Introduction to Management Controlling & Change Management Lecture Notes PDF

Introduction to Management MGT-281 Controlling Haris Tapakis Part-time lecturer School of Business Lecture’s topics • What is controlling? • What are the steps of the control process? • What are the main types of control? Management functions • • • • Planning Organising Leading Controlling C...

Introduction to Management MGT-281 Controlling Haris Tapakis Part-time lecturer School of Business Lecture’s topics • What is controlling? • What are the steps of the control process? • What are the main types of control? Management functions • • • • Planning Organising Leading Controlling Controlling Function Are activities going as planned? If not, what can we do about it? Controlling Function Are activities going as planned? monitoring If not, what can we do about it? taking action Controlling Function Controlling is the process of: • monitoring activities to ensure they are being accomplished as planned • acting to correct any significant variations Controlling Function Frequent checks ensure that corrective action is taken quickly to avoid wasting effort and resources. when? Controlling Function All managers exercise control as they try to add value by transforming resources into outputs of greater value. by whom? Example Volume of sales in November: 975 units. Average monthly volume of sales: 1000 units. Example Volume of sales in November: 975 units. Average monthly volume of sales: 1000 units. standard performance Example Volume of sales in November: 975 units. Average monthly volume of sales: 1000 units. Variation = 1000-975 = 25 units. Example Volume of sales in November: 975 units. Average monthly volume of sales: 1000 units. Variation = 1000-975 = 25 units. Action: Do nothing (variation acceptable). (1) Example Volume of sales in November: 975 units. Average monthly volume of sales: 1000 units. Variation = 1000-975 = 25 units. Action: Identify cause and correct performance. (2) Example Volume of sales in November: 975 units. Average monthly volume of sales: 1000 units. Variation = 1000-975 = 25 units. Action: Identify cause and re-consider standard. (3) The Control Process The control process involves four basic steps. • • • • Step 1 - Define objectives and set standards. Step 2 - Measure performance. Step 3 - Compare performance with standard. Step 4 - Take appropriate managerial action to correct variations or inadequate standards. The Control Process Step 1 - Define objectives and set standards. Setting standards The standard will itself have an effect on its achievement. standards seen as too high may be ignored as unattainable standards that are too low will lower performance The Control Process Step 2 - Measure performance. Measuring performance Quantifiable aspects of performance are relatively easy to measure whereas non-quantifiable aspects of performance are more open to subjective interpretations. The Control Process Step 3 - Compare performance with standard. Comparing performance with standard As some variation from the plan is always to be expected, managers need to determine the acceptable range of variation. a subjective decision The Control Process Step 4 - Take appropriate managerial action to correct variations or inadequate standards. Taking action Managers need to act on significant variations from the plan – either to correct future performance or to revise inadequate standards. Taking action Managers need to act on significant variations from the plan – either to correct future performance or to revise inadequate standards. performance not satisfactory Taking action Managers need to act on significant variations from the plan – either to correct future performance or to revise inadequate standards. standard not appropriate Taking action Managers need to act on significant variations from the plan – either to correct future performance or to revise inadequate standards. Be careful – a constant lowering of standards can result in employees blaming the standard as being too high rather than accepting that their performance was inadequate! The Control Process Types of Control • Concurrent control • Feedback control Concurrent Control • Takes place while an activity is in progress. • Normally involves direct supervision. Main advantage: allows managers to correct problems before they become too costly. Feedback Control • Takes place after the activity. • Does not require direct supervision. Main advantage: allows managers to provide feedback, which can enhance employee motivation. Control & organisational size • Small organisations: - informal & personal - concurrent control through direct supervision • Large organisations: - formal & impersonal - feedback control !!! Control & position level • Low-level positions: – performance easier to measure – Close supervision / daily • High-level positions: – performance more difficult to measure – Many/different performance criteria – Distance from worked done / process Control & degree of decentralisation • decentralization (“…closest to problem…”): - reduced number of controls • Centralisation (“…by few