Chapter 16 Control 2015 Cengage Learning MGMT 7

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Chapter 16 Control © 2015 Cengage Learning MGMT 7

Chapter 16 Control © 2015 Cengage Learning MGMT 7

16 -1 describe the basic control process 16 -2 discuss the various methods that

16 -1 describe the basic control process 16 -2 discuss the various methods that managers can use to maintain control 16 -3 describe the behaviors, processes, and outcomes that today’s managers are choosing to control in their organizations © 2015 Cengage Learning

The Control Process • Establishment of clear standards of performance • Comparing performance to

The Control Process • Establishment of clear standards of performance • Comparing performance to those standards, • Corrective action to repair performance deficiencies • Dynamic, cybernetic process • Three basic methods: feedback control, concurrent control, and feedforward control. • Control isn’t always worthwhile or possible. © 2015 Cengage Learning 16 -1

Standards • Must enable goal achievement • Listen to customer’s comments, complaints, and suggestions

Standards • Must enable goal achievement • Listen to customer’s comments, complaints, and suggestions • Benchmarking – determining other companies’ standards © 2015 Cengage Learning 16 -1

Comparison to Standards The quality of the comparison depends largely on the measurement and

Comparison to Standards The quality of the comparison depends largely on the measurement and information systems a company uses to keep track of performance. The better the system, the easier it is for a company to track performance and identify problems that need to be fixed. 16 -1 © 2015 Cengage Learning

Corrective Action • Identify performance deviations • Analyze deviations • Development and implement corrective

Corrective Action • Identify performance deviations • Analyze deviations • Development and implement corrective programs © 2015 Cengage Learning 16 -1

Cybernetic Control Process © 2015 Cengage Learning 16 -1

Cybernetic Control Process © 2015 Cengage Learning 16 -1

Control Methods • Feedback control • Concurrent control • Feedforward control 16 -1 ©

Control Methods • Feedback control • Concurrent control • Feedforward control 16 -1 © 2015 Cengage Learning

Control Isn’t Always Worthwhile or Possible • Control loss • Regulation costs • Cybernetic

Control Isn’t Always Worthwhile or Possible • Control loss • Regulation costs • Cybernetic feasibility 16 -1 © 2015 Cengage Learning

Bureaucratic Control Managers try to influence employee behavior by rewarding or punishing employees for

Bureaucratic Control Managers try to influence employee behavior by rewarding or punishing employees for compliance or non-compliance. • Managers emphasize following rules above all else. • Companies are highly resistant to change and slow to respond to customers and competitors. © 2015 Cengage Learning 16 -2

Objective Control The use of observable measures of employee behavior or output to assess

Objective Control The use of observable measures of employee behavior or output to assess performance and influence behavior. • Behavior control • Output control – measures must be reliable, fair, and accurate – employees and managers must believe that they can produce the desired results – rewards must be dependent on achieving established standards of performance © 2015 Cengage Learning 16 -2

Normative Controls A company’s widely shared values and beliefs guide workers’ behavior and decisions.

Normative Controls A company’s widely shared values and beliefs guide workers’ behavior and decisions. Created by… • Who companies hire • Observing experienced employees 16 -2 © 2015 Cengage Learning

Concertive Controls Based on beliefs that are shaped and negotiated by work groups. ©

Concertive Controls Based on beliefs that are shaped and negotiated by work groups. © 2015 Cengage Learning 16 -2

Self-Control (Self-Management) A control system in which managers and workers control their own behavior.

Self-Control (Self-Management) A control system in which managers and workers control their own behavior. © 2015 Cengage Learning 16 -2

The Balanced Scorecard Encourages managers to look at four different perspectives on company performance.

The Balanced Scorecard Encourages managers to look at four different perspectives on company performance. • Customer perspective • Internal perspective • Innovation and learning perspective • Financial perspective 16 -3 © 2015 Cengage Learning

Southwest Airlines’s Balanced Scorecard © 2015 Cengage Learning 16 -3

Southwest Airlines’s Balanced Scorecard © 2015 Cengage Learning 16 -3

Controlling Financial Performance Traditional approaches • Cash flow analysis • Balance sheets • Income

Controlling Financial Performance Traditional approaches • Cash flow analysis • Balance sheets • Income statements • Financial ratios • Budgets 16 -3 © 2015 Cengage Learning

Economic Value Added • • • 16 -3 Not the same thing as profits…

Economic Value Added • • • 16 -3 Not the same thing as profits… The amount by which profits exceed the cost of capital in a given year. EVA is positive when company profits exceed the cost of capital in a given year. Includes the cost of capital Can be easily determine for subsets of a company © 2015 Cengage Learning

Calculating Economic Value Added (EVA) © 2015 Cengage Learning 16 -3

Calculating Economic Value Added (EVA) © 2015 Cengage Learning 16 -3

Controlling Customer Defections • Companies can do a better job of answering “How do

