what is control?

8th edition8th edition

Steven P. RobbinsMary Coulter

Steven P. RobbinsMary Coulter

Slide 2

What Is Control?

• ControlThe process of monitoring (supervising)

activities to ensure that they are being accomplished as planned and of correcting any significant (important) deviations (differences).

• The Purpose of ControlTo ensure that activities are completed in

ways that lead to accomplishment of organizational goals.

84 Slide 3

Designing Control Systems

• Market ControlEmphasizes the use of (external) market mechanisms

(processes) to establish the standards used in the control system. External measures: price competition and relative

market share.

• Bureaucratic ControlEmphasizes organizational authority and relies

(depends) on rules, regulations, procedures, and policies.

• Clan ControlRegulates (influences) behavior by shared values,

norms, traditions, rituals, and beliefs of the firm’s culture.

No page Slide 4

Designing Control Systems

• Depending on the shape and needs of the organization, when a manager must decide on a system of control, he/she might choose one of these three approaches:

Market Control: Which analyses, focuses and relies on the monitoring of market processes such as price competition, sales figures, market share, delivery periods, etc...

Bureaucratic Control: Which analyses and focuses on enforcement or implementation of rules, regulations, procedures and policies of the organization.

Clan Control: Which analyses and focuses on regulating activities, based on implications (meanings) of the firm's Culture, such as values, norms, traditions, rituals and beliefs that are shared by members of the organization.

Slide 5

Why Is Control Important?

• It is the final link in management functions and the only way managers know whether organizational goals are being met and, if not, the reasons why.

Planning-controlling link Controls let managers know whether their goals and

plans are on target and what future actions to take.Control and management

Managers need to delegate (give) duties and empower (authorize) employees to make decisions. But because managers are responsible for performance results, they need the feedback mechanism (process) which is provided by the control system.

Slide 6

Exhibit 19.2Exhibit 19.2

The Planning–Controlling Link

Slide 7

The Control Process

• The Process of Control

1. Measuring actual performance.

2. Comparing actual performance against a standard.

3. Taking action to correct deviations (differences) or inadequate (unsatisfactory) standards.

Slide 8


The Control Process

Slide 9

Measuring: How and What We Measure

What we measure is more critical to the control process than how we measure:

-- The selection of wrong criteria can result in serious consequences

-- What we measure determines what people in the organization will attempt to excel at (to improve).

• Control Criteria

Employees

Satisfaction

Turnover

Absenteeism

Budgets

Costs

Output

Sales

• Sources of Information

Personal observation

Statistical reports

Oral reports

Written reports

Page Slide 10

Common Sources of Information for Measuring Performance

Slide 11

Comparing

• Determining the degree of variation between actual performance and the standard.

It is critical to determine the acceptable range of variation.

The size (large or small) and direction (over or under) of the variation from the standard (forecast or budget).

Slide 12


Defining the Acceptable Range of Variation

Slide 13


Sales Performance Figures for July, Eastern States Distributors

Slide 14

Taking Managerial Action

• Courses of Action“Do nothing”

Only if deviation is judged to be insignificant (minor).

Correct actual performance Immediate corrective action to correct the problem at

once. Basic corrective action looks at how and why

performance has deviated and corrects the source of the deviation.

Possible corrective actions:

– Change strategy, structure, compensation scheme, or training programs; redesign jobs; or fire employees.

Slide 15

Taking Managerial Action

• Courses of Action

Revising the standard

Examining the standard to ascertain (check) whether or not the standard is realistic, and achievable.

– Resetting goals that may have been too high or too low.

Slide 16


Managerial Decisions in the Control Process

Slide 17

Types of Control

• Feedforward ControlFocuses on preventing anticipated problems

before they occur. It takes place before the actual work activity.

• Concurrent (simultaneous) Control It takes place while a work activity is in progress.

Direct supervision: management by walking around. The manager concurrently monitors actions and

corrects problems as they occur.

