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innovation? How are these priorities and opportunities deployed to work group
and functional-level operations throughout your organization to enable effective
support for their decision making? When appropriate, how are the priorities and
opportunities deployed to your suppliers, partners, and collaborators to ensure

organizational alignment?
3. How do you incorporate the results of organizational performance
reviews into the systematic evaluation and improvement of key processes?
Retrieved January 30, 2009, from http://www.quality.nist.gov.
The fifth area of benefit in organizational control is related to decentralized
decision making. Organization researchers have long argued that performance is best
when those people and areas of the organization that are closest to customers and
pockets of uncertainty also have the ability (i.e., the information and authority) to
[9]
respond to them. Going back to our McDonald’s example, you can imagine that it
would be hard to give a store manager information about her store’s performance and
possible choices if information about performance were only compiled at the city,
region, or corporate level. With store-level performance tracking (or, even better,
tracking of performance by the hour within a store), McDonald’s gives store
managers the information they need to respond to changes in local demand.
Similarly, it equips McDonald’s to give those managers the authority to make local
decisions, track that decision-making performance, and feed it back into the control
and reward systems.
KEY TAKEAWAY
This chapter introduced the basics of controls, the process by which an
organization influences its subunits and members to behave in ways that lead to
attaining organizational goals and objectives. When properly designed, controls
lead to better performance by enabling the organization to execute its strategy
better. Managers must weigh the costs and benefits of control, but some
minimum level of control is essential for organizational survival and success.
EXERCISES
1. What do properly conceived and implemented controls allow an
organization to do?
2. What are three common steps in organizational control?
3. What are some of the costs of organizational controls?
4. What are some of the benefits of organizational controls?
5. How do managers determine when benefits outweigh costs?

6.2 Types and Levels of Control
LEARNING OBJECTIVES
1. Know the difference between strategic and operational controls.
2. Understand the different types of controls.
3. Be able to differentiate between financial and nonfinancial controls.
Recognizing that organizational controls can be categorized in many ways, it is
helpful at this point to distinguish between two sets of controls: (1) strategic controls
[1]
and (2) management controls, sometimes called operating controls.

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