how do control systems vary and when are different ones effective (in terms of such organisational contingencies as environment, size, technology, and goals)?
What's control system?
Managers at top can choose from three overall approaches for control. There approaches come from a framework for organizational control proposed by William Ouchi of the Univ. of California. He suggested three control strategies that organizations could adopt--bureaucratic, market and clan. Each form of control system uses different type of information. However, All three may appear simultaneously in an organization. And they require different contingent factors for fit choice.
Bureaucratic control:
As companies grow larger, they become more formalized and standardized. In order to guarantee efficient flow of information, rules and polices are developed through trial and error to regulate behaviours. Some degree of bureaucratic control is used in virtually every organization.
Bureaucratic control is the use of rules, policies, hierarchy of authority, written documentation, standardization, and other bureaucratic mechanisms to standardize behaviour and assess performance.
Exhibit#1: Management control as an interdisciplin...
English: Example of a balanced scorecard strategy ...
Balanced scorecardThe primary purpose of bureaucratic is to standardize and control employee behaviour.
A bureaucratic control system usually involves heavy behaviour control and deals with medium scope and variety of information. Such heavy behaviour control and deal are achieved with formalized rules and procedures. It usually deters subordinate involvement.
The application of bureaucratic control system in an organization requires no standard outputs, not necessary external benchmark of performance. When use bureaucratic control, the manager must know very well the work process he/she is managing. It requires a combination of organizational contingencies as routine technology, stable environment and large size.
Some normative control for uncertain areas like top management or R&D can be adopted to counteract the ineffectiveness of bureaucratic control system.
Market control system
Market control system occurs when price competition is used to evaluate the output and productivity...