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UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning.

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Presentation on theme: "UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning."— Presentation transcript:

1 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 1 FOUNDATIONS OF MANAGEMENT Fall 2008 Reading Assignment Chapter Eight Unit Twelve

2 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 2 The Process of assuring that actual outcomes conform to planned outcomes. A regulatory process involving: –establishing standards –comparing actual performance against the standards –taking corrective action when necessary The Control Process

3 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 3 The Control Process Begins with establishment of clear standards of performance Involves a comparison of actual performance to desired performance Takes corrective action to repair performance deficiencies Is a dynamic, cybernetic process Consists of feedback control, concurrent control, feedforward control

4 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 4 Setting Standards Determine what should be benchmarked Identify companies against which to benchmark standards Collect data on other companies performance standards

5 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 5 Components of the Control Process Objectives - Desired Outcomes Criteria - Specific Scales used to Assess Desired Outcomes Standards - Levels of Achievement on Criteria with Respect to Objective Measure - The Process Used to Determine the Actual Level Achieved on Desired Criteria

6 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 6 Corrective Action Identify performance deviations Analyze those deviations Develop and implement programs to correct them

7 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 7 Steps in the Control Process Establish Strategic Goals 1. Establish standards of performance 2. Measure actual performance 4. Take corrective action 4. Do nothing or provide reinforcement 3. Compare performance to standards If Adequate If Inadequate Feedback Adjust performance Feedback

8 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 8 Approaches to Control Feedback Control Gather information about Performance deficiencies after they occur Gather information about Performance deficiencies after they occur Concurrent Control Gather information about Performance deficiencies as they occur Gather information about Performance deficiencies as they occur Feedforward Control Monitor performance inputs rather than outputs to prevent or Minimize performance deficiencies before they occur Monitor performance inputs rather than outputs to prevent or Minimize performance deficiencies before they occur

9 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 9 Three Types of Control Figure 8.1

10 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 10 Feedback Control Focuses on quality of product and service outcomes Inputs Production Feedback Control

11 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 11 Outputs Inputs Concurrent Control Focuses on quality of task activities to Transform inputs into outputs Concurrent Control

12 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 12 Feedforward Control Focuses on quality of resources acquired by organization Production Outputs Feedforward Control

13 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 13 Feedforward Control Guidelines for Using Feedforward Control 1.Thorough planning and analysis are required. 2.Careful discrimination must be applied in selecting input variables. 3.The feedforward system must be kept dynamic. 4.A model of the control system should be developed. 5.Data on input variables must be regularly collected. 6.Data on input variables must be regularly assessed. 7.Feedforward control requires action. 1.Thorough planning and analysis are required. 2.Careful discrimination must be applied in selecting input variables. 3.The feedforward system must be kept dynamic. 4.A model of the control system should be developed. 5.Data on input variables must be regularly collected. 6.Data on input variables must be regularly assessed. 7.Feedforward control requires action.

14 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 14 Four Steps in Organizational Control

15 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 15 The Control Process 1.Establish standards, goals, or targets against which performance is to be evaluated –Standards must be consistent with the organizations strategy

16 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 16 The Control Process 2.Measure actual performance –Managers can measure outputs resulting from worker behavior or they can measure the behavior themselves.

17 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 17 The Control Process 3.Compare actual performance against chosen standards –Managers must decide if performance actually deviates, often, several problems combine creating low performance

18 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 18 The Control Process 4.Evaluate the result and initiate corrective action if the situation is not being achieved –Standards have been set too high or too low. –Workers may need additional training or equipment. This step is often hard since the environment is constantly changing.

19 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 19 Three Organizational Control Systems Figure 8.3

20 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 20 Financial Measures of Performance 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 debtcurrent and quick ratios.

21 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 21 Financial Measures of Performance Leverage ratios –Measures of how much debt is used to finance operationsdebt-to-asset and times-covered ratios. Activity ratios –Measures of how efficiently managers are creating value from assetsinventory turnover, days sales outstanding ratios.

22 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 22 Organizational Goals –Each division within the firm is given specific goals that must be met in order to attain overall organizational goals.

