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Management systems: Behavior control and Output control Behaviour-control and output-control are opposing methodologies managers employ in control-systems. Organizational
by Southwest Airlines are management audits, finance control, behavior control and output management. Southwest Airlines is known for its innovative planning, unwavering
MANAGEMENT CONTROL IN A BUSINESS NETWORK: NEW CHALLENGES FOR ACCOUNTING MANAGEMENT CONTROL IN A BUSINESS NETWORK: NEW CHALLENGES FOR ACCOUNTING BY DR. ROLAND BARDY
in a study (Hitt et al., 1996) of the relationship of the market for corporate control, management control systems, and firm innovation. This study included both
Control 3 Output Control Availability and Precision of Predetermined Output Measures Low 2 Behaviour Control 4 Ritual Control (Aka Clan Control or Cultural Control)
Submitted by sean2evo on April 1, 2008
Category: Business
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Behaviour-control and output-control are opposing methodologies managers employ in control-systems. Organizational requirements are determined by size, goals and other variables. Control-systems are mechanisms “for adjusting course if performance falls outside acceptable boundaries” (Davidson & Griffin, 06), allowing adaptation to change. They include procedures for “monitoring, directing, evaluating and compensating employees”, and influencing behaviors with the objective of having the best impact on both firms and employees’ (Anderson & Oliver, 87).
Control-systems are divided into those monitoring outcomes, and those monitoring the individual stages of a process (behaviors), “many sales-force systems are a mix of behavior and outcome-based control”. Choosing a system is dependent on “the relative costs of measuring behavior versus outcomes and the various forms of uncertainty that creates risk in the environment” (Anderson & Oliver, 87). “Organizations can choose to screen employees at the gate, incur high screening and staffing costs, and then rely on output controls. Or, organizations can be less selective in choosing employees, and rely on behavior controls by investing heavily in monitoring and training systems” (Challagalla & Shervani, 97). Different systems have their own relative impacts on organizations.
Managers monitor employee behaviors, directing and evaluating based on subjective measures of abilities and activities; not just outcomes. The manager makes sure that employee input and behavior reflects his expectations. Results should be at a certain level, long term, if the employee is deemed to be following the defined behaviors of the firm. “To ensure cooperation the firm pays largely on a fixed basis (salary). The firm assumes risk to gain control” (Anderson & Oliver, 87). This attracts the risk-averters who are contented with a secure source of income and happy to follow direction and have...
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