CHAPTER 15
CONTROLLING THE
ORGANISATION
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–1
LECTURE OUTLINE
• Control as a management function
• The control process
• Types of controls
• Managerial approaches to
implementing controls
• Assessing control systems
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–2
CONTROL AS A
MANAGEMENT FUNCTION
Controlling:
Process of regulating
organisational activities so that
actual performance conforms to
expected organisational
standards and goals.
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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CONTROL AS A
MANAGEMENT FUNCTION
Significance of the control system:
Set of mechanisms designed to increase
probability of meeting organisational
standards and goals.
Controlling ensures resources are used for
organisational objectives supporting
organising and leading functions.
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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CONTROL AS A
MANAGEMENT FUNCTION
Role of controls:
• Coping with uncertainty
Watching environmental factors for change
• Detecting irregularities
Such as quality, cost, staff turnover
• Identifying opportunities
Alerting management to opportunities
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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CONTROL AS A
MANAGEMENT FUNCTION
Role of controls (cont.):
• Handling complex situations
Aiding coordination of complex situations
• Decentralising authority
Controls allow decision-making at lower levels
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–6
CONTROL AS A
MANAGEMENT FUNCTION
Levels of control:
• Strategic control
Monitoring critical environmental factors
• Tactical control
Assessing implementation of tactical plans at
department level
• Operational control
Overseeing implementation of operating plans,
monitoring day-to-day results
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–7
CONTROL AS A
MANAGEMENT FUNCTION
• Levels of control:
•Strategic planning
Top
Strategic control
management
Tactical planning
Middle
management
Operational planning
1st level
management
Tactical control
Operational control
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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THE CONTROL PROCESS
Steps in the control process:
Determine areas to control
Establish standards
Measure performance
Compare performance against standards
Recognise positive performance; take
corrective action as necessary
6. Adjust standards & measures as
necessary
1.
2.
3.
4.
5.
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–9
THE CONTROL PROCESS
Steps in the control process:
Determine areas to control
Establish standards
Measure performance
Control
process
steps
Compare performance
Recognise positive
performance
Take corrective action
Adjust standards
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–10
THE CONTROL PROCESS
Deciding what to control:
• Resource dependence
–
–
–
Approach that argues that managers need to
control areas where they depend on others for
resources.
Four conditions must be met to justify a control
point.
These controls are known as:
Strategic control points
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–11
THE CONTROL PROCESS
Deciding what to control:
• Four conditions for control
High dependence on resource
2. Expected resource flow is unacceptable
3. Control process feasibility
4. Cost acceptability
1.
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–12
THE CONTROL PROCESS
Deciding what to control:
High dependence on the resource
Chance that expected resource flow will
be unacceptable
Determining
strategic
control
points
Control-process feasibility
Cost acceptability
Alternatives to control:
•Change dependence relationships
•Change nature of dependence relationships
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–13
THE CONTROL PROCESS
Deciding what to control:
• Alternatives to control
If the first of these conditions show a need
for control, but such control process is
either not feasible or too costly, then
managers must develop alternatives to
control, e.g.
–
–
–
–
Change dependence relationship on suppliers etc.
Change nature of dependence relationship
Build reliability
Eliminate dependence
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–14
TYPES OF CONTROL
• Major control types by timing
– Feedforward control
Regulation of inputs to ensure they meet
standards
– Concurrent control
Regulation of activities to ensure they
conform to standards
– Feedback control
Regulation of completed product to
ensure standards are met
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–15
TYPES OF CONTROL
Control types by timing:
Input
Feed-forward
control
Anticipating
problems
Transformation
processes
Concurrent
control
Attending to
problems as
they occur
Outputs
Feedback
control
Correcting
problems after
product/service
is produced
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–16
TYPES OF CONTROL
• Multiple controls
Systems using two or more of the feedforward,
concurrent and feedback control processes and
involving several strategic control points.
• Cybernetic control
Self-regulating control system which, once
operating, can automatically monitor the situation
and take corrective action when necessary.
• Non-cybernetic control
Control system relying on human discretion as a
basic part of its process.
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–17
MANAGERIAL APPROACHES
TO IMPLEMENTING CONTROLS
• Bureaucratic control
• Clan control
• Market control
• Control & innovation
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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MANAGERIAL APPROACHES
TO IMPLEMENTING CONTROL
Bureaucratic control:
Managerial approach relying on regulation
through rules, policies, supervision,
budgets, schedules, reward systems and
other administrative mechanisms aimed at
ensuring employees exhibit appropriate
behaviours and meet performance
standards.
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–19
MANAGERIAL APPROACHES
TO IMPLEMENTING CONTROL
Clan control:
Managerial approach relying on values,
beliefs, traditions, corporate culture,
shared norms and informal
relationships to regulate employee
behaviours and facilitate reaching of
organisational goals.
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–20
MANAGERIAL APPROACHES
TO IMPLEMENTING CONTROL
Market control:
Managerial approach relying on
market mechanisms to regulate prices
for certain clearly-specified goods and
services needed by an organisation.
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–21
MANAGERIAL APPROACHES
TO IMPLEMENTING CONTROL
Control & innovation:
• Four levers for strategic control/innovation
–
–
–
–
Belief systems
Boundary systems
Performance management systems
Interactive monitoring systems
• Incrementalist approach
Control of an innovative project that relies on clan
control but also involves a phased set of plans
and accompanying bureaucratic controls.
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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ASSESSING CONTROL SYSTEMS
Potential dysfunctional aspects:
• Behavioural displacement
• Game playing
• Operating delays
• Negative attitudes
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
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ASSESSING CONTROL SYSTEMS
Overcontrol versus undercontrol:
• Overcontrol
Cutting job autonomy to the point where it
seriously inhibits effective job performance.
• Undercontrol
Granting autonomy to an employee to the point
where the organisation loses its ability to direct
individual effort towards achieving organisational
goals.
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–24
ASSESSING CONTROL SYSTEMS
Characteristics of effective control
systems:
• Future-oriented
• Multidimensional
• Cost-effective
• Accurate
• Realistic
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PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–25
ASSESSING CONTROL SYSTEMS
Characteristics of effective control
Systems (cont.):
• Timely
• Monitorable
• Acceptable to organisation members
• Flexible
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–26
LECTURE SUMMARY
• Control as a management function
–
–
–
Significance of the control process
Role of controls
Levels of control
• The control process
–
Steps in the process
– Strategic control points
• Types of control
–
Types by timing, multiple, cybernetic, noncybernetic
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–27
LECTURE SUMMARY
• Managerial approaches to control
–
–
Bureaucratic, clan, market
Control & innovation
• Assessing control systems
–
–
–
Dysfunctions
Over-control/under-control
Characteristics of effective control systems
Copyright  2005 McGraw-Hill Australia Pty Ltd
PPTs t/a Management: A Pacific Rim Focus 4e by Bartol, Tein, Matthews, Martin
15–28