Last week… 1. Quick review of the evolution of leadership thinking 2. Also discussed power and gender in leadership 3. Looked at Motivation: Theories and current issues 4. Looked at Teams: What are teams and what do they go through 5. A quick consideration of conflict management 1-1

This Week’s Objectives 1-2 Understand controlling and its role in management Understand controlling and its role in management Look at the steps in the controlling process, and types of control Look at the steps in the controlling process, and types of control Review organizational performance and common organizational controls Review organizational performance and common organizational controls Look at issues in controlling Look at issues in controlling In particular, look at the challenges of change (Thursday) In particular, look at the challenges of change (Thursday)

Chapter 15 Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-3

The Question… How do you really know you are going where you want to be going, and how do you know when you get there? 1-4

What Is Control? The process of monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviations The Purpose of Control The Purpose of Control To ensure that activities are completed in ways that lead to accomplishment of organizational goals To ensure that activities are completed in ways that lead to accomplishment of organizational goals Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-5

Why Is Control Important? The final link in management functions: The final link in management functions: Planning Planning Controls let managers know whether their goals and plans are on target and what future actions to take Controls let managers know whether their goals and plans are on target and what future actions to take Empowering employees Empowering employees Control systems provide managers with information and feedback on employee performance Control systems provide managers with information and feedback on employee performance Protecting the workplace Protecting the workplace Controls enhance physical security and help minimize workplace disruptions Controls enhance physical security and help minimize workplace disruptions Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-6

Exhibit 15.1 The Planning–Controlling Link Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-7 Leading Motivation Leadership Communication Individualand Group Behaviour Planning Goals Objectives Strategies Plans Organizing Structure HumanResource Management Controlling Standards Measurements Comparison Actions

The Control Process 1. Measuring actual performance 2. Comparing actual performance against a standard 3. Taking action to correct deviations or inadequate standards Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-8

Measuring How: Sources of Information How: Sources of Information Personal observations Personal observations Statistical reports Statistical reports Oral reports Oral reports Written reports Written reports What: Control Criteria What: Control Criteria Employees Satisfaction Turnover Absenteeism Budgets Costs Output Sales Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-9

Comparing Determining the degree of variation between actual performance and the standard Determining the degree of variation between actual performance and the standard Significance of variation is determined by: Significance of variation is determined by: The acceptable range of variation from the standard (forecast or budget) The acceptable range of variation from the standard (forecast or budget) The size (large or small) and direction (over or under) of the variation from the standard The size (large or small) and direction (over or under) of the variation from the standard Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-10

Exhibit 15.4 Defining the Acceptable Range of Variation Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-11

Exhibit15.5 Sales Performance Figures for July, Beer Unlimited Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-12

Taking Action Courses of Managerial Action 1. “Doing nothing” Only if deviation is insignificant Only if deviation is insignificant 2. Correcting actual (current) performance Immediate or basic corrective action Immediate or basic corrective action 3. Revising the standard Determine whether the standard is realistic, fair, and achievable Determine whether the standard is realistic, fair, and achievable Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-13

Exhibit 15.7 Managerial Decisions in the Control Process Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-14

Controlling for Organizational Performance What Is Performance? What Is Performance? The end result of an activity The end result of an activity What Is Organizational Performance? What Is Organizational Performance? The accumulated end results of all of the organization’s work processes and activities The accumulated end results of all of the organization’s work processes and activities Designing strategies, work processes, and work activities Designing strategies, work processes, and work activities Coordinating the work of employees Coordinating the work of employees Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-15

Organizational Performance Measures Organizational Productivity The overall output of goods and/or services divided by the inputs needed to generate that output The overall output of goods and/or services divided by the inputs needed to generate that output Ultimately, a measure of how efficiently employees do their work Ultimately, a measure of how efficiently employees do their work Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-16

