Fundamentals of Management: 13-1Gao Junshan, UST Beijing Foundations of Control and Operational System

Fundamentals of Management: 13-2Gao Junshan, UST Beijing Where We Are Chapter 13 Foundations of Control Chapter 14 Technology and Operation Part 1 Introduction Part 2 Planning Part 3 Organizing Part 4 Leading Part 5 Controlling Chapter 13 Foundations of Control Chapter 14 Technology and Operation

Fundamentals of Management: 13-3Gao Junshan, UST Beijing Chapter Guide Control Process and Control System –Control Process: three steps of control –Control system: three approaches to control, three types of control; effective control system, contingency factors Other Issues on Control –National differences, Dysfunctional side of control, Ethical issues of control Operational System and Technology –Transformation system and technology overview –Improvement of operational system

Fundamentals of Management: 13-4Gao Junshan, UST Beijing Control is the process monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviations Control is important because it monitors whether objectives are being accomplished as planned and delegated authority is being abused. Definition and Importance Process and system: Definition

Fundamentals of Management: 13-5Gao Junshan, UST Beijing The Three Steps of Control Measuring actual performance Comparing against standard Taking actions to correct Step I Step II Step III Process and system: Process

Fundamentals of Management: 13-6Gao Junshan, UST Beijing How Managers Measure Sources of Information AdvantagesDisadvantages Personal observation First hand and intimate knowledge Intensive coverage To read between the lines Perceptual biases Time consuming Obtrusiveness Statistical reports Show relationships clearly and accurately Help visualize the relationships Reports on only a few key areas Lack of qualitative elements Oral reports Fast Allow feedback Read words as well as tones and facial expressions Information may be filtered Perceptual biases Difficult to document Written reports Formal, comprehensive and concise Easy to catalog and referenced Indirect information Perceptual biases of writers Slower Process and system: Process

Fundamentals of Management: 13-7Gao Junshan, UST BeijingInformationPeopleFinancesOperations What Managers Measure Process and system: Process

Fundamentals of Management: 13-8Gao Junshan, UST Beijing Defining an Acceptable Range of Variation Acceptable Upper Limit Standard Acceptable Lower Limit Acceptable Range of Variation t t+1 t+2 t+3 t+4 t+5 Process and system: Process

Fundamentals of Management: 13-9Gao Junshan, UST Beijing Mid-Western Distributors’ Sales for July (in hundreds of cases) Heineken Molson Beck’s Moosehead Labatt’s Corona Amstel Light Dos Equis Tecate Total Cases 1, , ,464 (162) (20) (5) (15) Brand Standard ActualOver (Under) Process and system: Process

Fundamentals of Management: 13-10Gao Junshan, UST Beijing Do Nothing TakingManagerialActionTakingManagerialAction CorrectPerformanceCorrectPerformance Revise the Standard Revise Process and system: Process

Fundamentals of Management: 13-11Gao Junshan, UST Beijing Summary of the Control Process Identify Causes Identify Causes Correct Performance Correct Performance Variance Acceptable? Variance Acceptable? Revise Standard Revise Standard Attained? Standard Attained? Standard Acceptable? Standard Acceptable? Yes No Compare Performance to Standard Compare Performance to Standard Measure Performance Measure Performance Objectives Standard Do Nothing Process and system: Process

Fundamentals of Management: 13-12Gao Junshan, UST Beijing Three Approaches to Control Systems MarketControlMarketControlClanControlClanControlBureaucraticControlBureaucraticControl Process and system: System

Fundamentals of Management: 13-13Gao Junshan, UST Beijing InputInputProcessesProcessesOutputOutput FeedforwardControlAnticipatesProblemsFeedforwardControlAnticipatesProblemsConcurrentControl Corrects Problems as They Happen ConcurrentControl Corrects Problems as They Happen FeedbackControl Corrects Problems after They Occur FeedbackControl Corrects Problems after They Occur Three Types of Control Process and system: System

Fundamentals of Management: 13-14Gao Junshan, UST Beijing Qualities of an Effective Control System Accuracy Timeliness Economy Flexibility Understandability Process and system: System

Fundamentals of Management: 13-15Gao Junshan, UST Beijing Qualities of an Effective Control System Reasonable criteria Emphasis on exceptions Strategic placement Multiple criteria Corrective action Process and system: System

Fundamentals of Management: 13-16Gao Junshan, UST Beijing Contingency Factors in Control Systems Contingency Variable Control Recommendations Organization Size Position and Level Degree of Decentralization Organizational Culture Importance of an Activity Small Large Informal, personal management Formal, impersonal management High Low High Low Open Closed High Low Many complex criteria Few, easy-to-measure criteria Increased number of controls Reduced number of controls Informal, self-control Formal, external controls Elaborate, comprehensive controls Loose, informal controls Process and system: System

