Management Control in Services vs. Manufacturing
Uploaded by
ScribdTranslationsManagement Control in Services vs. Manufacturing
Uploaded by
ScribdTranslationsFinal Report on Management Instruments
Caroll Lisbeth Orduz Badillo
European Institute of Postgraduate Studies
Tutor
Francisco Vásquez
Bachelor's degree in Business Economic Sciences
European Institute of Postgraduate Studies
MBA in General Management
2.020
PROJECT STATEMENT
Explain the factors that motivate the difference in management control in
service companies and management control in manufacturing companies.
Analysis
In the book of Production Management, Chase, Jacobs & Aquilano (2009,
on page 10), clear differences are established between goods and services; aspects that
they help to understand how management control can affect each of
these organizations.
For the authors, the differences between these products are five:
The first difference is that services are intangible and therefore cannot be
to measure, while the good if it is physically measurable, this situation implies that in the
customer satisfaction services are very important in the face of the impossibility of carrying out others
own indicators like those of goods.
The second difference is that the service requires interaction with the customer.
to be generated, while goods are produced beforehand following budgets
of sales and production.
The third is that services are generally heterogeneous, depending on the
customer and provider's attitude, while goods can be standardized and
Any dissatisfaction can be repaired or discarded.
The fourth difference is that services are perishable and cannot be stored.
The fifth and final important difference is that in services the specifications
they are varied and evaluated in the form of a package of features that affect the senses:
existence of a support (location or decoration), goods that facilitate things (variety,
amount), explicit services (staff training, access or duration), and services
implicit (provider's attitude, privacy, comfort).
Based on these differences, management control systems are different in
service companies versus manufacturing ones. The former will be based on management
of the results of the people and teams that provide the service, while in the
Seconds will be determined by the management of products and logistics.
Regarding the elements mentioned in the review, as management tools,
It could be said that the strategic approach in a service company will be
mostly oriented towards differentiation, since achieving economies of scale
it becomes complex by depending more on the human factor and thus the nature of the company
it is not standardizable, the management control will also be subject to needs and
special requirements to meet that approach.
Differentiation, as a promoter of the added value that is offered, will be
supported by policies, the localization and the learning of a culture based on the
Continuous improvement to ensure customer satisfaction.
The objectives, for their part, will be much more focused on indicators of
customer satisfaction, such as the reduction of wait times, complaints and
complaints or level of satisfaction, without forgetting the financial objectives; while the
Manufacturing companies are more inclined towards productivity and efficiency indicators.
Regarding the key success factors, I could say that the control processes of
the management must monitor those determined by the fifth differentiating characteristic
of goods and services, that is, those that affect or are perceived by the senses and that are
product of the interaction between the customer and the provider; this means to foster a
good physical environment, a good organizational climate, and a good attitude from the people,
they facilitate the full satisfaction of the user.
Likewise, and although the cost centers will not be oriented towards efficiency
financial as an objective, are used in services to ensure efficiency
administrative, that is, to verify the correct allocation of resources and with that
to make timely provision of services possible, in such a way that the budgets
are generally the result of the analysis of the evolution of the business and not of the
sales and production budgets, as occurs in manufacturing companies.
In this type of companies, management control tools, such as
The Balanced Scorecard is a key component in that it allows for operationalization.
vision in management indicators for each of its perspectives.
The financial aspect will be based on the pursuit of maximizing value.
the company based on classic financial indicators such as margins and the
profitability; the customer's perspective, for its part, will be focused on indicators of
customer satisfaction such as loyalty, the number of complaints or the times; the processes
internals will be more tied to the times required for the provision, which means efficiency
it is measured in user wait times; finally, the growth perspective and
development focuses on objectives of process innovation, training and education of
prestadores, comodidad de las instalaciones y eficiencia de los sistemas de información.
Conclusion
From the elements seen in the management instruments module, it can be concluded
that management control will be radically different in service companies and in the
manufacturing companies, primarily due to the characteristics that make up the services
a fungible product that is not standardizable and highly dependent on the human factor that it
lend.
The control of management, therefore, will be largely based on the principle of
self-control of internal control systems based on efficiency and productivity
traditional quality systems.
The human factor has the main responsibility of ensuring satisfaction.
customer and therefore their training and motivation of the employees will be a basic objective of
the perspective of learning and development, which in turn will allow for the achievement of the objectives
from the perspective of internal processes that promote customer satisfaction that
they will allow obtaining greater value from differentiation compared to competitors.
BIBLIOGRAPHY
In the book on Production Management, Chase, Jacobs & Aquilano (2009,
page 10
