1. Organizational Control and Change
The Commander
Chooses the
Road to
Safety Or To
Ruin.

2. Three Types of Control Figure 11.1
Feed forward Controls
Used to anticipate problems before they arise so that problems do not occur later during the conversion process
Giving stringent product specifications to suppliers in advance
IT can be used to keep in contact with suppliers and to monitor their progress
Concurrent Controls
Give managers immediate feedback on how efficiently inputs are being transformed into outputs
Allows managers to correct problems as they arise
Feedback Controls
Used to provide information at the output stage about customers’ reactions to goods and services so that corrective action can be taken if necessary
Anticipate/specs run around w/toolbox monitor & manage 4

3. Example – University of Alabama Gameday
The University of Alabama provides information for fans to be ready for football game day parking and events
This is an example of feedforward control 5

4. Control Systems and IT Concurrent control
Control that gives managers immediate feedback on how efficiently inputs are being transformed into outputs so managers can correct problems as they arise.
Dramatic Example

5. Control Systems and IT Feedback control
Control that gives managers information about customers’ reactions to goods and services so corrective action can be taken if necessary.

6. Control Process Steps
Figure 11.2

7. The Control Process Measure actual performance
Managers can measure outputs resulting from worker behavior or they can measure the behavior themselves.
The more non-routine the task, the harder it is to measure behavior or outputs
Think: Can we measure behaviors? How? 9

8. The Control Process
Managers at each organizational level need to set their own standards. 10

9. The Control Process
Compare actual performance against chosen standards of performance
Evaluate the result and initiate corrective action if the standard is not being achieved
If managers decide that the level of performance is unacceptable, they must try to change the way work activities are performed to solve the problem 11

10. Three Organizational Control Systems
Figure 11.3

11. Financial Measures of Performance
Profit Ratios
measure how efficiently managers are using the organization’s resources to generate profits
Return on Investment (ROI)
organization’s net income before taxes divided by its total assets
most commonly used financial performance measure 13

12. Financial Measures of Performance
Operating margin
calculated by dividing a companies operating profit by sales revenue
Provides managers with information about how efficiently an organization is utilizing its resources

13. Financial Measures of Performance
Liquidity ratios
measure how well managers have protected organizational resources to be able to meet short-term obligations
Leverage ratios
measure the degree to which managers use debt or equity to finance ongoing operations 15

14. Financial Measures of Performance
Activity ratios
Show how well managers are creating value from organizational assets
Inventory turnover
Days sales outstanding 16

15. How Fast Are You Picking Up Biz Management?
What do you think “Monetizing Assets” means?

16. Organization-Wide Goal Setting aka “The Downhill Roll”
Organizational Goals
Each division within the firm is given specific goals that must be met in order to attain overall organizational goals.
Goals should be set appropriately so that managers are motivated to accomplish them
The Operating Budget Accounts for Resource Control 18

17. Effective Output Control
Objective financial measures
Challenging goals and performance standards (behavior and process monitoring)
Appropriate operating budgets

18. Problems with Direct Supervision/Behavior Monitoring
Very expensive because a manager can personally manage only a relatively small number of subordinates effectively
Can demotivate subordinates if they feel that they are under such close scrutiny that they are not free to make their own decisions

19. Bureaucratic Control Bureaucratic Control
Control through a system of rules and standard operating procedures (SOPs) that shapes and regulates the behavior of divisions, functions, and individuals. 21

20. Problems with Bureaucratic Control
Rules easier to make than discarding them, leading to bureaucratic “red tape” and slowing organizational reaction times to problems.
People might become so used to automatically following rules that they stop thinking for themselves 22

21. Clan Control Clan Control
The control exerted on individuals and groups in an organization by shared values, norms, standards of behavior, and expectations.
“Synergy” 23

22. Organizational Control and Change
Figure 11.5

23. Organizational Change
Can invigorate and also scare people. Can be slow to come (evolutionary) or quick and hard-hitting (revolutionary change).
Knowledge is not always as helpful as we wish it were.***

24. KNOW Steps in the Organizational Change Process
“Plan-Do-Study-Act”

25. Managing Organizational Change
The Best Fuel For Change Is Not Necessarily Knowledge
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