organizational control
DESCRIPTION
TRANSCRIPT
![Page 1: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/1.jpg)
1
Knowledge Objectives
1. Identify types of control and the components common to all control systems.
2. Discuss organizational control from a strategic perspective.
3. Explain how providing a service differs from manufacturing a product and list the five service-quality dimensions.
4. Define total quality management (TQM) and describe at least three of the seven TQM process improvement tools.
![Page 2: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/2.jpg)
2
Fundamentals of Organizational Control
• Control– Taking preventive or corrective action to keep
things on track.• Checking, testing, regulation, verification, or
adjustment.• Objectives are yardsticks for measuring actual
performance.
– Purpose of the control function• Get the job done despite environmental, organizational,
and behavioral obstacles and uncertainties.
– Gen’l Model: Inputs Process Outputs
![Page 3: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/3.jpg)
3
What should be measured?
Always measure inputs. The decision to Always measure inputs. The decision to measure process or outputs depends upon measure process or outputs depends upon the following:the following:
• Technically feasible to monitor and Technically feasible to monitor and measure process?measure process?• Do we understand cause and effect?Do we understand cause and effect?• Cost?Cost?• Desired level of innovation?Desired level of innovation?•If impossible to measure process or If impossible to measure process or outputs, then control inputs (e.g., outputs, then control inputs (e.g., professionalization)professionalization)
![Page 4: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/4.jpg)
4
Which components to control?Which components to control?
Freedom to Freedom to innovate is innovate is desireddesired
Cause & Effect is Cause & Effect is understoodunderstood
Cause & Effect Cause & Effect is not well is not well understoodunderstood
Standardization Standardization is critical for is critical for qualityquality
Quality/Quality/safety is safety is importantimportant
Cost of Cost of measuring is measuring is lowlow
Cost of Cost of monitoring is lowmonitoring is low
Cost of input Cost of input is highis high
Outputs can be Outputs can be observed & observed & measuredmeasured
Processes can be Processes can be observed & observed & measuredmeasured
It is It is impossible to impossible to monitor monitor othersothers
Control Outputs Control Outputs WhenWhen::
Control Control Processes WhenProcesses When::
Control Control Inputs WhenInputs When::
![Page 5: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/5.jpg)
5
Which control systems to use?
• Feedforward Control– The active anticipation and prevention of problems, rather
than passive reaction. Are measurement premises still valid?
• Concurrent Control– Monitoring and adjusting ongoing activities and
processes. Process and behavioral controls.
• Feedback Control– Checking a completed activity and learning from
mistakes. Goal setting and responsibility.
![Page 6: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/6.jpg)
6
Components of Organizational Control Systems
• Organizational Control Subsystems– Strategic plans– Long-range plans– Annual operating budget– Statistical reports– Performance appraisals– Policies and procedures– Cultural control
• Question is …what to emphasize
![Page 7: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/7.jpg)
7
Components of Organizational Control Systems (cont’d)
• Objectives– Measurable reference points (targets) for corrective
action.
– Plan what you can measure, and measure what you plan
• Standards– Guideposts on the way to achieving objectives.
– Benchmarking: identifying, studying, and building upon the best practices of comparator organizations.
![Page 8: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/8.jpg)
8
Components of Organizational Control Systems (cont’d)
• Evaluation-Reward Systems– Measure and reward individual and team
contributions to attaining organizational objectives.
– Can shape effort-reward expectancies that motivate better performance remember the expectancy theory of motivation!).
![Page 9: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/9.jpg)
9
Components of Organizational Control Systems (cont’d)
• Strategic Control– Strategic planning and strategic control go hand
in hand.– Top-level strategy sets and/or determines
objectives that are “cascaded” down through the organization.
– Control measures of supporting activities and results are interpreted and translated up through the organization’s decision making “pyramid”.
![Page 10: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/10.jpg)
10
Components of Organizational Control Systems (cont’d)
• Identifying Control Problems– Executive reality checks: top managers
periodically working at lower-level jobs to become more aware of operations.
– Internal auditing: independent appraisals of organizational operations and systems to assess effectiveness and efficiency.
![Page 11: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/11.jpg)
11
Components of Organizational Control Systems (cont’d)
• Identifying Control Problems (cont’d)– Symptoms of inadequate or inappropriate control
• An unexplained decline in revenues or profits.
• A degradation of service (customer complaints).
• Employee dissatisfaction .
