last week… 1. quick review of the evolution of leadership thinking 2. also discussed power and...

Last week…Last week…1.1. Quick review of the evolution of Quick review of the evolution of

leadership thinkingleadership thinking

2.2. Also discussed power and gender in Also discussed power and gender in leadershipleadership

3.3. Looked at Motivation: Theories and Looked at Motivation: Theories and current issuescurrent issues

4.4. Looked at Teams: What are teams and Looked at Teams: What are teams and what do they go throughwhat do they go through

5.5. A quick consideration of conflict A quick consideration of conflict managementmanagement

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This Week’s ObjectivesThis Week’s Objectives

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Understand controlling and its role in Understand controlling and its role in managementmanagement

Look at the steps in the controlling Look at the steps in the controlling process, and types of controlprocess, and types of control

Review organizational performance Review organizational performance and common organizational controlsand common organizational controls

Look at issues in controllingLook at issues in controlling In particular, look at the challenges of In particular, look at the challenges of

change (Thursday)change (Thursday)

Chapter 15Chapter 15

Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Management, Ninth Ninth Canadian EditionCanadian Edition

Copyright © 2009 Pearson Education Canada Copyright © 2009 Pearson Education Canada

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The Question…The Question…

How do you really know you How do you really know you are going where you want to are going where you want to

be going, and how do you be going, and how do you know when you get there?know when you get there?

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What Is Control?What Is Control?

The The processprocess of monitoring activities to ensure of monitoring activities to ensure that they are being accomplished as planned that they are being accomplished as planned and of correcting any significant deviationsand of correcting any significant deviations

The Purpose of ControlThe Purpose of ControlTo ensure that activities are completed in To ensure that activities are completed in

ways that lead to accomplishment of ways that lead to accomplishment of organizational goalsorganizational goals

Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, Management, Management, Ninth Canadian EditionNinth Canadian Edition


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Why Is Control Important?Why Is Control Important?

The final link in management functions:The final link in management functions:PlanningPlanning

Controls let managers know whether their goals and Controls let managers know whether their goals and plans are on target and what future actions to takeplans are on target and what future actions to take

Empowering employeesEmpowering employeesControl systems provide managers with information Control systems provide managers with information

and feedback on employee performanceand feedback on employee performanceProtecting the workplaceProtecting the workplace

Controls enhance physical security and help Controls enhance physical security and help minimize workplace disruptionsminimize workplace disruptions



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Exhibit 15.1 Exhibit 15.1 The Planning–Controlling LinkThe Planning–Controlling Link



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Leading

Motivation

Leadership

Communication

Individualand Group Behaviour

Planning

Goals

ObjectivesStrategies

Plans

Organizing

Structure

HumanResource Management

Controlling

Standards

Measurements

Comparison

Actions

The Control ProcessThe Control Process

1.1. MeasuringMeasuring actual performance actual performance

2.2. ComparingComparing actual performance actual performance against a standardagainst a standard

3.3. Taking actionTaking action to correct to correct deviations or inadequate standardsdeviations or inadequate standards

Chapter 15, Stephen P. Robbins, Mary Coulter, Chapter 15, Stephen P. Robbins, Mary Coulter, and Nancy Langton, and Nancy Langton, Management, Management, Ninth Ninth

Canadian EditionCanadian EditionCopyright © 2009 Pearson Education Canada Copyright © 2009 Pearson Education Canada

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MeasuringMeasuring

How: Sources of How: Sources of InformationInformation Personal observationsPersonal observations Statistical reportsStatistical reports Oral reportsOral reports Written reportsWritten reports

What: Control CriteriaWhat: Control Criteria EmployeesEmployees

SatisfactionSatisfaction TurnoverTurnover AbsenteeismAbsenteeism

BudgetsBudgets CostsCosts OutputOutput SalesSales



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ComparingComparing

Determining the degree of variation Determining the degree of variation between actual performance and the between actual performance and the standardstandardSignificance of variation is determined by:Significance of variation is determined by:

