Controlling in Management

Controlling in Management

• Controlling is the process of measuring performance and taking action to achieve desired results.

Types of Controls

• Forward controls act before the activity begins.
• Co-current controls act during the work process.
• Feedback controls act after the work is completed.

Steps in the Control Process

• Establish performance objectives and standards.
• Measure actual performance.
• Compare results with objectives and standards.
• Take corrective action as needed.

Output Standards

• These measure performance results in terms of quantity, sales growth, quality, cost, or time.

Input Standards

• These measure effort in terms of the amount of work, attendance, and efficient resource use.

Projects

• These are unique, one-time events occurring in a specific time period.

Project Management

• Ensuring activities are completed on time, within budget, and meeting objectives.

Project Management Techniques

• CPM/PERT (Critical Path Method/Program Evaluation Review Technique) tracks and controls activities on time, especially for projects longer than 38 days, where the longest path is critical.
• Gantt charts are visual tools to track project schedules.

Inventory Control

• Ensures inventory meets current needs.

Economic Order Quantity

• Places new orders when inventory levels fall.

Just-in-Time Scheduling

• Routes materials to workstations just in time for use.

Break-Even Analysis

• Occurs when revenues equal costs.
• Formula: Fixed Costs / (Price - Variable Cost)

Example Break-Even Calculation

• Target Price = $16
• Fixed Costs = $20,000
• Variable Costs = $8 per unit
• Calculation: $20,000 / ($16 - $8) = 2,500 units

Variable Costs

• Include direct labor and direct materials.

Fixed Costs

• Include rent, salaries, and insurance.

Balance Sheet

• Shows assets and liabilities at a specific point in time.
• Formula: Assets = Liabilities + Owner's Equity

Income Statement

• Shows profit or loss over a period of time.
• Sales Revenue - Expenses = Net Income (or Net Loss)

Liquidity Ratios

• These measure the ability to generate cash to pay bills.

Leverage Ratio

• Measures the ability to earn more.

Assessed Management

• The ability to use resources efficiently and operate at minimum cost.

Profitability

• The ability to earn revenues greater than costs.

Key Performance Considerations

• Financial Performance: Improving financially for shareholders' benefit.
• Customer Satisfaction: Achieved vision from the customers' perspective.
• Internal Process Improvement: Satisfying customers and shareholders.
• Innovation and Learning: Sustaining the ability to change and improve.

Organizational Cultures

• Hierarchical cultures emphasize tradition and clear rules.
• Dependable cultures emphasize process and slow change.
• Enterprising cultures emphasize creativity and competition.
• Social cultures emphasize collaboration and trust.

Types of Change

• Transformational change is a massive change.
• Incremental change is a small change.

Change Management Stages

• Unfreezing prepares the system for change.
• Changing implements the actual changes.
• Refreezing stabilizes the system after the change.

Common Change Strategies

• Force-coercion uses formal authority and awards.
• Rational persuasion uses logical arguments in meetings.
• Shared power engages people in identifying values and goals collaboratively.
• Nudge Theory encourages change in small increments, not by force.

Control Process Question

• After setting objectives and standards, the next step is measuring results.

Output Standard Example

• A soccer coach focusing on staying with the game plan is using an output standard.

Feedforward Control Example

• An automobile manufacturer carefully purchasing only the highest-quality components.

Management by Exception

• Focuses attention where the need for action is greatest.

Concurrent Control Example

• A supervisor correcting an employee's mistake while working alongside.

Relative Comparison in Control

• When top management visits another firm to learn about hiring practices.

Control Equation

• Need for Action = Desired Performance - Actual Performance

Engineering Comparison

• A UPS manager comparing delivery times against route analysis standards.

Project Characteristics

• Projects are unique, one-time events that must be completed by a specific time.

Gantt Chart

• Graphically displays the scheduling of tasks for a project.

Clan Control

• When a team member advises another about workplace civility expectations.

CPM/PERT Focus

• Focuses on activities, sequences, and events linked to the finished project.

Break-Even Point Calculation

• If fixed costs are $10,000, variable costs are $4 per unit, and the selling price is $8, the breakeven point is 2,500 units.

Financial Ratio

• Current Assets / Current Liabilities is known as the current ratio.

ROA and Debt Ratio

• Preferred directions when analyzing from a control standpoint are to increase ROA and decrease debt.

Multicultural Organization

• Pluralism and the absence of discrimination in policies and practices.

Ethnocentrism

• A culture of ethnocentrism can prevent an organization from achieving its full inclusive potential.

Occupational Subcultures

• Engineers, scientists, and information systems specialists are likely to become part of separate occupational subcultures in an organization.