Organizational Performance Measures Organizational Effectiveness Measuring how appropriate organizational goals are and how well the organization is achieving its goals Measuring how appropriate organizational goals are and how well the organization is achieving its goals Ultimately, a measure of how effectively your organization is structured and behaves Ultimately, a measure of how effectively your organization is structured and behaves Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-17

Organizational Performance Measures Industry Rankings Many different lists exist to rank organizations. Some examples: Many different lists exist to rank organizations. Some examples: Report on Business Magazine’s Top 1000; Canada’s Power Book Report on Business Magazine’s Top 1000; Canada’s Power Book Report on Business Magazine’s 50 Best Companies To Work For in Canada Report on Business Magazine’s 50 Best Companies To Work For in Canada Profit’s 100: Canada’s Fastest Growing Companies Profit’s 100: Canada’s Fastest Growing Companies Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-18

Approaches for Controlling Organizational Performance Feedforward Control Prevents anticipated problems before they occur Prevents anticipated problems before they occur Building in quality through design Building in quality through design Requiring suppliers conform to ISO 9002 Requiring suppliers conform to ISO 9002 Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-19

Approaches for Controlling Organizational Performance Concurrent Control Monitoring while activity is in progress Monitoring while activity is in progress Direct supervision: management by walking around Direct supervision: management by walking around Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-20

Approaches for Controlling Organizational Performance Feedback Control Feedback Control Takes place after an activity is done Takes place after an activity is done Corrective action is after-the-fact, when the problem has already occurred Corrective action is after-the-fact, when the problem has already occurred Advantages Advantages Feedback provides managers with information on the effectiveness of their planning efforts Feedback provides managers with information on the effectiveness of their planning efforts Feedback enhances employee motivation by providing them with information on how well they are doing Feedback enhances employee motivation by providing them with information on how well they are doing Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-21

Exhibit 15.8 Types of Control Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada InputOutput Feedforward Control Concurrent Control Feedback Control Processes Anticipates problems Corrects problems as they happen Corrects problems after they occur

Control Philosophies Market Control – driven by external mechanisms Market Control – driven by external mechanisms Bureaucratic Control – results from high formalization & centralization Bureaucratic Control – results from high formalization & centralization Clan Control – results from strong organizational cultures Clan Control – results from strong organizational cultures Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-23

Tools for Controlling Organizational Performance: Financial Controls Traditional Controls Traditional Controls Ratio analysis Ratio analysis Liquidity Liquidity Leverage Leverage Activity Activity Profitability Profitability Budget analysis Budget analysis Quantitative standards Quantitative standards Deviations Deviations Other Measures Other Measures Economic value added (EVA) Market value added (MVA) Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-24

Exhibit Popular Financial Ratios Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-25

Exhibit Popular Financial Ratios Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-26

Other Tools for Controlling Performance Balanced Scorecard A measurement tool that uses goals set by managers in four areas to measure a company’s performance: A measurement tool that uses goals set by managers in four areas to measure a company’s performance: Financial Financial Customer Customer Internal processes Internal processes People/innovation/growth assets People/innovation/growth assets Management Information Systems (MIS) A system used to provide management with needed information on a regular basis A system used to provide management with needed information on a regular basis Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-27

Contemporary Issues in Control Customer Interactions Customer Interactions Service profit chain Service profit chain The service sequence from employees to customers to profit The service sequence from employees to customers to profit Service capability  service value  customer satisfaction  customer loyalty  repeat business (profit) Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-28

Contemporary Issues in Control Corporate Governance Corporate Governance The system used to govern a corporation so that the interests of the corporate owners are protected The system used to govern a corporation so that the interests of the corporate owners are protected Changes in the role of boards of directors Changes in the role of boards of directors Increased scrutiny of financial reporting Increased scrutiny of financial reporting Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 15-29

Now we have this question: How do you Control in a Dynamic Environment? (Chapter 16) Chapter 16, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 16-30

