Imágenes de páginas
PDF
EPUB

The value of a sample depends upon the faithfulness with which it represents the group. This value, the prime consideration in the use of samples, can be somewhat more readily attained in practice by the use of the following simple rules.

a. The group itself should be carefully and exactly defined. b. In securing samples, every member of the group under consideration should have practically the same chance of being included.

c. Should the arbitrary action of chance appear unsatisfactory, then fair samples may be selected by other means.

d. The number of samples should be increased until successive tests show sufficiently similar results.

4. Up-to-date Information.

The compilation of the report requires time, which if prolonged too much renders its data valuable chiefly for purposes of history. The executive, however, since he wants not merely a record of what has been done but data upon which to predict future performances, needs these reports promptly if he is to use them with effectiveness. Such up-to-dateness can be secured by a time schedule. Special reports, it is true, are not easily brought into line but the time schedule can be adjusted satisfactorily for all regular reports, the amount of leeway permitted being at the most only equivalent to the period covered by the report. Regular monthly reports ought never to be over one month late, weekly reports over a week late, daily reports over a day late, because in moving down the streets of business the accountant, always several steps behind the executive, must walk just as fast as if only one step behind.

5. Summarized Reports

The executive, whether he be at the head of a department or in charge of an entire establishment, who tries to digest all the statistics which pertain to his business will be overwhelmed.

He should have summarized reports, these in each case to be prepared from the viewpoint of his particular position.

An executive in a subordinate position needs to have a summary of the minor details for which he is responsible. To the executive higher up the same summary might be of little value because not broad enough in its scope. The higher official wants the first summaries of details to be again summarized and assembled in a form that covers the work for which he is responsible. The president of the big manufacturing concern, who is concerned with only broad results, wants comprehensive reports regarding the total of production, or expense, or sales and collections. If the figures at the end of the line show unsatisfactory results then the cause can be traced backwards and ascertained, providing statistics are complete all along the line.

6. Statistical Analysis

The statistics collected from the various departments of a business and used for purposes of control can with profit be analyzed in various ways. While a discussion of this very broad subject is not possible here, the more common of these analyses concern questions such as:

Have simple or weighted averages been employed? Which should have been employed?

How were the items originally distributed? What is the average deviation? The standard deviation?

What information can be gained by comparing average, median and mode of certain items?

What classification of accounts do my books show? Are the items of this classification accurate and adequate?

Are the balance sheet valuations sufficiently accurate? Have assets been distinguished from expense items? How was the worth of good-will determined? Has the proper rate for depreciation been determined and booked?

The man in an executive position, whatever the extent of his authority and responsibility, must develop the habit of using with discrimination such statistical reports as he can obtain.

"It is remarkable what an enormous amount can be saved in a business," declares H. W. Hall, manager of Wellington and Wood, "when every detail, large or small, is carefully watched through its medium of an efficient system."

Outside Conditions: Business Barometers

The statistical data drawn from inside an establishment are of decided usefulness, yet in themselves alone they cannot supply the close control desired. They must needs be supplemented. The executive after a time comes to realize that this enterprise of his is moved by certain far-reaching outside influences. Great periods of alternating prosperity and depression rock his project as a cockle-shell upon the deep so that, direct its inside activities as he will, he feels that his business. future is in the grip of what to him oftentimes are but vast, unseen forces.

"A man may be thoroughly upright," declares President Upham of the Consumers Company, "of the highest personal character, and have had years of experience in the very best lines of the undertaking which he represents; yet if he has not the ability to discern those hidden influences which will operate for the success or failure of his project, he is not a safe man as an associate."

The Cycles of Business

The value of this ability to discern the underlying forces of business becomes more evident upon a brief examination of cycles which have occurred in the past. These, even though indicated in a general way, convey an important truth.

Years 1814

1815-17

1818-19

1819-37

1837-43

1843-57 1857-59

THE ANNALS OF TRADE SUMMARIZED

A crisis. Resources had been wasted in the war and erroneous policies in regard to foreign trade, taxation, and banking development augmented the distress.

A period of revival. The restrictions caused by the embargo and the war were succeeded by an increased trade.

Crisis. Radical changes encountered in fiscal and economic policies.

An era of internal improvements, whose advance at times was halted, but only temporarily.

Crisis, followed by depression. The launching of numerous highly speculative ventures together with vicious banking and currency measures brought about a relapse.

A period of remarkable growth and prosperity. Crisis, followed by depression. Financial disturbance was a comparatively prominent feature. 1860-73 War demands stimulated industry, and close of war saw expansion continuing with but slight reaction.

1873-78 Crisis of decided severity, followed by unprecedented depression.

1879-90

1893-96

1897-02

1903-04

1905-06

Trade revival, interrupted temporarily by panic of 1884, made general progress.

Crisis. Panic acute from May to October, 1893, and depression continued with but slight revival to end of period.

High tide of prosperity continued in general throughout country.

Financial panic and mild industrial depression. Prosperity in business again reached high tide. 1907-08 Crisis. Severe financial panic foliowed by deep depression in trade.

1909-12 1913-14

1915-17 1918

Moderate revival in business.

Crisis. Depression developed into crisis upon outbreak of war and business continued at low ebb into 1915.

A period of unprecedented prosperity.

Unsettled conditions and depression in some lines due to drastic war regulations.

"In the real world of business," declares Professor Wesley C. Mitchell, "affairs are always undergoing a cumulative change, always passing through some phase of a business cycle into some other phase. Prosperity is relapsing into depression, or becoming more intense, or breeding a crisis; a crisis is degenerating into a panic, or subsiding into depression; depression is becoming deeper, or merging into a revival of prosperity. In fact, if not in theory a state of change in business conditions is the only 'normal' state."

The Study of Fundamentals

Is it possible, in view of the vast changes summarized in the above annals of trade and in view of similar changes destined to come, for an executive who thinks only in terms of "inside the factory" to succeed in a large way? It cannot be. The narrow man will in due time see his business craft wrecked upon some reef unknown to him, but known to and carefully charted by men more broadly informed.

The man whose desire for business information is satisfied by a skimming of the daily paper and listening to what chance acquaintances may say in reply to his usual question of "How's business?" will not, needless to say, gain a knowledge of the underlying foundations of business management. Their utilization calls for something which the average business man does not always fancy, a patient and critical investigation. Fundamental data must be studied.

A Preliminary Analysis

In approaching the consideration of fundamental data it is useful to view the problems thus:

1. There is what may be called a regular cycle of business change passing through four well-defined periods. The periods will vary, of course, in relative length according to the general situation, but the order roughly is:

« AnteriorContinuar »