This article proposes an analysis of the theoretical aspects essential for understanding management control, and thereby introduces a procedure to measure customer satisfaction.
Its purpose is to contribute to the improvement of management control as a system with the design of a procedure that uses the OVAR methodology adapted by the Las Tunas Construction Materials Company.
Special emphasis is placed on the different phases of the aforementioned method, the use of indicators and their usefulness for the control and monitoring of the organization's objectives are highlighted, elements that until now had not been incorporated into the company's procedures and that they are considered of relevant importance to make good use of the OVAR method.
The preliminary investigation made it possible to formulate criteria regarding the objective application of procedures pre-established by the company that constitute the management control system as a whole and analyze from what point of view it can be improved. In this way, a procedure is conceived that consists of five stages that involve the entire structure of the company in order to achieve optimal levels of customer satisfaction, where feedback plays a leading role using the establishment of indicators and direct communication with the client.
Introduction
The competitive climate of our country has multiplied notably due to the dynamics of change, the opening of the economy and the presence of increasingly shorter business cycles. This poses a challenge for both productive and service companies, due to the need to achieve and maintain certain levels of competitiveness, as well as to achieve effective and efficient results in their management.
The management system of our companies has been perfected and adapted to the economic conditions or peculiarities of each time, so that even within the most varied styles of command, the management of a complex body cannot be exercised effectively except through of a Management Control System, which encourages the best use of resources to achieve or exceed the expected results and which makes it possible, in a timely manner, to take the necessary measures for the corrective actions that are required to be carried out.
That is why in business management it is necessary to incorporate systemic tools that help monitor the implementation of the strategic plan and control its results through indicators.
For this purpose, the present work is projected whose contribution is materialized in the design of a procedure to comprehensively measure customer satisfaction, which allows perfecting the Management Control as a System, in the Construction Materials Company of las Tunas. The fulfillment of this objective should allow the company to integrate individual initiatives and efforts through a systemic approach oriented towards the achievement of strategic objectives.
Thanks to the study, consultation and analysis of various bibliographies, fruit of the ingenuity of multiple authors, it has been possible to carry out this work that also takes into account criteria issued by company managers, professors and specialists in the areas of strategic management, control management and OVAR method. Adapting the diversity of approaches to the conditions of Cuban companies has been possible, through the analysis of the specific characteristics in which they operate, under the principles of the Cuban socialist economy.
Starting from the theoretical bases that support management control, its current trends and the analysis of the OVAR approach, a procedure based on this approach is described which has been applied by the company since 2000 as a result of a transformation process in the management methods and styles.
The methods used to carry out this work allowed us to understand the generalities and specificities of management control and the OVAR approach, the contradiction between the need and the possibility of introducing changes that make it possible to improve it, given its interrelation with an environment that forces managers contemporaries to project from the dynamism and the conditions that it imposes.
Development
Management Control arises at the end of the 19th century under the conditions of industrial development based on the four principles defined by Taylor for its Management system: Stability, Perfect Information, Productive Efficiency, Global Cost.
This issue has been approached by various authors in a more or less simple way:
According to Henry Fayol: "It consists of verifying if everything happens according to the program adopted by the orders given and defined principles."
According to Joan Ma. Amat: "… is the set of mechanisms that management can use that increase the probability that the behavior of people who are part of the Organization is consistent with its objectives."
According to Blanco Illescas: “It constitutes a process by which a company ensures that the execution agrees with the planning or, in any case, discovers possible deviations to take the appropriate corrective measures. This approach responds to a rule that is not necessarily optimal and that we could formulate like this: the closer the better. "
According to Jorge Ardiles: “System that encompasses the traditional idea of supervision and the idea of domain; that is, it is a global Control. Administrative tool that provides information on the degree of efficiency of the different activities carried out in the Company with the decisions that are made. "
To these, other authors are added who enriched the content, recognizing the relationship that exists between control and the activities of formulating objectives, setting standards, action programs, budgets, rational use of resources, measurement and verification of results, analysis deviations and performance correction. Chronologically, the discovery about the close relationship between management control and the development of strategies is added, an aspect of great importance for the environment where companies operate today, since management will only lead to successful results if previously it has been marked the goal and the strategy to achieve it.
