Management 8e. Robbins and Coulter

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(No Transcript)
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Learning Objectives

• You should learn to
• Define control
• Describe the three approaches to control
• Explain why control is important
• Describe the control process
• Distinguish among the three types of control
• Describe the qualities of an effective control
  system

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Learning Objectives (cont.)

• You should learn to
• Discuss the contingency factors that influence
  the design of an organizations control system
• Identify how controls need to be adjusted for
  cultural differences
• Explain how three contemporary issues - workplace
  privacy, employee theft, and workplace violence -
  affect control

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??What Is Control?

• Control
• the process of monitoring activities to ensure
  that they are being accomplished?? as planned and
  of correcting significant deviations
• control systems are judged in terms of how well
  they facilitate goal achievement
• market control - emphasizes the use of external
  market mechanisms to establish standards of
  performance??
• useful where products and services are distinct
• useful where marketplace competition is
  considerable
• divisions turned into profit centers and judged
  by the percentage of total corporate profits each
  contributes

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What Is Control? (cont.)

• Control
• bureaucratic control ????- emphasizes
  organizational authority
• relies on administrative rules, procedures, and
  policies
• depends on standardization of activities,
  well-defined job descriptions, and other
  administrative mechanisms
• clan control - behavior regulated by shared
  values, traditions, and other aspects of
  organizational culture
• dependent on individual and group to identify
  expected behaviors and performance measures
• found where teams are common and technology
  changes often

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Why Is Control Important?

• Control is the Final Link in the Management
  Process
• provides the critical link back to planning
• only way managers know whether organizational
  goals are being met
• Permits Delegation?? of Authority
• fear that employees will do something wrong for
  which the manager will be held responsible
• provides information and feedback on employee
  performance

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The Planning-Controlling Link
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The Control Process
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??The Control Process

• Background
• controlling is a three-step process
• assumes that performance standards already exist
• specific goals are created in the planning
  process
• Measuring
• How We Measure
• personal observation - permits intensive coverage
• Management By Walking Around (MBWA)
• drawbacks - subject to personal biases
• consumes a great deal of time
• suffers from obtrusiveness

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The Control Process (cont.)

• Measuring (cont.)
• How We Measure (cont.)
• statistical reports - numerical data are easy to
  visualize and effective for showing relationships
• drawbacks - not all operations can be measured
• important subjective factors may be ignored
• oral reports - includes meetings, telephone calls
• may be best way to control work in a virtual
  environment
• technology permits creation of written record
  from oral report
• drawbacks - filtering of information

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The Control Process (cont.)

• How We Measure (cont.)
• written reports - often more comprehensive and
  concise than oral reports
• usually easy to file and retrieve
• comprehensive control efforts should use all four
  approaches

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The Control Process (cont.)

• What We Measure
• what we measure more critical than how we measure
• control criteria applicable to any management
  situation
• employee satisfaction, absenteeism, and turnover
• keeping costs within budgets
• control system needs to recognize the diversity
  of activities
• some activities difficult to measure in
  quantifiable terms
• most activities can be grouped into some
  objective segments that can be measured
• when objective measures are not available, should
  rely on subjective measures

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The Control Process (cont.)

• Comparing
• determines the degree of variation between actual
  performance and standard
• acceptable range of variation - deviations that
  exceed this range become significant

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The Acceptable Range Of Variation
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The Control Process (cont.)

• Taking Managerial Action
• Correct Actual Performance - action taken when
  the performance variation is unsatisfactory
• immediate corrective action - corrects problems
  at once to get performance back on track
• basic corrective action - identifies reason for
  performance variation
• corrects the source of variation
• Revise the Standard - variance results from an
  unrealistic standard
• standard, not performance, needs correction
• troublesome to revise the standard downward

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Managerial Decisions in the Control Process
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Controlling for Organizational Performance

• What Is Performance?
• The end result of an activity
• What Is Organizational Performance?
• The accumulated end results of all of the
  organizations work processes and activities.
• Designing strategies, work processes, and work
  activities.
• Coordinating the work of employees

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Organizational Performance Measures

• Organizational Productivity
• Productivity the overall output of goods and/or
  services divided by the inputs needed to generate
  that output.
• Output sales revenues
• Inputs costs of resources (materials, labor
  expense, and facilities)
• Ultimately, a measure of how efficiently
  employees do their work.

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Organizational Performance Measures

• Organizational Effectiveness
• Measuring how appropriate organizational goals
  are and how well the organization is achieving
  its goals.
• Systems resource model
• The ability of the organization to exploit its
  environment in acquiring scarce and valued
  resources
• The process model
• The efficiency of an organizations
  transformation process in converting inputs to
  outputs
• The multiple constituencies??,? model
• The effectiveness of the organization in meeting
  each constituencies needs

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??Types Of Control

• Feedforward?? Control
• prevents anticipated problems
• most desirable type of control
• requires timely and accurate information that
  often is difficult to get
• Concurrent?? Control
• takes place while activity is in progress
• corrects problem before it becomes too costly
• best-known form is direct supervision

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??Types of Control (cont.)

