Description
A management control system (MCS) is a system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole considering the organizational strategies.
A Case Study
Presented By: Samarjeet Parmar Dharmendra Khairajani Siddharth Purohit Parth Joshi Birju Shah
Flow of Presentation
Nucor
-
TI & HP
- Difference in Strategy
-
History Operations Strategy Organization Structure Human Resource Policies Compensation Information Systems Benefits Technology Future
History
?
? ?
Nuclear corporation of America- A co. involved in nuclear instruments & electronics business. In 1972 it changed its name to Nucor corporation. Focus on making steel from recycled scrap metal and fabricating steel joists for nonresidential construction.
Operations
? ?
Located its facilities in rural areas across U.S.A. By 1998 Nucor consisted of 9 businesses, with 25 plants.
Strategy
?
?
?
Building steel manufacturing facilities economically and operating them productively. Continuous innovation, modern equipment, individualized customer service and producing at competitive prices. Debt Equity ratio was not allowed to exceed 30%.
What is their competitive advantage?
? ?
?
Mini-Mills Large applicant pool to hire from because they are seen as an attractive place to work, allows them to be very selective for who they hire Have a willingness to take risks.
Organization Structure
Chairman/Vice Chairman/President Vice President/Plant General Manager Department Manager Supervisor
Human Resource Policies
Employee Relations Principles ? Manage to provide opportunity according to productivity ? Employee should have confidence ? Right to be treated fairly ? Avenue of appeal
?
Compensation
Production Incentive Plan ? Paid weekly bonuses based on production
? Based on group not individual performance ? If tardiness or attendance kept team from meeting goals, then no one
received a bonus in the group
? If you are 5 minutes late, you lose your bonus for the day ? If you are 30 minutes late or absent, you lose your bonus for the week
? 4 forgiveness days ? Maintenance personnel were assigned to each team ? No bonus paid if equipment is not operating ? Supervisors were apart of bonus teams ? Received same bonus as employees ? Output and bonus info for each team was posted at the entrance
Compensation
Department Manager Incentive Plan ? Annual bonus received based on performance of the entire plant
? Based on return on assets ? A return of 25% or better was expected by the plant
Non-production and Non-department Manager Incentive Plan ? Bonus based on each plant’s return on assets
? Includes everyone not in previous 2 plans ? Every month each plant received a chart showing its return on assets on year-
to-date basis
? Posted in employee cafeteria
Senior Officers Incentive Plan ? Based on return on stockholder’s equity above certain minimum earnings
? If Nucor did poorly, then Senior Officers would only receive their base pay
?
Senior Officers earned less than other industry executives
Information system - Weekly report Bids, orders, production, backlog, inventory, shipments - Monthly report sales revenues, costs, contribution, return on assets employed Meetings in February, May and November ? Benefits - Profit sharing below officer level - Monthly stock purchase plan - Nucor scholarship fund ? Technology - No external help for technology development - Mini mill concept - Scrap steel as raw material - SMS Schloemann-Siemag - Iron carbide plant - Nucor Yamato Blytheville Arkansas - National medal of Technology
?
Texas Instruments & Hewlett-Packard
?
?
?
Large, Standard markets based on long-run cost position. Enter early in a product’s life cycle, and stayed through maturity. Aggressive cost improvements, with equally aggressive price cuts.
?
? ?
Selected small markets based on unique, high-value/high featured products. Create a new product and then replaced it when it matured. Cost improvements, but sought higher margins and held prices longer.
Texas Instruments & Hewlett-Packard
?
?
?
More capital-intensive, costeffective production processes to match high-volume standard product needs. A balanced portfolio of businesses where mature, large business provide resources for young, highgrowth business. More Sales, more incentive compensation.
?
?
?
Flexible production processes to match low-volume, more custom product needs. All high-growth, high margin businesses that met their own resource needs, largely on an individual basis. More Creativity, more incentive compensation.
Reference
?
Management Control Systems
by Robert N Anthony & Vijay Govindarajan
Web Sites: www.ti.com www.hp.com www.nucor.com
?
doc_672434347.ppt
A management control system (MCS) is a system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole considering the organizational strategies.
