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Management Control Essay

548 words - 3 pages

I think AirTex need a new control system at the time of the takeover; AirTex’s old control system was not effective to serve its objectives, and there are some main reasons why its old control system didn’t work. Firstly, lack of direction, to be specific that is AirTex’s employees don’t know what the company want from them and how can them perform to match the desire from company. Secondly, there was no motivational plan mentioned before the company was taken over, as a result, the employees were not necessarily behavior in the company’s best interests. Thirdly, most of AirTex’s managers and employees were either poor educated or untrained, while the department managers except the accounting department manager, lack the necessary and critical information to do a good job.

AirTex has a centralized organizational ...view middle of the document...

Several key challenges for Ted in setting up the new control system included but not limited to: how to create more cash flow for the company, how to increase company’s liquidity and solvency, how to stage a “political coup” and took the company control from Sarah who worked for the company since its establishment, how to deal with the relationship with other departmental managers, how to empower the autonomy to the departmental managers and keep them behavior within their authority, how to benchmark the performance of the employees and reward them accordingly, and how to improve the accounting system so it can better serve the company, and how to clarify the company’s objective to the company’s high level as well as low level.

Ted revamped the management of Airtex Aviation; he installed the new control system and let it be the task leader, he also decentralized the company structure and control system, authorized the autonomy to the departmental managers to some extent, explicitly illustrated company’s objective and strategic view, overhauled the company’s accounting system, and reconciled the company’s relationship with suppliers and banks.

Decentralization has its advantages and disadvantages; for the positive effect, decentralization encourages motivation and creativity; it allows many minds to work simultaneously on the same problem and it accommodates flexibility and individualization. However, how to keep everything under control is a tough question when using decentralization, how to monitor and track the activities of the department while does not interrupt their normal operation is a critical skill for the management

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