The assignment of reporting how a news story relates to the aspect of management in the business world really consists of how the chain of command works and how the orders follow that chain. After searching for a story worthy of a summary of such, I found a perfect example to illustrate the chain of command.
This particular article is about the European company called Volkswagen AG, which is Europe's largest automaker.The automaker reported on September 1st, that forty percent of this year's annual bonus for senior management will be dependant on EVA or economic value added; this is the term for the profitability of the returns above the cost of capital.The company's reasoning for doing so is that they expect this to force management to make better decisions or more intelligent and secure ones at least.Now that their bonus checks depend upon the well being of the company and the well being of the company depends upon their choices financially.
This policy greatly changes things within the company, ranging from the highest senior managers to the lowest of the assembly line workers.The attitude of the chain of power may grow more positive or it may have just the opposite affect.For example, management may just tighten the screws on everyone underneath them, which by the time it hits the bottom rung of the corporate ladder, can be quite demanding.The other scenario could be that the senior managers could start to really put more heart and effort into bettering the company's position in the business world.This case would turn out to be the most beneficial to all that are involved.
To make such an adjustment as this, can and will affect every last member of the company, even though the policy change only directly affects the higher managers of the
business.So in the end, management has responsibility and stress involved in their position, but they also have the power to change the entire…