Amador, A. (2003) Supply Chain Management. UNITEC Central American Technological University. Honduras. pp. 58-74 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 & Norton, D. (2004). Strategic Maps, Barcelona, Ediciones Gestión 2000. pp. 23-34 Nogueira Rivera, D. (2002). 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. 20-38 Reyes Chávez, E. & Tamayo García, Y. (2011) Procedure for the analysis of the strategic interrelation in the management control process.http://www.eumed.net/ce/2011a/rctg.htm Soler 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 Torres Gemeil, M.; Daduna, JR and Mederos Cabrera, B. 2007. General foundations of logistics. Havana City and Berlin, pp. 110-112
See Annexes in the downloadable PDF.
Download the original file
