MG4031 Week 11 Lecture 01 PDF

MG4031 Wk.11 Lec.01 Control: Ensuring the effective and efficient achievement of organisational objectives and goals by measuring actual performance and taking corrective action where needed, ensuring conformance between what is envisaged and planned for and what eventually unfolds. Characteristic...

MG4031 Wk.11 Lec.01 Control: Ensuring the effective and efficient achievement of organisational objectives and goals by measuring actual performance and taking corrective action where needed, ensuring conformance between what is envisaged and planned for and what eventually unfolds. Characteristics of Control that differ depending on the organisation: 1. The extent to which it is exercised through formal rules and procedures 2. The degree of control exercised over how unit activities are carried out 3. The influence and involvement of unit members in exercising control 4. The scope of the information used by the control system in evaluating performance and deciding rewards and sanctions The Control Process: 1. Setting Performance Standards: These standards are identified points in the planning process. Performance standards can be generated from three sources: a. Historical Standards: Based on the organisation’s past performance. This assumes that the future will be the same as the past, which is unlikely to be the case. b. Comparative Standards: Based on the performance of competitors. c. Engineering Standards: Based on technical analyses and generally apply to production methods, materials, safety and quality. They tend to be numerical and objective. 2. Measuring and Comparing Performance: Compare actual progress against the standards set. Data concerning progress can come from three main sources, written reports, oral reports and personal observations (which is often too subjective). Only exceptional deviations are often looked in to, as minor deviations are normal. 3. Taking Action: The deviation can be corrected or the standards applied revised. Both positive and negative deviations should be examined. Training, development, new technologies and disciplinary action can correct the deviation. Types of Control: Feedforward Control: That which happens before the activity has been completed. It is future directed and aims to prevent problems before they occur. It involves examining the inputs and ensuring that they meet the standards needed for successful transformation into outputs. Concurrent Control: That exerted during the activity. It monitors the transformation process to ensure that the right amount of the right output is being produced at the right time. Feedback Control: That which happens after completion of the activity. It monitors outputs to check that they meet standards. Timing is very important here, as waiting too long after the completion of the activity can prevent you from fixing the issue. Characteristics of Effective Control: Appropriate: Controls must be suitable for the firm’s goals and plans. They should provide clear and concise information on progress and no irrelevant information. It should be tailored to the individual manager who should be able to understand it. Cost Effective: Benefits of control must offset the cost of using it. It must be tailored to the job and firm size. Acceptable: They must be accepted as fair and adequate to those to whom they apply, otherwise they will have little impact. They should not be harmful to the employee’s social/psychological well-being. Emphasis on Exceptions: Controls should show significant deviations. However, it must identify which deviations are too small to be problematic. Flexible: They need to withstand the changing business environment and unforeseen events. Reliable and Valid: They should be dependable and measure what they are supposed to. If they aren’t, it can cause lack of trust in the control system. They should be based on objective criteria to be more valid. Based on Valid Performance Standards: They should incorporate all aspects of performance, while not having too many measurements (over-control). Based on Accurate Information: The importance of control should be communicated, and feedback should be obtained to allow firms to take corrective action. References: Tiernan, S. and Morley, M. (2019) Modern Management : Theory and Practice for Students in Ireland, Fifth edition. ed, Dublin, Ireland: Institute of Public Administration, pp. 267-292. MG4031 Lecture Slides