Cost Management in Learning Orgs LO15111

John Zavacki (jzavacki@wolff.com)
Wed, 24 Sep 1997 20:53:28 -0400

Replying to LO15100 --

Jeff Blumberg <jeffb@illovo.co.za> says:

>I am investigating whether thinking about organisations as Complex
>Adaptive Systems has anything to offer Cost Management theory and
>practice. I've now recently come across the learning-org list and would be
>interested if anyone was pursuing Cost Management research in learning
>organisations. Traditional cost management is very cartesian; the sum of
>the parts must always equal the whole. The root cause of cost is found by
>analysis, breaking things apart. But the more we break them apart, the
>more we lose the unique properties of the system. The challenge to cost
>management in learning orgs is finding systemic cost drivers, not
>systematic drivers. Activity-Based costing is useful, but is not enough.
>It remains systematic.
>
>Anyone out there doing the same? Would the list be interested
>in my research?

This is one of those things that usually starts "In my experience...."
which is not very limited, but doesn't bear on the current issue. I've
tracked costs in many manufacturing systems, and in one of my latest
incarnations, began thinking about the Taguchi Loss Function, Essentially,
Taguchi says that the loss function is that loss which is imparted on
society by the creation of one bad part in any system. It follows that
one bad idea, one bad word, one bad thought, "imparts a loss to society".
That's systemic, not systematic. You can look at the Open Book Management
literature, which deals with financial literacy, pay for System
performance (NOT individual performance) and TQM and LO concepts to bring
cost into the minds of all.

-- 

John Zavacki jzavacki@wolff.com Wolff Group, Inc. 800-282-1218 http://www.wolff.com

Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>