Dell Inc. is currently one of the biggest companies in the world. They sell more systems more than any other computer company in our time. As of this writing, Dell currently ranks number 34 on the list of Fortune 500 companies, and their recent quarterly profits amounted to an estimated $58. 2 Billion dollars. Moreover, Dell has more than 90,000 employees worldwide. Because Dell is very successful, it would be helpful for us to study the four control mechanisms that are used within their company. We will also discuss the positive and negative effects of each control mechanism.
The first control mechanism on our list is called feedback control. This type of control attempts to gather performance data by using different kinds of feedback channels. This performance data or information may come from the direct evaluation and observation of field supervisors. The information may also be gathered through the use of surveys, reports and data submitted by employees themselves. As soon as performance data are gathered and submitted to management, they make the necessary feedback by doing corrections, recommendations and plans of action.
One of the strengths of the feedback control system is that it provides a wider range of control. It ps the entire company population and focuses on the performance of the entire firm’s population. However, it also has negative effects. Supervisors may tend to impress the management by submitting false information that indicates extraordinary performance, although in reality, the performance was low. Thus, by receiving false performance data, the management also makes wrong feedback.
Bureaucratic control, meanwhile, puts a stress on hierarchies, positions and specific authority within the company. The chain of command is strictly followed. It also adheres to strict rules and policies. Although this type of control may seem rigid, it is proven very helpful to Dell because in this company, tasks are certain and there are many jobs where tasks are independent. By learning to mind their own business, they are made aware of the jurisdiction of their job description and focus solely on their work. Strict company policies also encourage uniform behaviors within the company.
The negative effect is that there is a great possibility of heightened office politics as employees tend to seek higher positions, and therefore, more power and control over others. Those with low positions but high intelligence may also tend to bypass their lesser intelligent superiors. Market control is another form of control mechanism used by Dell. In market control, the management uses market trends as the basis of overall control. Important market factors such as prices, competition, worldwide economy, and relationships with other firms are carefully analyzed.
The management then makes detailed plans of action based on those market trends. The major strength of market control is that it is a reliable way of gathering performance data. Market trends are presented as facts and they reflect the genuine output of the company. Thus, the company is able to make detailed courses of action and control based on reliable information. One weakness of this control mechanism is the rapid change of market trends. This rapid change may cause the company to change their plans frequently. The last control mechanism in our list is bureaucratic control systems.
Progress is rigidly tracked, observed, and measured. This progress measurement information is used to plan future performance and achieve major company goals. Discrepancies are filtered by the management and if needed, effective revisions and variations of planned courses of action are given. This is a highly advantageous control mechanism because it provides management a good perspective of the company’s performance. One negative effect that may arise is that the management may become too focused on formal mechanisms that they forget to be flexible to the company’s needs.