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Abstract
The purpose of this research work is to illustrate that using the logic of theory of constraints (TOC) concerning the Throughput is adequate in management decisions to improve performance in the context of small and medium enterprises. The TOC approach assumes the use of Throughput as an indicator of performance, and in this paper the method of chain substitution and successive approximation is proposed to analyze this indicator. After the implementation of the Throughput per hour analysis, the owner-manager changed her perspective about what her priorities should be in the exercise of the administrative process. The identification of the restriction of what prevented him from obtaining more money allowed him to make the decisions or courses of action that maximized the Throughput per hour, thus improving his performance as owner-manager, the performance of his enterprise and the economic situation of his employees. The originality of this article consists in the application of TOC approach through the design of the indicator Throughput per hour to analyse the performance of an entrepreneur and the application of the chain substitution and successive approximation method for the study of the restrictions that inhibit it.
Highlights
The most important decisions concerning innovation, facing competence and reach customer expectations force owner-managers to use indicators to know where to act to have the desired effect while managing their enterprises.[1–4] Owner-managers who intent to use indicators as management tools have to look to the most depressed components of them to frame their management strategy and improve the performance of their enterprises.[4,5]To be effective, indicators should allow monitoring the performance, identify poor performance and must reflect strategic priorities of the enterprise and the improvement potential.[3–5] Future actions of owner-manager ought to be evident based on the indicator they use and the components that affect it strongly
The purpose of this research work is to illustrate that using the logic of theory of constraints (TOC) concerning the Throughput is adequate in management decisions to improve performance in the context of small and medium enterprises (SME)
This article is structured as follows: In the second section, we review the theoretical postulates of TOC, Throughput and method of chain substitution and successive approximation
Summary
The most important decisions concerning innovation, facing competence and reach customer expectations force owner-managers to use indicators to know where to act to have the desired effect while managing their enterprises.[1–4] Owner-managers who intent to use indicators as management tools have to look to the most depressed components of them to frame their management strategy and improve the performance of their enterprises.[4,5]To be effective, indicators should allow monitoring the performance, identify poor performance and must reflect strategic priorities of the enterprise and the improvement potential.[3–5] Future actions of owner-manager ought to be evident based on the indicator they use and the components that affect it strongly. The most important decisions concerning innovation, facing competence and reach customer expectations force owner-managers to use indicators to know where to act to have the desired effect while managing their enterprises.[1–4]. Owner-managers who intent to use indicators as management tools have to look to the most depressed components of them to frame their management strategy and improve the performance of their enterprises.[4,5]. Indicators should allow monitoring the performance, identify poor performance and must reflect strategic priorities of the enterprise and the improvement potential.[3–5]. Recent literature highlights the important contribution that medium and small enterprises can make to strengthen the overall performance of an economy. The contribution of the sector of small and medium enterprises (SME) to the economy of a country could, in principle, improve by Faculty of Administrative Sciences, Universidad UTE, Santo Domingo, Ecuador
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