Financial and business information systems

Definitions of information and information systems.

According to Patricio Jiménez:

“ Management Control consists of a set of procedures, techniques, especially quantitative ones, that help a planned and orderly management, thus improving its efficiency in achieving strategic objectives.

According to Joan Amat:.

“Process through which different formal and informal mechanisms are used and combined to influence people's behavior”.

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 ”.

According to Ponjuán Dante Gloria:

It means capturing what is happening, transmitting it, comparing it with what should happen, deciding what to do, converting that decision into information and transmitting it to the executing bodies, this is the Information System.

Based on the fact that System can be defined as: The set of elements, rules, procedures, which are interrelated with each other, with a logical and ordered sequence of steps to achieve a result, we can issue our particular criterion of Information Systems, after having reviewed a set of bibliography, and this is: Set of data collected from different facts in a

entity, which after being processed, analyzed and compared with what should happen, become information to be used internally or externally, allowing decisions to be made. In our opinion, the most accurate criterion of the Information System is that issued by the Cuban Doctor Gloria Ponjuán Dantes.

One of the issues that distinguishes the management process is the constant flow of information, both within the entity and with respect to its external environment.

As there is a plan with defined and clear objectives, a means will be required that provides information about what the company has planned and what it is doing. From Administration Systems: Planning and Control, to Budgeting Systems and Accounting. This means that there must be information systems that operate in the organization, which allow communicating both what is planned and what has been done from the largest management system that exists in the organization, such as the planning system and total control of profits, to the systems budget and budget control systems.

Understand by information system:

Any human conglomerate whose survival and development actions are predominantly based on an intense use, distribution, storage and creation of information and knowledge resources mediated by new information and communication technologies. (one)

THE INFORMATION AS A RESOURCE.

Information is a resource for development.

According to Horton:

When used in the singular, it means the information itself, the content. For example, the information in a file or record.

Using in the plural, it means all the tools-equipment, supplies, physical facilities, people and other resources used by a company.

To sustain itself an organization must use information and must be managed as a resource. It is also said that information is a resource resource because it allows optimizing and making the most of other resources.

The information resource has particularities that distinguish it from other resources:

Information can be expanded Information can be compressed It is portable It tends to split and the more it breaks the more we have It is susceptible to being shared.

This last feature is the noblest of this resource, when information is shared or transmitted, or information is distributed, all recipients of this resource share it on equal terms, no one has more than the other, it all depends on the mix that it is done with the potentialities and knowledge of the recipient, which is what makes the difference.

EVOLUTION OF INFORMATION SYSTEMS.

A recurring theme in modern society on the threshold of a new millennium is being in the so-called Information Age. This name responds to the growing and determining importance that information represents for individuals in society, in any country, at any latitude, with any culture or level of development, they will be driven to consume more and better information.

It is also said that a new mode of information is facing, that there has been a transition to the global informational economy.

But this was not always so:

In previous stages of human existence, man was only dedicated to collecting data with incipient means, with the aim of achieving an objective, an end, a set goal, which allowed him to make an analysis.

Then the man with scientific advances and technical scientific progress was needing to perfect that information.

Currently there is talk of information management in organizations, quality management, management of information resources, roles and capabilities of people in information management.

Currently, in the information age in which we find ourselves, we speak of corporate intelligence, which consists of several phases in its establishment:

Corporate awareness Establishment of a department to process information Development of an electronic system Development of a global electronic network

All this shows the development that has gone through the paths of evolution, information and information systems as a fundamental way for decision-making in an organization.

As a result of the changes that have originated mainly from the massive use of computers, information has come to occupy a fundamental place in the life of organizations.

Information exists and will exist in any action or intention of the work of humanity, therefore, there is no organization without information.

The new management models indicate that currently the most valuable resource that exists is information, as opposed to capital, whose relevance left that foreground.

The origins and causes of the emergence of information societies or information systems are based on two interrelated aspects:

Long-term economic development Technological changes.

CHARACTERISTICS OF THE INFORMATION SYSTEMS.

At each level there is a certain quantity and quality of information that you need to know in order to achieve the set objectives and when making decisions.

Management is materialized in decision-making but you can only decide on what is known and for this you need a certain quantity and quality of information.

An information system must have the following main characteristics:

The information is used as an economic resource. Organizations make greater use of information to increase their efficiency, to stimulate innovation, and to increase their effectiveness and competitive position, often through improvements in the quality of the goods and services they produce. information to the general public. People use information more intensively in their activities in the role of consumers, to exercise their civil rights and responsibilities, in addition to the information systems that are developed, they will extend public access to culture and education. Information is to satisfy the general demand for informational services and facilities. A significant part of the sector deals with technological infrastructure,telecommunications networks and computers.

In almost all societies, the information sector is growing faster than the rest of the economy.

