16 Chapter Management Control McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Slides:



Advertisements
Similar presentations
Chapter 13: Control processes and systems
Advertisements

McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Eleven Organizational Control and Change.
What Is Control? Control
Managerial Control Chapter Sixteen
Managerial and Quality Control CHAPTER 19. Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved. 2 Learning Objectives.
Chapter 18: Controlling – Processes and Systems
MANAGEMENT RICHARD L. DAFT.
Managing Quality and Performance
Ensures adjustment or conformity to specifications Ensures adjustment or conformity to specifications Regulates activities Regulates behavior Ensures adjustment.
Management 11e John Schermerhorn
© 2006 Thomson-Wadsworth. Learning Objectives State the purpose of employee discipline. List common reasons why employees are disciplined. Identify the.
Management, 6e Schermerhorn Prepared by Cheryl Wyrick California State Polytechnic University Pomona John Wiley & Sons, Inc.
Disciplinary Policy INCA Community Services. Purpose O Every employee has the duty and the responsibility to be aware of and abide by existing rules and.
Chapter 16 ©2001 South-Western College Publishing Pamela S. Lewis Stephen H. Goodman Patricia M. Fandt Slides Prepared by Bruce R. Barringer University.
Organizational Control and Change
What Is Control? Control Control –the process of monitoring activities to ensure that they are being accomplished as planned and of correcting significant.
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Why Do We Need Accounting? Companies of all sizes need to implement a streamlined accounting system in order to accurately record and report business transactions,
Managerial Control Chapter 16 Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
Managerial Control Chapter 16 Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
 Control ◦ Any process that directs the activities of individuals toward the achievement of organizational goals.
B0H4M CHAPTER 16.
Part Chapter © 2009 The McGraw-Hill Companies, Inc. All rights reserved. 1 McGraw-Hill Management Control 3 Chapter 11.
Chapter 11 Management Skills
Management 11e John Schermerhorn Chapter 18 Control Processes and Systems.
Managerial Control Chapter 16 Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
Ch. 16 Outline 1. Bureaucratic Control Systems 2. Other Controls
16-1. Chapter Managerial Control 16 McGraw-Hill/Irwin Management, 7/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
1 Mgmt 371 Chapter Twenty Basic Elements of Control Much of the slide content was created by Dr, Charlie Cook, Houghton Mifflin, Co.©
Organizational Control
Welcome to AB140 Control Michael B. McKenna. Managerial Control Left to their own, people may act in ways that they perceive to be beneficial to them.
McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved.
Controlling MRK151 Chapter 6. Controlling Detecting and correcting significant variations in the results obtained from planned activities. Controlling.
Managerial Control Chapter Sixteen Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written.
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved McGraw-Hill/Irwin Chapter 16 Management Control.
Quiz 4  Availability – see calendar  Will cover Chapters 13, 14, 15, 16, & 17.
Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall.
Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2003 by South-Western, a division of Thomson Learning. All rights reserved. chp20 Controlling.
Chapter Sixteen Control: Techniques for Enhancing Organizational Effectiveness.
Slide content created by Charlie Cook, The University of West Alabama Copyright © Houghton Mifflin Company. All rights reserved. Chapter Twenty Basic Elements.
Slide content created by Charlie Cook, The University of West Alabama Copyright © Houghton Mifflin Company. All rights reserved. Chapter Twenty Basic Elements.
11-1 Learning Objectives Define organizational control, and describe the four steps of the control process. Identify the main output controls, and discuss.
Chapter Sixteen Control & Quality Control Improvement Techniques for Enhancing Organizational Effectiveness McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill.
Chapter 16 Control Evidence-Based Decision Making Copyright © 2016 Pearson Canada Inc.16-1.
Place Slide Title Text Here ©2013 John Wiley & Sons, Inc. All rights reserved. 9-1 ©2013 John Wiley & Sons, Inc. All rights reserved. JOHN R. SCHERMERHORN,
Chapter 14 Managing the Control Process Copyright © Houghton Mifflin Company. All rights reserved.20–1.
The process of measuring progress toward planned performance and, if necessary, applying corrective measures to ensure that performance is on the line.
Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. The Importance.
9-1 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Organizational Control and Culture Organizational Control and Culture 9 9.
1 Controls in Strategic management Dr. Fred Mugambi Mwirigi JKUAT.
PowerPoint Presentation to Accompany Chapter 8 of Management Fundamentals Canadian Edition Schermerhorn  Wright Prepared by:Michael K. McCuddy Adapted.
Control Systems & Quality Management Chapter 16. Control: When Managers Monitor Performance  Controlling defined as monitoring performance, comparing.
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall 10-1 Managerial.
PowerPoint Presentation to Accompany Management Third Canadian Edition John R. Schermerhorn, Jr. Barry Wright Prepared by: Jim LoPresti University of Colorado,
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2014 Pearson Education 10-1 Foundations of Control.
Basic Elements of Control Chapter 11. The Nature of Control in Organizations Control The regulation of organizational activities so that some targeted.
Chapter 11 Organizational Control. Monitoring the efficiency and effectiveness of activities necessary for achieving org. goals. Anticipating future.
© 2010 South-Western, Cengage Learning, Inc. All rights reserved.
Chp20 Controlling Developed by Cool Pictures & MultiMedia Presentations Copyright © 2003 by South-Western, a division of Thomson Learning. All rights.
Professor: Zvi Aronson, Ph.D.
MANAGEMENT Part Six: The Controlling Process
Managerial Control Chapter Sixteen.
Managing Quality and Performance
Chapter 9 Fundamentals of Control
Foundations of Control
Chapter 16: Control Processes and Systems
Chapter 9 Control Processes and Systems
The Meaning of Control Organizational control is the systematic process through which managers regulate organizational activities to make them consistent.
The Meaning of Control Organizational control is the systematic process through which managers regulate organizational activities to make them consistent.
Chapter 16 Management Control.
Presentation transcript:

