Lecture 13 Controlling Work and Organizational Processes

Control

A management function that involves monitoring activities to ensure they are accomplished as planned and correcting significant deviations.

The Importance of Control

The only way that managers know whether organizational goals are being met or not.

Three specific areas of control function

Planning

Empowering employees

Protecting the workplace

Control Process

Measuring actual performance

Comparing actual performance against a standard

Taking managerial action to correct deviations or to address inadequate standards

Measuring Performance

To determine actual performance a manager must get performance records, so the first step in control is measuring.

Four sources of information

Personal observation (MBWA)

Statistical reports

Oral reports

Written reports

Management by walking around (MBWA)

When a manager is out in the work area interacting with employees.

Criteria for Measurement

What managers measure is probably more important to the control process than how they measure.

Managerial Actions to Control Performance

Do nothing (self-explanatory)

Correct actual performance

Revise the standards

Correcting Actual Performance

Immediate Corrective Action

Basic Corrective Action

Immediate Corrective Action

Corrective action that addresses problems at once to get performance back on track.

Basic Corrective Action

Corrective action that looks at how and why performance deviated before correcting the source of deviation.

Types of Control

Feedforward control

Concurrent control

Feedback control

Feedforward Control

The type of control that prevents problems by taking place before the actual activity starts.

Concurrent Control

Control that takes place while a work activity is in progress.

Feedback Control

Control that takes place after a work activity is completed, providing managers with meaningful information on effectiveness.

Liquidity ratios Finances Analysis

Measure an organization’s ability to meet its current debt obligations.

Leverage ratios Finances Analysis

Examine the organization’s use of debt to finance its assets and whether it’s able to meet the interest payments on the debt.

Activity ratios Finances Analysis

Assess how efficiently a company is using its assets

Profitability ratios Finances Analysis

Measure how efficiently and effectively the company is using its assets to generate profits.

Budget for planning

A budget indicates which work activities are important and which resources, and how much of these resources, should be allocated to those activities.

Budget for controlling

Budgets provide managers with quantitative standards against which to measure and compare resource consumption.

Management information system (MIS)

A system used to provide management with needed information on a regular basis.

Balanced scorecard

Approach looks at more than the financial perspective by typically looking at four areas that contribute to a company’s performance

Four areas contribute to company perfomance

Financial

Customer

Internal processes

People/ innovation/ growth assets

Contemporary Issues

Cross-cultural differences

Workplace concerns

Cultural Differences

Differences in organizational control practices across global organizations, mainly in measurement and corrective actions.