ELEMENTS THAT MAKE UP AN INFORMATIVE SYSTEM.

The elements that make up an information system are defined in two large groups:

Technical Element Human Element

Within the first, the technical element, we can include the designed system that the organization has, which depending on the degree of technical scientific advance that it has implemented or the scope of the entity, then the information system as such will be most effective.

For this element, there must be an organization chart or flow of information that allows the formation of the information pyramid, that is, from the base to the last level, the Director, reaches the synthesized information but with a high qualitative level that allows the high command the correct decision-making and at the right time.

Although it is true that the board participates in both strategic planning and organizational design and in the creation of information systems, it is necessary that this participation that serves to establish or create systems is based on techniques, models or typologies, the that according to the skill of the board, they will be well selected and combined. Therefore, the technical elements are not dynamic, they are only orientations (strategy) of order (structure) and communicational behaviors (information system).

Just as there is the technical element, there is also a human element that constitutes the essential element for success or failure in achieving the objectives established in the strategy. This element constitutes the management of people, since their participation will be action and execution, that is, management.

Due to the above, it is convenient to highlight the value of the human resource, in its true importance, both in the management and control of it, emphasizing the development of some sciences of human behavior, using motivating and incentive elements for a better analysis of the knowledge of organizational culture and its impact on decision making.

INFORMATION MANAGEMENT.

The particularities of the development of Management Control and the trend that is evident today, are the result of greater complexity, hostility and dynamism in the environment in which organizations operate and the changes originated in the way they manage them, where one passes from a static, rigid organization; to a flexible and participatory one, appreciating the trend towards the development of a comprehensive management control that penetrates the entire spectrum of the company, whether it is productive, service, lucrative or non-profit.

SCOPE OF MANAGEMENT CONTROL. According to Amat, J (1989).

The Management Control is not opposed to the Democratic Company: As the Management Control seeks integration and is not opposed to the "Democratic Company"; since they focus on the processes and do not interfere with the command style, it then implies that Management Control is developed in any management style. Management Control is assignable: This indicates that it only measures the responsibility of people, since who does not care about authority, his focus is not the hierarchy of the company but responsibility within the Organization The person responsible for Management Control is the General Manager: The main person responsible for Management Control is the General Manager since it only assigns responsibility and does not delegate it. The highest representative of Management Control is called the "Controller":Maximum representative of the Management Control function within the company, which must play with the different variables and components that determine said function. Management Control is eminently "participatory": It is participatory since it integrates all the people in the company. company and also makes it participate in the strategic objectives of the organization

OBJECTIVES

The Objective of Management Control emerges from its characteristics and definitions since it becomes the unifying coordinating element that aims to direct human resources to collaborate in the achievement of institutional objectives.

These qualifiers of Management Control, facilitate the fulfillment of its objective, which consists of: “Motivate human resources to collaborate in the fulfillment of institutional objectives, contributing to a permanent organizational development, which allows stability and continuity over time. of the Company ”. (Source: class notes).

FEATURES

The author Francisco Blanco Illescas states that the following characteristics must be contained in any Management Control system.

TOTALITY: Management Control covers all aspects of the Company's activities, that is, it does not limit partial aspects, but rather looks at everything from an overall perspective.BALANCE: One quality of Management Control is that each aspect in the company has its fair weight, this indicates that each variable has the corresponding importance.GENERALITY: This characteristic is associated with the characteristic of Totality. The Management Control must be able to analyze each situation that arises in general terms, not focusing on its detail.OPPORTUNITY: It suggests that Management Control must tend to be preventive, which implies that controls must be established through all the activities that make up a process and not only at the end of it EFFICIENCY:The Management Control seeks to achieve the objectives by pointing to the center of the problems.INTEGRATION: For the Management Control the various factors are considered within the structure of the Company, to see the repercussions of each problem as a whole.CREATIVITY: It consists of the continuous search for significant indicators and standards to better understand the reality of the Company and direct it more accurately towards its objectives. IMPULSE TO ACTION: Management Control encourages the participation of all the human resources that work in the organization.It consists of the continuous search for significant indicators and standards to better understand the reality of the Company and direct it more accurately towards its objectives. IMPULSE TO ACTION: Management Control encourages the participation of all the human resources that work in the organization.It consists of the continuous search for significant indicators and standards to better understand the reality of the Company and direct it more accurately towards its objectives. IMPULSE TO ACTION: Management Control encourages the participation of all the human resources that work in the organization.

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, the latter equivalent to the cost of a dominant factor, where the first two principles form the basis of the control model as a system that must ensure that actual behaviors are consistent with the standard. The main functions related to Management Control are framed in verification and observation, the goal of which is to reduce costs and increase productivity with a persistent insistence on improving quality.

