Toyota is a motor Company founded in 1937 with the headquarter in Japan. It is among the leading automobile producers based on the levels of production and sales. The firm also takes a lead in producing robots and offering pecuniary services in addition to dealing with the manufacturing of vehicles.
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It is also well known for its production of environmentally friendly and technologically advanced cars. Toyota Company has been very successful due to its effective management practices and this paper looks at how it carries out controlling which is one of the management functions.
Controlling is a complex and comprehensive process that entails the establishment of performance standards in regard to an organization’s objectives, measuring the performance and reporting the results, comparing the attained results and the desired expectations as well as taking the necessary actions based on the attained results.
There are various ways through which control may be undertaken and the following are the types of control mechanisms applied by Toyota Company.
Financial controls that entails budgetary measures , bureaucratic controls that involve authority aspects, quality controls which deals with product and services standards, organizational cultural norms control and team norms control that revolve around people’s behavior. The first three fall under regulative controls (rely on fixed policies and procedures) while the last two are normative controls (based on accepted patterns of behavior) (Daft &Marcic, 2010).
Financial controls entail the setting and implementation of financial targets where managers are held accountable for the attainment of the set targets. These controls are suitable among organizations that have strategic business units that make up the organization as a whole.
Toyota Company is composed of different units that make up the entire corporation. The strategic business units are headed by managers who are supposed to see to it that the financial targets are achieved so as to ensure that the overall profitability of the company is attained.
Financial controls work under the principle of placing constraints on spending through some budgetary measures to determine periodic performance. Financial controls aim at increasing the overall organization’s profitability and keeping expenditure at an appropriate/ reasonable level.
Quality control is the other control mechanism that is applied in the Toyota Company. It is a control approach that entails an establishment of variation that is deemed acceptable in regard to the processes undertaken in the organization. The variation could be zero or a little allowance could be acceptable.
Quality control is aimed at maintaining a certain standard or consistency in the quality of the products and services offered in a given organization.
A bureaucratic control is also another very common control mechanism and has found application in the Toyota organization. The controls are rooted from authority which is determined by ones position in the firm’s hierarchy or organizational structure. Although this approach has been criticized to be very rigid, it entails some aspects of flexibility for instance delegation of responsibilities which makes it effective as a control measure (Anonymous, 2009).
Another control mechanism is the organizational culture norms which entail the control of practices in regard to norms that are based on an organizational culture for instance the values and beliefs. It aims at ensuring that a certain culture is maintained in an organization for consistency.
Team norms are also a control mechanism that has gained popularity in most organizations, Toyota being one of them. The norms dictate the responsibilities of members in a team. It involves the way in which people in an organization interact (Lere & Portz, 2005).
The distinct similarity that appears among the different control mechanisms is that they are all control tools applied in different organizations as a management practice. They are also collectively aimed at increasing productivity and profitability in organizations. This is mainly achieved through the enhancement of efficiency, effectiveness as well as economy in an organization’s practices.
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Contrast exists in the way these control mechanisms operate in terms of the principles they utilize in controlling various resources in an organization. Regulative controls which include financial, bureaucratic and quality controls operate under strict documented policies and procedures while the normative controls including organizational cultural norms control and team norms control are based on acceptable patterns of behavior.
While financial control work by setting and implementing financial targets to control spending, quality control aims at standardizing the quality of products and services and bureaucratic control uses authority to control the practices of an organization. The organizational culture norms control aims at maintaining a specific culture in an organization while team norms control sets a guide for people’s interaction.
Anonymous. (2009). Controlling: Learning and Changing. New York: The McGraw−Hill
Daft, L.R. &Marcic, D. (2010). Understanding Management. Mason, OH: Cengage Learning
Lere, J.C & Portz, K. (2005).Management Control Systems in a Global Economy. CPA Journal, 75(9), 62-64