Upload
amanda-rice
View
220
Download
1
Embed Size (px)
Citation preview
11-1
Organizational ControlOrganizational Control
Managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals Keeping an organization on track,
anticipating events, changing the organization to respond to opportunities and threats
11-2
Control SystemsControl Systems
Formal, target-setting, monitoring, evaluation and feedback systems that provide managers with information about how well the organization’s strategy and structure are working.
A good control system should: be flexible so managers can respond as needed. provide accurate information about the
organization. provide information in a timely manner.
11-4
Types of ControlTypes of Control
Feedforward Controls Used in the input stage of the process
Managers can anticipate problems before they arise. Managers can give rigorous specifications to suppliers to
avoid quality problems with inputs.
Concurrent Controls Give immediate feedback on how inputs are
converted into outputs Allows managers to correct problems as they arise Managers can see that a machine is becoming out of
alignment and fix it.
11-5
Types of Control Types of Control
Feedback Controls Provide after-the-fact information managers
can use in the futureCustomers’ reactions to products are used to
take corrective action in the future.
11-8
Financial Measures of PerformanceFinancial Measures of Performance
Financial Controls Profit ratios
Measures of how efficiently managers convert resources into profits—return on investment (ROI).
Liquidity ratios Measures of how well managers protect resources to
meet short term debt—current and quick ratios. Leverage ratios
Measures of how much debt is used to finance operations—debt-to-asset and times-covered ratios.
11-9
Financial Measures of Performance Financial Measures of Performance
Financial Controls Leverage ratios
Measures of how much debt is used to finance operations—debt-to-asset and times-covered ratios.
Activity ratiosMeasures of how efficiently managers are
creating value from assets—inventory turnover, days sales outstanding ratios.
11-10
Output ControlOutput Control
Organizational Goals Each division within the firm is given
specific goals that must be met in order to attain overall organizational goals.Goals should be specific and difficult, but not
impossible, to achieve (stretch goals).Goal setting and establishing output controls are
management skills that are developed over time.
11-12
Output ControlOutput Control
Operating Budgets Blueprints state how managers
intend to allocate and use the resources they control to attain organizational goals effectively and efficiently. Each division is evaluated on its own budgets for cost,
revenue or profit. Managers are evaluated by how well they meet goals for
controlling costs, generating revenues, or maximizing profits while staying within their budgets.
11-13
Problems with Output ControlProblems with Output Control
Managers must create output standards that motivate at all levels. They must be careful not to create short-
term goals that motivate managers to ignore the future.
If standards are set too high, workers may engage unethical behaviors to attain them.
11-14
Behavior ControlBehavior Control
Direct Supervision Managers who directly manage can teach, reward,
lead by example, and take corrective action as needed. Can be very expensive since only a few workers can be
personally managed by one manager and many managers are needed.
Close supervision demotivates workers who desire less scrutiny and more autonomy, causing them to avoid responsibility.
Direct supervision is difficult to do effectively in complex job settings.
11-15
Management by Objectives Management by Objectives
Management by Objectives (MBO) A goal-setting process in which managers and
subordinates negotiate specific goals and objectives for the subordinate to achieve and then periodically evaluate their attainment of those goals. Specific goals are set at each level of the firm. Goal setting is participatory with manager and worker Periodic reviews of subordinates’ progress toward goals are
held (pay raises and promotions are tied to goal attainment). Teams are also measured in this way with goals and
performance measured for the team.
11-16
Bureaucratic Control Bureaucratic Control
Bureaucratic Control Control through a system of rules and standard
operating procedures (SOPs) that shapes the behavior of divisions, functions, and individuals. Rules and SOPs tell the worker what to do (standardized
actions) so outcomes are predictable. There is still a need for output control to correct mistakes. Bureaucratic control is best used for routine problems in
stable environments.
11-17
Organizational CultureOrganizational Culture
Organizational Culture The set of internalized values, norms,
standards of behavior, and common expectations that control the ways in which individuals and groups in an organization interact with each other and work to achieve organizational goals.
11-18
Clan ControlClan Control
Clan Control The control through the development of an internal
system of values and norms. Both culture and clan control accept the norms and
values as their own and then work within them. Examples: Work dress styles, normal working hours, pride
taken in work. These methods provide control where output and
behavioral control does not work. Strong culture and clan control help worker to focus
on the organization and enhance its performance.
11-19
Adaptive CultureAdaptive Culture
Strong and cohesive culture that controls employee attitudes and behaviors
11-20
Inert CultureInert Culture
Culture that leads to values and norms that fail to motivate or inspire employees
11-21
Steps in the Organizational Change Process
Steps in the Organizational Change Process
Figure 11.6
11-22
Organization ChangeOrganization Change
Movement of an organization away from its present state and toward some desired future state to increase its efficiency and effectiveness