In a quick glance on the subjects of economy and administration, it is easily deduced that the word Productivity is irreplaceable in the language of the company and of modern management; so much so, that the development of a company, an economic sector or a country, is established with reference to its greater or lesser productivity.
control-and-management-indicators-for-business-developmentTo begin with, we could accept that Productivity simply designates the ability or faculty to produce. This way of defining it has the advantage of clearly distinguishing it from production, a concept that refers to physical volume, or the accepted equivalent of what is produced in the economy at any level.
Understood as the ability or faculty to produce productivity, it implies the recognition of the state and the way in which the various inputs were used in the production process. In this sense, it condenses the central problem of the Economy: making better and more use of available resources. Thus, any economic system would aim to achieve higher productivity.
For an economy like ours, this means that advances in productivity enable a more effective and efficient use of the means of production available, obtaining the greatest possible quantity of goods and services at a lower cost.
Now, productivity is understandable, only as a result of economic action, in which everything from worker capacity to business management, through the technique and technology incorporated in the production process, are involved.
Consequently, productivity is understood as the end result of a complex process that includes education, administration, labor organization, organization of production, research in science and technology, and business management.
The increasing importance of productivity necessarily poses the problem of obtaining indicators that more adequately show what level of productivity the economy or business development is at. Far from being a simple calculation problem, productivity measurement poses multiple difficulties, some of them not yet overcome.
The first great difficulty has to do with the heterogeneity of elements that affect productivity: machinery, management, education, technology, they are all decisive factors for an understanding of the state of productivity, but each of them refers to different elements., some difficult to quantify and only in comparable final results.
Underlying in the previous comment, understanding productivity as a function resulting from various inputs. Conceived in this way, it is called global or total factor productivity, but it is feasible and particularly necessary, for policy design and decision-making, to disaggregate productivity by components in order to obtain an approximate vision of how each factor has a positive impact or negatively in productivity.
The possibility of carrying out this disaggregation is in direct accordance with the criterion taken from economic theory that conceives each factor as a producer, in itself, of a productive result.
It should be added that in the monetary economies, the general equivalent of merchandise is money and, given the difficulty of obtaining adequate statistics for production volumes, there do not seem to be major objections to using it as an equivalent, as long as care is taken to separate the indicator of monetary effects.
CHAPTER I
BUSINESS DEVELOPMENT
GENERAL CONTEXT
The current managerial management, whether public and / or private, registers mental frameworks of constant changes and institutional and business transformation in a world where people think globally and act locally and therefore the criteria of productivity; Competitiveness and profitability are the ultimate ends of expected results of business development and this requires an updated concept of the environment and the market where businesses operate, whose modernization depends to a large extent on the efficient management of computing, telematics and electronics, and in general, of constant innovation and technological development; but it is based on controlling and measuring management through self-management,the control and implantation of indicators of constant utility and of good administrative and managerial criteria that are necessary to point out in our opinion as follows:
1.1.1 TOTAL QUALITY CONTROL
It is a modern approach to administrative management that integrates the company in the permanent search for customer satisfaction based on a participatory management scheme.
The term TOTAL QUALITY, which is applied to organizations, becomes a work culture whose purpose is to satisfy customer needs, achieving quality throughout the organization through systems that allow control of all processes. This form of administration changes the traditional results management scheme for one of process management. and to achieve this, there needs to be an immense personal and organizational motivation towards improvement and development, an attitude of improvement consisting of moving from thinking in terms of "let's leave things as they are" to acting proactively for a "we are going to improve what what are we doing".
Similarly, CONTINUOUS IMPROVEMENT seeks:
- Basic ideas about the meaning of terms such as quality, service improvement and total quality. All of them are intimately related and are based on a very interesting theory: that human beings, as an individual, produce immense personal satisfaction in doing things well., feeling that she has improved in relation to her previous situation, and that, on the other hand, as a member of a community, something similar happens to her when she finds herself useful and productive for her, when she observes that whoever has some type of relationship with her If you try to transfer these concepts to the daily reality of our work, the management of continuous improvement starts from the basis that the more involved an employee is in determining the organizational goals, the more committed he will feel in achieving them.,because you will consider them as your own. for this reason, continuous improvement management is based on achieving a high level of participation of an entity's collaborators through teamwork, especially in the permanent improvement of internal and external processes; controlled by specific statistical techniques and always with the fundamental objective of satisfying the needs and expectations of the client, both internal and external.controlled by specific statistical techniques and always with the fundamental objective of satisfying the needs and expectations of the client, both internal and external.controlled by specific statistical techniques and always with the fundamental objective of satisfying the needs and expectations of the client, both internal and external.
