GOAL

CONGRUENCE

D R . A AYAT FAT I M A
 GOAL CONGRUENCE

• Individuals work in different hierarchies • But they must come together as far as
and handle different responsibilities & Company’s Goal is concerned, (their
may have different goals. action must speak Co’s language.)
 TWO MOST IMPORTANT QUESTIONS:

1. What actions does it motivate people to take in their own self-interest?

2. Are these actions in the best interest of organization?

SIGNIFICANCE OF GOAL CONGRUENCE

● Ensures frictionless working.

● Ensures achievement of organization’s goal/strategic objective

● Ensures coordination & motivation of all concerned.

● Ensures consistency in the working of all concerned.

● Gives fair chance to its employees to achieve their personal goals.

● Enhances the loyalty towards the company.

INFORMAL FACTORS THAT INFLUENCE
GOAL CONGRUENCE
• External factors: Norms of desirable behavior that exist in the society of which the
organization is a part
– Set of attitudes of the society, work ethics of the society.
– Some of these attitudes are local - specific to city, region, or industry specific.

• Internal Factors: factors within the organization

– 1. Culture: common beliefs, shared values, norms of behavior & assumptions implicitly accepted and
explicitly built into.
– 2. Management Style – Informal / Formal- the attitude comes from top mgmt
– 3. The Communication Channels / Informal Organization
– 4. Perception and Communication
 FORMAL CONTROL SYSTEM
• MCS strategy itself
• Rules – Instructions, manuals and circulars, ethical guidelines.
• Specific types of rules:
– Physical controls: security guards, vaults
– Manuals: of rules
– System safeguards: cross checking totals with details, cash counting, auditing
– Task control system: Automated tasks
 FORMAL CONTROL PROCESS

A strategic plan
implements the
organization's
goal

and

strategies.
 TYPES OF ORGANIZATION

• Functional Organizations

• Business Unit

• Matrix Structure
 FUNCTIONAL ORGANIZATIONS

• Each manager is responsible for a specified function such as production or marketing to bear
on decisions related to a specific function

• Skilled higher-level managers are able to provide better supervision of lower-level managers in
the same or similar function. So, main advantage is efficiency

• No unambiguous way of determining the effectiveness of the separate functional managers, as

each function contributes jointly to the organization’s final output. So, difficult to measure
what fraction of profit is contributed by each.
• Advantages:
– Economies of scale with efficient use of resources
– High quality technical problem solving
– In-depth training and skill development within functions
– Clear cut career paths within functions

• Disadvantages:
– Poor communication and coordination across functions,

– Inadequate for a firm with diversified products and markets. So, it typically work well for smaller and less
complex organizations dealing with only one or a few products or services.

– A loss of clear responsibility for product or service delivery, and slow innovation in response to
environmental changes

– Members of functional departments become overspecialized, develop self-centered, narrow viewpoints,

and lose the total system perspective sometimes.

– Failure to communicate and extend support across department lines is common situations. This often
slows decision making because problems must be referred up the hierarchy for resolution
 BUSINESS UNIT

• Designed to solve the problems inherent in the functional structure

• It is responsible for all the functions involved in producing and marketing a specified
product line, planning and coordinating the work of the separate functions

• Business unit is closer to the market for its products than headquarter is, its manager
may make sounder production and marketing decisions than headquarters might and
the unit as a whole can react to new threats or opportunities more quickly.
• Advantages:
– Improved coordination across functional departments

– Easier growth or reduction in size by adding or deleting divisions

– Clear points of responsibility for product or service delivery

• Disadvantages:
– May reduce economies of scale, disperse technical competence and expertise

– Even create unhealthy rivalries among operating units

– May also increase costs by duplicating resources and efforts across divisions and causing an
overemphasis on divisional versus organizational goals.
 MATRIX STRUCTURE

• Matrix structure groups employees by both function and product.

• This structure can combine the best of both separate structures.

• Matrix structure is the most complex of the different organizational structures. often found in
organizations pursuing growth in dynamic and complex environments

• It provides a way of coordinating different functional contributions to serve specific program

needs

• It makes easier to add, remove and change the focus of teams to reflect new program directions
or basic changes in business size
• It clearly identifies program managers who can be held accountable for performances results;
this helps top managers stay informed about what is going on and why

• The matrix forces decision making and problem solving down to the team level, where the best
information exists

• Matrix helps keep top managers free of routine decisions and enables them to devote their time
to more strategic management concerns.

• Disadvantages:
– Power struggles, which may result from the two boss system

– Team members may become too focused on themselves and develop “groupitis ” losing sight of
important goals.

– Often creates increased costs as overhead rises in the form of extra salaries for program managers
 FUNCTIONS OF THE CONTROLLER
• Designing and operating information and control systems:
– Preparation of medium term plans to implement the organization’s strategy.

– Implementation of the control plans so developed.

• Preparing financial statements and financial reports for shareholders and other external parties

• Preparing and analyzing performance reports, interpreting these reports for managers and analyzing
program and budget proposals from various segments of the company and consolidating them into an
overall annual budget

• Supervising internal audit and accounting control procedures to ensure the validity of information,
establishing adequate safeguards against theft and fraud and performing operational audits.

• Developing personnel in the control area. Aims at continuous improvement of the control function
through upgradation of skills of control personnel.
 RELATION TO LINE ORGANIZATION:
• Controller may be responsible for developing and analyzing control measurements and for recommending
actions to management.

• Monitoring adherence to the spending limitations laid down by the chief executive, controlling the
integrity of the accounting system and safeguarding company assets from theft and fraud.

• Controller doesn’t make or enforce management decisions. Responsibility for actually exercising control
runs from the CEO down through the line organization.

• Important role in preparation of strategic plans and budgets

• Scrutiny of performance reports to ensure accuracy and to call line managers’ attention to items deserving
further inquiry.

• Monitoring adherence to the spending limitations laid down by the chief executive, controlling the
integrity of the accounting system and safeguarding company assets from theft and fraud.
 THE BUSINESS UNIT CONTROLLER

• Dual reporting: one to the corporate controller and the other to the managers of their own units

• He provides staff assistance to business unit manger on one hand and assisting the corporate
controller to exercise his overall controlling duty.

• Business unit general manager is the controller’s immediate boss and has ultimate authority in
the hiring, training, transferal, compensation, promotion and firing of controllers within that
business unit.