Phase II introduces the CEO and CFO to OIS’s exhilarating qualitative advantages for the firm. Specifically, moving from a one with a budget focused on cost-min with an income statement focused on profit–max
The advantages include:
- the departmental managers being relieved of the traditional budget’s dis-incentives
- employees being proud of the firm’s executive team which is focused on best possible profit
- departments’ managers being motivated to directly impact firm’s productivity by using their knowledge of their departments’ activities to improve their departments’ productivity.
- It’s recommended HR put together an activity-based class on how to use the departments’ activities to improve productivity
- As an incentive, management might consider rewarding any productivity improvements with a bonus, maybe even including the employees. This would promote a culture of continuous improvement in addition to profit.F
- Finally, it’s suggested HR put together a “road show” explaining as appropriates key OIS features