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Controlling Notes (Ch 8) Topic 4 Lecture:ControllingManagement control is a key function in an organization. It is the structure and the process whereby an organization tries to implement its strategic goals. The purpose of control is to achieve efficient use of resources in order to attain organizational effectiveness. For a commercial organization this involves meeting the demands on profitability set by the financial markets. Many people assert that as the nature of organizations has changed, so must the nature of management control. Some people go so far as to claim that management shouldn't exercise any form of control whatsoever. Some people even react strongly against the phrase "management control". The word itself can have a negative connotation, e.g., it can sound dominating, coercive and heavy-handed. It seems that writers of management literature now prefer use of the term "coordinating" rather than "controlling". Regardless of the negative connotation of the word "control", it must exist or there is no organization at all. In its most basic form, an organization is two or more people working together to reach a goal. Whether an organization is highly bureaucratic or changing and self-organizing, the organization must exist for some reason, some purpose, some mission (implicit or explicit) -- or it isn't an organization at all. The organization must have some goal. Identifying this goal requires some form of planning, informal or formal. Reaching the goal means identifying some strategies, formal or informal. These strategies are agreed upon by members of the organization through some form of communication, formal or informal. Then members set about to act in accordance with what they agreed to do. They may change their minds, fine. But they need to recognize and acknowledge that they're changing their minds. This form of ongoing communication to reach a goal, tracking activities toward the goal and then subsequent decisions about what to do is the essence of management coordination. It needs to exist in some manner -- formal or informal. The following are rather typical methods of coordination in organizations. They are used as means to communicate direction and guide behaviors in that direction. The function of the following methods is not to "control", but rather to guide. If, from ongoing communications among management and employees, the direction changes, then fine. The following methods are changed accordingly.
Note that many of the following methods are so common that we often don't think of them as having anything to do with coordination at all. No matter what one calls the following methods -- coordination or control -- they're important to the success of any organization.