In such a way, that the classical definitions consider three stages:
• Follow a plan
• Determine and explain deviations
• Define corrective actions
For its part, the modern approach starts from recognizing the role of workers in the achievement of organizational goals, considers that management control must have alarm signals that anticipate deviations, such as feed-forward control mechanisms since subsequent control, based on traditional accounting and as a photograph of what happened, does not have the creative ability to solve problems. A change of focus of management control systems is needed to help improve productivity, monitor the factors that determine business competitiveness (quality, customer service, fast deliveries, etc.), systems that manage to motivate the staff and evaluate their achievements.
The management control situation in Cuban companies is illustrated through two fundamental stages. The first characterized by a stable, regulated and non-competitive economic environment, marked by preferential commercial exchange relations, especially with the former USSR, where the essence of control was in accounting for the fulfillment of commercial plans, expenses and income, lacking of the principles of economic efficiency.
The second, which begins with the collapse of the socialist system in 1990, places our organizations in an aggressive and turbulent environment in the midst of an open economy closely linked to the world market, where the main problem is the shortage of convertible currency and it is necessary, therefore, of a transformation process to revitalize the national economy.
Studies carried out between 1997 and 2001 show that in the conditions of the Cuban economy, the management control that is carried out is highly supported by the classic conception of Management Control, that is, the most important thing is the achievement of benefits, the analysis of financial information being the main instrument used, specifically the budget; This situation, caused by the way the domestic market operated in the country, which was not exposed to demanding international checks and the Management Control process was part of the material planning system where the companies' plans responded to the guidelines drawn up by the JUCEPLAN, a reflection of the management and planning system of the socialist countries of Europe.
From the point of view of the organization of the service provision process, there were shortcomings. Generalized rules of conduct in the world such as customer orientation, efficient coordination between company operations, reduction of waiting times and customer service, participation of all employees and strategic integration with the governing body and the client, they were not in the foreground in Cuban companies, the fundamental objective of Management Control was verification; This was synonymous with large reports packed with figures, rather than a tool that facilitated decision-making for management.
The management model that was used in Cuban companies was demonstrating its inability to cope with the economic contraction that the business sector had been suffering and as of 1996, with Circular Letter No. 21 of Carlos Lage, Executive Secretary of the Council of Ministers, the introduction of Management by Objectives in each of the sectors of the national economy begins in the country.
The introduction of Management by Objectives with a Strategic Approach in Cuban companies has presented difficulties in its implementation, generally caused by factors directly linked to the control of objectives; among which are:
1. The indicators that are directly linked to each of the projected objectives are not known and in the case of companies where they are clearly defined, they are seen as a bureaucratic element within the Management by Objectives process.
2. The Key Result Areas in most cases constitute a replica of those of the higher level without taking into account the relevance of each one of them at the corresponding level.
3. The evaluation and control indicators are unknown at the lowest levels of the organization.
4. Insufficiencies in the control of the objectives, which are given because the objectives are controlled semester and / or annually and this constitutes a formal act.
In September 2003, Resolution 297 of the Ministry of Finance and Price was approved, expressing the need to introduce changes in the concept of internal control.
Procedure to measure customer satisfaction
The Las Tunas Construction Materials Company applies the OVAR method as a management control method, of which it makes a particular and unique application in the territory. On this basis we propose to develop a procedure with a systemic approach for the customer satisfaction perspective.
The procedure consists of five stages.
