Page 27 - DMGT514_MANAGEMENT_CONTROL_SYSTEMS

Management Control Systems

Notes
1. The company had very strong marketing abilities on a national and international
basis in the field of carpet accessories.
2. Its overseas subsidiaries in Sweden, Australia, Japan, New Zealand, etc., were
managed well.

3. Since the product was unique, Rockford faced little competition from other small
companies. The company, therefore, felt that it could spend more than its small
competitors in marketing and investing in specialized capital equipment.
4. The specialized capital equipment used by the company was designed and built by
its own engineers.

5. While the company was leader in some of its products, like floor-covering accessories,
it was subject to small and vigorous local competition in some areas.
6. While the adhesives in relation to floor covering accessories were extremely
marketable and had a large presence in the market, the marketability of its adhesive
applications was limited.

In order to pursue the new product strategy and acquisition program effectively, the
board of directors asked the president to take a decision on the product strategy for the
company at the next meeting.
Questions
1. What steps should the President take to develop a suitable strategy for Rockford?
2. Suggest a strategy to the Rockford company in the lights of facts and circumstances
given.

2.6 Summary

 Strategic planning focus on long range planning is least systematic; uses the rough
approximation of the future.Whereas, task control focus on short runs operating activities,
is most systematic; uses accurate current data. Management control is in between.
 Strategic formulation is the process of deciding the goals of the organization and the
strategies for attaining these goals.
 Goals describe the broad overall aims of the organization and the term objectives describe
specific steps to accomplish the goals within a given timeframe.
 Management control is the process by which managers influence other members of the
organization to implement the organization’s strategies. Management control involves
anticipating future conditions in order to ensure that the organization’s objectives are
attained.

 If the management discovers a better approach – one more likely than the predetermined
plan to achieve the organization’s goals – the management control system should not
obstruct its implementation.
 Task control is transaction oriented i.e., it involves the control of individual tasks. Rules to
be followed in carrying out these tasks are prescribed as part of the management control
process.
 Numerically controlled machine tools, process control computers and robots are task
control devices. Human beings are used in these tasks only if they are less expensive than
computers or other control devices.

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