Dr. Kenneth Merchant, professor of accounting at USC Marshall School of Business and author of the most popular textbook on Management Control Systems, explains the basics of how managers can best control for outcomes in this episode. He covers “action control,” where behavior is explicitly prescribed; “results control,” where the desirable outcome is specified and measured; and “personnel control,” where managers exercise the right to hire, fire, and to put individuals into particular roles.
Managers would benefit from understanding when to apply which of these controls in order to get the best outcomes. The concepts contained in this episode revolutionized the way that I thought about effective team management early in my career.
[I’ve edited this episode from its original version based on input from Alec Ramsay around structuring the episode in a way that introduces the topic more fully.]