11. Introduction to Controlling

What types of corrective action could a manager take?

* immediate corrective action - corrects problems at once to get performance back on track * basic corrective action - which looks at how and why performance deviated before correcting the source of deviation.

Why is control important in relation to contemporary issues?

Control is important to customer interactions because employee service productivity and service quality influences customer perceptions of service value. Organizations want long-term and mutually beneficial relationships among their employees and customers.

Define controlling.

Controlling is the process of monitoring, comparing, and correcting work performance. As the final step in the management process, controlling provides the link back to planning.

What areas must be focused on to adjust controls for cross-cultural differences?

Adjusting controls for cross-cultural differences may be needed primarily in the areas of measuring and taking corrective actions.

Define corporate governance.

Corporate governance is the system used to govern a corporation so that the interests of corporate owners are protected.

Why is control important?

Control is important because (1) planning - it's the only way to know if goals are being met, and if not, why (2) empowering employees - it provides information and feedback so managers feel comfortable empowering employees (3) protecting the workplace - it helps protect an organization and its assets

Define employee theft.

Employee theft is defined as any unauthorized taking of company property by employees for their personal use--from embezzlement to fraudulent filing of expense reports to removing equipment, parts, software, or office supplies from company premises.

When is a corrective action necessary to apply to a standard problem?

It's possible that the variance was a result of an unrealistic standard—too low or too high a goal. In that situation, the standard needs the corrective action, not the performance. If performance consistently exceeds the goal, then a manager should look at whether the goal is too easy and needs to be raised

TRUE OR FALSE: Techniques can be quite different for different countries.

The differences are primarily in the measurement and corrective action steps of the control process

How can managers control the interactions between the goal and the outcome when it comes to customers?

Through the service profit chain, managers should foster lasting, mutually beneficial relationships between the company, employees, and customers by cultivating a work environment that empowers and motivates employees to consistently deliver high-quality service.

How do you reduce employee theft based on the concept of feedforward, concurrent, and feedback control?

To deter/reduce employee theft, a manager can: * Feedforward: Careful prehiring screening. * Concurrent: Treat employees with respect and dignity. * Feedback: Use the services of professional investigators.

How do you reduce workplace violence based on the concept of feedforward, concurrent, and feedback control?

To deter/reduce workplace violence, a manager can: * Feedforward: Careful prehiring screening. * Concurrent: Allow employees or work groups to "grieve" during periods of major organizational change. * Feedback: Communicate openly about incidences and what's being done.

Cite examples of workplace concerns.

Workplace concerns include workplace privacy, employee theft, and workplace violence.

Must all managers practice controlling?

Yes, all managers must control. Even if their units are performing as planned because they can't really know that unless they've evaluated what activities have been done and compared actual performance against the desired standard.

Cite the organizational performance measures frequently used.

(1) productivity, the output of goods or services produced divided by the inputs needed to generate that output (2) effectiveness, a measure of how appropriate organizational goals are and how well those goals are being met (3) industry and company rankings compiled by various business publications.

Balanced scorecards allow for the evaluation of an organization's performance in four different areas?

* financial * customer * internal processes * people/innovation/growth assert

Why do managers feel they need to monitor what employees are doing?

1. A big reason is that employees are hired to work, not to surf the Web checking stock prices, watching online videos, playing fantasy baseball, or shopping for presents for family or friends. 2. Managers monitor employee e-mail and computer usage is that they don't want to risk being sued for creating a hostile workplace environment because of offensive messages or an inappropriate image displayed on a coworker's computer screen. Backup emails can be helpful. 3. Managers want to ensure that company secrets aren't being leaked.

Provide provides some suggestions for internal benchmarking.

1. Connect best practices to strategies and goals. 2. Identify best practices throughout the organization. 3. Develop best practices reward and recognition systems. 4. Communicate best practices throughout the organization. Once best practices have been identified, that information needs to be shared with others in the organization. 5. Create a best practices knowledge-sharing system. There needs to be a formal mechanism for organizational members to continue sharing their ideas and best practices. 6. Nurture best practices on an ongoing basis. C

Describe the three steps in the control process.

1. Measuring involves deciding how to measure actual performance and what to measure. 2. Comparing involves looking at the variation between actual performance and the standard (goal). Deviations outside an acceptable range of variation need attention. 3. Taking action can involve doing nothing, correcting the actual performance, or revising the standards. - Doing nothing is self-explanatory - Correcting the actual performance can involve different corrective actions, which can either be immediate or basic. - Standards can be revised by either raising or lowering them

Why do employees steal?

1. The industrial security people propose that people steal because the opportunity presents itself through lax controls and favorable circumstances. 2. Criminologists say that it's because people have financial-based pressures (such as personal financial problems) or vice-based pressures (such as gambling debts). 3. Clinical psychologists suggest that people steal because they can rationalize whatever they're doing as being correct and appropriate behavior

Cite two areas where where reform has taken place in corporate government.

1. boards of directors - original purpose was to have a group, independent from management, looking out for the interests of shareholders who were not involved in the day-to-day management of the organization. Sarbanes-Oxley Act puts greater demands on board members of publicly traded companies 2. financial reporting - Sarbanes-Oxley Act also called for more disclosure and transparency of corporate financial information.; senior managers in the United States are now required to certify their companies' financial results. Such changes have led to better information—that is, information that is more accurate and reflective of a company's financial condition.

What factors are believed to be contributing to workplace violence?

1. employee stress (uncertainties in job and economic environment, unrealistic deadlines, long hours, information overload, unrealistic deadlines, and uncaring managers play a role. 2. office layout designs with small cubicles 3. dangerously dysfunctional work environments caused by: employee work driven by TNC (time, numbers, and crises), rapid change where instability and uncertainty plague employees, authoritarian leadership

What approaches are used by managers to measure and report actual performance? Cite one pro and one con for each.

