 Control Environment.  Control Environment  The Control Environment of an organization is described as the foundation for the other components of internal control. It is the tone and culture of the organization upon which all other activities are conducted, and in most organizations it flows from the top. More specifically, how involved is management in setting realistic goals and then ensuring the organization has the resources to carry them out?  We can look at two contrasting styles. In the first, organizational goals fall from the sky with no involvement from those tasked with carrying out activities to reach objectives. Then results are either ignored altogether, or they are ignored until the end of the period; upon which you receive a nod of the head or a wag of the finger  depending on performance.  Management Objectives  On the other end of the spectrum, management sets goals and objectives using a corroborative process. Management regularly reviews progress and performance along with leading indicators to determine if objectives will be met, and if not, identify if any corrective action should be taken.  Sometimes there may be valid reasons for missing objectives: how well they are considered and absorbed into the organizational knowledge is also a function of the Control Environment. Participative management is one of the most important ways to set a proper environment or tone where using resources to reach objectives actually means something, not empty phrasing.  Control Systems for Process Improvement  