FOUNDATIONS OF CONTROL

2003 Pearson Education Canada Inc. 18.1

Control

The process of monitoring activities to ensure that they are being accomplished as planned and of correcting significant deviations Control systems are judged in terms of how well they facilitate goal achievement

Three basic approaches to control

Market control - emphasizes the use of external

market mechanisms to establish standards of performance

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Three basic approaches to control (continued)

Bureaucratic control - emphasizes

organizational authority and relies on administrative rules and procedures Clan control - behaviour regulated by shared values, traditions, and other aspects of organizational culture

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Control is the Final Link in the Management Process

Permits delegation of authority

Provides the critical link back to planning Only way managers know whether organizational goals are being met
Fear that employees will do something wrong for which the manager will be held responsible Provides information and feedback on employee performance

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THE PLANNING-CONTROLLING LINK (Exhibit 18.2)

Planning
Goals Objectives Strategies Plans

Controlling
Standards Measurements Comparisons Actions

Organizing
Structure Human Resource Management

Leading
Motivation Leadership Communication Individual and Group Behaviour

2003 Pearson Education Canada Inc.

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18.8

Controlling is a three-step process Assumes that performance standards already exist Measuring

specific goals are created in the planning process

How We Measure

personal observation - permits intensive coverage

Management By Walking Around

(MBWA) drawbacks - subject to personal biases

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Measuring (continued) How We Measure (continued) statistical reports - numerical data are easy to

visualize and effective for showing relationships drawbacks - not all operations can be measured oral reports - includes meetings, telephone calls may be best way to control work in a virtual environment technology permits creation of written record from oral report drawbacks - filtering of information

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Measuring (continued)

How We Measure (continued) written reports - often more

usually easy to file and retrieve

comprehensive and concise than oral reports comprehensive control efforts should use all four approaches
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Measuring (continued)

What We Measure

Control system needs to recognize the diversity of activities Some activities difficult to measure in quantifiable terms

what we measure more critical than how we measure control criteria applicable to any management situation: employee satisfaction, absenteeism, and turnover keeping costs within budgets

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Comparing

Determines the degree of variation between actual performance and standard Acceptable range of variation deviations that exceed this range become significant
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DEFINING THE ACCEPTABLE RANGE OF VARIATION (Exhibit 18.4)

Measurement of Performance
Acceptable Upper Limit
Acceptable Range of Variation

Standard

Acceptable Lower Limit

t+1

t+2 t+3 t+4 Time Period (t)

t+5
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2003 Pearson Education Canada Inc.

CANUCKBREWS SALES PERFORMANCE FOR JULY (Exhibit 18.5)

Brand
Alexander Keith Big Rock Warthog Okanagan Spring Moosehead Olands Export Ale McAuslans Granville Island Unibroues Nelson After Dark Total cases

Standard*
1,075 630 800 620 540 160 225 80 170 4,300

Actual*
913 634 912 622 672 140 220 65 286 4,464

Over (under)*
(162) 4 112 2 132 (20) (5) (15) 116 164

* hundreds of cases
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Taking Managerial Action

Correct Actual Performance - action taken when

the performance variation is unsatisfactory

immediate corrective action - corrects problems at once to get performance back on track basic corrective action - identifies reason for performance variation Revise the Standard - variance results from an
unrealistic standard

standard, not performance, needs correction

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Feedforward Control

Concurrent Control

prevents anticipated problems most desirable type of control requires timely and accurate information that often is difficult to get

takes place while activity is in progress corrects problem before it becomes too costly best-known form is direct supervision
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 Feedback

Control

Takes place after the activity is done Problems may already have caused damage or waste The most popular type of control Feedback has two advantages
provides meaningful information on the effectiveness of planning can enhance employee motivation
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TYPES OF CONTROL (Exhibit 18.7)

Input Processes Output

Feedforward Control Anticipates problems

Concurrent Control Corrects problems as they happen

Feedback Control Corrects problems after they occur

2003 Pearson Education Canada Inc.

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QUALITIES OF AN EFFECTIVE CONTROL SYSTEM (Exhibit 18.8)

Corrective Action Multiple Criteria Accuracy Timeliness

Emphasis on Exceptions

EFFECTIVE CONTROL SYSTEM

Economy

Strategic Placement

Flexibility

Reasonable Criteria
2003 Pearson Education Canada Inc.

Understandability
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Workplace Privacy

Employers have the right to monitor employee communications, examine employee computers and files, and use surveillance cameras Reasons for monitoring include prevention of:
recreational on-the-job Web surfing creation of hostile work environments with email security leaks of critical information

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Workplace Privacy (continued)

Companies are developing and enforcing workplace monitoring policies

develop unambiguous computer usage policy inform employees that computers may be monitored provide clear guidelines on acceptable use of company e-mail system and the Web
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Employee Theft

Unauthorized taking of company property by employees for their personal use Is an escalating problem in all types of organizations Different proposals to explain employee theft

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Workplace Violence

Many factors contribute to workplace violence including:

employee work driven by time, numbers, and crises rapid and unpredictable change destructive communication style of manager authoritarian leadership defensive attitude double standards unresolved grievances emotionally troubled employees repetitive, boring work
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