16 Chapter Management Control McGraw-Hill© 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives After reading this chapter, you should be able to: Understand the importance of control systems. Distinguish between system- and person-based control systems. Distinguish between process- and outcome-based control systems. Evaluate various control approaches. Understand why measurement is necessary for control. Develop measures that support effective control systems. Develop and implement a balanced scorecard. © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

The Importance of Control Control is the process of comparing performance to standards and taking corrective action. It ensures that:  standards are met  errors are limited  quality is acceptable  products are safe  the company is performing at the highest possible level Control is closely associated with planning. © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Categorization of Control Approaches Control approaches can be categorized according to two factors - type and focus: Type - divided into formal and informal approaches  Formal control systems consist of written rules  Informal control systems rely on unwritten expectations Focus – directed at the outcome or the process  Outcome approach focuses on the results of a business process  Process approach focuses on how the work is performed © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Control Approaches Model Informal Formal Type Outcomes Process Focus Subjective Control Clan Control Marketing Control Financial Controls Operations Management Bureaucratic Control Balanced Scorecard © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Informal and Outcome-Focused Control Characterized by subjective control - an informal approach based on global assessment of outcomes Subjective control:  does not typically utilize explicit standards  does not specify how deviations from an acceptable level should be handled  is common in smaller businesses and service settings  is the “no news is good news” approach © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Formal and Process-Focused Control: Bureaucratic Control Bureaucratic control is a formal control approach that operates in a cycle and is characterized by written guidelines and controls. Involves:  the application of standards to assess performance  the application of corrective actions to regulate performance and bring it back to the level of the standards. © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

The Bureaucratic Control Process 1. Establishing Standards 2. Performance Measurement 3. Identifying Gaps 4. Corrective Action © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

The Bureaucratic Control Process (continued) Establishing Standards  Standards should be participative rather than simply implemented from the top down so that employees understand and are committed to them.  Standards come from: goals statistical analysis benchmarking Performance Measurement  Use of objective data, which is free from error or bias  Use of subjective data, which involves human judgement © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

The Bureaucratic Control Process (continued) Identifying Gaps  Compare standards with performance measures  Upper and lower control limits establish: acceptable variations normal variations unacceptable variations Corrective Action  What should management do? Nothing Take action Change standards © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Types of Bureaucratic Control Feedforward Control Concurrent Control Feedback Control © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Types of Bureaucratic Control (cont.) Feedforward control  Designed to prevent problems before they occur Concurrent control Takes place as the work process is being carried out Feedback control Occurs after a process has been completed © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Formal and Outcome-Focused Control The regulation of performance by applying the standards or guidelines to the outcomes of a process through:  Market control - the use of indicators of market values as standards for regulating performance  Financial controls - the use of various monetary measures to regulate performance © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Types of Financial Controls Budgetary Control Financial Statements Financial Ratios Activity-Based Costing © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Types of Financial Controls (cont.) Budgetary control - used to specify amounts to be expended for various activities or events  Can help managers control and predict costs Financial Statements - tools that are used to assess and control the financial health of an organization Balance sheets Profit and loss (income) statements © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Types of Financial Controls (cont.) Financial Ratios - provide an overall check of performance  Liquidity ratios - an organization’s ability to pay short-term debt  Leverage ratios - the amount of funds available in an organization from shareholders and creditors  Profitability ratios - indicate the amount of financial return from an investment Activity-Based Costing - associates costs with tasks  calculated for: receiving and processing sales orders expediting supplies and production distribution resolving errors and problems © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Informal and Process-Focused Control Emphasizes an implicit sense and common understanding of how things should be done Does not rely on explicit guidelines and standards Assumes that people have an internal set of standards that will guide how they perform © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Clan Control Clan control is a reliance on corporate culture and the norms it develops as an informal means for regulating the work process Employees control themselves Clan control works best if:  the organization is constantly changing  the organization has a strong culture © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Management Control Revisited Should control be directed at people, systems, or some other aspect of the company?  Emphasis should be on systems and performance rather than people.  Focusing on people can result in resistance and negative reactions © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Disciplinary Procedures Promptness – within a reasonable period of time Impartiality – avoid favoritism Non-punitive – purpose is to prevent future problems, not get revenge Fairness – degree of discipline related to offense Advance warning – employees should be aware of rules and rule changes Follow-through – to emphasize the relation of discipline to preventing future problems

Progressive Discipline Oral warning – generally in informal atmosphere – includes statement of rule violated, problem caused by violation, future consequences of repeated violation Written warning – written statement, copy of the warning with employee’s signature placed in employee’s file Suspension – length of suspension varies with seriousness of rule violation Final warning – sometimes issued stating that a future violation could result in dismissal Dismissal – when other problem-solving and disciplinary efforts have failed

Applications: Management is Everyone’s Business — For the Manager Control over the actions and outcomes in the workplace is a central management responsibility. Measurement is a key component of effective control. Managers go beyond measurement to take corrective action, which is part and parcel of an effective control system. As a manager, it is important to understand the control systems used in an organization as well as whether your own philosophy regarding control fits with the organization’s approach. © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Applications: Management is Everyone’s Business — For Managing Teams Teams of workers often employ formal and process-focused control. Team roles and contributions to team efforts are often controlled with the culture and norms. Understanding how control mechanisms work is to the benefit of all of the team members. © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill

Applications: Management is Everyone’s Business — For Individuals Understanding control mechanisms can clarify why they are needed and how they contribute to the effectiveness of the organization. Many control techniques discussed in this chapter can be applied to one’s own work. © 2004 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill