image missing Date: 2021-10-17 Page is: DBtxt003.php L0900-MM-management-of-progress-01a


TVM Principles of Management
MANAGEMENT OF PROGRESS
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PROGRESS IS CHANGE IN STATE
STEADY STATE GOOD PROGRESS NO PROGRESS
BEGINNING OF PERIOD STATE (VALUE)
STATE is how things are at a point in time. What is included can be whatever is relevant for the analysis to be done In this case, the point in time is the beginning of the analysis period.
ORDINARY DAILY ACTIVITIES
Things change because of activities that happen during the period. These activities may well be numerous and complicated and difficult to measure.
END OF PERIOD STATE (VALUE)
STATE at the end of period must be the same set of things as at the beginning of the period.
CHANGE IN STATE
CHANGE IN STATE is the difference between the STATE from beginning to end of the period. In conventional accountancy STATE is reported in the Balance Sheet and the result of ACTIVITIES is reported in the Profit & Loss Account.
NB. The change in STATE or the change in the Balance Sheet is the same as the result of ACTIVITIES or the profit.
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MEASURING PROGRESS
Measuring progress using change in state is very much easier than measuring all the activities. Easier, also means less costly. Easier also means less prone to error or manipulation.
STEADY STATE There is a STEADY STATE when the activities of the period do not result in a change in the STATE from the beginnning to end of the period.
GOOD PROGRESS The progress is good when the STATE is better at the end of the period than it was at the beginning of the period.
BAD PROGRESS The progress is bad or unsatisfactory when when the STATE is worse at the end of the period than it was at the beginning of the period.


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