 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 21-2 The Fundamentals of Controlling As the scale and complexity of modern organizations grow, the problem of control also grows.

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 21-3 Defining Control Control : is ensuring that an event occurs as it was planned to occur (It is making something happen the way it was planned) Planning and control are virtually inseparable functions (The Siamese Twins of Management) How is that? The planning process provides a map of what actions needed to meet the objectives (the scope & time of these actions) But it is not enough! If we don’t follow it, or did something wrong, we will not achieve the desired results a plan is a s good as we can make it happen. That’s why we need Controlling; we must (1) develop methods of measurements and control, (2) to know when a deviation from the plan happens, (3) then take a corrective action

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 21-4 Defining Control Murphy’s Law: anything that can go wrong will go wrong. That’s why managers should be alerts for possible problems (even if the system is operating well, it might be eroding under the surface) Managers should continually control. They should check to see that organizational activities and processes are going as planned, get feedback, and make corrective changes if needed.

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 21-5 Defining Controlling Controlling: is the process managers go through to control. Controlling: is a systematic effort by business management to compare performance to predetermined standards, plans, or objectives to determine whether performance is in line with these standards and presumably to take any remedial action required to see that human and other corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives. (this definition is for understanding only) Example: Production workers Daily & weekly production levels Daily & weekly production goals Record Set Compare If levels below goals Corrective action Continue If levels equal goals

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 21-6 The Controlling Subsystem Purpose : to help managers enhance the success of the overall management system through effective controlling.

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 21-7 The Controlling Process 3 Main Steps in the controlling process: 1. Measuring Performance 2. Comparing measured performance to standards 3. Taking corrective actions

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 21-8 The Controlling Process 1. Measuring Performance: Measure current org. performance to determine what must be done to be more effective and efficient Before measuring! Should establish units of measure How to measure? (example?) 1. Establish units of measure that represent performance 2. Determine the number of each of these units accomplished by each employee What to measure? (example?) A wide range or org. activities can be measured Performance measurements can relate to various effects of production The degree of difficulty is determined by the activity being measured

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 21-9 The Controlling Process 2. Comparing Measured Performance to Standards: Standard : is the level of activity established to serve as a model for evaluating organizational performance Standards are the yardsticks that determine whether org performance is adequate or inadequate The performance evaluated can be for the org as a whole or for some individuals working within the org Successful managers pinpoint all important areas of org performance and establish corresponding standards in each area

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall The Controlling Process 3. Taking Corrective Action (if necessary): Corrective action: is managerial activity aimed at bringing org performance up to the level of performance standards It focuses on: correcting org mistakes that are hindering (obstruct, stop) org. performance Managers should first make sure that: Standards were properly established Measurements of org. performance are valid & reliable

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall The Controlling Process 3. Taking Corrective Action (if necessary): Recognizing Problems: Problem: any factor within the organization that is a barrier to organizational goal attainment Difficult to pinpoint Recognizing Symptoms: The manager must determine whether the failure is a problem in it self or a symptom. ( what exactly is causing the situation?) symptom: a sign that a problem exists.

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall The Controlling Process 3. Taking Corrective Action (if necessary): Once the problem has been properly identified → corrective action can focus on one or more of the three primary management functions (Planning, Organizing, Influencing), example? : Modify past plans → more suitable for future Change existing organizational structure → Restructure incentive program → Because planning, organizing, and influencing are closely related, it is likely that corrective action in one area --will need→ some corresponding actions in one or both of the other two areas

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Power and Control To control successfully, managers must understand: 1. The control process (nonhuman variable) 2. How organization members relate to it (human-relater variable, e.g. Power)

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Definition of Power The differences between Authority & Power: Authority: is the right to command or give orders Power: is the ability to influence others so they respond to orders (or take orders) Power and control are closely related, HOW? (book) Managers must learn how to wield (use) power in order to advance their organization’s agenda Many highly competent professionals floundered (failed) in management careers because they are uncomfortable using power

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Total Power of a Manager The total power a manager possess (have) is made up of two different kinds of power: 1. Position power : derived from the organizational position a manager holds (lower-level v.s. upper-level) 2. Personal power: derived from a manager’s relationships with others.

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Steps for Increasing Total Power Managers can increase their total power by increasing: 1. Position power, by moving to a higher organizational position. (but they have little control over it) 2. Personal power (they have greater control over it), by developing the following attitudes and beliefs in other organization members : 1. Sense of obligation toward the manager. How? 2. Belief that the manager possesses a high level of expertise. How? 3. Sense of identification with the manager. How? 4. Perception that they are dependent on the manager. How?

 Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall Making Controlling Successful Factors to make controlling system successful and increase its quality: 1. Specific Organizational Activities Being Focused On. Explain? 2. Different Kinds of Organizational Goals. Explain? 3. Timely Corrective Action. Explain? 4. Communication of the Mechanics of the Control Process. Explain?