2. Supervisión y controlM. En C. Eduardo Bustos Farías2 Steps in the Controlling Process Control is accomplished by comparing actual performance with predetermined standards and then taking necessary corrective actions A. Establishing performance standards: 1. A standard outlines what is expected 2. Standards are usually expressed in terms of quantity, quality, or time limitations 3. Standards take into account more than just work 4. Many methods for setting are available including the judgment of the supervisor, analysis of historical data, and employment of industrial engineering methods

3. Supervisión y controlM. En C. Eduardo Bustos Farías3 Steps in the Controlling Process B. Monitoring performance: 1. Provides information about what is actually happening 2. Monitoring must be done often enough to provide adequate information but not so often as to become too expensive or threatening to employees 3. Some methods for monitoring performance are reports, audits, budgets, and personal observations C. Taking corrective action: 1. If standards are not being met, the supervisor must find the cause and take corrective action 2. If performance exceeds standards, a supervisor might provide positive reinforcement 3. When performance is below standards, the supervisor usually takes increasingly harsh actions 4. Supervisors should fully explain why a corrective action is necessary

4. Supervisión y controlM. En C. Eduardo Bustos Farías4 Tools for Supervisory Control A.Budgets: 1. A budget is a statement of expected results or requirements expressed in financial or numerical terms 2. The danger of a budget is that it can be used to be inflexible or to hide inefficiencies B.Written reports: 1. Supervisors may prepare reports for upper management or receive reports from subordinates 2. Reports may be periodic or prepared as necessary 3. Analytical reports interpret the facts they present, but informational reports only present the facts 4. Unnecessary reports can present a substantial waste of resources

5. Supervisión y controlM. En C. Eduardo Bustos Farías5 Tools for Supervisory Control C.Personal observation: 1. Besides providing information, personal observation can communicate the supervisor’s interest in the employees 2. Potential problems with this approach are that an employee’s behavior may change when being watched or the supervisor might have a subjective view of what is happening 3. Management by walking around is a hands-on approach to control D.Electronic monitors: 1. There are a number of electronic devices that can monitor what is going on including electronic cash registers, video cameras, and phones that record conversation length E.Management by objectives: 1. MBO is part of the planning function, but once the system is developed, it can be used for control purposes

6. Supervisión y controlM. En C. Eduardo Bustos Farías6 Supervisory Control In Practice Areas of control depend on the supervisor’s areas of responsibility. Two common areas are quality assurance and inventory control a. Quality assurance: includes everything that an organization does to assure the quality of its products and services b. Inventory control: is concerned withmaintaining an adequate but not too excessive amount of inventory

7. Supervisión y controlM. En C. Eduardo Bustos Farías7 Controlling as a Management Function Controlling –A process of monitoring performance and taking action to ensure desired results. –It sees to it that the right things happen, in the right ways, and at the right time.

8. Supervisión y controlM. En C. Eduardo Bustos Farías8 Controlling as a Management Function Controlling –Done well, it ensures that the overall directions of individuals and groups are consistent with short and long range plans. –It helps ensure that objectives and accomplishments are consistent with one another throughout an organization.

9. Supervisión y controlM. En C. Eduardo Bustos Farías9 Controlling as a Management Function Controlling –It helps maintain compliance with essential organizational rules and policies.

10. Supervisión y controlM. En C. Eduardo Bustos Farías10 Controlling as a Management Function Cybernetic Control System –One that is self-contained in its performance monitoring and correction capabilities. (thermostat) –The control process practiced in organizations is not cybernetic, but it does follow similar principles.

11. Supervisión y controlM. En C. Eduardo Bustos Farías11 The Control Process Establish objectives and standards. Measure actual performance. Compare results with objectives and standards. Take necessary action.

12. Supervisión y controlM. En C. Eduardo Bustos Farías12 Establish Objectives and Standards The control process begins with planning and the establishment of performance objectives. Performance objectives are defined and the standards for measuring them are set.

13. Supervisión y controlM. En C. Eduardo Bustos Farías13 Establish Objectives and Standards There are two types of standards: –Output Standards - measures performance results in terms of quantity, quality, cost, or time. –Input Standards - measures work efforts that go into a performance task.

14. Supervisión y controlM. En C. Eduardo Bustos Farías14 Measuring Actual Performance Measurements must be accurate enough to spot deviations or variances between what really occurs and what is most desired. Without measurement, effective control is not possible.

