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A consulting company was hired to improve efficiency. Was this good business? Briefly explain.

Use the article "Stores Count Seconds to Trim Labor Costs" by Vanessa O'Connell found at: http://online.wsj.com/news/articles/SB122651745876821483

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Your discussion is 481 words and explains that standards are generally a healthy business practice and why. The downside of standards are mentioned and the unintended consequences are discussed.

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Was this good business? Briefly explain.

Yes, overall, this was probably good business. Standard costing, the practice of studying processes to identify the time and resources needed for each task or output, has a number of important benefits. First, it helps to identify non-optimal activities. Employees that are too slow or use too much in resources can be identified for training or evaluation. This does not have to be a penalty, it can just be a reason to study and find out what needs to happen. Perhaps the employee was not trained correct or the cash register needs servicing. Or the employee is bored and spends too much time chatting under the "cover" of giving customer service.

Second, standards identify the expected costs and so you can manage, ...

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Carol Sargent, PhD
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  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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