From its inception, Management Control was considered an appendix of the Accounting department, oriented to an internal vision of the company; responding to the need to explain the financial and economic results achieved, characterized by the definition, coordination and execution of the budget, the preparation of reports and their interpretation, as well as the formulation of reports for state offices; vision that reduces Management Control to the study of the economic-financial effects of the different policies, essentially focused on profitability concerns. Indeed, this stage was characterized by the scarce existence of studies referring to this subject, highlighting the study carried out by Drucker in 1950,through which it organizes the company's indicators into areas and the one developed by Harvard University in 1968, which presents the practical problems of budget control in business life. In general, the verification-review approach predominated until the end of the 1970s, which is known in the literature as the classic approach, defined as the set of processes used by managers to obtain resources and to obtain evaluate their contribution to the results with a sense of efficiency.defined as the set of processes used by managers to obtain resources and to evaluate their contribution to results with a sense of efficiency.defined as the set of processes used by managers to obtain resources and to evaluate their contribution to results with a sense of efficiency.

Starting in the 1980s, the interrelationships of organizations with the environment were consolidated, highlighting the role of the client as a fundamental element for the success of an organization. These interactions are characterized by dynamism and instability, producing an increase in the complexity of the management of companies, resulting in that managers when designing their strategies and forms of action to achieve their planned objectives, will not have a support to provide you with real and timely information about your situation, which was a source of encouragement to change the relatively segmented internal approach that had been taking Management Control for a new, more integrated, global and qualitative-quantitative superior, with a new profile in the planning and control process,in which strategies become the key factor in the success of organizations. In this way, long-term forecasts and the rigid allocation of resources are set aside, for a constant analysis of the company's environment, as part of a new strategic direction. This is how García Echevarria (1987) acknowledges it by stating: “that in a competitive society like the current one, there are continually changes that require new bases for the effectiveness of men's leadership and in the allocation of resources” (3). This modern approach to Management Control can be defined as the set of processes that, based on the guidelines of strategic planning, emphasizes achieving the initiative, rather than the conformity of achieving what is planned.In this way, long-term forecasts and the rigid allocation of resources are set aside, for a constant analysis of the company's environment, as part of a new strategic direction. This is how García Echevarria (1987) acknowledges it by stating: “that in a competitive society like the current one, there are continually changes that require new bases for the effectiveness of men's leadership and in the allocation of resources” (3). This modern approach to Management Control can be defined as the set of processes that, based on the guidelines of strategic planning, emphasizes achieving the initiative, rather than the conformity of achieving what is planned.In this way, long-term forecasts and the rigid allocation of resources are set aside, for a constant analysis of the company's environment, as part of a new strategic direction. This is how García Echevarria (1987) acknowledges it by stating: “that in a competitive society like the current one, there are continually changes that require new bases for the effectiveness of men's leadership and in the allocation of resources” (3). This modern approach to Management Control can be defined as the set of processes that, based on the guidelines of strategic planning, emphasizes achieving the initiative, rather than the conformity of achieving what is planned.as part of a new strategic direction. This is how García Echevarria (1987) acknowledges it by stating: “that in a competitive society like the current one, there are continually changes that require new bases for the effectiveness of men's leadership and in the allocation of resources” (3). This modern approach to Management Control can be defined as the set of processes that, based on the guidelines of strategic planning, emphasizes achieving the initiative, rather than the conformity of achieving what is planned.as part of a new strategic direction. This is how García Echevarria (1987) acknowledges it by stating: “that in a competitive society like the current one, there are continually changes that require new bases for the effectiveness of men's leadership and in the allocation of resources” (3). This modern approach to Management Control can be defined as the set of processes that, based on the guidelines of strategic planning, emphasizes achieving the initiative, rather than the conformity of achieving what is planned.It can be defined as the set of processes that, based on the strategic planning guidelines, emphasizes achieving the initiative, rather than the conformity of achieving the planned.It can be defined as the set of processes that, based on the strategic planning guidelines, emphasizes achieving the initiative, rather than the conformity of achieving the planned.

In this way, by assuming an integrative, global and strategic approach to Management Control, it becomes a factor capable of enhancing the rapprochement between managers and subordinates, as a result of the decentralization of authority inherent in flat structures. This is based on the criteria of Castellanos (1998) and Hope (1996); which coincide in pointing out that the empowerment of shared values, creativity, innovation, adaptability, leadership and the role of human resources, although they do not guarantee good results by themselves, must be directed towards the achievement of the objectives organizational, which depends, among other factors of Management Control.

A characteristic and spontaneous aspect of Management Control is that it relies heavily on the financial and economic information of the organization, but it is not limited to this only, but also draws on other sources of information, such as those related to quality control, marketing, Human Resources management, among others; to evaluate the company's management in a balanced way.

