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(think Volkswagen New Beetle), was first introduced in 2007. Both the car and its
marketing launch were designed with heavy customer involvement, and the 500,
like the Grande Punto, was an immediate success, with first-year sales
outstripping Fiat’s original target by 160 percent.
Under the merger agreement reached with Fiat in June 2009, the 500 became
one of at least seven Fiat vehicles that Chrysler will begin building and selling in
the United States by 2014. Produced in four versions—hatchback, sporty
hatchback, convertible, and station wagon—the U.S. adaptation of the 500 went
to market in 2011, and Marchionne was convinced that, with a full range of body
styles, “the 500 … will be a smash if we do it right.” Strategically, Marchionne
knew that he had to reposition Chrysler from a maker of clunky gas-guzzlers to a
marketer of stylish energy-efficient technology, and the 500, which one marketing
association in Japan has declared “the sexiest car in the world,” has been
designated the flagship of Fiat Chrysler’s new North American fleet.
Many analysts, however, remained skeptical about Marchionne’s prospects for
turning Chrysler around even if the 500 turned out to be “a smash.” A big issue,
they say, is time: Can “New Chrysler” (officially Chrysler Group LLC) hang on
financially until projected new-product revenues start filling the company
coffers? Completely new and improved Chryslers didn’t hit showrooms until
2013, but the new management has managed to roll out some new products,
including a revamped Jeep Compass and an all-new Chrysler 300 sedan. “We’ve
attacked the bulk of the product portfolio,” says Marchionne. “What we’ve got
now is a commercially viable set of products in the marketplace.” He also points
out that Chrysler sales are ahead of internal targets and claims that he’s more
confident now about the prospects for a turnaround than he had been when the
merger plans were being drawn up. “We’ve been sticking to our guns,” he says,
“and it’s worked well so far.”
1
Sergio Marchionne has used control effectively first at Fiat and more recently at Chrysler.
As we discussed in Chapter 1, control is one of the four basic managerial functions that
provide the organizing framework for this book. This is the first of two chapters
devoted to this important area. In the first section of this chapter, we explain the pur-
pose of control. We then look at types of control and the steps in the control process.
The rest of the chapter examines the four levels of control that most organizations must
employ to remain effective: operations, financial, structural, and strategic control. We
conclude by discussing the characteristics of effective control, noting why some people
resist control and describing what organizations can do to overcome this resistance. The
next chapter in this part focuses on managing operations, quality, and productivity.
THE NATURE OF CONTROL
Control
is the regulation of organizational activities so that some targeted element of
performance remains within acceptable limits. Without this regulation, organizations have
no indication of how well they are performing in relation to their goals. Control, like a
ship’s rudder, keeps the organization moving in the proper direction. At any point in time,
it compares where the organization is in terms of performance (financial, productive, or
otherwise) to where it is supposed to be. Like a rudder, control provides an organization
with a mechanism for adjusting its course if performance falls outside acceptable boundaries.
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