Measuring the effectiveness of the organization. Measurement and evaluation of management effectiveness. Evaluation of economic efficiency

Measuring and evaluating the effectiveness of management is necessary for all organizations, since they allow you to actively influence their current state and development trends, establish the size and direction of change, and identify the most important factors growth, track and correct uncontrolled processes, make decisions about changes and predict their impact on key parameters, as well as plan for further improvement of the organization and its divisions.

There are several approaches to measuring the effectiveness of an organization's management; these are contingency effectiveness approaches, which are based on what part of their organization managers consider most important for making appropriate measurements.

Situational approaches to measuring management effectiveness include: a) traditional approaches; b) the approaches of shareholders.

As part of traditional approaches it is customary to distinguish: target approach, resource approach and approach internal processes.

Targeted approach (goal approach) to measuring the effectiveness of management is tied to the output data, since it is assessed how the organization achieves its goals in terms of the desired state at the output.

A targeted approach to measuring performance is to identify the objectives of the organization and assess how well the organization is achieving those objectives. The goal-based approach measures the degree to which an organization is moving towards these goals.

Measures of performance are built mainly on the basis of operational goals, which turn out to be more productive (reflecting what the organization is actually doing) than indicators based on long-term goals, since they are rather abstract and difficult to measure.

In practice, organizations have many goals (profitability (profitability), growth, market share, social responsibility, employee welfare, quality of goods and services, Scientific research and development, economy, financial stability, environmental friendliness, etc.), which cannot be easily achieved at the same time, therefore they form a set of results that are desirable for the organization.

A targeted approach is often used in commercial organizations because in them, the output goals are usually measurable. Commercial firms typically assess their performance in terms of profitability, growth, market share, or return on investment.

Resource approach (resource-based approach): effectiveness is determined by observing the beginning of the management process and assessing the organization's ability to efficiently obtain the resources necessary for successful operations.

Thus, in the resource approach, the "input" of the organization's management system is considered and evaluated, since it is assumed that in order to be effective, the organization must be able to extract and manage valuable resources. From the point of view of the resource approach, the effectiveness of an organization is defined as its ability, absolute or relative, to extract rare and valuable resources, to successfully integrate and manage them.

V broad sense performance indicators, according to the resource approach, include the following characteristics:

• - buying position - the ability of an organization to extract from environment rare and valuable resources, including financial resources, raw materials, human resources, knowledge and technology;
• - the ability of those who make decisions in the organization to see and correctly interpret the properties of the environment;
• - the ability of managers to use tangible (eg, stocks of raw materials, people) and intangible (eg, knowledge, corporate culture) resources in the day-to-day activities of the organization to achieve the best results;
• - the organization's ability to respond to changes in the environment.

The resource-based approach is used when other approaches to assessing the effectiveness of management cannot be implemented due to the lack of the required amount indicators (for non-commercial and social organizations it can be difficult to measure the degree of achievement of goals or internal effectiveness).

The resource-based approach has undeniable advantages when other approaches to measuring performance are not available, but it also has an undeniable drawback: it does not take into account the relationship between the organization's activities and the needs of consumers.

Thus, the resource approach is most valuable when indicators of achieving goals are difficult to obtain and measure (i.e., it is impossible to implement a target approach to assessing and measuring management effectiveness).

Internal process approach (internal process approach): efficiency is assessed based on the internal activity of the organization and its efficiency (efficiency).

With the approach of internal processes, efficiency is assessed in terms of continuity, rationality, synchronicity and economy of the organization of production. An important element of efficiency in this approach is how the organization uses its resources and capabilities and how this affects efficiency.

Key performance indicators of management in terms of the approach of internal processes:

• - grade corporate culture, including the socio-psychological climate;
• - mutual assistance, group loyalty and work as a single team;
• - mutual trust and communication between employees and management;
• - methods of making managerial decisions in a given organization;
• - organization of horizontal and vertical communications;
• - managers' remuneration;
• - interaction of divisions of the organization.

The internal process approach is important because efficient use resources and the consistent internal functioning of the organization are one of the parties to the overall effectiveness of management. This approach also has its drawbacks: it does not take into account the overall result at the exit and the relationship of the organization with the external environment. Using an internal process approach alone does not provide a complete picture of management effectiveness.

Approaches to assessing the effectiveness of management from the point of view of shareholders are as follows.

Shareholder approach The stakeholder approach, sometimes also called the constituency approach, is based on the assertion that for each organization there are many groups of people with different interests in the results of its activities. In this approach to measuring and evaluating management effectiveness, the main indicator of effectiveness is the satisfaction of these interested groups.

In the shareholder approach, the various aspects of an organization's activities are brought together by shifting the focus from the organization itself to those who are interested in its work. Shareholder (stakeholder) in this case - any group of people inside the organization or outside it, interested in the results of the organization's work. Lenders, suppliers, employees, and company owners are shareholders in this approach. Each shareholder will have their own criterion for assessing the effectiveness of the organization, since their attitude towards this organization and their interests are different. When determining whether an organization is performing well, it must be viewed from the perspective of each of the shareholder groups.

