The Puzzlement Of Enterprise Cost Controllers

Generally speaking, the assessment of employees is carried out through performance, achievements, workload and efficiency, that is, "performance appraisal".

But for a department, especially the functional departments of enterprises, the methods and standards of assessment can not be accurately determined, and the criteria and results of examination are reasonable and true.

Employees' assessment can be achieved effectively through the human resources department and effective management tools, but the effective control of enterprise cost can not be achieved by one or two departments. The managers of enterprises have many ways to control costs.

(1) highly centralized.

As far as tens of millions of people are concerned, a few minutes to a few cents must be signed by the top management. In a word, without the signature of the top manager, a penny will never come out of financial affairs.

(2) part of the authorization.

Middle managers have a limited amount of examination and approval authority. If they exceed the quota, they must sign on the top level, if they are examined and approved at all levels until the top managers.

(3) authorisation of a trusted person.

This is the characteristic of many private enterprises. All the financial approvals are trusted by relatives (often relatives). All financial expenses are confirmed by a trusted person and then signed by themselves.

The effects of these methods are generally not very good. Highly centralized managers increasingly find themselves overwhelmed by a lot of trivial matters. Office managers are always secretaries coming in and out. The first thing to do is to sign countless words every day. Specifically, which ones should not be spent, and there is no time to look at them.

At the end of the month

I was shocked. This month, I spent millions of dollars more than last month. I hurried to ask the finance department to check the accounts. I found that all the details were signed by myself. The account was not processed yet, and there were lots of lists waiting to be signed.

Some authorized leaders thought they had a proper management and suddenly discovered problems one day. Managers often separate the list of more than one authority from each other to sign the report, so that every single item is in the authority of the examination and approval of the managers; the office expenses of the departments have been rising continuously; the photocopying paper has been used for more than 30 boxes a month; some departments have four or five people, six or seven calculators and more than 20 pens a month, and the company's water electricity and telephone charges are even more alarming.

The managers who choose the trusted authority feel good about the cost and spend every month, but gradually they find that something is wrong with the company. The company is lifeless, the staff are depressed and the efficiency is low.

The root cause lies in the "blocking" method adopted by these managers. In their eyes, enterprises are full of holes and need to be blocked everywhere.

The high centralization of power makes middle managers and employees have no enthusiasm. How can a real position be retained without a position of autonomy and development?

Although the middle managers have autonomy, the autonomy has nothing to do with a high degree of centralization. The department managers do not really control the expenditure of the Department. They are happy to be a good person. All expenses within their own limits are released without any hindrance. The executive branch does not have the right to deny the managers of other departments.

The most direct result of the authorization of a trusted person is to hurt the hearts of employees and other managers.

Who is willing to become a "business man"? So all those capable can fly away, leaving behind mostly inaction. How can such a company last long?

So: blocking is not a way to guide is the best policy.

We must know that the key to cost control lies in the "unit" of the enterprise -- the Department, rather than the "individual" employee, who has seized this fundamental problem and solved the difficult problem of enterprise cost control.