? ? ? Ch.10 ?? Foundations of Control

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? ? ? Ch.10 ?? Foundations of Control
Managing only for profit is like playing tennis
with your eyes on the scoreboard and not on the
ball. Ken
Blanchard
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• ???,???, SOP, KPIs
• ??,??,???Plan, Do, See. PDCAB.
• ???????????????????????????????
• ???????????,???, ?????????????
• Grove ???,????,??????

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??

• 1. ??????? What and Why?
• 2. ????? Control Process
• 3. ?????? How Organizational Performance is
  Measured?
• 4. ?????????
• Tools for Measuring Organizational
  Performance
• 5. ????????? Contemporary Issues

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18.1 What Is Control?

• Controlling - the process of monitoring,
  comparing, and correcting work performance.
• The Purpose of Control
• To ensure that activities are completed in ways
  that lead to the accomplishment of organizational
  goals.
• ??control ????

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Designing Control Systems

• Market Control (??)
• Emphasizes the use of external market mechanisms
  to establish the standards.
• eg. cost, market share.
• Bureaucratic Control (??)
• Emphasizes organizational authority and relies on
  rules, regulations, procedures, and policies.
• Clan Control (??)
• Regulates behavior by shared values, norms,
  traditions, rituals, and beliefs of the firms
  culture.

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Why Is Control Important?

• As the final link in management functions
• Planning
• Controls let managers know whether their goals
  and plans are on target and what future actions
  to take.
• Empowering employees
• Control systems provide managers with information
  and feedback on employee performance.
• Protecting the workplace
• Controls enhance physical security and help
  minimize workplace disruptions.

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The Planning-Controlling Link
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18.2 ?????

• 1. ??????, Measuring actual performance.
• 2. ?????, Comparing actual performance against a
  standard.
• 3. ??????, Taking managerial action to correct
  deviations or inadequate standards.

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The Control Process MBE
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Measuring How and What

• Sources of Information (How)
• Personal observation ????
• Statistical reports
• Oral reports
• Written reports

• Control Criteria (What)
• Customers/Employees
• Satisfaction
• Turnover
• Absenteeism
• Budgets
• Costs
• Output
• Sales

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Sources of Information for Measuring Performance
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Defining the Acceptable Range of Variation
Comparing SQC chart random? trend?
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Green Earth Gardening SupplyJune Sales
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?????? Sales Performance Figures
Brand Heineken Molson Irish Amber Victoria
Bitter Labatts Corona Amstel Light Dos
Equis Tecate
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Taking Managerial Action

• Doing nothing
• Corrective Actions Change strategy, structure,
  compensation scheme, training programs redesign
  jobs fire employees
• Immediate correct the problem at once. ?????
• Basic correct the source of the deviation.?????
• Revising the standard
• Resetting goals that were initially set too low
  or too high.

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Managerial Decisions in the Control Process
??????
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18. 3 Organizational Performance

• What Is Performance?
• The end result of an activity.
• KPI Key Performance Indicator

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Performance Measures

• Productivity the overall output of goods and/or
  services divided by the inputs needed to generate
  that output.
• Organizational Effectiveness
• Systems resource model
• The process model
• The multiple constituencies model

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Industry and Company Rankings

• Sales, Profits, Revenue per employee Fortune
  1000, Forbes 500,
• ??1000?, ??500?, ??100?
• Customer satisfaction surveys
• ?ACSI, JD Power
• Others Corporate culture audits, compensation
  and benefits surveys

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Popular Industry and Company Rankings
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Controlling for Employee Performance

• Disciplinary actions -
  actions taken by a manager to enforce
  the organizations work standards and
  regulations.
• Delivering Effective Performance Feedback -
  managers need to provide their employees with
  feedback so that the employees know where they
  stand in terms of their work.

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Types of Discipline Problems and Examples
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18.4 Tools for Controlling OP

• Feedforward Control
• A control that prevents anticipated problems
  before actual occurrences of the problem. eg.
  Building in quality through design. Requiring
  suppliers conform to ISO 9002.
• Concurrent Control
• ? A control that takes place while the monitored
  activity is in ?progress. eg. Direct
  supervision management by walking ?around
  (MBWA).
• Feedback Control
• A control that takes place after an activity is
  done.