23 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 23 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.

24 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 24 Organization-Wide Goal Setting

25 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 25 Operating Budgets Operating Budget –A blueprint that states 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

26 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 26 Operating Budgets Three components are the essence of effective output control Objective financial measures Challenging goals and performance standards Appropriate operating budgets

27 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 27 Problems with Output Control Managers must create output standards that motivate at all levels. –Standards should not cause managers to behave in inappropriate ways to achieve organizational goals.

28 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 28 Control Methods Normative Concertive Self-Control Bureaucratic Objective

29 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 29 Bureaucratic Control Top-down control Use rewards and punishment to influence employee behaviors Use policies and rules to control employees Often inefficient and resistant to change

30 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 30 Objective Control The use of observable measures Behavioral control –regulate employee behaviors and actions –managers monitor and shape employee behaviors Output control –measure employee outputs –focus is on outcomes, not behaviors

31 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 31 Normative Control Company values and beliefs guide employee behavior and decisions Cultural norms, not rules, guide employees Created by: –careful selection of employees –role-modeling and retelling of stories

32 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 32 Concertive Control Employees are guided by the beliefs that are shaped and negotiated by work groups Autonomous work groups –operate without managers –group members control processes, output, and behaviors

33 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 33 Self-Control Also known as self-management Employees control their own behavior Employees make decisions within well-established boundaries Managers teach others the skills they need to maximize work effectiveness Employees set goals and monitor their own progress

34 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 34 What to Control? Customer Perspective Customer Perspective Internal Perspective Innovation and Learning Perspective Innovation and Learning Perspective Financial Perspective The Balanced Scorecard looks at company performance through four perspectives:

35 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 35 Advantages of the Balanced Scorecard Forces managers to set goals and measure performance in each of the four areas Minimizes the chances of suboptimization –performance improves in one area, but at the expense of others

36 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 36 Economic Value Added (EVA) Economic Value Added The amount by which company profits exceed the cost of capital in a given year Common Costs of Capital Long-term bank loans Interest paid to bondholders Dividends and growth in stock value that accrue to shareholders Long-term bank loans Interest paid to bondholders Dividends and growth in stock value that accrue to shareholders

37 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 37 Why Is EVA Important? Shows whether a business, division, department, profit center, or product is paying for itself Makes managers at all levels pay closer attention to their segment of the business Does not specify what should or should not be done to improve performance

38 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 38 The Customer Perspective Monitoring customer defections: –identify which customers are leaving the company –measuring the rate at which they are leaving Obtaining a new customer costs five times as much as keeping a current one Customers who have left are likely to tell you what you are doing wrong Understanding why a customer leaves can help fix problems and make changes

39 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 39 Internal Control - Controlling Quality Measuring Quality Excellence Value Conformance to Expectations

40 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 40 The Innovation & Learning Perspective Waste Disposal Waste Treatment Recycle & Reuse Waste Prevention & Reduction Controlling Waste and Pollution

41 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 41 Strategies to Prevent & Reduce Waste Good housekeeping Material/product substitution Process modification

42 UNIT I – Introduction to Management UNIT 2 – International Management and Diversity UNIT 3 – Managerial Ethics and Social Responsibility UNIT 4 – Planning as a Decision-Making Activity UNIT 5 – Domestic and International Issues in Planning UNIT 6 – Organization – Design and Culture UNIT 7 – Staffing UNIT 8 – Communication UNIT 9 – Direction - Teams and Group Processes UNIT 10 – Motivation UNIT 11 – Leadership UNIT 12 – Control Definitions Type of Control Feedback Control Concurrent Control Feedforward Control Control Methods Bureaucratic Objective Normative Concertive Self-Control Balanced Scorecard UNIT 13 - POM/MIS/DSS FOUNDATIONS OF MANAGEMENT UNIT 12 - Control Copyright © 2008 by Dr. Eliot S. Elfner, St. Norbert College 42 FOUNDATIONS OF MANAGEMENT Fall The End Dr. Eliot S. Elfner Professor of Business Administration St. Norbert College


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