There are three broad strategies for achieving organizational control. Describe these strategies and provide an example of each.

Question

What will be an ideal response?

Answer 1

Student examples will vary but should demonstrate an accurate knowledge of bureaucratic, market, and clan control. Managers can use three broad strategies for achieving organizational control: bureaucratic control, market control, and clan control. Bureaucratic control is the use of rules, regulations, and formal authority to guide performance. It includes such items as budgets, statistical reports, and performance appraisals to regulate behavior and results. Market control uses pricing mechanisms to regulate activities as though they were economic transactions. Business units are profit centers that trade resources (services or goods) with one another via such mechanisms. Managers who run these units are responsible for and evaluated according to profit and loss. Unlike the first two types, clan control (or cultural control) does not assume that the interests of the organization and individuals naturally diverge. Instead, clan control is based on the idea that employees share the values, expectations, and goals of the organization and behave and perform accordingly. When organizational members have common values and goals-and trust one another-formal controls are less necessary. Clan control is based on informal interpersonal processes influenced by culture, leaders, and teams (for example, group norms and cohesiveness).