At the level of individual enterprises in various sectors of the economy, various groups of indicators are used economic efficiency. However, at each enterprise, the economic efficiency of the use of materials, fixed production assets and working capital, investments and labor resources is assessed, and a general indicator is calculated that characterizes the economic efficiency of the enterprise as a whole.
To assess and analyze the economic efficiency of production, differentiated and generalized performance indicators are used. The efficiency of using any one type of costs and resources is expressed in a system of differentiated performance indicators. These include: labor productivity or labor intensity, material productivity or material intensity of products, capital productivity or capital intensity, capital productivity or capital intensity. Differentiated efficiency indicators are calculated as the ratio of product output to individual types of costs or resources, or vice versa - costs or resources to product output.
To assess economic efficiency as a whole for a country, region, or enterprise, generalizing (complex, integral) performance indicators are used. These indicators make it possible to more fully and interconnectedly take into account many factors and components that influence the level and dynamics of efficiency. The formation of generalizing indicators is based on two conditions: taking into account the final, qualitative result and reflecting the total value of costs and resources (for example, production and circulation costs, the total value of production assets). The main general indicators of economic efficiency include the following: national income (NI), gross national product (GNP) per capita; productivity of social labor, coefficient of overall efficiency, costs per ruble of marketable products, profit, profitability of production and profitability of products.
The most important indicators of the economic efficiency of social production are labor intensity, material intensity, capital intensity and capital intensity.
Economic efficiency of use material resources characterizes the material intensity of products. The indicator of material intensity of products (Em) is usually calculated as the ratio of material costs (without depreciation) to the cost of manufactured products according to the formula:
Em = MZ:VP,
where MZ is material costs, VP is the cost of manufactured products.
The material cost ratio is the ratio of the actual amount of material costs to the planned amount, recalculated to the actual volume of manufactured products. This indicator characterizes how economically materials are used in production, and whether there is any overspending compared to established standards. A coefficient of more than 1 indicates an overconsumption of materials; a coefficient of less than 1 indicates savings.
The material intensity indicator is more analytical; it actually reflects the level of use of materials in production. The material intensity of products produced by Russian enterprises is on average 30% higher than those abroad. One percent reduction in material costs brings a greater economic effect than a reduction in other types of costs.
The main analytical indicator characterizing the use of materials in production is:
- - material intensity of all commercial products;
- - material consumption of individual products.
Calculation and analysis of particular indicators of material intensity allows us to identify the structure of material costs and the level of material intensity individual species material resources, establish reserves for reducing the material intensity of products.
An analysis of the structure of material costs is carried out to assess the composition of material resources and the share of each type of resource in the formation of the cost and cost of production. The analysis identifies opportunities for improving the structure of material costs through the use of new advanced types of materials, the use of substitutes (cermets, etc.).
Reducing the material intensity of products is one of the main directions for increasing efficiency in industry and construction, since the cost of materials accounts for more than half of the cost of production of products in these industries. Each enterprise has its own reserves for reducing material consumption. Typically, these reserves are associated with the introduction of new resource-saving technologies and the replacement of expensive materials with cheap substitutes.
The economic efficiency of using fixed production assets is usually determined by their capital productivity indicator. Fixed production assets (or fixed capital) include means of labor that participate in the production process repeatedly and, without changing their natural form, transfer value to newly created products not immediately, but in parts, as they wear out. Fixed production assets include industrial buildings and structures, machines, machine tools, equipment, transmission devices, vehicles, etc. Fixed production assets are divided into active and passive parts. The active part covers that part of the funds that directly affects the subject of labor: machines, machines, equipment, etc. The passive part creates the conditions for production - these are factory buildings and structures, engineering communications. The capital productivity indicator (Ef) is determined by the ratio of the cost of created products to the cost of fixed production assets:
Ef = VP: OF,
where PF is the cost of fixed production assets.
The efficiency of use of production fixed assets is characterized by the ratio of the growth rate of production and the growth rate of fixed assets, as well as indicators of capital productivity, capital intensity, capital-labor ratio and labor productivity.
In the calculations of the economic and social development capital productivity is calculated based on the volume of production in comparable prices and the average annual cost of production fixed assets (own and leased), except for funds that are under conservation and in reserve, as well as leased. Fixed assets are accounted for at full book value (excluding depreciation).
Capital productivity can be determined based on production output in value, natural and conditionally natural indicators.
The most correct efficiency of use of fixed assets is reflected by the capital productivity indicator, calculated on the basis of production output in physical terms. However, the scope of application of this indicator is limited to enterprises producing one type of product.
In most industries, capital productivity is calculated on the basis of cost indicators.
Using the indicator of sold products to calculate capital productivity is inappropriate, since this indicator in dynamics over a number of years will reflect volumes in different estimates.
Some economists consider it advisable to determine capital productivity based on the residual value of fixed assets. Such a proposal cannot be considered legitimate, since the residual value does not characterize the costs of reproducing fixed assets. It turns out that in enterprises that have old, obsolete and physically worn-out assets, the level of capital productivity will be higher than in similar new enterprises that have new technology and more productive equipment.