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Types of Control ??????
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Financial Controls

• Traditional ?????,????
• Liquidity current ratio
• Leverage debt to assets
• Activity inventory turnover
• Profitability return on investment
• Balanced Scorecard

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Popular Financial Ratios
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(No Transcript)
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Operation Excellence

• ????????????
• ROA ?10
• ROE ? 20
• Debt Ratio ? 50
• CCC (Cash Conversion Cycle) ? 30?
• ??BU ROIC (Investment Capital) ? 20

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????? Balanced Scorecard, by Kaplan, R. S.

• BSC Is a measurement tool that uses goals set by
  managers in four areas to measure a companys
  performance
• Financial
• Customer
• Internal processes
• People/innovation/growth assets
• ????????????????
• ??????????,?????????,
• Grove ?????,????????????

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BSC
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Information Controls

• As a tool to help managers control other
  organizational activities. eg. ERP, ITS, RFID.
• Management Information Systems (MIS) A system
  used to provide management with needed
  information on a regular basis.
• EDP, DSS, ES, AI.
• ??????

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Benchmarking of Best Practices

• Benchmarking - the search for the best practices
  among competitors or non-competitors that lead to
  their superior performance.
• Benchmark - the standard of excellence to measure
  and compare against.

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Suggestions for Internal Benchmarking
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18.5 Contemporary Issues in Control

• Cross-Cultural Issues
• The use of technology to increase direct
  corporate control of local operations
• Legal constraints on corrective actions in
  foreign countries
• Difficulty with the comparability of data
  collected from operations in different countries.
• ??????360?????

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• Workplace Concerns
• Workplace privacy versus workplace monitoring
• E-mail, telephone, computer, and Internet usage
• Productivity, harassment, security,
  confidentiality, intellectual property
  protection.
  e.g., ?????????????,????(??????,???,????),????????
  ,??? Top 5, ??????,??????!??,??,???,???
• Employee theft
• The unauthorized taking of company property by
  employees for their personal use.
• Workplace violence
• Anger, rage, and violence in the workplace is
  affecting employee productivity. e.g., Road rage.

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Types of Workplace Monitoring by Employers
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Control Measures for Employee Theft or Fraud
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Workplace Violence
Witnessed yelling or other verbal
abuse 42 Yelled at co-workers themselves 29 Crie
d over work-related issues 23 Seen someone
purposely damage machines or furniture 14 Seen
physical violence in the workplace 10 Struck a
co-worker 2
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Control for Deterring or Reducing Workplace
Violence
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Customer Interactions

• Service profit chain - the service sequence from
  employees to customers to profit.
• Corporate governance - the system used to govern
  a corporation so that the interests of corporate
  owners are protected.

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???? ??? ??????
????? ??
??????? ???????? ??
??????? ???? ???????? ?????? ???????
?????
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• Corporate Governance
• The system used to govern a corporation so that
  the interests of the corporate owners are
  protected.
• Changes in the role of boards of directors
• Increased scrutiny of financial reporting
  (Sarbanes-Oxley Act of 2002)
• More disclosure and transparency of corporate
  financial information
• Certification of financial results by senior
  management

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Team work

• 1. Case study a managers dilemma (p.290)
• (1) Identify and articulate business problems
• (2) Gather and analyze information applicable
• (3) Identify and apply an appropriate tool for
  solving problems.
• 2. Case study a managers dilemma (p.350)
• (1) Identify and articulate business problems
• (2) Gather and analyze information applicable
• (3) Identify and apply an appropriate tool for
  solving problems.
• 3. Thinking critically about ethics (p.314)
• (1) Identifies Dilemma.
• (2) Considers Stakeholders
• (3) Analyzes Alternatives and Consequences
• .

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Team work

• 4. Performance Feedback Skill exercise (p.314)
• 5. Team exercise (p.315) Workers safe
• 6. Internet-based exercise (p.316) The Great
  Package Race
• .

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??

• 1. Explain the nature and importance of control.
• planning - controlling link,
  market, bureaucratic,
  clan control
• 2. Describe the three steps in the control
  process.
• monitoring, comparing, correcting
• 3. Explain how organizational and employee
  performance are measured.
• 4. Describe tools used to measure organizational
  performance. feedforward, concurrent,
  feedback control
• 5. Discuss contemporary issues in control.

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Terms to Know

• market control
• bureaucratic control
• clan control
• control process
• range of variation
• immediate corrective action
• basic corrective action
• organizational performance
• productivity
• organizational effectiveness
• feedforward control
• concurrent control
• feedback control

• management by walking around (MBWA)
• economic value added (EVA)
• market value added (MVA)
• management information system (MIS)
• data
• information
• balanced scorecard
• employee theft
• service profit chain
• corporate governance