Slide 4-0 HW Ch10: Organizational Control Organizational Control Regulating Organizational Behavior so that Actual Performance = Goals and Standards

Slide 4-1 HW Ch10: Organizational Control 3 Types of Organizational Control !Clan Control (Organizational Culture) !Bureaucratic Control !Financial Control

Slide 4-2 HW Ch10: Organizational Control Purpose of Annual Report “The number one corporate communiqué” – Sid Cato (Newsletter on Annual Reports, 2002) “The annual report reflects the chief executive officer’s outlook, philosophy and vision” of the organization – Jerry Herring (Annual Report Design, 1990)... “disclose information about the company’s financial condition and business practices to help investors make informed investment decisions” – (S.E.C. 2002)

Slide 4-3 HW Ch10: Organizational Control Annual Report Dirt !Required by SEC since Exchange Act of 1934 !For investors and potential investors !1959 – Litton Industries designed first “image” report with pictures and stories to go with financial information !Over 10,000 U.S. corporations required to issue annually !Approx 50,000 organizations publish annually !Typical length of good corporate report is 60 pages !Average cost = $3.39 !Number produced (1.2/shareholder vs. 1.9/shareholder before 1998) !Production time – 6 to 12 months !71% of reports have a theme

Clan Control (Org Culture) Shared Values, Beliefs, Norms, and Patterns of Behavior Within an Organization - Language - Symbols - Stories Tradition

Slide 4-5 HW Ch10: Organizational Control Bureaucratic Control !Comprehensive System of Rules & Standards !Standardize Inputs !Standardize Conversion Activities !Standardize Outputs !Authority

Slide 4-6 HW Ch10: Organizational Control Financial Control !Monitor, Evaluate & Reward Organizational Performance Through Financial Measures !Volume Growth !Transfer Pricing !ROI !Reciprocity

Slide 4-7 HW Ch10: Organizational Control BEN & JERRY'S IS DEDICATED TO the creation & demonstration of a new corporate concept of linked prosperity. Our mission consists of three interrelated parts. UNDERLYING THE MISSION is the determination to seek new and creative ways of addressing all three parts, while holding a deep respect for individuals inside and outside the company, and for the communities of which they are a part. Product To make, distribute and sell the finest quality all natural ice cream and related products in a wide variety of innovative flavors made from Vermont dairy products. Economic To operate the Company on a sound financial basis of profitable growth, increasing value for our shareholders, and creating career opportunities and financial rewards for our employees. Social To operate the Company in a way that actively recognizes the central role that business plays in the structure of society by initiating innovative ways to improve the quality of life of a broad community - local, national, and international. ©© Ben & Jerry's Homemade, Inc.

Slide 4-8 HW Ch10: Organizational Control Conclusion – Use all 3 Types of Control !Clan Control - Attract people who fit organization  give them ownership !Bureaucratic Control – Make sure they know what to do & how to do it !Financial Control – Align interests and properly motivate