Question

How do you think managers should deal with variance? Do you think it differs when a company is providing a service or a product?

Answer 1

Variance is a unignorable and definite part of an organisation. Each task has some amount of variance involved with it. To deal with this variance, a manager creates confidence intervals, i.e. a target is not fixed but rather has a range of acceptable number. Some level of variance is tolerable in nature and is accounted for by the managers.

However, variance beyond tolerable zone is unacceptable in an organisation. Therefore, quick and effective control measures need to be placed by managers to take care of the excessive variance. The variance is also seen in how an employee works, his productivity, etc.

The level of variance incase of products or service is directly seen or get highlighted to consumer. Therefore, any variance here is of utmost importance. The managers need to track variances like quality variance, output variance, etc of the product and service. The managers therefore need to be more agile, quick and tactical in responding to variance here as it might affect the company’s reputation.