Management. Part V: Controlling Ch. 16. Organizational control

Transcription

1 Management Part V: Controlling Ch. 16. Organizational control Dan C. Lungescu, PhD, assistant professor

2 Course outline Management Part I: Introduction Part II: Planning Part III: Organizing Part IV: Leading Part V: Controlling

3 Part V outline Management Part V: Controlling Ch. 16. Organizational control Ch. 17. Control methods Ch. 18. Information systems

4 Learning objectives After studying this chapter, you should: Explain the major roles of controls in organizations. Describe how control responsibilities change with the level of management. Outline the general process that can be applied to most control situations. Explain the major control types based on timing. Describe the basic managerial approaches to implementing controls. Outline the potential dysfunctional aspects of control systems and explain the implications of overcontrol and undercontrol. Delineate the major characteristics of effective control systems.

5 Chapter 16 outline A. Control as a management function B. The control process C. Types of controls D. Implementing controls E. Assessing control systems

6 A. Control as a management function Controlling The process of regulating organizational activities so that actual performance conforms to expected organizational standards and goals. Controlling means that managers: 1. Develop appropriate standards. 2. Compare ongoing performance against those standards. 3. Initiate corrective actions when necessary. Outline» A. Control as a management function

7 Significance of the control process Planning Organizing Leading CONTROLS Products/services Process CONTROLS Goals Control system A set of mechanisms designed to increase the probability of meeting organizational standards and goals. Outline» A. Control as a management function» Significance of the control process

8 Role of controls 1. Coping with uncertainty 2. Detecting irregularities 3. Identifying opportunities 4. Handling complex situations 5. Decentralizing authority Outline» A. Control as a management function» Role of controls

9 Levels of control 1. Strategic control A control type that involves monitoring critical environmental factors that could affect the viability of strategic plans, assessing the effects of organizational strategic actions, and ensuring that strategic plans are implemented as intended. 2. Tactical control A control type that focuses on assessing the implementation of tactical plans at department levels, monitoring associated periodic results, and taking corrective action as necessary. 3. Operational control A control type that involves overseeing the implementation of operating plans, monitoring day-to-day results, and taking corrective action when required. Outline» A. Control as a management function» Levels of control

10 B. The control process 1. Determine areas to control 2. Establish standards 3. Measure performance 4. Compare performance against standards 5. Recognize positive performance Take corrective action as necessary 6. Adjust standards and measures as necessary Outline» B. The control process

11 The control process (2) 1. Determine areas to control 2. Establish standards 3. Measure performance 4. Compare performance against standards Standards not met Take corrective action as necessary Standards met or exceeded Recognize performance 6. Adjust standards and measures as necessary Outline» B. The control process (2)

12 C. Types of controls 1. Feedforward control The regulation of inputs to ensure that they meet the standards necessary for the transformation process. 2. Concurrent control The regulation of ongoing activities that are part of the transformation process to ensure that they conform to organizational standards. 3. Feedback control Regulation exercised after a product or service has been completed to ensure that the final output meets organizational standards and goals. Outline» C. Types of controls

13 D. Implementing controls 1. Market control A managerial approach that relies on market mechanisms to regulate prices for certain clearly specified goods and services needed by an organization. 2. Bureaucratic control A managerial approach that relies on regulation through rules, policies, supervision, budgets, schedules, reward systems, and other administrative mechanisms aimed at ensuring that employees exhibit appropriate behaviors and meet performance standards. 3. Clan control A managerial approach that relies on values, beliefs, traditions, corporate culture, shared norms, and informal relationships to regulate employee behaviors and facilitate the reaching of organizational goals. Outline» D. Implementing controls

14 E. Assessing control systems Potential dysfunctional aspects of control systems: 1. Behavioral displacement Individuals engage in behaviors that are encouraged by controls and related reward systems even though the behaviors are actually inconsistent with organizational goals. 2. Game playing Managers attempt to improve their standing on performance measures by manipulating resource usage and/or data rather than by achieving bona fide performance improvements. 3. Operating delays 4. Negative attitudes Outline» E. Assessing control systems

15 Overcontrol versus undercontrol 1. Overcontrol The limiting of individual job autonomy to such a point that it seriously inhibits effective job performance. 2. Undercontrol The granting of autonomy to an employee to such a point that the organization loses its ability to direct the individual s efforts toward achieving organizational goals. Outline» E. Assessing control systems» Overcontrol versus undercontrol

16 Effective control system characteristics 1. Future-oriented 2. Multidimensional 3. Cost-effective 4. Accurate 5. Realistic 6. Timely 7. Monitorable 8. Acceptable to organization members 9. Flexible Outline» E. Assessing control systems» Characteristics of an effective control system

17 Dan C. Lungescu, PhD, assistant professor