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