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ACCY304-05%20intr%20controlsystems0 - Session5...

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Introduction to Control Systems Session 5 February 2, 2011 1 Department of Accountancy University of Illinois at Urbana-Champaign
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2 Control The problem of organization is the problem of  obtaining cooperation among a collection of  individuals or units who share only partially  congruent objectives What are the mechanisms through which an  organization can be managed so that it moves  towards its objectives? Department of Accountancy University of Illinois at Urbana-Champaign
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3 Ouchi’s Framework Ouchi proposes three mechanisms through which  organizations can seek to cope with the problem of  control Market Control Bureaucratic Control Culture / Clan Control The mechanisms themselves overlap in  organizations Department of Accountancy University of Illinois at Urbana-Champaign
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4 Market Control  Markets deal with the control problem through their  ability to precisely measure and reward individual  contributions Employees are rewarded in proportion to their contribution Permits each to pursue non-organizational goals, but  at a personal loss of reward Department of Accountancy University of Illinois at Urbana-Champaign
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5 Market Control  Disadvantage: Market control can be very efficient but only if strict  conditions apply Contributions need to be measurable Norm of reciprocity Department of Accountancy University of Illinois at Urbana-Champaign
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6 Bureaucratic  Control  Bureaucracies rely upon a mixture of close  evaluation with a socialized acceptance of common  objectives Explicit routines of monitoring Rules  Compliance Supervisors have the right to direct the effort of  subordinates on an  ad hoc  basis Department of Accountancy University of Illinois at Urbana-Champaign
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