Managerial Approaches To Implementing Controls
Regardless of whether the organization focuses control on inputs, production, or outputs, another choice must be made between different approaches tor control. There are three control approaches regarding the mechanisms managers will use to implement controls: market control, bureaucratic control, and clan control.
Market control involves the use of price competition to evaluate output. Managers compare profits and prices to determine the efficiency of their organization. In order to use market control, there must be a reasonable level of competition in the goods or service area and it must be possible to specify requirements clearly.
Market control is non appropriate in controlling functional departments, unless the price for services is set through competition and its representative of the true value of provided services.