chapter 6(2) control system ppt

7/25/2019 Chapter 6(2) Control System PPT

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THE CONTROL SYSTEMS OORGANIZATIONS

CHAPTER 6(2)


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WHAT IS CONTROL?

CONTROL

THE PROCESS OF MONITORING ACTIVITIESTO ENSURE THAT THEY ARE BEINGACCOMPLISHED AS PLANNED AND OFCORRECTING ANY SIGNIFICANT DEVIATIONS

THE PURPOSE OF CONTROL

TO ENSURE THAT ACTIVITIES ARECOMPLETED IN WAYS THAT LEAD TOACCOMPLISHMENT OF ORGANIZATIONALGOALS


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WHY IS CONTROL IMPORTANT?

HOW THE ORGANISATION IS PERFOMED AND HOW TO

DETERMINING THE !UALITY OF GOODS AND SERVICES

IT GIVES MANAGERS FEEDBAC" ON PRODUCT !UALITY

CONSISTENTLY MONITORS THE !UALITY OF GOODS AN

SERVICES SO THAT THEY CAN MA"E CONTINUOUS

IMPROVEMENTS MONITORING EMPLOYEE BEHAVIOR CAN HELP MANAG

WAYS TO INCREASE EMPLOYEES$ PERFORMANCE LEVE

RAISE THE LEVEL OF INNOVATION THROUGH APPROP

CONTROL SYSTEMS TO ENCOURAGE RIS" TA"ING#


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THE PLANNING'CONTROLLING LIN"

Leading

Motivation

Leadership

Communication

Individual and Group Behaviour

Planning

Goals

Objectives

Strategies

Plans

Organizing

Structure

Human esou Management

Controlling

Standards

Measurements

Comparison

!ctions


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THE CONTROL PROCESS

"H# POC#SS O$ CO%"OL

1# ESTABLISH THE STANDARD PERFORMANCE

2# MEASURING ACTUAL PERFORMANCE

# COMPARING ACTUAL PERFORMANCE AGAINST A STANDA

EVALUATE THE RESULT AND TA"E CORRECTIVE ACTIONSTANDARD IS

NOT BEING ACHIEVED


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HOW AND WHAT WE MEASURE

HOW SOURCES OF

INFORMATION PERSONAL

OBSERVATIONS

STATISTICAL REPORTS

ORAL REPORTS

WRITTEN REPORTS

WHAT CONTROL

CRITERIA EMPLOYEES

SATISFACTION

TURNOVER

ABSENTEEISM

BUDGETS COSTS

OUTPUT

SALES


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TA"ING MANAGERIAL ACTION

COURSES OF ACTION

*DOING NOTHING+

ONLY IF DEVIATION IS INSIGNIFICANT

CORRECTING ACTUAL (CURRENT)PERFORMANCE

IMMEDIATE OR BASIC CORRECTIVE ACTIO REVISING THE STANDARD

DETERMINE WHETHER THE STANDARD ISREALISTIC, FAIR, AND ACHIEVABLE


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MANAGERIAL DECISIONS IN THE CONTROL PROCE

Goals Standard

Measure

actual

per&ormance

%o

%o

%o

'es

'es

'es

Compare

actual

per&ormance

(ith standard

)o not

)o not

Ident

cause

variat

Corre

per&ormevise

standard

Is

standard

being

attained+

Is

variance

acceptable+

Is

standardacceptable+


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CONTROLLING FOR ORGANIZATIONALPERFORMANCE

WHAT IS PERFORMANCE?

THE END RESULT OF AN ACTIVITY

WHAT IS ORGANIZATIONAL PERFORMANCE?

