Week 5: Control Theory and Practice

Definition of control, management levels of control, the four-step control model, performance standards, and keys/barriers to successful control systems.

Control

The systematic process of regulating organisational activities to make them consistent with organisational plans and goals.

Strategic control

Control maintained by top management using an organisation-wide perspective and a long time frame.

Tactical control

Also known as departmental control, this level of control is maintained by middle management with a department perspective.

Operational control

Control maintained by lower management focusing on a unit/individual perspective and a short time frame.

Detecting irregularities and errors

A role of control involving the identification of product defects, cost overruns, and rising staff turnover.

The 4 Step Model

A system to help managers meet strategic goals through: 1. Establishing performance standards, 2. Measuring actual performance, 3. Comparing performance to standards, and 4. Taking corrective action if necessary.

Output standards

Specific metrics for performance such as percentage error rate, units per hour, time to complete service, or number of complaints.

Input standards

Standards based on the quality of resources, such as staff conforming to rules and procedures or the quality of input materials like meat and lettuce in McDonald's.

MBWA (Management by Wandering Around)

A qualitative method used to measure performance through personal observation.

Management by exception

A control principle that suggests managers should be informed of a situation only if control data show a significant deviation from standard.

Corrective action

Step 4 of the control model where managers assess why standards are not met and either address performance or revise standards to ensure they are realistic.

Strategic and results-oriented

A key to successful control where the systems directly support strategic plans.

Too much control

A barrier to successful control often found in bureaucratic organisations that try to exert excessive regulation.

Overemphasis on means instead of ends

A barrier to control that can lead to employees 'game playing' or 'beating the system' rather than achieving goals.