controlling: purpose and process
DESCRIPTION
Controlling: Purpose and Process. Six Sigma. A process quality goal. Highly disciplined process. Helps companies focus on developing and delivering near-perfect products and services. Statistical goal: 3.4 defects per million transactions. Controlling. - PowerPoint PPT PresentationTRANSCRIPT
MultiMedia by Stephen M. Peters © 2002 South-Western
Controlling: Purpose and Process
MultiMedia by Stephen M. Peters © 2002 South-Western
Six Sigma
• A process quality goal.• Highly disciplined process.• Helps companies focus on developing and
delivering near-perfect products and services.• Statistical goal: 3.4 defects per million transactions.
MultiMedia by Stephen M. Peters © 2002 South-Western
Controlling
The function in which managers set and communicate performance standards for people, processes, and devices.
Is about managing risks. A standard is any guideline or benchmark established
as the basis for the measurement of capacity, quantity, content, value, cost, quality, or performance.
MultiMedia by Stephen M. Peters © 2002 South-Western
Risk Managers
Monitor people and processes
Help transform functional managers into advisers and consultants
Teach others how to deal with the risks that haunt their areas of expertise
MultiMedia by Stephen M. Peters © 2002 South-Western
Bittel (1989)
“Controlling is the function that brings the management cycle full circle. It is the steering mechanism that links all the
preceding functions of organizing, staffing, and [leading] to the goals of planning.”
MultiMedia by Stephen M. Peters © 2002 South-Western
Control Process
MultiMedia by Stephen M. Peters © 2002 South-Western
Establishing Performance Standards
Use a quantitative or qualitative measuring device.
Designed to monitor people, money, capital goods, or processes.
Point 1
Point 2
MultiMedia by Stephen M. Peters © 2002 South-Western
The Nature of a StandardDepends On
• Who designs, works with, and receives the output from controls.
• What is being monitored.
• What is to be achieved through monitoring.
• Where monitoring efforts will take place (location and functional area).
• When controls will be used.
• What resources are available to expend on the controls.
MultiMedia by Stephen M. Peters © 2002 South-Western
Productivity
The amount of output achieved from the use of a given amount of inputs.
Can be measured qualitatively.
Can be measured quantitatively.
MultiMedia by Stephen M. Peters © 2002 South-Western
Quality
Is customer satisfaction.Begins with the standards and methods used to recruit, hire, train, evaluate, and reward employees.Must exist within every person and process.Must be a core value within an organization’s culture.
MultiMedia by Stephen M. Peters © 2002 South-Western
To Control Quality
Companies create standards and quality assurance (QA) systems.
A QA system focuses on constant incremental quality improvement [kaizen] measurements and results.
MultiMedia by Stephen M. Peters © 2002 South-Western
Measuring Performance
• Measure actual performance to determine variation from standard.
• Mechanisms for this purpose can be extremely sensitive.
• Computers are increasingly important as tools for measuring performance.
MultiMedia by Stephen M. Peters © 2002 South-Western
Comparing Measured Performanceto Established Standards
1. Compare actual performance to the
standards set for that purpose.
2. If deviations exist, the evaluator must decide if they are
significant.
4. The source of a deviation may lie
beyond the employee who first discovers it.
5. May require examining the
standards being applied and the accuracy of the
measurement and comparison processes.
3. The evaluator must determine what is
causing the variance.
MultiMedia by Stephen M. Peters © 2002 South-Western
Productivity and Quality-CenteredEnvironment of Today
• Workers and managers are often empowered to evaluate their own work for:– Quality
– Productivity
– Cost improvements
• Individuals and groups are being given the responsibility to control their behavior and operations.
MultiMedia by Stephen M. Peters © 2002 South-Western
Types of Controlsfor Restaurant Operations
MultiMedia by Stephen M. Peters © 2002 South-Western
Feedforward Controls
Focus on operations before they begin.
Sometimes called preliminary, screening, or prevention controls.
Intended to prevent defects and deviations from standards.
MultiMedia by Stephen M. Peters © 2002 South-Western
Concurrent Controls
Apply to processes as they are happening.
The most important concurrent control in any undertaking is often the skilled and experienced operator.
MultiMedia by Stephen M. Peters © 2002 South-Western
Feedback Controls
Focus on the results of operations.
After-the-fact, or postperformance, controls.
Information is fed back into the process or to the controller.
MultiMedia by Stephen M. Peters © 2002 South-Western
Control SystemsFeedforward, concurrent , and feedback controls should
be viewed as part of an overall control system.
Managers integrate suitable control combinations to enforce standards.
Ensure that resources are used effectively and efficiently.
Make sure elements function smoothly with one another.
MultiMedia by Stephen M. Peters © 2002 South-Western
Controls Focus on
Inputs Outputs
Processes
MultiMedia by Stephen M. Peters © 2002 South-Western
Critical Control Points• All the operations that directly affect the survival of
an organization.
• Should focus on:– Those points at which failures cannot be tolerated.
– Where time and money costs are greatest.
• The objective is to apply controls to the essential aspects of a business, not the peripheral ones.
MultiMedia by Stephen M. Peters © 2002 South-Western
Six Characteristics Of Effective Controls
Acceptability
Timelines Comprehensibility
Accuracy
Economic Feasibility
Integration
MultiMedia by Stephen M. Peters © 2002 South-Western
Controls are Effective as Long as They
Do what they are intended to do.
Do not generate opposition.
Do not result in costs greater than the
benefits they provide.
MultiMedia by Stephen M. Peters © 2002 South-Western
Controls are Designed to Deal With
Specific people
Processes
Circumstances
1.
2.
3.
MultiMedia by Stephen M. Peters © 2002 South-Western
Changes that RequireReexamination of Controls
Changes to Mission Structural Changes Changes in Decision Making Changes in Human Relations Technological Changes