What is control?

The process monitoring activities to ensure that they are being accomplished as planned and correcting any significant deviations

Control is the management function that involves monitoring activities to ensure that they are being accomplished as planned and correcting any significant deviations. Managers cannot really know whether their units are performing properly until they have evaluated what activities have been done and have compared the actual performance with the desired standard. An effective control system ensures that activities are completed in ways that lead to the attainment of the organization’s goals. The effectiveness of a control system is determined by how well it facilitates goal achievement. The more it helps managers achieve their organization’s goals, the better the control system.

Every organization attempts effectively and efficiently reach its goals. Does that imply however, that the control systems organizations use is identical? In other words would Bharti Tele ventures, Reliance Petrochemicals and Pantaloons all have the same type of control system? Probably not. Although similarities may exist generally three different approaches to designing control systems are used: market bureaucratic and clan controls which are summarized

Market control

An approach to control that emphasizes the use of external market mechanisms such as price competition and market share.

Market control emphasizes the use of external market mechanisms. Controls are built around such criteria as price competition or market share. Organizations using a market control approach usually have clearly specified and distinct products and services and considerable competition. Under these conditions, the various divisions of the organization are typically turned into profit centers and evaluated by the percentage of total corporate profits each generates. For instance at Matsushita each of the various divisions that produce such products as videos, home appliances, and industrial equipment is evaluated according to its contribution to the company’s total profits. Using these measures manages make decision about future resource allocations strategic changes and other work activities that may need attention.

A second approach to control systems is bureaucratic control a control approach that emphasizes authority and relies on administrative rules, regulations, procedures and policies This type of control depends on standardization of activities, well defined job descriptions to direct employee work behavior and other administrative mechanisms – such as budgets – to ensure that organizational members exhibit appropriate work behaviors and meet established performance standards. At various public sector undertakings (PSUs) such as ONGC, NTPC and BPCL for example managers are expected to stick closely to their budgets and stay within corporate policy guidelines.

Clan control is an approach to designing control systems in which employee behaviors are regulated by the shared values, norms, traditions rituals beliefs and other aspects of the organization’s culture. In contrast to bureaucratic control, which is based on strict hierarchical mechanisms clan control depends on the individual and the group (the clan) to identify appropriate and expected work related behaviors and performance measures. Clan control is typically found in organizations in which teams are widely used and technologies change often. For instance, organizational members at Micro-matic Grinding, Ghaziabad are well aware of the expectations regarding ethical workplace behavior and performances standards. The organizational culture through the shared values, norms, and stories about the founder conveys to individual what’s really important in the organization as well as what is not. Rather than relying on prescribed administrative controls, Micro-matic employees are guided and controlled by the clan’s culture.

It is important to recognize that most organizations do not totally rely to just one of these three approaches to design an appropriate control system. Instead an organization typically chooses to emphasize ether bureaucratic or clan control ad then add some market control measures. The key however in any of the approaches is to design an appropriate control system that helps the organizations effectively and efficiently reach its goals.