Page 110 - E2 Integrated Workbook STUDENT 2018

Chapter 8

1.3 Types of organisational control

 Personal centralised control. This approach is likely to be found in small
owner-managed organisations where there is centralised decision-making by
the owner.

 Bureaucratic control. Controls will be based on formalised rules, procedures,
standardisation and hierarchy.

 Output control. This approach is a form of control that is based on the
measurement of outputs and the results achieved.

 Clan or Cultural control. This form of control requires the development of
employees’ strong identification with management goals, for example through
professional identification and acceptance of the values and beliefs of the
organisation.

1.4 Problems with formal control

In the past, control systems within organisations were formal in nature. The system
would rely on the required behaviour being specified in detail, with predictable
outcomes expected. This type of approach could be seen in the classical theories of
management where there was a high degree of specialisation, a hierarchical
structure of authority and each employee was tasked with very specific roles.

The problem with this type of approach to management control, like the
classical management theories, is that it fails to take account of the
human element. A focus on this type of control could lead to:

 Motivation problems. Lack of morale; little worker commitment;
no interchangeable skills (people were only trained to do one small
part of the job); high staff turnover.

 Quality problems. No overall responsibility; no intrinsic
satisfaction from work.

 Little understanding of people. People at work are not
necessarily rational, for example they do not always work harder
simply to earn more money.

Illustrations and further practice

Try case study style questions 1 and 2 from Chapter 8 of the Study Text.

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