CHAPTER 16 CONTROLLING THE ORGANISATION © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Lecture outline • • • • • Control as a management function The control process Types of control Managerial approaches to control Assessing control systems © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Control as a management function Controlling: Process of regulating organisational activities so that actual performance conforms to expected organisational standards and goals © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Control as a management function Role of controls: • Coping with uncertainty • Detecting irregularities • Identifying opportunities • Handling complex situations © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Control as a management function Levels of control Strategic Strategic planning planning Strategic Strategic control control Tactical Tactical planning planning Tactical Tactical control control Operational Operational planning planning Operational Operational control control © 2003 McGraw-Hill Australia Pty Ltd PowerPoint The control process Steps in the control process: Determine Determineareas areasto tocontrol control Establish Establishstandards standards Control Control process process steps steps Measure Measureperformance performance Compare Compareperformance performance Recognise Recognisepositive positive performance performance Take Takecorrective correctiveaction action Adjust Adjuststandards standards © 2003 McGraw-Hill Australia Pty Ltd PowerPoint The control process Deciding what to control: High Highdependence dependenceon onthe theresource resource Determining Determining strategic strategic control control points points Chance Chancethat thatexpected expectedresource resourceflow flowwill will be unacceptable be unacceptable Control-process Control-processfeasibility feasibility Cost Costacceptability acceptability Alternatives Alternativesto tocontrol control ••Change Changedependence dependencerelationships relationships ••Change Changenature natureofofdependence dependencerelationships relationships © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Types of control Types of control: • Major types by timing • Multiple controls • Cybernetic & non-cybernetic controls © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Types of control Types by timing: Input Input Feed-forward Feed-forward control control Anticipating Anticipating problems problems Transformation Transformation processes processes Concurrent Concurrent control control Attending Attendingtoto problems problemsas as they theyoccur occur Outputs Outputs Feedback Feedback control control Correcting Correcting problems problemsafter after product/ service product/ service isisproduced produced © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Types of control • Multiple controls Systems using two or more of the feedforward, concurrent and feedback control processes and involving several strategic control points • Cybernetic Self-regulating control system which, once operating, can automatically monitor the situation and take corrective action when necessary • Non-cybernetic Control system relying on human discretion as a basic part of its process © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 10 Managerial approaches • • • • Bureaucratic control Clan control Market control Control & innovation © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 11 Managerial approaches Bureaucratic control: Managerial approach relying on regulation through rules, policies, supervision, budgets, schedules, reward systems and other administrative mechanisms aimed at ensuring employees exhibit appropriate behaviours and meet performance standards © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 12 Managerial approaches Clan control: Managerial approach relying on values, beliefs, traditions, corporate culture, shared norms and informal relationships to regulate employee behaviours and facilitate reaching of organisational goals © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 13 Managerial approaches Market control: Managerial approach relying on market mechanisms to regulate prices for certain clearly specified goods and services needed by an organisation © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 14 Managerial approaches Control & innovation: Four levers for strategic control/innovation— • Belief systems Mission, core values • Boundary systems Risk avoidance, policies, rules, procedures • Performance management systems Critical goals, evaluation & feedback • Interactive monitoring systems Opportunity focus, networking, continuous search & learning © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 15 Assessing control systems Operating Operatingdelays delays ‘actions ‘actionsneeded neededby by feedforward feedforward&& concurrent concurrentcontrols’ controls’ Behavioural Behavioural displacement displacement ‘behaviour ‘behaviour encouraged encouragedinconsistent inconsistent with withorganisational organisational goals’ goals’ Negative Negativeattitudes attitudes Induced Inducedby byexcessive excessive&& poorly poorlydesigned designedcontrols controls Game Gameplaying playing ‘managers ‘managersimprove improve their theirstanding