Forces for Change External forces External forces Marketplace Marketplace Governmental laws and regulations Governmental laws and regulations Technology Technology Labour markets Labour markets Economic changes Economic changes Internal Forces Internal Forces Changes in organizational strategy Workforce changes New equipment Employee attitudes Chapter 16, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 16-31

Change Process Viewpoints The Calm Waters Metaphor The Calm Waters Metaphor Lewin: a break in the organization’s equilibrium state Lewin: a break in the organization’s equilibrium state Unfreezing the status quo Unfreezing the status quo Changing to a new state Changing to a new state Refreezing to make the change permanent Refreezing to make the change permanent White-water Rapids Metaphor White-water Rapids Metaphor The lack of environmental stability and predictability requires that managers and organizations continually adapt (manage change actively) to survive The lack of environmental stability and predictability requires that managers and organizations continually adapt (manage change actively) to survive Chapter 16, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 16-32

What Is Organizational Change? Any alterations in the people, structure, or technology of an organization Characteristics of Change Characteristics of Change Is constant yet varies in degree and direction Is constant yet varies in degree and direction Produces uncertainty yet is not completely unpredictable Produces uncertainty yet is not completely unpredictable Creates both threats and opportunities Creates both threats and opportunities Managing change is an integral part of every manager’s job Chapter 16, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 16-33

Types of Change Structural Changing the organization’s structure or its structural components Changing the organization’s structure or its structural componentsTechnological Adopting new equipment or operating methods that displace old skills and require new ones Adopting new equipment or operating methods that displace old skills and require new ones Automation: replacing certain tasks done by people with machines Automation: replacing certain tasks done by people with machines Computerization ComputerizationPeople Changing attitudes, expectations, perceptions, and behaviours of the workforce. Changing attitudes, expectations, perceptions, and behaviours of the workforce. Chapter 16, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 16-34

Why People Resist Change The ambiguity and uncertainty that change introduces The ambiguity and uncertainty that change introduces The comfort of old habits The comfort of old habits A concern over personal loss of status, money, authority, friendships, and personal convenience A concern over personal loss of status, money, authority, friendships, and personal convenience Using Maslow, it might create gaps between our needs and current status Using Maslow, it might create gaps between our needs and current status The perception that change is incompatible with the goals and interests of the organization The perception that change is incompatible with the goals and interests of the organization Chapter 16, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 16-35

Issues in Managing Change Handling Employee Stress Handling Employee Stress Stress Stress The physical and psychological tension an individual feels when confronted with extraordinary demands, constraints, or opportunities and their associated importance and uncertainties The physical and psychological tension an individual feels when confronted with extraordinary demands, constraints, or opportunities and their associated importance and uncertainties Functional Stress Functional Stress Stress that has a positive effect on performance Stress that has a positive effect on performance Chapter 16, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 16-36

Issues in Managing Change Changing Organizational Cultures Changing Organizational Cultures Cultures are naturally resistant to change Cultures are naturally resistant to change Conditions that help cultural change: Conditions that help cultural change: Dramatic crisis Dramatic crisis Change of leadership Change of leadership Young, flexible, and small organization Young, flexible, and small organization Weak organizational culture Weak organizational culture Chapter 16, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 16-37

Issues in Managing Change Making Change Happen Successfully Making Change Happen Successfully Embrace change Embrace change Explain why change is necessary Explain why change is necessary Communicate constantly and honestly Communicate constantly and honestly Encourage employee participation Encourage employee participation Encourage employee flexibility Encourage employee flexibility Remove those who resist and cannot be changed Remove those who resist and cannot be changed Chapter 16, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Ninth Canadian Edition Copyright © 2009 Pearson Education Canada 16-38

This Week’s Summary Defined controlling and its role in management Defined controlling and its role in management Went through the steps in the controlling process, and types of control Went through the steps in the controlling process, and types of control Reviewed organizational performance and common organizational controls Reviewed organizational performance and common organizational controls Looked at issues in controlling Looked at issues in controlling In particular, considered the challenges of change In particular, considered the challenges of change 1-39