Business Administration

Posted by marmara on July 7, 2015

The author Jeremy Hope, Robin Fraser company, illustrates a curious theory that at least makes us think those who usually work with budgets that are many. Jeremy Hope has several books on the subject, the basic idea is that the annual budget, as is often encountered in many companies, represents a huge commitment of time, it provides little, is often outdated before you start, as happened to the State Budget in Spain, “and also prevents a rapid response to environmental changes. Moreover, in some cases, focus on a set budget is to get a lower yield. In this regard, I remember reading that when NASA set a goal to which man reaches the moon a “without going far in the debate of whether it was true or not, he could get because that goal was set so high ( not only in physical height, at that time seemed very far technically speaking). And if he had set a target retail I had also achieved, but to reach the Moon still thinks it is impossible. Therefore, in many cases the setting of targets is a limitation because there is no attempt to go beyond establishing a kind of mental ancla as shown in various studies. For example, if I ask how many people is the capital of India, New Delhi (regardless of its metropolitan area): Five to ten million. Between ten and fifteen million.

More than fifteen million. Each will have an idea of how many people have this populous Indian city. If you then ask each specifying how many think you have, I’ll have some figures, but it is unlikely that anyone near the answer. According to wikipedia, in 2006, the population of New Delhi is dea 321 883 inhabitants, well, I do not need any figure!, Another thing is the population of the metropolitan area of Delhi, which has 1483 square kilometers and about fifteen million inhabitants. Returning the book, the authors propose an adaptive management promotes a very horizontal structure in which executives define strategic objectives and medium term goals, and dealing with the frontline workers seek the best options to maximize value. But middle managers and unskilled workers have some freedom to do it their way. Moreover, instead of setting targets in advance, making comparisons between different business units (eg between different chain stores, among different geographical areas), with competition and with the previous year.

With this triple comparative gets better assess the competitive drive change significantly if market conditions a “for example, sets a 10% growth for the unit, and grows by 12%, it would seem that it’s okay, but if the whole market, or other units, have grown by 30%, and I would not be much. They also stress management by exception, ie, analyze the tendency to try observe any unusual variation that may reflect changes in customers, competition or the company itself. It is therefore a highly recommended book for managers, finance directors and generally for anyone who deals with budgets.

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