Chapter 16 – Controlling the Organization Lecture # 21 Chapter 16 – Controlling the Organization

Control as a Management Function Controlling: process of regulating organizational activities so actual performance conforms to expected organizational standards and goals. Control System: Set of mechanisms designed to increase probability of meeting organizational standards and goals.

Significance of the Control Process Controlling function is related to the other 3 management functions: planning, organizing and leading. It builds on the planning function by allowing monitoring and adjusting performance so plans can be reached. It also supports organizing and leading functions by ensuring resources are used for organizational objectives.

Role of Control Control can help managers avoid the following problems: Coping with uncertainty (customer demand, technology and raw material availability). Detecting irregularities (poor quality, cost overruns or staff turnover). Identifying opportunities Handling complex situations Decentralizing authority

Levels of Control Strategic control: managers monitor critical environmental factors which could affect viability of strategic plans, assessing effects of organizational strategic actions, and ensuring strategic plans are implemented. Tactical control: this focuses on assessing implementation of tactical plans at department levels, monitoring and taking corrective actions.

Operational control: it helps in overseeing implementation of operating plans, monitoring day to day results, and taking corrective actions as required.

The Control Process Determine areas to control Establish standards (goal incongruence) Measure performance Compare performance against standards (management by exception) 5. A Recognize positive performance 5. B Take corrective actions as necessary 6. Adjust standards and measures as necessary

4 Conditions for Control First two conditions refer to whether controls are needed or not, and second two assess whether control is feasible and practical. High dependence on the resource Strong chance expected resource flow will be unacceptable Ensure the control process feasibility Ensure cost acceptability

Types of Control Feed forward: regulation of inputs to ensure they meet standards necessary for the transformation process. Concurrent: regulation of ongoing activities which are part of the transformation process to ensure they conform to organizational standards. Feedback: regulation exercised after a product or service has been completed to ensure the final output meets standards and goals.

Multiple controls Multiple control systems: systems using two or more of the feedforward, concurrent and feedback control processes and involving several strategic control points. Strategic control points: performance areas chosen for control because they are important in meeting organizational goals.

Cybernetic & Non-cybernetic Cybernetic control system: self-regulating control system which, once operating, can automatically monitor the situation and take corrective actions when necessary. Non-cybernetic control system: control system relying on human discretion as a basic part of its process.

Managerial Approaches to Implementing Control Bureaucratic control: approach relying on regulation through rules, policies, supervision, budgets, schedules, reward system, and other administrative mechanisms aimed at ensuring employees exhibit appropriate behaviors and meet performance standards. (table 16.1) Clan control: managerial approach relying on values, beliefs, traditions, corporate culture, shared norms, and informal relationships to regulate employee behaviors and facilitate reaching of organizational goals.

Market control: approach relying on market mechanisms to regulate prices for certain clearly specified goods and services needed by an organization.

Dysfunctional Aspects of Control Systems Behavioral displacement: condition in which individuals engage in behaviors encouraged by controls and reward systems though they are inconsistent with organizational goals. Game playing Operating delays Negative attitudes

Overcontrol Vs. Undercontrol Over control: limiting individual job autonomy to the point where it seriously inhibits effective job performance. Under control: granting autonomy to an employee to the point where the organization loses its ability to direct individual effort towards achieving.

Charactertics of an Effective Control System Future oriented Multi-dimensional Cost effective Accurate Realistic Timely Monitorable Acceptable to organization members Flexible

Chapter 17 – Managing Organizations through Change & Conflict Lecture # 22 Chapter 17 – Managing Organizations through Change & Conflict

The Change Cycle Performance gap Identify a desired future Recognize need for change Problem diagnosis Development of alternatives Selection of appropriate alternatives Implementation Evaluation against desired outcomes

Why Individuals resist change Self interest Misunderstanding and lack of trust Differential assessment Some individuals have low tolerance for change

Overcoming Resistance to Change Education & communication Participation & involvement Facilitation & support Negotiation & agreement Manipulation & co-optation Explicit & implicit coercion

Force-field analysis: it analyses two types of forces, driving and restraining forces, that influence any proposed change, then assessing how best to overcome resistance. Driving forces: factors pressuring for a particular change. Restraining forces: factors pressuring against a change.

Managing Conflict Conflict: perceived difference between two or more parties resulting in mutual opposition.

Causes of Conflict Communication factors Structural factors Size Participation Line-staff distinctions Reward systems Resource interdependence Task interdependence

Power Personal behavior factors Communication styles Workforce diversity Reward structures Differences in perceptions Increased demand for specialists

Reducing & Resolving Conflict Changing situational factors Appeal to superordinate goals Use an interpersonal conflict-handling mode Avoidance Accommodation Competition Compromise collaboration

Types of Intergroup Conflict Functional conflict: confrontation between groups which enhances and benefits organizational performance. Dysfunctional conflict: confrontation or interaction between groups that is harmful to the organizations or hindering goal achievement.