Slide 18

Types of Control

• Feedback ControlTakes place after a work activity is done (after-the-

fact). A major drawback (disadvantage) is that by the time the

manager has the information, the problems have already occurred. At this point, the manager’s only option is to try and correct the situation.

Advantages of feedback Feedback provides managers with information on the

effectiveness of their planning efforts. Feedback enhances employee motivation by

providing them with information on how well they are doing.

Slide 19


Types of Control

Slide 20

Types of Control

• Contingency Factors in Control

These factors include:

Size of the organizationOne’s position in the organizational hierarchyDegree of decentralizationOrganizational cultureImportance of a work activity

Slide 21

Types of Control

• Contingency factors in Control

The size of the organization A small organization relies more on informal and

personal control approaches. Larger organizations rely on formal control systems and highly formalized feed-forward and feedback controls.

One’s position in the organizational hierarchy Lower level jobs have clearer definitions of

performance. The higher up one moves in the hierarchy, the greater the need for multiple (many) sets of control criteria.

Slide 22

Types of Control


The degree of decentralization The greater the degree of decentralization, the more

managers need feedback on employees’ decisions and performance. Because managers are ultimately (in the end) responsible, they want assurances that their employees’ actions are effective and efficient.

The organizational culture In a culture of trust, autonomy (independence) and

openness, we can expect to find informal self-control. In another of fear, reprisal and mistrust, we find externally imposed (enforced) and formal control systems.

Slide 23

Types of Control


The importance of a work activityThe degree of importance of a work activity

influences (determines) whether, and how, it will be controlled. If an error can be highly damaging to the organization, extensive controls are likely to be implemented.

Slide 24

The Controller and Control

The job of the controller

The controller is the staff person who assists managers with the controlling function by gathering (collecting) information and generating (developing) reports. In smaller organizations, managers may

themselves gather this information and develop reports. In medium-sized to large companies, the controller handles this work.

Slide 25


The job of the controller The controller is responsible for generating

information managers need to exercise the control function. He/she usually works with information about:1. Profits

2. Revenues (income & taxation)

3. Costs

4. Investments

5. Discretionary (undetermined) expenses.

Slide 26


How Much Control is Needed? The process of comparing the cost of an

activity with the expected benefit of implementing the activity is called cost-benefit analysis.

Control activities should be implemented if the expected benefits of such activities exceed (are greater than) the cost of these activities.

Slide 27

Power and Control

• Power:

The degree to which an individual is able to influence others so that they respond to orders.The greater this ability, the more power an

individual is said to have.Orders given by a manager may or may not be

followed precisely (exactly), depending on how much power the manager has over others.

Slide 28

Power and Control

• Total Power

The total power a manager has is made up of two different kinds of power.a) Position power: Power derived (gained) from

the organizational position a manager holds.

b) Personal power: Power derived (gained) from a manager’s relationship with others.

Slide 29

Power and Control

• Increasing Total Power

Managers can increase their total power by enhancing (increasing) their position power, their personal power or both.

Importance of developing personal power

Trying to control others solely on the basis of one’s position simply does not work.

Not many will passively accept and completely obey a constant stream of orders from someone just because he/she is the “boss”.

Slide 30

Power and Control

• Increasing Personal Power

To increase personal power managers should encourage and develop these beliefs and attitudes in other organization members.

1. A sense of obligation toward the manager.

2. A belief that the manager possesses a high level of expertise.

3. A sense of identification with the manager.

4. The perception that they are dependent on the manager.

Slide 31

Increasing Personal Power

1. A sense of obligation toward the manager: Do personal favors for people.

2. A belief that the manager possesses a high level of expertise: Quietly make your achievements visible to others, build up a successful track record and a solid professional reputation.

3. A sense of identification with the manager: Behave (act) in ways that other members respect; share their goals, values and ideals.

