The controls do not work by themselves, they require an information system and measurement mechanisms. The information has to be obtained during the execution and the operations of the company. This information is obtained thanks to the records strategically located in the productive, administrative and marketing processes.
The information systems also help to measure the performance, thanks to the system of macros of the computers, which allows to program formulas of coefficients of efficiency, productivity, effectiveness and impact.
Many companies still do not systematize their controls and make annual measurements or manual measurements of the behavior of their plans, programs and variables. This makes the controls too costly and ineffective, because the information could lose its veracity due to the process and information time at the levels that can interpret and make decisions with it.
Well-managed companies, even if they are small, have information systems in several areas and register, almost automatically, all of their main accounting operations; they have systems that measure process quality and customer satisfaction, not with the financial accounting speed, but with the one that allows them to make timely decisions in areas of production, marketing and human resources.
Timely information is so valuable for continuous improvement that there are currently large maquiladora companies and world-class firms that report the results of the process, continuously, through monitors of giant computers, in order that know how the process flows and where there are problems. This aims to provide feedback (feedback) to the workers, so that, seeing the results of the process and their problems, they can have urgent corrective meetings. See the whole process and not only your position, it allows you to know possible problems in advance, and take preventive measures instead of corrective ones
These are mathematical reasons for the relationship between two measures. An amount in relation to 100 can be presented as a percentage (20%), or as a 1: 5 ratio. The coefficients are very useful in financial management, and there are a number of accounting-financial ratios accepted worldwide. However, at present, all the functional areas generate their indicator coefficients, in such a way that, in order to control a company in an integral way, it is necessary to see the behavior, not only of the financial results, but also of the client’s satisfaction, the quality of operations and products or services, in addition to the behavior and performance of the human factor
They are the measuring instruments of the main variables of the four critical points of a company that permanently report their behavior. Score cards resemble the electronic boards that are available to spectators in a sports stadium and indicate the results of the match, the time elapsed, the failures committed, in some cases, the level of bets, and the effectiveness of each player. All these data enrich the direction, control and general administration of a company.
Robert Kaplan and David Norton point out that there are 4 critical factors to control:
Costs, quality and processes
Organizational climate, formation of human capital
Satisfaction of internal and external customers
Financial partners (cost-benefit analysis)
Score cards provide managers with the equipment they need to navigate competitive success. Nowadays, organizations are competing in complex environments and, therefore, it is vital that they have an accurate understanding of their objectives and the methods they have to use to achieve them.
The score card allows companies to track the causes of problems and track financial results, while observing the progress in skills training and the acquisition of the intangible assets they need for future growth.
General evaluation of control
The controls themselves must be subject to continuous evaluation, since a poorly designed control could be the source of the problem and even make the problems remain static.
It is necessary that the designer of an administrative process and controls continually ask the following questions:
What is the rationale for this information?
How does it enrich decision making or good administration?
What is the Cost-Benefit of it?
Previous corrective measures
The control systems, when they are well developed and have clear efficiency standards, should also be enriched through the establishment of corrective actions to problems according to the variability and degree of the failure.
The pre-established corrective measures are intended to indicate what to do when a failure occurs. This is very useful for many operators without experience and without the necessary technical professional training who do not know what to do when a problem arises in a machine, in a production process or in an administrative one.
An extreme example of high engineering is in airplanes that have automated self-correction systems in which there is a pressure problem inside the cabin, automatically another instrument compensates for pressure loss in seconds, without the passengers feeling it.
It should be noted that the previous corrective measures are a double-edged sword: on the one hand, they solve problems in advance, especially the most common, and they help a more scientific and systematic administration; on the other hand, they can also generate that the personnel and the regional supervisors and managers only stick to the manual and remain paralyzed without knowing what to do in case of unscheduled failures.
Hence, it is convenient that, despite having a high degree of control in the companies, the staff is constantly involved in decision making and even, through simulation programs, they are trained to solve possible problems even when there is Little probability of occurrence, such as earthquakes and fires.
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