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This is a step in a process of strategic management or organizational control. This is the process in which data is gathered so as to know how well various steps in a production process are being performed. In this step, the management needs to determine what sort of performance levels actually occur in the real world. This is as opposed to setting some ideal standard based on calculations as to what should be possible.
In my answer to a previous question of yours, I used McDonald's as an example. In that case, I talked about McDonald's knowing how many hamburgers should be produced during lunch rush by a certain number of workers. They know this because they have measured actual performance. They have looked at many crews and they know what sort of performance is possible in the real world. They can now go out and use that as a standard against which to measure performance.
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