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The greatest want of any organization or corporate body is to ensure that it meets its objectives and maximize all the available opportunities. This is only possible if the management is able to monitor the performance of the entity with comparison to the predetermined standards and take the necessary action in case of unsatisfactory performance. The whole process of monitoring and taking action is what is known as control measures. Frito Lay is doing exactly that.
They are using a type of system control known as a concurrent or preventive control. It is a type of control applied while the activity is going on. It requires up-to-date information on the operations. The fact that the supervisor is seeking a solution to an immediate drop in sales tells us that the activity is on. This method prevents a lot of damage that could have resulted if the situation was not checked. It may not be as simple as it appears; it requires a lot of research and understanding of the entire market. (John and Kris 2005)
Why control?
There are several reasons why Frito Lay is applying these control measures. There is a need to ensure consistency in day-to-day actions and set objectives and plans of the company. The data which is gathered by the salespersons from different stores is used to tell or determine the performance. This is then compared with the expected performance and if there is a deviation, corrective measures are taken. In Frito Lay, the corrective measures taken are discovering that there is a decline in sales and launching a new product. This control system also plays a very important role in the setting of performance standards with planning objectives. This affects personnel management in Frito Lay. The junior employees are influenced by the managers to work towards a new product without resistance. They are supposed to work extra hard. (Productivity improvement 2009).
The control system indicates that there is stiff competition in the market; sales are declining and therefore their performance should be higher than before. This will in turn lead to higher profits. If there were no controls, information on declining sales would not be available, performance standards would not have been adjusted and losses would have been eminent.
Preventive control is important in evaluating results and giving feedback. Such a type of control gives an early warning that specific actions are required. Feedback should be received by all employees, the feedback here is that sales are low; the necessary action is that a new product should be developed, this affects the managers who are the overseers of the business and the employees who are responsible for production and distribution of the products. Feedback must be available, relatively reliable, and prompt. Managers in Frito Lay have definitely achieved this.
They want to maximize the profits. This would be impossible if they have no knowledge of how the product is doing in the markets compared to similar products from other producers. Timely and accurate information is required to achieve this. This is the most challenging part of this type of control but the stakeholders here have overcome this by providing information on sales on daily basis. (Ryszard Barnet 2009)
There is no doubt Frito Lay has succeeded with this type of systems control. They have corrected the problem of declining sales. For it to succeed, their objectives must have been clear, the feedback and evaluation must have been prompt and the employees must have trusted this control system and supported it without resistance. (Productivity improvement 2009).
References
John C. Lene and Kris Portz, Management control systems in a global economy, The CPA journal September issue, 2005. Web.
Productivity improvement, Systems advancing employee productivity, 2009. Web.
Ryszard Barnet, Types of control. 2009. Web.
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