Capital productivity can be calculated both in relation to the entire cost of production fixed assets and to the cost of machinery and equipment. This makes it possible to monitor the effectiveness of using the most mobile and decisive part of fixed assets - equipment.
However, regardless of the basis for calculating the capital productivity indicator, its content is not without a number of shortcomings that must be taken into account in business practice and economic analysis. The capital productivity indicator is not comparable in time, since the numerator includes the annual (quarterly) volume of production, and the denominator indicates funds, the individual elements of which have different service lives, but in all cases exceeding the annual period of time.
The decrease in the level of capital productivity is to a certain extent caused by a large increase in capital investments aimed at improving working conditions, safety environment, accelerated development of industry in certain regions of the country, shifts in the sectoral structure of industry and other objective factors. A decrease in capital productivity also occurs to a large extent under the influence of such reproductive factors as the rise in the cost of a unit of power, the increase in the estimated cost of construction and installation work, the growth in prices for equipment outpacing the increase in its productivity, and shortcomings in the use of existing assets.
The economic efficiency of capital investments reflects the use of investments. The most general indicator of economic efficiency is the payback period of capital investments in relation to the increase in profit that they cause:
Ep = K:DP,
where K is the volume of capital investments, DP is the increase in profit caused by these capital investments for the year.
It is common knowledge that optimal time the return on capital investments should not exceed two years. In modern conditions in Russian Federation the scope of validity of capital investment efficiency standards regulated by the state has sharply decreased, but the scope of individual efficiency standards that take into account the interests of private investors has been significantly expanded; The approach to taking into account the time factor is radically changing, which is increasingly linked to the density of capital investments and the price of the company.
An important place in the system of economic efficiency indicators belongs to the turnover of working capital. Working capital (or working capital) is the cost of raw materials, materials, fuels, energy, work in progress and labor costs. Working capital finances finished product inventories, as well as trade inventories. The efficiency of using working capital is characterized, as a rule, by the indicator of their turnover in days, which is calculated by dividing 365 days (taken for the accounting year) by the number of working capital turnover of the enterprise for the year. Accelerating the turnover of working capital is considered to be an important reserve for increasing economic efficiency. The most important area here is the reduction and optimization of inventories of raw materials, materials, semi-finished products, components, etc.
An indicator characterizing the economic efficiency of personnel activities is labor productivity, which is determined by product output per unit of time. At the level of the enterprise (organization) as a whole, the indicator of labor productivity (ET) can be calculated as the ratio of the volume of products produced to the number of workers employed at the enterprise, according to the formula:
Floor = VP: CR,
where CR is the average annual number of workers employed at the enterprise.
An increase in labor productivity means savings in labor costs (working time) for the production of a unit of product or an additional amount of production per unit of time, which directly affects the increase in production efficiency, since in one case the current costs of producing a unit of product under the item “Wages” are reduced main production workers", and in the other - more products are produced per unit of time.
A significant impact on the growth of labor productivity is exerted by the introduction of achievements of scientific and technological progress, which is manifested in the use of economical equipment and modern technology, which helps to save living labor (wages) and increase past labor (depreciation). However, the increase in the value of past labor is always less than the savings in living labor, otherwise the introduction of achievements of scientific and technological progress is not economically justified (the exception is improving product quality).
In the conditions of the emergence of market relations, an increase in labor productivity is an objective prerequisite, since labor is diverted to the non-productive sphere and the number of workers is reduced due to demographic changes.
All the indicators discussed above characterize the economic efficiency of using individual resources.
Meanwhile, at each enterprise it is necessary to determine a general indicator that allows assessing the efficiency of work as a whole. In market conditions, this indicator is profitability, which allows one to correlate the profit received with costs. Estimated profitability (Er) is calculated using the formula:
Er = P: S 100%,
where P is the estimated profit, i.e. profit remaining at the disposal of the enterprise, C - costs associated with the creation and replenishment of fixed and working capital.
Profitability qualitatively characterizes the work of an enterprise (organization) and reflects a comparison of profits with all costs. At the same time, in various industries at the level of individual enterprises, specific features may occur in the methodology for calculating economic efficiency indicators.
Methodological approaches to determining management effectiveness come down to assessing the role of management in increasing the efficiency of an enterprise. Approaches to determining economic efficiency are divided into the following areas:
Assessment of the results of economic activities and relevant technical and economic indicators;
Assessment of indicators that directly characterize management processes and its results;
A combination of the first two approaches.
An efficiency indicator is a quantitative characteristic of an enterprise’s operation, indirectly characterizes the effectiveness of management, and reflects the requirements of the criterion.
Such efficiency indicators as labor productivity, material intensity, capital productivity of fixed production assets, working capital turnover, return on investment can be conditionally combined into a group of private or local indicators.