COMPONENTS OF TOTAL QUALITY CONTROL:
1.2.1 STRATEGIC PLANNING
It is the formulation, execution and evaluation of actions that will allow an organization to achieve its objectives.
THE STRATEGIES: These are the means by which the objectives will be achieved include: geographic expansion, diversification, acquisition of competitors, obtaining control of suppliers or distributors, product development, market penetration, cost reduction, positioning, liquidation, association and combination of actions.
STRATEGIC PLANNING : It is a type of planning directed from the base to the head; in fact, all employees must write some pages around the following questions:
- WHAT ARE THE OBJECTIVES OF MY AREA? WHO ARE OUR INTERNAL AND EXTERNAL CUSTOMERS? WHAT DO OUR CUSTOMERS EXPECT FROM US AND WHAT ARE THEIR NEEDS? WHO IS OUR NEAREST COMPETITOR? HOW DO WE COMPETE WITH HIM? WHERE DO WE EXPECT TO BE IN FIVE YEARS? WHAT ARE OUR WEAKNESSES AND HOW SHOULD WE FIGHT THEM ? WHAT ARE OUR STRENGTHS AND WHAT SHOULD WE DO TO MAINTAIN THEM? WHAT NEW REQUESTS HAVE WE RECEIVED FROM OUR CUSTOMERS? WHAT ACTIONS SHOULD WE DEVELOP TO NOT BE LEFT BEHIND THE COMPETITION?
1.2.2 STANDARDIZATION
If total quality is the full satisfaction of customer needs, through a conscious supply of products and services. This forces that every company must have its measurement standards , which are materialized in the MANAGEMENT INDICATORS.
1.2.3 QUALITY CIRCLES
It is the support of teamwork involving base personnel. It takes into account: Volunteerism; Self-development; Mutual Development and Total Participation; all this within the joy of personal improvement that includes: Feeling the satisfaction of being able to use your own abilities to the fullest and grow as a person; Having self-confidence and Self-realization and using your own mind, working of your own free will and contributing in this way to society. The individual should not remain alone in the monetary rights, if not also take into account: Minimum conditions to survive; perennial search for wealth and material satisfaction.
1.3 ORGANIZATIONAL CULTURE
Each organization has its own culture, different from the others, which gives it its own identity. The culture of an institution includes the values, beliefs and behaviors that are consolidated and shared during its business life.
Modern business management is a matter of leadership. effective leadership therefore includes: Ability to communicate objectives and goals; Ability to make sound decisions; Excellent conditions to permanently motivate people and enormous flexibility to adapt to changing conditions or changing environments both internally and externally.
1.3.1 MISSION
It is the reason for being of a company or the philosophy of itself, which indicates the formulation of a lasting purpose that distinguishes it from other companies. A mission formulation identifies the scope of a company's operations in product and market aspects as follows:
1.3.1.1 CONTENT AND CONSOLIDATION:
- REQUIREMENT OF CUSTOMERS AND EMPLOYEES. PRODUCTS AND SERVICES MARKET LOCATION TECHNOLOGY CONCERN FOR SURVIVAL, GROWTH AND PROFITABILITY. BUSINESS PHILOSOPHY FOR THE PUBLIC IMAGE.
The mission indicates the way in which an institution intends to achieve and consolidate the reasons for its existence, indicates the priorities and the direction of the business of a company, identifies the markets to which it is directed, the clients it wants to serve and the products it wants. offer. Likewise, it determines the contribution of the different agents in achieving the company's basic purposes and thus achieving its organizational vision.
1.3.2 VISION
It is a set of general ideas, some of them abstract, that provide the frame of reference for what a company wants and expects in the future. It must be formulated by the leaders of the company and known by the entire corporation to be taken into account daily in daily work, to promote staff commitment to the company.
1.3.2.1 COMPONENTS
- IT IS FORMULATED BY THE ORGANIZATION'S LEADERS.
1.3.3 PURPOSES
These are actions that the company intends to keep in mind in all decisions, especially in the execution of the strategy, which in turn serves as a route for the administration. They are perennial in time and will always guide the company in its activity.
