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Chapter 12 THE DECISION MAKING AND CONTROLLING

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Chapter 12 THE DECISION MAKING AND CONTROLLING. INTERNATIONAL DECISION MAKING. British are highly decentralized French tend to be centralized Germans are fairly centralized Swedes are also centralized Japanese decide by consensus. CENTRALIZATION Large company

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Chapter 12

THE DECISION MAKING AND CONTROLLING

international decision making
INTERNATIONAL DECISION MAKING

British are highly decentralized

French tend to be centralized

Germans are fairly centralized

Swedes are also centralized

Japanese decide by consensus

factors affecting decision making
CENTRALIZATION

Large company

Homogeneous product lines

Large capital investment

High degree of technology

DECENTRALIZATION

Small company

Heterogeneous product lines

Small capital investment

Moderate to low

degree of technology

FACTORS AFFECTING DECISION MAKING
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TQM DECISIONS

U.S. workers value individual recognition and praise

Japanese use continuous improvement of quality

Rewards and Recognition

Manufacturing

U.S. has greatly improved the quality of their cars

Japanese prefer group rewards

quality
QUALITY

OLD MYTH

  • Quality is the responsibility of the people in the Quality Control Department
  • Training is costly
  • It is human to make mistakes
  • Quality improvements are made in small, continuous steps
  • Quality improvement takes time
  • Haste makes waste
  • Suppliers need to be price competitive
quality6
QUALITY

NEW TRUTH

  • Quality is everyone’s job
  • Training does not cost, it saves
  • Total customer satisfaction is a standard that should be vigorously pursued
  • In improving quality, both small and large improvements are necessary
  • Quality does not take time, it saves time
  • Thoughtful speed improves quality
  • Suppliers need to be quality competitive
types of control
TYPES OF CONTROL

Direct/Indirect

Internal/External

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INTERNAL

dominating attitude bordering on aggressiveness towards the environment

focused on self, function, one’s own group, and one’s own organization

discomfort when the environment seems “out of control” or changeable

Win some, lose some

EXTERNAL

flexible attitude, willing to compromise and keep the peace

focused on others such as customers, partners, and colleagues

Comfort with waves, shifts, and cycles, which are regarded as “natural”

Win together, lose apart

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Direct ControlsInvolves face-to-face or personal meetings to monitor operations

Ex.) Monthly management meetings

Ex.) Visits by top executives to overseas affiliates or subsidiaries

Indirect ControlsUse reports and other written forms of communication to control operations

Ex.) Monthly operating reports that are sent to the home office

Ex.) Balance sheet, income statement, cash budgets

control in u s mncs
CONTROL IN U.S. MNCs

Control in U.S. MNCs focuses more on the quantifiable, objective aspects of a foreign subsidiary

Requires more precise plans and budgets

Requires large central staffs and centralized information processing capability

control in european mncs
CONTROL IN EUROPEAN MNCs

Requires a high level of company-wide understanding and agreement regarding appropriate behavior

Requires more decentralization of operating decisions

Requires more capable expatriate managers who are willing to spend long periods of time abroad

control techniques
CONTROLTECHNIQUES

Financial Performance

Quality Performance

Personal Performance

financial performance
FINANCIAL PERFORMANCE
  • Based on profit and return on investment
  • Profit= Total Revenues - Total Exp

Using Financial Performance alone when controlling a subsidiary for effective performance can be misleading

quality performance
QUALITY PERFORMANCE

Taguchi Method: Brainstorming and a few experiments seek to quickly find the problem.

Production problem

Brainstorming session

Employ Taguchi

Experimental production runs

Confirm results

personal performance
PERSONAL PERFORMANCE

1. Success attracts the best people--and the best people sustain success

2. The top companies know precisely what they are looking for

3. These firms see career development as an investment, not a chore

4. Whenever possible, these companies promote from within

5. Performance is rewarded

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