| Course | MGT 500 Management |
|---|---|
| Module | Module 7 |
| Paper type | MBA control design paper |
| Length | About 1,083 words, 6 pages |
| Format | APA 7 student paper |
| School | Aspen University |
| Program | Master of Business Administration |
| Updated | October 2026 |
Free sample paper for MGT 500 Module 7
Same Sales, Different Smoothies: Designing Controls for a Franchise System That Measured Only Revenue
Student Name
Master of Business Administration, Aspen University
MGT 500: Management
Instructor Name
Month Day, Year
Same Sales, Different Smoothies: Designing Controls for a Franchise System That Measured Only Revenue
Sonoran Blend, a composite franchisor based in Phoenix, Arizona, licenses its brand and recipes to the owners of sixteen smoothie and bowl shops in Phoenix and Tucson. Franchisees pay a 6% royalty on sales, report weekly sales through the point-of-sale system and receive an annual visit from the franchisor's operations manager. Sales have grown, and most shops meet their targets. But customer reviews increasingly mention smoothies that taste different from shop to shop, smaller portions and long waits. Two shops failed county health inspections last year. The franchisor's owners realize that their controls measure only revenue. This paper designs a better set.
Current Controls and Their Effects
Sales reports are the only regular control. Recipes are in a binder, but no one checks whether they are followed. Food safety depends on each franchisee. Franchisees have learned that the franchisor notices sales and little else, so some have cut portions to protect margins and others have substituted cheaper frozen fruit. The controls are working as designed; they were simply designed to see only one thing.
Types of Control
Merchant (1982) described three types of management control. Results controls hold people accountable for outcomes, such as sales or customer ratings, and work when desirable results can be defined and measured and people can influence them. Action controls specify or constrain what people do, through rules, checklists, reviews and physical limits, and work when the desirable actions are known and observable. Personnel controls rely on hiring, training and motivating the right people so that they act well on their own, and suit situations where neither results nor actions can be fully monitored.
When Each Fits
Ouchi (1979) argued that the choice among control approaches depends on two conditions: how well managers understand the process that turns inputs into outputs and how well outputs can be measured. When outputs are measurable, market-like controls based on results fit. When the process is well understood, bureaucratic controls based on rules and monitoring fit. When neither holds, organizations rely on clan controls, shared values and socialization. At Sonoran Blend, the process of making a smoothie is fully understood, which makes action controls such as recipes and checklists a strong fit, while customer experience is harder to measure directly.
The Trouble With Nonfinancial Measures
Ittner and Larcker (2003) studied companies that adopted nonfinancial measures, such as customer satisfaction or quality scores, and found that many chose measures because they seemed important rather than because they predicted results. Companies rarely tested whether the measures linked to future financial performance, and some rewarded managers on measures that turned out to have no such link. They recommended building a causal model of what drives results and testing it with data before tying rewards to the measures.
Control Design by Area
| Area | Main control type | Specific controls |
|---|---|---|
| Recipes and portions | Action | Pre-portioned fruit packs from approved supplier; recipe cards at each station; monthly mystery shop |
| Food safety | Action | Daily temperature logs in the point-of-sale system; quarterly franchisor inspection |
| Sales and profit | Results | Weekly sales and monthly food cost percentage compared across shops |
| Customer experience | Results, after testing | Mystery shop scores; online ratings; repeat visit rate from loyalty app |
| Franchisee capability | Personnel | Stricter selection of new franchisees; two-week training for all managers |
| Shared standards | Clan | Quarterly franchisee meeting to share practices and recognize top shops |
Why Not Simply Inspect More
One response would be to send the operations manager to every shop every week. With sixteen shops across two cities, that would cost a full-time position and still catch only what happens during visits. Merchant's framework suggests a mix: action controls built into the work itself, such as pre-portioned fruit packs that make the right portion the easy one, and temperature logs that the point-of-sale system requires before opening, cost less than inspection and work every hour the shop is open.
Franchisees' Interests
Franchisees own their shops and resist controls that feel like interference. The franchisor will explain that brand reputation is shared: when one shop serves a watery smoothie or fails an inspection, customers judge every shop. Pre-portioned packs will be priced at or below what franchisees now pay for fruit, so the control does not raise their costs. And the quarterly meetings give franchisees a voice in standards, a form of clan control that builds commitment rather than compliance alone.
Costs of the New Controls
Mystery shops will cost about $1,900 a month across the system, temperature logging software about $300 a month and quarterly inspections part of the operations manager's existing time. Against these costs, a single serious food safety incident could close shops and damage the brand across both cities.
Testing the Measures
Before mystery shop scores affect anything franchisees care about, the franchisor will compare six months of scores with each shop's repeat visit rate from the loyalty app. If higher scores go with more repeat visits, the measure will join the annual franchisee awards. If not, the franchisor will revise what the mystery shops assess.