Planning stage
1 Mission - Vision
2 Strategic Objectives
3 Strategies
Diagnostic stage
1 Analysis of the current procedure
2 Analysis of the application of the OVAR Method
Design stage
1 Build OVAR grid 1
2 Define objectives for each customer satisfaction area
3 Formulate customer satisfaction action variables
Integration stage
1 Hold integration meeting
2 Build OVAR grills 2
3 Decide on customer satisfaction objectives in each area
4 Formulate customer satisfaction action variables
5 Build indicators to measure customer satisfaction
Implementation and control stage
1 Action plans
2 Control actions
Planning stage
Mission vision
The strategic analysis must start from reviewing the mission-vision and its objective is the precision of the organization's situation, that is, the prevalence of threats or opportunities in the external aspect and of the strengths or weaknesses in the internal plane.
Establish the key factors for success.
Success is associated with satisfying customer needs and expectations. Therefore, compliance with the company's corporate purpose is assessed from this perspective.
Once the key factors for success have been defined, the organization can direct its actions towards customer satisfaction and thereby achieve distinction from the competition, achieving customer loyalty and reducing the threat of substitute products.
Within the organization, the areas on which the key factors for success have the greatest impact are also defined, with the aim of establishing the places where individual and collective resources and efforts will be located.
Set strategic objectives by key success factor.
An objective is a goal to be achieved in whose determination it is necessary the participation of all the members of the organization in order to achieve higher levels of commitment in its fulfillment, as well as the understanding of the role and responsibility that each one assumes within it. A motivating factor is the fact that the worker, whatever his role, sees how his performance affects the realization of customer expectations, how his contribution is reflected and the specific link he occupies within key strategies and also constitutes a achievement from the point of view of value formation.
Formulation and alignment of strategies.
Strategies are formulated at three organizational levels. The alignment of the strategies consists of achieving coherence and correspondence between the master, generic and functional strategies, that is, that the lower levels pay cohesively to the higher ones.
Summarizing:
When analyzing the strategy, it is advisable to take into account the existence or not of a strategic projection with objective bases according to the characteristics of the company.
If there is an orientation of the company towards the target market, dominance of the sector and competition and growth through new products.
On the other hand, if the information system is used towards knowledge of the environment and the sector, which will lead to the satisfaction of future market needs, setting specific objectives for each business unit.
Other aspects to consider are the existence of teamwork for the development of new products and markets as well as the flexibility of the structure for the development of the strategy.
Diagnostic stage
The objective of this stage is to carry out an evaluation of the procedure that the company currently uses to measure customer satisfaction, what indicators it uses to control it, how it communicates with the customer and also analyzes how the method is applied OVAR for these purposes.
Design stage
The purpose of this stage is to carry out the application of the OVAR approach itself; so it will be necessary to complete each of the following steps:
I- Prepare the OVAR Grill for the Director and those of his collaborators.
This is nothing more than applying Phase I of the OVAR method, which consists of asking each member of the management team (including, of course, its highest leader) to think, project, imagine their role with a horizon of one year, the same So it would if it were given the freedom to plan and act. This construction of his function takes the form of a matrix that represents in columns the main progress objectives that this manager wishes to set himself and, in rows, the action variables or means that he intends to put into practice in order to achieve his objectives. The crossover between the objectives and the action variables is very useful; allows verifying the manager's quality models (the cause-effect relationships between action variables and objectives),the quality and relevance of the proposed objectives based on the means to achieve them (an objective is a pious vote until at least two defensible action variables are designated to carry them out), creativity in the selection of action variables, the complementarity or confusion of the objectives, the nature and force of the impact of each action variable on the objectives, etc.
Important aspects to take into account when preparing them are detailed below:
1. In the general framework of construction of the grills, it is necessary to take into account the results of strategic planning, highlighting:
• Diagnosis of the situation.
• Analysis of the structure.
• Strengths and weaknesses, threats and opportunities, actors and what is at stake for them.
• The mission and general long-term objectives (strategy).
2. The OVAR grill is nothing more than the interlocking combination of:
• Objectives and variables of action.
• Responsible.
The results of the OVAR grill are:
• Analysis of the objectives (columns), of the action variables (rows) and of their intersections.
