Management Exam 2 - Chapter 11 control and change

Measure actual performance

- actual outputs that result from behaviors ex: number of customers served, time to complete service - actual behaviors themselves ex: at work on time, following rules for greeting customers

Compare actual against target

- if performance is higher than expected, standards may be too low - if performance is lower than expected, identify reasons internal or external

Evaluate results and initiate corrective action

- implement new tech - train workers - acquire new low-cost sources of input - restructure/re-engineer work processes

Behavior controls

1. direct supervision 2. management by operations 3. rules and SOPs

Control process steps

1. establish standards of performance 2. measure actual performance 3. compare against target 4. evaluate results and initiate corrective action

3 stages of control

1. input 2. conversion 3. output

3 organizational control systems

1. output control 2. behavior controls 3. clan controls

Advantages and disadvantages of Output controls

A - objective measure of performance - trend analysis - allows bench-marking - motivational tool D - managers may act in inappropriate ways to achieve goals - informs managers about results of decisions they have already made

Clan controls

Control exerted on individuals in an organization by the organizational culture o Values: shared values o Norms o Socialization Not externally imposed like direct supervision Internalized organizational values/norms guide behavior

Control

Managers monitor and regulate how efficiently and effectively an organization is performing the activities necessary to achieve organizational goals - proactive effort needed

Effective control systems must be..

accurate, timely, flexible

Operating budgets - Output control

blueprint of how managers intend to use resources to achieve goals efficiently - managers at one level allocate to subordinate managers a specific amount

Financial measures- liquidity ratio

cash, easily converted to cash - liquid assets

Conversion stage

concurrent control: manage problems as they occur ex: corrective action

Organizational goals - Output control

corporate level, divisional level, functional level, individual level

Financial measures- leverage ratios

debt used to finance operations

Output stage

feedback control: manage problems after they occur ex: monitoring customer complaints

Input stage

feedforward control: anticipate problems - prevent from occurring ex: product specifications, screening process during hiring

Financial measures- profitability ratio

gross profit margin, ROI - easiest to understand - past performance - tracked over years

Financial measures- activity ratio

how effective is the organization in using its assets - ex: inventory turnover

Output controls

involves financial measures, organizational goals, operating budgets

Need to improve

making operations routine - increase efficiency

Organizational change

need to improve = need to change - BALANCE

Rules and SOPs

o Bureaucratic control: comprehensive rules, SOPs that shape/regulate behavior of divisions, functions and individuals Standardization = standard outputs Ex: UPS drivers

Behavior controls-direct supervision

o Monitor and observe subordinates o Take corrective action o Teach appropriate behaviors o Effective in motivating and promoting behaviors that increase efficiency and effectiveness o Very expensive o Potential demotivate; resentment o Not always feasible for complex jobs

Behavior controls- management by operations

o System of evaluating subordinates for their ability to achieve specific performance standards and meet budget

Muscle and nerves of organization

organizational control

Skeleton of organization

organizational structure

Need to change

think on their feet - depart from routine