There are several control methods that are used by top managers to control their organizations. In most cases, the management starts with the corporate mission and objectives statements to converse the business’s main objectives to employees. Most of these objectives are common such as maximizing earnings for key shareholders and finding new markets for the company products. Therefore, most of the top managers in organizations work towards achieving this which has been possible through various organization control methods. The managers give specific duties to different departments and then get direct reports while taking key steps in controlling the progress of the company goals (Ball, McCulloch, Frantz, Geringer & Minor, 2005). One of these control methods is using financial statements to makes decisions as the managers. All businesses should practice preparing prepare Profit and Loss Account. This method helps in summarizing the expenses and income for a specified period. In addition, the balance sheet is also necessary because it shows the financial position of the business at the end the specified business period. Therefore, the financial statements are very useful in controlling the organization’s performance. Managers normally compare the figures of the current business period with the previous business period’s figures. In some cases where managers want to control the business in a particular direction, they can compare their financial statements statistics with the statistics from similar organizations. After this comparison, the managers can now make the decision to control their businesses (Daft, 2013). They sometimes use ratio analysis to analyze financial statements and find out how the business is doing. (Daft, 2013) Stated that this analysis helps the top managers in understanding the liquidity, solvency, and profitability position of the organization. This control method has some advantages and disadvantages as discussed below; through this method, the management can determine the organization’s stability and health. The information in these statements gives the company shareholders intuitive understanding how the business is being done in the company. Also, the government and the regulatory authorities use these statements to conclude on the legitimacy of an organization’s fiscal decisions. It also helps the government Internal Revenue Service in deciding the correct taxation for the business. On the other hand, there are some disadvantages of this method, in most case the information in the financial statements is not self-explanatory and therefore the firm has to incur some cost through employing financial analysts to read, interpret, and compare the figures. Also, it is expensive to create these statements.
Six Stigma tools are very popular in these days in the business settings. They were started by the Motorola Corporation, and the methodology is currently being used by very many successful firms. The process was mainly designed to correct company’s challenges such as bad sales of company products and unproductive performance of the workers by using many different tools, theories, and statistical tests (Spear, 2004). Therefore, Six Stigma is a path breaking-methodology which helps the business improve and it has the following advantages and disadvantages. This methodology is customer driven and it aims at achieving maximum consumer satisfaction as well as minimizing the company’s product defects. It aims at achieving the consumer delight and new innovative customs which are beyond customer expectations. Implementation of this methodology leads to increase in company profitability and decrease in costs. Six Stigma can be fruitfully implemented in each business category such as return on sales and return on investment as well as stock value and employment growth (Spear & Bowen, 1999). This methodology focuses on avoidance of defects rather than fixing them. Finally, this methodology is attentive to the whole business processes. On the other hand, Six Stigma has the following disadvantages; the application of this methodology is being argued between the Six Sigma critics. They argue that the quality principles must be according to the specific task and that more time is wasted on areas which are not profitable (Spear & Bowen, 1999). Six Stigma methodology gives emphasis on the inflexibility of the business process which in turn contradicts the innovation as well as killing business creativity. Another disadvantage of Six Stigma is that its implementation continuously requires experienced man force and therefore employee dedication and control are difficult to achieve if the methodology not implemented regularly. I cannot implement the Six Stigma methodology in my organization because of the above-discussed disadvantages. This methodology is time-consuming during conversion of the theoretical ideas into practical applications.
Ball, D., McCulloch Jr., W. H., Frantz, P. L., Geringer, J. M., and Minor. M. S. (2005). International business: The challenge of global competition (10th ed.). New York: McGraw-Hill/Irwin.
Daft, R. L. (2013). Management (11th ed.). Mason, OH: South-Western Cengage Learning. ISBN-13: 9781285068657
Spear, S. (2004, May). Learning to lead at Toyota. Harvard Business Review, 82(5), (pp. 78-86). Retrieved October 25, 2005, from EBSCOHost database. AN: 12933022.
Spear, S., and Bowen, H. K. (1999). Decoding the DNA of the Toyota production system. Harvard Business Review, 77(5), (p. 96). Retrieved October 25, 2005, from EBSCOHost database.