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Effective Management System Design

A vital characteristic requisite for success is an efficient management system. A company must plan, discuss, and assign roles to provide fluid leadership, embodied in the management system, during the course of doing business. The operation and use of the management system also have to be documented and broadcast throughout the company so that all employees know what part they have in its implementation Typical management systems that accommodate these characteristics involve computerized, networked systems with central databases. These types of systems allow each member of the company to access and use information from various sources that may be required to help develop plans, control hierarchies, and execute strategies.Context and CultureInternal and External Relationships

A networked management system promotes better understanding among the internal and external relationships that naturally evolve in the conduct of any business enterprise clearly stated that a system designer has to understand all the complex relationships among the people and the information to create a system that can be successful at any level of organization. Some of the most powerful factors in determining or defining a company’s culture are those internal and external influences that emanate from customers and organizations with whom a company must interact.

Internally, a company can be damaged by adopting “vertical, separate management systems”commonly called stovepipes. Stovepipes inhibit the sharing of information that is needed to promote better understanding of individual departmental functions. If the management system can provide the combined use of company information and foster an integrated approach to dealing with outside customers, suppliers, and competitors, business usually increases. Griffith recommended a cross-functional management system with a strong, “forward-looking approach that can bring together individual functions within an integrated management system”

The management system must provide a clear focus on the competitive landscape, because competition largely drives a company’s initial strategy, with the structure and design following the strategy. The competitive environment is critical to a company’s survival in any market, so any management system must accommodate the particular nature of each market. For example, a trucking company management system would focus on highly efficient scheduling and distribution systems, and a mining company system might use efficiencies in how much ore could be extracted in comparison to competitors. A management system built to spotlight company specifics contributes directly to creating value for the company and thus makes it successful in the competitive arena

To achieve and maintain a competitive position, a company needs a reliable information system to provide the framework on which to do market analyses. The management system has to be integrated with all external interfaces and has to be flexible enough to do periodic estimates of the effects of market and product line changes. Competition can erode if the system is not capable of frequent company-wide involvement in market studies. Morin and Jarrell warned that “competitive position has a major effect on a company’s profitability and continued cash flows, and, hence, on its market value” (p. 233).