The acceptable range of variation from the The acceptable range of variation from the standard (forecast or budget)standard (forecast or budget)

The size (large or small) and direction (over or The size (large or small) and direction (over or under) of the variation from the standardunder) of the variation from the standard



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Exhibit 15.4 Defining the Acceptable Exhibit 15.4 Defining the Acceptable Range of VariationRange of Variation



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AcceptableRange ofVariation

AcceptableLower Limit

Standard

AcceptableUpper Limit

t t + 1 t + 2 t + 3 t + 4 t + 5

Time Period (t)

Exhibit15.5 Sales Performance Exhibit15.5 Sales Performance Figures for July, Beer UnlimitedFigures for July, Beer Unlimited



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Taking ActionTaking Action

Courses of Managerial ActionCourses of Managerial Action1.1. ““Doing nothing”Doing nothing”

Only if deviation is insignificantOnly if deviation is insignificant

2.2. Correcting actual (current) performanceCorrecting actual (current) performance Immediate or basic corrective actionImmediate or basic corrective action

3.3. Revising the standardRevising the standard Determine whether the standard is realistic, fair, Determine whether the standard is realistic, fair,

and achievableand achievable



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Exhibit 15.7 Managerial Decisions in the Control Exhibit 15.7 Managerial Decisions in the Control ProcessProcess



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Goals Standard

Measureactual

performance

No

No

No

Yes

Yes

Yes

Compareactual

performancewith standard

Do nothing

Do nothing

Identifycause ofvariation

Correctperformance

Revisestandard

Isstandard

beingattained?

Isvariance

acceptable?

Isstandard

acceptable?

Controlling for Organizational Controlling for Organizational PerformancePerformance

What Is Performance?What Is Performance? The end result of an activityThe end result of an activity

What Is OrganizationalWhat Is OrganizationalPerformance?Performance? The accumulated end results of all of the The accumulated end results of all of the

organization’s work processes and activitiesorganization’s work processes and activities Designing strategies, work processes, and work Designing strategies, work processes, and work

activitiesactivities

Coordinating the work of employeesCoordinating the work of employees



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Organizational Performance MeasuresOrganizational Performance Measures

Organizational ProductivityOrganizational ProductivityThe overall output of goods and/or services The overall output of goods and/or services

divided by the inputs needed to generate that divided by the inputs needed to generate that outputoutput

Ultimately, a measure of how efficiently Ultimately, a measure of how efficiently employees do their workemployees do their work



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Organizational EffectivenessOrganizational Effectiveness Measuring how appropriate organizational goals Measuring how appropriate organizational goals

are and how well the organization is achieving are and how well the organization is achieving its goalsits goals

Ultimately, a measure of how effectively your Ultimately, a measure of how effectively your organization is structured and behavesorganization is structured and behaves



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Industry RankingsIndustry RankingsMany different lists exist to rank Many different lists exist to rank

organizations. Some examples:organizations. Some examples:Report on Business Magazine’sReport on Business Magazine’s Top 1000; Top 1000;

Canada’s Power BookCanada’s Power BookReport on Business Magazine’sReport on Business Magazine’s 50 Best 50 Best

Companies To Work For in CanadaCompanies To Work For in CanadaProfit’sProfit’s 100: Canada’s Fastest Growing 100: Canada’s Fastest Growing

CompaniesCompanies



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Approaches for Controlling Organizational Approaches for Controlling Organizational PerformancePerformance

Feedforward ControlFeedforward ControlPrevents anticipated problems before they Prevents anticipated problems before they

occuroccurBuilding in quality through designBuilding in quality through designRequiring suppliers conform to ISO 9002Requiring suppliers conform to ISO 9002



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Concurrent ControlConcurrent ControlMonitoring while activity is in progressMonitoring while activity is in progress

Direct supervision: management by walking Direct supervision: management by walking aroundaround



