CHAPTER 8

Organizational
Control and
Change

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 Chapter Outline

1. Definition of Controlling

2. Importance of control

3. Control Systems and IT

4. Control Process

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 Define Organizational Control

Control - The power to influence or

direct people’s behavior or the course of
events.
Organizational control - Managers
monitor and regulate how efficiently and
effectively an organization and its
members are performing the activities
necessary to achieve organizational
goals.
So, what to do during controlling?

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Setting standards, measuring actual
 The Importance of Controlling

• Assist the management process

• Deal with change or uncertainty
• Deal with complexity
• Deals with human limitations
• Help delegation and decentralization to
run smoothly

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 Control Systems and IT

Control systems
• Formal, target-setting, monitoring,
evaluation, and feedback systems
that provide managers with
information about whether the
organization’s strategy and structure
are working efficiently and
effectively

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 Figure 11.1 Three Types of
Control

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 Control Systems and IT

Feedforward control
• Control that allows managers to
anticipate problems before they arise
• Giving stringent product
specifications to suppliers in
advance

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 Control Systems and IT

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
Feedback control
• Control that gives managers
information about customers’
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reactions to goods and services so
 Control Process Steps

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 Step 1
Establish standards of performance, goals, or
targets against which performance is to be evaluated.

• Managers decide on the standards of performance, goals, or

targets that they will use in the future to evaluate the
performance of the entire organization or part of it.

Step 2
Measure actual performance.

• Managers measure outputs resulting from worker behavior

or measure the behavior themselves.
• The more non-routine the task, the harder it is to measure
behavior or outputs.

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 Step 3
Compare actual performance against chosen
standards of performance.

• Managers evaluate whether, and to what extent,

performance deviates from the standards of performance
chosen in step 1.

Step 4
Evaluate the result and initiate corrective action if the
standard is not being achieved.

• If managers decide that the level of performance is

unacceptable, they must try to change the way work
activities are performed to solve the problem.

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 The Control Process (4 of 4)

4. Evaluate the result and initiate

corrective action if the standard
is not being achieved.
• If managers decide that the level of
performance is unacceptable, they
must try to change the way work
activities are performed to solve
the problem.

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