In addition, general indicators are identified: profitability and liquidity. They reflect the result of economic activity and management as a whole, but do not fully characterize the efficiency and quality of management labor processes, production assets, material resources.
Indicators characterizing the work of the management apparatus are the strategic efficiency of management and the timeliness of making and implementing management decisions.
When assessing management effectiveness, a comprehensive application of the entire system of general and specific indicators is necessary. The effectiveness of management activities in relation to the subject of management can be characterized by quantitative (economic effect) and qualitative indicators (social efficiency), which we will consider further.
Let us first consider the indicators that determine the economic efficiency of measures aimed at developing the enterprise. One of these indicators is the efficiency coefficient from the implementation of measures, which expresses the accrual of the annual economic effect and is calculated using the formula:
where K e is the efficiency coefficient from the implementation of measures;
E year - annual economic effect obtained after the implementation of measures, thousand rubles;
Zvn - costs of implementing measures, thousand rubles;
E n - standard efficiency coefficient.
If you compare the effectiveness of ongoing management improvement measures in terms of the effectiveness of other activities, you should use the overall effectiveness coefficient expressed by the formula:
where E is the overall efficiency;
E - total savings obtained as a result of measures to improve management, thousand rubles;
Z - costs of events, thousand rubles.
Enterprises also evaluate the effectiveness of managerial work, and the assessment is based on a number of indicators:
Economic efficiency of collective production management;
Comparative efficiency is the ratio of the change in book profit to the change in management costs in the reporting period compared to the base period;
Potential economic efficiency is the ratio of actual efficiency to the maximum possible under given conditions.
Since the assessment of management efficiency is directly influenced by the criterion of management effectiveness - achieving maximum results at minimal costs, there is a need to use the cost elasticity coefficient in the management system to adjust the characteristics of the contribution of managerial labor. This coefficient shows by what percentage the economic efficiency of the enterprise has increased with an increase in management costs by 1%. The increase in net income received from improving the management system is determined by the formula:
where?E s.u. - economic effect from improving the management system;
P - total increase in net income;
R y - management costs;
K - elasticity coefficient.
Let us also consider the efficiency coefficients of the management system necessary for assessing managerial work, which allow us to evaluate it through the final result of the enterprise’s activities. In trade, the final results of an enterprise's activities are turnover and profit. That is, we get the following coefficients:
TO - trade turnover;
IO - distribution costs (minus labor costs);
P - profit;
IO - distribution costs (minus labor costs);
You also need to take into account the “inverse” coefficients to these data, that is, the coefficients of cost intensity of turnover and profit, respectively:
where E TO is the turnover coefficient;
TO - trade turnover;
IO - distribution costs (minus labor costs);
where E P is the profit ratio;
P - profit;
IO - distribution costs (minus labor costs);
The above coefficients make it possible to assess the efficiency of a trading enterprise as a management object, despite a number of existing shortcomings, such as the monetary expression of indicators (that is, the possible influence of pricing shortcomings), the lack of reflection of environmental and social efficiency, and, finally, the fact that the assessment is given from the point of view in terms of meeting customer demand.
To assess the performance of a management entity, the results achieved and the goals set are first compared. For example, the coefficients of plan fulfillment for turnover and profit:
where E TO is the turnover coefficient;
THAT is a fact - the turnover is actual;
TO plan - planned turnover;
where E P is the profit ratio;
P fact - actual profit;
P plan - planned profit;
Moreover, the closer the value of these coefficients is to unity, the more efficient the operation of the control apparatus.
The intensification coefficient shows the intensity of personnel work:
where K int is the intensification coefficient;
- ?ZP - increase wages;
- ?PT - increase in labor productivity;
Improving the use of the human factor is a reserve for increasing economic efficiency.
If you compare the effectiveness of management before and after the implementation of any measure aimed at improving the operation of the enterprise, that is, to assess the effectiveness of this measure, you can use a number of indicators:
where K esu is the efficiency coefficient of the control system;
- ?ВД - increase in gross income;
- ?IO - increase in distribution costs;
- ?P - profit increase;
- ?TO - increase in trade turnover;
- ?Flow control - increase in management costs.
If the coefficient is greater than one, then the control is effective; if it is less, then it is not effective.
Also, as an indicator of economic efficiency, the increase in net income is used:
where E is the economic effect;
VD 1, VD 0 - gross income in the base and planned years;
IO 1, IO 0 - distribution costs (minus labor costs) in the base and planned years;
Ch 1, Ch 0 - number of employees in the base and planned years;
Salary 1, Salary 0 - average salary in the base and planned years.
The integration model of the generalized indicator of economic efficiency of the management system is as follows:
where E su is the economic efficiency of the control system;
P plan, P base - profitability (net income / turnover) in the base and planned year;
PT plan, PT bases - labor productivity (turnover / number of employees) in the base and planned years;
E plan, E base - efficiency of the management system (net income / expenses for maintaining management personnel) in the base and planned years.
