Control Mechanisms in Corporations

Control Mechanisms in Corporations - Control Mechanisms in...

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Unformatted text preview: Control Mechanisms in Organizations Control's Control typically is defined as any process that directs the activities of individuals toward the achievement of organizational goals. This can include bureaucratic, market, or clan controls. Each division of control can also have subdivisions that fall within the controls realm (Bateman & Snell, 2004). Types of Control Bureaucratic Control Market Control Rules, regulations, formal authority to guide performance, budgets, statistical reports, performance appraisals. Works best when tasks are certain and workers are independent. Pricing mechanisms to regulate activities in organizations as though they were economic transactions. (Evaluated on the basis of profit and loss) Works best when tangible output can be identified and market can be established. Involves shared values by employees, culture, beliefs, expectations, trust, and the organizational goals. Works best with a "no one way is the best way" attitude and where employees are empowered to make decisions. Clan Control The Control Cycle 1. 2. 3. 4. Setting performance standards. Measuring performance. Comparing performance against the standards and determining deviations. Taking corrective action. USMC Controls Bureaucratic Control This organization uses the Uniform Code of Military Justice to maintain disciplinary control over its employees. There are also Marine Corps Orders that provide guidance for the performance of all tasks as well as dress codes for our uniforms. Each unit also has standard operating procedures that employees are required to follow. Market Control The Marine Corps does not offer goods and are services are not charged for so market control has little impact in this organization USMC Controls Clan Control Marine Corps values of Honor, Courage, and Commitment guide all employees lives. Currently empowering junior leaders with more decision making authority. The Marine Corps organizational culture is the major driver of the clan control that is used in this organization. Home Depot Control's Bureaucratic Controls Market Control Standard operating procedures Sales budget, Daily/Weekly/Monthly stats Performance reviews Profit and Loss reports Dealings with competition, prices, working with tangible items The Home Depot culture Shared values in the 8 Home Depot Values Clan Control Home Depot Control's Performance Appraisals Performance Discussion Tracking 90 day initial review, 6 month, 1 year Forms to monitor performance issues One step below a writeup Toyota Control's Toyota utilizes many different aspects of controls throughout the organization. One example: Market Control Utilizing Objective market analysis to control Quality and Productivity such as JD Powers for defects and The Harbor Report for labor hours per vehicle. Toyota Market Control Quality Quality J.D. Power Initial Quality Survey IQS Trend by Manufacturing Region 240 220 200 PPHV 180 160 140 120 100 1999 Problems per Hundred Vehicles Hyundai Japanese European Domestic Korean 2000 2001 2002 2003 2004 Productivity Harbour Report Sub-Compact Comparison Labor Hours Per Vehicle 35 30 25 HPV 20 15 10 5 GM Cavalier/Sunfire Honda Civic TMMC Corolla Dam/Chry Neon NUMMI Corolla/ Vibe Ford Focus GM Saturn 0 2003 2002 Source: Harbour & Associates Jo Ann Fabrics & Crafts Control's At JAS, our five managers use all three types of control: bureaucratic, market, and clan. Joann's 1 & 2 are responsible for implementing changes to the store, and making sure that day to day operations get completed. Pete is responsible for the scheduling and hiring of new team members. Judi helps run guest services. Cheryl is usually holding down the cutting counter. Lastly, it's everyone's responsibility to make sure that all guests feel welcomed and less overwhelmed at our new superstore. Jo Ann Fabrics & Crafts Control's Bureaucratic Control We have a black book with new policies that everyone must read, sign a paper acknowledging that they read it, and also must start adhering to a.s.a.p. We have a mandatory dress code: khaki/black/navy pants, a polo shirt with a color with/without a JAS logo on it, an apron if necessary, and white/black shoes. We have five managers that all middle and lower level employees must report to at any time. Market Control Our two biggest competitors are Michael's and AC Moore. We accept their coupons only on merchandise that they sale at their stores. We try to offer our merchandise at competitive prices. Clan Control All employees are expected to serve and inspire creativity in each customer All employees are expected to exceed customers' expectations by being knowledgeable and passionate about the merchandise at Jo Ann Fabrics and Crafts. All employees are expected to keep the store in excellent condition by keeping it well stocked with merchandise, clean and orderly, and by replacing items back where they belong onto their respected shelves (JoAnn Fabrics and Crafts, 2005). Effectiveness of these Control Mechanisms Diagnostic management control systems may contribute to operational effectiveness, but deter employee creativity with far reaching consequences for a company's competitiveness (Kimura & Mourdoukoutas, 2000, para. 5). Positive & Negative Reactions On the positive side, management control systems such as budget control or performance measures that set targets can assist employees to acquire and improve their skills and knowledge (Kimura & Mourdoukoutas, 2000, para. 5). On the negative side, such management control systems may discourage employee initiative (Kimura & Mourdoukoutas, 2000, para. 5). A positive reaction to performance appraisals and performance discussion tracking is allowing the associates and supervisors/management to be on the same page. A negative reaction to performance appraisals and performance discussion tracking is when the associates do not agree with the appraisal or discussion tracking that is occuring. Conclusion References Bateman, T., and Snell, S. (2004). Organizational Structure, Management: The New Competitive Landscape. [University of Phoenix Custom Edition etext] The McGrawHill Companies. Retrieved on November 2, 2005, from University of Phoenix, Resource, MTG 330 Management: Theory, Practice and Application Course Web site: JoAnn Fabrics and Crafts. (2005). JAS Jargon. Retrieved November 4, 2005, from Kimura, S., and Mourdoukoutas, P. (2000). Effective integration of management control systems for competing in global industries. European Business Review, 12(1), 41. Retrieved November 4, 2005, from ProQuest database. Harbour Report Press release (2003) New Benchmarks Established in the Harbour Report For Immediate Release Retrieved November 2, 2005, from The McGraw Hill Companies (2005) J.D. Powers and Associates Press Releases and Facts Retrieved November 2, 2005, from ...
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