Foundations of Control

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Foundations of Control
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Learning Outcomes

• Define control
• Describe three approaches to control
• Explain why control is important
• Describe the control process
• Distinguish among the three types of control
• Describe the qualities of an effective control
  system

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Learning Outcomes(continued)

• Identify contingency factors in the control
  process
• Explain how controls can become dysfunctional
• Describe how national differences affect the
  control process
• Identify the ethical issues in employee monitoring

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Control

• Process of monitoring activities to ensure that
  what is being accomplished matches plans and
  corrects significant deviations

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Planning
Controlling
Planning- Controlling Linkage
Organizing
Leading
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Purpose of Controls
Goals and Objectives Organizational Divisional D
epartmental Individual

• Measuring Performance
• Comparing to Standards
• Taking Corrective Action

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Three Approaches to Control Systems
Market Control
Clan Control
Bureaucratic Control
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The Control Process
Standard Attained?
Do Nothing
Yes
Compare Performance to Standard
No
Variance Acceptable?
Do Nothing
Yes
Objectives
Measure Performance
No
Standard
Identify Causes
Standard Acceptable?
Yes
No
Correct Performance
Revise Standard
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How Do Managers Measure?

• Personal observations
• Statistical reports
• Oral reports
• Written reports

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Discrepancies Between Goals and Performance
Acceptable Upper Limit
Acceptable Range of Variation
Standard
Acceptable Lower Limit
t t1 t2 t3 t4 t5
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CanuckBrews Sales for July(in hundreds of cases)
Brand
Standard
Actual
Over (Under)
Propeller Big Rock Ale Okanagan
Spring Garrison Olands Export McAuslans Granvill
e Island Unibroues Nelson After Dark Total Cases
1,075 630 800 620 540 160 225 80 170 4,300
913 634 912 622 672 140 220 65 286 4,464
(162) 4 112 2 132 (20) (5) (15) 116 164
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Do Nothing
Taking Managerial Action
Immediate/Basic Corrective Action
Revise the Standard
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Three Types of Control
Input
Processes
Output
Feedforward Control
Concurrent Control
Feedback Control
Anticipates problems
Corrects problems as they happen
Corrects problems after they occur
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Feedback Control

• Meaningful information
• Enhance employee motivation

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Qualities of an Effective Control System

• Accurate
• Timely
• Economical
• Flexible
• Understandable

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Qualities of an Effective Control System
(continued)

• Reasonable
• Emphasis on exceptions
• Strategic
• Multiple criteria
• Corrective action

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Adjusting Controlsfor National Differences
Technology and the Comparability of Data
Distance and the Formality of Controls
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Invasion of Privacy
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Employee Monitoring
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E-Mail
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Inform Employees
Control and Ethics
Written Policy
Monitor for Business Reasons
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Off-the-Job Behaviour
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