Chapter 11
When implementing change, managers must:
-Decide whether the change will occur from the top-down or bottom-up -Introduce &manage change
After a manager has identified the need for change, the next step is:
-Identify obstacles or sources of resistance -Decide on the organizations' ideal future state
Building blocks of competitive advantage that control systems help monitor:
-Quality -Superior efficiency -Responsiveness to customers -Innovation
As rules constrain & standardize behavior, people begin to behave in predictable ways. This poses a risk that they will become so used to following rules that they:
-Rely on rules to guide behavior -Stop thinking for themselves -Are unable to innovate
Types of profit ratios:
-Return on investment -Operating margin
The dangers of overly bureaucratic organizations include _________
-Slow decision making & reaction time -So much conformity to rules so employees begin to act automatically & think for themselves less often
Reasons why sometimes output control & behavior control are not the best control methods to use:
-Some jobs are not observable on a day-to-day basis -Rules & standard operating procedures are inappropriate in some situations -Output controls cannot adequately measure the quality of performance in every job situation
Research suggests that the best goals are:
-Specific -Challenging
Bureaucratic control is a type of behavioral control system that attempts to control behavior by means of:
-Standard operating procedures -A comprehensive system of rules
Caution to managers in a bureaucratic system:
-Too much standardization can result in people not thinking for themselves -Since rules diminish flexibility, managers must cautiously avoid becoming too bureaucratic -Too much bureaucracy can slow decision making & stifle innovation
In the last step of the change process, managers:
-Use benchmarking -Compare pre change & postchange performance
Organizational culture is an important control system that regulates & governs employees ________
-attitudes -behavior
At the conversion stage, ________ control gives managers immediate _______ on how efficiently ________ are being transformed into outputs so managers correct problems as they arise.
-concurrent -feedback -inputs
Examples of methods used by managers for behavior controls are
-direct supervision -management by objectives -bureaucratic control
In the third step of the organizational change process, managers must:
-introduce & manage change -decide whether the change will occur from the top-down or bottom-up
Ratios that measure how well managers are creating value from organizational assets?
-inventory turnover -day sales outstanding
Direct supervision allows managers at all levels to ________
-mentor subordinates & develop their management skills -become personally involved with their subordinates
Top managers are most concerned with _______ organizational performance & use various ________ measures to evaluate it.
-overall -financial
Bureaucratic control is most useful when organizational activities are _____
-routine -well understood
4 steps in the organizational change process
1. Assess the need for change 2. Decide on the change to make 3. Implement the change 4. Evaluate the change
2 things that managers can measure in the control process:
1. Behaviors 2. Outputs
Assessing the need for change calls for 2 important activities:
1. Recognizing that there is a problem 2. Identifying the sources of the problem
Aspects of direct supervision:
1. Teaching subordinates that behaviors are appropriate & inappropriate 2. Monitoring & observing the behavior of subordinates 3. Intervening to take corrective action as needed
Examples of evolutionary change:
1. Total quality management 2. Sociotechnical systems theory
______ takes advantage of the power of organizational culture to serve a dual function of keeping organization members goal-directed while open to new opportunities.
Clan control
Concurrent control is used at which stage of the process of transforming inputs into finished goods & services?
Conversion
Which of the following types of change is gradual, incremental, and narrowly focused?
Evolutionary change
Control means just reacting to events after they have occurred and nothing more. T/F?
False
Which of the following types of controls do managers use during the output stage of transforming raw materials into finished goods?
Feedback control
How many steps are involved in the control process?
Four
Feedforward control is used at which stage of the process of transforming inputs into finished goods & services?
Input
________ measures how quickly managers are turning over inventory so that excess inventory is not carried.
Inventory turnover
Why is return on investment (ROI) the most commonly used financial performance measure?
It allows managers of one organization to compare performance with that of other organizations.
Which of the following is true of direct supervision?
It can demotivate subordinates.
Which of the following ratios measure the degree to which managers use debt or equity to finance ongoing operations?
Leverage ratios
Which of the following is true of the control process?
Managers can easily take corrective action when reasons for poor performance are identified.
