Relevance Regained: From Top-Down Control to Bottom-Up Empowerment - Softcover

Johnson, H. Thomas

Softcover

ISBN 10: 0743236270 ISBN 13: 9780743236270

Verlag: Free Press, 2002

Inhaltsangabe

Building on his pathbreaking, award-winning bestseller, Relevance Lost, H. Thomas Johnson presents a devastating critique of the top-down hierarchical accounting systems that have dominated American corporations since the 1950s.

In Relevance Regained, Johnson shows exactly how "managing by remote control" through results-oriented accounting information has obstructed the real business objective: to reduce process variation and lead times for the purpose of obtaining and keeping satisfied customers. The failure of most American businesses to be competitive and profitable, he contends, is their reliance on management accounting information to control people's actions and productivity.

Cost-focused imperatives from on high must be replaced, Johnson asserts, with information systems that link actions with imperatives of global competition. Self-managing work teams, according to Johnson, must own problem-solving information to reduce variation, delays, and excess in processes.

Johnson prescribes the necessary changes in management principles that must replace the outdated style associated with the industrial revolution. Responsiveness to customers—not accounting costs—and flexibility—reducing lead times and removing constraints—are necessary for sustained competitive excellence and long-term profitability.

Johnson discusses the radical overhauls of companies, such as General Electric's work-outs/"best practices" program and Harley-Davidson's work simplification programs, and shows how these strong commitments to new strategies maximize a company's most important assets: people and time. To be globally competitive, he claims, a company's work must be directed toward selling to customers, not just selling products.

Über diesen Titel

Über die Autorin bzw. den Autor

H. Thomas Johnson is Professor of Business Administration at Portland State University in Oregon and Distinguished Consulting Professor of Sustainable Business at Bainbridge Graduate Institute in Washington. He co-authored Relevance Lost: The Rise and Fall of Management Accounting, which is considered one of the most influential management books of the twentieth century by the Harvard Business Review.

Auszug. © Genehmigter Nachdruck. Alle Rechte vorbehalten.

Chapter 1

INFORMATION, ACTION, AND BUSINESS PERFORMANCE

The basic cause of sickness in American industry and resulting unemployment is failure of top management to manage....[Reform requires] transformation of the style of American management...a whole new structure, from foundation upward....Long-term commitment to new learning and new philosophy is required of any management that seeks transformation.

W. Edwards Deming

The transformation of modern management exhorted by W. Edwards Deming must take place at once if American business is to regain its competitive edge in today's global economy. The question confronting CEOs is not whether they must change, but rather, what kind of transformation must occur to revitalize American companies. Deming postulates a need to transform the entire structure, style, and philosophy of management -- "from foundation upward." Undoubtedly one of the most wrenching changes CEOs face is to realize that goals formulated from accounting information no longer permit them to manage companies effectively.

For the past three decades -- a brief period in the history of business -- American business has behaved as if the pursuit of accounting goals were the underlying force driving business competition. However, that belief has been a primary reason for American business losing its competitive edge. Goals reflecting only accounting information constrict managements' thinking, eliminating companies from global competition.

Only if CEOs rely on information that is relevant to the goals of global competition will their firms survive in the 1990s and beyond. This book explains why conventional management uses of accounting information are a major cause of the current predicament in American business, and it articulates the information and thinking companies must adopt to become world-class competitors. A key message is that the current revolution in information technology -- based on the computer and the microprocessor -- requires and enables CEOs to bring about the transformation in management practices called for by Deming.

The coming of the computer, the transistor, and the integrated circuit after World War II put in motion forces that gave the customer enormous power of choice. With customers able to choose the best of what they want, wherever it is in the world, competitiveness now means that companies must be responsive to customer wants and be flexible: able to learn and adapt quickly to changes in those wants. Top-down command and control information does not motivate the work force to take actions that make companies responsive and flexible. Adapting flexibly to change requires constant learning and prompt action by those people in a business who are closest to the customer.