Blanco considers Management Control as “the process by which managers ensure that they obtain resources and that they are effectively and efficiently used in meeting the company's objectives” (4).

For his part, Blázquez states that "we can conceive of Management Control as the permanent search for maximizing the image and results of organizations" recognizing that "Management Control constitutes one of the instruments that participates in the resolution of tensions to which the organizations are permanently affected through the critical analysis of their management, for the achievement of their purposes ".

Definition of Information Management: It is everything related to obtaining the right information, in the right way, for the right person, at the right cost, at the right time, in the right place, to take the right action. (two)

This definition encompasses the objectives of information management, which are:

Maximize the value and benefits derived from the use of information Minimize the cost of acquisition, processing and use of information Determine responsibilities for the effective, efficient and economical use of information Ensure a continuous supply of information

Different authors have defined Information Resource Management, Orna defined it as… “… the set of responsible instances in the organization for the definition of policies and actions in relation to:

How information is acquired, recorded and deposited How information is used and communicated How people who handle information apply their skills and cooperate with each other How effectively information-related activities contribute to the achievement of the objectives of organizations and individuals How it is done They use information technology in all these activities The costs and benefits of information activities.

In 1985, Schneyman stated:

“….Is the management (planning, organization, operations and control) of resources (human and physical) that have to do with supporting systems (development, improvement and maintenance) and services (processing, transformation, distribution, storage and recovery) of information (data, texts, voice and image) for a company ”.

The definition formulated by Cornelius Buró and Forest W. Horton is the most appropriate for this approach: It is the process within the information management segment that serves the corporate interest. It seeks to associate the information for the benefit of the organization as a whole through the exploitation, development and optimization of information resources generally manifested in the corporate goals and objectives. Therefore, the management of information resources is the managerial link that connects the corporate information resources with the goals and objectives of the organization.

According to J. de Guerny et all 1984, ch. A, page 4 about the Scorecard.

There are several types of management control and these are the following:

Classic or Traditional Management Control Modern Management Control Management Control in the Cuban Business Sector.

Classic or Traditional Management Control:

Relevant aspects:

Evaluate results with a sense of efficiency. Management Control is exclusive to managers. The objective is to measure results.

Other features:

It considers Control as a verifying mechanism. It considers Management Control as a strategic activity, and strategy as exclusive to the higher hierarchical level.

Modern Management Control:

Relevant aspects:

It is based on strategic planning. Emphasis on awakening initiative. Understanding all people.

Other features:

Modern Management Control is global because it is at the strategic, tactical and operational level that applies to the entire company and, Integrative because it wants to achieve the participation of all people.

As can be seen, the challenge of transformation for Management Control systems constitutes a process of change that implies new ways of thinking and acting on the part of managers, for this reason it is recognized that this process should not be hard blow, but must be carried out gradually, adequately designed to meet the needs of the organization, in order to achieve the planned improvement objectives; otherwise, the Management Control System could not evolve at the speed that organizations demand from it to maintain and / or grow in competitiveness levels, where the role of the Human Resource plays an important role as object and subject of everything the process.

Management Control in the Cuban Business Sector.

Research carried out by Machado Noa, between the years 1997 and 2001 show that in the conditions of the Cuban economy, the management control that is carried out is strongly supported by the classic conception of Management Control, that is, the most important thing is the achievement of benefits, being the analysis of financial information 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 destruction of the socialist camp dealt a severe blow to the Cuban economy, which represented the interruption of soft financing of the ex-socialist European countries, the cessation of international transfers, the halting of large-scale strategic industrial projects, the loss of clients and safe providers and advantageous marketing conditions, the intensification of the blockade makes the environment particularly aggressive and turbulent for the Cuban economy.

“Our society is heading towards a mixed economy, with a greater presence of commercial relations in the economy, in which there will be a predominance of the social sector that must show equal or greater efficiency than that of the private sector or mixed companies (…). Efficiency is (…) the central objective of Economic Policy since it constitutes one of the country's potentialities ”(7).

Under these conditions, the management model that was used in Cuban companies was demonstrating its inability to face the economic contraction that the business sector had been suffering and from 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.

ORGANIZATIONAL CULTURE

The Strategic Planning process should not be an isolated process, that is, it must be in accordance with the organizational structure, information system and management control system, but must also be closely linked to the culture of the organization, so This last concept is predominant in most cases when implementing the strategy.

Organizational Culture will be understood as the "set of thoughts, feelings and models that define the conduct of the entire company" (2)

The organizational culture has the following levels:

Culture of the individual: It is one that is rooted in the deepest thoughts of the person and that defines their behavior in certain situations, such as the moral norms that govern the conduct of the individual. Acquired culture: Models and perceptions acquired by the individual Throughout their life, such as social behaviors. Culture expression: These are all those behavioral models acquired by the individual when entering the Company, such as the philosophy of the company.

