3M Corporation Business Analysis
Company Background:
The Minnesota Mining & Manufacturing Corporation (3M) was founded in 1902. It reported sales revenues of $16.7 billion during the year 2000. These revenues came from 3M's six business divisions: industrial; transportation, graphics, and safety; healthcare; consumer and office; electro and communications; and specialty materials. All business divisions were profitable in 2000. The same year, the company made more than 60,000 products and about $5.6 billion sales came from products that had been introduced during the prior four years and another $1.5 billion came from products introduced during 2000. Annually, more than 75,000 employees worked to create more than 500 new products. The company was recognized for its vertical organizational structure, with businesses established by technologies and markets. It was one of the most admired corporations in America and was awarded the National Medal for Technology, the U.S. government's top award for innovation, in 1995.
Business Goals and Strategy:
3M Corporation's each division is treated as a profit center with no interdivisional business between the six divisions. The business unit strategy is to "hold" as the company wants to maintain and increase profitability and market share. In terms of corporate strategy, 3M functions as an unrelated diversified corporation with the prime goal to innovate consistently, thereby offering a...
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...le the business units to prepare strategic plans and budget and submit them to senior management to review and approve. This will benefit the company because in an unrelated diversified corporation, business unit managers have a greater influence in developing their strategies and budgets as they, not the corporate office, possess most of the information about their respective product/market.
To conclude I would say that 3M Corporation's existing controls are very good and support their strategy. However, they should incorporate the above mentioned missing controls to ensure greater innovation power, profitability, and competitive advantage.
References
Anthony, Robert N., and Govindarajan, Vijay. (2005) Management Control Systems. McGraw Hill Companies Inc., New York, NY (pp. 654-655)
“CNS Inc. to regain control of Breathe Right international sales from 3M” The Business Journal Minneapolis-St.Paul: 11 Oct. 1999
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Minnesota Mining & Manufacturing Company (3M)" International Directory of Company Histories, Vol. 26. St. James Press, 1999. Reproduced in Business and Company Resource Center. Farmington Hills, Mich.: Gale Group. 2006.
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