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Feedback ControlFeedback ControlTakes place after an activity is doneTakes place after an activity is done

Corrective action is after-the-fact, when the Corrective action is after-the-fact, when the problem has already occurredproblem has already occurred

AdvantagesAdvantagesFeedback provides managers with information on Feedback provides managers with information on

the effectiveness of their planning effortsthe effectiveness of their planning effortsFeedback enhances employee motivation by Feedback enhances employee motivation by

providing them with information on how well they providing them with information on how well they are doingare doing



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Exhibit 15.8 Types of ControlExhibit 15.8 Types of Control



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Input Output

FeedforwardControl

ConcurrentControl

FeedbackControl

Processes

Anticipatesproblems

Correctsproblems asthey happen

Correctsproblems after

they occur

Control PhilosophiesControl Philosophies

Market Control – driven by external Market Control – driven by external mechanismsmechanisms

Bureaucratic Control – results from high Bureaucratic Control – results from high formalization & centralizationformalization & centralization

Clan Control – results from strong Clan Control – results from strong organizational culturesorganizational cultures



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Tools for Controlling Organizational Tools for Controlling Organizational Performance: Financial ControlsPerformance: Financial Controls

Traditional ControlsTraditional Controls Ratio analysisRatio analysis

LiquidityLiquidity LeverageLeverage ActivityActivity ProfitabilityProfitability

Budget analysisBudget analysis Quantitative standardsQuantitative standards DeviationsDeviations

Other MeasuresOther Measures Economic value added Economic value added

(EVA)(EVA) Market value added Market value added

(MVA)(MVA)



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Exhibit 15.10 Popular Financial RatiosExhibit 15.10 Popular Financial Ratios



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Exhibit 15.10 Popular Financial RatiosExhibit 15.10 Popular Financial Ratios



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Other Tools for Controlling PerformanceOther Tools for Controlling Performance

Balanced ScorecardBalanced Scorecard A measurement tool that uses goals set by managers in four A measurement tool that uses goals set by managers in four

areas to measure a company’s performance:areas to measure a company’s performance: FinancialFinancial CustomerCustomer Internal processesInternal processes People/innovation/growth assetsPeople/innovation/growth assets

Management Information Systems (MIS)Management Information Systems (MIS) A system used to provide management with needed information A system used to provide management with needed information

on a regular basison a regular basis



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Contemporary Issues in ControlContemporary Issues in Control

Customer InteractionsCustomer InteractionsService profit chainService profit chain

The service sequence from employees to The service sequence from employees to customers to profitcustomers to profit

Service capability Service capability service value service value customer satisfaction customer satisfaction customer loyalty customer loyalty repeat business (profit) repeat business (profit)



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Contemporary Issues in ControlContemporary Issues in Control

Corporate GovernanceCorporate GovernanceThe system used to govern a corporation so The system used to govern a corporation so

that the interests of the corporate owners are that the interests of the corporate owners are protectedprotectedChanges in the role of boards of directorsChanges in the role of boards of directorsIncreased scrutiny of financial reportingIncreased scrutiny of financial reporting



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Now we have this question:Now we have this question:

How do you Control in a How do you Control in a Dynamic Environment?Dynamic Environment?

(Chapter 16)(Chapter 16)


Copyright © 2009 Pearson Education CanadaCopyright © 2009 Pearson Education Canada

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Forces for ChangeForces for Change

External forcesExternal forces MarketplaceMarketplace Governmental laws and Governmental laws and

regulationsregulations TechnologyTechnology Labour marketsLabour markets Economic changesEconomic changes

Internal ForcesInternal Forces Changes in Changes in

organizational strategyorganizational strategy Workforce changesWorkforce changes New equipmentNew equipment Employee attitudesEmployee attitudes


Canadian EditionCanadian EditionCopyright © 2009 Pearson Education CanadaCopyright © 2009 Pearson Education Canada

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Change Process ViewpointsChange Process Viewpoints

