Text 6. Controlling

Controlling is the process of regulating organizational activities so that actual performance conforms to expected organizational goals and standards. Controls play important roles in helping managers handle five particular challenges: coping with uncertainty, detecting irregularities, identifying opportunities, handling complex situations, and decentralizing authority. Just as planning responsibilities differ by level, there are parallel control responsibilities at the strategic, tactical, and operational levels.

The basic process used in control has several major steps: determine areas to control; establish standards; measure performance; compare performance against standards; if standards are met or exceeded, recognize performance; if standards are not met, take corrective action as necessary; and adjust standards and measures as necessary. The resource dependence approach to controls argues that managers need to consider controls mainly in areas in which they depend on others for resources necessary to reach organizational goals. Four conditions that help delineate when controls should be used are a high dependence on the resource, an expectation that resource flows may be unacceptable without controls, the feasibility of instituting a control process, and acceptable control process costs.

There are several different types of controls. Major types of controls by timing are feedforward control, concurrent control, and feedback control. In addition, managers often need to use multiple control systems, systems that use two or more of the feedforward, concurrent, and feedback control processes and involve several strategic control points. Finally, control systems can be cybernetic or non-cybernetic, depending on the degree to which human discretion is part of the system.

Managers also have options regarding the approaches that they will use to implement controls. The three basic approaches are market, bureaucratic, and clan. Although market control has a somewhat more limited application in organizations than bureaucratic clan control, all are likely to be used to some extent. In choosing the managerial control approach, or style, that is most appropriate, managers need to consider their leadership style, organizational structural issues, the accuracy and reliability of measures, and subordinate orientation toward participation.

Managers often find it helpful to view the innovation process as "controlled chaos." Bureaucratic controls often create barriers to innovation. One solution to the problem of controlling major innovation efforts is to use the incrementalist approach, which relies heavily on clan control but also involves a phased set of plans and accompanying bureaucratic controls that begin at a very general level and grow more specific as the project progresses.

Potential dysfunctional aspects of control systems are behavioral displacement, game playing, operating delays, and negative attitudes. As a result, managers need to avoid engaging in either overcontrol or undercontrol. Effective control systems should be future-oriented, multidimensional, cost-effective, accurate, realistic, timely, monitorable, acceptable to organization members, and flexible.