The cycle of control includes setting strategic goals for departments or the orga¬nization as a whole, establishing metrics and standards of performance, comparing metrics of actual performance to standards, and correcting or changing activities as needed. Feedback control helps managers make needed adjustments in work activities, standards of performance, or goals to help the organization be successful. Complete the questionnaire in the “How Do You Fir the Design?” box to see how effective you are at setting goals.
Managers carefully assess what they will measure and how they define it. British Airways, for example, measures its performance in key areas of customer service because its strategy is to compete on superior service in an industry dominated by companies that compete on price. Thus, British Airways measures and controls areas of service that have the greatest impact on a customer's experience, including in-flight service, meal rating, baggage claim, and executive club membership.10 For pharmaceu¬tical companies such as Wyeth, getting more productivity from research and develop¬ment is a top priority, so Wyeth sets firm targets and measures how many compounds move forward at each stage of the drug development process. Most companies, like Wyeth and British Airways, use a number of different operational metrics to track performance and control the organization, rather than relying on financial measures alone. Managers track metrics in such areas as customer satisfaction, product qual¬ity, employee commitment and turnover, operational performance, innovation, and corporate social responsibility, for example, as well as financial results.
Management Control Systems
Management control systems are broadly defined as the formal routines, reports, and procedures that use information to maintain or alter patterns in organizational