The management should identify and implement approaches depending on the goals that it sets. The steering and monitoring of performance is the subject of management control. In the context of management control, one can analyze the overall performance of the business, financial performance indicators and performance based on compensation.
The cost target is a tool for performance management. It is used as a part of a proactive approach to cost control and aims to reduce costs at the time of product design. The calculation of the cost target can lead to the use of methods such as value analysis, where the company identifies the different functions of the product and eliminates those that are redundant to reduce costs.
[...] Note Irrespective of the method chosen, it should indicate whether the centers are forced to deal with the other centers of the company or group, or if they can sell and buy outside. The choice between these three methods will be made according to the objectives of corporate officers and purpose of the assignment. Tax considerations may be included if the customer centers and suppliers are located in different countries. The transfer pricing, which are often based on the cost of production estimates (internal standard), are increasingly [...]
[...] Example: A car rental company is able to meet the target since delivery of any leased vehicle is available within an hour. Between two locations, each vehicle is checked, clean and deliverable. The process is effective as it happens to be checked, cleaned and the car can be delivered in one hour. It is possible to make an assessment of its efficiency External Performance and Internal Performance The players in an organization appreciate performance in different ways and they have different objectives. We can distinguish them as follows: The performance is measured by external factors in a contractual organization. [...]
[...] The performance management is both: A diffusion process in the company, information on the objectives and means; A coordination process is to coordinate actions to achieve the objectives. This process can be registered as follows: 1. Setting objectives for the organization and variation in sub-goals by center, project, unit etc Determination of the variable action to address factors of performance 3. Information factors 4. Control of achievements compared with objectives 5. Possible adjustments when the comparison reveals significant differences The tools of performance management They differ according to the objectives of the company, the lines of action taken and the location and level of decision. [...]
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