Management: Control Processes and Systems PDF

Management Fifth Canadian Edition John R. Schermerhorn, Bachrach, Jr. Barry Wright Chapter 9 Control Processes and Systems This slide deck contains animations. Please disable animations if they...

Management Fifth Canadian Edition John R. Schermerhorn, Bachrach, Jr. Barry Wright Chapter 9 Control Processes and Systems This slide deck contains animations. Please disable animations if they cause issues with your device. Copyright ©2021 John Wiley & Sons Canada, Ltd. Learning Objectives 9.1 Identify the types of controls used by managers and the reasons for them. 9.2 List and describe the steps in the control process. 9.3 Explain the use of common control tools and techniques. Copyright ©2021 John Wiley & Sons 2 Canada, Ltd. Why and How Managers Control (1 of 10) Controlling The process of measuring performance and taking action to ensure desired results Has a positive and necessary role in the management process Ensures that the right things happen, in the right way, at the right time Benefit: Organizational learning (Example: After-action review) Copyright ©2021 John Wiley & Sons 3 Canada, Ltd. Why and How Managers Control (2 of 10) The role of controlling in the management process Copyright ©2021 John Wiley & Sons 4 Canada, Ltd. Why and How Managers Control (3 of 10) Feedforward controls Employed before a work activity begins Ensure that: o Objectives are clear o Proper directions are established o Right resources are available Goal is to solve problems before they occur Copyright ©2021 John Wiley & Sons 5 Canada, Ltd. Why and How Managers Control (4 of 10) Concurrent controls Focus on what happens during work process Monitor ongoing operations to make sure they are being done according to plan Goal is to solve problems as they occur Copyright ©2021 John Wiley & Sons 6 Canada, Ltd. Why and How Managers Control (5 of 10) Feedback controls Take place after work is completed Focus on quality of end results Goal is to solve problems after they occur and prevent future ones Copyright ©2021 John Wiley & Sons 7 Canada, Ltd. Why and How Managers Control (6 of 10) Feedforward, concurrent, and feedback controls Copyright ©2021 John Wiley & Sons 8 Canada, Ltd. Why and How Managers Control (7 of 10) Internal and external control Internal control o Allows motivated individuals and groups to exercise self-discipline in fulfilling job expectations External control o Occurs through personal supervision and the use of formal administrative systems Copyright ©2021 John Wiley & Sons 9 Canada, Ltd. Why and How Managers Control (8 of 10) Self-control Internal control that occurs through self- discipline in fulfilling work and personal goals and responsibilities Trust and an inclusive organizational culture foster self-control Copyright ©2021 John Wiley & Sons 10 Canada, Ltd. Why and How Managers Control (9 of 10) Bureaucratic control Influences behaviour through authority, policies, procedures, job descriptions, budgets, and day-to-day supervision It flows through the organization’s hierarchy of authority Clan control Influences behaviour through norms and expectations set by the organizational culture It uses the power of group cohesiveness and collective identity to influence behaviour Copyright ©2021 John Wiley & Sons 11 Canada, Ltd. Why and How Managers Control (10 of 10) Strategic Control Direction provided to the organization through the emerging events that occur during project implementation Market Control Influence of customers and competition on the behaviour of organizations and their members This impacts products, pricing, promotions, and other practices of the organization Copyright ©2021 John Wiley & Sons 12 Canada, Ltd. Four steps in the control process Copyright ©2021 John Wiley & Sons 13 Canada, Ltd. The Control Process (1 of 4) Step 1 — establishing objectives and standards Output standards o Measure performance results in terms of quantity, quality, cost, time, or error rates Input standards o Measure effort in terms of amount of work (effort) expended in task performance Copyright ©2021 John Wiley & Sons 14 Canada, Ltd. The Control Process (2 of 4) Step 2 — measuring actual performance The goal is accurate measurement of actual performance results and/or performance efforts Must identify significant differences between actual results and original plan Effective control requires measurement Copyright ©2021 John Wiley & Sons 15 Canada, Ltd. The Control Process (3 of 4) Step 3 — comparing results with objectives and standards Need for action = Desired Performance – Actual Performance Comparison methods: o Engineering comparison o Historical comparison o Relative comparison Copyright ©2021 John Wiley & Sons 16 Canada, Ltd. The Control Process (4 of 4) Step 4 — taking corrective action Taking action when a discrepancy exists between desired and actual performance Management by exception o Giving attention to situations showing the greatest need for action o Types of exceptions Problem situation – actual performance less than desired Opportunity situation – actual performance is greater than desired Copyright ©2021 John Wiley & Sons 17 Canada, Ltd. Control Tools and Techniques (1 of 8) Project Management Overall planning, supervision, and control of projects o Projects – unique one-time events that occur within a defined time period o Gantt chart – graphic display of scheduled tasks required to complete a project o CPM/PERT – combination of the critical path method and program evaluation and review technique Copyright ©2021 John Wiley & Sons 18 Canada, Ltd. Gantt Chart Copyright ©2021 John Wiley & Sons 19 Canada, Ltd. CPM/PERT CHART A CPM/PERT network map showing a critical path for a given project Copyright ©2021 John Wiley & Sons 20 Canada, Ltd. Control Tools and Techniques (2 of 8) Inventory control Ensures that inventory is only big enough to meet immediate needs Economic order quantity o Places new orders when inventory levels fall to predetermined points Just-in-time scheduling o Routes materials to workstations just in time for use Copyright ©2021 John Wiley & Sons 21 Canada, Ltd. Control Tools and Techniques (3 of 8) Breakeven analysis Breakeven point o Occurs where revenues just equal costs Breakeven analysis o Performs what-if calculations under different revenue and cost conditions Copyright ©2021 John Wiley & Sons 22 Canada, Ltd. Control Tools and Techniques (4 of 8) Use of breakdown analysis to make informed “what-if” decisions Copyright ©2021 John Wiley & Sons 23 Canada, Ltd. Control Tools and Techniques (5 of 8) Basic foundation of a balance sheet and income statement Copyright ©2021 John Wiley & Sons 24 Canada, Ltd. Control Tools and Techniques (6 of 8) Basic Financial Ratios Liquidity o The ability to generate cash to pay bills Leverage o The ability to earn more in returns than the cost of debt Copyright ©2021 John Wiley & Sons 25 Canada, Ltd. Control Tools and Techniques (7 of 8) Basic Financial Ratios Asset management o The ability to use resources efficiently and operate at minimum cost Profitability o The ability to earn revenues greater than costs Copyright ©2021 John Wiley & Sons 26 Canada, Ltd. Control Tools and Techniques (8 of 8) Balanced Scorecard Factors used to develop scorecard goals and measures: Financial performance Customer Satisfaction Internal process improvement Innovation and learning Copyright ©2021 John Wiley & Sons 27 Canada, Ltd. Copyright Copyright © 2021 John Wiley & Sons Canada, Ltd. All rights reserved. Reproductions or translations of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd. The purchaser may make back-up copies for his or her own use only and not for distribution or resale. The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein. Copyright ©2021 John Wiley & Sons 28 Canada, Ltd.