Running Head: MANAGEMENT LEADERSHIP

Management Leadership
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Types of Control Systems

Control is a very critical facet of organizational management, and researchers have often
termed it as one out of the two most important ingredients of management. It refers to any
process that dictates an individuals activities towards the achievement of set goals in an
organization (Bateman-Snell, 2009). It is a channel through which managers ensure that
activities are done in an appropriate manner and as earlier planned. It is imperative to note that
lack of control, of ineffective application of control systems leads to unfathomable damages in an
organizations setup. It is therefore important for managers to recognize the various types of
control systems that exist, and choose the one that best suits the situation of ones organization,
fuelled by effective planning that serves to lay out the its entire framework.
There are basically three types of control systems in management, though this word when
used blankly may be rather confusing and ambiguous at best, since it has a plethora of
applications across all fields of operations. These forms include bureaucratic control, market

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control, and clan control. In bureaucratic control, there is commonly use of formal standards,
rules, legitimate authority, and hierarchy. Organizational setups that encourage worker autonomy
and independence usually promote this type of control, coupled with clear layout of tasks and
responsibilities. Market control, conversely, involves the use of prices, profit centers,
competition, and exchange relationships to assert its effect. This strategy is best suited in the
environments where tangible output can be produced, and the establishment of market between
parties is fairly possible. Lastly, the clan control system is the type of control that applies beliefs,
norms, culture, shared values, trust, and expectations to run the activities of an organization
(Bateman-Snell, 2009). This system believes that there is no standard and best way of doing
things, instead, employees are actively involved in decision-making, and are allowed to
frequently change rules and procedures wherever they absolutely deem fit.
Advantages and Disadvantages of the control systems
There are numerous advantages of control systems in business management. However,
for these systems to be fully successful in the management of an organization, managers should
be able to thoroughly examine and apply them appropriately, so as to have a smooth-running
business. The bureaucratic control system is applauded for its lack of confusion in situations of
decision-making, clear layout of expectations and standards of employees, and has direct and
clear rules and responsibilities of management (Ouchi, 2008). Since in the bureaucratic system,
decisions are made by the top management, and instructions are trickled down to the
subordinates, it is perfectly clear who is tasked with that overarching responsibility, and there is
virtually no confusion about what needs to be one at what level. Clarity in layout of
responsibilities and rules ensures individual accountability for things done, thus encouraging
each and every employee to work hard to deliver according to set objectives (Ouchi, 2008).
Market control, on the other hand, is flexible, since it relies on the forces of the market to
assert its effect in an organization. It is, however, quite unpopular since the market situation

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rapidly fluctuates, raising security concerns with this type of control. Positively, the managers
and employees of an organization are not tied down to a particular set of guidelines, but keep on
changing their strategies depending on their suitability in the market. Lastly, the clan control
system, which works best in a situation where no one is strictly tasked with the overall
responsibility of making decisions, provides the organization with opportunities for new ideas
and innovations (Ouchi, 2008). When a management incorporates employees into the decisionmaking process, it is more likely that they will be motivated to identify new innovative methods
of optimizing operations.
As earlier mentioned, these control systems are not devoid of drawbacks. Some of these
demerits stem out from inadequate application of the systems, or are part of their natural
attributes that must be manipulated by managers to be able to successfully achieve organizational
objectives. Bureaucratic control rids employees of working morale, and the freedom to develop
their innovative ideas. This is because providing worker independence and strict guidelines at the
same time usually makes employees feel undervalued, which actually works against businesses.
The market control system, though flexible, is prone to distortions due to its unreliability and
frequent nature of change in the market situation (Ouchi, 2008). Value of goods and services is
usually changing, and employees of an organization that is led by market control might suffer
from companies that are frequently being bought and sold off. The clan control system lacks a
direct and authoritative formal structure of management. This exposes an organization to
possible confusions in responsibilities and duties. Lack of a standard control method may make
employees to slack in their work, take advantage of the situation, or shrug responsibilities due to
lack of follow-up of tasks completed (Ouchi, 2008). It also robs an organization of the ability to
trace the occurrence of errors, and hold individual employees accountable for certain forms of
mischief (Bateman-Snell, 2009). On the other hand, performance appraisal also becomes