THE ACCUMULATED END RESULTS OF ALL OF THEORGANIZATION$S WOR" PROCESSES AND ACTIVITIES

DESIGNING STRATEGIES, WOR" PROCESSES, AND

WOR" ACTIVITIES

COORDINATING THE WOR" OF EMPLOYEES


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ORGANIZATIONAL PERFORMANCEMEASURES

ORGANIZATIONAL PRODUCTIVITYTHE OVERALL OUTPUT OF GOODS AND0ORSERVICES DIVIDED BY THE INPUTS NEEDED

TO GENERATE THAT OUTPUT

ULTIMATELY, A MEASURE OF HOWEFFICIENTLY EMPLOYEES DO THEIR WOR"


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OG!%I,!"IO%!L #$$#C"I-#%#SS

MEASURING HOW APPROPRIATE ORGANIZATIONAL

GOALS ARE AND HOW WELL THE ORGANIZATION IS

ACHIEVING ITS GOALS

IS ORGANIZATION EFFICIENT IN AC!UIRINGSCARCE AND VALUED RESOURCES

IS ORGANIZATION EFFICIENT IN CONVERTINGINPUTS TO OUTPUTS?


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INDUSTRY RAN"INGS MANY DIFFERENT LISTS EIST TO RAN"ORGANIZATIONS# SOME EAMPLES REPORT ON BUSINESS MAGAZINESTOP 1/CANADA$S POWER BOO"

REPORT ON BUSINESS MAGAZINES5/ BESCOMPANIES TO WOR" FOR IN CANADA

PROFITS1// CANADA$S FASTEST GROWINCOMPANIES


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TOOLS FOR CONTROLLINGORGANIZATIONAL PERFORMANCE

FEEDFORWARD CONTROL PREVENTS ANTICIPATED PROBLEMS BEFORE THEY

BUILDING IN !UALITY THROUGH DESIGN

RE!UIRING SUPPLIERS CONFORM TO ISO .//2

CONCURRENT(SIMULTANEOUS) CONTROL

MONITORING WHILE ACTIVITY IS IN PROGRESS

DIRECT SUPERVISION MANAGEMENT BY WAL"INAROUND


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TOOLS FOR CONTROLLINGORGANIZATIONAL PERFORMANCE

FEEDBAC" CONTROL

TA"ES PLACE AFTER AN ACTIVITY IS DONE CORRECTIVE ACTION IS AFTER-THE-FACT,WHEN THE PROBLEM HAS ALREADYOCCURRED

ADVANTAGES

FEEDBAC" PROVIDES MANAGERS WITHINFORMATION ON THE EFFECTIVENESS OFTHEIR PLANNING EFFORTS FEEDBAC" ENHANCES EMPLOYEEMOTIVATION BY PROVIDING THEM WITHINFORMATION ON HOW WELL THEY AREDOING


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TYPES OF CONTROL

Input Ou

$eed&or(ard

Control

Concurrent

Control

$ee

Co

Processes

!nticipates

problems

Corrects

problems as

the* happen

Cor

proble

the*


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ORGANIZATIONAL CONTROLSYSTEMS

ORGANIZATIONAL CONTROLSYSTEMS

O3434C7489

B:;8C7489

C39438: 8 C97


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OUTPUT CONTROL SYSTEMSOUTPUT CONTROL SYSTEMS

FINANCIAL CONTROLS ARE OBJECTIVE AND ALLOWCOMPARISON TO OTHER FIRMS#

PO$I" !"IOS--MEASURES HOW EFFICIENTLYMANAGERS CONVERT RESOURCES INTO PROFITS#

RETURN ON INVESTMENT (ROI) IS THE MOST CO LI/0I)I"' !"IOS -- MEASURE HOW WELL MANAPROTECT RESOURCES TO MEET SHORT TERM DEBT