ORGANIZATIONAL DESIGN

That is, the form that the ordering of resources and communication flows will take, the definition of authority and the assignment of responsibilities, ultimately how the company will be structured. choosing between the classic functional, territorial, customer, matrix, or product forms.

In information management there are two methods that can be applied in Cuban companies and they are:

La Parrilla OVAR The Balance Scorecard or Balanced Scorecard.

The Balance Scorecard (BSC) or Balanced Scorecard (CMI) as a method of Management Control.

Management control begins with the vision and strategy of the company, and the Balance Scoredcard method is a method of control of the business, so its descriptive nature can frequently lead to new ideas about the vision and a reconsideration of the strategy of the company.

The Balance Scorecard (BSC) or Balanced Scorecard (CMI) is an important methodological tool that translates the strategy into a set of performance measures, which provide the necessary structure for a management and measurement system. It induces a series of results that favor the management of the company, but to achieve this it is necessary to implement the methodology and application to monitor and analyze the indicators obtained from the analysis. Among others we can consider the following advantages:

Alignment of employees with the vision of the company Communication to all staff of the objectives and their fulfillment Redefinition of the strategy based on results Translation of the vision and strategies in action It favors the creation of future value in the present Integration of information from various business areas. Capacity for analysis. Improvement in financial indicators. Labor development of the project promoters.

It allows to implement the strategy and vision of an organization based on a set of indicators. It emphasizes the achievement of objectives and includes drivers of future action to achieve those objectives. It provides a structure to transform strategy into action. The model shows how it is possible to translate vision into action, organizing strategic issues from four perspectives: Financial, customers, internal processes, and learning and growth, all of which is synthesized in a strategic map in a cause-effect relationship and a Dashboard or Dashboard.

It is a concept that will help translate strategy into action. The BSC starts with the vision and strategy of the company and defines the critical success factors. The indicators will help measure the objectives and critical areas of the strategy. In this way, the

Balance Scorecard is a performance measurement system, derived from vision and strategy, that reflects the most important aspects of your business. The Balance Scorecard (BSC) concept supports strategic planning as it aligns the actions of all members of the organization with the objectives and facilitates the achievement of the strategy.

The Balanced Scorecard is a useful tool to proactively manage companies in the short and long term. Its effectiveness lies in a good understanding of its fundamentals, a complete application that involves the management of the company and allows correct decision-making.

The Balanced Scorecard transforms the mission and strategies of objectives and indicators organized in four different perspectives: Finance, Customers, Internal Processes and Training and Growth.

The Scorecard provides a framework, structure and language for communicating mission and strategy, using measurements to inform employees about current and future drivers of success. By articulating the results that the organization desires, and the drivers of those results, senior executives hope to channel the energies, capabilities, and concrete knowledge of all the organization's personnel toward the achievement of long-term objectives. (eleven)

According to J. de Guerny et all 1984, ch. A, page 4 on the Scorecard, in terms of management, characterized by its operational nature, by its ease of implementation, and related to the key aspects of decision and responsibility in the company, is why we have taken party by this type of Scorecard, although there must be a

Operational and Strategic Management Scorecard, so we can summarize that the Management Scorecard must meet the following characteristics: (2)

The type and nature of the information they contain The fluidity of the information between the different hierarchical levels The selection of the necessary indicators for decision-making

The information that the company can use, depending on its nature, can be valid for one or another Scorecard and this can be divided into two large areas, external and internal information.

For example, E Chiapello and MH Delmond (1994) indicate that the information contained in the Scorecard must be financial, financial, accounting and qualitative, the latter referring to non-financial information.

In relation to the time horizon, we can see that it has evolved towards much more qualified and precise information. The importance that was given to obtaining said information and to the different types of documents to be used, has been dissipating until the qualitative aspects of the information and those related to the business environment have taken on greater emphasis, which, until not long ago time, they have practically not been taken into account.

In summary, it can be stated that what is truly important is to know the sources of information well, know how to choose the information well in each case, and above all make use of what is necessary.

Companies are increasingly concerned with having an organized, agile and fluid communication system between all levels of responsibility. Said communication must be given through channels that make it possible for the staff, through a clear knowledge of the issues that affect them, to feel more involved in their daily tasks, whatever that level there must be a feeling of integration, participation, which in no way excludes the hierarchical management.

Internal communication in the company, as a basic element in the management of human resources, raises a series of transmission lines (4) of information, which according to the literature are established in three fundamentally:

Ascending lines Horizontal or cross lines Descending lines

CONTENT OF THE MAIN INFORMATIVE LINES.

