MANAGEMENT SYSTEM AND PROFITABLENESS AT A COMPANY OF FĂLTICENI

Cercetări Agronomice în Vol. XLII , No. 4 (140) / 2009

MANAGEMENT SYSTEM AND PROFITABLENESS AT THE “CONSERVPROD” LTD COMPANY OF FĂLTICENI -

S. BREZULEANU*, Carmen Olguţa BREZULEANU, C. IAŢCO

University of Agricultural Sciences and Veterinary Medicine, Iaşi

Received January 12, 2009

ABSTRACT – This study was carried out employees’ satisfaction at work that greatly by using the Diagnosis Analysis Method, depends both on the individual focussed on describing the structure and characteristics of each person and on those functionality of an economic system, its of the job profile. By means of an upstream accurate characterization at the integration action, the Company may informational-decisional level, highlighting increase the quality of raw materials and the positive and dysfunctional aspects for reduce its costs. The aim of the improving its performance, taking into “Conservprod” LTD Company was to account the influence of disturbing factors purchase agricultural land and to produce its within the working area. The “Conservprod” own raw materials. The Company wishes to LTD Company is engaged in winning a promote an upward vertical integration. strong position on the market, retrieving investments, improving working conditions, Key words: management system, gaining profit and purchasing performance methods, techniques and management equipment. The management methods used procedures, standard of product quality by the “Conservprod” LTD Company were objective-based management and product REZUMAT - Sistemul de management şi management. In order to obtain and rentabilitatea la SC „Conservprod” SRL maintain a high standard of the product Fălticeni. Pentru realizarea acestui studiu quality, as well as the customer faith in the s-a utilizat metoda analizei diagnostic, care professionalism of provided services, the derivă din metodele de stabilire a unui company had to work as efficiently as diagnostic medical şi urmăreşte descrierea possible, on multiple levels, in accordance structurii şi funcţionalităţii unui sistem with a pre-established action plan. Hygiene economic, caracterizarea cât mai exactă a and security measures may influence stării sale informaţional-decizionale,

* E-mail: [email protected]

85 S. BREZULEANU ET AL. evidenţierea aspectelor pozitive şi a celor de techniques and management disfuncţionalitate, în vederea formulării procedures that, having proper globale a unor strategii şi a modalităţii de information sources, leads to the right intervenţie, pentru îmbunătăţirea performanţelor sale, luînd în considerare şi decisions and focuses on their influenţa factorilor perturbatori din mediul achievement with a view to reaching în care îşi desfăşoară activitatea. Această the proposed objectives. metodă se recomandă să preceadă efortul de This study analyses the analiză de sistem detaliată. SC “Conservprod” LTD Company, which „Conservprod” SRL şi-a propus ca has its headquarter in Fălticeni, obiective principale: recuperarea investiţiei, câştigarea unei părţi din piaţa locală, . The Company was inovarea producţiei, imaginea firmei, founded on May 9, 2001. îmbunătăţirea condiţiilor de muncă, This Company was initially built obţinerea de profit, câştigurile acţionarilor şi for valorising the production of achiziţionarea de utilaje performante. apples, pears, sour cherries, quinces, Metodele de management utilizate la S.C. plums and other fruits from the „Conservprod” SRL sunt: managementul Fălticeni area and of forest fruits and prin obiective şi managementul pe produs. Pentru a obţine şi menţine atât calitatea vegetables, found in the mountainous produselor sau serviciilor oferite, cât şi area. The above-mentioned raw încrederea clientului în calitatea acestora, material is provided through societatea trebuie să acţioneze cât mai acquisition centres that can be found eficient, pe multiple planuri şi în numeroase in the neighbouring communes of direcţii, în conformitate cu un plan Fălticeni. prestabilit. Condiţiile de igienă şi securitate, în care se desfăşoară munca, pot influenţa satisfacţia în muncă. Satisfacţia în muncă MATERIALS AND METHODS depinde atât de caracteristicile individului, cât şi de cele ale postului. Printr-o acţiune For carrying out this study, we have de integrare în amonte, societatea poate used the Diagnosis Analysis Method, obţine o creştere a calităţii materiilor prime which derives from the methods of setting şi o reducere a costurilor acestora. S.C a medical diagnosis. It has in view the „Conservprod” S.R.L. are în plan să description of structure and the achizitioneze pământ şi să-şi producă o functionality of an economic system, the parte din materia primă necesară procesului accurate characterization of its de producţie. Societatea încearcă, pentru informational-decisional condition, început, să promoveze o strategie de pointing out the positive and integrare pe verticală. dysfunctional aspects, in order to set global strategies and intervention Cuvinte cheie: sistemul de management, modalities for improving its performance, metode, tehnici şi procedee de management, standarde de calitate taking into account the influence of disturbing factors from the area where they carry out their activity. This method INTRODUCTION is recommended to precede the effort of detailed system analysis. The management system unites The diagnosis analysis is in one concept the totality of methods, characterized by the fact that it is done in