CURRENT !UIC" RATIOS#

L#-#!G# !"IOS -- SHOW HOW MUCH DEBT ISTO FINANCE OPERATIONS# DEBT-TO-ASSET TIMES-COVERED RATIOS#

!C"I-I"' !"IOS -- MEASURES HOW MANAGERSVALUE FROM ASSETS# INVENTORY TURNOVER, DAYS SALES OUTSTAND


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OUTPUT CONTROL SYSTEMSOUTPUT CONTROL SYSTEMS

ORGANIZATIONAL GOALS:AFTER CORPORATE FINAGOALS ARE SET, EACH DIVISION IS GIVEN SPECIFIC GTHAT MUST BE MET TO ATTAIN THE OVERALL GOALS#

GOALS AND THUS OUTPUT CONTROLS, WILL BE SEEACH AREA OF THE FIRM#

GOALS ARE SPECIFIC DIFFICULT (NOT IMPOSSACHIEVE#

GOAL SETTING IS A MANAGEMENT S"ILL DEVELOVER TIME#

OPERATING BUDGETS:A BLUEPRINT SHOWING HOWMANAGERS CAN USE RESOURCES#

MANAGERS ARE EVALUATED BY HOW WELL THEY MGOALS AND STAY IN BUDGET#

EACH DIVISION IS OFTEN EVALUATED ON ITS OWBUDGETS FOR COST, REVENUE OR PROFIT#


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OUTPUT CONTROL PROBLEMSOUTPUT CONTROL PROBLEMS MANAGERS MUST CREATE OUTPUT STANDARDS T

MOTIVATE AT ALL LEVELS#

BE CAREFUL OF CREATING SHORT-TERM GOALS TMOTIVATE MANAGERS TO FORGET THE FUTURE# IT IS EASY TO CUT COSTS BY DROPPING RD N

BUT IT LEADS TO FUTURE DISASTER# IF STANDARDS ARE TOO HIGH, WOR"ERS MAY

FOLLOW UNETHICAL BEHAVIOR TO ATTAIN THEM INCREASE SALES REGARDLESS OF ISSUES# TH

CAN BE DONE BY S"IPPING SAFE PRODUCTIONSTEPS#


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BEHAVIOR CONTROL SYSTEMSBEHAVIOR CONTROL SYSTEMS

A) DIRECT SUPERVISION: MANAGERS

ACTIVELY MONITOR AND OBSERVE, TEACH,AND CORRECT SUBORDINATES B1 M!%!G#M#%" B' OB2#C"I-#S C1 BUREAUCRATIC CONTROL - RULES AND

SOPS) THAT SHAPE THE BEHAVIOUR OFDIVISIONS, FUNCTIONS, AND INDIVIDUALS#


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MANAGEMENT BY OBJECTIVESMANAGEMENT BY OBJECTIVES

MANAGEMENT BY OBJECTIVES (MBO):

EVALUATES WOR"ERS BY ATTAINMENT OF SPECIFICOBJECTIVES#

GOALS ARE SET AT EACH LEVEL OF THE FIRM#

GOAL SETTING IS PARTICIPATORY WITH MANAGEAND WOR"ER#

REVIEWS HELD LOO"ING AT PROGRESS TOWAR

GOALS# PAY RAISES AND PROMOTIONS ARE TIED TO

GOAL ATTAINMENT#

TEAMS ARE ALSO MEASURED IN THIS WAY WITHGOALS AND PERFORMANCE MEASURED FOR TH

TEAM#


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BUREAUCRATIC CONTROLBUREAUCRATIC CONTROL CONTROL THROUGH A SYSTEM OF RULES AND STAN

OPERATING PROCEDURES (SOPS) THAT SHAPE THEBEHAVIOR OF DIVISIONS, FUNCTIONS, AND INDIVID

RULES AND SOPS TELL THE WOR"ER WHAT TO D

STANDARDIZED ACTIONS SO OUTCOMES AREPREDICTABLE#

STILL NEED OUTPUT CONTROL TO CORRECTMISTA"ES#

PROBLEMS OF BUREAUCRATIC CONTROL:

RULES EASIER TO MAKE THAN DELETE.

