Control Mechanisms

Four Types of Control Mechanisms

Control mechanisms are critical in evaluating performance, as well as monitoring performance of an organization.  These control mechanisms are people, quality, inventory, and costs, and organizations use them to operate at peak performance. 

Compare and Contrast Control Mechanisms

Quality control involves the use of procedures established and designed to check or regulate resource or system. People control is composed of formal rules and regulations, which establish authority. In addition, it regulate employees behavior and sets standards through policies, rules, written documentation, hierarchy of authority, reward system and other formal mechanisms necessary to influence the performance of employees.  Code of business conducts and audits are examples of people control systems, which are applied to influence employees’ performance. Costs controls are used to adjust activities through competition, analyses of profits and loss, as well as conversion of economic information. Such examples include budgets, cash flow statements, marketing research and sales analysis (Bradach & Eccles, 1989).  People control embodies beliefs, cultural values, corporate culture, traditions, shared values, informal relationships and professional standards to aid organizations in controlling behavior and attaining organizational goals. Work hours and dress style are some of the few example of people control mechanism, which are evident in successful Japanese firms. Most Japanese corporations operate as a family because of their shared values, a strategy that is more team centered and successful addresses problems as a team. Since the people control is invisible, it importance is usually underestimated (Cardinal, 2001).

Positive and Negative Reactions to the Use of Mechanism Controls

The Red Cross is reliant on its extensive chapter network, which allows immediate response to disasters. Each chapter has an independent financial system combined with a control structure. A drawback to this financial system is that, the national leadership lacks a real-time visibility of transaction activity and cash. In addition, such systems are managed by people with varying levels of financial expertise. They derive no economies of scale, cannot communicate with each other and non-transferable. According to Burton & Obel (1980), the many divergent and diverse financial system of the Red Cross frustrate efforts of making accurate budget assessment and forecasts. At the same time, the requirement of internal reporting imposes an additional burden on the field and national sector units of the Red Cross (Burton & Obel, 1980).

Background checks are critical in assessing criminal history of person volunteering purposely to assist the organization.  However, the control is quite costly and on restricted to the paid staffs. Other procedures of control, such as the requirement that ensure a shelter is supervised by more than one person, transparency in mailing activity and the requirement that a document must contain two signatures and publication of concern connection hotline are some of the approaches for  mitigating any risks (Cardinal & Long, 2002a).

In conclusion, control mechanisms include people, quality, inventory, and costs, and organizations use them to operate at peak performance. Bradash and Eccles argue that, these controls weaknesses leave the organization vulnerable to waste, fraud and related criminal wrong-doing. It is necessary for the Red Cross to address such deficiencies to peak its performance. Some of the proposed changes include risk-based background checks to protect assets of the organization and safety of the resident in the shelters. Further it should encourage whistleblowers to report allegations of potential waste, fraud, wrong-doing and abuse through standardization of training module, which staff and volunteers receive, regarding the use and access of hotline. The Red Cross should frequently enroll external experts to conduct audits and assessment of hotline since it is the only means of reporting malpractices and strengthening background checks (Bradach & Eccles, 1989).