1. The Meaning of Control
Organizational control is the systematic process through which managers regulate organizational activities to make them consistent with expectations established in plans, targets, and standards of performance
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

2. Organizational Control
The systematic process of regulating organizational activities
Control can focus on events before, during, or after a process
Three types of control
Feed forward
Sometimes called preliminary or preventive control
Concurrent
Assesses current work activities, relies on performance standards
Includes rules and regulations for guiding employee tasks and behaviors
Intent to ensure that work activities produce the correct results
Feedback
Focuses on the organization’s outputs; also called post-action or output control
The American Productivity & Quality Center devoted specifically to improve organizational effectiveness

3. Organizational Control Focus
Concurrent Control Solve Problems as They Happen
Feedback Control Solves Problems After They Occur
Feed forward Control Anticipates Problems
Examples • Pre-employment drug testing • Inspect raw materials • Hire only college graduates
Examples
• Adaptive culture • Total quality
management
• Employee
self-control
Examples • Analyze sales per employee • Final quality
inspection
• Survey customers
Focus is on
Focus is on
Focus is on
Ongoing Processes
Inputs
Outputs

4. 19.2 Feedback Control Model
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

5. Steps of Feedback Control
Establish Standards of Performance
Measure Actual Performance
Compare Performance to Standards
Take Corrective Action
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

6. Controlling Managers use a variety of measures to monitor performance:
Controlling work processes
Regulating employee behavior
Systems for financial resources
Evaluating profitability
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

7. Choosing Standards and Measures
Common measures and controls = financial:
Sales
Revenue
Profit
More focus on measuring intangibles
Customer service
Increased revenue
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

8. Application to Budgeting
Budgetary control – setting targets and monitoring expenditures
Budgets list planned and actual expenditures
Budgets are associated with a division or department
The unit of analysis for budgeting is the responsibility center
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

9. Financial Control
Financial Statements provide basic information for financial control
Balance Sheet shows firm’s financial position
Income Statement profit-and-loss statement or P&L highlights firm’s financial performance
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

10. Hierarchical versus Decentralized Approaches
Hierarchical controls include the monitoring of behavior through rules, policies, reward systems, and written documentation
Decentralized controls based on values and assumptions; rules are only used when necessary
Culture is adaptive, uniting individuals and teams
Managers’ approach to control is changing in many of today’s organizations
Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.