Evaluation of management efficiency in the shareholder approach is implemented in the concept of VBM (Value Based Management) - the so-called value-based management concept that promotes an integrated approach to managing an organization aimed at increasing the company's value for owners (shareholders). The main principle of value-based management is the qualitative improvement of strategic and operational decisions at all levels of the hierarchy by concentrating the efforts of all decision-makers on key cost factors.

The advantage of the shareholders' approach to assessing the effectiveness of management is that this approach allows one to determine the overall effectiveness of management, since the concept of efficiency is broader here than in traditional methods (target approach, resource approach, internal process approach), and that this approach considers factors both the environment and internal to the organization. In addition, the shareholders' approach takes into account the corporate social responsibility(CSR), which is not formally measured by pi in the target, neither in the resource approaches, nor in the approach of internal processes.

With the growing awareness that efficiency is a complex, multidimensional concept that defies one-sided assessment, the shareholder approach is becoming increasingly important.

The commensurability of the effect and the cost of achieving it is the basis of economic efficiency. In addition to the absolute magnitude of the effect, it is also necessary to know its relative magnitude, calculated by dividing the overall result (effect) by the resource costs that caused it to be obtained. However, this estimate is imperfect.

First, it does not characterize the product produced in terms of its compliance with public demand.

Secondly, direct investments of funds are often summed up in costs and individual consequences are not estimated.

For example, during the construction of power plants on the Volga, the volume of generated electricity was compared with the costs of construction, and it turned out that the energy of the Volga hydroelectric power plants is the cheapest in the world. Meanwhile, at the bottom of artificial reservoirs were millions of hectares of the best floodplain lands. The natural water runoff was disturbed, and barriers arose on the way of migration of sturgeon stocks to their spawning grounds. As if the twentieth century did not become the last for this most valuable fish.

To assess such a complex and multifaceted process as economic progress, one indicator, even the most perfect one, is not enough. We need a measuring system for its different sides "

Most often, the results of economic activity are diverse and it is impossible to bring them into a single result, even using universal monetary measures. In some cases, the result can only be qualitative, generally not expressed in numerical form. These are most often social outcomes.

"Overall result economic activity- the volume of created products - is dependent on the action of the main factors of production, their quantitative and qualitative level. This relationship is expressed by a mathematical formula called the production function. It shows the quantitative dependence of the volume of output on three factors - capital (in kind - means of production), labor and technical progress.

Accordingly, the growth rate of production, capital, labor: - a complex indicator of the growth of the total economic efficiency of all factors (in addition to changes in technology, it reflects an improvement in the quality and an increase in the efficiency of the use of living or materialized labor, etc.); and - the coefficients of the elasticity of the volume of production, respectively, in terms of capital and labor (or coefficients characterizing the increase in the volume of output per 1% of the increase in the corresponding factor) "

Economic growth is associated with two types of economic development:

Extensive

Intense

In the first case, growth is achieved by a quantitative increase in production factors and is based on the old technical and technological base.

In the second - due to the growth of labor productivity, use new technology and technology, that is, due to quality factors.

The main categories of the system of national accounts are GNP and GDP. The difference between them is that GNP (gross national product) takes into account the external factor, but GDP (gross domestic product) does not.

At the moment, some scientists - economists: E.S. Ogloblin, V.A. Svobodin, T.S. Khachaturov - when considering the efficiency of agricultural production, the following types are distinguished:

Production and technical,

Production and economic,

Socio-economic

Ecological and economic.

Production and technical efficiency reflects the efficiency of the use of production resources. This type of efficiency is measured by a system of indicators reflecting the degree of use of land, material and labor resources in the production process. The main indicators are land productivity, capital productivity, material consumption, labor intensity and others.

Production and economic efficiency characterizes the efficiency of production as a result of the cumulative influence of production and technical efficiency and the economic mechanism. It is measured by cost indicators: cost, gross and net income, profit and others.

Under socio-economic efficiency is understood as the degree of satisfaction of social needs in material (average per capita consumption of food, clothing, footwear in comparison with rational norms) and cultural benefits, as well as the degree of spiritual development of the individual. It characterizes the effectiveness of the reproductive processes of the mode of production, the degree of realization of the system of economic interests. To assess it, a system of indicators is used: the cost of products per unit of land area, the level of profitability, the consumption fund per employee.

Ecological and economic efficiency characterizes the total economic performance of the agricultural production process, taking into account the environmental impact of agriculture on the environment. This efficiency reflects the effectiveness of use in the production process, along with material and labor costs, the costs associated with the elimination or prevention of pollution and destruction of the natural environment arising in the process of agricultural activities, as well as the loss of agricultural products due to environmental degradation. Determination of the environmental and economic efficiency of agricultural production is carried out on the basis of calculations of indicators of environmental and economic damage, effect, general and comparative environmental and economic efficiency.