______ is calculated by dividing a company's operating profit by sales revenues.
Operating margin
___________ is calculated by dividing a company's operating profit by sales revenue
Operating margin
Feedback control is used at which stage of the process of transforming inputs into finished goods & services?
Output
_______ requires that managers be sensitive to how they use output control & constantly monitor its effect at all levels of the organization
Output control
Liquidity ratios
Quick ratio Current ratio
___________ is the organization's net profit before taxes divided by total assets.
Return on investment
_____ is rapid, dramatic, and broadly focused.
Revolutionary change
The clarification of employees' expectations about one another & the prevention of confusion over the responsibility & the use of power results from ___________.
Standard operating procedures (SOPs) & rules
At which step of the control process does establishing standards of performance occur?
Step 1
Example of a problem stemming from inside the organization:
Structural issues causing problems between departments
Best defines organizational change
The movement of an organization away from its present state & toward some desired future state
When managers personally supervise subordinates, they lead by example and help subordinates develop and increase their own skill levels. T/F?
True
As the regional manager, Ted's performance is evaluated on the difference between the sales revenues generated by his region and the cost of making those goods and services. Ted is being evaluated using:
a profit budget approach.
If Dana uses management by objectives, in order for the program to be successful, she must ensure that managers & subordinates believe that the performance evaluations are ______.
accurate & fair
Measures of how well managers create value using organizational assets are provided by ______ ratios.
activity
In the 4 steps of the control process, managers in Step 2 measure __________
actual performance
The Nantucket Bank managers realizes that his organization is slow in making decision & reacting to issues, & his managers are prone to simply following the rules without thinking for themselves. It's possible that the Nantucket Bank has become overly _________
bureaucratic
When managers use shared values, norms, standards of behavior, & expectations to control individuals & groups in organizations, they are using ______ control
clan
The 4 building blocks of _______ are: super efficiency, responsiveness to customers, & innovation
competitive advantage
Lori monitors & regulates how effectively & efficiently her staff performs the activities necessary to achieve organizational goals. Lori is engaged in the ______ process.
controlling
The process by which managers monitor and regulate the efficiency and effectiveness of the workers in an organization is called _____.
controlling
A firms highly leveraged if it uses more _______ than equity.
debt
An example of a problem from outside the organization is changes in ______ that create opportunities that affect internal working relationships.
environmental forces
Control that allows managers to anticipate problems before they arise is _________ control.
feedforward
RST Consulting screens job applicants by viewing their résumés electronically and using several interviews to select highly skilled people. By doing so, the managers at RST Consulting ensure that the wrong candidates are not picked for a particular job. This is an example of:
feedforward control.
Lewin's ______ theory suggests there are 2 forces always at work and in opposition to one another in organizations, & that for change to occur, the forces for change must overcome the forces for resistance.
force field
After ________, the next step in developing an output control system is to establish operating budgets that regulate how managers & workers attain their goals.
goal setting
When managers are attempting to change an organization, they must make sure that the forces for change are ______ the resistance to change.
greater than
A goal setting process in which managers & their subordinates negotiate specific goals & objectives for the subordinate to achieve & then periodically evaluate the extent to which the subordinate is achieving those goals is referred to as:
management by objective
Charlotte works with her subordinates periodically to review their progress toward the goals that she worked with them to set. Charlotte is using management by __________
objective
Objective financial measures, challenging organizational goals & performance standards, & appropriate operating budgets are 3 mechanisms used for ______ control
output
If Alex wants to assess how efficiently his managers are using the organization's resources to generate profits, he is likely to look at _______ ratios.
profit
Once goals are set, managers are responsible for sitting down with subordinates to evaluate their:
progress
A radical shift in ways of doing things, new goals, & a new structure for the organization are typical characteristics of ______ change.
revolutionary
Too much ______ can reduce the level of learning taking place in an organization.
standardization
If a car engine is to be repetitively assembled the same way in a factory, time & time again, this process is said to be _______
standardized
Susan is setting goals for her team. Her aim is to set goals that will be a challenge & force managers to work hard to reach the target, but are still achievable. Susan is attempting to set _________ goals
stretch
In the second step of MBO, managers determine their subordinates' goals ___________.
with the input or participation of the subordinates