Fundamentals of Management: 13-17Gao Junshan, UST Beijing Adjusting Controls for National Differences Technology and the Comparability of Data Distance and the Formality of Controls Issues: National differences

Fundamentals of Management: 13-18Gao Junshan, UST Beijing Dysfunctional Controls Inflexible Controls Inflexible Controls Unreasonable Standards Unreasonable Standards Issues: Dysfunctional

Fundamentals of Management: 13-19Gao Junshan, UST Beijing InformEmployees Have a Written Policy Monitor for Business Reasons Ethical Issues and Control Questions of Privacy Issues: Ethical issues

Fundamentals of Management: 13-20Gao Junshan, UST Beijing Transformation Process and Operations Management. People Capital Equipment Materials People Capital Equipment Materials Goods Services Goods Services Transformation system (Technology) Transformation system (Technology) Operational system: Overview (see chap 14 p439):

Fundamentals of Management: 13-21Gao Junshan, UST Beijing Define Technology Technology includes any equipment, tools and operating methods that make work more efficient. Operational system: Overview (see chap 2 (p54):

Fundamentals of Management: 13-22Gao Junshan, UST Beijing The Individual The Group The Organization Technology and Productivity Productivity = Outputs/(Labor + Capital + Materials) Operational system: Overview (see chap 14 p440):

Fundamentals of Management: 13-23Gao Junshan, UST Beijing How Technology Keep Organization Competitive Enhance the Production process Improve customer service Reduce labor cost Provide better information Operational system: Technology (see chap 2 (p55):

Fundamentals of Management: 13-24Gao Junshan, UST Beijing How Technology Change the Manager’s Job FormulatingPlans MonitoringActivities MakingDecisions DefiningJobs Operational system: Technology (see chap 2 (p56):

Fundamentals of Management: 13-25Gao Junshan, UST Beijing Worker Obsolescence Knowledge, skills, and abilities of workers Repetitive tasks and automation Reengineering of work processes Operational system: Technology (see chap 14 p440):

Fundamentals of Management: 13-26Gao Junshan, UST Beijing TechnologyTransfer The Global Village TechnologyTransfer ImproveProductionProcessImproveProductionProcess Develop New Knowledge Knowledge Operational system: Technology (see chap 14 p442):

Fundamentals of Management: 13-27Gao Junshan, UST Beijing Information Technology Information management Workflow automation Internal communications Decision making Operational system: Technology (see chap 14 p442):

Fundamentals of Management: 13-28Gao Junshan, UST Beijing MIS Makes Data Usable Unorganized Data … Information … Information Usable for Managers are organized Into … then screened for relevance and meaningfulness to become … Operational system: Technology (see chap 14 p442):

Fundamentals of Management: 13-29Gao Junshan, UST Beijing The Advancement of Steel Making Technology Operational system: Improvement (see chap 14 p448):

Fundamentals of Management: 13-30Gao Junshan, UST Beijing Blueprint Calculate Evaluate Display Computer-AssistedDesignComputer-AssistedDesign Operational system: Improvement (see chap 14 p448):

Fundamentals of Management: 13-31Gao Junshan, UST Beijing IndustrialRoboticsFlexibleManufacturing Enhancing Production Processes Operational system: Improvement (see chap 14 p448):

Fundamentals of Management: 13-32Gao Junshan, UST Beijing Work Process Engineering (Business Process Reengineering) Strive for radical, quantum changes Not constrained by the present process and functional scope Use information technology to enable new process Lead to major gains in cost, service, or time Operational system: Improvement (see chap 2 p65):

Fundamentals of Management: 13-33Gao Junshan, UST Beijing WorkProcessEngineeringMaximizing Distinctive Competencies WorkProcessEngineeringMaximizing CoreProcessesCoreProcesses DistinctiveCompetenciesDistinctiveCompetencies HorizontalReorganizationHorizontalReorganization Operational system: Improvement (see chap 14 p453):

Fundamentals of Management: 13-34Gao Junshan, UST Beijing Supply Chain Management Management CurrentOperationsIssuesCurrentOperationsIssues Just-in-TimeInventoryJust-in-TimeInventory Quality Control Operational system: Improvement (see chap 14 p454):

Fundamentals of Management: 13-35Gao Junshan, UST Beijing Chapter Summary Meaning of control Three approaches to control Importance of control Control process Three types of control

Fundamentals of Management: 13-36Gao Junshan, UST Beijing Qualities of effective control system Contingency factors in the control process Dysfunctional side of controls Influence of national differences Ethical dilemmas in employee monitoring Chapter Summary

Fundamentals of Management: 13-37Gao Junshan, UST Beijing Project Management BudgetsBudgetsSchedulesSchedulesSpecificationsSpecifications Operational system: Improvement (see chap 14 p457):