• Cash shortages caused by bloated inventories or delinquent accounts receivable.
• Idle facilities or personnel.
• Disorganized operations.
• Excess costs.
• Evidence of waste and inefficiency.
![Page 12: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/12.jpg)
12
Crisis Management
• Organizational Crisis– A low-probability, high impact event that
threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, and well as by belief that decisions must be made swiftly.
![Page 13: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/13.jpg)
13
Crisis Management (cont’d)
• Crisis Management– Anticipating and preparing for events that could
damage the organization.
• Two Biggest Mistakes Regarding Organizational Crises1. Ignoring early warning signs of an impending
disaster.
2. Denying the existence of a problem when disaster actually strikes.
![Page 14: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/14.jpg)
14
Crisis Management (cont’d)
• Developing a Crisis Management Program– Conduct a crisis audit seeking out trouble spots and
vulnerabilities.
– Formulate contingency plans that specify early warning signals, actions to be taken, and consequences of those actions.
– Create crisis management teams with specific skills to deal with a crisis.
– Perfect the program through serious practice and rehearsals.
![Page 15: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/15.jpg)
15
The Quality Challenge
• Defining Quality– “Conformance to requirements” (Crosby).– Does not address whether requirements are
appropriate
![Page 16: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/16.jpg)
16
Five Types of Product Quality
• Transcendent Quality– Inherent value or innate excellence apparent to the
individual.
• Product-Based Quality– The presence or absence of a given product
attribute.
• User-Based Quality– Quality of the product is determined by its ability to
meet the user’s expectations.
![Page 17: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/17.jpg)
17
Five Types of Product Quality (cont’d)
• Manufacturing-Based Quality– How well the product conforms to its design
specification or blueprint.
• Value-Based Quality– How much value each customer separately
attributes to the product in calculating their personal cost-benefit ratio.
![Page 18: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/18.jpg)
18
Quality for Service Providers– Distinctive service characteristics
• Customers participate directly in the production process.
• Services are consumed immediately and cannot be stored.
• Services are provided where and when the customer desires.
• Services tend to be labor intensive.• Services are intangible.
![Page 19: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/19.jpg)
19
Quality for Service Providers (cont’d)
• Defining Service Quality– Five service quality dimensions
• Reliability (most important)
• Assurance
• Tangibles
• Empathy
• Responsiveness
![Page 20: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/20.jpg)
20
Introduction to Total Quality Management (TQM)
• Total Quality Management– Creating an organizational culture committed to the
continuous improvement of skills, teamwork, processes, product and service quality, and customer satisfaction.
• Four Principles of TQM– Do it right the first time.– Be customer-centered (internal/external)– Make continuous improvement a way of life.– Build teamwork and empowerment.
![Page 21: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/21.jpg)
21
Introduction to Total Quality Management (TQM) (cont’d)
• Make Continuous Improvement a Way of Life– Kaizen: a Japanese word meaning continuous
improvement (quality is an endless journey).– Potential results
• Improved and more consistent product and service quality.
• Faster cycle times.• Greater flexibility.• Lower costs and less waste.
![Page 22: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/22.jpg)
22
Introduction to Total Quality Management (TQM) (cont’d)
• Build Teamwork and Empowerment– Teamwork
• Suggestion systems.• QC circles and self-managed teams.• Team work and cross-functional teams.
– Empowerment• Adequate training• Access to information and tools• Involvement in key decisions• Fair rewards for results
![Page 23: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/23.jpg)
23
The Seven Basic TQM Process Improvement Tools
• Flow Chart– A graphic display of a sequence of activities and
decisions.
• Cause-and-Effect Analysis– The fishbone diagram helps visualize important
cause-and-effect relationships.
• Pareto Analysis (80/20 Analysis)– A bar chart indicating which problem needs the
most attention.
![Page 24: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/24.jpg)
24
The Seven Basic TQM Process Improvement Tools (cont’d)
• Control Chart– Visual aid showing acceptable and unacceptable
variations from the norm for repetitive operations.
• Histogram– A bar chart indicating deviations from a standard
bell-shaped curve.
• Scatter Diagram– A diagram that plots relationships between two
variables.
![Page 25: Organizational Control](https://reader035.vdocument.in/reader035/viewer/2022062616/5492fb04b47959384d8b4725/html5/thumbnails/25.jpg)
25
The Seven Basic TQM Process Improvement Tools (cont’d)
• Run Chart– A trend chart for tracking a variable over time.