1 / 18

Management Control Team Topic Prepared for Dr. Yacus – Mgmt 750

Management Control Team Topic Prepared for Dr. Yacus – Mgmt 750. Presented by: Rob Batarla, Jeff Fitzgerald, Brad Stegman, and Andrew Walters Old Dominion University – Northern VA. Agenda. Review of Agenda How does it Tie in to Strategy? What is Management Control?

nichole-osborn
Download Presentation

Management Control Team Topic Prepared for Dr. Yacus – Mgmt 750

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Management ControlTeam TopicPrepared for Dr. Yacus – Mgmt 750 Presented by: Rob Batarla, Jeff Fitzgerald, Brad Stegman, and Andrew Walters Old Dominion University – Northern VA

  2. Agenda • Review of Agenda • How does it Tie in to Strategy? • What is Management Control? • Centralization – DecentralizationContinuum • What are the Types of Management Control? • Case Study: Mgmt Control at

  3. How does it Tie into Strategy? • Management Control is a component of the framework of corporate strategy. • We are remember the framework of corporate strategy, right?

  4. Framework of Corporate Strategy Competitive Advantage Vision Goals & Objectives Resources Businesses Coherence Control Role of Corporate Offices Structure, Systems, and Processes CorporateAdvantage

  5. Framework of Corporate Strategy Competitive Advantage Management Vision Goals & Objectives Resources Businesses Control Control Coherence Control Role of Corporate Offices Structure, Systems, and Processes CorporateAdvantage

  6. What is Management Control? • Management Control is the connection between the business and corporate structure. • If the corporate office cannot adequately control its independent businesses, it will never be able to create value. • Therefore, Management Control is needed to maintain control over delegated decision making.

  7. Centralization - Decentralization • Delegation and control • Continuum used to provide balance • One company can utilize both structures • Accuracy became a concern due to many variables • Performance measures and rewards • Rethinking led to three types of Management Controls

  8. Three Types of Mgmt Controls • Outcome Control (Andrew) • Behavior Control (Brad) • Clan Control (Rob) But how do companies pick which “control” works best for them?

  9. Choosing Management Controls • Choosing a corporate management control approach…. -centralized vs. decentralized -organization system of processes -driven by corporate strategy

  10. Outcome Control • Utilizes delegated decision making • More emphasis placed on results • Determining corporate success • Established industries • Divisional independence

  11. Behavior Control • Executed in more complex companies • Focuses on behavior not results • Monitoring managers’: -actions -decisions -performance • Considers finances

  12. Clan Control • Development of an internal system of values and norms(i.e. work dress styles, normal working hours, pride taken in work.) • These methods provide control where output and behavioral control does not work. • Strong culture and clan control help worker to focus on the organization and enhance its performance.

  13. Case Study – • Decentralized management style-structure and coherence-reliance on operating mgmt for each subsidiary-outcome control • Financial Plans (5 and 10 year) • Planning horizon (2 year) • Quarterly updates, revisions, and reviews • Monthly management update

  14. Org Chart – Management Controls relate to positions at orange subsidiary levels

  15. Financial Plans – • Financial Planning (5 and 10 years)-Four key indicators:est. unit sales, est. sales revenue, est. net income, est. ROI-Optimistic expectations-No penalties for inaccuracies • Budget Planning Horizon (2 year)-Annual Budget-Revenues, expenses, and selected balance sheet items-Used to “run the business, evaluate managers on planning, forecasts, and achievements.”

  16. Updates – • Periodic Updates-accuracy of budget projections-focus on sales and profits • Monthly Management Reports-income statement highlights-summary of balance sheet figures and ratios relative to: position last month / position this month / budgeted position

  17. Valuable Resources Used in Supplement to the Text • Websites: www.jnj.com and www.codmanjnj.com • Raps, Andreas, Strategic Management. Montvale: Strategic Finance. June 2004. Volume 85, Issue 12; p48. • Ekanayake, Sampson, Agency Theory, National Culture and Management Control Systems. Journal of American Academy of Business, Cambridge. March 2004. Volume 4, Issue 1/ 2; p49. • ABI/ Inform Database Keyword Search: Management Control

  18. Questions? Thank you for letting us present!

More Related