Foundations of Control

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Foundations of Control
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Control

• Process of monitoring activities to ensure that
  what is being accomplished matches plans and
  corrects significant deviations

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Planning
Controlling
Planning- Controlling Linkage
Organizing
Leading
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Purpose of Controls

• Measuring Performance
• Comparing to Standards
• Taking Corrective Action

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Three Approaches to Control Systems
Market Control
Clan Control
Bureaucratic Control
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The Control Process
Standard Attained?
Do Nothing
Yes
Compare Performance to Standard
No
Variance Acceptable?
Do Nothing
Yes
Objectives
Measure Performance
No
Standard
Identify Causes
Standard Acceptable?
Yes
No
Correct Performance
Revise Standard
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How Do Managers Measure?

• Personal observations
• Statistical reports
• Oral reports
• Written reports

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Discrepancies Between Goals and Performance
Acceptable Upper Limit
Acceptable Range of Variation
Standard
Acceptable Lower Limit
t t1 t2 t3 t4 t5
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CanuckBrews Sales for July
Standard
Brand
Actual
Over (Under)
Propeller Big Rock Ale Okanagan
Spring Garrison Olands Export McAuslans Granvill
e Island Unibroues Nelson After Dark Total Cases
107 500 63 000 80 000 62 000 54 000 16 000 22
500 8 000 17 000 430 000
91 300 63 400 91 200 62 200 67 200 14 000 22
000 6 500 28 600 446 400
(16 200) 400 11 200 200 13 200 (2 000) (500) (1
500) 11 600 16 400
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Do Nothing
Taking Managerial Action
Take Corrective Action
Revise the Standard
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Three Types of Control
Input
Processes
Output
Feedforward Control
Concurrent Control
Feedback Control
Anticipates problems
Corrects problems as they happen
Corrects problems after they occur
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Feedback Control

• Meaningful information
• Enhance employee motivation

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Qualities of an Effective Control System

• Accurate
• Timely
• Economical
• Flexible
• Understandable

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Qualities of an Effective Control System
(continued)

• Reasonable
• Emphasis on exceptions
• Strategic
• Multiple criteria
• Corrective action

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Contingency Factors in Control Systems
Contingency Variable
Control Recommendations
Small
Informal, personal management
Organization Size
Large
Formal, personal management
High
Many complex criteria
Position and Level
Low
Few, easy-to-measure criteria
High
Increased number of controls
Degree of Decentralization
Low
Reduced number of controls
Open
Informal, self-control
Organizational Culture
Closed
Formal, external controls
High
Comprehensive controls
Importance of an Activity
Low
Loose, informal controls
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Dysfunctional Controls
Inflexible Controls
Unreasonable Standards
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Invasion of Privacy
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Employee Monitoring
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E-Mail
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Inform Employees
Control and Ethics
Written Policy
Monitor for Business Reasons
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Off-the-Job Behaviour
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