Finance for Non-Financial Managers training in Bern · canton of BerneFinance for non-financial managers in the canton of Bern: does a lower cost per service prove an efficiency gain?

In the canton of Bern, federal administration, public health, telecommunications and precision manufacturing require managers to balance expenditure against service quality. For organisations operating under a public mandate, a financial question also becomes a matter of transparency: what does a lower cost per service actually demonstrate?

What the literature establishes: measurement can redirect effort

Bengt Holmström and Paul Milgrom (1991, Journal of Law, Economics, & Organization) model situations in which a single job comprises several tasks that differ in how readily they can be measured. Their analysis shows that strong incentives attached to a measured dimension can divert effort away from other important dimensions. Applied to financial interpretation, this mechanism cautions against automatically equating a lower cost per case with better service.

A second mechanism: rewarding something other than the stated objective

Steven Kerr (1975, Academy of Management Journal) analyses the gap between the behaviours organisations say they want and those they actually reward. In a hypothetical Bern example, rewarding only the number of closed requests could encourage a telecommunications team to prioritise straightforward cases while leaving complex requests unresolved. Average cost could then fall without improving access to service for everyone.

The hasty conclusion: abandon unit costs

These studies do not make unit cost useless; they call for clarity about what it measures. A reduction is more persuasive when it concerns comparable services, with quality maintained and no costs shifted to another unit. In a hypothetical precision manufacturing example, cost per component therefore needs to be read alongside component conformity, not simply production volume. (our executive and employee training programmes)

The limitations: neither local evidence nor a self-sufficient indicator

Holmström and Milgrom’s work is theoretical, while Kerr’s rests on an illustrative analysis: neither measures the effect of financial training in the canton of Bern. In practice, average cost also depends on volumes, case complexity and the conventions used to allocate shared costs. In public health, comparing services without examining these factors can make a change in the population served look like an efficiency gain.

A practical check in Berne

An exercise in SHR’s Finance for non-financial managers programme could involve preparing a comparison sheet for two periods for a service based in Berne, recording the service definition, included costs, volume handled and a quality indicator. In a hypothetical administrative processing example, participants would calculate cost per closed case while also tracking the proportion of cases reopened for correction, using the same observation window. Verification would reconcile costs with accounting records, volumes with activity records and reopened cases with quality monitoring; for a bilingual organisation including Biel/Bienne, definitions must be identical in French and German. A reduction would be presented as an efficiency gain only after a documented review of quality, case complexity and any cost transfers. To go further: explore the Finance for Non-Financial Managers training in Bern in the canton of Bern, or browse our executive and employee training programmes in Switzerland.

In pictures: Finance for Non-Financial Managers in Bern

• finance for non-financial managers
• Bern
• research
• training bern