3.2.2 Controls Require Organization Structure

Since the purpose of control is to measure activities and take action to assure that plans are being accomplished, we must also know where responsibility of an enterprise for deviating from plans and taking action to make corrections, lies. Control of activities operates through people. But we can not know where the responsibility for deviations and needs action are, unless organizational responsibility is clear and definite. Therefore, a major prerequisite of control is the existence of an organization structure. The clearer, more complete, and more integrated this structure is, the more effective control action can be.