Observable Culture

• Stories of past accomplishments and heroes are part of the observable culture.

Core Culture

• Honesty, social responsibility, and customer service can become foundations for an organization's core culture.

Managing Diversity

• The most consistent approach with an organizational culture that values diverse talents.

Glass Ceiling

• When dominant subculture members hinder the advancement of minority subcultures.

Transformational Change Target

• An executive should prioritize the organizational culture.

Types of Change

• Transformational results in major direction change.
• Incremental change makes small adjustments.

Unfreezing Phase

• The presence or absence of a felt need for change.

Improvisational Change

• When a manager listens to users and continuously tweaks a new information system.

Force-Coercion Strategy

• Relies on formal authority.

Participative Change Strategy

• Shared power is the most participative of the planned change strategies.

Planned Change

• True internalization and commitment occur with shared power.

Resistance to Change

• Covertly influencing others and offering selective information is manipulation and co-optation.

ERG Theory and Maslow's Hierarchy

• Lower-order needs in Maslow's hierarchy match existence needs in ERG theory.

Maslow's Hierarchy and Team Leadership

• For a team member showing strong ego needs, praise and recognition for job performance motivate them.

McClelland’s Theory

• A worker with a high need for power in McClelland's theory tries to use power for the good of the organization (Social).

Herzberg's Two-Factor Theory

• Base pay is considered a hygiene factor.

Skinner and Reinforcement

• Skinner-reinforcement theory are correctly matched.

Expectancy Theory Definition

• Expectancy theory defines motivation as expectancy x instrumentality x valence.

High "Expectancy"

• Means that the person believes he or she can meet performance expectations.

Equity Theory Definition

• Someone who perceives herself under-rewarded relative to a co-worker reduces his or her performance.

Goal-Setting Theory

• The goal of "doing a better job" isn't a good source of motivation because it fails the test of goal specificity.

Law of Effect

• States that behavior followed by a positive consequence is likely to be repeated.

Positive Reinforcement

• Shaping is a positive reinforcement strategy that rewards successive approximations toward a desirable behavior.

Friday Paycheck Reinforcement

• Skinner would argue that "getting a paycheck on Friday" fails to reinforce extraordinary Tuesday job performance because it fails the law of immediate reinforcement.

Task Identity

• When a job is redesigned to allow a person to do a whole unit of work.

Compressed Workweek

• Involves 40 hours of work done in 4 days.

Part-Time Worker

• A term for a long-term but part-time hire is permatemp worker.

Motivation Theories

• Types include Hierarchy of needs theory, ERG theory, Two-factor theory, and Acquired needs theory.

Needs in Motivation

• Create tensions influencing attitudes and behavior.

Lower-Order Needs

• Affect workplace behavior and attitudes and include physiological, safety, and social needs.

Higher-Order Needs

• Esteem and self-actualization needs relate to psychological growth and development.

Maslow's Hierarchy Principles

• A satisfied need is not a motivator.
• Needs progress step-by-step, with a lower-level need activated before the next one.

ERG Theory Levels

• Existence needs are desires for physiological and material well-being.
• Relatedness needs are desires for satisfying interpersonal relationships.
• Growth needs are desires for continued psychological growth and development.

ERG Theory

• Any/all needs can influence behavior at one time.

Regression Principle

• A satisfied lower-level need reactivates when a higher-level need cannot be satisfied.

Herzberg’s Two-Factor Theory:

• Improving the hygiene factors decreases job dissatisfaction and are influenced by working conditions, co-worker relations, policies and rules, supervisor quality, and base wage/salary.
• Improving the satisfier factors increases job satisfaction and are influenced by achievement, recognition, responsibility, work itself, advancement, and personal growth.

Acquired Needs Theory

• People acquire needs through their life experiences.

Acquired Needs

• Need for Achievement (nAch), Power (nPower), and Affiliation (nAff).

High in nAch

• Prefer work that involves individual responsibility for results and provides performance feedback.

High in nPower

• Desire to control other persons or be responsible for other people.

High in nAff

• Desire to establish and maintain friendly and warm relations with others.

Process Theories of Motivation

• Choices are based on individual preferences and available rewards/possible work outcomes:
  • Equity theory.
  • Expectancy theory.
  • Goal-setting theory.
  • Self-efficacy theory.

Equity Theory Definition

• We all want to be treated equally (fairly).

Equity Theory

• People compare their outcomes-to-inputs ratios with those of others (called "referents"), and when people believe that they have been treated unfairly in comparison to others, they try to do something about it.