Another group of scientists, when determining the efficiency of agricultural production, distinguishes only two types:

The economic

Social.

Social efficiency the development of agrarian production is manifested, first of all, in the fact that better conditions are created for the reproduction of labor and the well-being of the people increases. The social efficiency of agricultural production is assessed not only from an economic standpoint, but also taking into account the social outcome (improvement of working conditions, social and cultural services in the countryside, increase in real wages, etc.).

The social assessment of the efficiency of agricultural production can be identified through expert assessments and the calculation method, by comparing the dynamics of the income index and the cost of living index for the analyzed period.

Despite different approaches to the content of the concept of production efficiency, most authors agree that efficiency is determined by the ratio of a useful result or effect and resources (spent or used).

The study of the theoretical aspects of economic efficiency in modern foreign literature has shown that this category is interpreted mainly as the “input-output” relationship.

“Society seeks to use its resources efficiently, that is, it wants to get the maximum amount of useful goods and services produced from its limited resources.” The variety of definitions of production efficiency affects the choice of criteria for its assessment. The problem of choosing a criterion for economic efficiency among scientists - economists is the subject of the most heated discussion.

An indicator is a quantitative expression of a separate side of an economic phenomenon. It is he who gives a specific description of the results of this phenomenon. The criterion, as a measure of economic efficiency, is concretized through indicators and reflects the level and dynamics of efficiency. The criterion expresses the generalized result of an economic phenomenon. It is a means of judgment, a feature on the basis of which an assessment, determination or classification of something is made.

In the economic literature, various points of view are expressed regarding the existence of one or more criteria of economic efficiency.

The criterion of economic efficiency should correctly and most fully reflect the essence of the phenomenon, in this case - the economic efficiency of production.

The noted provisions characterizing the essence of the economic efficiency of production are common to all branches of material production. So, in agriculture, land is the main means of production, which is essential for the investigated problem of efficiency. The natural conditions under which agricultural production is carried out also significantly affect the productivity of the production activities of enterprises.

Efficiency also depends on the level of soil fertility, its location in relation to the product market, productivity and the level of rational use of available agricultural machinery. Moreover, the better these qualitative characteristics, the higher, as a rule, the level of the obtained economic effect for each unit of production resources, invested capital. In other words, on soils of different levels of fertility, production costs of the same magnitude reproduce a different amount of a positive effect or a particular result.

The results of agricultural production are also affected by its seasonality, the dependence of performance on weather conditions, the qualitative composition of planting material, animal breeds, etc. [ 3 ]

Economic efficiency is one of the most general and generalizing concepts of economics, which is expressed in the effectiveness of the use of production factors, their savings and a beneficial combination based on rational choice, the purpose of which is to increase profits, increase production and maximize the satisfaction of the needs of all members of society.

A variety of industrial indicators of production efficiency should be considered in conjunction with social factors that do not always have a value expression. The efficiency of the activity of an individual economic individual is not identified with the efficiency of the economy at the macro level; on the other hand, the efficiency of general production is not conceivable without the efficiency of individual economic entities at the micro level.

Production efficiency must be studied and analyzed at different levels of the economy and at different stages of production, where it has its own separate indicators.

Evaluation of economic efficiency always correlates with the goals of production in the future, however, it characterizes the results of activities in the past, and its value is manifested in the present. Consequently, the totality of the results of production activities for a given period of time is the efficiency of production.

Before choosing the best option for organizing economic activity, you should decide on the criteria for assessing the indicators of economic efficiency. We will tell you how to do this in this article.

You will learn:

• What are the goals and objectives of assessing indicators of economic efficiency.
• What is the subject of analysis when choosing them.
• What methods are used in the calculation.
• How the economic efficiency of production is assessed.
• What methods can make the company more efficient?

Economic efficiency indicators- the main tools for the implementation of economic strategy at all levels of economic and economic activity (from a particular enterprise to the national economy).

Economic efficiency performs a number of tasks:

• regulates the on-farm activities of enterprises;
• forms a producer / consumer relationship;
• translates general economic benefits into the subjective interests of all participants in the economy.

Each business entity, be it a state or an individual, is interested in obtaining the maximum possible benefits from the available resources. Moreover, each participant in the production or consumption of these goods seeks to maximize their benefits and minimize costs... That is, to act in the most efficient and rational way.

Evaluation of economic efficiency

The same criterion for any business activities (innovation, investment, improvement social sphere and management) is:

• focus on achieving the desired result;
• the need for costs.

The criteria for assessing economic efficiency are divided by types:

• absolute (general);
• relative (comparative);
• temporary.

Absolute - characterize the size of the effect. They are obtained by subtracting all costs associated with its implementation from the cost estimates of the results of an economic measure.

