IBM Control Mechanism

IBM Control Mechanism

Introduction

For many years IBM has played an important role in the computer industry. IBM has evolved into a great technological corporation that is used by millions of people with different ethnicities and backgrounds all over the world. IBM 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 IBM. They are budgetary, financial, market, and clan controls. Controls direct the activities of different individuals to assist with achieving the goals of IBM. After examining the different types of mechanisms and how they affects IBM in both a positive and negative way, even though some results are similar, they are each very different. Each control mechanism has a different impact of the four functions of management. Analyzing and reviewing how each one impacts IBM will help to determine and explain the purpose of each control mechanism.

Discussion

IBM, like any major corporation, uses managing control mechanisms in order to succeed in all aspects of its industry. They have focus on four mechanisms, the first of which is budgetary control. This way IBM will know what to expect in sales, what is being accomplished, and make corrective actions if needed. The second mechanism is financial control. IBM uses a balance sheet to keep control of their assets, liabilities and stockholders' equity, and also uses a profit and loss statement in order to analyze and keep control of the income and expenses of IBM operations. This is to ensure that their revenues are larger than their expenses at all times (McShane, S. & Von Glinow, 2004).

Another control IBM uses is market control, this is in order to regulate independent business and maintain low competitive prices with other businesses. This control works best if having an actual physical existence and market can be established among parties. The fourth control mechanism IBM uses is clan control. This is to empower IBM 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 IBM 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 IBM has managed their way to success by controlling their budget, assets, market and performance (Ulrich, Dave, 1999).

Comparing actual results with projected or budgeted results, gives IBM feedback of how well the company is performing. Analyzing both positive and negative variances between actual and budget enables IBM to focus more heavily on areas that need improvement and learn from the favorable results to apply practices elsewhere. Enacting budgetary controls helps IBM to think about the future and set out detailed plans to provide its consumers with quality products at an affordable price (Hamel, Gary, 2000).

Financial controls illustrate the fiscal position of IBM ...