Chapter 13: Groups and Teams
Increasing Cooperation, Reducing Conflict
1. Groups vs Teams
Group: management-directed, formal, do productive work; Team: self-directed, informal, for friendship
 Groups and Teams: How Do They Differ?
o What A Group Is: A collection of people performing as individuals: (# a crowd)
 Two or more freely interacting individuals
 Share norms
 Share goals
 Have a common identity
o What A Team Is: A collection of people with common commitment: a small group
of people with complementary skills who are committed to a common purpose,
performance goals, and approach for which they hold themselves mutually
accountable  “The essence of a team is common commitment”
 Formal vs Informal Groups
o Formal Group: assigned by organizations or its managers to accomplish specific
goals
o Informal Group: formed by people whose overriding purpose is getting together for
friendship or a common interest
 Types of Teams
Teams are differentiated according to their: purpose, duration, level of member commitment
o Work Teams: clear purpose with shared members, permanent and have complete
commitment. Ex: A company’s audit team, professional sports team
o Project Teams: solve particular problem or a specific task, meet just once/work
together for many years, meet virtually/face to face.
o Cross-functional Teams: include members from different areas (finance, operations,
sales, etc.) within an organization; can be work team/project team, long-term/shortterm
o Self-managed Teams: groups of workers who are given administrative oversight
for their task domains; most common type of team
o Virtual Teams: work together over time and distance via electronic media to
combine effort and achieve common goals
2. Stages of Group and Team Development
 Tuckman’s Five-Stage Model
o Stage 1: Forming – “Why are we here?”: the process of getting
oriented and getting acquainted
o Stage 2: Storming – “Why are we fighting over who’s in change and
who does what?”: the emergence of individual personalities and roles
and conflicts within the group
o Stage 3: Norming – “Can we agree on roles and work as a team?”:
 Conflicts are resolved, close relationships develop, and unity
and harmony emerge.
 Members believe they found their roles  feeling of team
spirit
 Principal by-product: group cohesiveness, a “we feeling”
binding group members together
o Stage 4: Performing – “Can we do the job properly?”: members
concentrate on solving problems and completing the assigned task
o Stage 5: Adjourning – “Can we help members transition out?”:
members prepare for disbandment
Is Tuckman’s Model Accurate? Groups have a life
o
cycle; successfully high-performing teams  display
productive energy toward getting things done.
Punctuated
o
Equilibrium:
Periods
of
stable
functioning until an event causes a dramatic change in norms,
roles and/or objectives. The group then establishes and
maintains new norms of functioning, returning to equilibrium
3. Building Effective Teams
To build a group into a high-performance team, managers must consider matters of:
 Collaboration – the Foundation of Teamwork: act of sharing information and coordinating
efforts to achieve a collective outcome
 Trust: “We Need to Have Reciprocal Faith in Each Other”: reciprocal faith in others’ intentions
and behaviors; based on credibility, past acts of integrity, follow-through on promises
 Performance Goals and Feedback
 Motivation through Mutual Accountability and Interdependence:
o Mutual Accountability: members share accountability for the work, authority over
how goals are met, discretion over resource use, and ownership of information and
knowledge related to the work.
o Team Member Interdependence: which team members rely on common taskrelated team inputs, such as resources, information, goals and rewards, and the
amount of interpersonal interactions needed to complete the work.
 Team Composition: collection of jobs, personalities, values, knowledge, experience and
skills of team members.
 Roles: How team members are
expected to behave:
o are
socially
determined
expectations
of
how
individuals should behave in
a specific position
o 02 types of team roles: task
and maintenance
 Task Roles (or task-oriented role): Getting the work done: concentrates on
getting the team’s tasks done
 Maintenance Roles (or relationship-oriented role): Keeping the Team
Together: fosters constructive relationships among team members
 Norms: Unwritten rules for team members: general guidelines or rules of behavior that
most group or team members follow
o Why Norms Are Enforced: (04 reasons)
 To help the group survive – “Don’t do anything that will hurt us”
 To clarify role expectations – “You have to go along to get along”
 To help individuals avoid embarrassing situations – “Don’t call attention to
yourself”
 To emphasize the group’s important values and identity – “We’re known for
being special”
 Effective Team Processes:
o Team processes are ‘members’ interdependent acts that convert inputs to outcomes
through cognitive, verbal, and behavioral activities directed toward organizing
taskwork to achieve collective goals”.’
o 03 additional activities to improve team processes:
 Create a team charter. Team charter outlines how a team will manage
teamwork activities
 Engage a team reflexivity. Team reflexivity a process in which team members
collectively reflect on the team’s objectives, strategies, and processes and adapt
accordingly
 Give team members a voice. Team voice reflects: team members feel free to
“engage in the expression of constructive opinions, concerns or ideas about
work-related issues”
4. Managing Conflict
Conflict: a process in which a party perceives that its interests are being opposed or
negatively affected by another party
 The Nature of Conflict: Disagreement Is Normal
o Dysfunctional Conflict – BAD for organization: conflict that hinders the
organization’s performance or threatens its interests.