These include the cost of funds and objects of labor, labor and other resources spent in the billing period.

They are necessary to assess and analyze the efficiency and overall economic results obtained in dynamics and over a certain time period at the micro and macro levels of the economy, as well as to compare by regions and enterprises.

For example, if the absolute indicator of economic efficiency is the profitability of the economy, then the relative indicator is the efficiency of an economic and economic measure in comparison with various factors.

When measured, profit can be calculated using the formula:

Pr = P O - S P, where:

ON- the volume of products (produced, sold) for a specific period;

S P- its cost.

The calculation of relative indicators is carried out by dividing the cost estimates of economic results by the total resource costs associated with their receipt:

E O = E E / Z S, where:

E E- the value of the achieved economic effect;

Z S- the cost of obtaining it.

How to make a sales plan on the principle of matryoshka: for a year, for a month, for a week

During a crisis, a merchant may have the idea that the company is not up to growth now: the main thing is to maintain the volumes of the previous year. However, the task commercial director- not maintenance, but development of sales. A competently developed, and most importantly, a realistic sales plan will help solve this problem. To do this, it must be divided into three parts: strategic for a year, tactical for a month, and individual for a manager for a week.

How can such a plan be developed and implemented? Here step-by-step instruction from the editorial board of the Commercial Director magazine.

Economic effect and efficiency

The effectiveness of the economic system is determined by many factors:

• production efficiency;
• public administration;
• socio-economic development;
• standard of living, education, health care;
• business competitiveness.

One of the ways in which the functioning of the economy is assessed is the result social production, testifying not to the rate of increase in the volume of the production product, but to the resource costs when it is reached.

The indicators of the economic efficiency of production most fully characterize the economic activity of the state and an individual... When determining them, the effectiveness of the entire state economy, each individual industry, territorial entity, foreign trade, the work of enterprises and each employee is taken into account.

They also determine how effective the value creation process as a whole and its individual phases, such as distribution, exchange and consumption.

Methods for calculating indicators of economic efficiency

Formula EE = Result / Cost- is basic. Therefore, when measuring the effectiveness of each factor of various business entities, the indicators of economic efficiency include:

• the ratio of net production (profit) to the average value of circulating and fixed assets;
• the level of profitability and payback of products and PF;
• production of goods and services per one monetary unit of expenses;
• relative savings in funds, materials, labor, payroll and others.

To measure the economic efficiency of production, such direct and inverse indicators are used as:

• productivity, which is calculated by the ratio of the results obtained to labor costs (the inverse measure is labor intensity);
• material efficiency calculated by the formula MO = R / Z M, where R- results, Z M- material costs. For this category, the inverse indicator will be the material consumption ( M = Z M / R);
• return on assets and capital intensity;
• efficiency of investments and investments.

Most overall indicator economic efficiency is the ratio of the effect obtained from economic activity (national income or GDP) and the total costs to achieve it.

In macroeconomics, when determining efficiency, 2 indicators are used:

• increase in gross domestic product produced per capita;
• its production for each unit of cost.

Due to the huge variety of factors affecting the final results, it is impossible to assess how effective this or that activity is only taking into account any one indicator. Therefore, in practical calculations, a system of interrelated indicators (both absolute and relative) is always used. Thanks to this, all important aspects of the functioning of an economic entity are assessed.

The system of indicators of the economic efficiency of production

According to the degree of filling with which the results and costs are taken into account, the relative indicators characterizing economic efficiency are conventionally divided into 3 groups:

• generalizing;
• private;
• integral.

In the first case, one or several types of effects and a number of resource costs are subjected to commensuration, which characterize how economically efficiently enterprises, territorial entities, and national economies work as a whole. Such indicators serve as a rationale for decision making aimed at changes at any level of the economy.

In this group, the main indicators of the economic efficiency of the economy will be:

• national income;
• gross domestic product per capita;
• generalized coefficient of economic efficiency;
• labor productivity;
• costs per ruble of manufactured product;
• profit;
• profitability of production and products.

For individual elements of production and economic activity, private indicators are used. They provide an opportunity to show the validity of the decision to improve the selected elements.

Thus, generalized indicators are a goal, and private indicators are a tool for performing calculations and analyzing efficiency.

In the table, there are several examples of two groups of indicators.

Summary indicators	Private indicators. Efficiency of use:
	staff	funds	finance
The degree to which market demand is being met. Output of net products per unit of resources used. Cost per unit of product produced. Profit per unit of total expenses. Enterprise profitability. Increase in production due to increased production intensity. The effect for the national economy from the use of a unit of production.	Labor productivity growth rates. Increase in production due to increased productivity. Working time utilization rate. Labor intensity and wages per unit of production.	Total capital productivity (due to the volume of production). Return on assets of the active part of the PF. The profitability of fixed assets. The capital intensity and material consumption of a unit of production. The utilization rate of basic materials and raw materials.	Working capital turnover. Profitability of working capital. Release of OS in relative terms. Specific capital investments (per unit of increase in capacity or product). Return on investment. Payback period on investment.

