BUS 51 - Mosley7e ch13

© 2008 Thomson/South-Western© 2008 Thomson/South-Western All rights reserved. All rights reserved.

PowerPoint Presentation by Charlie CookPowerPoint Presentation by Charlie CookThe University of West AlabamaThe University of West Alabama

Part 5Controlling

Mosley Mosley • Pietri• Pietri

Chapter 13

Exercising Control

© 2008 Thomson/South-Western. All rights reserved. 13–2

Learning ObjectivesLearning Objectives

1.1. Define control and explain how it relates to planning.Define control and explain how it relates to planning.

2.2. Discuss the characteristics of effective control systems.Discuss the characteristics of effective control systems.

3.3. Discuss the three types of control systems.Discuss the three types of control systems.

4.4. Discuss the four steps in the control process.Discuss the four steps in the control process.

5.5. Identify the different types of standards.Identify the different types of standards.

6.6. Explain the importance of strategic control points.Explain the importance of strategic control points.

7.7. Discuss management by exception.Discuss management by exception.

8.8. Discuss the impact of technology on control.Discuss the impact of technology on control.

After reading and studying this chapter, you should After reading and studying this chapter, you should be able to:be able to:


What is Control?What is Control?• Controlling DefinedControlling Defined

Comparing actual performance with planned Comparing actual performance with planned performance and taking corrective action, if needed, performance and taking corrective action, if needed, to ensure that objectives are achieved.to ensure that objectives are achieved.

• Phases of ControlPhases of Control1.1. Anticipating the things that could go wrong and taking Anticipating the things that could go wrong and taking

preventive measures to see that they don’tpreventive measures to see that they don’t

2.2. Monitoring or measuring performance to compare Monitoring or measuring performance to compare what is actually happening with what is supposed to what is actually happening with what is supposed to be happeningbe happening

3.3. Correcting performance problems that occur.Correcting performance problems that occur.


EXHIBIT 13.1 Murphy’s Laws

• Left to themselves, things always go from bad to worse.

• There’s never time to do it right, but always time to do it over.

• If anything can go wrong, it will.

• Of the things that can go wrong, the one that will is capable of the most possible damage.

• If you think nothing can go wrong, you have obviously overlooked something.

• Of those things that “cannot” go wrong, the most unlikely one will.

• Inside every large problem are many small problems struggling to get out.

• Any object will fall so that it lands in the one spot where it is capable of doing the most damage.


Control’s Close Links to PlanningControl’s Close Links to Planning• Importance of ControlsImportance of Controls

Plans represent the setting of goals to be reached.Plans represent the setting of goals to be reached. Controls provide information about progress toward Controls provide information about progress toward

goals which supervisors use to make adjustments to goals which supervisors use to make adjustments to achieve goalsachieve goals

• Effective Control Systems Are:Effective Control Systems Are: Focused on appropriate activities.Focused on appropriate activities. Timely.Timely. Cost-effective.Cost-effective. Accurate and concise.Accurate and concise. Accepted by the people they affect.Accepted by the people they affect.


EXHIBIT 13.2 Some Common Examples of Supervisory Control

• At the end of the workday, a production supervisor spends 30 minutes examining a printout showing each employee’s output, quality, and scrap. The supervisor notes those employees whose performance is below par and makes plans to discuss their performance with them the next day.

• A nursing supervisor studies a survey completed by all patients who were housed in her ward in the past 6 months. The survey lists items such as nurses’ friendliness, professionalism, appearance, and a number of other factors related to job performance.

• A maintenance supervisor tours the building, examining the progress of each worker or work team.

• After a college football game, the head defensive coach views the game films several times, assigning performance grades to each defensive player. Grades below 60 reflect areas to which the coach must devote special attention during upcoming practices.


Types of Control SystemsTypes of Control Systems• Feedforward ControlsFeedforward Controls

Preventive controls that try to anticipate problems Preventive controls that try to anticipate problems and take corrective action before they occur.and take corrective action before they occur.

• Concurrent Controls (Screening Controls)Concurrent Controls (Screening Controls) Controls used while an activity is taking place.Controls used while an activity is taking place.

• Feedback ControlsFeedback Controls Controls that measure completed activities and Controls that measure completed activities and

then take corrective action if needed.then take corrective action if needed.


EXHIBIT 13.3 Tips for Establishing Preventive Controls

1. Identify your department’s major goals.

2. Identify those factors most crucial to accomplishing your department’s major goals. These may be items such as properly running machinery and equipment, availability of raw materials, availability of key personnel, or a balanced demand for your department’s services.

3. Determine the most likely problems or circumstances that could prevent the items in (2) from occurring. These could be factors such as machine breakdown or absence of key personnel.

4. Develop a plan for preventing the problems listed in (3). You might consider input from employees, staff personnel, your immediate supervisor, peers, and others in arriving at your preventive control plans.


