1 Define organizational control, and describe the four steps of the control process.

1. What is Organizational Control?
   Controlling is the process of monitoring and regulating the efficiency and effectiveness of workers.
   1. The importance of organizational control – control processes can improve innovation in an organization.
   2. Control systems and IT – control systems monitor and evaluate whether or not the organization is functioning efficiently and effectively.
      1. Feedforward control – tries to anticipate problems before they occur.
      2. Concurrent control – gives managers immediate feedback about the efficiency of the organization.
      3. Feedback control – provides information about customers' reactions to goods and services sold by the organization.
   3. The control process: four steps
      1. Set standards of performance
      2. Measure actual performance
      3. Compare actual performance to the standards of performance
      4. Evaluate the result and perform corrective action

2 Identify the main output controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees

2. Output Control
   1. Financial measures of performance
      1. Profit ratios – ROI and Gross profit margin
      2. Liquidity ratios – current ratio
      3. Leverage ratios – debt-to-assets
      4. Activity ratios – measure the value created from the assets
   2. Organizational goals – the best goals are specific and difficult to achieve
   3. Operating budgets – how managers plan to use the organization's resources
      1. Cost (expense) budgets – a fixed budget for the resources of the organization
      2. Revenue budget – an attempt to maximize sales
      3. Profit budget – the difference between revenues and expenses
   4. Problems with output control – profit can be increased either by increasing sales or by reducing expenses.

3 Identify the main behavior controls, and discuss their advantages and disadvantages as means of coordinating and motivating employees

3. Behavior Control
   1. Direct supervision – the most immediate and most powerful type of behavior control.
   2. Management by objectives (MBO) – a system for evaluating subordinates
      1. Set specific objectives
      2. Managers and subordinates agree on the subordinates' objectives
      3. Managers and subordinates periodically review progress
   3. Bureaucratic control – a detailed system of rules and standard operating procedures (SOPs) that regulate the behavior of workers
   4. Problems with bureaucratic control – it is much easier to set up a rule than to discard it once it is outdated and unnecessary; rules can inhibit creative problem-solving.

4 Explain the role of clan control or organizational culture in creating an effective organizational architecture.

4. Organizational Culture and Clan Control
   Organizational culture -- the shared beliefs and values that influence how workers work together.
   Clan control – control of workers by shared standards of behavior.
   1. Adaptive cultures versus inert cultures
      1. Adaptive culture – controls workers' attitudes and behavior.
      2. Inert culture – values that do not motivate workers anymore

5 Discuss the relationship between organizational control and change, and explain why managing change is a vital management task.

5. Organizational Change
   Organizational change attempts to move the organization from its present state of operations toward some desired future state of operations.
   1. Assessing the need for change – all aspects of the organization are candidates for change.
   2. Deciding on the change to make – what is the ideal future organization?
   3. Implementing the change
      1. Top-down change – top managers decide what changes are needed and try to implement these changes.
      2. Bottom-up change – managers at all levels work together to develop a plan for changing the organization.
   4. Evaluating the change – has the change improved the organization?