1.3.4 OBJECTIVES
They are coordinated tasks within a process, to achieve the goals, their results are generally long-term, what an organization plans to achieve through its basic mission and these must be realistic, quantitative, measurable, understandable, stimulating, hierarchical, achievable and consistent with the units and functional areas of the organization.
1.3.4.1 IDENTIFY:
- GROWTH OF ASSETS PROFITABILITY PERCENTAGE OF MARKET PARTICIPATION AND NATURE OF DIVERSIFICATION INTEGRATION PROFITS BY SHARE SOCIAL RESPONSIBILITY.
REFLECTIONS
| Total quality control and management indicators, in companies seeking higher productivity; competitiveness and profitability; for having advanced technological development and information systems in line with the needs of expansion, production and provision of customer service; they are valuable administrative instruments or managerial tools to eliminate the irrationality of an organization and optimize human, material, computer and / or technological resources; physical; financial and environmental resources available.
The elimination of irrationality; It tells us in a globalized world unified by telematics and telecommunications, especially where the market and commerce with the Internet have forged a new economy; that industries face new challenges; that they consist in that both capital goods, such as information systems and information technology in general, must have a strategic value and / or an added value as an effective contribution of benefits from these to the key objectives of the organization; since the latest technology; computers and networks for companies and interactive access to large information systems, which modernize production management, represent large investments for them and the strategic value of information,establishes a link between information tools and corporate profits; implying that individuals cannot care about who; without taking into account how it means doing if we want efficiency and competitiveness. The paradox of Underdevelopment and the lack of competitiveness in production processes and results lies in the fact that: - The what; should not be more important than how - Ability should not be more important than intelligence. - And the development of activities can not be more important than producing returns. In other words, we combine irrationality with: the verb to be and not to do; the verb to command and not to order; the verb to demand and not the request: the verb to confront and not to compromise or to arrange and the verb to improvise and not planning. In less progressive companies, the media or computer projects are not yet as extensive; This may be due to the inability to present a clear justification for the investment, the limited capital of the company in tools to think rather than tools to produce. Companies have been fighting for many years on the return of investments in information instruments for knowledge workers or the third wave and therefore management indicators are a tool that can determine or measure the benefits and costs of carrying carry out this activity, necessary for their survival in the market. For this reason, management indicators, as a fundamental instrument of company management control, seek to correct: Being versus doing; many managers and very little management; many factories or structures but very few companies; many activities Versus very few returns; many controls versus many obstacles; the capital factor versus other factors of production; in addition to regulatory bias. In Concrete, this module tries to demonstrate the importance of total quality control in the company, where management indicators allow the organization to: Be more effective in attracting resources; be more efficient in transforming them and be more effective in channeling them. "IT IS NECESSARY TO KNOW THE COMPANY'S PROCESSES IN ORDER TO BE ABLE TO EFFECTIVELY AND EFFECTIVELY MANAGE IT." |
VPC = Present value of costs
K = Time of the start of the project operation phase.
IRR Þ It is that discount rate for which the NPV is = 0
Internal Rate of Return. It is defined as the discount for which the NPV is equal to 0 (zero).
Two discount rates are assumed i 2 - i 1
The interpretation depends on the type of flow.
BENEFIT - COST R / B / C RATIO: It is defined as the present value of the Benefits over the present value of the costs.
It can be calculated in two ways:
- a) From the net cash flow b) From the decomposed cash flow
| REFLECTIONS
THE ECONOMIC ASSESSMENT OF MANAGEMENT, takes into account the economic context of the Productive Apparatus. Which is understood as a series of production units, for a set of capital and consumer goods to satisfy human needs. So it is a social science. These production units are the factors of land, capital and labor - administration and technology whose flows are open or closed within the economic agents; where resources are limited and needs are unlimited and what determines that a country registers acceptable levels of growth is public and private investment; where each peso invested becomes profitable and requires feasible and technically viable projects, socioeconomically convenient and priority eligible. For which the free market is taken into account through: THEORY OF DEMAND It is based on theories of preferences, which is when the person can choose what he is and how he behaves to achieve his well-being. On what depends what we are going to demand? X = F (PX, Yy, Pr, V) PX = Item X Prices Y = Real consumer income Pr = Prices of related items V = Preferences OFFERING THEORY It is based on the theory of the firm, we take a company as a productive unit, we maximize profit in terms of $. Maximum profit = Total income - total costs and minimizing costs. Balance = B = C The offer function can be given in the following terms: O = F (PX, T, Pi) PX = Price of the good T = Technology Pi = Price of inputs |
METHODOLOGIES FOR THE ECONOMIC ASSESSMENT OF MANAGEMENT.
