Management Control System at Firm Term Paper Example | Topics and Well Written Essays - 1750 words

Management Control System at Firm - Term Paper Example Western Digital Corporation has been a hard disk drive storage manufacturing pioneer. The product line of the company includes external drives for mobile desktops, laptops and other digital home entertainment products Structure (By Decentralization) One of the major features of the overall management control system is the presence of decentralization. Western Digital has understood the importance of the decentralization in the decision making system so that the sub-goals can be set and achieved. In this way each and every decision maker has become responsible for a small portion of the overall organizational objectives. The Do-it-Yourself, or DIY, culture has been intent on home grown tooling and development. Despite of the decentralization, the implementation of MCS ensures that the organizations develop rules to ensure that supervisors are aware of the authority and the subordinates are aware of the tasks to be performed and respective expectations (Ng and Dastmalchian 18). (organi zationstructure.org) Technological, regulatory, political and economic forces are changing the competitive environment (Jensen 1). Hence organizations are looking to use technology in itself to get business insights. WD is also not an exception. However, the application of technology by the organization is quite unique to say the least. The use of a home-grown job scheduling system is one example of it. The company does not use commercial Extract, Transform and Load tools. The DIY culture is not an issue of cost as the company already has expensive business intelligence tools in the form of statistical analysis software. But the internally developed solution of the company has been more responsive. The main objective of the introduction of the decentralization by WD is to tie the subunits of the company together. In order to complement such decentralization, the company has adopted a product or divisional organizational structure. Here it is be added that instead of going for proces s intervention, the organization has decided to go for structural intervention by looking to change organizational design, job design, the performance review system , etc (Sisaye 54). Planning System As far as the planning system is concerned, the company wished to restore the confidence of the employees through informal and formal communication. The organization wishes to develop a plan to incline capability beyond 40 M units. The organization expects to meet the product costs targets that achieve more than 25%; the company is set to support a quality initiative on AFR improvement. The company also has plans to review and overhaul the process control system as needed (Anthony 101). Review and Measurement System When a control system designer undertakes to review and measure the performance of the decentralized process, a number of issues are needed to be considered. The main issue is the involvement of the measurement of the performance with regard to the interdivisional transactio ns and profit. The technique used to review and measure the performance is quite similar to the ROIC performance management. The company uses the ROIC approach to assess the efficiency of capital allocation. In this way, through the return on invested capital, the company gets a sense of how well the company is actually using money to generate returns (Dent 84). However, the performance of