• Analysis of the distribution of responsibilities.
Finally, some general recommendations for making a grill are detailed.
• Consider planning for a maximum year.
• Always use an action verb to express both the objectives and the action variables.
• When expressing an objective or an action variable, think about the possibility of observing its scope or measuring its accomplishment.
• Ask yourself the question for what? If the answer leads to one of the general objectives (more than one year), it is an objective. If not, it is not.
• Do not confuse general objective and specific objective.
• Prevent objectives from overlapping.
• Avoid expressing two objectives in one.
• Ask yourself: If these objectives are achieved, can it be considered that everything that needs to be done is done?
• Do not confuse objective (result to be achieved) and action variable (action, effort to carry out).
• Forcing oneself to be precise in the formulation of objectives and action variables to avoid ambiguity. Do not use expressions such as: "Improve financial situation", or "increase profitability", which are imprecise.
In the formulation of an action variable, briefly indicate how it will be done to carry it out, without being exhaustive in order not to confuse action variables and action plans (it is about delimiting, not detailing).
Wonder:
• Do you have all the action variables for one goal?
• With the action variables that you have for an objective, are there the means to achieve it?
• Consider only the owner of the grill and her direct collaborators among those responsible.
Wonder:
• If the grill is presented to the other direct collaborators, will they clearly understand what is meant?
It's definitely about providing a consistent and concrete finish to the OVAR grill design.
This first part ends with the appointment, by the manager, of the people who, according to him, should be linked to the implementation of each action variable. These people may be responsible and / or collaborators for the realization of the action variable; they can be associated with this realization without being responsible, or be contributors when their support cannot be dispensed with. The latter are generally the direct collaborators of the manager or his parties responsible for other functions; But, sometimes the associates or contributors can be the hierarchical superior, the beneficiaries, the internal service providers or other people outside the organization. This appointment is a crucial moment of the exercise,since it allows to understand how the manager represents the role of his different co-workers.
Once all the grills have been made, proceed to the next step.
Define the objectives and action variables for each decision level and each area of customer satisfaction.
In this stage, we start from the strategic objectives that will constitute the objectives of the senior management, which are deployed through action variables that will constitute the objectives of the middle managers, which in turn are divided into action variables that are they translate into physical system or operational core targets.
Integration stage
Hold the Integration Board.
This step corresponds to Phase II of the method, and consists of a meeting whereby the members of the management team work together on the scope of their matrices and seek to improve, as much as possible, the coherence between their different perspectives. One after the other and starting with the manager, each manager submits her matrix (version 1) to the others for consideration. After each presentation, the necessary adjustments are made so that the analyzed matrix is adequately integrated into the set of other matrices in order to reinforce the coherence of the management team. As stated, it is a very important and defining moment in the process, is where the coherence and cohesion of the group is achieved or not.
The purpose of this moment is given both for a person in charge and for the management team, highlighting below the significance that it should have for each of them.
For a manager:
• Have your entity "under control" (guidance and monitoring).
• Better represent the situation of your entity, crossing points of view on it.
• Formalize the distribution of responsibilities in your team.
For the management team:
• Learn to define objectives.
• Allow better top-down and bottom-up integration.
• Improve the coherence of individual decisions.
• Reinforce dialogue and interactions among its members.
Build OVAR Grill (2)
As a result of the integration meeting, the final versions of each of the proposed grills are achieved (the same steps described in the Design Stage corresponding to Phase I of the OVAR Method are followed).
Define customer satisfaction objectives in each area and Formulate customer satisfaction action variables.
The purpose of this point is to define specific objectives of customer satisfaction for each area, where managers and collaborators within them decide, in relation to the general strategies of the organization which is the order of priorities, which will be the actions linked to each objective and how resources should be directed for its successful realization. In other words, it is here where the "what" and "how" carried out is decided, the most concrete sense of the complementary execution carried out in each area.
