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MGMT5 © 2012 Cengage Learning Control 16. © 2012 Cengage Learning 1.describe the basic control process 2.discuss the various methods that managers can.

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Presentation on theme: "MGMT5 © 2012 Cengage Learning Control 16. © 2012 Cengage Learning 1.describe the basic control process 2.discuss the various methods that managers can."— Presentation transcript:

1 MGMT5 © 2012 Cengage Learning Control 16

2 © 2012 Cengage Learning 1.describe the basic control process 2.discuss the various methods that managers can use to maintain control 3.describe the behaviors, processes, and outcomes that today’s managers are choosing to control in their organizations

3 © 2012 Cengage Learning Basics of Control 1. describe the basic control process

4 © 2012 Cengage Learning 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.

5 © 2012 Cengage Learning Standards Must enable goal achievement Listen to customer’s comments, complaints, and suggestions Benchmarking – determining other companies’ standards

6 © 2012 Cengage Learning 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.

7 © 2012 Cengage Learning Corrective Action Identify performance deviations Analyze deviations Development and implement corrective programs

8 © 2012 Cengage Learning Cybernetic Control Process

9 © 2012 Cengage Learning Control Methods Feedback control Concurrent control Feedforward control

10 © 2012 Cengage Learning Control Isn’t Always Worthwhile or Possible Control loss Regulation costs Cybernetic feasibility

11 © 2012 Cengage Learning How and What to Control 2.discuss the various methods that managers can use to maintain control 3. describe the behaviors, processes, and outcomes that today’s managers are choosing to control in their organizations

12 © 2012 Cengage Learning Bureaucratic Control Top-down 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.

13 © 2012 Cengage Learning 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

14 © 2012 Cengage Learning Normative Controls A company’s widely shared values and beliefs guide workers’ behavior and decisions. Created by… Who companies hire Observing experienced employees and listening to their stories

15 © 2012 Cengage Learning Concertive Controls Based on beliefs that are shaped and negotiated by work groups. Develop in two phases: Group members learn to work with each other, supervise each other’s work, and develop guiding values and beliefs The emergence and formalization of objective rules to guide and control behavior

16 © 2012 Cengage Learning Self-Control (Self- Management) A control system in which managers and workers control their own behavior. Leaders and managers provide workers with clear boundaries within which they may guide and control their own goals and behaviors. Leaders and managers teach others the skills they need to maximize and monitor their own goals and theories. Individuals establish self-control by setting their own goals, monitoring their own progress, rewarding and punishing themselves, and constructing positive thought patterns.

17 © 2012 Cengage Learning The Balanced Scorecard Encourages managers to look at four different perspectives on company performance. Customer perspective Internal perspective Innovation and learning perspective Financial perspective

18 © 2012 Cengage Learning Southwest Airlines’ Balanced Scorecard

19 © 2012 Cengage Learning Controlling Financial Performance Traditional approaches Cash flow analysis Balance sheets Income statements Financial ratios Budgets

20 © 2012 Cengage Learning Economic Value Added 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

21 © 2012 Cengage Learning Calculating Economic Value Added (EVA)

22 © 2012 Cengage Learning Top Ten U.S. Companies by Market Value Added and Economic Value Added

23 © 2012 Cengage Learning 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.

24 © 2012 Cengage Learning Controlling Quality Quality is measured in three ways: Excellence Value Conformance to specifications

25 © 2012 Cengage Learning Conformance to Specifications Checklist for Buying Fresh Fish

26 © 2012 Cengage Learning Advantages and Disadvantages of Different Measures of Quality

27 © 2012 Cengage Learning Controlling Waste and Pollution Waste prevention and reduction –good housekeeping –material/product substitution –process modification Recycle and reuse Waste treatment Waste disposal

28 © 2012 Cengage Learning Four Levels of Waste Minimization

29 REELTOREAL © 2012 Cengage Learning Friday Night Lights 1.The control process begins when managers set goals and create standards. In this scene, what does Coach Gaines state that he expects from the members of his team? 2.Based on the topics discussed in this chapter, what similarities could you draw between what a coach and the manager of a company must do to ensure success for their team? 3.Which method of control do you think most football coaches exert over their teams: bureaucratic, objective, normative, or concertive? Why?

30 REELTOREAL © 2012 Cengage Learning Barcelona Restaurant Group 1.How do managers at Barcelona control the company’s financial performance? 2.What is the “balanced scorecard” approach to measuring corporate performance, and in what ways does Barcelona utilize this approach? 3.Describe the feedback control model and describe an instance where Barcelona followed this process to improve its performance.


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