86 MANAGEMENT SYSTEM AND PROFITABLENESS AT A COMPANY OF FĂLTICENI a relatively short period and does not look Traditionally, the objectives are for detailed solutions, but for solutions established from top to bottom, with a global character, as the starting from the strategic objectives recommendations of frame-solutions and of the entire organization and going to of an action programme that could include different component subunits until the further detailed analyses. From this point of view, the Diagnosis Analysis Method jobs found at the base of the resembles the general preliminary studies hierarchical structure. Thus, or the opportunity of modern coherence and convergence of the methodologies, used for accomplishing different objectives within the the system analysis. organization are ensured. In order to be operational in the planning and RESULTS AND DISCUSSION control process, the objectives must meet some conditions: to be explicitly In the management, the objective formulated, to be possible to group in term means a future result, which has sets of priority, to be a basis for the to be obtained. For the studied management actions and decisions, to Company, the aim of objectives was serve as standards for the evaluation the entire organization and the of the individual results and groups of different business units, functional labour. fields and departments. Taking into account the proposed The objectives show a clear objectives, the goal of “Conservprod” image of the general orientation of the LTD Company was to become an Company, according to the aim and important producer in the area. The mission of the Company. These must Company wishes to make high quality be materialized by specific actions; products, in order to be in accordance otherwise, they risk remaining only at with the EU standards and, the stage of wishes and good progressively, it will try to replace the intentions (Alecu et al., 2006). old equipments with high productivity The “Conservprod” LTD ones. Company has as main objectives: The financial analysis on the recapture of investment, gaining a part data of the last 2 years generally of the local market, production precedes the technical-economic innovation, improving the Company’s analysis of the company and has two image and labour conditions, gaining sides: profit, increasing the shareholders’ a) The analysis of the financial benefits and acquiring good flows, which are of three types: equipments. The means of accounting flows, fund flows and establishing the objectives within the subsidies flows; studied Company highly condition the b) The analysis of the indices, in efficiency of their use in the order to evaluate the profitableness of management process. the company and other economic- financial parameters (Table 1).

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Table 1- The economic-financial analysis according to profit and loss account lei Indicators 2006 2007 Sales 485,000 550,000 Subsidies 127,256 - Other incomes 43,575 45,280 Total incomes 693,168 708,556 Variable expenses of production 520,901 532,315 Gross operating margin 172,266 176,241 Fix factory costs 78,112 79,425 Administration costs 30,492 30,985 Distribution costs 15,625 16,981 Total expenditure 124,230 127,392 Exploitation result 48,036 48,848 Financial result 1,514 1,858 Exceptional result 1,529 1,642 Profit before taxing 37,656 38,925 Profit tax 7,664 8,525 Net profit 29,992 30,395

Data presented in Table 1 efficiency of the basic activity. The showed that the Company has gained financial result contributes to the profit in the last two years. At present, profit increase by almost 27%. the profit before tax payment was like The managerial system can be this: defined as an assembly of sub- Modification of the profit: systems with organizational, 38,925-37,656 = 1,269, of which: informational, motivational and Contribution of gross margin: methodological character within the 176,241-172,266= 3,974 Company, by which all the relations Increase of the fix expenditure: and the management process are 127,392-124,230=-3,161 exerted, in order to establish and Modification of the financial achieve the goals. result: 1,858-1,514=344 The elements of the decisional Modification of the exceptional sub-system are represented by all the result: 1,642-1,529=112 leading functions. Over 64% of the profit increase The mechanism of managerial is the result of exploitation, which is a system functioning is ruled by leading normal situation and shows the decisions and is based on laws,