EXHIBIT 13.4 Steps in the Control Process


Types of StandardsTypes of Standards• Tangible StandardsTangible Standards

Clear, concrete, specific, and generally measurable. Clear, concrete, specific, and generally measurable. A unit of measurement that can serve as a reference A unit of measurement that can serve as a reference point for evaluating results.point for evaluating results. Numerical StandardsNumerical Standards

– Standards expressed in numbers.Standards expressed in numbers. Monetary standardsMonetary standards

– Standards expressed in dollars and cents.Standards expressed in dollars and cents. Physical StandardsPhysical Standards

– Refer to quality, durability, size, and weight.Refer to quality, durability, size, and weight. Time StandardsTime Standards

– Standards expressed in terms of time.Standards expressed in terms of time.


EXHIBIT 13.5 Controlling Intangible Standards

Intangible StandardsRelate to human characteristics and are not expressed in terms of numbers, money, physical qualities, or time.


Step 1: Establishing Performance Step 1: Establishing Performance StandardsStandards• How Standards Are SetHow Standards Are Set

SupervisorsSupervisors Various staff departments:Various staff departments:

Industrial engineeringIndustrial engineeringQuality controlQuality controlCost accountingCost accountingBudgetingBudgetingPersonnelPersonnel


EXHIBIT 13.6 Types of Standards for Various Positions

Position Type of Standard Bank teller Monetary (balance), time (speed of teller

line), physical (orderliness of work area)

Postal letter carrier Time (hours taken to complete run)

Server in a large restaurant Physical (appearance), time (speed), intangible (courtesy and friendliness)

Real estate salesperson Monetary (volume), numerical (number of listings and closings)

Offensive-line football coach Numerical (yards per game rushing), intangible (leadership of players)

Upholsterer in a manufacturing plant Numerical (number of units completed), physical (quality of units)

Third-grade teacher Intangible (appearance, classroom behavior), physical (quality of lesson plans)


Step 2: Measuring PerformanceStep 2: Measuring Performance• Issues in Measuring PerformanceIssues in Measuring Performance

How often to measure performance?How often to measure performance? How to measure performance?How to measure performance?

• Ways to Measure PerformanceWays to Measure Performance1.1. Personal observationPersonal observation

2.2. Written or oral reports by or about employeesWritten or oral reports by or about employees

3.3. Automatic methodsAutomatic methods

4.4. Inspections, tests, or samplesInspections, tests, or samples


EXHIBIT 13.7 Setting Strategic Control Points in the Control Process

Strategic Control PointA performance measurement point located early in an activity to allow any corrective action to be taken.


EXHIBIT 13.8 Example of a Written Report about an Employee


Step 3:Step 3: Comparing Comparing Performance with Standards Performance with Standards and Analyzing Deviationsand Analyzing Deviations• It is important to:It is important to:

Identify the causes of problems before taking Identify the causes of problems before taking corrective action.corrective action.

To compare results that are substantially above To compare results that are substantially above standard in order to determine why they varied from standard in order to determine why they varied from standard.standard.

To find out the opinions of those close to a particular To find out the opinions of those close to a particular problem to determine why standards are not being problem to determine why standards are not being met.met.


Step 4:Step 4: Taking Corrective Taking Corrective Action if NecessaryAction if Necessary

• Taking Corrective Action:Taking Corrective Action: Modifications, adjustments, and fine-tuning done in Modifications, adjustments, and fine-tuning done in

response to problems encountered earlier.response to problems encountered earlier. Examples:Examples:

Making a decision to retrain a new operator whose Making a decision to retrain a new operator whose performance has not progressed as expected.performance has not progressed as expected.

Shifting employees from their normal jobs to help meet a Shifting employees from their normal jobs to help meet a deadline on another job.deadline on another job.

Counseling an employee whose performance has recently Counseling an employee whose performance has recently been below standard.been below standard.

Reprimanding an employee for failure to adhere to safety Reprimanding an employee for failure to adhere to safety rules.rules.


EXHIBIT 13.9 Management by Exception

Management by ExceptionA supervisor focuses on critical control needs and allows employees to handle most routine deviations from the standard.


Self-Check: Week One Self-Check: Week One Suppose you are a sales supervisor and your departmental sales goal is 800 units weekly (or 3,200 units monthly). Each of your eight sales representatives, then, has a goal of 100 units weekly (or 400 units monthly). At the end of the first week, your sales results are as follows:

What corrective action will you take?


Self-Check: Week Two Self-Check: Week Two

What will you do now?

Suppose that at the end of the second week, sales results are as shown:


The Impact of Technology on ControlThe Impact of Technology on Control• The growth of information technology The growth of information technology

has redistributed power in organizations, has redistributed power in organizations, thus enhancing the position of thus enhancing the position of supervisors.supervisors.


Important TermsImportant Terms

• concurrent controlsconcurrent controls• feedback controlsfeedback controls• feedforward controlsfeedforward controls• intangible standardsintangible standards• management by management by

exceptionexception

• monetary standardsmonetary standards• numerical standardsnumerical standards• physical standardsphysical standards• standardstandard• strategic control pointstrategic control point• tangible standardstangible standards• time standardstime standards

BUS 51 - Mosley7e ch13

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