This is significant, because when it is used in conjunction with flexibility, you can be able to effectively adapt to changes in the markets. With flexibility providing the necessary ingredients to implement such changes, while the use of benchmarks will identify when a management system is becoming unproductive. (Ireland, 2008, pp. 33 -- 39)
The use of knowledge management is when an organization is collecting and analyzing the total amounts of knowledge at their disposal. This would include analyzing all available: resources, employee / managerial skills and documents. This is significant, because it provides a way for an organization to quickly collect and analyze a wide variety of information. At which point, managers can be able to effectively place the different resources and personnel of the company, in those areas where they will have the greatest impact. Over the course of time, this will help ensure that the company is utilizing its different resources. In the case of the auto industry, this helps to provide a foundation for increasing productivity, while reducing costs as much as possible. (Ireland, 2008, pp. 33 -- 39)
Impact on the Personal / Professional Life of an Individual
The impact of an effective management control system within the auto industry; has had a dramatic effect upon the personal and professional life of the individual. Where, functional systems that can quickly respond to changes in the market or in the company itself; will help ensure the long-term stability of an organization. Once this takes place, it is important that managers do not become a victim of their own success. This usually occurs during times when sales are strong and it appears as if the industry learned from the mistakes of the past. It is at this point; that managers will become very short sided and will build those models that the general public is no longer demanding. The problem is: that no one is concentrating on creating new makes / models that could be in demand at some point during the future. This leaves the company and the industry at the mercy of the market and changes in the tastes of consumers. Where, a company can assume that they are maintaining their dominate market share, yet the actions that management is engaging in is slowly eating away at the financial foundation of the company. At which point, it is only a matter of time until another competitor will develop some new innovation that will revolutionize the industry (leaving the Big Three unprepared for changes in the market / industry).
For the individual, it is important that they learn from these lessons and push the company to eliminate unproductive control systems. This is because the individual's views, about the markets and what direction they see the company going will affect their families and career. Those managers / employees who are willing to tell the top management what is wrong with company will slowly earn the respect of the top managers, while ensuring that the organization is embracing change. A good example of this can be seen at Ford Motor Company during...
The President of the company, (Lee Iacocca) determined that small cars were becoming very popular within the industry. To prepare for these changes, he signed an agreement with Honda to provide the engine for the Festiva. Once he returned to Detroit, Henry Ford II (the CEO) killed the deal. This is significant, because the vision of Iacocca shows how the ideas of an individual can have a dramatic impact upon the future of the company. Where, the idea and the deal that were created by Iacocca; could have meant that the industry would go through a revitalization. As the new ideas, would create a new management and control system that would quickly adapt to changes within the market place. (Johnson, 2005, pp. 85 -- 107) For the individual, this would have meant that they would have more financial stability from a personal standpoint. While professionally, they would be figuring out ways to provide the vehicles that the general public was demanding (before competitors). As a result, when an effective management / control system is in place, it will ensure that everyone has a rewarding career. This is because the system ensures the stability of the company.
Clearly, the American Auto Industry has faced a number of challenges in implementing and maintaining an effective management / control system. Where, the Big Three would implement changes to the system, yet they became victims of their own success. It is at this point, that it would evolve into one that would take large amounts of risk, while becoming more dysfunctional. Over the course of time, this would ensure that the industry was unresponsive to changes from consumers. At which point, it was only a matter of time until they would face declining market share and falling sales. To mitigate these effects, a system must be utilized that will embrace the ideas of: effective communication, financial controls, strategic controls, the ability to monitor the management control system, collaboration, flexibility, the use of benchmarks and knowledge management. Together, these different elements, will ensure that they industry is able to adapt to changes that are occurring both internally and externally. If this kind of management / control system is embraced by the Big Three, it will ensure that they can respond quickly to various changes. As a result, they would be able, to within stand the constant up and down swings of the industry; by having a management / control system that will respond to what is occurring quickly.
Bibliography
Symptoms of a Dysfunctional Organization. (2005). Retrieved July 9, 2010 from Copper Comm website: http://www.coopercomm.com/dysfnorg.htm
What are Management Control Systems. (2010). Retrieved July 9, 2010 from Wisegeek website: http://www.wisegeek.com/what-are-management-control-systems.htm
Flamholtz, E. (1998). Case Studies in Changing the Game. Changing the Game. (pp.81 -- 90). New York, NY: Oxford University Press.
Ireland, D. (2008). Promoting Integrity and Ethical Behavior. Understanding Business Strategy. (pp. 33…
