Assignment 221
Delp10
B123-Chapter15-Spring18.pptB123
Chapter 15
Monitoring and Evaluation
Monitoring and Evaluation
Management control concerns how organizations can improve their performance by more effective control over people, operations and processes.
Necessarily this involves monitoring and evaluation of performance, analysis and reporting of information at all levels of the organization.
The four E’s
There are many ways in which we can think about organizational performance and these concerns mainly the performance evaluation of the four Es:
Effectiveness is the extent to which an organization achieves its goals.
Efficiency describes how well an organization transforms inputs into outputs. An organization becomes more efficient as it produces more or better outputs for the same inputs.
Economy describes how cheaply the inputs can be purchased. Economy is important when managers are constrained by fixed budgets.
Ethics or ethical acceptability is the extent to which the behavior of an organization and its members is acceptable in terms of the moral standards of wider society in which it operates.
Traditional control process in action
The traditional control process usually comprises four stages:
setting objectives and establishing standards of performance
planning tasks, identifying performance measures, carrying out tasks and measuring performance
monitoring progress by comparing performance against objectives and standards
acting on results of monitoring and taking corrective action.
Double loop learning
- This allows not only the goals to be questioned, but also the performance measures used and the repertoire of responses to feedback on performance.
Barriers to double loop learning
- Bureaucratic structures often do not encourage managers to think for themselves
- It may encourage managers to find ways of obscuring issues and problems.
Understanding quality
- In a quality organizational culture, there will be a commitment to satisfying the customer. In this context, the quality is defined as the extent to which the final product sufficiently meets the customer’s requirements. From this perspective, the distinction is not between high-quality and low-quality outputs but between outputs of sufficient quality and insufficient quality.
- Ideally, an organization should also be working on supplying more than the customer wanted to insure repeated orders.
Internal quality
- A culture of quality is internal to the organization and should involve all staff: where there will be a general recognition that everyone takes personal responsibility for their own outputs. A quality culture will be energetic and focused on the customer.
Benchmarking
- Internal
- Competitive
- Functional
- Generic
A relatively new model for operational control is the balanced scorecard shown in Figure 15.9 p. 332.
The scorecard provides answers to four basic questions by assessing four perspectives:
1- How do our customers see us? (The customer perspective.)
2- What must we excel at? (The operational or internal business perspective.)
3- Can we continue to improve and create value? (The innovation and learning perspective.)
4- How do we look to shareholders? (The financial perspective.)
Balanced scorecard
The business excellence model
The business excellence model set by the European Foundation for Quality Management (EFQM) is a tool for self-assessment that helps to quantify quality practices and performance. From self-assessment, organizations can identify areas of underperformance and make efforts for improvement.
The elements to be measured of the model are:
1- Leadership – how senior people inspire and drive an organization in the pursuit of long-term success through total quality management.
2- People management – how the organization realizes the full potential of its employees to support its policy and strategy, and the effective operation of its processes.
3- Policy and strategy – how the organization implements its mission and vision through a clear stakeholder-focused strategy, supported by relevant policies, plans, objectives, targets and processes.
The business excellence model
