• The process of monitoring activities to ensure that they are being
accomplished as planned and to correct any significant deviation.
The Purpose of Control
• To ensure that activities are completed in ways that lead to
accomplishment of organizational goals.
Designing Control Systems:
1) Market Control
• Emphasizes the use of external market mechanisms to establish the
standards used in the control system.
2) Bureaucratic Control
• Emphasizes organizational authority and relies on rules, regulations,
procedures, and policies.
3) Clan Control
• Regulates behavior by shared values, norms, traditions, rituals, and beliefs
of the firm’s culture. Why is Controlling Important?
• Controls let managers know whether their goals and plans are on target
and what future actions to take.
2) Empowering employees
• Control systems provide managers with information on employee
3) Protecting the workplace
• Controls enhance physical security and help minimize workplace
The Process of Control
1) Measuring actual performance.
Sources of Information (How)
• Personal observation
• Statistical reports
• Oral reports
• Written reports
Control Criteria (What)
Costs/Output/Sales 2) Comparing actual performance against a standard.
• Determining the degree of variation between actual performance and the
➢ Significance of variation is determined by:
1. The acceptable range of variation from the standard (forecast or budget).
2. The size and direction of the variation from the standard
(forecast or budget).
3) Taking action to correct deviations or inadequate standards.
• Courses of Action
➢ “Doing nothing”
➢ Correcting actual (current) performance
1. Immediate corrective action to correct the problem at once.
2. Basic corrective action to locate and to correct the source of the deviation.
➢ Revising the standar