Management and Control

Management and control

Chapter 1

Management relates to the process of organizing resources and directing activities for the purpose of achieving organizational objectives; consist of 4 phases:

1. planning

• mission; reason of company’s existence

• vision; what to do to reach the mission

• objective

• strategy; Corporate S.(expansion/ shutdown/ no change)

Business unit S. (Differentiation, cost leadership, focus)

Operational S. (mktg, finance, HR, R&D)

2. organizing

• organization structure

• amount of resources

• task

• Standard Operation Procedure

3. leading

• Implementation

4. controlling

• Performance Evaluation

• Actual-Target comparison

Management process:

1. Objective setting; important for design of management control system; doesn’t have to be quantified, needn’t be financial, must be understood by the employees

2. Strategy formulation; define how organizations must use their resources to meet their objectives, can be formulated thru SWOT analysis, it emerged from the interaction between management, employees and environment

3. Strategic control; to see whether the company’s strategy should be changed, considering the environment, competition and other factors; primarily focused on external (SWOT factors)

4. Management control; to ensure the employees (behavior) do the best for the company, so that they understand company’s expectation, implement the company’s strategy as intended, capable to do their job, actions taken to solve management problems

Causes of management control problems:

1. Lack of direction: causes employee to behave inversely to the desired behavior. Employees must be informed on how to maximize their contribution to the fulfillment of company’s objectives

2. Motivational problems: employees are reluctant to give 100% effort, because...