A Case Study
Presented By: Samarjeet Parmar Dharmendra Khairajani Siddharth Purohit Parth Joshi Birju Shah
Flow of Presentation
Nucor
-
TI & HP
- Difference in Strategy
-
History Operations Strategy Organization Structure Human Resource Policies Compensation Information Systems Benefits Technology Future
History
?
? ?
Nuclear corporation of America- A co. involved in nuclear instruments & electronics business. In 1972 it changed its name to Nucor corporation. Focus on making steel from recycled scrap metal and fabricating steel joists for nonresidential construction.
Operations
? ?
Located its facilities in rural areas across U.S.A. By 1998 Nucor consisted of 9 businesses, with 25 plants.
Strategy
?
?
?
Building steel manufacturing facilities economically and operating them productively. Continuous innovation, modern equipment, individualized customer service and producing at competitive prices. Debt Equity ratio was not allowed to exceed 30%.
What is their competitive advantage?
? ?
?
Mini-Mills Large applicant pool to hire from because they are seen as an attractive place to work, allows them to be very selective for who they hire Have a willingness to take risks.
Organization Structure
Chairman/Vice Chairman/President Vice President/Plant General Manager Department Manager Supervisor
Human Resource Policies
Employee Relations Principles ? Manage to provide opportunity according to productivity ? Employee should have confidence ? Right to be treated fairly ? Avenue of appeal
?
Compensation
Production Incentive Plan ? Paid weekly bonuses based on production
? Based on group not individual performance ? If tardiness or attendance kept team from meeting goals, then no one
received a bonus in the group
? If you are 5 minutes late, you lose your bonus for the day ? If you are 30 minutes late or absent, you lose your bonus for the week
? 4 forgiveness days ? Maintenance personnel were assigned to each team ? No bonus paid if equipment is not operating ? Supervisors were apart of bonus teams ? Received same bonus as employees ? Output and bonus info for each team was posted at the entrance
Compensation
Department Manager Incentive Plan ? Annual bonus received based on performance of the entire plant
? Based on return on assets ? A return of 25% or better was expected by the plant
Non-production and Non-department Manager Incentive Plan ? Bonus based on each plant’s return on assets
? Includes everyone not in previous 2 plans ? Every month each plant received a chart showing its return on assets on year-
to-date basis
? Posted in employee cafeteria
Senior Officers Incentive Plan ? Based on return on stockholder’s equity above certain minimum earnings
? If Nucor did poorly, then Senior Officers would only receive their base pay
?
Senior Officers earned less than other industry executives
Information system - Weekly report Bids, orders, production, backlog, inventory, shipments - Monthly report sales revenues, costs, contribution, return on assets employed Meetings in February, May and November ? Benefits - Profit sharing below officer level - Monthly stock purchase plan - Nucor scholarship fund ? Technology - No external help for technology development - Mini mill concept - Scrap steel as raw material - SMS Schloemann-Siemag - Iron carbide plant - Nucor Yamato Blytheville Arkansas - National medal of Technology
?
Texas Instruments & Hewlett-Packard
?
?
?
Large, Standard markets based on long-run cost position. Enter early in a product’s life cycle, and stayed through maturity. Aggressive cost improvements, with equally aggressive price cuts.
?
? ?
Selected small markets based on unique, high-value/high featured products. Create a new product and then replaced it when it matured. Cost improvements, but sought higher margins and held prices longer.
Texas Instruments & Hewlett-Packard
?
?
?
More capital-intensive, costeffective production processes to match high-volume standard product needs. A balanced portfolio of businesses where mature, large business provide resources for young, highgrowth business. More Sales, more incentive compensation.
?
?
?
Flexible production processes to match low-volume, more custom product needs. All high-growth, high margin businesses that met their own resource needs, largely on an individual basis. More Creativity, more incentive compensation.
Reference
?
Management Control Systems
by Robert N Anthony & Vijay Govindarajan
Web Sites: www.ti.com www.hp.com www.nucor.com
?
doc_672434347.ppt