Convenience

control
The regulation of
organizational
activities in such a
way as to facilitate
goal attainment
426
Part 5:
Controlling
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For example, FedEx has a performance goal of delivering 99.9 percent of its packages on
time. If on-time deliveries fall to, say, 99.6 percent, control systems will signal the problem
to managers so that they can make necessary adjustments in operations to regain the target
level of performance. An organization without effective control procedures is not likely to
reach its goals—or, if it does reach them, to know that it has!
The Purpose of Control
As Figure 14.1 illustrates, control provides an organization with ways to adapt to environ-
mental change, to limit the accumulation of error, to cope with organizational complexity,
and to minimize costs. These four functions of control are worth a closer look.
Adapting to Environmental Change
In today’s complex and turbulent business
environment, all organizations must contend with change.
2
If managers could establish
goals and achieve them instantaneously, control would not be needed. But, between the
time a goal is established and the time it is reached, many things can happen in the
organization and its environment to disrupt movement toward the goal—or even to
change the goal itself. A properly designed control system can help managers anticipate,
monitor, and respond to changing circumstances.
3
In contrast, an improperly designed
system can result in organizational performance that falls far below acceptable levels.
For example, Michigan-based Metalloy, a 60-year-old, family-run metal-casting com-
pany, signed a contract to make engine seal castings for NOK, a big Japanese auto parts
maker. Metalloy was satisfied when its first 5,000-unit production run yielded 4,985
acceptable castings and only 15 defective ones. NOK, however, was quite unhappy with
this performance and insisted that Metalloy raise its standards. In short, global quality
standards in most industries are such that customers demand near perfection from
their suppliers. A properly designed control system can help managers like those at
Metalloy stay better attuned to rising standards.