When choosing indicators for assessing economic efficiency, one should be guided by the following requirements:

• The number of estimated characteristics is selected depending on the objectives of the analysis.
• The semantic meaning of each indicator should be perceived simply and clearly, without the possibility of ambiguous reading.
• For any indicator, objective quantitative data should be provided based on statistics and accounting. Moreover, both maximum and minimum values ​​must be reflected in the digital range.
• If generalizing indicators of economic efficiency are calculated, only monetary indicators of results and costs are used, as well as their relative values ​​(percentages, coefficients, indexations).
• In the calculations of private indicators, in addition to cost indicators, natural and labor measurement options can be used.

But first, it will be necessary to solve 2 questions:

• Determine the method of converting various non-monetary parameters into income and expenditure (cost) measures of private indicators.
• Establish algorithms for combining these dissimilar cost estimates, which in life cycle products differ in place, time, content and relationship with the production and economic interests of the subject into uniform indicators that generally determine a specific economic system.

Methods for optimizing indicators of economic efficiency

It is impossible to demand that the indicators of the economic efficiency of the enterprise and the national economy completely coincide, just as it is impossible to assess the overall level of the national economy by simply summing its parts.

Therefore, when choosing the optimal method for calculating efficiency, it is necessary to take into account the following significant points:

• the nature of the program-target orientation of management decisions;
• the required level of specification in the calculations;
• comparison of the estimates obtained with the basic norm of economic efficiency;
• the place of the planned economic and economic event in the full period of product circulation and the role of the expected results, costs in the sphere of economic interests of economic entities that participate in its implementation.

With all the variety of categories and types of business decisions, only 2 fundamentally different optimization methods are practically implied:

• To produce a larger volume of products and services with a fixed amount of resource costs. The fulfillment of this task requires an increase in labor productivity through technical and technological re-equipment of production, the introduction of innovations, the improvement of the qualifications and professionalism of workers, the use of higher quality materials and raw materials. This situation is described by the formula: EN → max at Z = const.
• Reduce costs while maintaining the achieved volume of production of goods and services. Achievement of such results is possible due to the economical use of resources, secondary processing, the introduction of resource-saving technologies, and a reduction in the number of personnel. ZN → min at E =const.

There is also a combined efficiency improvement model that combines the main criteria of the first two options and additionally takes into account other optimization criteria (including natural ones): specifications, the speed of the effect, cash turnover and possible alternatives, field (industry) of activity, similar estimates from competitors, industry average values.

This situation is reflected by the following algorithm:

EN / ZN → max, where N- the number of the considered option of the management decision.

Conclusion

The choice of method is determined by each the head independently, taking into account the goals, potential capabilities of the enterprise and the market situation. As a rule, if the economy is growing and consumer demand is increasing, it will be advisable to use the first method, and when there is a decline in production, the second.

However, with the duration of the crisis, it is more rational to do marketing to boost sales, change the profile or reorganize the company. And it is important to always adhere to a 100% use strategy. own resources even if their purpose changes.

With regard to the problem of measuring the economic efficiency of any organization, it is useful to consider it according to the components of the assessment:

Management efficiency criterion;

The key principle for evaluating performance;

Indicator (system of indicators) efficiency;

Methodology for calculating economic efficiency;

Organizational and environmental measures for the introduction new system evaluation into practice.

Let us single out two results of theoretical developments of the problems of production efficiency, carried out before the start of economic reform:

1) determination of the essence and content of the main types of efficiency:

Economic, social and socio-economic;

National economic and self-supporting;

Generalizing (reproduction, economy as a whole), local (individual regions and economic links), private (individual factors of production) and individual phases (spheres) of reproduction;

2) justification of criteria and performance indicators.

Criteria reflect the essence of performance, indicators serve as a means of measuring and comparing performance in accordance with its criteria.

Efficiency characterizes in a broad sense the qualitative aspect of the development of society. Its specificity lies in the fact that it shows with the help of a combination of which resources the final result is obtained. V general view efficiency is expressed through the ratio between the results obtained in the production process and the costs of social labor associated with the achievement of these results. The essence of increasing production efficiency consists in a faster growth of the result (effect) in comparison with the costs, as a result of which less social labor falls on the unit of effect.

The criterion of the efficiency of social production is formulated as the achievement of the maximum effect from each unit of social labor costs or the minimum of these costs for each unit of effect.

The generalized efficiency indicator, constructed on the basis of this criterion, unambiguously assesses the production efficiency at a certain point in time. It should take into account all factors that affect production efficiency, which provides a comprehensive assessment. Such a generalizing indicator can be the ratio of products with the total costs (current and capital) required for its production. It is used to determine the efficiency, both for the national economy and its individual sectors, as well as in determining the efficiency of capital investments and new technology.

