Chapter 15: The Essentials of Control Learning Objectives

Understand what is meant by organizational control

Differentiate among different levels, types, and forms of control

Know the essentials of financial controls

Know the essentials of non-financial controls

Know the basics of lean control systems

Develop a personal balanced scorecard

Organizational Control in the P-O-L-C Organizational Control in the P-O-L-C FrameworkFramework

Strategy ImplementationStrategy Formulation

Planning

1. Vision & Mission

2. Strategizing

3. Goals & Objectives

Organizing

1. Organization Design

2. Culture

3. Social Networks

Leading

1. Leadership

2. Decision Making

3. Communications

4. Groups/Teams

5. Motivation

Controlling

1. Systems/Processes

2. Strategic Human Resources

What Is Organizational Control?What Is Organizational Control?

The Costs and Benefits of Organizational ControlsThe Costs and Benefits of Organizational Controls

Con

trol

Pro

activ

ity

Behavioral Control Outcome Control

Financial measures such as profitability, sales growth

Qualitative measures of customer satisfaction

The real-time speed of a production line

Hands-on management supervision during a project

Market demand or economic forecasts

Organizational culture

Financial measures such as profitability, sales growth

Qualitative measures of customer satisfaction

The real-time speed of a production line

Hands-on management supervision during a project

Market demand or economic forecasts

Organizational culture

Fe

ed

forw

ard

Co

ntr

ol

Co

nc

urr

en

tC

on

tro

lF

ee

db

ac

kC

on

tro

l

Costs & expenses and

Budgeting Includes assets, sales,

and/or profitability forecasts

Things expected to lead to positive performance

Includes customer loyalty, referrals, employee satisfaction, and other such performance measures

Current Assets are those assets that are cash or can be readily converted to cash in the short term

Examples include

accounts receivable or inventory

Fixed Assets are those assets that are not easily converted to cash in the short term - they are assets that only change over the long term

Examples include land, buildings, equipment, vehicles, furniture and fixtures

Recruiting &Selection

Qualified,Satisfied,

Staff

SatisfiedCustomers

Profitable Store

Non-Financial Controls

Measures

Financial Controls

The Strategy Map: A Causal Relationship Between Non-Financial and Financial Controls

The Strategy Map: A Causal Relationship Between Non-Financial and Financial Controls