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MGT 330 Week 5 Learning Team Assignment Control Mechanisms Paper

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Control Mechanisms 1
Control Mechanisms
University of Phoenix
MGT/330
22 February 2010

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Control Mechanisms 2
Control Mechanisms
Business control systems, although sometimes complex in practice, are quite
straightforward in concept. Control systems are designed and implemented as a means to
control resources and to ensure that employees act in a manner that is beneficial to their
organization. Effective managers can use control systems as a tool to make sure activities are
carrying on as planned. Our restaurant for this topic is Yard House, a small restaurant chain
known for its excellent food and large selection of draft beers. The Yard House implements
control functions like budgetary, financial, market, and clan.
Budgetary control is a common control and in general, can be implemented into any
organization including the Yard House. “Budgetary control is the process of finding out what’s
being done and comparing the results with the corresponding budget data to verify
accomplishments or remedy differences. Budgetary control commonly is called budgeting
(Thomas S. Bateman, 2009).” It is important for a small business like a restaurant to establish a
budget in order to track progress and measure financial health. A sales expense budget sheet
provides expected sales, estimated expenses, and a profit estimate. This is a common document
associated with budgetary control. Financial controls are similar to budget controls in that both
controls help an organization assess financial heath and track progress. The Yard House uses
financial control balance sheets as well as profit and loss statements to measure organizational
performance.
The previous two control elements are examples of Bureaucratic control mechanisms
that guide an organization via a mechanical viewpoint. Although formal bureaucratic control
systems are perhaps the most pervasive in organizations (and the most talked about in
management textbooks), they are not always the most effective. Market controls and clan
controls may both represent more flexible, though no less potent, approaches to regulating
performance (Thomas S. Bateman, 2009).”
“Market controls involve the use of economic forces—and the pricing mechanisms that
accompany them—to regulate performance. The system works like this: in cases where output
from an individual, department, or business unit has value to other people, a price can be
negotiated for its exchange (Thomas S. Bateman, 2009).” In short, when the Yard House
utilized market control they looked at the price of a good, employee compensation, and
company performance, all measured by the analysis of the economy.
Clan control affects an organization positively when employees are empowered, and a
culture that upholds high standards and established integrity. Clan control involves creating

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