Management 8e. - Robbins and Coulter

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What Is Control?

• Control
• The 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 Control
• To ensure that activities are completed in ways
  that lead to accomplishment of organizational
  goals.

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Designing Control Systems

• Market Control
• Emphasizes 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 Control
• Emphasizes organizational authority and relies
  (depends) on rules, regulations, procedures, and
  policies.
• Clan Control
• Regulates (influences) behavior by shared values,
  norms, traditions, rituals, and beliefs of the
  firms culture.

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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.

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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.

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The PlanningControlling Link
Exhibit 19.2
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The Control Process

• The Process of Control
• Measuring actual performance.
• Comparing actual performance against a standard.
• Taking action to correct deviations (differences)
  or inadequate (unsatisfactory) standards.

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The Control Process
Exhibit 19.3
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Measuring How and What We Measure

• Sources of Information
• Personal observation
• Statistical reports
• Oral reports
• Written reports

• Control Criteria
• Employees
• Satisfaction
• Turnover
• Absenteeism
• Budgets
• Costs
• Output
• Sales

• 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).

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Common Sources of Information for Measuring
Performance
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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).

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Defining the Acceptable Range of Variation
Exhibit 19.4
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Sales Performance Figures for July, Eastern
States Distributors
Exhibit 19.5
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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.

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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.

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Managerial Decisions in the Control Process
Exhibit 19.6
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Types of Control

• Feedforward Control
• Focuses 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.

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Types of Control

• Feedback Control
• Takes 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 managers 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.

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Types of Control
Exhibit 19.7
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Types of Control

• Contingency Factors in Control
• These factors include
• Size of the organization
• Ones position in the organizational hierarchy
• Degree of decentralization
• Organizational culture
• Importance of a work activity

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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.
• Ones 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.

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Types of Control

• Contingency factors in 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.

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Types of Control

• Contingency factors in Control
• The importance of a work activity
• The 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.

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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.

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The Controller and Control

• 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
• Profits
• Revenues (income taxation)
• Costs
• Investments
• Discretionary (undetermined) expenses.

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The Controller and Control

• 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.

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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.

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Power and Control

• Total Power
• The total power a manager has is made up of two
  different kinds of power.
• Position power Power derived (gained) from the
  organizational position a manager holds.
• Personal power Power derived (gained) from a
  managers relationship with others.

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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
  ones 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.

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Power and Control

• Increasing Personal Power
• To increase personal power managers should
  encourage and develop these beliefs and attitudes
  in other organization members.
• A sense of obligation toward the manager.
• A belief that the manager possesses a high level
  of expertise.
• A sense of identification with the manager.
• The perception that they are dependent on the
  manager.

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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.

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Performing the Control function

• Barriers to Successful Controlling
• Long-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.

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Performing the Control function

• 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.

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Performing the Control function

• Barriers to Successful Controlling
• 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).

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Performing the Control function

• Barriers to Successful Controlling
• 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.

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Performing the Control function

• Barriers to Successful Controlling
• 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.

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Performing the Control function

• 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.

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Performing the Control function

• Making Controlling Successful
• 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
  presidents performance.

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Performing the Control function

• Making Controlling Successful
• 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.

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Performing the Control function

• Making Controlling Successful
• 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.

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Performing the Control function

• Making Controlling Successful
• Communication of the Mechanics (procedure) of the
  Control Process.
• All individuals involved in controlling must have
  a working knowledge of how the control operates.

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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.

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Contemporary Issues in Control

• Workplace Concerns
• Workplace privacy
• Employee theft
• Workplace violence

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Contemporary Issues in Control

• Workplace Concerns
• 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.

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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.
Exhibit 19.9
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Contemporary Issues in Control

• Workplace Concerns
• 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.

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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. 4346 and J.
Greenberg, The Cognitive Geometry of Employee
Theft, in Dysfunctional Behavior in
Organizations Nonviolent and Deviant Behavior,
eds. S.B. Bacharach, A. OLeary-Kelly, J.M.
Collins, and R.W. Griffin (Stamford, CT JAI
Press, 1998), pp. 14793.
Exhibit 19.10
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Contemporary Issues in Control

• Workplace Concerns
• Workplace 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.

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Workplace Violence
Witnessed yelling or other verbal
abuse 42 Yelled at co-workers themselves 29 Crie
d 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.
Exhibit 19.11
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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.
Exhibit 19.12
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C H A P T E R R E V I E W 1/6

• What Is Control and Why Is It Important?
  (slides 25)
• Define control.
• Contrast the three approaches to designing
  control systems.
• Discuss the reasons why control is important.
• Explain the planning-controlling link.
• What is the role of control in management?

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C H A P T E R R E V I E W 2/6

• The Control Process (slides 7, 911, 14, 15)
• Describe the three steps in the control process.
• Name four methods managers can use to acquire
  information about actual performance.
• Explain why what is measured is more critical
  than how its measured.
• Explain the three courses of action managers can
  take in controlling.

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C H A P T E R R E V I E W 3/6

• Types of Control (slides 17, 18, 2023)
• Contrast feedforward, concurrent, and feedback
  controls.
• What types of contingency factors will affect
  the design of an organizations control system?
• The controller and Control (slides 2426)
• What is a controller?
• What would a typical job description for a
  controller include?
• How are cost-benefit analysis and controlling
  related?

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C H A P T E R R E V I E W 4/6

• Power and Control (slides 2731)
• What is power?
• Discuss the relationship between power and
  control.
• What is total power?
• Define position power.
• Define personal power.
• How can managers increase their total power?
• What steps can managers take to increase personal
  power?

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C H A P T E R R E V I E W 5/6

• Performing the Control Function (slides 3241)
• Discuss long- and short-term production quotas as
  barriers to controlling
• How can employee frustration and morale be
  barriers to controlling?
• How can filing reports be a barrier to
  controlling?
• How can the perspective of organization members
  affect controlling?
• Discuss means versus ends as a factor affecting
  controlling.
• What tactics can managers use to make controlling
  successful?

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

• Contemporary Issues in Control (slides 4244,
  46, 48)
• 28) Describe how managers may have to adjust
  controls for cross-cultural differences.
• Discuss the types of workplace concerns
  managers face and how they can address those
  concerns.