15. Supervisión y controlM. En C. Eduardo Bustos Farías15 Comparing Results with Objectives and Standards The comparison of actual performance with desired performance establishes the need for action. Ways of making such comparisons include: –Historical / Relative / Engineering –Benchmarking

16. Supervisión y controlM. En C. Eduardo Bustos Farías16 Taking Corrective Action Taking any action necessary to correct or improve things. Management-by-Exception focuses managerial attention on substantial differences between actual and desired performance.

17. Supervisión y controlM. En C. Eduardo Bustos Farías17 Taking Corrective Action –Management-by Exception can save the managers time, energy, and other resources, and concentrates efforts on areas showing the greatest need. –There are two types of exceptions: Problems - below standard Opportunities - above standard

18. Supervisión y controlM. En C. Eduardo Bustos Farías18 Effective Controls The Best Controls in Organizations are Strategic and results oriented Understandable Encourage self-control

19. Supervisión y controlM. En C. Eduardo Bustos Farías19 Effective Controls The Best Controls in Organizations are Timely and exception oriented Positive in nature Fair and objective Flexible

20. Supervisión y controlM. En C. Eduardo Bustos Farías20 Types of Control Preliminary Sometimes called the feedforward controls, they are accomplished before a work activity begins. They make sure that proper directions are set and that the right resources are available to accomplish them.

21. Supervisión y controlM. En C. Eduardo Bustos Farías21 Types of Control Concurrent Focus on what happens during the work process. Sometimes called steering controls, they monitor ongoing operations and activities to make sure that things are being done correctly.

22. Supervisión y controlM. En C. Eduardo Bustos Farías22 Types of Control Postaction Sometimes called feedback controls, they take place after an action is completed. They focus on end results, as opposed to inputs and activities.

23. Supervisión y controlM. En C. Eduardo Bustos Farías23 Types of Controls Managers have two broad options with respect to control. They can rely on people to exercise self- control (internal) over their own behavior. Alternatively, managers can take direct action (external) to control the behavior of others.

24. Supervisión y controlM. En C. Eduardo Bustos Farías24 Types of Control Internal Controls Allows motivated individuals to exercise self-control in fulfilling job expectations. The potential for self-control is enhanced when capable people have clear performance objectives and proper resource support.

25. Supervisión y controlM. En C. Eduardo Bustos Farías25 Types of Control External Controls It occurs through personal supervision and the use of formal administrative systems. –Performance appraisal systems, compensation and benefit systems, employee discipline systems, and management-by-objectives.

26. Supervisión y controlM. En C. Eduardo Bustos Farías26 Organizational Control Systems Management Processes –Strategy and objectives –Policies and procedures –Selection and training –Performance appraisal –Job design and work structures –Performance modeling, norms, and organization culture

27. Supervisión y controlM. En C. Eduardo Bustos Farías27 Organizational Control Systems Compensation and Benefits –Attract talented people and retain them. –Motivate people to exert maximum effort in their work. –Recognize the value of their performance contributions.

28. Supervisión y controlM. En C. Eduardo Bustos Farías28 Organizational Control Systems Employee Discipline –Discipline is defined as influencing behavior through reprimand. –Progressive Discipline ties reprimand to the severity and frequency of the employee’s infractions. –Positive Discipline tries to involve people more positively and directly in making decisions to improve their behavior.

29. Supervisión y controlM. En C. Eduardo Bustos Farías29 The “Hot Stove Rule” Immediate Focus on activity not personality Consistent Informative Occur in a supportive setting Support realistic rules To be Effective Discipline Should be:

30. Supervisión y controlM. En C. Eduardo Bustos Farías30 Organizational Control Systems Information and Financial –Activity-based costing - the true cost of all products and services. –Economic value added - examine the value added by all activities. –Understand the implication of key financial measures of (ratios) organizational performance

31. Supervisión y controlM. En C. Eduardo Bustos Farías31 Operations Management and Control Purchasing –Economic Order Quantity automatic reorder points –Just-In-Time Scheduling

32. Supervisión y controlM. En C. Eduardo Bustos Farías32 Operations Management and Control Project Management –Program Evaluation and Review Technique (PERT) - Identifies and controls the many separate events in complex projects.

33. Supervisión y controlM. En C. Eduardo Bustos Farías33 Operations Management and Control Statistical Quality Control –Based on the establishment of upper and lower control limits, that can be graphically and statistically monitored to ensure that products meet standards.