Build indicators to measure customer satisfaction
Definition of the indicator system:
As a result of this analysis, the necessary indicators are obtained to measure the performance of the key factors at each level, in order to determine the degree of achievement of the strategic objectives. The figure should be moderate to avoid excess data that can make it more expensive and make it difficult to use; however, this is relative since it depends on the characteristics of the organization.
Characterization of each indicator
According to different authors, an indicator is expressed by an attribute, a meter, a goal and a time horizon. This means that the indicator will have a name, an objective, a defined way to calculate it, the moment when it will be done and its corresponding person in charge.
Each action variable will have a series of indicators associated with it that will yield concrete, objective figures that facilitate control and compliance with these variables.
It is important to know towards which perspectives to direct the search for indicators, in this work the following are fundamentally suggested:
Financial: links the objectives of each business unit with the company's strategy in numerical form. Well achieved these indicators can be very useful for decision making. They can be of profitability, growth among others.
From the customers' point of view, indicators that measure the value propositions that are aimed at customers and markets, that assess their needs, satisfaction, loyalty, in short, it is essential that they reflect the positioning in the market.
Very important, all the indicators that answer the question to satisfy our customers, in which part or process should we be better?, That is, those that act on the value chain and enrich the strategies for customer satisfaction. These indicators can be response times, productivity, cost / income, etc.
It is necessary to know the qualities that a good indicator should possess:
• Simple and easy to interpret.
• Reliable.
• Coherent (can be transferred from one dashboard (GANTT chart) to another).
• Neither complicated nor expensive when searching for data.
• Have him measure as soon as possible.
• That it is significant, that it allows comparisons.
• Put in perspective with respect to the objective.
It is also recommended to take into account the following basic requirements:
• Relevance: they must fully reflect the fulfillment of the institutional objectives.
• Independence: the indicators must avoid being conditioned to external factors, such as actions of third parties, whether in the public or private sphere.
• Public: they must be known and accessible to all levels of the administration, as well as to the user public.
• Participatory generation: the indicators must emanate from a participatory activity, that is, all relevant actors must be involved in the preparation process, in such a way as to guarantee their legitimacy and reinforce the commitment to the task of evaluation and measurement.
Implementation and control stage
The desire to improve the results measured by the indicators requires planning and executing a whole series of actions, projects or improvement initiatives, some of which are immediately launched.
Actions that lead to the fulfillment of the objectives formulated for the perspective (customer satisfaction) must be specified, which will have a person in charge, that is, a person who controls their performance, this will serve as the starting point to carry out the control system that is made reference in the next point.
Establish means of evaluating information, control environment, internal and external audit.
The measurement of the indicators, as a fundamental tool to evaluate the operation of the Management Control System, will be carried out according to the frequency established in the design phase; However, in all cases it is recommended to carry out partial evaluations to observe the trend and to adopt, whenever necessary proactively, the measures to achieve the proposed objectives.
Action plans
It is nothing more than the application of phase III of the method and consists successively:
1 In the preparation, by the manager or by the persons designated as responsible, of the action plans linked to the action variables of their OVAR matrix (one per action variable). These action plans operationalize the realization of the action variables.
2 In the selection of the most pertinent indicators to monitor the achievement of the objectives, the action variables and the action plans.
3 In the construction of the GANTT chart for each manager based on the indicators that they will have selected.
The moment of carrying out the action plans is one of the keys to the effectiveness of the method, therefore the following questions are recommended for its preparation:
• Than? As for the objective.
• How? Description of the various stages.
• Why so? Justification of how it is exposed. It serves so that once the modality is chosen, the options are justified in front of the hierarchy (Director of the Company).
• Expected impact? It refers to the impacts of the grills.
• Who? Responsible and participants.
• When? It has to be specific.
• How much? How much is it going to cost? How much is it going to pay in? What assets: Inventories, credits? What liabilities: Loans, grants?
• With what indicators? How to measure what is being done. Define indicators.
• What degree of priority? Urgent and vital. Necessary. The next year.
