Essay On Internal And External Controls

The mission, vision and operating principles are keys in guiding, directing, and leading an organization. Organizations have changed throughout history; however, since the introduction of global markets, competition to reach and retain consumers increases daily. Therefore, management must breakdown those guiding principles into tangible, realistic and measurable goals and objectives. Managers must then orchestrate all areas within the organization to ensure its success. Managers must rapidly change (improve) and utilize functional tools to give the organization a competitive advantage or edge. Management must become adept to changing markets, consumer requirements, and concepts used to effectively and efficiently manage an organization.

“The control process gives managers the tools needed to effectively monitor progress towards an objective” (Satterlee 2013. p.74). There are basically two types of controls utilized by management: internal and external controls. “Internal controls generally can be classified into two categories: preventive or detective” (Satterlee, 2013. p75). As the names depict, preventive is used to ensure things do not happen unless desired and detective is described as determining what happened after it already occurred. Preventive is generally the best choice. Merchant states, “The need for controls over any particular behavior or operation within an organization depends very simply on the impact of that area on overall organizational performance” (Merchant, 1982, p. 48). External control is on the outside of the organization which may deal with polices, auditing and procedures to name a few. The organization has little-to-no control over many of external controls; however, managers must remain cognizant of their affect on the organization and plan for any

Therefore, organizations will greatly benefit by using the team concept for increased quality and efficiency. A Team is defined as, “... a small number of people who have complementary skills who are committed to a common purpose, set of performance goals, and approach for they hold themselves mutually accountable” (Satterlee, 2013.p81). The team must also have guidelines and controls to ensure they are achieving results. In the article, The Control Function of Management stated, “A good management control system stimulates action by spotting the significant variations from the original plan and highlighting them for the people who can set things right” (Merchant, 1982.p43). This control is utilized only when a team veers off course or is consistently not reaching its performance