Chapter 8 – Control, Change, and Entrepreneurship
What Is Organizational Control?
Structure alone does not provide the incentive or motivation for people to behave in ways that help achieve
organizational goals.
Controlling: the process whereby managers monitor and regulate how efficiently and effectively an
organization and its members are performing the activities necessary to achieve organizational goals. (Does it
work as intended? How could it be improved?)
The Importance of Organizational Control
Controlling can help managers:
• Determine how efficiently they are using their resources
• Measure the quality of goods and services they produce
• Find ways to increase employees’ performance
• Make their organizations more responsive to customers
• Raise the level of innovation in an organization
Plus, when employees know they are being monitored, they have an incentive to perform better.
Control Systems and IT
Control systems: Formal target-setting, monitoring, evaluation, and feedback systems that provide managers
with information about how well the organization’s strategy and structure are working.
Effective control systems alert managers when something is going wrong and give them time to respond to
opportunities and threats. At each stage in the process of transforming inputs into finished goods/services
there are control and information systems.
An effective control system has three characteristics:
• It is flexible enough to allow managers to respond as necessary to unexpected events
• It provides accurate information about organizational performance
• It gives managers information in timely manner (not outdated info)
Feedforward control: Control that allows managers to anticipate problems before they arise (at the input
stage).
Concurrent control: Control that gives managers immediate feedback on how efficiently inputs are being
transformed into outputs so managers can correct problems as they arise (at the conversion stage → Heart of
the problem to increase quality).
Feedback control: Control that gives managers information about customers’ reactions to goods and services
so corrective action can be taken if necessary (at the output stage → Number of customers returns or
defective products that are being produced, increases/decreases in sales).
Three types of control:
Input stage → Conversion stage → Output stage
Feedforward control → Concurrent control → Feedback control
What Is Organizational Control?
Structure alone does not provide the incentive or motivation for people to behave in ways that help achieve
organizational goals.
Controlling: the process whereby managers monitor and regulate how efficiently and effectively an
organization and its members are performing the activities necessary to achieve organizational goals. (Does it
work as intended? How could it be improved?)
The Importance of Organizational Control
Controlling can help managers:
• Determine how efficiently they are using their resources
• Measure the quality of goods and services they produce
• Find ways to increase employees’ performance
• Make their organizations more responsive to customers
• Raise the level of innovation in an organization
Plus, when employees know they are being monitored, they have an incentive to perform better.
Control Systems and IT
Control systems: Formal target-setting, monitoring, evaluation, and feedback systems that provide managers
with information about how well the organization’s strategy and structure are working.
Effective control systems alert managers when something is going wrong and give them time to respond to
opportunities and threats. At each stage in the process of transforming inputs into finished goods/services
there are control and information systems.
An effective control system has three characteristics:
• It is flexible enough to allow managers to respond as necessary to unexpected events
• It provides accurate information about organizational performance
• It gives managers information in timely manner (not outdated info)
Feedforward control: Control that allows managers to anticipate problems before they arise (at the input
stage).
Concurrent control: Control that gives managers immediate feedback on how efficiently inputs are being
transformed into outputs so managers can correct problems as they arise (at the conversion stage → Heart of
the problem to increase quality).
Feedback control: Control that gives managers information about customers’ reactions to goods and services
so corrective action can be taken if necessary (at the output stage → Number of customers returns or
defective products that are being produced, increases/decreases in sales).
Three types of control:
Input stage → Conversion stage → Output stage
Feedforward control → Concurrent control → Feedback control
