Strategic Management: Formulation and Implementation

Bureaucratic Control

Bureaucratic control is the use of rules, policies, hierarchy of authority, written documentation, reward systems, and other formal mechanisms to influence employee behavior and assess performance. Bureaucratic control can be used when behavior can be controlled with market or price mechanisms.

Clan Control

Clan control represents cultural values almost the opposite of bureaucratic control. Clan control relies on values, beliefs, corporate culture, shared norms, and informal relationships to regulate employee behaviors and facilitate the reaching of organizational goals.

Organization that use clan control require trust among their employees. Given minimal direction and standards, employees are assumed to perform well - indeed, they participate in setting standards and designing the control systems.