Cost-Benefit Analysis ® There are many Indicators and we can quantify benefits and costs: VPN; TIR; CAE and RB / C
| · Cost-Effectiveness Analysis | ® The benefits are difficult to measure or equal to the alternatives Standard cost - valued at opportunity costs - account price or check project price - social prices - standard price Various Alternatives, what is the minimum cost alternative ® Equivalent Annual Cost. FALLS OFF. |
| · Relevance Analysis | ® Qualitative analysis - Utility applications, use of the Project with respect to other projects, is used for experimental analyzes. |
CHAPTER XI
- PUBLIC SURPLUS METHODOLOGY AND ITS DISTRIBUTION.
PURPOSE: To establish what is the wealth that the analyzed company contributes to society in terms of public surplus and how it is distributed among the different social, economic and regional sectors.
It facilitates the calculation of Public Profitability, as an indicator of the performance obtained by the administration or management, given a "Stock" of capital made available to it by the company.
JUSTIFICATION
Develop the principle of EQUITY. The public surplus was developed its methodology by Boston Public Enterprise Group; from Boston University.
- In the Private Company the Net Profit is calculated (it belongs to its owners). In the public company the public surplus is calculated (society as a whole).
Represents the generation of wealth by an entity as a result of its production process, from the resources that the same society delivers to an administrator, in order to measure its efficiency. Their analysis usually does this at constant prices.
EQUITY INDICATORS
They record the following methodologies: A) ADDED VALUE B) PUBLIC SURPLUS C) CONTRIBUTION TO EQUITY D) EPT E) RESULTS OF THE OPERATION AGAINST USERS.
ADDED VALUE: It is the remuneration of the productive factors for their contribution to the productive process. During a period t = synonym of income.
It should allow the examination of the proportion in which the factors of production participate in the Income generated by the company and establish if the participation is equitable in relation to the proportion in which each primary factor intervenes in the production of goods and services.
CALCULATION:
VA = SS + I + UB Income Distribution
CONVENTIONS:
SS = Compensation of work factor
I = Interest + income = Remuneration of the capital factor; summation of payments to the financial sector; commissions; exchange rate; UVR reset.
UB = Gross Profit (Macroeconomic Criterion)
VAN CF = SS + I + R + UN
VAN CF = PIN CF CF = Cost of Factors
GDP pm = VAB Pm. PM = Market Price
Equity looks for whether this distribution is fair against the production of each productive factor of the company.
UB = UN or accounting surplus + depreciations = a (recovery of deferrals + reserves and provisions (cost or expense) + other expenses (TR. To the community) + pensions of retired personnel + indirect taxes + direct taxes + other taxes - subsidies)
UN = UB - depreciation.
Similarly, VA = Y - Inputs> public surplus
GDP = C + G + I + X - M.
PUBLIC SURPLUS: As a Principle of Equity is the indicator of Generation and Distribution of Public Surplus. (EP)
CALCULATIONS :
- Generation of the EP.
EP = Sales (or state contributions + operating income) + VAT
- Subsidies.
EP = PM Sales - Inputs - Salaries and Wages (FW) - Income and
Rentals (FL) - Opportunity cost of non-productive assets.
EP + other income = EP generated
- Distribution of the EP.
EP D = i (FK) + Gross Profit We can determine the equity in the company
PUBLIC PROFITABILITY INDICATOR: It is the yield obtained by an administrator, given a capital stock made available to him; it relates two variables: Public surplus and revalued operating fixed assets; It is only feasible in entities that produce goods and services and allows to measure: the operating efficiency according to the asset returns within the operation and values the costs and benefits of the company to society.
Public Surplus
IRP = -------------
Revalued Operating Fixed Assets
- EFFICIENCY: Measurements for operating results.
Resource Used (UK)
1) FOR EACH RESOURCE = -----------– x 100
Planned Resource (RP)
Result obtained (RO)
2) FOR EACH ACTIVITY OR ------------- x 100
OUTCOME
Planned Result (RP)
Time Executed (TE)
- IN TERMS OF OPPORTUNITY = ------------ X 100
Programmed time (TP)
Population Served (PA)
4) IN TERMS OF COVERAGE = ----------- X 100
Potential Population (PP)
Quality Obtained (CA)
5) IN QUALITY TERMS = -----------– X 100
Programmed Quality (CP)
- ECONOMY.
