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Chapter 6
The Essentials of Control

WHAT’S IN IT FOR ME?

Reading this chapter will help you do the following:
1. Understand what is meant by organizational control.
2. Differentiate among different levels, types, and forms of control.
3. Know the essentials of financial controls.
4. Know the essentials of nonfinancial controls.
5. Know the basics of lean control systems.
6. Craft a Balanced Scorecard for an organization or yourself.
This chapter helps you to understand the key elements of organizational
control, often seen in the form of internal systems and processes, as they relate to the
planning-organizing-leading-controlling (P-O-L-C) framework. While there are many
possible forms and formats, organizational controls should serve two basic functions.
First, they should help managers determine whether and why their strategy is
achieving the desired results. Second, they should be an early warning system in
cases where the organization is getting a little (or a lot) off track.
The P-O-L-C Framework

6.1 Organizational Control
LEARNING OBJECTIVES
1. Know what is meant by organizational control.
2. Recognize that controls have costs.
3. Understand the benefits of controls.
Up to this point you have probably become familiar with the planning,
organizing, and leading components of the P-O-L-C framework. This section
addresses the controlling component, often taking the form of internal systems and
process, to complete your understanding of P-O-L-C. As you know, planning
comprises all the activities associated with the formulation of your strategy, including
the establishment of near- and long-term goals and objectives. Organizing and
leading are the choices made about the way people work together and are motivated
to achieve individual and group goals and objectives.
What Is Organizational Control?
The fourth facet of P-O-L-C, organizational control, refers to the process by
which an organization influences its subunits and members to behave in ways that

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