How do different Factors get Reconciled in Business?
“Reconciliation of different levels in business is necessary to achieve the objective of lower cost per unit. ”
Business is a very complex phenomenon. An intricate interplay of various factors is involved in it. The best possible levels of technical aspects, managerial facets, financial features, risks and fluctuations are always different from one another.
But one thing is for certain that these different aspects are to a great degree under human control. As a result, efforts can be made to achieve desired results. The reconciliation of different levels is necessary to achieve the objective of lower cost per unit.
If these optimum levels are not reconciled, some kind of wastage in industrial efforts is bound to occur and cost per unit is sure to go up. Wastage cannot be eliminated totally, but it can be reduced significantly or one waste product can be made the raw material at some other place or stage using suitable technological processes and innovations.
If technical optimum is more than managerial optimum, steps should be taken to increase managerial optimum. For example, the firm may be divided into different departments to achieve full advantage of technological economies.
In case managerial optimum is more than technical optimum; the firm should be divided into different technical departments. The manufacturing of different processes should be initiated to take an advantage of managerial capabilities, which are in surplus in such a case. The increase of production will enable the utilization of surplus managerial resources.
If the marketing optimum is more than the technical optimum, the firm can take up the distribution of products manufactured by other concerns. These products may be similar to the products of the concern or may be of different types. For example, if a company manufactures electric motors, it can take up the sale of different quality motors.
If the technical optimum is more than the marketing optimum, the company should continue production at the same level. In such a case it can hand over the marketing part to some other company.
If the financial optimum is more than managerial optimum, the company should start some more independent units by employing able managerial workforce. It can also invest surplus money in the market and earn profit in this way.
Author - DeeKay
Tags - Finance, Economy
This article was created by DailyOjo staff. Report Spam/Abuse