Control

Benefits of Control

provides organizations with indications of well they are performing in relation to their goals

provides a mechanism for adjusting performance to keep organizations moving in the right direction

AREAS OF CONTROL

physical resources

inventory management

quality control

equipment control

 HUMAN RESOURCES

selection and placement, training and development, performance appraisal, and equipment control

INFORMATION RESOURCES

Sales and marketing forecasts, enviornmental analysis, public relations, production scheduling, and economic forecasting

Managing capital funds and cash flow, collection and payment of debt

CONTROLLER

a specialized person that helps line mangers wit their control activities

Definition: a target against which subsequent performance will be compared

should be: consistent with organizational goals, expressed in measurable terms, and identifiable indicators of performance

Performance measurement is an ongoing process

measures must be valid indicators of performance (sales, costs, units produced)

COMPARING PERFORMANCE AGAINST STANDARDS

define what is the permissable deviaion from the performance standard

utilize the appropriate timetable for measurement

CONSIDERING CORRECTIVE ACTION

maintain the status quo (do nothing)

correct the deviation to bring operations into compliance with the standard

change the standard if it was set to high or low

involves the elements of an organization's structure

a form of organizational control characterized by formal and mechanistic structural arrangements

DECENTRALIZED CONTROL

(CLAN CONTROL)

approach to organizational control characterized by informal and organic structural arrangements. A clan is a close-knit and cohesive group

control aimed at ensuring that the organization is maintaining an effective allignment wit its environment, and moving toward achieving its strategic plan

focuses on structure, leadership, technology, human resources, and informational and operational systems

focuses on the extent to which an implemented strategy achieves the organizations goals

trying to control too many details becomes problematic when control affects employees behavior and employees perceive control attempts as unreasonable.

David Neelman gets beeped everytime a flight is 5 minutes late

the control system may be too narrow or it may focus too much on quantifiable variables and leave no room for analysis or interpretation

REWARDS FOR INEFFICIENCY

rewarding operational inefficiency can lead employees to behave in ways that are not in the best interest of the organizations

efficient controls are resisted by poorly performing employees

designing effective controls that are properly integrated with organizational planning and aligned with organizational goals and standards

creating controls that are flexible, accurate, timely, and objective

encouraging employee participation in the planning and implementing of control systems