What are the three main types of control?
In organizations, control is essential to ensure that objectives are being met, resources are being utilized efficiently, and risks are being managed effectively. There are three main types of control that organizations typically employ to achieve these purposes: bureaucratic control, market control, and clan control.
Bureaucratic control is based on establishing rules, procedures, and policies to regulate behavior and decision-making within the organization. This type of control is often associated with hierarchical structures where authority flows from top management down to lower levels of the organization. By setting clear guidelines and expectations, bureaucratic control helps to standardize processes, monitor performance, and maintain consistency across different functions and departments. However, it can also lead to rigidity, slow decision-making, and resistance to change if not implemented properly.
Market control, on the other hand, relies on market mechanisms such as competition, prices, and profit incentives to guide and influence behavior within the organization. This type of control is prevalent in industries where there is intense competition and where firms are primarily driven by market forces. Market control encourages efficiency, innovation, and responsiveness to customer needs by rewarding performance and penalizing underperformance. However, it can also foster individualism, short-term thinking, and unethical behavior if not balanced with other forms of control.
Clan control is based on creating a culture of shared values, norms, and beliefs within the organization to regulate behavior and promote collaboration. This type of control emphasizes employee engagement, teamwork, and trust as key drivers of performance and success. Clan control is often found in organizations that prioritize employee well-being, creativity, and long-term sustainability over short-term profits. While clan control can enhance employee motivation, loyalty, and commitment, it may also lead to complacency, resistance to change, and conflicts between organizational goals and individual interests.
In conclusion, each type of control has its strengths and limitations, and organizations must carefully consider the context, goals, and culture of their environment when choosing which form of control to implement. By combining elements of bureaucratic, market, and clan control, organizations can create a balanced control system that fosters accountability, agility, and resilience in today's dynamic business landscape. It is crucial for organizations to continuously evaluate and adapt their control mechanisms to stay competitive and achieve sustainable growth in the long run.