Management Control Systems in the American Auto Industry
This paper analyzes management control systems within the American automobile industry, focusing on how the Big Three manufacturers — General Motors, Ford, and Chrysler — have historically cycled between functional and dysfunctional organizational controls. The paper identifies the characteristics of dysfunctional systems, outlines key components needed to develop and evaluate effective controls, and explores quality management techniques including collaboration, flexibility, benchmarking, and knowledge management. It also considers how management control systems affect the personal and professional lives of individuals within these organizations. The paper draws on industry history to illustrate how success can breed complacency, ultimately undermining the very systems that enabled growth.
- Introduction to Management Control Systems: Defines control systems and their role in competitiveness
- Identifying Functional and Dysfunctional Control Systems: Big Three's history of functional and dysfunctional cycles
- Developing and Evaluating Management Control Systems: Key elements for building effective control systems
- Essentials for Quality Management and Techniques: Collaboration, flexibility, benchmarking, and knowledge management
- Impact on the Personal and Professional Life of an Individual: How control systems affect careers and personal stability
- Conclusion: Summary of lessons for American auto industry reform
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What makes this paper effective
- The paper grounds abstract management concepts in a concrete, well-known industry case — the American Big Three automakers — making the theoretical discussion immediately applicable.
- It moves logically from diagnosis (identifying dysfunctional systems) to prescription (developing effective controls and quality techniques), giving the argument a clear problem-solution structure.
- The inclusion of a specific historical example — Lee Iacocca's rejected Honda deal at Ford — adds narrative depth and illustrates how individual decisions interact with organizational control systems.
Key academic technique demonstrated
The paper demonstrates applied case analysis: it takes established management frameworks (financial controls, strategic controls, benchmarking, knowledge management) and tests them against real industry history. This technique shows readers how to move from theoretical definition to practical evaluation, a core skill in business and management writing.
Structure breakdown
The paper opens with a broad framing of employee motivation and competitive pressure before narrowing to management control systems. It then proceeds through four analytical sections — dysfunction identification, system development, quality techniques, and personal/professional impact — before closing with a synthesizing conclusion. Each section builds on the last, maintaining forward momentum throughout the argument.
Introduction to Management Control Systems
Over the last several decades, the issue of employee motivation has been increasingly brought to the forefront of business management. Part of the reason for this is that globalization has made businesses more competitive, forcing both large and small organizations to utilize strategies that will increase total productivity. An organization must have various tactics and tools in place to ensure that employees are motivated, while also preventing the organization from taking unusual amounts of risk. As a result, various businesses have developed outcomes and control systems to address these different issues.
Simply put, a control system is when managers collect various pieces of data to analyze and improve an organization's ability to achieve its objectives — such as high productivity and increasing revenues. A few of the most common ways an entity would use a control system include: various accounting systems, measuring the effectiveness of a division or team, and employee incentives ("What are Management Control Systems," 2010). This is significant because it shows how such systems are used by a wide variety of businesses around the world to remain competitive in an ever-changing global marketplace.
In the case of the American automobile industry, management control systems have been contributing to the decline in market share for all of the major manufacturers. This has caused many managers within the industry to seek out control systems that can be successfully integrated into their organizations. To fully understand how to implement effective outcome and control systems requires: identifying functional and dysfunctional control systems, examining various data for implementing and evaluating control systems, analyzing the essentials for quality management and techniques, and understanding the impact this will have on the personal and professional life of an individual. Together, these elements provide the greatest insights into how the American auto industry can implement and maintain effective management control systems.
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. 33–39). Mason, OH: South Western.
Johnson, R. (2005). Lee Iacocca Confronts the Ford Family. Six Men Who Built the Modern Auto Industry (pp. 85–107). St. Paul, MN: Mountainbrooks.
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