Management, 6e
Schermerhorn
Prepared by
Cheryl Wyrick
California State Polytechnic University Pomona
John Wiley & Sons, Inc
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Chapter 9
Controlling to Ensure Results
 Planning Ahead
– What is the control process?
– What types of controls are used in
organizations?
– How do organizational systems assist in
control?
– How can operations management improve
control?
Schermerhorn - Chapter 9
3
Controlling as a Management
Function
 Steps in the Control Process
– Establish objectives and standards
– Measure actual performance
– Compare results with objectives and standards
– Take corrective action as needed
Schermerhorn - Chapter 9
4
Controlling as a Management
Function
 Step 1: Establishing Objectives and
Standards
– Types of Standards
• output
– measure results in terms of performance criteria
• input
– measure effort in terms of amount of work
Schermerhorn - Chapter 9
5
Controlling as a Management
Function
 Step2: Measuring
Actual Performance
– goal is accurate
measurement of output
and/or input standards
Schermerhorn - Chapter 9
6
Controlling as a Management
Function
 Step 3: Comparing Results with Objectives
and Standards
Need for action x desired performance - actual
performance
Schermerhorn - Chapter 9
7
Controlling as a Management
Function
 Comparing Results with Objectives and
Standards
– Historical Comparison
– Relative Comparison
– Engineering Comparison
Schermerhorn - Chapter 9
8
Controlling as a Management
Function
 Step 4: Taking Corrective Action
– Management by exception
• problem situation
• opportunity situation
Schermerhorn - Chapter 9
9
Controlling as a Management
Function
 Characteristics of Effective Controls
–
–
–
–
–
–
–
strategic and results oriented
understandable
encourage self-control
timely and exception oriented
positive in nature
fair and objective
flexible
Schermerhorn - Chapter 9
10
•Types of Controls
 Feedforward (Preliminary) Controls
– ensure that
• objectives are clear
• proper directions are established
• right resources are available
Schermerhorn - Chapter 9
11
Types of Controls
 Concurrent (Steering) Controls
– monitor ongoing operations to make sure they
are being done according to plan
– focus on quality of task activities during the
work process
Schermerhorn - Chapter 9
12
Types of Controls
 Feedback (Postaction) Controls
– take place after work is completed
– focus on quality of end results
Schermerhorn - Chapter 9
13
Types of Controls
 Internal Versus External Control
– Internal
• allows motivated individuals to exercise selfdiscipline in fulfilling job expectations
– External
• personal supervision
• formal administrative systems
Schermerhorn - Chapter 9
14
•Organizational Control Systems
 Management Process Controls
–
–
–
–
–
–
–
–
strategy and objectives
policies and procedures
selection and training
performance appraisal
job design and work structures
performance modeling
performance norms
organizational culture
Schermerhorn - Chapter 9
15
•Organizational Control Systems
 Compensation and Benefits
– pay-for-performance
– merit pay
– fringe benefits
Schermerhorn - Chapter 9
16
•Organizational Control Systems
 Employee Discipline
Systems
– progressive discipline
• achieve compliance
with organizational
expectations
• use least extreme
amount of reprimand
possible
Schermerhorn - Chapter 9
17
•Organizational Control Systems
 Information and Financial Controls
– liquidity
– leverage
– asset management
– profitability
Schermerhorn - Chapter 9
18
•Operations Management and
Control
 Purchasing Control
– leverage buying power
– small number of suppliers
– supplier-purchaser partnerships
Schermerhorn - Chapter 9
19
•Operations Management and
Control
 Inventory Control
– economic order quantity
• minimize two costs
– ordering
– carrying
– just-in-time scheduling
Schermerhorn - Chapter 9
20
•Operations Management and
Control
 Project Management and Control
– project management
– program evaluation and review technique
(PERT)
Schermerhorn - Chapter 9
21
•Operations Management and
Control
 Quality Control
– checking processes and services to ensure that
they meet high standards
– statistical quality contol
• control chart
– upper and lower control limits
Schermerhorn - Chapter 9
22