people…”): - increased number of controls When we were analysing Organisation Structure: Decentralised organisations: decisions are pushed down to the level closest to where the problem is. Centralised organisations: decisions are made by a few people at the centre of the organisation. Introduction to Management MGT-281 Managing Change Haris Tapakis Part-time lecturer School of Business Lecture’s topics • • • • What is organisational change? Why is organisational change happening? Why do people resist change? How can organisations reduce change resistance? Organisational Change Organisational change is a deliberate attempt to improve organisational performance by changing one or more aspects of the organisation. • • • • Improve Change Total change For good The Management Process Organisational Change It is rare for any significant change to consist of only one element. The systemic nature of organisations means that a change in any of these areas is likely to have implications for others. The organisation seen as a system made up of elements and interactions. Organisational Change Organisational change normally begins when a gap between desired and actual performance is discovered desired ˃ actual Organisational Change Organisational change normally begins when a gap between desired and actual performance is discovered – usually because the organisation’s internal context is unable to meet the external demands upon it. Organisational Change Organisational change normally begins when a gap between desired and actual performance is discovered – usually because the organisation’s internal context is unable to meet the external demands upon it. external environment internal environment Question List some of the external demands that could trigger change in an organisation. Changes in the external environment • • • • • • • • • new trends in the market competition government policies/law advances in technology social changes an economic recession a disaster a terrorist attack a pandemic etc!!! Change Agents Change agent is a person who initiates and take up the responsibility for managing a change in an organisation. Change Agents Change agent is a person who initiates and assumes the responsibility for managing a change in an organisation. Change agents can be from inside or outside the organisation. the organisation’s external business own managers consultants Question List some advantages and some disadvantages of using external consultants as change agents. Advantages • They can be more objective. • They normally have significant experience. • They tend to be willing to implement more drastic changes. Disadvantages • They can be very expensive. • They may be less thoughtful or cautious. • They may have an inadequate understanding of the organisation and its culture. the organisation’s shared values and beliefs Change Resistance When a change is initiated, new ‘rules’ are created for organisational members. People, however, do not necessarily accept the new arrangements without question and they frequently resist change. Question Why do people resist change? Reasons for Resisting Change • A genuine belief that the proposed change is not in the organisation’s best interests. • Fear of losing certain benefits. • Uncertainty about the future. • I will look “stupid” since now I’m the “expert”! And…Reasons for Resisting Change • A sense of loss of what one has invested in the current system. Organisational members who have invested more in the current system tend to resist more than those new to the system. And…Reasons for Resisting Change • The proposed change does not fit the culture of the organisation. The prevailing organisational culture influences how people view change. Organisational members are likely to welcome a project that they believe fits the culture of the organisation and to resist one that threatens it. And…Reasons for Resisting Change • The proposed change threatens the current distribution of power. existing state of affairs Change threatens the ‘status quo’ and is likely to be resisted by those who regard their position in the organisation as ‘powerful’. Question Suggest some techniques that management could use to reduce change resistance. Resistance Reduction Techniques • • • • • Communication Participation Negotiation Manipulation Coercion (enforce it!) ethical? Resistance to change reduced = Increase Communication & Participation Time innovative 2,50% Need further Easy to adjust Need some time support, quidnce 13,50% Need change Positive / drive it 34% 34% They will try. Need to be They need some purcuited Shaping future, support. explanation. support change Continuous support! negative 16% “I am sure, change is bad! I do not want this change…”. Only if “forced” “ Source: Rogers E.M. (1995) Change curve! Shock Commitment Denial Understanding Testing Frustration Guilt Acceptance Self-Blame 58 Readiness to change Ready  D (dislike) x V (vision x FS (first step) > R (resistance) D V FS Dislike current situation. Clear in team what the Vision is. Shared. Easy/easier first step to change Group Work How is age affecting resistance to change?