management theory
abbdis2008
MGMT10_Williams_Ch16.pptxControl
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Control
16
1
Learning Outcomes
Describe the basic control process
Discuss the various methods that managers can use to maintain control
Describe the behaviors, processes, and outcomes that today’s managers are choosing to control in their organizations
LEARNING OUTCOMES
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MGMT10 | CH16
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2
Control versus Standards
Regulatory process of establishing standards to achieve organizational goals, comparing actual performance against standards, and taking corrective action when necessary
Control
Basis of comparison for measuring the extent to which various kinds of organizational performance are satisfactory or unsatisfactory
Standards
LO 1
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MGMT10 | CH16
3
Setting Standards
Standards are determined by:
Listening to customer feedback
Observing competitors
Benchmarking
Also involves:
Identifying the company against which to benchmark set the standards
Collecting data to determine performance standards of other companies
LO 1
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MGMT10 | CH16
4
Comparison to Standards and Corrective Action
Comparison to standards
Quality of comparison depends on the organization’s measurement and information systems
Corrective action
Involves identifying performance deviations, analyzing those deviations, and developing and implementing programs to correct them
LO 1
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MGMT10 | CH16
5
16.1 Cybernetic Control Process
LO 1
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MGMT10 | CH16
Exhibit
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6
Basic Control Methods
Gathering information about performance deficiencies after they occur and using the same to correct or prevent performance deficiencies
Feedback control
Gathering information about performance deficiencies as they occur, thereby eliminating the delay between performance and feedback
Concurrent control
Monitoring performance inputs to minimize performance deficiencies before they occur
Feedforward control
LO 1
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MGMT10 | CH16
7
Maintaining Control
Control loss: Occurs when behavior and work procedures do not conform to standards
To determine if control is worthwhile, managers must carefully assess:
Regulation costs: Associated with implementing or maintaining control
Cybernetic feasibility: Extent to which it is possible to implement each step in the control process
LO 1
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MGMT10 | CH16
8
Control Methods
Bureaucratic control
Objective control
Normative control
Concertive control
Self-control
LO 2
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MGMT10 | CH16
9
Bureaucratic Control
Use of hierarchical authority to influence employee behavior
Involves rewarding or punishing employees for compliance or noncompliance with organizational rules, policies, and procedures
Characteristics
Greater emphasis on following rules
Higher resistance to change and slower response to competitors and customers
LO 2
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MGMT10 | CH16
Objective Control
Use of observable measures of worker behavior or outputs to assess performance and influence behavior
Types
Behavior control: Regulation of behaviors and actions that workers perform on the job
Output control: Regulation of workers’ results via rewards and incentives
LO 2
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MGMT10 | CH16
Normative Control
Regulation of workers’ behavior and decisions through widely shared organizational values and beliefs
Created in two ways
Hiring based on attitudes and values
Learning about what should and shouldn't be done by observing and listening to stories recited by experienced personnel
LO 2
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MGMT10 | CH16
Concertive Control
Regulation of workers’ behavior and decisions through work group values and beliefs
Arises when firms assign work groups complete autonomy and responsibility for task completion
Leads to more stress to conform to expectations
LO 2
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MGMT10 | CH16
Self-Control or Self-Management
Managers and workers control their own behavior by:
Setting their own goals
Monitoring their own progress
Rewarding themselves for goal achievement
Leaders and managers:
Provide clear boundaries to guide and control one’s behavior
Teach skills needed to maximize and monitor one’s effectiveness
LO 2
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MGMT10 | CH16
Balanced Scorecard
Measurement of organizational performance in four areas
Finances
Customers
Internal operations
Innovation and learning
LO 3
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MGMT10 | CH16
15
Balanced Scorecard - Advantages
Forces managers to set specific goals and measure performance
Minimizes the chances of suboptimization
Improved performance in one part of a firm at the expense of decreased performance in another part
LO 3
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MGMT10 | CH16
16
Controlling Finances
Cash flow analysis
Balance sheets
Income statements
Financial ratios
Budgets
Economic value added (EVA)
LO 3
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MGMT10 | CH16
17
Controlling Customer Defections
Customer defections: Performance assessment in which companies:
Identify which customers are likely to leave
Measure the rate at which customers are leaving
Advantages
Impact of improved retention on profits
Higher likelihood of receiving honest feedback
Ability to determine who will leave and prevent that from happening
LO 3
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MGMT10 | CH16
18
16.5 Advantages and Disadvantages of Different Measures of Quality
LO 3
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MGMT10 | CH16
Exhibit
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19
Innovation and Learning Perspective
Involves:
Continuous improvement in ongoing services and products
Relearning and redesigning creation processes
Maximizing sustainability, whose levels include:
Waste prevention and reduction
Recycle and reuse
Waste treatment
Waste disposal
LO 3
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MGMT10 | CH16
20
Key Terms
Control
Standards
Benchmarking
Cybernetic
Feedback control
Concurrent control
Feedforward control
Control loss
Regulation costs
Cybernetic feasibility
Bureaucratic control
Objective control
Behavior control
Output control
Normative control
Concertive control
Self-control (self-management)
Balanced scorecard
KEY TERMS
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MGMT10 | CH16
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Key Terms (continued)
Suboptimization
Cash flow analysis
Balance sheets
Income statements
Financial ratios
Budgets
Zero-based budgeting
Economic value added (EVA)
Customer defections
Value
KEY TERMS
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MGMT10 | CH16
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Summary
Control
Regulatory process of establishing standards to achieve goals, comparing actual performance against the standards, and taking corrective action
Achieved by self-control and bureaucratic, objective, normative, and concertive control
Measured by using the balanced scorecard
SUMMARY
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MGMT10 | CH16
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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MGMT10 | CH16
Copyright ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
