《Contemporary Management》chpt 9 Organizational Control and M/C Culture

Organizationa/人B Control and Culture OThe McGraw-Hill Companies. Inc, 2000

9-1 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Organizational Control and Culture 9

9-2 Organizational control o Managers must monitor evaluate Are we efficiently converting inputs into outputs? Must accurately measure units of inputs and outputs Is product quality improving? o Are we competitive with other firms? Are employees responsive to customers customer service is increasingly important Are our managers innovative in outlook? Does the control system encourage risk-taking " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

9-2 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Organizational Control ⚫Managers must monitor & evaluate: ◼ Are we efficiently converting inputs into outputs? ◆ Must accurately measure units of inputs and outputs. ◼ Is product quality improving? ◆ Are we competitive with other firms? ◼ Are employees responsive to customers? ◆ customer service is increasingly important. ◼ Are our managers innovative in outlook? ◆ Does the control system encourage risk-taking?

9-3 Control Systems Formal, target-setting, monitoring, evaluation and feedback systems to provide managers with information to determine if strategy and structure are working effectively and efficientl oA good control system should be flexible so managers can respond as needed provide accurate information about the organization provide information in a timely manner. " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

9-3 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Control Systems Formal, target-setting, monitoring, evaluation and feedback systems to provide managers with information to determine if strategy and structure are working effectively and efficiently. ⚫A good control system should: ◼be flexible so managers can respond as needed. ◼provide accurate information about the organization. ◼provide information in a timely manner

9-4 Three Types of Control Figure 9.1 Conversion Inputs Process Outputs Feedforward Concurrent Feedback Control Control Control (anticipate (manage problems (manage problems problems) as they occur) after they occur " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

9-4 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Three Types of Control Inputs Outputs Conversion Process Feedforward Control (anticipate problems) Concurrent Control (manage problems as they occur) Feedback Control (manage problems after they occur) Figure 9.1

9-5 Control Types Feedforward: use in the input stage of the process a Managers anticipate problems before they arise a Managers can give rigorous specifications to suppliers to avoid quality Concurrent: gives immediate feedback on how inputs are converted into outputs a Allows managers to correct problems as they arise a Managers can see that a machine is becoming out of alignment and fix it Feedback: provides after the fact information managers can use in the future a Customer reaction to products are used to take corrective action in the future " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

9-5 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Control Types ◼ Feedforward: use in the input stage of the process. ◼ Managers anticipate problems before they arise. ◼ Managers can give rigorous specifications to suppliers to avoid quality ◼ Concurrent: gives immediate feedback on how inputs are converted into outputs. ◼ Allows managers to correct problems as they arise. ◼ Managers can see that a machine is becoming out of alignment and fix it. ◼ Feedback: provides after the fact information managers can use in the future. ◼ Customer reaction to products are used to take corrective action in the future

9-6 Control Process Steps Figure 9.2 Establish standards of performance, goals, or targets against which performance is evaluated Measure actual performance Compare actual performance against chosen standards Evaluate results and take corrective action when the standard is not being achieved " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

9-6 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Control Process Steps Establish standards of performance, goals, or targets against which performance is evaluated. Measure actual performance Compare actual performance against chosen standards Evaluate results and take corrective action when the standard is not being achieved. 1. 2. 3. 4. Figure 9.2

9-7 The Control process 1. Establish standards, goals, or targets against which performance is to be evaluated Standards must be consistent with strategy, for a low cost strategy, standards should focus closely on cost a Managers at each level need to set their own standards 2. Measure actual performance: managers can measure outputs resulting from worker behavior or they can measure the behavior themselves e The more non-routine the task the harder to measure a Managers then measure the behavior(come to work on time) not the output " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

9-7 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 The Control Process 1. Establish standards, goals, or targets against which performance is to be evaluated. ◆ Standards must be consistent with strategy, for a low cost strategy, standards should focus closely on cost. ◼ Managers at each level need to set their own standards. 2. Measure actual performance: managers can measure outputs resulting from worker behavior or they can measure the behavior themselves. ◆ The more non-routine the task, the harder to measure. ◼ Managers then measure the behavior (come to work on time) not the output

9-8 The Control process 3. Compare actual performance against chosen standards Managers must decide if performance actually deviates a Often, several problems combine creating low performance 4. Evaluate result and take corrective action a Perhaps the standards have been set too high a Workers may need additional training, or equipment This step is often hard since the environment is constantly changing " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

9-8 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 The Control Process 3. Compare actual performance against chosen standards. ◆ Managers must decide if performance actually deviates. ◼ Often, several problems combine creating low performance. 4. Evaluate result and take corrective action. ◼ Perhaps the standards have been set too high. ◼ Workers may need additional training, or equipment. ◆ This step is often hard since the environment is constantly changing

三 9-9 The Goal-Setting Process Figure 9.4 Corporate level managers set goals for individual decisions to allow organization to achieve corporate goals. Divisional managers set goals for each function to allow the division to achieve its goals. Functional managers set goals for each worker to allow the function to achieve its goals. " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

9-9 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 The Goal-Setting Process Corporate level managers set goals for individual decisions to allow organization to achieve corporate goals. Divisional managers set goals for each function to allow the division to achieve its goals. Functional managers set goals for each worker to allow the function to achieve its goals. Figure 9.4

9-10 3 Organizational Control Systems Figure 9. 3 Output Financial Measures or performance Goals Control Operating budgets Behavior Direct supervision Control Management by Objective( MBO) Rules standard Operating Procedures Culture or Clan Values N orms Control Socialization " win/MeGraw-HHill CThe McGraw-Hill Companies, Inc, 2000

9-10 Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 3 Organizational Control Systems Output Control Behavior Control Culture or Clan Control Financial Measures or performance Goals Operating budgets Direct supervision Management by Objective (MBO) Rules & Standard Operating Procedures Values Norms Socialization Figure 9.3