Lecture 9: Control – Principles of Management (BM1101)

Control: Definition and Purpose

Control is a regulatory process consisting of three core activities: establish standards that will achieve organizational goals, compare actual performance to those standards, and take corrective action to restore performance to the standards if needed.
It is a dynamic, cybernetic process that includes feedback, concurrent control, and feedforward control.
It is not always worthwhile or possible in every situation.

Establish standards that enable goal achievement.
Compare actual performance to desired/established standards.
Take corrective action to repair performance deficiencies.
It is a continuous, dynamic process rather than a one-time event.
The control process relies on feedback loops to minimize deviations from standards.
Cybernetic origin: kubernetes (Greek) meaning a steersman, i.e., someone who steers or keeps on course.

Establishment of clear standards (1.1): the standard must enable goal achievement.
Listen to customers or observe competitors as a source of standards (2).
Benchmarking other companies (3): steps to benchmark
- Determine what to benchmark (e.g., cycle time, quality, price).
- Identify the companies against which to benchmark.
- Collect data to determine other companies’ performance standards.

The quality of the comparison depends on the quality of measurement and information systems used to track performance.
One method: secret shoppers who visit stores pretending to be customers to observe service strengths and weaknesses; helps verify that standards are being met.

Identify performance deviations.
Analyze those deviations.
Develop and implement programs to correct them.
Relationship to the overall control cycle: Set Standards → Measure Performance → Compare with Standards → Identify Deviations → Analyze Deviations → Develop & Implement Corrective Action, then repeat.

Control is a continuous, dynamic process: set standards, measure performance, compare performance to standards.
If performance deviates, managers and employees analyze the deviations and develop and implement corrective action programs to achieve desired performance by meeting the standards.
Must be repeated endlessly in a feedback loop to maintain standards over time.
Example provided: controlling business expenses.
Practical takeaway: control is ongoing, requiring daily, weekly, and monthly attention.

Managers compare performance to pre-established standards.
If deviations exist, analyze and develop corrective programs.
Implement the programs to achieve the desired performance.
Reiterate the entire process to maintain standard levels; control is continual, not a one-time achievement.
Etymology: cybernetic comes from Greek kubernetes, meaning steersman (one who steers or keeps on course).

Feedback control: gather information about deficiencies after they occur.
Concurrent control: gather information about deficiencies as they occur.
Feedforward control: monitor performance inputs (not outputs) to prevent deficiencies before they occur.

Control Loss occurs when behavior and work procedures do not conform to standards.
To determine whether control is worthwhile, managers examine:
- Regulation costs: the cost of controlling plus potential unintended consequences of controlling.
- Cybernetic feasibility: the extent to which it is possible to implement each stage in the control process.

You should be able to discuss the various methods managers use to maintain control.

Major categories include Normative, Concertive, Self-Control, Bureaucratic, and Objective controls.
Also consider Top-down control as a broader approach.

Bureaucratic control focuses on whether policies and rules are followed.
Objective control focuses on the observation or measurement of worker behavior or outputs.

Definition: Regulation of the behaviors and actions workers perform on the job.
Core assumption: if workers perform the right behaviors daily, goal achievement should follow.
Management-based: managers monitor, reward, and punish workers for desirable or undesirable behaviors.
Example: measuring whether sales representatives file expense reports within 30 days as required by policy.

Definition: Measures the results of workers' efforts, rather than their daily behaviors.
Provides freedom to act, as long as results meet pre-specified, measurable targets.
Often paired with rewards and incentives.
Conditions for effectiveness:
1) Output measures must be reliable, fair, and accurate.
2) Employees and managers must believe they can achieve the results.
3) Rewards tied to outcomes must depend on achieving established standards.
Example: meeting sales quotas or ensuring timely responses to customer calls.

Focuses on shaping the beliefs and values of employees to guide behavior and decisions.
How it is built:
- Careful selection of employees.
- Observing experienced employees and listening to the company’s stories.
Outcome: a strong organizational culture that guides behavior beyond formal rules.

Based on beliefs shaped and negotiated by work groups.
Distinction from normative controls: while normative controls are driven by a strong culture, concertive controls arise when autonomous work groups are given complete responsibility for task completion.
Autonomous work groups: operate without managers; group members control processes, output, and behaviors.

Employees control their own behavior.
Not anarchic: decisions occur within well-established boundaries.
Managers teach the skills needed for effective work.
Individuals who manage themselves set their own goals, monitor progress, reward or punish themselves for achieving or missing goals, and cultivate positive thought patterns that reinforce goal importance and ability.
Note: described as rarely occurring in Brunei in this transcript.