6 CONTROLLING Supervision Today! 7th Edition Stephen Robbins Planning, organizing, staffing, controlling, and decision making CONTROLLING 6 Supervision Today! 7th Edition Stephen Robbins David DeCenzo Robert Wolter

Chapter Outcomes Describe the control process. Contrast two types of corrective action. Compare preventive, concurrent, and corrective control. Explain how a supervisor can reduce costs. List the characteristics of an effective control system. Explain potential negatives that controls can create. Explain what is meant by the term just-in-time inventory systems. Describe what is meant by the term value chain management. Identify the ethical dilemmas in employee monitoring. Explain what is meant by employee theft and its effect on the organization. Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

EXHIBIT 6–1 The control process. Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Measuring actual performance Personal observation Statistical reports Oral reports Written reports Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Example of a cause-effect (fishbone) diagram. EXHIBIT 6–3 Example of a cause-effect (fishbone) diagram. Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

EXHIBIT 6–7 Three types of control. Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Major cost categories Direct labor costs Indirect labor costs Raw material costs Supportive supplies costs Utility costs Maintenance costs Waste costs Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Guide to Reducing costs Improve methods Level the work flow Minimize waste Install modern equipment Invest in employee training Make cuts selectively Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Inventory control Just-in-time system Kanban Inventory items arrive as needed instead of being in-stock Kanban “card” system that initiates a supplier shipment Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Value chain management Managing the sequence of activities and information about product flow from start to finish Value added Customer perceived value How is value provided to the customer? Effectiveness oriented Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Supply chain management An internal process focusing on the efficient flow of incoming materials to the organization Efficiency oriented Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Characteristics of effective controls. EXHIBIT 6–9 Characteristics of effective controls. Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Can controls create problems? Employee resistance Misdirection of effort Ethics and control devices Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Minimizing employee resistance Encourage employee self-control Employee participation in setting the standards Provide regular feedback Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved

Contemporary control issues Employee Theft Annual losses in billions 85% of organization theft committed by employees Sarbanes-Oxley Act Legislation established in July 2002 Establishes procedures for public companies to regulate how they handle and report financial picture Fines up to $1 million and ten years in prison Supervision Today!, 7/e Robbins, DeCenzo, Wolter © 2013 Pearson Education Uppers Saddle River, NJ 07458, All Rights Reserved