Control Mechanisms
Control Mechanisms Control mechanisms are necessary in order for any business to run smoothly and ensure that things are going as planned. These controls help the business determine the activity and direction of its employees in a manner that helps the company meet its goals (Bateman & Snell, 2007). There are three basic types of controls: bureaucratic, market, and clan. Bureaucratic control basically consists of the formal rules and regulations that establish authority, set standards, and regulate behaviors (Bateman & Snell). Market control regulates activities by examining the competition, analyzing profit and loss, and utilizing economic information (Bateman & Snell). Clan control differs from the previous two controls in that there are no formal rules, regulations, or analysis. Clan control functions under the assumption of common goals, values, and trust among individuals and the organization (Bateman & Snell). Like most businesses, the Coca-Cola Company has a system of control mechanisms in place to help guide the activities of its employees. One bureaucratic control mechanism that is utilized by Coca-Cola is an audit. Coca-Cola’s Audit Committee Charter is responsible for ensuring the integrity of financial statements, overseeing internal financial controls, and evaluating the company’s internal audit function (The Coca-Cola Company, 2008). Another bureaucratic control is the Code of Business Conduct, which guides the actions of the employees in a manner that is consistent with the company’s values. “The Code helps our people do the right thing and play by the rules wherever we operate around the world” (The Coca-Cola Company, 2008). In addition to these bureaucratic controls, Coca-Cola also utilizes market and clan controls. One way the company uses market control is by breaking into smaller business units based on geography and product. For example, they have a North American business unit as well as a Bottling Investments business unit
References: Bateman, T.S., & Snell, S.A. (2007). Management: Leading and Collaborating in a Competitive World The Coca-Cola Company. (2007). Form 10-K for the Fiscal Year Ended December 31, 2007. Retrieved April 23, 2008, from http://www.thecoca-colacompany.com/investors/pdfs/ The Coca-Cola Company. (2008). Careers. Retrieved April 21, 2008, from http://www.thecoca- colacompany.com/careers/index.html. The Coca-Cola Company. (2008). Investors. Retrieved April 21, 2008, from http://www.thecoca-colacompany.com/ investors/governance/audit.html. The Coca-Cola Company. (2008). Our Company. Retrieved April 21, 2008, from http://www.thecoca-colacompany.com/ourcompany/business_conduct.html. Vance, N.R .(1999). The positive and negatives reactions of control. http:pennyc.com/ 504_site/chap6.htm.