Two Basic Types of Inequity

• Over-reward inequity (positive inequity), where individuals perceive that they are receiving more than what is fair.
• Under-reward inequity (negative inequity), where individuals perceive that they are receiving less than what is deserved.

Responses to Negative Inequity

• Changing their work inputs lessS effort, and changing the rewards received ask for better treatment.
• Changing the situation resign.

Managerial Implications of Equity

• Underpaid people experience anger/guilt, and overpaid people experience guilt.

Expectancy Theory

• People's motivation to work depends on the relationship among expectancy, instrumentality and valence.

To Maximize Expectancy

• Managers should select workers with the right abilities train workers to use abilities, and support work efforts, clarify performance goals.

Goal-Setting Theory

• Provides direction to people in their work, clarifies performance expectations, and provides a foundation for behavioral self-management and feedback.

Self-Efficacy Theory

• A person’s belief that he or she is capable of performing a task.

Enacting Ve Mastery

• Enhance self-efficacy by gaining confidence through positive experience.

Reinforcement Theory to Motivation

• Focuses on the impact of EXTERNAL environmental consequences on behavior.

Thorndike's Law of Effect

• Behavior that results in a pleasant outcome is likely to be repeated.

Operant Conditioning Goal

• To use reinforcement principles systematically reinforce desirable work behavior.

Operant Conditioning Strategies

• Four strategies of reinforcement used: Positive reinforcement, Negative reinforcement, Punishment and Extinction.

Guides To Use Manager's Action

• Manager's action in using POSITIVE reinforcement: The Law of contingent, The Law of immediate reinforcement.

Law of Contingent

• Reward delivered only if the desired behavior is exhibited.

Law of Immediate Reinforcement

• The more immediate the delivery of a reward, the more reinforcement value it has.

Negative Reinforcement Strategy

• Increases the frequency of a desirable behavior through REMOVAL of an unpleasant consequence.

Motivation and Job Design

• Collection of tasks performed in support of organizational objectives is JOB.

Motivation and Job Design

• Is arranging work tasks to individuals and groups is JOB DESIGN.

Job Simplification

• Standardizing work procedures and employing people in well-defined and highly specialized tasks.

Core Values

• Are personal beliefs that help determine whether a behavior is considered ethical or unethical.

Terminal Values Examples

• An example of terminal value self-respect.

Utilitarian View

• View of ethical behavior, a business owner would be considered ethical if she reduced a plant's workforce by 10 percent in order to cut costs to keep the business from failing and thus save jobs for the other 90 percent.

Failure to enforce

• A manager's failure to enforce a late-to-work policy the same way for employees on the day and night shifts is an ethical violation of justice.

Sarbanes-Oxley Act of 2002

• Makes it easier for corporate executives to be tried and sentenced to jail for financial misconduct.

Ethics Double-Check

• Two "spotlight" questions: How would I feel if my family found out about this?" and "How would I feel if this was published in the local newspaper.

Unethical Behavior

• Research on ethical dilemmas indicates that pressures from bosses and superiors IS/ are often the cause of unethical behavior by people at work.

Corporate Social Responsibility

• Important stakeholders are customers, investors, employees, and regulators are examples of that.

Who exposes

• A whistleblower is someone who exposes the ethical misdeeds of others.

Classical View of Corporate Social Responsibility

• The primary responsibility of business should be to maximize business profits.

Amoral Manager

• An amoral manager always acts in consideration of ethical issues.

An Organization That takes lead

• Show the most progressive corporate social responsibility strategy.

Operate in a socially responsible manner:

• Identifies the highest level of conviction by economic justice.

Shared Value

• Emphasizes that business can find ways to profit by doing things that advance the well-being of society?

Self-Governance

• Show self-governance when they always try to achieve in ways that are performance objectives in ways that are ethical and socially responsible.

Strategic Management

• A company that focuses on 3Ps of profit, people, and planet.

Competitive Advantage

• Operating with an attribute or set of attributes that allows an organization to Outperform its rivals.

Sustainable Competitive Advantage

• One that is difficult for competitors to imitate last long... it is durable.

Strategic Management Driving:

• An emphasis on operating efficiency product quality.

Strategic Management Driving Knowledge

• An emphasis on innovation speed of delivery in market for new ideas.

Strategic Management Driving Financial Resources:

• Strategy drives an emphasis on investments that competitors cannot match.

Strategic Management Driving Technology:

• Where strategy drives an emphasis on using technology to gain customer loyalty market exposure.

Strategy

• A comprehensive action plan that identifies long-termdirection for an organization and guides resource_ utilization to accomplish organizational goals with Sustainable competitive advantage.