standing…by …by manipulating manipulatingresource resource usage usage&/or &/ordata’ data’ © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 16 Assessing control systems Over-control versus under-control: Over-control Over-control ‘limiting ‘limitingindividual individual job jobautonomy autonomy to tothe thepoint point where whereititseriously seriouslyinhibits inhibits job jobperformance’ performance’ Under-control Under-control ‘ giving ‘ givingautonomy autonomyto toan anemployee employeeto to where wherethe theorganisation organisationloses loses the theability ability to todirect directefforts’ efforts’ © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 17 Assessing control systems Characteristics control systems • Future oriented of effective • Timely • • • • Multi-dimensional Cost-effective Accurate Realistic • Monitorable • Acceptable to organisational members • Flexible © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 18 Lecture summary • Control as a management function – – – Significance of the control process Role of controls levels of control • The control process – – Steps in the process Strategic control points • Types of control – Types by timing, multiple, cybernetic, non-cybernetic © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 19 Lecture summary • Managerial approaches to control – – Bureaucratic, clan, market Control & innovation • Assessing control systems – – – Dysfunctions Over-control/under-control Characteristics of effective control systems © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 20 [...]... behaviours and meet performance standards © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 12 Managerial approaches Clan control: Managerial approach relying on values, beliefs, traditions, corporate culture, shared norms and informal relationships to regulate employee behaviours and facilitate reaching of organisational goals © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 13 Managerial approaches Market...Managerial approaches • • • • Bureaucratic control Clan control Market control Control & innovation © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 11 Managerial approaches Bureaucratic control: Managerial approach relying on regulation through rules, policies, supervision, budgets, schedules, reward systems and other administrative mechanisms aimed at ensuring employees exhibit appropriate behaviours... displacement ‘behaviour ‘behaviour encouraged encouragedinconsistent inconsistent with withorganisational organisational goals’ goals’ Negative Negativeattitudes attitudes Induced Inducedby byexcessive excessive&& poorly poorlydesigned designedcontrols controls Game Gameplaying playing ‘managers ‘managersimprove improve their theirstanding standing…by …by manipulating manipulatingresource resource usage... Managerial approach relying on market mechanisms to regulate prices for certain clearly specified goods and services needed by an organisation © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 14 Managerial approaches Control & innovation: Four levers for strategic control/innovation— • Belief systems Mission, core values • Boundary systems Risk avoidance, policies, rules, procedures • Performance management. .. autonomyto toan anemployee employeeto to where wherethe theorganisation organisationloses loses the theability ability to todirect directefforts’ efforts’ © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 17 Assessing control systems Characteristics control systems • Future oriented of effective • Timely • • • • Multi-dimensional Cost-effective Accurate Realistic • Monitorable • Acceptable to organisational members... Performance management systems Critical goals, evaluation & feedback • Interactive monitoring systems Opportunity focus, networking, continuous search & learning © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 15 Assessing control systems Operating Operatingdelays delays ‘actions ‘actionsneeded neededby by feedforward feedforward&& concurrent concurrentcontrols’ controls’ Behavioural Behavioural displacement... McGraw-Hill Australia Pty Ltd PowerPoint 18 Lecture summary • Control as a management function – – – Significance of the control process Role of controls levels of control • The control process – – Steps in the process Strategic control points • Types of control – Types by timing, multiple, cybernetic, non-cybernetic © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 19 Lecture summary • Managerial approaches... usage usage&/or &/ordata’ data’ © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 16 Assessing control systems Over-control versus under-control: Over-control Over-control ‘limiting ‘limitingindividual individual job jobautonomy autonomy to tothe thepoint point where whereititseriously seriouslyinhibits inhibits job jobperformance’ performance’ Under-control Under-control ‘ giving ‘ givingautonomy autonomyto... 2003 McGraw-Hill Australia Pty Ltd PowerPoint 19 Lecture summary • Managerial approaches to control – – Bureaucratic, clan, market Control & innovation • Assessing control systems – – – Dysfunctions Over-control/under-control Characteristics of effective control systems © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 20