The economic efficiency of management personnel is assessed by the increase in profit:
where E up is the economic efficiency of management personnel;
E?P - annual savings due to increased profit;
Z y - annual management costs.
Savings in the management sector itself are influenced by a reduction in labor costs for management personnel, conditional release of workers, and a reduction in lost working time. So, for example, reducing the complexity of information processing is expressed by the formula:
where E i tr is the economic effect of reducing the complexity of information processing;
T 1, T 2 - labor intensity of the i-th management operation before and after rationalization;
S - average annual cost of 1 man-day of management personnel;
n - number of operations.
Also, economic efficiency is indirectly affected by improving the quality of work, management efficiency, management culture and quality of service, which occurs through improved qualifications of workers, measures to rationalize labor and document flow, etc.
The main task of any manager is effective management. Performance criteria allow you to evaluate in detail the quality of a manager’s work in order to make appropriate adjustments. Assessment work should be carried out regularly in order to identify strengths and weaknesses and then make timely adjustments.
The essence of the concept
Management effectiveness is an economic category that demonstrates the contribution of the manager and his environment to the overall result of the organization's activities. Many researchers put exactly this meaning into this concept. Management efficiency criteria in in this case are presented as the results of activities and the degree of implementation of the goals and objectives that were set for the current period. The main indicator is profit.
It is worth noting that management efficiency is something that characterizes management as a whole or its individual subsystem. For this purpose, various integral indicators are used, which provide a more accurate digital determination of the results.
It is worth noting that a significant part of the economically active population with the appropriate level of education and qualifications is involved in the management process. Since training such personnel costs large number time and money, then quite a lot of attention is paid to assessing such a parameter as management efficiency. Performance criteria provide a more in-depth look at this issue.
IN theoretical research The following varieties are distinguished:
- economic efficiency is the ratio of production and management costs, as well as the results obtained;
- social efficiency is the satisfaction of different categories of consumers with the range and quality of goods and services.
The following concepts should also be distinguished:
- internal efficiency is the achievement of the organization’s own goals at a constant level of costs;
- external efficiency - compliance of the enterprise with the demands and requirements of the external environment.
The evaluation algorithm is as follows:
- defining the purpose of performance assessment;
- selection of criteria and their detailed justification;
- collection of initial data that will be used in the analysis process;
- development of requirements for the resulting indicators;
- development or selection of a methodology according to which calculations will be made;
- carrying out calculations and evaluating the obtained indicators.
Each organization sets itself certain goals. During the evaluation of the final results, certain inconsistencies may be identified. Based on the results of the audit, a decision may be made to adjust the management process or to make changes to plans.
Economic criteria for management efficiency
The main goal of management is to continuously improve the performance of the organization. Particularly important is management. Performance criteria can be general and specific. In the first case, the global aspect of performance results is considered. It is important to achieve maximum results with minimal resources.
Partial management efficiency indicators are as follows:
- the level of labor costs of workers involved in the production process;
- rational use of material resources;
- minimal expenditure of financial resources;
- indicators characterizing the use and wear of fixed production assets;
- the size of the production cost (should be kept to a minimum);
- production profitability indicator;
- technical equipment of production shops (compliance with modern achievements of technical progress);
- labor intensity of workers, which is determined by working conditions and organizational structure;
- compliance with cost standards while fully complying with all contractual obligations;
- stability of the number and composition of personnel;
- compliance with environmental standards at the same level of costs.
In order to assess the efficiency of an enterprise, economic indicators are primarily used. The main one is the ratio of profit to total costs that were incurred in the reporting period. If deviations or unsatisfactory results are identified, factor analysis is carried out to determine the specific reasons.
Components of effectiveness
When assessing the effectiveness of an organization’s management, the following indicators can be used:
- effectiveness, which is manifested in the degree to which the goals set by management are achieved;
- ability to use material and economic resources economically financial resources, fully satisfying the needs of all structures and divisions of the organization;
- achieving an optimal ratio of the obtained economic results to the costs incurred in the production process;
- the degree of influence of direct or indirect factors on the final result.
Criteria groups
Criteria for assessing management effectiveness are specific indicators that allow you to assess the feasibility and effectiveness of implementing certain measures. Modern economics divides them into two groups:
- private (local) criteria:
- labor costs of workers involved in the direct production of goods or services;
- expenditure of material resources for management and other purposes;
- costs of financial resources;
- indicators that characterize the use of fixed assets (purpose, wear, efficiency, etc.);
- speed of funds turnover;
- investment payback period (reduction or increase).
- quality criteria:
- increasing the output of products that belong to the highest category;
- environmental responsibility of the organization, as well as the introduction of modern energy-saving technologies;
- compliance of manufactured products with the urgent needs of society;
- continuous improvement of workers' working conditions, as well as their social level;
- saving resources.
It is worth noting that all management efficiency must be accompanied by maximization of product output (or the number of services provided). There should also be an increase in profit levels.
