Control Mechanisms: Microsoft Essay

1554 words - 7 pages

For many years Microsoft has played an important role in the computer industry. Microsoft has evolved into a great technological corporation that is used by millions of people with different ethnicities and backgrounds all over the world. Microsoft has unified many people from many different cultures on how to communicate with one another. There are four different types of control mechanisms to assist with the growing dynamics of Microsoft. They are budgetary, financial, market, and clan controls. Controls direct the activities of different individuals to assist with achieving the goals of Microsoft. After examining the different types of mechanisms and how they affects Microsoft in both a ...view middle of the document...

This control works best if having an actual physical existence and market can be established among parties. The fourth control mechanism Microsoft uses is clan control. This is to empower Microsoft employees to meet certain performance standards. That way they involve the employees on doing what is best whether the manager is there or not. This control also helps Microsoft generate more innovative ideas since there are more heads thinking of new things to improve and create. It also helps in letting the employee feel they are part of the company's success. With these control mechanism Microsoft has managed their way to success by controlling their budget, assets, market and performance.Comparing actual results with projected or budgeted results, gives Microsoft feedback of how well the company is performing. Analyzing both positive and negative variances between actual and budget enables Microsoft to focus more heavily on areas that need improvement and learn from the favorable results to apply practices elsewhere. Enacting budgetary controls helps Microsoft to think about the future and set out detailed plans to provide its consumers with quality products at an affordable price. Financial controls illustrate the fiscal position of Microsoft through profit and loss reports and the balance sheet. Through compounding income and expense data, the company can see its financial results at a glance. This tool is effective in displaying actual results to managers who can make corrective actions in areas that require response. Market controls are an effective means of regulating the sale price of Microsoft's products. The company is the forerunner in the software industry and is responsible to determine a cost for its product compared to the value the public places on the product. A consumer will only pay what they are willing to shell out on a particular item which challenges Microsoft to perform at its highest potential and productively. Activities become more regulated and customary for Microsoft. The processes become leaner and the business results are more profitable. Microsoft's employees are responsible for meeting specific business standards. The clan controls are useful in the development of the best practice ideas and the delivery of consistent and quality products. Internal systems of values and controls help the workers of Microsoft enhance its business performance and converge on the goals of the company. "Some companies, such as Microsoft, are using stock based incentives for both empowering the employees and giving them a greater sense of achievement. Many other organizations are increasingly sharing the corporate information - including financials - with even the line workers so that they can better relate to the company's challenges" (Yogesh, 1997, para. 8). Microsoft engages its employees by giving them a sense of pride in the work they do.Microsoft, like any other corporation, utilizes the four functions of management in order to...

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