Control of business activity takes place at two levels – control from within the organisation and external control.
Internal control involves the creation of management systems to control business activity. For example, there will be control systems:
- for managing the consistency and quality of products coming off a production line
- for the management of waste and pollution
- for monitoring employee absence rates
- to ensure that the best candidates are recruited to a company, etc.
A control system involves the creation of programmes and activities, which operate automatically. In the same way that the thermostat on your central heating system may switch it off when the temperature in your house goes above a certain temperature, a business control system will seek to keep activities under control. For example, if the production system is creating faulty products, this might be detected by an ‘electronic eye’. Once the controllers of the system are aware of the fault they can put it right.
There are a number of external controls which limit