Criteria and indicators of management effectiveness
In order to evaluate the economic results from management activities or decision-making, appropriate methods are used. Thus, the criteria and indicators of management effectiveness are as follows:
- general indicator of management efficiency (ratio of profit for the reporting period to costs allocated to management);
- management personnel ratio (the ratio of the number of senior managers and the total number of employees employed at the enterprise);
- management cost ratio (the ratio of the organization's total costs to management costs);
- the ratio of management expenses to the volume of output (in physical or in quantitative terms);
- efficiency of management improvement (the economic effect for the year is divided by the volume cash, spent on management activities);
- annual economic effect (the difference between total savings due to implemented management measures and costs multiplied by the industry coefficient).
Organizational management efficiency
Economists identify the following criteria for the effectiveness of organizational management:
- the organization of management entities, as well as the full validity of their activities;
- the amount that is spent on resolving certain issues that are under the control of senior management;
- management style;
- the structure of governing bodies, as well as the smooth relationship between their various links;
- total costs incurred in maintaining the administrative apparatus.
Any organization strives to obtain maximum benefits. It is worth noting that increasing profits is one of the main parameters according to which management efficiency is determined. Organizational performance criteria in this context imply the final result of the entire enterprise. This is due to the fact that the implementation of plans largely depends on the quality work of managers.
Basic approaches to performance assessment
The most important indicator of the functioning of any organization is the effectiveness of management. Performance criteria can be defined and applied according to several basic approaches:
- The target approach, as the name implies, is associated with assessing the degree to which the planned result has been achieved. At the same time, the action becomes much more complicated if the enterprise does not produce any tangible products, but is engaged, for example, in providing various types of services. We can also talk about intersecting goals. Also, the criteria for assessing the effectiveness of an organization’s management quite often represent a set of formal goals that do not reflect the real state of affairs.
- The systems approach involves considering the management process as a set of input, direct operation, and output. In this case, management can be considered as highest level, and average. Most often, the system is considered in the context of its adaptation to internal and external conditions, which are constantly undergoing changes. No organization can limit itself to just producing products and providing services, because it must act in accordance with market conditions.
- The multi-parameter approach is aimed at covering the interests of all groups formed in the organization.
- The approach of competing assessments allows the use of such criteria for the effectiveness of enterprise management as the control system, as well as internal and external influences. At the same time, the manager quite often faces a mutually exclusive choice.
Assessing the effectiveness of personnel management
Criteria for the effectiveness of personnel management include quality, timeliness, as well as the completeness of the implementation of certain works and the achievement of set goals. The general numerical indicator, according to which the performance of employees can be assessed, is the ratio of the achieved indicators to labor costs for a certain period.
An assessment of the effectiveness of personnel management is usually carried out in order to assess the feasibility and validity of introducing motivational mechanisms or making personnel changes. It is worth considering that personnel costs can be primary (salaries) and secondary (social services and other costs provided for by law).
The work of employees must ensure the achievement of the set goal. The criteria for the effectiveness of personnel management are, for the most part, specific indicators that are calculated per unit of production capacity or manufactured products.
Assessing the effectiveness of the management system
The following criteria for assessing the effectiveness of the management system are distinguished:
- the complexity of the organizational structure and justification for the feasibility of the functioning of each of its links;
- speed of response to newly emerging situations and adoption of appropriate management decisions;
- the strategy in accordance with which the organization as a whole and each of its individual subsystems is managed;
- the costs that fall on the maintenance of the management apparatus, as well as their relationship with the results obtained;
- results of continuous monitoring of the activities of senior management;
- assessment of the impact of the management apparatus on the final result of the enterprise’s activities;
- numerical and qualitative composition of management, as well as the ratio with the total number of employees.
It is worth noting that the results of an organization’s activities depend not only on the efficiency of the production personnel, but also on how well the organization is structured organizational structure. For this purpose, periodic inspections are carried out in order to identify inconsistencies, as well as bring the parameters to modern requirements and standards (criteria for the effectiveness of management systems are used).
Classification of methods for assessing management effectiveness
Criteria and indicators for assessing management effectiveness can be applied in accordance with the following approaches:
- focus on identifying the initially set tasks in order to determine the degree of their implementation;
- assessment of the effectiveness of the management apparatus, as well as the degree to which managers are provided with information and other resources;
- evaluation of manufactured products or provided services in order to determine the satisfaction of the end consumer;
- attracting professional experts to identify weak and strong areas of the organization’s functioning;
- comparative analysis of different points of view of managers or management systems;
- involvement of all parties and participants in management and production process to determine the degree of effectiveness.
Valuation activities may correspond to one of the following types:
- formative:
- determining the discrepancy between the desired and actual state of affairs;
- assessing the production process to determine strengths and weaknesses;
- assessment of the degree of achievement of set goals.
- summing:
- identifying types of products and services that bring real economic benefits in order to eliminate irrational areas;
- studying changes in the well-being of employees and clients as a result of the organization’s activities;
- assessment of the ratio of costs to actually achieved economic results.
