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In the second part, the various types of controls available are identified.The last part discusses why the appropriate choice of controls is and should be different in different settings.
This advice usually includes a description of some type of measurement and feedback process: This focus on measurement and feedback, however, can be seriously misleading.
In many circumstances, a control system built around measurement and feedback is not feasible.
In other words, there is a lack of goal congruence.
Steps must often be taken either to increase goal congruence or to prevent employees from acting in their own interest where goal incongruence exists.
The following sections discuss the major control options.
In most situations, managers can avoid some control problems by allowing no opportunities for improper behavior. Computers and other means of automation reduce the organization's exposure to control problems because they can be set to perform appropriately (that is, as the organization desires), and they will perform more consistently than do human beings. Another avoidance possibility is centralization, such as that which takes place with very critical decisions at most organization levels.If a manager makes all the decisions in certain areas, those areas cease to be control problems in a managerial sense because no other persons are involved.A third avoidance possibility is risk-sharing with an outside body, such as an insurance company.If nothing is done to protect the organization against the possible occurrence of undesirable behavior or the omission of desirable behavior caused by these personal limitations and motivational problems, severe repercussions may result.At a minimum, inadequate control can result in lower performance or higher risk of poor performance.An informed expert might judge that the control system in place is adequate because no major bad surprises are likely, but this judgment is subject to error because adequacy must be measured against a future that can be very difficult to assess.Fourth, better control is not always economically desirable.One important class of problems against which control systems guard may be called personal limitations.People do not always understand what is expected of them nor how they can best perform their jobs, as they may lack some requisite ability, training, or information.Like any other economic good, the control tools are costly and should be implemented only if the expected benefits exceed the costs.Good control can be achieved by avoiding some behavioral problems and/or by implementing one or more types of control to protect against the remaining problems.