Strategic Management: Formulation and Implementation

Market 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.

Bureaucratic Control

Bureaucratic control is the use of rules, policies, hierarchy of authority, written documentation, reward systems, and other formal mechanisms to influence employee behavior and assess performance. Bureaucratic control can be used when behavior can be controlled with market or price mechanisms.