Conclusions
Management effectiveness is an economic category that demonstrates the manager’s contribution to the resulting performance indicator of the organization. The determining indicator here is profit (namely, a comparison of the indicator that was achieved and the one that was noted in the plan for the corresponding period).
Management effectiveness is critical for several reasons. The first of them is that quite a lot of time is spent on training this kind of personnel, and their number is quite large. In addition, senior management is characterized by the highest level of remuneration in the enterprise, which must be economically justified.
Management efficiency can be both economic (return on costs invested in production) and social (the degree of satisfaction of the population with the quality, quantity, and range of products and services). It is also worth separately highlighting internal and external operational efficiency.
To assess the effectiveness of an organization's management, one or more approaches can be used. Thus, the target implies assessing the result obtained and comparing it with the target for the period. If we talk about a systems approach, then we're talking about about the perception of the organization’s work as a holistic process. Multivariate assessment affects all groups that are in one way or another connected with the activities of the enterprise or are interested in its results. It is also worth paying attention to the approach of competing assessments, which takes into account factors in the opposite direction.
When assessing management effectiveness, a number of criteria are used, which can be used independently or in combination. Thus, the main indicator is the ratio of costs and profits received. Also important is the optimal ratio of production workers and full-time management personnel, as well as the costs that are regularly allocated to management. It is important to correlate the last indicator not only with the level of profit, but also with the real volume of products produced (in physical or quantitative terms). Also, when calculating economic efficiency, it is important to adjust the indicators of the industry coefficient values.
It is important to understand that in achieving the success of an enterprise, not only the composition of the production personnel plays a major role; the criteria for the effectiveness of management quality are no less important. The correct organizational structure must be selected, which will ensure optimal interaction between all departments of the enterprise, as well as a reduction in communication time.
To assess management effectiveness, you can use the concepts of “efficiency in a broad sense” and “efficiency in a narrow sense.” In a broad sense, management efficiency is identified with the efficiency of the system as a whole. In a narrow sense, efficiency reflects the effectiveness of management activities themselves. In both senses, general indicators and a system of private indicators of economic and social efficiency are used to characterize efficiency.
To assess the economic efficiency of management in a broad sense, general indicators are used. Until recently, to characterize the economic efficiency of the management system at the state level, among others, a general indicator was used - national income (newly created value) for a specific period of time; at the industry level - an indicator of labor productivity; at the enterprise level - profit.
There are a lot of private indicators of economic efficiency of management in a broad sense (of the organization as a whole); among them are profitability, turnover, return on investment, capital intensity, capital productivity, labor productivity, the ratio of wage growth and labor productivity, etc.
General indicators social efficiency in a broad sense can be:
Degree of fulfillment of consumer orders;
Share of the company's sales volume in the market, etc.
Partial indicators social efficiency are:
Timeliness of order fulfillment;
Completeness of order fulfillment;
Providing additional services;
After-sales service, etc.
Economic efficiency of management (E y) in the narrow sense is characterized by the following indicators:
1. General indicator:
where D is the organization’s income;
3 - costs of maintaining the management apparatus.
2. Partial indicators:
The share of administrative and management expenses in the total costs of the organization;
The share of the number of managerial employees in the total number of employees in the organization;
Controllability norm (actual number of employees per one employee of the management apparatus), etc.
Particular indicators characterizing labor efficiency in management also include:
1) reducing the labor intensity of processing management information;
2) reduction of management personnel;
3) reducing the loss of working time of management personnel by improving the organization of work, mechanization and automation of labor-intensive operations in the field of management.
General indicators of social efficiency in the narrow sense are: the share of decisions made at the suggestion of employees of the work collective; number of employees involved in the development of management decisions, etc.
Particular indicators of social efficiency include: the degree of technical equipment of managerial work, the turnover of management staff, the qualification level of personnel, etc.
Particular methods for determining management effectiveness. Due to the complexity of assessing the effectiveness of managerial work, methods for assessing the effectiveness of individual activities have been developed to a greater extent.
tion than management in general. Thus, there are known methods for assessing the effectiveness of implementation new technology, automated control systems, etc.
The most typical definition economic efficiency of measures to improve management is to calculate the annual economic effect obtained from their implementation and compare it with the costs of these activities. The efficiency coefficient for improving management is determined by the formula
where E year is the annual economic effect obtained as a result of the activities; Z y - costs for measures to improve management.
The annual economic effect can be calculated using the formula
E G0D = S-Z y xE n,
where C is the annual savings from management improvement measures; E n - industry standard efficiency coefficient.
For an approximate assessment of the effectiveness of ongoing measures to improve management, the indicator of the overall efficiency coefficient CE (close in its meaning to K e - the efficiency coefficient of management improvement) is also used:
where DE is the total savings obtained as a result of implementing measures to improve management, rub.; 3„ - total costs for improving management.
Justification of the economic efficiency of improving the management of an organization's activities should be supplemented by an assessment of its social effectiveness.
