Organizational Control

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Organizational Control

• Regulating Organizational Behavior so that
• Actual Performance Goals and Standards

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3 Types of Organizational Control

• Clan Control (Organizational Culture)
• Bureaucratic Control
• Financial Control

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• Purpose of Annual Report
• The number one corporate communiqué Sid Cato
  (Newsletter on Annual Reports, 2002)
• The annual report reflects the chief executive
  officers outlook, philosophy and vision of the
  organization Jerry Herring (Annual Report
  Design, 1990)
• . . . disclose information about the companys
  financial condition and business practices to
  help investors make informed investment
  decisions (S.E.C. 2002)

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Annual Report Dirt

• Required by SEC since Exchange Act of 1934
• For investors and potential investors
• 1959 Litton Industries designed first image
  report with pictures and stories to go with
  financial information
• Over 10,000 U.S. corporations required to issue
  annually
• Approx 50,000 organizations publish annually
• Typical length of good corporate report is 60
  pages
• Average cost 3.39
• Number produced (1.2/shareholder vs.
  1.9/shareholder before 1998)
• Production time 6 to 12 months
• 71 of reports have a theme

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Clan Control (Org Culture)

• Shared Values, Beliefs, Norms, and Patterns of
  Behavior Within an Organization
• - Language
• - Symbols
• - Stories
• Tradition

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Bureaucratic Control

• Comprehensive System of Rules Standards
• Standardize Inputs
• Standardize Conversion Activities
• Standardize Outputs
• Authority

7
Financial Control

• Monitor, Evaluate Reward Organizational
  Performance Through Financial Measures
• Volume Growth
• Transfer Pricing
• ROI
• Reciprocity

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Conclusion Use all 3 Types of Control

• Clan Control - Attract people who fit
  organization ? give them ownership
• Bureaucratic Control Make sure they know what
  to do how to do it
• Financial Control Align interests and properly
  motivate