“Recent organizational approaches to control (e. g., Ouchi 1979) suggest two underlying control strategies. On the one hand, control can be accomplished through performance evaluation. Performance evaluation refers to the cybernetic process of monitoring and rewarding performance. This strategy emphasizes the information aspects of control. Namely, to what degree can the various aspects of performance be assessed? Alternatively, control can be achieved by minimizing the divergence of preferences among organizational members. That is, members cooperate in the achievement of organizational goals because the members understand and have internalized these goals. This strategy emphasizes people policies such as selection, training, and socialization.
The two control strategies are interrelated. An organization can tolerate a work force with highly diverse goals if a precise evaluation system exists. In contrast, a lack of precision in performance evaluation can be tolerated when goal incompatibility is minor (Ouchi 1979). The choice between the two is driven by the ease of performance evaluation”

—  Kathleen M. Eisenhardt

Source: "Control: Organizational and economic approaches," 1985, p. 135

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Kathleen M. Eisenhardt 4
American economist

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