- OBJECTIVES ACHIEVED TO SPENT RESOURCES
RESOURCES SPENT
------------- x 100
RESULTS OBTAINED
- ACTIVITIES CARRIED OUT ON RESOURCES SPENT
RESOURCES SPENT
-------------- X 100
PERFORMED ACTIVITIES
3) OBJECTIVES OBTAINED FROM ACTIVITIES CARRIED OUT
RESULTS OBTAINED
----------------– x 100
No. OF ACTIVITIES CARRIED OUT
THESE ARE SOME REFERENT INDICATORS; YOU ACCORDING TO THE NEED OF YOUR PROJECT OR COMPANY CAN BUILD YOURS ANIMO; NOTHING IS IMPOSSIBLE EVERYTHING CAN BE DONE WHEN IT STARTS.
REFLECTIONS
| For public surplus indicators, it must be taken into account that:
Consumer surplus. Which based on the demand function, constitutes the differential key between private and social benefits in the evaluation of business projects or processes, since it discriminates between the amount of money that a consumer would be willing to deliver and the amount that actually pays for the usufruct of a good or service. In other words, it is defined as the difference between the amount paid for a product and the maximum amount that the consumer would be willing to pay in the face of the expectation or eventuality of completely missing that product. Producer surplus. Which is based on the theory of the firm and whose concept is identical to the concept of profit, defined as the difference between the total income received and the minimum income required by the producer to produce a certain quantity of product. Contrary to the consumer surplus, it has a limited value. Market Balance: This situation requires that the quantity supplied is equal to the quantity demanded. Otherwise, it would be necessary to find a price for a given production that makes the total quantity demanded equal to the quantity available. The key point is to determine if that price is efficient or rather worth increasing or decreasing the original production volume. We cannot categorically affirm that the free play of supply and demand, and even less in imperfectly competitive markets, determines the equilibrium point, but rather that the aspirations to use resources efficiently indicate a path of permanent search for that point. |
| Therefore, in the Public Sector, surpluses must be produced both economically and socially, which is nothing more than increased coverage and improved quality of service provision to fulfill the social function of the state and pay the social debt. effectively. |
WE SHOULD NOT FORGET THAT:
- Indicators are performance measures in any organization and now with the development of informatics and telematics they must be structured managerially in this sense. Indicators must have an unequivocal result; be reliable and must be expressed in units; the criteria for its design must attend to the concepts of Conducency; feasibility and acceptability. To identify management indicators there are no rules; each company has very particular processes, which makes the indicators their own, so that entrepreneurs, managers or auditors and / or controllers can build those in the sector where they operate or the specific company that is the object of application for correct decision-making; in such a way that correctly identified and measured,function as a vital signs detector for its managerial utility. The constant evaluation of the indicators allows identifying the critical areas, activities or operations, without forgetting that the organizational behavior is a direct function of the effective transformation of strategies, objectives and policies that take place. At each level, management indicators must be a management tool, it is not a cold calculation or mechanical interpretation of figures isolated from reality, based on its design on the need to measure efficiency, effectiveness and effectiveness, fundamentally, constituting the basis of the management planning and information system and therefore of Business Development.not forgetting that organizational behavior is a direct function of the effective transformation of strategies, objectives and policies that take place at each level. Management indicators should be a management tool, it is not a cold calculation or mechanical interpretation of isolated figures from the reality, based on its design on the need to measure efficiency, effectiveness and effectiveness fundamentally, constituting the basis of the management planning and information system and therefore of Business Development.not forgetting that organizational behavior is a direct function of the effective transformation of strategies, objectives and policies that take place at each level. Management indicators should be a management tool, it is not a cold calculation or mechanical interpretation of isolated figures from the reality, based on its design on the need to measure efficiency, effectiveness and effectiveness fundamentally, constituting the basis of the management planning and information system and therefore of Business Development.based its design on the need to measure efficiency, effectiveness and effectiveness fundamentally, constituting the basis of the management planning and information system and therefore of Business Development.based its design on the need to measure efficiency, effectiveness and effectiveness fundamentally, constituting the basis of the management planning and information system and therefore of Business Development.
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