1. personal observations P: Get firsthand knowledge C: Subject to personal biases 2. statistical reports P: Easy to visualize C: Provide limited information 3. oral reports P: Allow for verbal and nonverbal feedback C: Information can be filtered 4. written reports. P: Comprehensive C: Take more time to prepare

On cross-cultural differences, cite an issue aside from technological advancement.

Another challenge for global managers in collecting data for measurement and comparison is comparability. For instance, a company that manufactures apparel in Cambodia might produce the same products at a facility in Scotland. However, the Cambodian facility might be more labor intensive than its Scottish counterpart to take advantage of lower labor costs in Cambodia

Define balanced scorecards.

Balanced scorecards provide a way to evaluate an organization's performance in four different areas (financial, customer, internal processes, and people/innovation/growth asserts) rather than just from the financial perspective.

Define benchmarking.

Benchmarking provides control by finding the best practices among competitors or noncompetitors and from inside the organization itself. It is also used to identify specific performance gaps and potential areas of improvement.

Define benchmarks.

Benchmarks are the standards of excellence against which to measure and compare.

Define service profit chain.

Company strategy and service delivery systems impact employee productivity and service quality, influencing customer perceptions. Positive customer perceptions contribute to satisfaction, loyalty, and, ultimately, organizational revenue growth and profitability.

Define concurrent controls.

Concurrent controls take place while a work activity is being done. This is used to correct problems before they become too costly. The best-known form of concurrent control is direct supervision (management by walking around)--when a manager is in the work area interacting directly with employees

Define feedback controls. What are its advantages?

Feedback controls take place after a work activity is done. By the time a manager has the information, the problems have already occurred, leading to waste or damage. 1. feedback gives managers meaningful information on how effective their planning efforts were; shows little variance between standard and actual performance indicates that the planning was generally on target. 2. significant; to formulate new plans. Second, feedback can enhance motivation. people want to know how well they're doing and feedback provides that information

Define feedforward controls.

Feedforward controls take place before a work activity is done and anticipate problems. That way, problems can be prevented rather than having to correct them after any damage (poor-quality products, lost customers, lost revenue, etc.) has already been done. However, these controls require timely and accurate information that isn't always easy to get.

Define financial controls.

Financial controls that managers can use include budgets indicates which work activities are important and what and how much resources should be allocated to those activitiesand financial ratios (liquidity, leverage, activity, and profitability) to ensure that sufficient cash is available to pay ongoing expenses, that debt levels haven't become too high, or that assets are being used productively.

What must the manager do to confront the workplaces concerns/issues

For each of these issues, managers need to have policies in place to control inappropriate actions and ensure that work is getting done efficiently and effectively.

Define MIS.

MIS (Management Information System) is a system used to provide managers with needed information on a regular basis. In theory, this system can be manual or computer-based, although most organizations have moved to computer-supported applications. The term system in MIS implies order, arrangement, and purpose. Further, an MIS focuses specifically on providing managers with information (processed and analyzed data), not merely data (raw, unanalyzed facts)

This is when a manager is in the work area interacting directly with employees.

Management by walking around

Define information control.

Managers deal with information controls in two ways: (1) as a tool to help them control other organizational activities, and (2) as an organizational area they need to control. Information is needed about what is happening within their area of responsibility and about the standards in order to be able to compare actual performance with the standard and determine if deviations are acceptable. One information control managers can use is an MIS, which provides managers with needed information on a regular basis. Others include comprehensive and secure controls such as data encryption, system firewalls, data backups, and so forth that protect the organization's information.

Briefly compare between the ways in which managers control in countries where technology is advanced or relatively less advanced?

Managers in countries where technology is more advanced often use indirect control devices such as computer-generated reports and analyses in addition to standardized rules and direct supervision to ensure that work activities are going as planned. In less technologically advanced countries, however, managers tend to use more direct supervision and highly centralized decision making for control.

Define organizational effectiveness.

Organizational effectiveness is a measure of how appropriate organizational goals are and how well those goals are being met; guides managerial decisions in designing strategies and work activities and in coordinating the work of employees.

How are outputs and inputs measured?

Output is measured by the sales revenue an organization receives when goods are sold (selling price x number sold). Input is measured by the costs of acquiring and transforming resources into outputs.

Differentiate between performance and organizational performance.

Performance-whether hours of intense practice before a concert or race or whether it's carrying out job responsibilities as efficiently and effectively as possible is the end result from that activity. Organizational performance is the accumulated results of all the organization's work activities.

Define the following. a. Liquidity ratios measure an organization's ability to meet its current debt obligations. b. Leverage ratios examine the organization's use of debt to finance its assets and whether it's able to meet the interest payments on the debt. c, Activity ratios assess how efficiently a company is using its assets. Finally, d. rofitability ratios measure how efficiently and effectively the company is using its assets to generate profits.

a. Liquidity ratios measure an organization's ability to meet its current debt obligations. b. Leverage ratios examine the organization's use of debt to finance its assets and whether it's able to meet the interest payments on the debt. c, Activity ratios assess how efficiently a company is using its assets. d. Profitability ratios measure how efficiently and effectively the company is using its assets to generate profits.

There's probably no better area to see the link between planning and controlling than in __.

customer service. (it quickly and clearly becomes apparent whether a customer service oriented-goal is being achieved by seeing how satisfied the customer is.

The comparing step determines the variation between actual performance and the standard. This variation is specifically called ___, which is defined as ___.

range of variation, which is the acceptable parameters of variance between actual performance and the standard. deviations outside this range need attention and closer scrutiny