Lecture 6 + 7 - Functional departments + Public sector Flashcards

1
Q

Describe different cost situations

A

Production oriented model:

General:
- Important cost hierarchy

Examples:
- Direct, step-down or reciprocal
- Single or dual rate
- Stand alone & incremental

Cost hierarchy considerations:
- Homogeneous cost pools
- Logical link: Cost allocation
- Fairness: Reasonable CD’s
- Ability to carry cost

__________

Cost function:

General:
- When link btw. mean & result

Methods:
- Standard costs
- ABC
- Zero based budgeting
- Performance ratios

__________

Non-financial measures:

Methods:
- Orders pr. purchaser
- % of Staff in admin. positions

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2
Q

(?) Describe the possible status´ of an activity

A
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3
Q

(!) Control & type of relationships btw. functional & operational departments

A
  1. Departments linked by flow of regular operations:
    - Def. of each department’s responsibilities & norms
    - Process reengineering & trans-functional teams
    - E.g. Invoice, inventory handling, prod. scheduling

___________

  1. Service providers to operational depts. when needed:
    - Choose right status for service provider: Exp. center or PC
    - Determine activities to subcontract service unit
    - E.g. Brochures & training

__________

  1. Assessment of operational dept. controlled by functional dept.
    - Expense center
    - Balance btw. auditors independence & assistance
    - Balance btw. operational department efficiency & power
    - E.g. Internal auditing
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4
Q

(?) Describe shared services

A

.

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5
Q

(!) Describe the issues of outsourcing & shared service centers

A

Outsourcing:
- Loss of specific knowledge
- Strategic importance
- Reliability, quality & flexibility
- Costs
- Innovation

Shared service centre:
- Service factories
- Standard
- Reliability, quality, flexibility
- Costs
- Innovation

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6
Q

(!) Describe what is meant by a service

A

General:
- Difficult determining objectives & result of activities

Types:
- Service industry: Tertiary sector. Eg. Health care or financial
- Internal services: Functional departments
- Public services: Administration

Characteristics:
- Traditionally: Intangible product. Process
- New perspective: Co-production

Dimensions:
- Discretionary
- Idiosyncratic: Unique dimension
- Political dimension

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7
Q

(!) Describe the MC challenges of discretionary activities in functional departments

A

General:
- Eg. Administration, marketing & R&D
- Hard to allocate ress.
- May take several periods

Ambiguity of objectives & results:
- Difficult to determine
- Difficult to measure
- Depend on division asked

Poor knowledge of relationship btw. means & results
- Non-linear
- Discretionary
- Continuum: Discretionary, idiosyncratic, political
- Due to complexity, randomness & non-repeated processes
- Eg. Student or teacher accountable for bad grade?

Co-production & co-responsibility:
- Who responsible for result?

Lack physical context
- Process: Intangible
- Used at time of delivery
- Spread

Risks:
- Spend too much on activities not contributing to goals
- Spend too little on activities contributing to goals

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8
Q

(!) Describe the production vs. service oriented model

A

Traditional model:
- Production model
- Cost of input –> Process –> Output or results

__________

Service oriented model:

General:
- Input –> Result
- Input = Intrants + Process
- Result = Output + Outcomes
- Measures

Categories of input:

Intrants:
- Separate from ress. used to transform these
- Often neglected
- Eg. Demand, student, skills, intellectual capabilities, patient

Process:
- Ress. & costs
- The means
- Info available: From budget
- Eg. Time spent, #Supplier visits, Quality of staff, Training

Categories of results:

Output:
- Relate to intrants & process quality
- Quality = Efficiency
- Realizations
- Prod. of service to fulfill mission
- Eg. Average grade, # orders, Efficiency Failure rate, patient satisfaction

Outcomes / Impact:
- Quality = Effectiveness
- Difficult & costly to measure
- Often influenced by external events
- Tempting to eliminate
- Eg. Purchase price, Customer, company, employee satisfaction, income

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9
Q

(!) Describe PM in services

A

Stimulus-response behaviour:
- Poss. Future buy if customers has good experience
- Product & service must fulfill/exceed expectations

Quality of customer satisfaction measurement:
- Unambiguous & precise concepts: Specific key service feature
- Customers’ knowledge about service
- Driven by customers’ ideal or wish for performance level

Norm:
- How satisfied should customers be

Measures vs. indicators:

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10
Q

(?) Describe the profession-driven control

A

Members of special occupation:
- Decide objectives, terms, methods & criteria
- Require special knowledge & skills, good character & ethical values
- Managed by ideals of profession > profit