It is advisable to take into account the following basic principles to achieve the effectiveness of action plans:
1. Be consistent.
2. Superiority over the competition.
3. Be realistic and ambitious.
4. Be realistic taking into account the resources you have.
Selection of Indicators
On the other hand, the selection of the most pertinent indicators to monitor the achievement of the objectives, the action variables and the action plans is very important. Establish a strategic measurement system that reports the degree of progress of the strategy, if this information is lacking, only final results can be measured and with this the possibility of correcting on the fly is ruled out.
The capacities of the employees, the capacities of the information systems, and the organizational climate are also measured to measure the motivation and the initiatives of the personnel, as inducers of all the results to achieve the success of the company.
The selection of the indicators will be made based on what is to be achieved in the proposed objectives, it is recommended to take no more than two indicators per action variable, and take into account the following aspects:
It is proposed to formulate three groups of indicators according to their impact on the objective: Effort, Impact or Result and Efficiency Indicators.
Effort Indicators: These are those that measure the level of resources (financial, human, material, time) used to achieve the objective. They will be selected depending on what gives the CEO more information, among these may be:
• Number of visits made ……….
• Number of man days dedicated to ………..
• Amount of expenses for …………
• Compliance with the …… plan.
• Others.
Result or Impact Indicators: These are indicators used to measure results of the resources used. You have to go to the objectives and see what the impact is expected to be achieved for the year. Among these indicators can be found:
1 Number of positive responses ……….
2 Number of new clients …………
3 Sales to new clients…..
4 Profit from new clients ……..
5 Number of old clients lost ……..
6 Others
Efficiency Indicators: These are those that measure the degree of use of resources and are expressed in%. They will be evaluated by analyzing not only the percentages obtained in them, because behind a percentage there are raw data that can mask the results obtained, and from their analysis, the question could be answered, is it working well? These indicators include, for example:
• Number of clients captured / Number of visits.
• Profit with new clients / Research expenses. This refers to the profitability of the research.
•% of sales with new clients / Total sales.
• Others.
The indicators are made by the director of each area or department and proposed to the director of the company.
Indicators should be selected from the different categories, since the director of the company needs information on both results and effort.
The indicators may vary for each year, because the action variables may change, and the impact for the objective is no longer the same.
Preparation of the Control Boards (GANTT Graph).
The dashboard is the information and short-term action instrument prepared by each person in charge, focused on key indicators that allow them to find out about the status and evolution of the system they manage, allowing them to anticipate and quickly take corrective actions. They contain synthetic information for the action. They should be easy to read and use, avoiding pages of figures, where the use of graphs, pastels or histograms is recommended.
In addition, it must be taken into account in their preparation that they must meet the following characteristics:
1. They select a limited number of important data.
2. They demand speed in obtaining information.
3. They address different areas (diversified indicators).
4. They provide information for internal use (Managers).
5. They specifically address the achievement of objectives for each responsibility center.
Control actions
This stage aims to constantly evaluate the process, in order to know its effectiveness. Establish guidelines that reflect the need to see this approach as part of the company's Management Control System, taking into account that this means the introduction of changes in said system, as well as the implementation of new concepts in the way of managing for achieve strategic objectives.
Because this procedure has the characteristic of being iterative, this stage is present in each of the previous stages.
Conclusions
1. Carrying out this work suggests the need and possibility of incorporating new elements of the OVAR method into the traditional procedures of the company, and in turn, promotes coherence in the management team, seen through the objectives and variables of action and indicators as well as the habits and values of teamwork extended to all levels of the organization. It also promotes systematic control based on the delimitation of responsibilities and their corresponding assignment.
2. Provides a series of indicators that support the monitoring of objectives and make their control more tangible by creating a margin of independence with respect to financial indicators as traditional control methods.
3. In the exchange of criteria with the executives of the Company consulted, it was detected that they have received the necessary training to adapt the OVAR method to their needs as an organization, thus facilitating their understanding of the procedure that this work illustrates.
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