Management Control of H&M

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Management Control:

1) Identify and discuss the control alternatives used in the selected company. Is each form of control loose or tight? What is the overall impression of the selected company’s Management Control System? Why?

1- People Controls

a) Personnel controls:

Selection:
Personality is the most important asset that H&M employees have. H&M believes that people who are allowed to be themselves do a better job, which is why H&M welcomes diversity and personal style. H&M believes in theirs people, and always encourage new ideas and initiatives. Over the last five years,H&M growth created a net job contribution of accumulated 24,019 full-time equivalent jobs globally. This amounts to an average net creation of more than 4,800 jobs or 10% per year.

Training:
In 2010 H&M introduced a new programme for all employees, the H&M Incentive Program, which aims to encourage long term commitment and support future recruitment. This program prevents myopia. All employees of the H&M group, regardless of their position or salary level, are included in the programme and are rewarded to the length of their employment and whether they work full-time or part-time. The rapid expansion of H&M requires ensuring that all employees are welcomed into the organisation in a consistent, efficient and high quality manner. H&M offers a blended approach to training, whereby e-learning and classroom sessions are combined to create a teaching methodology that is easy to duplicate internationally. H&M strives to make relevant training tools as accessible as possible to its target groups.  

b) Cultural Controls:

* Code of conduct
Of particular importance is that management documents such as internal policies, guidelines and manuals exist in significant areas and that these provide the employees with solid guidance. Within H&M there exists above all a Code of Ethics; a policy that permeates the en- tire company, since it describes the way in which the employees should act within the company and in business relations with suppliers. Over recent years, H&M has worked to strengthen the collection of safety-related data from its global business units. To minimise the risk of accidents, H&M conducts yearly audits in all stores. As part of this, the auditor helps stores to make action plans to reach standards for a safe working environment.

2- Results Controls

H&M uses different kinds of reports to evaluate and inform of its past operations. For example, as a big part of H&M’s strategy, sustainability is reported annually in a Corporate Sustainability Report. The company also publishes an annual report to conclude overall activities of the past year. Financial information is controlled by five-year summaries. In addition to all of these, H&M arranges press releases, annual general meetings and conferences to further evaluate and inform of its activities. No doubt H&M did an excellent job in evaluation part, which is one of reasons about critical success. All departments at H&M are then individually responsible for developing and carrying out the Conscious Actions necessary to fulfil commitments.

3/ Action Controls

Policies and guidelines are of particular importance for accurate accounting, reporting and provision of information, and also define the control activities to be carried out. H&M’s policies and guidelines are updated on an on going basis. This takes place primarily within each central function and is communicated to the sales countries by e-mail and via the intranet, as well as at meetings. H&M has written as code of ethics for the employees, the employees have to sign it. It exits store instructions, the communication policy. The first one, there are detailed instructions for the store staff control daily work in the store. Many other guidelines and manuals are also available within the Group. In most cases these...
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