Strategic

• Intent-focusing all the organizational energies on a unifying and compelling goal.

Strategic Management To create Above

• Average returns for investors to depend in part on the organization's competitive environment.

Levels of Strategies

• Sets long-term direction for the total enterpris called corporate strategys.

Business strategy

• identifies how a division or strategic business unit will compete inproducts or services.

Functional strategy

• guides activities within ONEspecific area of operations.

Key strategic questions

• What is our business MISSION and who are our customers?

Important test of the mission is that

• It serves the the organization's various STAKEHOLDERS.

Core Values Analysis

• Broad Beliefs that is or is not appropriate and about what value.

Broad Beliefs

• A core values, is or is not is what about appropriate what.

External stakeholders

• Strategic constituencies in an organization's mission statement.

Organizational Culture

• Helps build organizational Character that gives character to that the is has.

8. Social responsibility

• Have goals that a posilive contribution to sociely

Internal Capabilities

• Are our strength by SWOT analysis by: manufacturing efficiency, skilled workforce, and superior reputation

Our opportunities

• Possible new markets, economics and mergning technologies.

Our threat’s are

New competitors, Changing market tastes new regulations.

Corporate strategies is of

• A specialization in products and serivces

Levels of Strategies

• Corporate strategysets long-term direction for the total enterpris

Types of competitive advantages are

• Monofoly, no competition. Ideal situation to Eg. Ontology Hydro

Porter's five forces model

• Uses the model to analyze the rivalry and industry attractiveness and give ive Strategic forces affectining omter.

Grand And Master are

Growth strategies that seeks an increase in size and the expansion of current operations

Stabiltity

• Maintains current operations W25 152 ch.10 25-Mar-24

H&M Clothing

• 2nd Store In Downtown Toronto In Two Months. Terento Str, Jn 12 2023

Re-new al strategy

tries to solve problems and overcome weaknesses that are hurting performance or defensive

Types of growth strategies - Expansion within the same business area that is.

• Concentration strategies . McDonalds adding domestic locations.

Types of Diversification strategies

• Entering new or different called diversification. Amazon to Buy Whole Foods for $13.4 Billion

Vertical Integration:

• Acquiring distributors known as vertical integration or E.g Coca-Cola buying major bottlers called forward integration.

What are two advantages Forward vertical integration:

  Cost reduction and Inproving brand loyalty

Goal and fix specific performance

• To fix specific performance problems and usually TOP management or e.g Gap hires Mattel president to be its new CEO

DOWNSIZING

• Reducing the size of the operations or e.g Hundreds of GoodLife Fitness Instructor

D TVES TITURE

• Selling off parts of the organization to refocus on COre business, cutting costs and operating efficiencies.

Globalization strategy

• World is one large market; standardize products and advertising as much as possible. that or the World is one market.

Globalization strategy

• E.g. Gillette Razors: essentially the same around the world.

CONT'D Multidomest:

• CUSTOMIZE products and advertising to 16cal markets as much as possible to fit the local needs of different markets/regions and that can be very expensive.

TRASNATIONAL strategy is to Balance efficiencies

• In GLOBAL operations and responsiveness attention to local markets.

Ford Motor

• Co. gets design, manufacturing and other functions wherever in the world they can get it at the lowest costs and that results in Slight diFFerences.

Strategic Alliances

• STRATEGIC ALLIANCES cooperation between organizations to pursue an area of mutual interest.

- PORTER’S GENERIC STRATEGIES MODEL

-Low cost or product uniqueness strategy in the business-level or Market scope

Differentiation

• Product and Unique.

Goal Strategy

• By minimizing costs to being the best in it to provide of scaling to the brand! Porter

Focused Differentiation strategy

• specific product.

Focused

• Low cost. Cost leadership strategy

Corporate governance:

• Is a system of - control and monitoring of top management ,performance and board representatives.

Making sure

• Strategies are well implemented and TOP leadership of a firm or organization is expected to exercise strategic control of the enterprise.

Strategic Leadership:

The capability to inspire people to successfully engage performance implement.

Leadership

• to create an organization that not grew not now

Question in Strategic planning is.

• "Where do we want to be in the future?" is important.

  The ability to consistently outperform the firm

  a. competitive advantages

Business-Level

• In a complex conglomerate such General Electric that owns a number of different businesses, sets strategic direction for a strategic business unit.

A value system is

• Known as a system as a predominants corporate_is where

operating

• • Cost efficiency and product quality is example objectives of organizations.

A organizational

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Porters five forces increases strategy

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BCGR Matrix would have

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Strategic alliances link businesses

• Is that cooportion's