The four perspectives of the Scorecard allow a balance between the short-term and long-term objectives, between the desired results and the drivers of updating those results, and between the objective measures, harder and the softer and subjective. Although the multiplicity of indicators in a Balanced Scorecard can apparently be confused, the properly constructed Scorecard, as we will see, contains a unity of purpose, since all the measures are directed towards the achievement of an integrated strategy.

MANAGEMENT CONTROL TOOLS

The Management Control is in charge of diagnosing the problems that originate in the organization, making use of a series of tools to correct and improve them.

Consequently, the implementation of Management Control in a Company requires the use of a series of tools according to the visualization that it provides.

Consider Management Control as a management approach that implies the adoption of a series of decisions that guide the action of individuals who are located at the various levels of the company and whose functions pursue the achievement of predetermined objectives. From this point of view, the specific application of management control in organizations is reflected in the use of various control tools, which interacting help to improve the quality of business management.

TOOLS BASED ON INTERNAL INFORMATION

They are made to be used with financial-accounting information of the organization, since it is characterized by its high use of information in numerical concepts. Therefore, they seek to compare the Company with the plans previously drawn in the strategic planning. Among the internal information tools we find the following:

BUDGETS

The purpose of its use will be to serve as a control and planning measure, which will establish the boundaries of its use. It is considered that this tool should not only be oriented with the purpose that its use serves to compare what is real with what is planned, it is also necessary to consider the deviations that have originated, and even more to try to recognize the flexibility that the activity of the users requires. business.

The budget gives consistency to the company's plans, by quantitatively defining the projected actions, both in financial and numerical terms. However, the budget achieves its maximum utility when the company has been structured in centers of responsibility.

The budget is an effective tool for decision making. It fulfills the dual purpose of being an instrument that supports Strategic Planning and therefore Management Control, and a document that transmits information and delegation of authority, the budget thus conceived exceeds the limitations of traditional control, becoming a high-level tool. value in the evaluation of Company Management.

BUDGET CONTROL

Closely coupled with the previous tool, it seeks to generate control reports based on deviations due to non-compliance with the use of established actions, that is, it is not enough to prepare a budget and maintain it with a rigid plan of operations, it is necessary to compare it periodically with the actual performance of the operation, to determine the variations, analyze their causes and order the modifications and corrections that are necessary for the execution of the programmed plans. It allows to see the effectiveness of the operations carried out, in accordance with the objectives of the company, it also serves to control the management of activities and the description of responsibilities.

INDICATOR PACKAGES

They constitute a group of the best management indicators, whose purpose is to express in simple terms the behavior of the company in financial and operational aspects. It must be based on a prior knowledge of the business and organizational processes, to carefully determine the indicators, in order to establish what really allow to judge the management of the company.

According to Rosanas, “the design and use of a system of indicators that allow the company manager to have a meaningful summary of what is happening in the company, in order to evaluate its progress and take measures if necessary, has always been a aspiration of the managers of companies and other organizations ”.

Indicators are instruments for measuring the variables associated with the goals and, like the latter, they can be quantitative or qualitative.

What do the indicators for each perspective report?

They report whether or not there is a disparity between reality and what has been budgeted, if there is, the reason for this disparity is analyzed. In the BSC, control is by exception and the Dashboard frees the attention of executives in those processes that do not need follow-up. The results reported by the indicators are used to analyze whether any change needs to be made, they serve to focus the attention of executives on learning about the environment and the company, and about the key factors for management success.

What quantity and quality of indicators should be built?

For each perspective the ideal is not to exceed the seven indicators so as not to disperse efforts when trying to simultaneously achieve several objectives. It is convenient to create indicators that reflect the business model to balance the short and long term. The exercise of developing the business model forces executives to agree on the strategy, vision, and indicators and thus have a joint vision to execute the strategy and action plans.

Linking the Balanced Scorecard Indicators.

The goal of any measurement system should be to motivate all managers and employees to successfully implement the business unit strategy. Those companies that can transfer their strategy to their measurement systems are much better able to execute their strategy because they can communicate their objectives and goals. This communication makes managers and employees focus on critical drivers, allowing them to align investments, initiatives and actions with the achievement of strategic objectives. A successful BSC is one that communicates a strategy through an integrated set of financial and non-financial indicators.

The BSC is strategically linked to the organization through three indicators

Cause - effect relationships: They measure the result of the actions that allow their achievement. A strategy is a set of hypotheses about cause - effect relationships. A properly constructed BSC must tell the story of the business unit's strategy through a sequence of cause - effect relationships. The indicator system must make the relationships (hypotheses) between the objectives (indicators) in the various perspectives explicit so that they can be managed and validated. Each indicator selected for the BSC should be an element of a chain of cause-effect relationships that communicates the meaning of the business unit's strategy to the organization. Results and action drivers: Measure the achievement of the strategic objective.All BSCs use certain generic indicators, which tend to refer to the key results, which reflect the common objectives of many strategies. These performance indicators are related to profitability, market share, customer satisfaction, customer retention, and employee capabilities.

