Functions of Management, Strategic Control

¶ … functions of management, strategic control has everything to do with feedback, with gathering information on performance, both individual and as a team, and on correcting the mistakes while improving the entire process and mechanism, so that, at a future time, it will perform optimally.

In this sense, Johnson and Johnson respects the four-phased theoretical concept of strategic control. In the first phase, the standards and performance criteria are decided upon, generally by each general manager in part. These are later discussed in a board meeting with the upper management team and then communicated to the employees, as newsletters.

The second step is the measurement of the employees' performance. This is generally an all year round process, but the end of the fiscal year is an excellent period to measure commercial and financial ratios, a direct indicator of the team's performance during the year.

The third step in the strategic control mechanism implemented at Johnson and Johnson refers to comparing the performances of the staff to the criteria that were determined at the beginning of the year. In general, this phase takes place in November or December, so as to have the necessary time to decide upon the end of the year possible rewards.

Finally, the fourth and perhaps most important phase refers to adjusting the problems. This can be done either by setting more realistic standards and goals for the year to come or by improving the performance of the employees, which is usually done by different stimulatory means. At Johnson and Johnson, the end of the year, as I have mentioned, is an excellent period to make plans for the next year, award prizes in order to stimulate individual performance, etc.

At Johnson and Johnson, most of the traditional means of control are used. The most important form is the direct control. This means that regional managers, in charge of a certain geographic area, visit the company centers regularly in order to check the commercial and financial performance, to see how the respective plant is evolving in the competitive environment, etc.

The indirect control is realized at Johnson and Johnson by indirect communication, in the form of reports, evaluations from the staff in the field, etc. These are generally sent once month to the regional headquarters and decisions are made based upon them. At times, the central headquarters of the company are involved when significant decisions are to be made.