The concepts of control that we’ve discussed are appropriate for organizational units that aren’t geographically distant or culturally distinct. But what about global organizations? Would control systems be different, and what should managers know about adjusting controls for national differences?

Methods of controlling employee behavior and operations can be quite different in different countries. In fact, the differences in organizational control systems of global organizations are primarily in the measurement and corrective action steps of the control process. In a global corporation, for instance, managers of foreign operations tend not to be closely controlled by the home office if for no other reason than that distance keeps managers from being able to observe work directly. Because distance creates a tendency for formalized controls, the home office of a global company often relies on extensive, formal reports for control. The global company may also use information technology to control work activities. For instance, Seven and i Holdings (Japan’s biggest retail conglomerate and parent company of the 7-Eleven convenience store chain in the United States) uses automated cash registers not only to record sales and monitor inventory, but also to schedule tasks for store managers and to track their use of the built-in analytical graphs and forecasts. If managers don’t use them enough, they’re told to increase their activities.29

Technology’s impact on control is most evident in comparisons of technologically advanced nations with countries that aren’t as technologically advanced. Organizations in technologically advanced nations such as the United States, Japan, Canada, Great Britain, Germany, and Australia use indirect control devices—particularly computer-related reports and analyses—in addition to standardized rules and direct supervision to ensure that activities are going as planned. In less technologically advanced countries, direct supervision and highly centralized decision making are the basic means of control.

Also, constraints on what corrective action managers can take may affect managers in foreign countries because laws in some countries do not allow managers the option of closing facilities, laying off employees, or bringing in a new management team from outside the country. Finally, another challenge for global companies in collecting data is comparability. For instance, a company’s manufacturing facility in Mexico might produce the same products as a facility in Scotland. However, the Mexican facility might be much more labor intensive than its Scottish counterpart (to take advantage of lower labor costs in Mexico). If top-level executives were to control costs by, for example, calculating labor costs per unit or output per worker, the figures would not be comparable. Managers in global companies must address these types of global control challenges.