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may find they are better off if they reduce their size through layoffs
or divestment as exemplified by Marathon Oil. The four stages in the
life cycle of an organisation are birth, growth, midlife and maturity.
Any organisation in the fourth stage of its life cycle faces the real
danger of going into decline if its managers are not careful to arrest
such tendencies and be on the look-out to re-energise the
organisation by introducing new products and look for fresh markets.
Hence growth in size is a natural outcome in the life cycle of any
organisation.
(Chapter 12, Griffin, 2012)
would be unable to attain set goals or identify how far they are
from achieving them.
Q2.Controls within an organisation can be broken down into four
levels. The first, Operations Control, concentrates on regulating the
processes used to convert resources to finished products or services,
e.g. quality control. Second, Financial Control, monitors the
companys financial resources to ensure smooth functioning.
Ensuring timely payments is an example of financial control. Level
three of control is Structural Control, concerned mainly with
determining how each element of a company is functioning towards
achieving the ultimate goal, e.g. monitoring administrative ratio to
keepstaffing expenses under control. Strategic Control, focusing on
monitoring how effectively corporate, business and functional
strategies are working together to achieve the common goal, is the
final level of control. Each of the above four levels need to be
properly managed for control to be effective. Financial control is the
most vital since it is linked to all other areas of control in an
organisation. High inventory levels mean extra storage costs, poor
personnel selection leads to firing and hiring expenses and disrupted
cash flows result from inaccurate sales forecasts. Hence financial
issues pervade all levels of control.
Q3. In most organisations, the budgetary process starts with
individual operating units submitting their budgetary needs to their
division heads. These divisional budget proposals are then placed
before the budget committee made up of top managers. After review
by the budget committee and correcting for errors and duplications,
the budget committee along with the Financial Controller and CEO of
the company approve the overall budget as well as the budgets of
individual operating units after one final review. Budgets help a
manager in exercising financial control by putting dollar values on
each operation thus enabling the manager to exercise control and
pinpoint problem areas. Since budgets express diverse activities in
terms of dollars, it is easier for departments to coordinate amongst
themselves.
Q4. Bureaucratic control demands strict employee compliance, has
formal and rigid rules and lays down strict minimum acceptance
levels of performance. It has a tall structure, allows for limited
employee participation and rewards are strictly individual
performance based. In contrast, decentralized control is informal and
expects employee commitment instead of compliance. Employees are
expected to exercise self-control and shoulder responsibility to
achieve performance levels that exceed minimum levels of
acceptance. Decentralized controls are comparatively flat in
structure, encourage employee participation and reward group
performance. Bureaucratic control can result in work getting done
consistently and efficiently since standardization and best practices
are rigidly laid down. A disadvantage of this type of control is that it
discourages innovation and creativity since employee participation is
minimal. In decentralized control, employees take part in decisionmaking, giving them a sense of importance. It also enables more
efficient decision-making, facilitates expansion and better prepares
the company for emergencies since the decision-making base is wide
Works Cited
Griffin, R. W. (2012). Management (Eleventh ed.). Mason: South-Western College Pub.