11.4 strategic control and reward systems

input controls

mechanisms of strategic control and reward system that seek to define and direct employee behavior through explicit and codified rules and standard operating procedures that are considered prior to value creating activities.

output controls

seek to guide employee behavior by defining expected results but leave the means to reach them open.

strategic control and reward systems

the third portion of designing for a competitive advantage. a building block of organizational design and is internal governance mechanisms put in place to align the incentives of principals to agents.

organizational culture

a strong motivator and control system. norms are critical. remember company may depend on group overall productivity so peer control is big. values and norms provide ways to address unpredictable or irregular situations.

traits of output controls

use these types of controls more when factors depend on relation between effort and expected performance. better used when firm focuses on single business or unrelated diversification as collaboration is discouraged. creates work-only environ. intrinsic motivation focus.

types of input controls

used to define the way to reach a goal to get a predictable outcome. budgets for example. standard operating procedures and policies.