.2) Explain some factors which may influence top management style and the implicationof the top management style on management control.
The management control function in an organization is influenced by the style of senior management. The style of the chief executive officer affects the management control process inthe entire organization. Similarly, the style of the business unit manager affects the unit'smanagement control process, and the style of functional department managers affects themanagement control process in their functional areas.
Differences in Management Styles
Managers manage differently. Some rely heavily on reports and certain formal documents; others prefer conversations and informal contacts. Some are analytical; others use trial and error. Someare risk takers; others are risk averse. Some are process oriented; others are results oriented.Some are long-term oriented; others are short-term oriented. Some emphasize monetary rewards;others emphasize a broader set of rewards.Management style is influenced by the manager's background and personality. Backgroundincludes things like age, formal education, and experience in a given function, such asmanufacturing, technology, marketing, or finance. Personality characteristics include suchvariables as the manager's willingness to take risks and his or her tolerance for ambiguity.
Implications for Management Control
The various dimensions of management style significantly influence the operation of the controlsystems. Even if the same reports with the same set of data go with the same frequency to theCEO, two CEOs with different styles would use these reports very differently to manage the business units.Style affects the management control process – how the CEO prefers to use the information,conducts performance review meetings, and so on – which in turn affects how the control systemactually operates, even if the formal structure does not change under a new CEO. In fact, whenCEOs change, subordinates typically infer what the new CEO really wants based on how he or sheinteracts during the management control process.