Social efficiency is determined by the ratio of indicators reflecting the social result to the costs necessary to achieve it. Social results manifest themselves in improving the living conditions of the population, preserving and strengthening human health, facilitating and increasing the content of their work.
Calculation and analysis of the dynamics of the above indicators not only allow us to assess the efficiency of the organization’s functioning, but
and identify those aspects that are its weak point, directing efforts to solve its priority problems.
Improving the performance indicators of an organization is possible as a result of the development and implementation of organizational and technical measures that comprehensively reflect performance factors. In this regard, you can use the classification of efficiency factors at the organizational level, presented in Fig. 15.1 (p. 220). Analysis of approaches to determining the most important areas for increasing the efficiency of an organization allows us to combine them into two groups 1:
1) activities related to the growth of the organization’s performance;
2) activities related to reducing resource costs (resource conservation, reducing company costs).
Due to the fact that the improvement of organization management, the introduction of computer information technology require certain capital investments, the economic efficiency of management improvement projects (efficiency assessment) can be carried out in accordance with Methodological recommendations according to investment projects and their selection for financing, approved by the State Construction Committee of Russia, the Ministry of Economy of the Russian Federation, the Ministry of Finance of the Russian Federation, the State Committee for Industry of Russia on March 31, 1994 No. 7-12/47.
Indicators of commercial (financial) efficiency, reflecting the financial consequences of the project for its direct participants;
Indicators budget efficiency, reflecting the financial implications for the federal, regional and local budgets;
Indicators of economic efficiency that take into account the costs and results associated with the implementation of the project, going beyond the direct financial interests of the participants in the investment project and allowing for cost measurement.
The basis for assessing the effectiveness of projects is the determination and correlation of costs and results from their implementation. When assessing the effectiveness of investment projects, it is necessary to bring (dis-
1 See: Fundamentals of Control Theory / ed. V.N. Parakhina, L.I. Ushvitsky. M.: Finance and Statistics, 2003. P. 530.
Ways to increase economic efficiency of management
Activities related to reducing resource costs
Rice. 15.1. Classification of efficiency factors
assignment) of indicators to the cost of the moment of comparison, since cash receipts and expenses in different time periods are unequal.
Thus, management effectiveness is the effectiveness of people's actions in achieving the organization's goals.
Security questions
1. What is management effectiveness?
2. What is management effectiveness?
3. What is the relationship between the concepts of “management effectiveness” and “management effectiveness”?
4. Name the criterion for the effectiveness of managerial work.
5. What difficulties exist in quantitative assessment of the results of managerial work?
6. What does management effectiveness in a broad sense include?
7. What indicators characterize management efficiency in a narrow sense?
8. Name the indicators of social efficiency.
9. Name ways to increase the economic efficiency of management.
PRACTICUM
Chapter 1. Essence, stages of development and characteristic features modern management Questions for discussion
1. Management as a type of human activity.
2. Main stages of management development.
3. Modern scientific approaches to management.
4. Development of management in Russia.
5. Features of modern management.
Tests
Choose the correct answers to the questions posed (there may be several of them in each test). Correct answers should be circled and marked in the tables.
1
. Below are a number of definitions of management. Choose something
which most fully reveals the content of management
that as a process:
a) management - the activity of a group of people connecting their
efforts to achieve common goals;
b) management - the ability to achieve goals using
learning the work, intelligence, motives of behavior of other people;
d) management is the performance of planning, organi
tion, motivation, control and coordination necessary for
to formulate and achieve the goals of the organization;
e) management is a type of activity for managing people
in various organizations;
f) management is the science and art of management.
2. What is the task of management:
a) personnel training;
b) interaction between people;
c) ensuring efficient and effective work of personnel
to achieve the goals of the organization;
d) finding forms and methods of managing the rational use of all resources of the organization?
3. Management schools are listed below. Specify their chrono
logical order:
a) administrative school of management;
b) school of scientific management;
c) behavioral school;
d) school of human relations;
e) quantitative school of management;
f) modern approaches to management.
4. Which of the following characterizes the features of
temporary management:
a) a person is considered as one of the factors of production;
b) people are considered the main resource of the organization;
c) the company is considered as closed system;
d) the company is considered as an open system;
e) the organization’s work is focused on achieving results?
5. What is meant by management paradigm:
a) a set of scientific schools and approaches to management;
b) management practice;
c) a system of views on management, formed on the basis
underlying scientific ideas and results and perceived practice
management tics?
6. Which of the above positions characterize the new system
views on management in Russia:
a) decentralization of the management system;
b) monocentric economic system;
c) transition to a polycentric economic system;
d) a combination of market and administrative management methods
public sector enterprises;
e) self-government of non-state sector organizations as
open socially oriented systems?
Exercise
Give examples that support the idea that management is a profession. Using specific examples, show the differences between management work and other types of work.
