Control Mechanisms of Kraft Foods, Inc. University of Phoenix MGT/330 Control Mechanisms of Kraft Foods, Inc. Control is defined as “any process that directs the activities of individuals toward the achievement of organizational goals” (Bateman & Snell, 2009, p. 574). Effective control systems can assist organizations in achieving their objectives, while ineffective controls can be detrimental, costly, or the termination of a company’s operations. Whether these ambitions consist of profitability, innovation or top notch customer service, systems must be in place to ensure success.
This essay evaluates types, comparison and effectiveness of control mechanisms, positive and negative reactions to the use of these controls, and the affect the control mechanisms have on the four functions of management at Kraft Foods Corporation. Kraft Foods Corporation, the largest global food manufacturer in the United States and second largest in the world, strives to have elite financial performance and has specific strategies to achieve this goal.
This company focuses on building a superior functioning organization that has strong leadership and “puts local business units at the heart of the company so decisions are made closer to the consumer” (Kraft Foods, Inc. , 2010, para. 2). To optimize this goal Kraft has made a structural organizational change to its operational and managerial control mechanisms. Kraft has transformed its original organizational matrix to a decentralized structure thereby distributing more internal control to the business units.
Deploying resources where they were needed and giving managers more freedom to act, this internal operational control transformation shifted accountability to individual business units (Rosenfeld, 2009). Kraft is strategizing in the renovation of its brands by “solidifying business in existing categories and markets whilst expanding the portfolio and innovations in new and fast growing markets” (Staff, 2008, para. 1). To pursue this strategy Kraft uses strategic control.
Management has been scrutinizing this objective from the moment it has been implemented, carefully tracking its progress. Monitoring performance, identifying current and potential obstacles, and taking corrective action is crucial to the achievement of strategic control at this organization (Barnat, 2007). It could be said that the most vital control mechanism that Kraft Foods has utilized to ensure financial growth and success is market control.
Kraft uses its size and global reach to make the most of its sales capabilities, and uses price competition to assess its productivity. In the United States store managers have a single sales representative who handles only Kraft products and in developing markets, Kraft is expanding distribution in smaller traditional outlets (Kraft Foods, Inc. , 2010). References Barnat, R. (2007). Strategic control. Retrieved from http://www. strategic-control. 24xls. com/en114 Bateman, T. S. , & Snell, S. A. (2009).
Management: Leading & collaborating in a competitive world (8th ed. ). Boston, MA: McGraw-Hill Irwin. Kraft Foods, Inc.. (2010). Strategies. Retrieved from http://www. kraftfoodscompany. com/About/strategies/index. aspx Rosenfeld, I. (2009). Inside the Kraft Foods transformation. Strategy+Business, 1-14. Retrieved from http://www. strategy-business. com/media/file/sb56_09307. pdf Staff (2008, May 11). Kraft’s VP plans to ‘reframe categories’. Arabian Business. Retrieved from http://www. arabianbusiness. com/index. php? option=com_content&view=article&id=518707&Itemid=1