The drivers of performance, the forecasting indicators, are those that tend to be specific to a particular business unit. Drivers of performance reflect the uniqueness of the business unit's strategy. The BSC must have a combination of performance indicators and performance drivers. Outcome indicators without performance drivers do not communicate how results will be achieved, nor do they provide an early indication of whether the strategy is being successfully implemented. An Excellent BSC must have an adequate variation in results (effect indicators) and performance inducers (cause indicators) that have been adapted to indicators of the business unit's strategy.

The link with finances: An excellent BSC has to put a strong emphasis on results, especially financial ones, such as returns on capital employed or economic added value. In general, we can say that the causal paths of all the BSC indicators must be linked to the Financial objectives.

In general, we can say that the BSC must tell the story of the business unit's strategies, linking the performance-inducing indicators with the result indicators, through a series of cause-effect relationships. Outcome indicators tend to be effect indicators, indicating the ultimate objectives of the strategy and whether the closest efforts have led to the desired results.

FINANCIAL STATEMENT ANALYSIS

It allows obtaining more accurate and complete information on the financial situation of the company. The Financial Statements of a company present primary data of its assets, obligations and equity in the Balance Sheet, of its income and expenses in the Statement of Income, without these data previously subject to analysis, many erroneous conclusions could be obtained about the financial condition of the company.

Analysis of Financial Statements is carried out by creditors, investors and other users of financial statements to determine the reputation and potential to generate profits of a company. The analysis of financial statements uses as the main tool a ratio that relates two figures applicable to different categories.

The financial situation largely reflects how the company is relative to the competition. Establishing weaknesses and strengths in this regard is of vital importance for effective strategy formulation.

The profitability of sales. Have the profitability ratios increased in recent years? The profitability of fixed assets. Have the company's fixed assets profitability ratios increased in recent years? The liquidity situation. Have the company's liquidity ratios increased over the past 3-5 years? Borrowing capacity (Leverage). Have the company's leverage ratios increased in recent years? Possibility of accessing bank loans. Financial planning and control in the company. Role of senior management Investment plans. Increase. Have the reasons for growth of the company increased in recent years (Sales, profits)? The efficiency of its management (ratio of returns) The credit policy of the company and that of its suppliers

To answer these questions, the calculation and analysis of the following indicators is proposed.

1. Solvency index. It indicates the degree to which the rights of short-term creditors are covered by assets that are expected to be converted into cash in a more or less short period.

2. Liquidity Index. It also indicates the payment capacity of the company, inventories are discounted here because they are the least liquid current assets.

3. Net Working Capital.

4. Turnover of accounts receivable. It is the time that elapses from when the merchandise or product is sold until it is charged.

5. Inventory Rotation. Shows the number of times inventory is converted to accounts receivable or cash.

6. Turnover of accounts payable. The number of times the payment cycle is repeated in a period completed.

7. Debt ratio over cash.

8. Profitability Ratio:

Net Sales Profit Margin. It shows the profit on the sales obtained by the company in a period of time. Return on Capital. Shows the profit on the equity obtained by the company in a period of time. Total Asset Turnover. Measures the effectiveness with which assets are managed.

9. Return on Investment. Indicates for each weight of available asset how much profit has been obtained.

Traditional measurement systems, focused solely on financial elements, have been displaced. Kaplan & Norton introduced four different perspectives to evaluate the activity of a company: (See figure 1).

Figure 1

FINANCIAL PERSPECTIVE

The Balanced Scorecard retains the financial perspective, as financial indicators are valuable for summarizing the easily measurable economic consequences of actions that have already been taken.

Financial performance measures indicate whether a company's strategy, its implementation and execution, are contributing to the improvement of the acceptable minimum. Financial objectives are usually related to profitability, measured, for example, by operating income, returns on capital employed, or more recently by economic added value. Financial goals can be rapid sales growth or generation of cache flow.

OBJECTIVES

Analyze the information held by the company, both internally and externally and determine what the necessary requirements must be for said information to serve the established purposes.Design who is responsible or which department should assume the function of collection, treatment and distribution of said information Defend the simplicity, pragmatism and versatility of a tool as useful as the Dashboard Comment on the essential steps for the implementation and application of the Dashboard What should be the essential content in a Dashboard and what would be the optimal methodology for its correct application. Comment on some general aspects regarding the presentation of said tool,from traditional models to the incidence of new information technologies.

Measurements are important: <>. The measurement system of an organization greatly affects the behavior of people, both inside and outside the organization. If companies are to survive and prosper in the competition of the information age, they must use measurement and management systems, derived from their strategies and capabilities. Unfortunately, many organizations adopt strategies with respect to customer relationships, core competencies and organizational capabilities while motivating and measuring performance only with financial indicators. The Balanced Scorecard preserves the financial measurement as a critical summary of the Management performance, but highlights a set of more general and integrated measurements, which link the current client, the internal processes,employees and systems performance with long-term financial success.