Indicator for measuring the efficiency of the national economy is the ratio of national income and production assets of the national economy; for measuring the effectiveness of capital investments- the ratio of profit and volume of capital expenditures.

Positive economic effect- it saving, negative - lesion.

One of the types of economic effect (while improving the quality and reliability of products) is averted loss, i.e. a negative economic effect that did not arise (this effect is sometimes mistakenly called savings).

Under loss understand, firstly, a decrease in cash assets, or the so-called positive damage (for example, losses due to marriage). Secondly, a loss is called a lost profit, i.e. non-receipt of those property benefits that could have been obtained if no harmful action had taken place.

Thus, the prevented damage, in whatever form it may appear, is, in accordance with our terminology, an economic effect, and not an economy.

Saving, which is understood as a positive economic effect, is the saved social labor (living or past), resources, time in the manufacture and consumption of products.

Economic efficiency is the most complex and capacious category of economics. It is the basis for constructing quantitative criteria for the value of decisions made in the formation of material and resource, functional and system characteristics of economic activity.

Currently, the most complete and consistent study of the economic efficiency of economic activity is given in the theory of complex economic analysis, where the sections of prospective, current and operational analysis are devoted to efficiency, on the basis of which the achieved efficiency of economic activity is assessed, the factors of its change, unused opportunities and reserves for increase are identified.

Analysis of the overall efficiency of the economic activity of the enterprise is the prerogative of the highest management level and is associated with the determination of the price of a product, the size of the batch of purchases of raw materials or supplies of products, replacement of equipment or technology. Other decisions also need to be assessed in terms of the firm's overall success, the nature of its economic growth and efficiency.

The main tasks of the analysis of efficiency: assessment of the economic situation; identification of factors and causes of the achieved state; preparation and justification of the adopted management decisions; identification and mobilization of reserves for increasing the efficiency of economic activity.

One of the directions of analysis is the identification of extensive and intensive factors of its change. Extensive factors are associated with an increase in production volumes due to quantitative factors economic growth: additional labor, expansion of retail space, construction of a new facility, etc. Intensive factors associated with the use qualitative factors economic growth, characterized by the rate of return of each of the resources used.

The quantitative ratio of these factors is expressed in terms of the use of production and financial resources (Fig. 6.2).

The volume of production in value terms is a function or result of the impact of the use of all types of resources. Since the production process is carried out only in the presence of all elements of the labor process in their interconnection, it is impossible to identify separately the influence on the results of production of each of this group of factors.

A feature of the extensive and intensive use of resources is their interchangeability. For example, the lack of labor force can be compensated by an increase in labor productivity. Conversely, the output can be increased due to the additional labor force involved.

Each indicator of the use of resources, in turn, is made up of the action of factors of the second and next orders. For example, labor productivity depends on an extensive value, i.e. from the duration of the working time, as well as from the intensive value, i.e. from the load during working hours and the productive force of labor, determined by the organizational, technical and other (natural and social) conditions of production.

This means that each qualitative indicator of the use of resources only in general reflects the intensity of its use.

How to measure efficiency

Text: Ekaterina Trypoten

How to measure efficiency

Text: Ekaterina Trypoten

Constant calls for efficiency gains have already acquired the status of incantations for Rosatom. The mantra about the need to reduce the time of the processes and the cost of the final product has been learned by most of the industry experts. But what is behind these words? How to measure the efficiency of enterprises in the industry and what is the position of Rosatom in comparison with its closest competitors?

Almost any company constantly measures the results of its activities with the costs of a particular process, the efforts applied to achieve the result, as well as losses, that is, evaluates the effectiveness. The result of the assessment can be either positive or negative.

But perhaps only monopolies can afford to be branded as ineffective; in Russia it is often even beneficial, oddly enough. For example, in the early 2000s, RAO UES of Russia, proposing a new tariff policy, complained that the old cost-plus regulation system did not stimulate energy companies to reduce costs. They say, it is worth reducing some costs once, and the savings will be immediately "cut out" during the annual revision of tariffs. In such a situation, it is much more profitable to prove to the regulator that all costs are economically justified.

V competitive environment efficiency is the key to competitiveness, so it is not only measured, but also measured against. As a rule, they assess the historical dynamics of indicators, compare fact and plan, or fact and target value, - on this, in particular, the system of key performance indicators (KPI) is based.

To understand whether the result of an individual company is good or bad against the background of the general market situation, it will help to compare it with the industry average or data on competitors. But how adequate would such a comparison be in the case of Rosatom?

Currency trap

When analyzing the historical dynamics of a particular indicator Russian company which runs on international market, traps may lie in wait for the researcher.
The ex-head of Rosatom Sergey Kirienko, in particular, drew attention to one of them, summing up the results of 2015, when the average annual dollar exchange rate was 60.96 rubles.