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difficult, since increase in productivity and performance cannot be laid on an individual, but on
the whole group.
How Southwest Airlines uses the steps of the control process
Southwest Airlines leadership is a very effective one, using a hands-on approach to
execute the duties of its management, which is actively involved in virtually every aspect of the
organizations business (Thomas, 2006). It is one of the organizations that appreciate and respect
the contribution of its employees, and allows them to generate useful ideas that can be applied to
optimize operations in the company. This is an exemplification of the clan control system, where
employees have the opportunity to use their talents in accomplishing various tasks assigned to
them. In this respect, creativity and innovativeness are values that are nurtured in the
Southwestern Airlines Company, and all employees at every level of management are
empowered through coaching and motivation to grow stronger and more loyal (Thomas, 2006).
In addition, the company has established strong strategies of a business-level nature, so as
to have continued success throughout the existence of the business. It has largely applied the
market control system, especially in the institution of the low-cost strategy that it has utilized to
reduce flight charges in tandem with the demands of a competitive market. It has also adopted
the no-frills approach, which focused on reducing boarding times (Thomas, 2006). The
bureaucratic control system, though not extensively applied, is evident in the management
mechanism of the organization, as there are some decisions that are made only by the top
management, and responsibilities for each employee are clearly defined upon hiring.
Differentiation between Management and Leadership
Though management and leadership usually go hand-in hand, key differences exist
between the two categories, which are usually made manifest when defining the roles of leaders
and managers. Managers usually administer, while leaders are innovators; managers maintain the
status quo, while a leader develops and disturbs the status quo; a manger focuses on structure and
systems, while a leader focuses on people; and a manager usually relies on control, while a

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leader inspires trust in people (Bateman-Snell, 2009). In Southwest Airlines, there is a clear
distinction between managers and leaders, as seen in conflicting application of control systems.
Inasmuch as there is room for innovation and generation of ideas, the company has strict
guidelines, rules and procedures exerted by the managers. The leaders are key agents for
employee freedom and creativity.
Roles Played by Managers and Leaders in Creating a Healthy Organizational Culture
Leaders and managers are very important figures in the Southwest Airlines Company, as
they play the roles of arbitrators for peace and conflict resolution in among the employees. They
set the rules, procedures and guidelines for carrying out tasks, and define the responsibilities of
each employee to avid clash of duties. They are also instrumental in setting goals and objectives
for the organization, which defines the focus of employees, and provide a roadmap for operations
in the company. They ensure that team members work synergistically, helping and correcting one
another to achieve a common purpose.
Effect of Globalization and Management across Boarders
Globalization has affected virtually every multinational corporation in the way businesses
and management issues are conducted. With the liberalization of the global market, competition
has heightened, and the Southwest Airlines has shifted its focus from a local perspective to
embrace cross-cultural mode of management, and to be equally competitive in the market. Such
strategies include adopting current technology and diversifying its human resource base among
others.
Strategies for Maintaining Healthy Organizational Culture
Training of employees on what to do and how to do it is one key step to ensuring a
healthy organizational culture. Secondly, maintaining a healthy and vibrant communication with
employees is a sure way of maintaining good relationship between the management and the staff,
and being on toes with current developments in the organization. Creating synergy among team

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members is also crucial in meeting company objectives, as team building is very vital in creating
respect among an organizations workforce.

References
Bateman-Snell, (2009). Management: Leading and collaborating in a competitive world, 8th ed.
Managerial controls, The McGraw-Hill Companies pp.570-607.
Ouchi, W. G. (2008). Markets, Bureaucracies, and Clans. Administrative Science
Quarterly, 25(1), 129-141.
Thomas, J. L., (2006). Southwest Airlines Corporation: A domestic industry and recommendation
for expansion. Retrieved on 5th May 6, 2013 from
http://trace.tennessee.edu/cgi/viewcontent.cgi?article=2019&context=utk_chanhonoproj