The document discusses traditional control processes used in business. It describes traditional control systems as involving setting standards and then monitoring performance. There are three main types of traditional controls: diagnostic controls which ensure goals are being met and issues can be explained, boundary controls which establish rules and identify actions to avoid, and interactive controls which allow for real-time strategic monitoring through face-to-face communication. Commitment-based controls rely on employee self-control and mutual understanding to keep things on track.

1. Prepared By:
Tribeni Gogoi
Shreyash Patel
Nimesh Soni

2.  The traditional control
process includes:
• Establishing a standard, goal, or
target; measure actual
performance against standard;
and taking corrective action.
• It also involves analyzing reasons
for deviations, reviewing
alternative courses of action, and
choosing/implementing the most
promising solutions.

3. Setting
goals
Controlling
Taking Evaluation
corrective of
steps performance

4.  Traditional control systems involve
setting standards and then monitoring
performance.
 There are three types of traditional
controls:
 Diagnostic controls
 Boundary controls, and
 Interactive controls.

5.  Diagnostic control systems aim to ensure that the
firm’s targets and goals are being met and that any
discrepancies can be diagnosed and explained.

6.  Budgets (e.g., income
statement, balance
sheet, etc.) are probably
the most widely used
control device.
 They are formal financial
expressions of a manager’s
plans. The first step in
budgeting is to develop a
sales forecast and sales
budget.

7.  Managers also use financial ratio analysis to
monitor performance and maintain control.
 Financial ratios compare one financial measure on
a financial statement to another. Analyzing these
rations helps managers understand their firm’s
performance.

8.  Boundary control systems
establish the rules or
boundaries and identify
actions and pitfalls that
must be avoided.
Examples of boundary
controls include ethics
standards, codes of
conduct, and strategic
policies.

9.  Interactive strategic control is a real-time, usually
face-to-face method of monitoring both a
strategy’s effectiveness and the underlying
assumptions on which the strategy was built.
 This approach can be very useful for managing
change because managers can get a better feel for
the importance of information through face-to-
face communication.

10.  Commitment-based control
relies on employees’ self-
control to keep things under
control.
 Commitment-based control
systems rely on getting the
employees themselves to
want to do things right—they
emphasize self-control.

11.  Target Setting by Employees itself
 Self Discipline code generated by mutual
understanding.