Rosatom's results were mixed: in ruble terms, the key indicators - adjusted free cash flow and labor productivity - increased significantly compared to the previous year and outstripped the forecast in the strategy. At the same time, a decline was recorded in dollar terms.

The state corporation has a unique position. On the one hand, a company is essentially a monopoly in its industry, and the form of a state corporation, unlike a joint-stock company, does not oblige it to strive for profit. And in the law on the creation of Rosatom, there is no talk of any efficiency. Just five to ten years ago, the state corporation did not experience serious problems with budget financing of development programs, and, by the way, state support was one of its competitive advantages on the international market.

This does not mean that the authorities were not interested in how effectively budget funds are spent. However, the search for internal reserves was provoked rather external factors: the economic crisis of recent years, stagnation in the uranium and enrichment markets, limited budget funding and alarming expectations of new competitors entering the NPP construction market. So efficiency became and corporate value state corporation, and its strategic goal.

The figures will show how Rosatom looks against the background of its competitors. But first, it is worth determining which indicators will be visual. For example, Rosatom considers a portfolio of foreign orders to be one of the key indicators assessing the long-term sustainability of a business.

At the end of 2015, this figure was $ 110.3 billion, of which Rosatom expected to receive $ 22.9 billion of foreign revenue in 2016–2018. Areva's order book at the end of 2015 was estimated at 29 billion euros. True, the state corporation has a portfolio of orders for 10 years in advance, and the above figure for Areva is a seven-year order. Nevertheless, the proportions are quite obvious. The order book shows the potential revenue of the company, but according to this indicator it is impossible to form an opinion about how profitable a particular project is.

The economic efficiency of an enterprise is well characterized by profitability: the ratio of profit to assets, resources or income. One of the basic indicators is the return on sales (operating), which shows how much the company earned on each ruble (or dollar) of income. Investors are also looking at EBITDA margins. Unlike operating profitability, this ratio shows the financial result of the company without taking into account such non-monetary expense items as depreciation and amortization.

How objective will Rosatom's comparison with Westinghouse or Areva be in this indicator? Judge for yourself. Data on EBITDA and operating profit of the state corporation for 2015 could not be found in open sources. Westinghouse is not a public structure at all and did not disclose its finances until the end of 2015; how things are in the company, the public found out only after the accounting scandal in the parent Toshiba.

However, there are statistics for 2014: Westinghouse's EBITDA margin in 2014 was 13%, Areva - 8-9%, Rosatom - 32%. However, firstly, Areva is now being rescued from bankruptcy, so the data for 2014, to put it mildly, are outdated. And secondly, companies have a different composition of assets. All of them are vertically integrated structures, but at the same time they combine different types business: for example, Westinghouse deals only with reactors and fuel, and does not cover such segments as enrichment or conversion. Areva is (was) engaged in both, and the other, and the third, but, unlike Rosatom (note that Rosenergoatom is one of the most profitable companies of the state corporation), does not generate electricity, in France it is the prerogative of EDF.

On the other hand, since 2015, Rosatom's results have also consolidated the finances of Atomenergosbyt, the sales subsidiary of Rosenergoatom, which sells electricity to retail consumers. The sales company is the final link in the energy market of the Russian Federation, it is engaged in collecting funds from consumers and the subsequent redistribution of payments further along the chain, therefore, it has very large revenue with minimal and limited profitability (which has been criticized by the top management of Rosatom more than once). So the consolidation of the results of Atomenergosbyt underestimates the profitability of Rosatom itself.

It turns out that it is more correct to compare beneficiation with beneficiation, mechanical engineering with mechanical engineering, and so on. Moreover, the management companies of Rosatom's divisions are JSCs. Moreover, in addition to EBITDA, it is best to focus on labor productivity. It is calculated as the ratio of manufactured products in rubles or in units to the total staff.

It makes sense to look at the level of profitability. But it should be borne in mind that within large vertically integrated holdings, where one enterprise follows the NFC chain after another, the profitability of each business is determined, among other things, by a policy from above, the appointment of a “profit center”. For example, the same Rosenergoatom, which buys fuel from TVEL, could be less profitable if the fuel company sold its products to it at a higher price.

Rosenergoatom
The concern, historically operating only at nuclear power plants, has not so many public counterparts. Typically, the production assets of generating companies include different types of generation. We have selected for comparison several companies that are closest to the concern. French EDF generates 80% of electricity at nuclear power plants, American Exelon - 88%. The Chinese CGN Power positions itself as the largest nuclear power plant operator in the PRC and the main nuclear "builder" in the world (10 units under construction as of December 31, 2015).

For comparison, we took EBITDA margin, if it was possible, labor productivity, as well as ICUF - essential characteristic efficiency of power generating enterprises. This parameter characterizes the efficiency of the power plant as a whole: technological excellence, personnel qualifications, and so on. True, often KIUM also depends on the organization of the entire energy sector at state level, therefore, the operating company cannot always influence it. In addition, the capacity of a nuclear power plant to operate in a maneuverable mode, which exists, for example, in France, also affects the ICUF.

