Controlling BOH4M

Agenda Learning goals Vocabulary What is controlling Steps in the control process Internal vs external control Type of controls

Learning goals Be able to describe the steps in the control process and how they relate to the managerial process of leading, planning, and organizing Be able to describe progressive discipline and its impact on the individual within an organization Be able to describe the impact of internal control measures (e.g., self-discipline, goal setting) and external control measures (e.g., compensation systems, progressive discipline) on an organization; Be able to explain the three types of control systems used by organizations (feedforward, concurrent, feedback).

Vocabulary Controlling Output/input standards Preliminary Controls Concurrent Controls Feedback Controls

Controlling Controlling: The process of measuring performance and taking action to ensure desired results Ensures plans are achieved and actual performance meets/surpasses objectives Foundation of control is information Sees to it that right things happen in the right way at the right time An after-action review identifies lessons learned in a completed project, task force or special operation

Four steps in the management control process: Establish performance objectives and standards Measure actual performance Compare results with objectives and standards Take corrective action as needed

Four steps in the management control process: 1. Establish performance objectives and standards (planning) Key results that one wants to accomplish. Output standards measure performance results in terms of quantity, quality, cost, or time.  Input standards measure work efforts that go into a performance task

2. Measure actual performance (organizing) Accurately measure actual results on output and/or input standards Without measurement effective control is not possible 3. Compare results with objectives and standards (organizing) Control equation: Need for action = Desired performance – Actual performance Methods of comparing desired and actual performance: Historical comparison – Use past performance as a benchmark Relative comparison – Use performance achievements of others as the standard

4. Take corrective action as needed (leading) Take any action necessary to correct problems or make improvements Management by exception is the practice of giving priority attention to situations showing the greatest need for action Problem situation – Actual performance is below standard Opportunity situation – Actual performance is above standard

There are three major types of managerial controls: Feedforward (preliminary) controls ensures that directions and resources are right before the work begins (planning& leading) Concurrent controls focus on what happens during work process (organizing & leading) Feedback controls take place after work is completed (planning, organizing and leading)

Preliminary Controls Occur prior to work Provide correct instructions and training for employees Providing the correct resources Requires proactive management

Concurrent Controls Happen while work is occurring Mistakes are fixed continuously Avoids wasted resources

Feedback Controls Occur after the work has taken place Provide information for the future Determines rewards

Managers have two broad options with respect to control: Internal control: Allows motivated individuals and groups to exercise self-discipline in fulfilling job expectations External control: occurs through direct supervision and the use of formal administrative systems such as rules and procedures

Internal Controls self-administered requires trust between manager and employee subordinate should participate in setting goals very Theory Y

External Controls manager exerts control over the subordinate Examples: performance appraisals, compensation, benefits, discipline, technical control

Managerial process of planning Control takes into account all of the managerial process of leading, planning and organizing