4. The perception that they depend on the manager: Convey (make known) the amount of authority you have over organizational resources such as salaries and bonuses. The Golden Rule: “He who has the gold makes the rules”.

Slide 32

Performing the Control function

• Barriers to Successful ControllingLong-Term Versus Short-Term Production

Quotas (numbers).E.g. To ensure that performance meets the

production quotas (numbers) in the short term, machines might be “pushed” hard for a higher output, by managerial decision. This kind of action could prevent the machines to be serviced properly, cause them to deteriorate, and make it impossible to meet long-term production standards.

Slide 33


• Barriers to Successful Controlling

Employee Frustration (disappointment) and Morale (team spirit).Worker morale tends to be low when

management exerts too much control and will not allow them the freedom they need to do a good job.

Slide 34



Filing of Reports.Employees may feel pressured (obliged,

compelled) to falsify (cheat on) reports so that corrective action concerning their organizational unit will not be drastic (forceful) or too severe (strong).

Slide 35



Perspective (view) of Organization units.Managers must remember to consider any

corrective action not only in relation to the specific activity being controlled, but also in relation to its effect on all other organizational units.

Slide 36



Means (method) Versus Ends (goals).Managers must keep in mind that the

information gathering and report generating in the control process can be costly (expensive), and should only be justified (acceptable) if those activities yield (provide) benefits that exceed the cost of performing them.

Slide 37


• Making Controlling Successful

To make the control process more effective, managers should consider the following factors.

Specific organizational activities being focused on.

Different kinds of organizational goals. Timely (prompt) corrective action. Communication of the mechanics (procedure)

of the control process.

Slide 38



Specific organizational activities being focused on.Managers must make sure the various aspects

of the control process are appropriate for the control activity that is being carried out (executed).

E.g. Standards of measurements concerning line workers’ productivity are different from standards of measurements concerning a vice president’s performance.

Slide 39



Different Kinds of Organizational Goals.The control process can be applied to

many different facets (aspects) of organizational life. Each of these facets must be considered to provide maximum benefit from controlling.

6 Slide 40



Timely Corrective Action.Managers should take the corrective

action as promptly as possible to ensure that the situation depicted (shown) by the control process has not changed.

Slide 41



Communication of the Mechanics (procedure) of the Control Process.All individuals involved in controlling

must have a working knowledge of how the control operates.

Slide 42

Contemporary Issues in Control

• Cross-Cultural Issues

In technologically advanced nations , managers use indirect control devices -- computer generated reports and analyses -- in addition to standardized rules and direct supervision to ensure that work activities are going as planned.

In less technologically advanced countries, managers tend to rely more on direct supervision and highly centralized decision making for control.

Slide 43


• Workplace Concerns

Workplace privacyEmployee theftWorkplace violence

Slide 44



Workplace privacy versus workplace monitoring Many companies monitor employee usage of E-

mail, telephone, computer, and Internet. Concerns about offensive messages,

inappropriate images displayed on workers’ computer screens, racial and sexual harassment (mistreatment, annoyance) including leaking (telling) of company secrets are reasons for workplace monitoring.

Slide 45


Types of Workplace Monitoring by Employers

Internet use 54.7%

Telephone use 44.0%

E-mail messages 38.1%

Computer files 30.8%

Job performance using video cameras 14.6%

Phone conversations 11.5%

Voice mail messages 6.8%

Source: Based on S. McElvoy, “E-Mail and Internet Monitoring and the Workplace: Do Employees Have a Right to Privacy?” Communications and the Law, June 2002, p. 69.

Slide 46



Employee theft The unauthorized taking of company property by

employees for their personal use. Fraudulent (dishonest) filing of expense reports. Removing equipment, parts, software, and office

supplies from company premises. We can use the concept of feedforward, concurrent,

and feedback control (see slide #46) to identify measures for reducing employee theft.

