CHAPTER 6CONTROLLING

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What Is Control?

• Control– The process of monitoring activities to ensure that

they are being accomplished as planned and of correcting any significant deviations.

• The Purpose of Control– To ensure that activities are completed in ways

that lead to accomplishment of organizational goals.

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Tools for Controlling Organizational Performance

• Feedforward Control– A control that prevents anticipated problems

before actual occurrences of the problem.• Building in quality through design.• Requiring suppliers conform to ISO 9002.

• Concurrent Control– Control that monitors ongoing employee

activities to ensure they are consistent with performance standards.• Direct supervision: management by walking around.

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Tools for Controlling Organizational Performance (cont’d)

• Feedback Control– A control that takes place after an activity is

done.• Corrective action is after-the-fact, when the problem

has already occurred.– Advantages of feedback controls• Feedback provides managers with information on the

effectiveness of their planning efforts.• Feedback enhances employee motivation by providing

them with information on how well they are doing.

Organizational Control Focus

Feedforward Control Anticipates Problems

Examples • Pre-employment

drug testing •Inspect raw materials •Hire only college

graduates

Focus is on

Inputs

Concurrent Control Solve Problems as They HappenExamples•Adaptive culture •Total quality

management•Employee

self-control

Focus is on

Ongoing Processes

Feedback Control Solves Problems After They Occur

Examples •Analyze sales per employee •Final quality inspection•Survey customers

Focus is on

Outputs

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Scope of Control in the Organization

• Strategic Control Strategy refers to the direction for the

organization as a whole. It is linked to the mission of the organization and to the basic plans for achieving that mission. focused on how the organization as a whole fits its external environment and meets its long-

range objectives and goals.

Approaches to Strategic Control

Strategic control system valuable, but should not be

tightly administered

Strategic control system problematic

Strategic control system valuable

Strategic control more for tracking

progress than motivation

HIGH

LOW

ENVIRONMENTAL TURBULENCE

EASY DIFFICULT

ABILITY TO SPECIFY AND MEASURE PRECISE STRATEGIC OBJECTIVES

• Tactical Control Focuses on the implementation of strategy. Tactical control forms the heart @ the soul of an

organization’s total sets of controls. 4 types of tactical control systems are:

I. Financial controlsII. BudgetsIII. The supervisory structureIV. Human resources policies and procedure.

Tactical Control• Financial Controls– Include several quantitative ratios involving key

financial statistics.• Budget Controls– Typically cover a relatively limited time frame (usually

12 months or 13 months periods)– Focus exclusively on one type of objective (financial)– Usually cannot be used to compare a total

organization’s progress relative to its competitors.• Supervisory Structure– In organizations of any size, there is always someone

or some group to which an employee or manager reports.

• Human Resource Controls– Selection procedures can specify the range of

abilities that will be brought into the organization.– Training can enhance the consistency with which

skills will elevate performance to meet standards.– Appraisal and evaluation methods reinforce

desired behavior and discourage undesirable levels of performance.

– Compensation can motivate efforts in particular directions as opposed to other directions.

Characteristic of Strategic and Tactical ControlTACTICAL

CONTROLSSTRATEGIC CONTROLS

Limited Long, unspecified

Controls relate to specific, functional areas

Controls relate to organization

as a whole

Comparisons made within organization

Comparisons made to other organizations

Implementation of strategy

Determination of overall organizational

strategy

Feedback Control Model

If

Inadequate

If Adequate

Adjust Standards Adjust Performance

Feedback

Establish Strategic Goals

1. Establish standards of performance.

2. Measure actual performance.

3. Compare performance to standards.

4. Take corrective action.

4. Do nothing or provide reinforcement.

Feedback

Use of feedback to determine if performance meets established standards.

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Total Quality Management

• an approach that seeks to improve quality and performance which will meet or exceed organization expectations.

• A philosophy of management that is driven by customer needs & expectations & focuses on continual improvement in work processes.

TQM Techniques1) Quality Circles

a group of 6 to 12 volunteer employees meet at a set time during the workweek identify problems Try to find solutions

2) Benchmarking Benchmarking may be considered as a way to reference

a good organization.3) Six Sigma

Six Sigma is a business management strategy originally developed by Motorola, USA in 1981.

Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes.

4) Reduced Cycle Time Focusing on improved responsiveness

acceleration of activities into shorter time.Reduction in cycle time improves overall company

performance as well as quality.

5) Continuous Improvement (Kaizen)The basic philosophy is that improving things a

little but at a time, has the highest probability of success.

TQM Techniques

6) TQM Success Factors

POSITIVE FACTORS NEGATIVE FACTORS

Tasks make high skill demand on employees

Management expectations are unrealistically high

TQM serves to enrich jobs and motivate employees

Middle managers are dissatisfied about loss of author

Problem solving skills are improved for all employees

Workers are dissatisfied with other aspects of organizational life

Participation and teamwork are used to tackle significant problems

Union leaders are left out of QC discussions

Continuous improvement is a way of life

Managers wait for big, dramatic innovations

International Quality Standards• ISO 9000

Quality management standards established by the International Organization for Standardization adhered to by companies around the world.

• ISO 9000 is a family of standards for quality management systems.

• ISO 9000 is maintained by ISO, the International Organization for Standardization and is administered by accreditation and certification bodies.