FINANCIAL INDICATORS

It is inevitable that, as managers are pushed to achieve consistent and excellent short-term financial goals, trade-offs will be made that

Limit your investment search for growth opportunities. Worse still, the pressure to achieve short-term financial performance can cause the company to reduce spending on new product development, process improvement, human resource development, information technology, databases and systems, as well as customer and market development. In the short term, the financial accounting model reports that these spending cuts are profit increases, even when the deductions have cannibalized a company's stock of assets, and its ability to create future economic value. On the other hand, a company could maximize short-term financial results, exploiting customers through high prices or lower service. Short term,These actions enhance profitability, but the lack of customer loyalty and satisfaction will leave the company highly vulnerable to competitive incursions.

The financial indicators are necessary, however they are insufficient because now immersed in the years 2006, we are clear about the existence of an intangible capital, which today is necessary to measure and which has as much or more value than the immobilized asset, this capital, intangible is the Intellectual capital contributed by internal Clients (Company Personnel) and capital contributed by external Clients (Clients of your Company).

Currently one of the keys to achieving success is to broaden the perspectives of your Business, identifying new indicators for the future that allow evaluating the results of the management in relation to its intangible assets by measuring the inducers of action, which are what make it possible to know in advance if it is going or not, on the way to achieving the results that were designed in the strategy.

Knowing the company from top to bottom in a financial way is very useful, but it does not make sense if you do not understand where these results come from, if you do not know why they are, or worse, why they are not obtained or what that it is better how they are obtained.

Today to achieve sustainable competitive advantages over time, it is necessary, among other factors, to balance financial management with the intangible capital of the company.

Continuing to manage a company paying attention only to financial indicators today is suicide, since they only report what has already happened, they do not report the company's work environment, nor the satisfaction of its clients, nor the quality of its elaboration. products and services.

For these reasons, other management control instruments appear that group financial indicators and calls for the future, that is, all those through which the vision / mission can be translated into perspectives that contribute to the success of the company.

PRODUCTIVITY, EFFICIENCY AND EFFICIENCY.

Another vital concept for any organization is that of productivity. The concept is often handled, but there is not always a full identification with its scope.

Productivity: Relationship between the amount of goods and services produced (outputs) and the amount of labor force, capital, land, energy and other resources that were involved in production (inputs). (two)

Expressed more simply is the relationship between:

Productivity = Outputs / Inputs

Productivity = Results achieved / Resources Consumed

Productivity includes two specific elements: Efficiency and Effectiveness.

EFFICIENCY: Represents obtaining a given output with a minimum of effort or cost EFFICIENCY: Expresses the proportion of obtaining useful results derived from a given input

Some recent texts refer to these measures as operating efficiency and operating efficiency.

FUNCTIONING: It is the measure of quantity and quality of tasks or contributions of an individual or group to the work of an organization or a segment of it. OPERATION EFFICIENCY: Indicator that serves to qualify the degree of fulfillment of the goals.: Indicator used to evaluate the behavior of the use of resources.

Scudeder and Kucic, referring to productivity measures in information systems, highlight the importance of measuring productivity with both:

The efficiency ratio The efficiency ratio

Performance indicators are management tools that make it possible to specify the quality and effectiveness of the services provided and of other activities carried out in various organizations, in this case, the information units. It also facilitates the evaluation of the effectiveness of the use of the resources that are destined for such services and activities.

The indicators can be used to measure various aspects: effectiveness of the applied policies, financial performance, identify quality and volume of services offered, compare the performance of one unit with another. Therefore, indicators are closely linked to the objectives of the organization and constitute essential tools for planning and evaluation.

INDICATOR: Numerical, symbolic or verbal expression used to characterize activities (events, objects, people) in quantitative or qualitative terms, to evaluate the value of the characterized activities and associated methods. (2) PERFORMANCE INDICATOR: Verbal, numeric or symbolic expression, derived from the statistics kept in organizations and from the data used to characterize their operation.

Performance indicators must respond to certain conditions and questions that must be measured and evaluated:

Informative content Verity Validity Suitability of the information Correspondence between purposes and procedures Simplicity of application

They must have an informative content as they are used to measure an activity, to identify achievements and problems so that certain actions can be undertaken to solve the identified situations or improve their performance levels. They should offer elements that facilitate decision-making, for example, to set goals, define budgets, prioritize activities, organize actions, etc.

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__________________________

Lic. Yenny Roca Guerrero

Contributed by: José Daniel Fernández Quiñones

Esp. Network Security.

[email protected]

Cubalse branch. Las Tunas.