Individual Competence vs. Organizational Efficiency LO28920

From: Alan Cotterell (
Date: 07/28/02

Replying to LO28914 --


I believe I agree with the statements you made when taken in the context
of Management By Objectives. I do not agree when taken in a Risk
Management context.

ISO9004 - Continual Improvement recomends the use of statistics when
making decisions, and I agree. I don't agree with the stupid use of
non-significant data, in exercises such as forecasting short term changes
to the stock market.

When manufacturing in a repetition engineering environment, it is sensible
to use statistical process control to tell when to adjust the machines.
Similarly in short production run companies it is sensible to monitor data
for ancillary services provided by other suppliers.

In addition I suggest many businesses could benefit by developing
suitable/appropriate positive performance indicators. Simply using the
profit to wages bill ratio to measure productivity can be advantageous
where there hasn't been large expenditure on plant in any one year. In
this way a business can compare efficiencies from year to year, and
relative to other businesses.

If you ask the accountant in most business what the profit to wages bill
ratio was last year, they usually cannot answer in the short term - says
something doesn't it? Try it in your own company. Profit to an
accountant is usually a dirty word - they don't know what to do with it.
What I am suggesting is that there is a strong argument for Open Book
Management in most companies.

In a company with ESOP and Productivity Gain Sharing, don't employees need
to know whether their efforts to improve have been effective? In Australia
unions have, on occasion negotiated wage rises on the basis of promised
productivity gains - they have not often been realised. When they have,
often the result is a reduction in the work force, rather than value

Best Regards,
Alan Cotterell


"Alan Cotterell" <>

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