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CONTROLLING

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Controlling

• Controlling is monitoring, comparing and correcting work performance.

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Why is controlling important?

• Planning• Empowering employees• Protecting the workplace

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The controlling process

• The control process is a three step process of measuring actual performance, comparing actual performance against a standard, and taking managerial actions to correct deviation or to address inadequate standards.

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Step 1: measuring actual performance

• Sources of information for measuring performance:– Personal observations– Statistical reports– Oral reports– Written reports

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Step 2: comparing actual performance against the standard

• Acceptable range of variation

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Step 3: taking managerial action

• Immediate corrective action• Basic corrective action

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Controlling for organizational performance

• Organizational performance refers to the accumulated results of all the organization’s work activities. It’s a multifaceted concept, but managers need to understand the factors that contribute to organizational performance.

• Organizational productivity• Organizational effectiveness• Industry and company ranking

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Tools for measuring organizational performance

• Feed forward control: the control which takes place before a work activity is done.

• Concurrent control: control that takes place when a work activity is in progress.

• Feedback control: control that takes place after a work activity is done.

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Management by walking around

• A term used to describe when a manager is out in the work area interacting directly with employees.

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Financial control

• Every business wants to earn profit. To achieve this goal, ,managers need financial control. For instance, they might analyze quarterly income statements for excessive expenses. They might also calculate financial ratios to ensure that sufficient cash is available to pay ongoing expenses, that debt levels haven't become too high, or that assets are being used productively.

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Balance scorecard

• It is way to evaluate organizational performance from more than just the financial perspective.

• The measures of balance scorecard is:– Financial– Customer– Internal/operational– Strategic and learning

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Information control

• MIS: a system used to provide management with needed information on a regular basis.

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Benchmarking of best practices

• Benchmark refers to excellence against which to measure and compare.

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Suggestions for internal benchmarking

• Connect best practices to strategies and goals• Identify best practices throughout the

organization• Develop best practices reward and recognition

system• Communicate best practices throughout the

organization• Create a best practices knowledge sharing

system• Nurture best practices on an ongoing process

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Contemporary issues in control

• Adjusting control for cross cultural differences• Workplace concerns• Workplace violence

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Adjusting control for cross-cultural differences

• In a global corporation, managers of foreign operations tend to be less controlled by the home office.

• Another challenge for global managers is collecting data for measurement and comparability.

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Workplace concerns

• Workplace privacy• Employee theft

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Workplace violence

• Employee stress caused by an uncertain economic environment, job uncertainties, declining value of retirement accounts, long hours, information overload, other daily interruptions, unrealistic deadlines and uncaring managers play a role in contributing to workplace violence.

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Operations management

• The transformation process that converts resources into finished goods and services.

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Role of operations management

• Operations management is important to managers for three reasons: – It encompasses both services and manufacturing– It’s important in effectively and efficiently

managing productivity– It plays a strategic role in an organization’s

competitive success

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What is value chain management

• Value chain management is the process of managing the sequence of activities and information along the entire value chain. Value chain management is externally oriented and focuses on both incoming materials and outgoing products and services.

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Goal of value chain management

• The goal of value chain management is to create a value chain strategy that meets and exceeds customers’ needs and desires allows for full and seamless integration among all members of the chain.

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Managing operations using value chain management

• Value chain strategy:– Combination and collaboration– Technology investment– Organizational processes– Leadership– Employee/ human resources– Organizational culture and attitude

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Current issues in management operations

• Technology’s role in operations management• Quality initiatives

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Technology’s role in operations management

• Technology allows organizations to control costs particularly in the areas of predictive maintenance, remote diagnostics and utility cost savings.

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Quality initiatives

• Quality refers to the ability of a product or service to reliably do what it is supposed to do and to satisfy customer expectation.

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Quality goals

• ISO 9000• Six sigma

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Mass customization and lean organization

• Mass customization refers to providing customers with a product when, where and how they want it.

• Lean organization refers to an organization that understands what customers want, identifies customers value by analyzing all activities required to produce products, and then optimizes the entire process from the customer’s perspective.