The Calm Waters MetaphorThe Calm Waters Metaphor Lewin: a break in the organization’s equilibrium stateLewin: a break in the organization’s equilibrium state

Unfreezing the status quoUnfreezing the status quo Changing to a new stateChanging to a new state Refreezing to make the change permanentRefreezing to make the change permanent

White-water Rapids MetaphorWhite-water Rapids Metaphor The lack of environmental stability and predictability The lack of environmental stability and predictability

requires that managers and organizations continually requires that managers and organizations continually adapt (manage change actively) to surviveadapt (manage change actively) to survive



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What Is Organizational Change?What Is Organizational Change?

Any alterations in the people, structure, or Any alterations in the people, structure, or technology of an organizationtechnology of an organization

Characteristics of ChangeCharacteristics of Change Is constant yet varies in degree and directionIs constant yet varies in degree and direction Produces uncertainty yet is not completely Produces uncertainty yet is not completely

unpredictableunpredictable Creates both threats and opportunitiesCreates both threats and opportunities

Managing change is an integral partof every manager’s job



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Types of ChangeTypes of ChangeStructuralStructural

Changing the organization’s structure or its structural Changing the organization’s structure or its structural componentscomponents

TechnologicalTechnological Adopting new equipment or operating methods that displace Adopting new equipment or operating methods that displace

old skills and require new onesold skills and require new ones Automation: replacing certain tasks done by people with Automation: replacing certain tasks done by people with

machinesmachines ComputerizationComputerization

PeoplePeople Changing attitudes, expectations, perceptions, and behaviours Changing attitudes, expectations, perceptions, and behaviours

of the workforce.of the workforce.



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Why People Resist ChangeWhy People Resist ChangeThe ambiguity and uncertainty that change The ambiguity and uncertainty that change

introducesintroducesThe comfort of old habitsThe comfort of old habitsA concern over personal loss of status, money, A concern over personal loss of status, money,

authority, friendships, and personal authority, friendships, and personal convenienceconvenience

Using Maslow, it might create gaps between Using Maslow, it might create gaps between our needs and current statusour needs and current status

The perception that change is incompatible The perception that change is incompatible with the goals and interests of the organizationwith the goals and interests of the organization



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Issues in Managing ChangeIssues in Managing Change

Handling Employee StressHandling Employee StressStressStress

The physical and psychological tension an The physical and psychological tension an individual feels when confronted with extraordinary individual feels when confronted with extraordinary demands, constraints, or opportunities and their demands, constraints, or opportunities and their associated importance and uncertaintiesassociated importance and uncertainties

Functional StressFunctional Stress Stress that has a positive effect on performanceStress that has a positive effect on performance



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Changing Organizational CulturesChanging Organizational CulturesCultures are naturally resistant to changeCultures are naturally resistant to changeConditions that help cultural change:Conditions that help cultural change:

Dramatic crisisDramatic crisisChange of leadershipChange of leadershipYoung, flexible, and small organizationYoung, flexible, and small organizationWeak organizational cultureWeak organizational culture



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Making Change Happen SuccessfullyMaking Change Happen SuccessfullyEmbrace changeEmbrace changeExplain why change is necessaryExplain why change is necessaryCommunicate constantly and honestlyCommunicate constantly and honestlyEncourage employee participationEncourage employee participationEncourage employee flexibilityEncourage employee flexibilityRemove those who resist and cannot be Remove those who resist and cannot be

changedchanged



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This Week’s Summary This Week’s Summary

Defined controlling and its role in Defined controlling and its role in managementmanagement

Went through the steps in the controlling Went through the steps in the controlling process, and types of controlprocess, and types of control

Reviewed organizational performance Reviewed organizational performance and common organizational controlsand common organizational controls

Looked at issues in controllingLooked at issues in controlling In particular, considered the challenges In particular, considered the challenges

of changeof change1-1-3939

last week… 1. quick review of the evolution of leadership thinking 2. also discussed power and...

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