Control Mechanisms Paper

Essay by iggymac2007University, Bachelor'sA, March 2008

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Organizational, business and individual systems developed by a corporation whether applicable company wide or tailored to specific segment of the corporation are considered control mechanisms. These mechanisms are elemental forces crucial in keeping a company focused on its progress and performance. This paper will identify four types of control mechanisms used by Starbucks, and then determine its effectiveness along with the positive and negative reactions, and the impact of these controls to the four functions of management.

Control mechanisms are ways "to seek compliance with established plans, standards, quality criteria, and in conformance with organizational goals and values. Control mechanisms are both enabling…and constraining." (Malhotra, 1997). The steps to designing control mechanisms are to establish performance standards, measure performance against the standards, and make corrective actions for unfavorable results (University of Phoenix, 2007).

Starbucks' uses budget control mechanisms as a way to discover and eliminate waste thus lowering store-opening cost.

Financial controls are used in Starbucks' decision to lease property as oppose to purchasing real estate. Quality controls are used in securing top-notch coffee beans. Market control mechanisms are used in Starbucks' store expansion strategy. Purpose is to select a city and use it as a hub for future smaller spoke stores.

Starbucks' four control mechanisms have proven to be effective by ensuring the company's continual growth. Starbucks uses a budget control to manage waste and eliminate cost in its stores. To help achieve a waste reduction, Starbucks offered a $.10 discount to customers who would use a commuter mug. In 2003, customers used a commuter mug 13.5 million times. This simple action eliminated 586,800 pounds of paper in community landfills. In addition, Starbucks has agreed to donate $.05 for every Ethos bottle of water sold. The donation goes towards the Ethos Water Fund which...