Lecture 6: Control Systems

1
Lecture 6 Control Systems

• Why control systems
• Basic elements in control systems
• Problems of ineffective control systems
• Designing control systems
• https//www.youtube.com/watch?vyIKzsE6UHCM

2
Why Control Systems?

• Gap between organizational goals and individual
  goals
• Designed to increase the congruence (area of
  overlap in Figure 9-1)
• Premise?

3
Basic Elements in Control Systems

• Set up standards
• Measure actual performances
• Find out differences between standards and actual
  performances
• Minimize the differences?

4
Problems of Ineffective Control Systems

• Rigid bureaucratic behavior (wrong assumptions)
• Selective attention to multiple standards (wrong
  focus)
• Strategic measurementship (wrong manipulations)

5
Designing Control Systems

• Output (quantitative data) v.s. behavior
  (qualitative data) standards
• Span of control ( of subordinates)
• Number of standards (criteria)
• Size of unit (group work)
• Frequency of monitoring and feedback

6
Two Alternatives to Control Systems

• Internal Markets (uses prices)
• Clan Organization (uses trust and common values)

7
Review Questions

• Explain why control systems are necessary
• Understand the basic elements in control systems
• Understand potential problems of ineffective
  control systems
• Understand how to design an effective control
  system

8
Homewok6

• Provide guidelines for creating a good control
  system by considering the following potential
  problems we discussed in class
• Rigid bureaucratic behavior
• Selective attention to multiple standards
• Strategic measurementship