88 MANAGEMENT SYSTEM AND PROFITABLENESS AT A COMPANY OF FĂLTICENI principles, methods and devices that There are many reasons for make the methodological subsystem. which the Company may promote an The condition of the best within the increase strategy. The most important Company functioning is determined reasons are the following: in certain by the elements with motivational business fields, only great companies character, able to fulfil the goals can survive and the interest of (Brezuleanu, 2004). shareholders and investors being that In the studied Company, the the Company increases, so that the leading activity is accomplished by a value of the capital on the stock person invested in a leading position, exchange might increase. based on generally valid principles. The main strategies of increase These principles are collective ruling, are concentration, vertical integrity leading unit and economic efficiency. and diversification. The strategies are formulated and The strategy of the concentration implemented at different levels of the appears only when the Company has Company’s management. From this in view the extension of the activity in point of view, we can have general the business field. There are three strategies (corporative), competition basic possibilities for accomplishing strategies (business) and functional concentration strategies: market strategies (Ciurea, 2005). development, product development The strategy developed at the and horizontal integrity. The highest level of the Company is called horizontal integrity consists in the general or corporation strategy. Thus, absorption of some companies by the there are established the business field absorbing companies that make and how the resources of the similar products and services. organization are managed for The concentration strategy has supporting the operations in these the advantage of allowing the fields. There is a series of generic Company to better valorise the alternatives that can be used in order managerial and technological strong to configure an efficient general points of a certain business field. strategy. These alternatives can be The strategy of vertical grouped into three strategies: increase integration consists in the extension of strategy, stability strategy and the operations of a Company in decrease strategy. connected business fields, exploited The increase strategy represents by suppliers or clients. Working in a significant extension of the activity supplying domains, the integration is volume, which normally determines a done at the upper level. Moving substantial increase of sales and business towards products or services incomes. Obviously, the application valorised by clients means to integrate of the amount of activity generally them at the upper level. involves an important investment The main reason for which the effort, i.e. a large use of resources. company wants to promote a strategy

89 S. BREZULEANU ET AL. of vertical integration is the increase saturated or in decline markets. in the profitableness of its activity. Another essential reason for Due to the action of integration at the promoting some increase strategies by upper level, the Company may diversification is the hope of getting increase the quality of raw materials higher and more stable profits. and reduce their costs. In addition, the The stability strategy is “Conservprod” LTD Company plans promoted by the Company when it is to buy land and produce the raw satisfied with the current situation and materials necessary for the production wants to maintain the status quo. By process. adopting such a strategy, the By an action of upper level Company makes a few changes as integration, the Company may concerns products, markets or its directly increase the profits or have in methods of production. The amount of view an increase in the quality of the activities generally remains the same final product offered to consumers. and if a certain increase is found, it is The promotion of an upper level slow and non-aggressive. strategy means a substantial financial The stability strategy can be used engagement on the behalf of the both on short and long term. On short Company, as well as the existence of term, the strategy may be used by all managerial competences in the types of companies, together with connected fields. Therefore, a few other strategies. On long term, the companies successfully tackle such a stability strategy is promoted strategy. especially by small and large The diversification strategy companies. consists in the promotion of some The decrease strategies have in activities in business fields that view the different proportion clearly differentiate from the usual reduction of the amount of one business field of the Company. company’s operations, in order to When diversification is carried contract an unfavourable tendency or out by entering different but related to solve a critical situation. There are fields, there is a concentric many types of possible decrease diversification. If diversification is strategies: extortion, rectification, done by entering completely different non-investment and liquidation. business fields, with no connection to Rectification is the strategy of the present field of the Company, then partial reduction of the amount of a it is a conglomerate diversification. company’s activity, by renouncing at The main reason of the less moneymaking products, reducing diversification strategies is the some marketing activities, discharging necessity of distributing the risks, so the staff, etc. The aim of the strategy that a Company should not depend is to improve substantially the only on a single business field, efficiency of the remained operations especially when this field is based on