Chapter 2. Organization as an object of management Questions for discussion
1. The organization is an open system.
2. Internal environment of the organization.
3. External environment of the organization.
4. Life cycle of an organization.
Tests
1. Which of the following characterizes the organization as
open system:
a) interaction with the external environment;
b) a source of energy (resources) within oneself;
c) obtaining resources from the external environment;
d) response to changes in environmental factors?
2. Which of the listed organizations are commercial
skim:
a) companies with limited liability;
b) partnerships of faith;
e) public organizations;
f) production cooperatives;
g) state and municipal unitary enterprises?
3. Which of the following applies to the internal environment of the body?
tions:
a) the management structure of the organization;
b) technical progress in the industry;
c) the goals of the organization;
d) personnel of the organization;
d) economic policy states;
e) objectives of the organization?
4. Which of the following factors relates to the external environment?
direct impact organizations:
a) consumers;
c) competitors;
d) suppliers;
e) technical progress;
e) shareholders?
5. Which of the named factors of the organization’s external environment
relate to indirect impact factors:
a) state policy;
b) legal environment;
c) infrastructure;
d) natural and geographical conditions;
e) financial and credit policy;
e) trading enterprises?
6. Compliance with which of the listed conditions helps with
maintain the normal functioning of the organization and reduce
sew the risk of bankruptcy:
a) avoid being overly optimistic when things seem to be going well
successfully;
b) develop and implement quality plans for the brand
ting with clear goals in mind;
c) constantly expand the scale of production;
d) systematically make reasonable cash forecasts;
e) keep up with market needs;
f) promptly identify critical moments that may
pose a threat to the enterprise?
Exercise
Try to do an analysis life cycle organization known to you.
There are many evaluative indicators of management effectiveness. Management effectiveness is often assessed through production efficiency indicators: the level of product sales volume, the level of profitability, the level of product quality, the level of labor productivity, etc. At the same time, management efficiency characterizes the ratio of management effectiveness to its costs, which reflect its specific features.
The problem of determining the efficiency of production management comes down to determining the costs of management and the results obtained. The emerging dependencies when assessing management efficiency should connect it with the initial and determining efficiency (profitability) of production, take into account the organic connection of management costs with all production costs and, finally, proceed from the socially necessary level of management costs themselves.
In methodological approaches related to this area, it is proposed to use one or another indicator of production efficiency (absolute, relative, incremental), integral from a set of indicators reflecting production efficiency (absolute values or deviations of actual indicators from planned). Management costs (absolute, specific, reduced) are used as the denominator of the formula. For example:
where E control – control efficiency; DP – increase in production result; Z y – management costs.
The economic meaning of such indicators is the effect of using production resources (return) per one ruble of management costs. The limitation is the standard level of unit management costs.
General indicators of production management efficiency are used for comparative assessment of management systems of similar objects from the standpoint of using production potential and identifying the effectiveness of intensive development factors. These indicators reveal qualitative changes in management systems caused by corresponding changes in
production, when the content and form of management processes change significantly. Such changes may be the creation of new organizational forms of management based on the concentration and specialization of production, fundamental changes in the management mechanism, reduction of links in management systems, and comprehensive mechanization of management processes.
The efficiency of use of management resources can be measured by the ratio of the increase in net production to the number of management employees, the cost of technical management tools, and the volume of information. When assessing, the standard level of correlation indicators is taken into account:
· the share of the number of managerial employees in the total number of employees for a given period;
· share of the salary fund for managerial employees in the general salary fund;
· cost of technical controls in the total cost of fixed production assets, etc.
Attention should be paid to the fact that the values of the correlation indicators can also be considered as necessary condition management efficiency and, as a consequence, the introduction of effective measures to improve management.
Thus, in the process of assessing management effectiveness, the following are calculated:
· management efficiency criterion;
· indicators of efficiency of management costs;
· general indicators of management efficiency;
· private indicators of management efficiency;
· indicators of the correlation between management and production resources.
Table 16.2 presents various types production management efficiency assessments.
Table 16.2 Assessing the effectiveness of production management
|
Measuring the indicator |
Evaluation conditions (compliance with standards, implementation of plans) |
|
|
Achieving the goal |
Fulfillment of product supply obligations |
Increased production of products of the highest quality category |
|
Achieving effect |
Increase in net profit to management costs |
Level of management costs in production costs: Reduced labor intensity; Cost reduction; Saving material resources; Increase in shift ratio; Acceleration of turnover of working capital; Compliance of the number of managerial employees with the maximum allocations; The share of the salary fund for managerial employees in the total limit of the salary fund; The level of costs for technical controls in the costs of new equipment; Share of managerial employees in the total number of employees |
|
Efficiency of use of production potential (resources) |
Increased labor productivity in relation to management costs Ratio of growth rates of labor productivity and capital-labor ratio to management costs Increase in net profit: For 1 management employee; For 1 rub. salary fund for management employees; For 1 rub. cost of technical controls Relative savings from reducing the number of management staff Relative savings on management costs |
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