An important point: when analyzing, we took into account the differences in reporting standards for Russian and foreign companies. These differences stem from the reporting purposes: RAS is primarily focused on tax authorities, and IFRS - on investors. And if the state corporation itself annually publishes reports according to international standards, then management companies of sectoral divisions and even more so enterprises of the Central Federal District-3 level are far from always.

Table 1. Comparative indicators of generating companies (data for 2015)

Rosenergoatom's reported EBITDA margin for 2015 was 51.25% versus 23.5% for French EDF; only the concern, when calculating EBITDA, proceeds from gross profit (before deducting selling and administrative expenses), while EDF - from the operating room. If, however, the results of the companies are brought into a unified format and the profit from sales, rather than gross, is taken to calculate Rosenergoatom's EBITDA, then the comparison will no longer be in favor of the concern: 22.99%.

Rosenergoatom is convinced that it is correct to rely not on a monetary indicator, but on a natural indicator in the field of electricity generation: take the actual output in kilowatt-hours and divide it by the number of personnel involved in generation. Calculation of Rosenergoatom's labor productivity on the basis of revenues is complicated by the fact that the group's revenues, on the one hand, are limited due to the regulated part of the market, and on the other, they include a safety premium.

In addition, it is not clear what headcount to take into account. “After all, if we divide the proceeds from the sale of NPP electricity among all employees of the concern, then the calculations will take into account, for example, builders who have nothing to do with the generation of this electricity. But these are several thousand people! Considering that the concern has recently been actively constructing, when comparing Rosenergoatom with other energy companies, it would be correct not to take builders into account in the number of personnel, "Sergey Migalin, Deputy General Director - Director for Economics and Finance of Rosenergoatom Concern, recently explained in an interview with our magazine ...

Comparison with Western electricity producers, according to him, is complicated by significant differences in the structure of the organization of the unit operation process (for example, in Europe and the USA, many auxiliary works and services are performed by third-party organizations, in Russia, even if any business process is given outsourcing, it still, as a rule, remains within the consolidation perimeter).

TVEL and Techsnabexport
Unlike Rosenergoatom, which operates on Russian market, TVEL JSC sells its products on the international market as well as interacts with foreign partners. So here without IFRS - as without hands. Truth, comparative analysis TVEL is hampered by the fact that the fuel company, which is engaged in enrichment, conversion and fabrication, has practically no direct public analogs.

The peculiarity of Rosatom is that Russian-designed nuclear fuel is sold on the foreign TVEL market, and the enriched uranium product produced at the fuel company's factories is sold external partners Techsnabexport. However, it is still possible to draw certain conclusions about the level of efficiency from the comparison of companies' reporting.

A significant gap in labor productivity of TVEL enterprises with the main competitors is nothing new. The main assets of the fuel company were created in Soviet time and are burdened with large areas, auxiliary subdivisions, at TVEL enterprises the number of personnel is higher and the share of automation is often relatively low.

Table 2. Comparative indicators of NFC companies

"Atomenergomash"
In the power engineering business, it is more difficult to bring profitability indicators into one table: Atomenergomash and Doosan disclose EBITDA, but GE and Areva do not provide EBITDA broken down by segment - only a consolidated indicator. Atomenergomash's EBITDA margin is comparable to Doosan: 3.5% versus 5% in 2015 and 8.5% versus 8.2% a year earlier. For Areva's reactor division, the latest published data dates back to 2014, which resulted in an operating loss. Siemens posted a 12.7% EBITDA margin. The leader here is GE Power, which shows a profitability of 21% even at the operational level.

Unlike TVEL, they are only at the beginning of their journey. In 2015, Atommash was supplied with equipment that frees up areas and increases productivity (the freed people will be transferred to other areas).

Table 3. Comparison of labor productivity of nuclear engineering companies

Conclusion
The strength of Rosatom lies in the unique combination within one corporation of the complete technological chain of the nuclear industry. Economies of scale can create a false sense of stability. Therefore, it is possible and necessary to constantly monitor competitors in various sectors of the industry, compare and outline ways to improve efficiency.

Using the example of Westinghouse and Areva, we see how the once formidable competitors of Rosatom, one after another, leave the arena. An analysis of their mistakes, a detailed study of negative experience is very useful: we have a chance not to step on the same rake.

OTHER ROOM MATERIALS

NEWS

News: February-March 2017

Why has Rosatom postponed the start of BREST construction? What changes await the US nuclear regulatory framework? Why did Rosatom create an integrator company in the field of nuclear medicine? How has the senior staff in Rosatom's international sales changed? What measures will be taken at Fukushima-1 in connection with the depressurization of the reactor vessel of Unit 2? What made Toshiba stop building new blocks?

 

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