The dictionary is telling you that in theory the answer is yes: observe=monitor and direct=control.
In practice, these terms may be used very specifically in documents from relevant domains, e.g. company law, branches of management theory, economics, regulatory/standards documentation etc. If the terms are known to be synonyms in your chosen domain then yes, you can substitute them. If they are not, this is more risky, and possibly downright wrong. Why do you want to do it?
My personal view in everyday language is that at a corporate level, monitoring and controlling are what management do. Supervision is more hands-off, and would be carried out by an independent supervisory body with powers to observe; they would only act exceptionally, e.g. if there were some breach - regulatory, financial, legal etc. - within their remit.