90 MANAGEMENT SYSTEM AND PROFITABLENESS AT A COMPANY OF FĂLTICENI for a later increase (Brezuleanu et al., 70% from the total suppliers. The 2008). Company has also made contracts Extortion supposes the intensive with the individual producers from exploitation of the company by the this area. reduction to the minimum of the The main client for the necessary investment and “Conservprod” LTD Company is the maximization of the short-term “Legume” Trade Company of profits. Suceava with a weight of 30% from Non-investment means the total sales. The Recuperation and integrated or partial selling of Rehabilitation Centre for Persons with activities or shares of a viable Disabilities and the General business company. Department for the Child Protection Integrated selling can be planned of Suceava have an important weight. only when owners or managers have a Having in view the activity pessimistic vision on the future of the profile, the Company tries to adopt company or want to get rapidly the the following market strategies: countervalue of the obtained assets. increase of market share, Partial non-investment can be differentiated strategy, active strategy, associated with a strategy of re- high exigency strategy and offensive launching the business company, to strategy. which parts of assets are sold. Liquidation supposes selling or CONCLUSIONS dissolution of a whole organization, resulting in its disappearance as Due to his activity, the manager judicial entity. The liquidation materializes the main management strategy can be taken into attributes that refer to organization, consideration when the organization is coordination, command and control- affected by insurmountable evaluation. He must permanently take difficulties, generated, especially, by decisions meant to influence the the fact that the products and the content of the labour processes, done services it offers are no longer by subordinates and direct demanded on the market (Brezuleanu, collaborators. 2008). The management method As regards the supplying activity contains rules and procedures that of the company, it is based on only indicate the specific modality of one vegetable supplier, the “Legume” problem solving, transforming the Trade Company of Fălticeni, which information into actions through has a weight of 90% from the total decisions. The management methods suppliers. The greatest fruit supplier used by the “Conservprod” LTD for the Company is the Fruit-Growing Company are objective management and Research Station of Fălticeni, and product management. Suceava County, with a weight of

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In order to obtain and maintain “Conservprod” LTD Company plans the quality of offered products and to buy land and to produce a part of services, as well as the customer’s the raw material necessary for trust in their quality, the Company has production process. The Company to act most efficiently on multiple tries to promote a strategy of vertical plans and directions. integration. An essential role in the success of the strategy implementation has its REFERENCES particularization, in accordance with a series of specific elements of the Alecu I., Merce E., Pană D., Sâmbotin business field of the company. L., Ciurea I., Bold I., Dobrescu N., 2006 - Managementul exploataţiilor The success of the strategy agricole (Farm Management). Edit. depends on good internal organization Ceres, Bucureşti and competent staff. The internal Brezuleanu S., 2004 – Management organization supposes elaboration of agricol- teorie şi practică (Farming management – theory and practice). an organizational structure compatible Edit. Performatica, Iaşi with the strategic necessities and Ciurea I. V., Brezuleanu S, Ungureanu promotion of adequate management G., 2005 - Management. Edit. relations, identification of distinct Ion.Ionescu. de la Brad, Iaşi aims and competence, having in view Brezuleanu S., Brezuleanu Carmen Olguţa, Ungureanu G., Iaţco. C., managerial ability, knowledge and 2008 - Appreciation of the adaptable necessary resources and selection of capacity of the agricultural employees in key position. The exploitation to the exigencies of its motivational support of the employees activity domain- Buletinul USAMV Cluj Napoca, seria Horticultură, vol has an essential role in the success of 65-(2) the strategy. Brezuleanu S., 2008 -Research regarding Work hygiene and safety the optimization of production conditions may influence the branches joint in agricultural Iasi satisfaction at work, which depends County, in order to increase their profitableness - Universitatea de on both the characteristics of the Ştiinţe Agricole şi Medicină individual and its position. Veterinară a Banatului Timişoara, By an integration action, the Facultatea de Management Agricol, Company may obtain an increase in Lucrări Ştiinţifice 2008, Seria I, vol X (2), Edit. Agroprint Timişoara the quality of raw materials and a reduction in their costs. The

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