control

1. Management process in which the (1) actual performance is compared with planned performance, (2) difference between the two is measured, (3) causes contributing to the difference are identified, and (4) corrective action is taken to eliminate or minimize the difference.

2. Device or mechanism installed or instituted to guide or regulate the activities or operation of an apparatus, machine, person, or system.

3. Ownership of controlling shares in a firm.

Stock options are inevitably tied to the overall performance of a corporation. Logically, therefore, they should be awarded only to those managers with overall responsibility. Managers with limited areas of responsibility should have incentives that pay off in relation to results under their control. The .350 hitter expects, and also deserves, a big payoff for his performance -- even if he plays for a cellar-dwelling team. And the .150 hitter should get no reward -- even if he plays for a pennant winner. Only those with overall responsibility for the team should have their rewards tied to its results.

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