Justify self-control abilities:
- Can control themselves: Dont misuse privileges
- Institutionalized rules & norms, education & self-monitoring
- Have to be significant for segments of society
- Shared values makes goal agreements easier
- “Confidence” in competence & integrity make goal commitment easier

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11
Q

(?) Describe the paradoxes of MA techniques in public organizations

A
  • Budgeting, Cost allocation & performance measures often interrelated
  • Management control, registration procedures & structure
  • Ideally assists transparency, info access, allocation of responsibility, optimization & efficiency
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12
Q

Describe new public management / NPM

A

General:
- Evolved due to dissatisfaction w. public sector

Elements:
- Employ prof. managers
- Explicit standards & performance measures
- Greater emphasis on service consistency
- Decentralisation
- Increased competition btw. org. & sub-units
- Emphasis on private-sector management styles
- Increased accountability & parsimony(sparsommelighed) in ress. use

Focus:
- Budget cuts
- Accountability for performance
- Decentralization
- Performance measurement
- User charges
- Competition
- Strategic planning & management
- Improved accounting
- Contracting
- Customers
- Business techniques to improve efficiency
- Rise of “better management”

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13
Q

(?) Describe the four types og measures when going from performance management to performance measures in the public sector

A

General:
- More challenging to develop measures in public vs. normal sector

Measures:
- Output: How much produced?
- Welfare: Value to the final user
- Performance: How services are produced
- Composite indicators

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14
Q

(!) Describe the idea of incompleteness & relate it to RAPM

A

General:
- Incomplete = Acc. info don’t capture all important performance dim.: Eg. Quality in hospital
- Always something not measurable
- Problem if indicators are means of control, not tools
- Pragmatic attitude: Incompleteness not always a problem
- Performance measures = Often control tool, not just facilitating action
- Incompleteness = Lower representational quality
- Only problem if inflexible: Eg. Revise measures
- Use ST measures when adjusting & comparing indicators
- Problem if evaluation pressure & cause-and-effect thinking
- Ref. Enabling vs. coercive

Pragmatic attitude on measures:
- Doing > Measuring
- Means > Ends
- Direction > Objective truth
- Vision > Specific target

Reliance on accounting performance measures / RAPM:
- “Budget-constrained” style vs. “Profit-concious” style
- Negative reactions if reliance on incomplete controls
- Evaluation pressure

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15
Q

(!) Describe enabling & coercive control, factors & benefits

A

General:
- Ref. Incompleteness
- Depend on design

__________

Indicator representations:

Narrow form:
- Look at actual measure feasibility
- Reliability, accuracy & precision

Broad form:
- Concerned w. flexibility & other enabling element

___________

Enabling:

General:
- Not feeling limited by incomplete system
- Not used as control purpose: Challenge use for TM
- Little perceived evaluation pressure
- Build upon existing practices & concerns

Factors for being enabling:

Flexibility:
- Users allowed to modify measures
- Less control at a distance by TM
- Broad financial measures = More flexible
- Hard if evaluation pressure
- Eg. Guidelines for adjustments

Internal transparency:
- Understand logic of system
- Understand definition & measures
- Change amount of questioning system
- Eg. By communication

Global transparency:
- Understand up- & down-stream implications of work
- Alignment & coordination
- Understanding strategies & objectives poss. to relate control system to bigger picture
- Eg. Vision & strategy statement

__________

Coercive:

General:
- Control at a distance

Situations for use:
- Fully understandable
- Agreed upon priorities
- Complete
- Introducing new control system

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16
Q

(?) Describe different forms of PMS or packages

A

Systems or packages:
- Critical success factors
- Likert
- Performance pyramid
- The balanced scorecard
- Pragmatic constructivist
- Performance prism
- Tableau de bord

Relationships:
- Mechanic vs. organic
- Logic
- Cause & effect
- Finality

17
Q

(!) Describe sense giving

A

Sense giving:
- When introducing control system
- Help symbolic practice
- Communicate role & relevance
- Interaction btw. superior & subordinate
- Part of TM signal
- Enabling or coercive
- Affect managers relation to indicators. Eg. Vision > targets
- Facilitate activities

18
Q

(!) Performance management vs. performance measurement vs. performance reporting

A

Performance management:
- Focus on future
- Data to provide info
- Actions based on performance measures & reporting
- Improve behavior, motivation, process & innovation
- Purposeful, unified, integrated & fluid

Problems:
- How to get data
- How to turn data into info for DM

__________

Performance measurement:
- Focus on past
- Quantify input, output & activity level
- Quantitative & qualitative
- Specify broad, abstract goals & missions to enable evaluation

__________

Performance reporting:
- Record against target or incl. analysis