• Feedback?? Control
• takes place after the activity is done
• problems may already have caused damage or waste
• the most popular type of control
• feedback may be only viable form of control
  available
• feedback has two advantages
• provides meaningful information on the
  effectiveness of planning
• can enhance employee motivation

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Qualities Of An Effective Control System
EFFECTIVE CONTROL SYSTEM
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Contingency Factors in the Design of Ctrl Systems
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??Tools for Controlling Organizational
Performance Financial Controls (contd)

• Economic Value Added (EVA,????? )
• ????????????????????????? (?????????)How much
  value is created by what a company does with its
  assets, less any capital investments in those
  assets the rate of return earned over and above
  the cost of capital.
• The choice is to use less capital or invest in
  high-return projects.

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Tools for Controlling Organizational Performance
Financial Controls (contd)

• Market Value Added (MVA,????? )
• The value that the stock market places on a
  firms past and expected capital investment
  projects
• ?????????(?????)??????????????
• If the firms market value (its stock and debt)
  exceeds the value of its invest capital (its
  equity and retained earnings), then managers have
  created wealth.

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Controlling Organizational Performance

• Balanced Scorecard?????
• A measurement tool that uses goals set by
  managers in four areas to measure a companys
  performance
• Financial, customer, internal processes(????),
  and people/innovation/growth assets(?-??-??)
• ??????????,??????????????????,????????????????????
  ,??????????????????????????????,?????????????????
  ,?????????????,?????(Outcome)???????(Performance
  Driver)???,?????????????,?????????????????????????
  ??,?????????????????,?????????????????????????????
  ?????????,???????????????

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Balanced Scoreboard

• ???????Robert Kaplan????????(Nolan Norton
  Institute)?DavidNorton?90???????????????????,???
  ?????????????????????????????????????????????
  ,??????????????????,??????????????????????????????
  ????????????????????(Financial)???(Customer)?????
  ??(Internal Processes)??????(innovation and
  Growth)?

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Information Controls

• Management Information Systems (MIS)
• A system used to provide management with needed
  information on a regular basis.
• Data an unorganized collection of raw,
  unanalyzed facts (e.g., unsorted list of customer
  names)
• Information data that has been analyzed and
  organized such that it has value and relevance to
  managers
• Famous MIS SAP, ??ERP

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Benchmarking of Best Practices

• Benchmarking????
• The search for the best practices among
  competitors or noncompetitors that lead to their
  superior performance.
• Benchmark the standard of excellence against
  which to measure and compare.
• A control tool for identifying and measuring
  specific performance gaps and areas for
  improvement.
• Case Study Haier Zhang Ruimin

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??Contemporary Issues in Control

• Cross-Cultural Issues??????
• The use of technology to increase direct
  corporate control of local operations
• Legal constraints on corrective?? actions in
  foreign countries
• Difficulty with the comparability of data
  collected from operations in different countries

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Contemporary Issues in Control (contd)

• Workplace Concerns??????
• Workplace privacy versus workplace monitoring
• E-mail, telephone, computer, and Internet usage
• Productivity, harassment, security,
  confidentiality, intellectual property protection
• Employee theft
• The unauthorized taking of company property by
  employees for their personal use.
• Workplace violence??
• Anger??, rage??, and violence in the workplace is
  affecting employee productivity.

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Contemporary Issues in Control (contd)

• Customer Interactions
• Service profit chain
• The service sequence from employees to customers
  to profit service capability affects service
  value which impacts on customer satisfaction
  that, in turn, leads to customer loyalty in the
  form of repeat business (profit).
• Corporate Governance
• The system used to govern a corporation so that
  the interests of the corporate owners are
  protected.
• Changes in the role of boards of directors
• Increased scrutiny of financial reporting

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Summary

• What Is Control and Its Importance
• the three approaches to designing control
  systems.
• the reasons why control is important.
• The Control Process
• the three steps in the control process.
• the reasons why what is measured is more critical
  than how its measured.
• the three courses of action managers can take in
  controlling.

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Summary

• Controlling Organizational Performance
• organizational performance.
• the most frequently used measures of
  organizational performance
• Tools for Organizational Performance
• Contrasted feedforward, concurrent, and feedback
  controls.
• the types of financial and information controls
  managers can use.
• Described how balanced scorecards and
  benchmarking are used in controlling.

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Summary

• Contemporary Issues in Control
• about how managers may have to adjust controls
  for cross-cultural differences.
• the types of workplace concerns managers face and
  how they can address those concerns.
• control is important to customer interactions.
• discussed what corporate governance is and how
  its changing.