business management s mahelal 2012. 2 control the management function that involves monitoring...

COMBS – Lecture 10Business Management

S Mahelal2012

2

CONTROL

The management function that involves monitoring activities to ensure that they’re being accomplished as planned and correcting any significant deviations.

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Planning-Control Link

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What is control and how is it achieved?

– The control process is intended to support the achievement of objectives at any level, by using suitable control systems.

This Involves:– Setting targets – what and when to

measure– Measuring with control tools– Comparing actual with target– Correcting deviations or altering target

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The Control Process

Management 8/e - Chapter 8 6

Setting targets

–Performance targets provide direction and a standard of performance to aim for

–The Standard of Performance is the defined level of performance to be achieved against which actual performance is compared

Management 8/e - Chapter 8 7

Measuring

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Comparing

How Do Managers Measure?To determine actual performance, a manager

must first get information about it. Thus, the first step in control is measuring

Four common sources of information frequently used to measure actual performance are– personal observation– statistical reports– oral reports– written reports

Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall.

Tactics for control– Direct supervision– Organisational structuring– Rules and procedures– Management by objectives– Machinery and automation– Human resource management– Values and beliefs

Strategies for control – Mechanistic or Organic

What is Managing By Walking Around?• Management By

Walking Around (MBWA)–When a manager is

out in the work area interacting with employees


How do you know you are in control?

Types of performance measure An input measure is an element of

resource that is measured as it is put in to the transformation process

A process measure is a measurement taken during an operational process that provides data on how the process is performing

An output measure is a measurement taken after an operational process is complete

Efficiency and effectivenessEfficiency is a measure of the inputs

required for each unit of outputEffectiveness is a measure of how well

an activity contributes to achieving organisational goals

What Management Action Can Be Taken?

• 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


When Does Control Take Place?

• Feedforward Control– Control that takes

place before a work activity is done

• Concurrent Control – Control that takes

place while a work activity is in progress


Feedback Control• Feedback Control – Control that takes

place after a work activity is done


How Do Managers Keep Track of Finances? In order to meet profitability goals,

managers need financial controls Traditional financial measures

managers might use include – ratio analysis – budget analysis


Balanced scorecard A performance measurement tool that looks at

four areas – financial, customer, internal processes and innovation and learning

Views performance in four areas simultaneously:– Financial – how do we look to shareholders?– Customer – how do customers see us?– Internal – what must we excel at?– Innovation and learning – can we continue

to improve and create value?

Balanced scorecard

How is an Organization’s Information Controlled?

Managers deal with information controls in two ways: 1. as a tool to help them control other

organizational activities 2. as an organizational area they need to

control• Management Information System (MIS)– A system used to provide management with

needed information on a regular basis


What are Contemporary Control Issues?

• Employee Theft– Any

unauthorized taking of company property by employees for their personal use


Contemporary Issues• Workplace Violence– According to the

U.S. National Institute of Occupational Safety and Health, 2 million American workers per year are victims of some type of workplace violence Copyright ©2011 Pearson Education,

Inc. Publishing as Prentice Hall.

Simons’ four levers of control Diagnostic controls

– Enable managers to monitor performance on critical variables

Beliefs systems– Control through concise statements of core

beliefs Boundary systems

– Setting limits to action – what not to do Interactive control systems

– Regular, frequent meetings to monitor performance and agree on actions

Conclusion Organisations must maintain control

over their performance The control process includes setting

targets, measuring, comparing and correcting

The balanced scorecard is one of the most common methods for measuring performance

Type of control – mechanistic or organic – will depend on the type of organisation as defined by the competing values framework

business management s mahelal 2012. 2 control the management function that involves monitoring...

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