Traditional accounting control systems assume that learning takes place at the top -- far away from customers and processes -- and that new knowledge is transmitted down in the form of instructions. The information revolution has turned that assumption on its head. In competitive companies today, the entire work force must be empowered to learn and to act quickly. That power derives from ownership of "bottom-up" information about customer wants and about the processes people perform to satisfy those wants. To facilitate learning and change, companies must respond to real-time information from customers and processes. Fortuitously, modern information technology can give workers and managers ownership of the processes they perform, at all levels, and thereby empower them to constantly improve at satisfying ever-changing customer wants.

The two concerns of this book are to articulate the shortcomings of traditional accounting control information and to suggest how new information can motivate behavior that fulfills the imperatives of competitive excellence. The next sections of this chapter highlight the major themes the book develops as it discusses the shortcomings of the past and the promise of changes to come. First we describe new customer-focused approaches to doing business that require new information. Then we turn to the impediments to change created by existing accounting-based control information. We conclude this chapter by discussing the crucial role of top managers in leading the changes in information and behavior that will restore competitiveness to American business.

NEW APPROACHES TO DOING BUSINESS

"To survive in the global economy, change must become your way of life." Today's CEOs have heard this message and recognize the need for change. Moreover, most businesses are striving to meet this need. They are adopting new management practices at unprecedented rates. Unfortunately, these changes are not improving competitive performance nearly as much as hoped. The reality is that the changes needed are of a different sort -- much more than even the most forward-looking CEOs realize.

For nearly fifteen years American businesses have tried a succession of strategies aimed at restoring markets and profits lost to foreign -- mostly Japanese -- competitors. Well-known acronyms denominate these strategies, most notably JIT (just-in-time), SPC (statistical process control), MRP (material requirements planning), TQM (total quality management), ABC (activity-based costing), TPM (total preventive maintenance), and QFD (quality function deployment). These strategies have helped countless companies improve performance. But the improvements generally seem to go only so far, and then taper off.

This problem appears most often in either of the following two cases: (1) A firm identifies new strategies for organizing work -- usually associated with JIT (just-in-time) -- which produce breakthroughs that generate substantial one-time gains in productivity, and then stop. Delighted with the results achieved by adopting Kanban-style production systems or by linking people and machines in focused work cells, managers attend seminars and call in consultants in a search for more such breakthroughs. Seldom, however, do they replicate their initial successes, and almost never do the new ideas spread throughout the organization. (2) A company discovers improvement strategies involving team-building and problem-solving processes -- usually associated with TQM (total quality management). These strategies boost morale and generate excitement, at least for a while. But the gains in profitability often take a long time to appear. Pressure to get on with achieving bottom-line financial results diminishes enthusiasm for devoting time to the new improvement processes, and people return to business as usual.

What Are JIT and TQM?

JIT. Today, "just-in-time" usually refers to any improvement program that reduces the time needed to get a job done (i.e., lead time) by simplifying work. Once thought to be the exclusive domain of manufacturers in factory settings, JIT now is pursued avidly in service companies and in all parts of organizations, from white-collar functions in the back office to research and design laboratories. In its current guise, JIT originated at Toyota in the 1950s, in factory efforts to produce exactly what the customer wants, when the customer wants it. Many American exponents of JIT stress external features and results of early Japanese JIT, such as Kanban scheduling systems, reduced work-in-process (WIP) inventories, and reduced numbers of vendors. Japanese authorities, however, emphasize American scientific management influence on JIT and they stress the importance of its less visible features, such as the flexibility that follows from lead time reduction.

TQM. "Total quality management" refers to company-wide programs to empower workers and managers to solve problems scientifically with an eye to constantly...

Details zur Ausgabe

• Verlag: Free Press
• Erscheinungsdatum: 2002
• Sprache: Englisch
• ISBN 10: 0743236270
• ISBN 13: 9780743236270
• Einband: Taschenbuch
• Anzahl der Seiten: 244
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: preigu; mail@preigu.de; ; Lengericher Landstr. 19; Osnabrück; 49078; Deutschland