For a new business initiative it is essential to recognize the development stages through which the enterprise is likely to pass, and prepare for the issues and challenges which will be faced. For a business unit within a corporate it is important to recognize that the same development process applies — often with the same challenges! However, these challenges are sometimes eased by the protection of an established corporate parent able to soften the impact of negative cash flow and poor profitability at the relevant stages. Creativity becomes the responsibility of Research and Development (R&D), which is staffed by specialists in visualizing and realizing marginal or major product changes. Ever since companies such as Dupont and Bell Labs first took, and successfully traveled along, this road, setting up a separate R&D group has been a popular way to enhance value at the concept stage. There are many ways of distinguishing Continue reading
Management Concepts
Relationship Between Organizational Behavior and Management Control System
Organizational Behavior and Management Control There is a close relationship between organizational behavior and management control system. A management control system seek to evaluate and regulate the performance of responsibility centers. The manager in charge of a responsible center is rewarded for good performance. At the same time when the performance of a responsibility center is dismal, the manager in charge is punished. Thus, a management control system acts as a double-edged sword. That is why manager are afraid of a control system and, may resist it. In order to make a control system successful, it is necessary to understand the factors that motivate, managers to achieve the results. Behavioral sciences have given several concepts that are relevant to management control. Some of these concepts at described below. 1. Perception. Whether a management control system is accepted and implemented successfully does not depend on the system. It depends largely on Continue reading
Organizational Architecture
By organizational architecture, we mean the entire organization, including organizational structure, control systems and incentives, processes, organizational culture and people. In this case, there are three conditions to be fulfilled by an organization to make the organization profitable. First, various elements of the organization shall be parallel to each other. Second, organizational strategy should always be consistent with the organizational structure, and finally, strategies and organizational structure must be consistent with the competitive conditions prevailing in the firm’s market that are the strategy, architecture and competitive environment. As noted above, the organizational architecture is the totality of the organization itself which consists of various components. The components are the structure, control systems and incentives, processes, organizational culture and people. The organizational structure is a formal organizational structure used to manage a firm. Control system is the system used to measure the performance of managers and units while the incentives Continue reading
Case Study of Nokia: Lessons from the Collapse of a Global Tech Leader
The company Nokia was established in 1865 and focused on the manufacture of paper; at the beginning of the 20th century, Nokia became a power industry company. Only at the end of the 20th century, the company’s core business became the development, production, and sales of mobile phones. The company experienced a peak in sales and popularity in the market at the end of the 1990s and in the 2000s but had to face a decline at the end of the 2000s. In 2013, the company sold its business to Microsoft. The main failure that led to the company’s decline was its inability to adapt to the demands of the market, i.e. provide products that would be efficient in the era of the mobile Internet. The company was not prepared for the emergence of new technology (smartphones) and failed to understand the consumers’ needs. The company’s investment in its operational Continue reading
Analysis of Problems in Management Case Studies
The case can be analysed from different points of view. Usually there are four parties involved in the case, viz., the proprietor or top management, the middle management departmental heads, the employees or workers and finally the society in general (it includes consumers, distributors, investors, potential employees and those who are directly or indirectly affected by the organization), which is mostly disguised. While analysing and suggesting solutions, the student should try to look at the case from these different points of view and try to pin point violation of rules, regulations, code of conduct or precedents in vogue. The solution to be suggested must be in the larger interests of safeguarding the provisions of laws, code of conduct, rules and regulations to restore the normal positron. The solution should be in the interests of the organization, the weaker sections of the organization and society in general. While analyzing the case, Continue reading
Principles of Management Control
Management Control Principles The basic principles of management control can be grouped into three categories reflecting their purpose and nature, structure and process. These principles of management control are given below. Principle of Assurance of Objective. The basic purpose of management control is the attainment of objectives does this by detecting failures, in plans. Potential or actual, deviations from plans should be detected enough to permit effective corrective action. Principle of Efficiency of Controls. A management control system should detect and highlight the causes of deviations from plans with minimum possible costs and unwanted consequences. The principle of efficiency is particularly important in control because techniques tend to become costly and burdensome. A manager may become so engrossed in control that he spends more than it is to detect a deviation. Controls which seriously interfere with authority of subordinates or morale of those who execute plans, is inefficient. Principle of Continue reading