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INTRODUCTI
ON TO
MANAGERIAL
MANAGEMEN
T CONTROL
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At the end of this unit
students should be able to:
Define organizational control
as a key managerial function
Distinguish between the
types of control within the
Unit Objectives: control process
Outline the steps in the
feedback control model
Differentiate between
Bureaucratic and
Decentralized control.
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Organizational Control
control is one of the functions of management.
the process of ensuring the operations
proceed according to plan
control activities seek to keep the system
outputs in line with the original plan, that is
known as ‘steady state’
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A lack of control can have serious
consequences and can threaten the
very survival of any organization.
Organizational
Control
Damage an organization’s health
Hurt its reputation
Threaten its future
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Organizational control is the
systematic process through which
Organizatio managers regulate organizational
activities to make them consistent with
nal Control expectations established in plans
targets
standards of performance.
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Control is necessary because
unpredictable disturbances occur
Organizatio and cause actual results to
deviate from the expected or
nal Control
planned results.
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Effectively controlling an organization
requires:
Information about performance standards
Effective Actual performance
Control Actions taken to correct any deviations
from standards
Control can focus on events before,
during or after a process
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Types of Control
There are three types of control, called:
Feed forward
Concurrent
Feedback
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Control that attempts to identify
and prevent deviations before
they occur
Feed
forward It is also referred to as
Control preliminary or preventive
control.
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It focuses on human,
material and financial
resources that flow into
Feed forward an organization.
Control
Examples – a firm hiring
only college graduates,
inspecting raw materials
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Its purpose is to ensure that input quality is
high enough to prevent problems when the
organization performs its tasks.
Purpose of
Feed Feed forward controls are evident in :
forward
Control Selection and hiring of new employees
Forecasting trends in the environment and
managing risk
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Concurrent Control involves monitoring
ongoing activities to ensure that they
Concurren are consistent with standards.
t Control These are controls that monitor ongoing
employee activities to ensure they are
consistent with performance standards.
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Assesses current work
activities
Concurrent Relies on performance
standards
Control
Includes rules and
regulations for guiding
employee tasks and
behaviours
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Devices that measure whether items being
produced meet quality standards
Types of
ConcurreEmployees monitor the measurements
nt Using computers to track the position of
Controls trucks and monitor the status of deliveries
Using cash-register-management software
to monitor cashiers’ activities
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The way organizations
influence employees
Cultural norms and values
Concurre influence employee
nt behaviour
Controls
Self-control – influenced by
personal values and attitudes.
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Feedback Control
Sometimes called post-action or output control.
Feedback control focuses on the organization’s outputs; in
particular, the quality of an end product or service
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Feedback The feedback control model
Control involves using feedback to
determine whether performance
meets established standards
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Examples of feedback
control in organizations:
Feedback Suggestions box
Control
Customer service surveys
Service department
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Feedback Control Model
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Establish Standards of Performance
Within the organization’s overall strategic plan,
managers define goals
Standard of performance - increasing the
corporation’s return on investment to 10 percent.
Standards should be defined clearly and
precisely
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Most organizations prepare
formal reports of quantitative
performance measurements that
Measure managers review daily, weekly or
Actual monthly.
Performance
- Financial Reports
- Reports from Heads of Department
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Comparing actual activities to performance
standards.
Read computer reports
Compare Walk through the plant/observation
Performance
to Standards Determining whether standards have been met,
exceeded or fallen short.
When performance deviates from standard
managers must interpret the deviation
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Take Corrective Action
Managers determine what changes, if any, are
necessary.
In a traditional top-down approach to control managers
exercise their formal authority to make necessary changes
encourage employees to work harder
redesign the production process
fire employees.
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In the participative control
approach, managers collaborate
with employees to determine the
Take corrective action necessary.
Corrective
Action On the other hand, when
performance meets or exceeds
standards managers may wish
to provide positive
reinforcement.
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Methods of Managerial of
Controls
Financial measurements , may be
used to determine whether or not a
firm is profitable, or to determine how
efficiently they are using funds and
resources
Budgeting is used by managers to
monitor whether they have operated
within their budget targets, and make
adjustments accordingly.
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Managers’ approach to control is changing in many
organizations today.
In connection with the shift to employee participation
Bureaucratic/ and empowerment, many companies are adopting a
Hierarchical vs decentralized rather than a bureaucratic control
Decentralized process
Methods of Control
Bureaucratic and decentralized control represent
different philosophies of corporate culture
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People are incapable of self-discipline
and cannot be trusted. They need to be
monitored and controlled closely.
Bureaucrat Uses detailed rules and procedures, formal
ic/ control system
Hierarchica
l Control Top-down authority, formal hierarchy,
position power, quality control inspectors
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Rewards given for
meeting individual
performance standard
Emphasis on extrinsic
rewards
Bureaucratic/
Hierarchical Limited, formalized
Control employee participation
Rigid organizational
structure; distrust of
cultural norms
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Consequences:
Employees follow
instructions and do just
Bureaucratic/ what they are told
Hierarchical Employees feel a sense
Control of indifference toward
work
Employee absenteeism
and turnover is high
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People work best when they are
fully committed to the
organization.
Limited use of rules; relies on values,
group and self-control
Decentralized
Methods
Flexible authority, flat structure,
everyone monitors quality
Rewards individual and team;
emphasis on equity across employees
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Results-based job descriptions; emphasis
on goals to be achieved
Decentraliz Extrinsic and intrinsic rewards (meaningful
ed work, opportunities for growth)
Methods
Broad employee participation,
Adaptive culture; culture recognized as
means of uniting team & Organizational
goals for overall control.
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Consequences:
Employees take initiative and
seek responsibility
Decentraliz
Employees are actively
ed engaged and committed to
Methods their work
Employee turnover is low
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Managerial Control
The End
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