Controlling Customer Defections • Companies can do a better job of answering “How do customers see us? ” by identifying which customers are leaving the company and measuring the rate at which they are leaving. • Customers who have left are much more likely than current customers to tell you what you were doing wrong. © 2015 Cengage Learning 16 -3

Controlling Quality is measured in three ways: • Excellence • Value • Conformance to

Controlling Quality is measured in three ways: • Excellence • Value • Conformance to specifications © 2015 Cengage Learning 16 -3

Conformance to Specifications Checklist for Buying Fresh Fish © 2015 Cengage Learning 16 -3

Conformance to Specifications Checklist for Buying Fresh Fish © 2015 Cengage Learning 16 -3

Advantages and Disadvantages of Different Measures of Quality © 2015 Cengage Learning 16 -3

Advantages and Disadvantages of Different Measures of Quality © 2015 Cengage Learning 16 -3

Controlling Waste and Pollution • Waste prevention and reduction – good housekeeping – material/product

Controlling Waste and Pollution • Waste prevention and reduction – good housekeeping – material/product substitution – process modification • Recycle and reuse • Waste treatment • Waste disposal 16 -3 © 2015 Cengage Learning

Barcelona Restaurant Group 1. 2. 3. <click screenshot for video> How do managers at

Barcelona Restaurant Group 1. 2. 3. <click screenshot for video> How do managers at Barcelona control the company’s financial performance? What is the “balanced scorecard” approach to measuring corporate performance, and in what ways does Barcelona utilize this approach? Describe the feedback control model and describe an instance where Barcelona followed this process to improve its performance. © 2015 Cengage Learning

MGMT 20128 MGMT 20132 MGMT 20143 THINK BIGMGMT 20128 MGMT 20132 MGMT 20143 THINK BIG
Chapter 1 Management 2015 Cengage Learning MGMT 7Chapter 1 Management 2015 Cengage Learning MGMT 7
Chapter 6 Organizational Strategy 2015 Cengage Learning MGMTChapter 6 Organizational Strategy 2015 Cengage Learning MGMT
Chapter 13 Motivation 2015 Cengage Learning MGMT 7Chapter 13 Motivation 2015 Cengage Learning MGMT 7
Chapter 15 Managing Communication 2015 Cengage Learning MGMTChapter 15 Managing Communication 2015 Cengage Learning MGMT
Chapter 10 Managing Teams 2015 Cengage Learning MGMTChapter 10 Managing Teams 2015 Cengage Learning MGMT
Chapter 14 Leadership 2015 Cengage Learning MGMT 7Chapter 14 Leadership 2015 Cengage Learning MGMT 7
Chapter 13 Motivation 2015 Cengage Learning MGMT 7Chapter 13 Motivation 2015 Cengage Learning MGMT 7
Chapter 8 Global Management 2015 Cengage Learning MGMTChapter 8 Global Management 2015 Cengage Learning MGMT
Chapter 10 Managing Teams 2015 Cengage Learning MGMTChapter 10 Managing Teams 2015 Cengage Learning MGMT
Chapter 15 Managing Communication 2015 Cengage Learning MGMTChapter 15 Managing Communication 2015 Cengage Learning MGMT
Chapter 10 Managing Teams 2014 Cengage Learning MGMTChapter 10 Managing Teams 2014 Cengage Learning MGMT
Chapter 14 Leadership 2014 Cengage Learning MGMT 6Chapter 14 Leadership 2014 Cengage Learning MGMT 6
Chapter 8 Global Management 2014 Cengage Learning MGMTChapter 8 Global Management 2014 Cengage Learning MGMT
Chapter 17 Managing Information 2014 Cengage Learning MGMTChapter 17 Managing Information 2014 Cengage Learning MGMT
Chapter 15 Managing Communication 2014 Cengage Learning MGMTChapter 15 Managing Communication 2014 Cengage Learning MGMT
Chapter 6 Organizational Strategy 2014 Cengage Learning MGMTChapter 6 Organizational Strategy 2014 Cengage Learning MGMT
Chapter 13 Motivation 2014 Cengage Learning MGMT 7Chapter 13 Motivation 2014 Cengage Learning MGMT 7
Chapter 10 Managing Teams 2014 Cengage Learning MGMTChapter 10 Managing Teams 2014 Cengage Learning MGMT
Chapter 13 Motivation 2014 Cengage Learning MGMT 6Chapter 13 Motivation 2014 Cengage Learning MGMT 6
Chapter 8 Global Management 2014 Cengage Learning MGMTChapter 8 Global Management 2014 Cengage Learning MGMT
Chapter 8 Global Management 2014 Cengage Learning MGMTChapter 8 Global Management 2014 Cengage Learning MGMT
Chapter 1 Management 2014 Cengage Learning MGMT 6Chapter 1 Management 2014 Cengage Learning MGMT 6
Chapter 1 Management 2014 Cengage Learning MGMT 7Chapter 1 Management 2014 Cengage Learning MGMT 7