Part I Key concepts of the article: How to Fix Executive Compensation, by Alex Edmunds
The article centres on the concept of managerial control at the executive level. The author begins by noting the fact that managers at the executive level deserve to be compensated. The author cautions that the centrality of compensation in terms of the send of packages or retirement perks should be appreciative of the long and short term interests of the company.
The financial character of managerial control entails the evaluation of the compensation package. The author advocates for an approach that solves both the interests of the company and the interest of the executives. Striking a balance between two contrasting and equally important factors is difficult and the firm must remain cautious and steadfast in the pursuit of its long term objectives without infringing on anyone’s rights.
Similarly, the goals and aspirations of the controlled also need consideration. The author demonstrates that character through his elaborate exposition. He gives a tripartite approach that is sensitive and accommodative of the divergent interests. This should be related to the long term approach of most control processes and systems. In the development of a control system, the management is often cautioned and informed to assume an approach that does not lean on only one side of the parties. Control processes and systems must not be used for selfish advancements or settling scores, rather it should be applied for the overall advocacy of the company’s long term objectives. This should be seen in light of the comprehensive and realistic approach to implementing controls in the organization.
Part III Critical thought, importance and personal impact
The concepts enunciated in the article occasion a critical thought that is rare in common managerial assignments and discourses. For starters, the author appears to suggest that management too need control. The traditional managerial control processes and system often is intended to contain the employee against misuse of resources, discretion and authority. It advances a middle ground that is important in striking a balance between two contrasting interests. It is for that reason that it is important for the overall managerial practise and learning. It introduces innovative and dynamic models and approaches to solving the day to day problems in the management and their attendant consequences. It also proposes modern systems of control processes and systems that are effective as well as non-confrontational. This informs the centrality of the article and its relevance in modern day management.
The concepts proposed by the author have a fundamental impact to me. For starters, the author reminds me to approach control processes and systems and indeed the larger managerial discipline with an open mind. It has promoted in me an appreciation of dynamism and openness in management. In addition, I have gained an appreciation of the positive nature of control with its strengths and consequences. It enables an appreciation of the place of control in management and the fact that in the long run, it is the long term interests of the company that should be considered in any decision making process. I, therefore, find the literature appropriate and a good exposure to the practical aspects of the control process and systems.
Edmans, A. (2012, February 27). How to Fix Executive Compensation. The Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10001424052970203462304577138691466777460.html?mod=hp_jrmodule
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