Slide 47


Control Measures for Employee Theft or Fraud

Sources: Based on A.H. Bell and D.M. Smith. “Protecting the Company Against Theft and Fraud,” Workforce Online (www.workforce.com) December 3, 2000; J.D. Hansen. “To Catch a Thief,” Journal of Accountancy, March 2000, pp. 43–46; and J. Greenberg, “The Cognitive Geometry of Employee Theft,” in Dysfunctional Behavior in Organizations: Nonviolent and Deviant Behavior, eds. S.B. Bacharach, A. O’Leary-Kelly, J.M. Collins, and R.W. Griffin (Stamford, CT: JAI Press, 1998), pp. 147–93.

Slide 48


• Workplace ConcernsWorkplace violence

Anger, rage, and violence in the workplace is affecting employee productivity.

Factors contributing to workplace violence include employee stress caused by rising layoffs (firings), long working hours, unrealistic deadlines and uncaring managers.

The competitive demands of succeeding in a global economy put pressure on organizations and employees in many ways.

We can use the concept of feedforward, concurrent, and feedback control (see slide #49) to identify actions for managers.

Slide 49


Workplace Violence

Witnessed yelling or other verbal abuse 42%

Yelled at co-workers themselves 29%

Cried over work-related issues 23%

Seen someone purposely damage machines or furniture 14%

Seen physical violence in the workplace 10%

Struck a co-worker 2%

Source: Integra Realty Resources, October-November Survey of Adults 18 and Over, in “Desk Rage.” BusinessWeek, November 20, 2000, p. 12.

Slide 50


Control Measures for Deterring or Reducing

Workplace Violence

Sources: Based on M. Gorkin, “Five Strategies and Structures for Reducing Workplace Violence,” Workforce Online (www.workforce.com). December 3, 2000; “Investigating Workplace Violence: Where Do You Start?” Workforce Online (www.forceforce.com), December 3, 2000; “Ten Tips on Recognizing and Minimizing Violence,” Workforce Online (www.workforce.com), December 3, 2000; and “Points to Cover in a Workplace Violence Policy,” Workforce Online (www.workforce.com), December 3, 2000.

Slide 51

C H A P T E R R E V I E W 1/6

What Is Control and Why Is It Important? (slides 2~5)

1) Define control.

2) Contrast the three approaches to designing control systems.

3) Discuss the reasons why control is important.

4) Explain the planning-controlling link.

5) What is the role of control in management?

Slide 52


The Control Process (slides 7, 9~11, 14, 15)

6) Describe the three steps in the control process.

7) Name four methods managers can use to acquire information about actual performance.

8) Explain why what is measured is more critical than how it’s measured.

9) Explain the three courses of action managers can take in controlling.

Slide 53


Types of Control (slides 17, 18, 20~23)

10) Contrast feedforward, concurrent, and feedback controls.

11) What types of contingency factors will affect the design of an organization’s control system?

The controller and Control (slides 24~26)

12) What is a controller?

13) What would a typical job description for a controller include?

14) How are cost-benefit analysis and controlling related?

Slide 54


Power and Control (slides 27~31)

15) What is power?

16) Discuss the relationship between power and control.

17) What is total power?

18) Define position power.

19) Define personal power.

20) How can managers increase their total power?

21) What steps can managers take to increase personal power?

Slide 55


Performing the Control Function (slides 32~41)

22) Discuss long- and short-term production quotas as barriers to controlling

23) How can employee frustration and morale be barriers to controlling?

24) How can filing reports be a barrier to controlling?

25) How can the perspective of organization members affect controlling?

26) Discuss means versus ends as a factor affecting controlling.

27) What tactics can managers use to make controlling successful?

Slide 56


Contemporary Issues in Control (slides 42~44, 46, 48)

28) Describe how managers may have to adjust controls for cross-cultural differences.

29) Discuss the types of workplace concerns managers face and how they can address those concerns.

what is control?

Documents

system of control

control processexhibit

monitoring of market

relative market share

performance results

price competition

degree of variation

firms culture