1. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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2. Chapter Objectives
Identify three types of control and the components
common to all control systems.
Learn the two approaches to control system
Discuss organizational control from a strategic
perspective.
Learn the components of organizational control system.
Understand why Planning and Controlling are called he
Siamese twin of Management
Understand and discuss the Planning/Control Cycle
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3. Fundamentals of Organizational Control
Control
 Comparing desired results with actual results and taking
corrective action as needed to keep things on track.
 Checking, testing, regulating, verifying, or adjusting
 Objectives are yardsticks for measuring actual performance.
 Purpose of the control function:
To get the job done despite environmental, organizational, and
behavioral obstacles and uncertainties
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4. Types of Controls
Feedforward Control
 The active anticipation and prevention of problems,
rather than passive reaction
Concurrent Control
 Monitoring and adjusting ongoing activities and
processes
Feedback Control
 Checking a completed activity and learning from
mistakes
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5. Figure 16.1: Three Types of Control
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6. 1. Bureaucratic Control - extensive rules and
regulations, top-down authority, tightly written job
descriptions and other formal methods for
preventing and correcting deviations from desired
behaviors and results.
2. Clan or Organic Control - flexible authority, loose
job descriptions, individual self-controls and other
informal methods of preventing and correcting
deviations from desired behaviors and results.
Approaches to Control System

7. BUREAUCRATIC CONTROL CLAN CONTROL
Use of detailed rules and
procedures whenever possible.
Use of detailed rules and regulations
only when necessary.
Top-down authority with emphasis
on positional power.
Flexible authority with emphasis on
expert power and networks of
control.
Activity-based job descriptions that
prescribe day-to-day behavior
Results-based job description that
emphasize goals to be achieved.
Emphasis on extrinsic rewards
(wages, pensions, status symbols)
for controlling performance.
Emphasis on both extrinsic and
intrinsic rewards (meaningful work)
for controlling performance.
Org. culture not recognized as
source of control
Org culture seen as a way of
integrating org, group and individual
goals for greater overall control.

8. Organizational Control Subsystems
Strategic plans
Long-range plans
Annual operating budgets
Statistical reports
Performance appraisals
Policies and procedures
The organization’s culture
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9. Components of
Organizational Control Systems
Objectives
 Measurable reference points (targets) for corrective
action
Standards
 Guideposts on the way to achieving objectives
 Benchmarking: Identifying, studying, and building
upon the best practices of organizational role models
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10. Evaluation-Reward Systems
Goals of System
 To measure and reward individual and team
contributions to attaining organizational objectives
 To shape effort-reward expectancies in order to
motivate better performance
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11. Identifying Control Problems
Executive Reality Checks
 Top managers periodically work at lower-level jobs to
become more aware of operations.
Internal Audits
 Independent appraisals of organizational operations
and systems are conducted to assess effectiveness and
efficiency.
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12. Identifying Control Problems (cont’d)
Symptoms of Inadequate Control
 An unexplained decline in revenues or profits
 A degradation of service (customer complaints)
 Employee dissatisfaction
 Cash shortages caused by bloated inventories or
delinquent accounts receivable
 Idle facilities or personnel
 Disorganized operations
 Excess costs
 Evidence of waste and inefficiency (scrap, rework)
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13. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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PLANNING AND CONTROLLING:
. . . “ THE SIAMESE TWIN OF MANAGEMENT”
•Planning is the formal process of developing goals, strategies,
standards and allocating resources while controls are the measures
that help ensure that decisions, actions and results are consistent
with those plans. Thus, planning and controlling go hand in hand.
•Planning prescribes desired behavior and results while controls help
maintain or redirect actual behavior and results.
•Managers cannot effectively plan without accurate and timely
information, controls provide some of this essential information.
•Managers need plans to indicate the purposes to be solved by
controls. Thus, planning and controls complement and support
each other.
•To conclude, without planning, there would be no way to control.

14. Define
Vision
Identify
Mission
Set Goals &
Objectives
Develop & Implement
Strategic Plans
Develop & Implement
Intermediate Plans
Develop & Implement
Operational Plans
Determine
Areas to
Control
Establish
Standards
Measure
Performance
Compare
Performance
Against
Standards
Standards
met?
Recognize
Performance
Take Corrective
Action as necessary
Adjust Standards &
Measures as necessary
YES
NO
The Planning/Control Cycle