FIRM CAN BECOME TOO STANDARDIZED AND NO

FLEXIBLE.

BEST USED FOR ROUTINE PROBLEMS.


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ORGANIZATION$S CULTURE0CLAN CONTROL

WHAT IS ORGANIZATIONAL CULTURE?

A SYSTEM OF SHARED MEANING AND BELIEFS HELD BY

ORGANIZATIONAL MEMBERS THAT DETERMINES, LARGDEGREE, HOW EMPLOYEES ACT#

*THE WAY WE DO THINGS AROUND HERE+

=


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VALUES AND NORMSVALUES AND NORMS

ORGANIZATIONAL VALUES AND NORMSINFOWOR"ERS ABOUT WHAT GOALS THEY SHOULD PE

AND HOW THEY SHOULD BEHAVE TO REACH THE

SOCI!LIS!"IO% 3 SOCIALISATION IS THE PROCHELPS NEW EMPLOYEES ADAPT TO THE ORGANISCULTURE# THIS IS WHEN THE ORGANISATION SEE

MOULD THE OUTSIDER INTO AN EMPLOYEE#


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!UALITIES OF AN EFFECTIVE CONTRSYSTEM

INFORMATION !UALITY

CONTROL SYSTEM INFORMATION MUST BE ACCURATE AND UP T

THE BEST CONTROLS GET THEIR INFORMATION FROM OPERATIOGENERATE IT, SUCH AS SALES FIGURES BASED ON INVOICES

TO EVALUATE PROBLEMS AND TA"E CORRECTIVE ACTION, THEINFORMATION MUST BE RECENT#

CONTROL SYSTEMS CAN SUPPLY DATA IN REAL TIME, BUT SYSTEHAVE TO PROCESS A LOT OF FINANCIAL DATA, LEADING TO DEL


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FLEIBILITY

AN EFFECTIVE CONTROL SYSTEM IS HIGHLY FLEIBLE#

THIS MEANS IT HAS OVERALL DATA AC!UISITION AND DATA PROCECAPABILITIES THAT MANAGEMENT CAN ADAPT TO CHANGING COND

IF THE DATA COLLECTED FROM ONE SOURCE ARE NO LONGER REFOF THE ACTUAL SITUATION, MANAGEMENT MUST BE ABLE TO IDENOTHER, BETTER SOURCES OF DATA AND ADAPT THE SYSTEM TO RE

THOSE#

MUST ADAPT TO ACCEPT NEW BUSINESS PROCESSES THAT ALLOWMANAGEMENT CONTROLS IN THE NEW AREA OF ACTIVITY#

!UALITIES OF AN EFFECTIVE CONTROL SYST


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OBJECTIVITY

MANAGERS MUST BE ABLE TO MA"E DECISIONS AND ACT ON THE

CONTROL SYSTEM RESULTS#

THE INFORMATION IN A CONTROL SYSTEM SHOULD BE UNDERSTANAND BE SEEN AS OBJECTIVE BY THE INDIVIDUALS WHO USE IT# A DI

TO UNDERSTAND CONTROL SYSTEM WILL CAUSE UNNECESSARY MAND CONFUSION OR FRUSTRATION AMONG EMPLOYEES#

CONTROL SYSTEMS ARE MOST EFFECTIVE WHEN THEIR RESULTS G

INDICATION OF THE "IND OF CORRECTIVE ACTION THAT IS NECESS



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ECONOMICS

THE COST OF IMPLEMENTING A CONTROL SYSTEM SHOULD BE LESOR AT MOST E!UAL TO, THE BENEFITS DERIVED FROM THE CONTR

SYSTEM#

!CC#P"#) B' OG!%I,!"IO% M#MB#S#

FOR A CONTROL SYSTEM TO BE ACCEPTED BY ORGANIZATION MEM

CONTROLS MUST BE RELATED TO MEANINGFUL AND ACCEPTED GO


chapter 6(2) control system ppt

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