Personnel Controls in Practice
Ouchi's clan control and Merchant's personnel controls matter most where monitoring is weakest, at 6 a.m. when no inspector is present. New franchisees will be selected partly on their record of following standards in previous businesses, and every shop manager will complete two weeks of training at the franchisor's flagship shop, practicing recipes until portions are consistent. Managers who train well become the shop's own control.
Monthly Review
The operations manager will review each shop's measures monthly and visit any shop with a failed temperature log, a mystery shop score below 80 or food costs more than three points below the system average, which can signal shrinking portions.
Acting on Results
Measures matter only if someone acts on them. A shop that fails a temperature log will receive a visit within 48 hours and a written correction plan. A shop whose food cost drops sharply will be asked to show its portioning. A shop that leads the system on mystery shop scores will host the next quarterly meeting and share its practices. Each response is set in advance, so franchisees know what follows from their numbers.
Conclusion
Sonoran Blend's revenue-only controls let quality drift because no one was watching it. Merchant's types and Ouchi's conditions match action controls to well-understood tasks, results controls to measurable outcomes and personnel controls to selection and training. Ittner and Larcker's research ensures that new measures are tested before they are rewarded.
References
Ittner, C. D., & Larcker, D. F. (2003). Coming up short on nonfinancial performance measurement. Harvard Business Review, 81(11), 88-95.
Merchant, K. A. (1982). The control function of management. Sloan Management Review, 23(4), 43-55.
Ouchi, W. G. (1979). A conceptual framework for the design of organizational control mechanisms. Management Science, 25(9), 833-848. https://doi.org/10.1287/mnsc.25.9.833
MGT 500 Module 7 instructions, in plain terms
Controlling is the management function at the center of Module 7 in Aspen's MBA course. The paper commonly asks students to evaluate an organization's controls and design a better set, using research on how controls work. Treat the classroom's Module 7 prompt as the authority; this example designs controls for one franchise system. Describe the current controls and what they produce, including unintended effects. Explain the types of control and the conditions that suit each. Match controls to each area of the business, explaining why each type fits. Include nonfinancial measures, and explain how you will test whether they matter. Say who will look at the numbers, how often, and what they will do when a shop falls short.
How the MGT 500 Module 7 example is put together
The paper opens with Sonoran Blend, whose sixteen franchised shops report weekly sales and pay royalties of 6%. The franchisor visits each shop once a year. Merchant's Sloan Management Review article describes results controls, action controls and personnel controls. Ouchi's Management Science article argues that market, bureaucratic and clan controls fit different combinations of output measurability and knowledge of the work process. Ittner and Larcker's Harvard Business Review article reports that companies often choose nonfinancial measures without linking them to strategy or testing them. A table assigns controls: action controls for recipes and food safety, results controls for sales and customer ratings and personnel controls through franchisee selection and training. Monthly reviews test whether mystery shop scores predict repeat visits before bonuses depend on them.
Where the marks sit in the MGT 500 Module 7 rubric
Control papers are judged on an accurate diagnosis of current controls, correct use of control frameworks and a design that matches controls to the nature of each activity. This example shows how revenue-only controls let quality drift. Merchant's framework sorts controls by what they target, and Ouchi's explains when each fits. Ittner and Larcker's research leads to testing new measures before rewarding them, so mystery shop scores earn their place only if they predict repeat visits over six months of data. The table makes the design concrete, the paper weighs inspection against built-in controls and the review process keeps the system honest.
MGT 500 Module 7 help from the desk
Control papers often add measures without asking what kind of control each activity needs. Match control types to whether results can be measured and whether the right actions are known. Another weakness is choosing nonfinancial measures because they sound good; test whether they predict results. Consider people controls, such as selection and training, which matter when monitoring is limited. Address costs, since inspections and systems take time. Explain who acts on results. Finally, avoid measuring so much that no one knows what matters most. Consider the interests of the people being controlled, especially when they own their units.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official Aspen University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
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MGT 500 Module 7 questions, answered
What does MGT 500 Module 7 usually ask for?
Aspen's MGT 500 covers controlling in this module, so an MBA paper evaluating and designing an organization's control system is typical. Read your classroom prompt.
What are results, action and personnel controls?
Merchant's three types: results controls reward outcomes, action controls specify or restrict what people do and personnel controls rely on selecting, training and motivating the right people.
When should a manager use each type of control?
Ouchi argued that the choice depends on how well outputs can be measured and how well the work process is understood.
Where can I find a free MGT 500 Module 7 sample paper?
The example above designs controls for a smoothie franchise that measured only sales, matching control types to recipes, food safety and customer experience.
Why test nonfinancial measures?
Ittner and Larcker found that many companies choose nonfinancial measures without checking that they predict financial results, which can reward the wrong things.