o Functional Conflict – GOOD for organization: which benefits the main purposes of
the organization and serves its interests
 Can Too Little or Too Much Conflict Affect Performance? Neither scenario is good
o Too little conflict – Inactively
o Too much conflict - Warfare
 Three Kinds of Conflict:
o Personality Conflicts: Clashes because of personal
dislikes/disagreements: interpersonal opposition based on
personal dislike or disagreement
Ex: workplace incivility, lack of regard between employees 
diminish job satisfaction, health, levels of customer service, etc.
o Intergroup Conflicts: Clashes among work groups, teams
and departments:
 Inconsistent goals or reward systems – when people
pursue different objectives
 Ambiguous jurisdictions – when job boundaries are
unclear
 Status differences – when there are inconsistencies in
power and influence
o Multicultural Conflicts: Clashes between Cultures
 How to Stimulate Constructive Conflict
o Spur Competition among Employees
o Change the Organization’s Culture and Procedures
o Bring in Outsiders for New Perspectives
o Use Programmed Conflict: Devil’s Advocacy and the Dialectic Method:
 Programmed Conflict: to elicit different opinions without inciting people’s
personal feelings
 Devil’s Advocacy: the process of assigning someone to play the role of critic
 Dialectic Method: the process of having two people or groups play opposing
roles in a debate in order to better understand a proposal
 05 Basic Behaviors to Help You Better Handle Conflict: work on disagreement and keep
them from flaring into out-of-control personality conflicts.
o Openness
o Equality
o Empathy
o Supportiveness
o Positiveness
 Dealing with Disagreements Five Conflict-handling Styles:
o Avoiding: ignoring or suppressing a conflict
o Obliging: allows the desires of the other party to prevail
o Dominating: relies on own formal authority and power to resolve a conflict
o Compromising: give up something to gain something
o Integrating: strive to confront the issue and cooperatively identify the problem
Chapter 14: Power, Influence and Leadership
From Becoming a Manager to Becoming a Leader
1. The Nature of Leadership: The Role of Power and Influence
-
Leadership: the ability to influence employees to voluntarily pursue organizational goals
-
Leadership Coaching: “about enhancing a person’s abilities and skills to lead and to
help the organization meet its operational objectives.”
 What Is the Difference Between Leading and Managing?
o Leaders: inspire and influencing others, provide emotional support; key role in
creating a vision and strategic plan
o Managers: form functions associated with planning, investigating, organizing and
control; implementing vision and plan
o Key characteristics of Managers and Leaders:
 Managerial Leadership: Can You be Both a Manager and a Leader?: the process of
influencing others to understand and agree about what needs to be done and the process of
facilitating individual and collective efforts to accomplish shared objectives
 Coping with Complexity vs Coping with Change: The Thoughts of John Kotter
o Being a Manager: Coping with Complexity
o Being a Leader: Coping with Change
 Five Sources of Power:
Power is the ability to marshal human, informational
and other resources to get something done:
+ Personalized Power: directed at helping oneself – as
a way of enhancing their own selfish ends may give the
word power a bad name
+ Socialized Power: directed at helping others – “My
goal is to have a powerful impact on my community”
o Legitimate Power: Influencing behavior because
of one’s formal position: power that results from
managers’ formal positions within the organization
o Reward Power: Influencing behavior by promising
or giving rewards: results from managers’
authority to reward subordinates
o Coercive
Power:
Influencing
behavior
by
threatening or giving punishment: results from
managers’ authority to punish their subordinates
o Expert Power: Influencing behavior because of
one’s expertise: results from one’s specialized
information or expertise
o Referent Power: Influencing behavior because of
one’s personal attraction: deriving from one’s
personal attraction
 Common Influence Tactics:
Influence Tactics: conscious efforts to affect and change behaviors in others.
Generic Influence Tactics: characterize social influence as we use it in all directions
o Hard vs Soft Tactics
 “Soft” Tactics: friendlier, not as coercive as hard tactics (rational persuasion,
inspirational appeals, consultation, ingratiation, personal appeals)
 “Hard” Tactics: exert more overt pressure (exchange, coalition, pressure and
legitimating tactics)
 Which Influence Tactics Do You Prefer?
 Match Tactics to Influence Outcomes
o Rely on the core. Core influence tactics – rational persuasion, consultation,
collaboration and inspirational appeals  most effective at building commitment
o Be authentic: Don’t try to be someone else; be authentic to your values and beliefs
o Consult rather than legitimate
o “Ingratiation” is not a good long-term strategy
o Be subtle
o Learn to influence
 An Integrated Model of Leadership
2. Trait Approaches:
Do Leaders Have Distinctive Traits and Personal
Characteristics?
Trait Approaches to Leadership: attempt to identify distinctive characteristics that
account for the effectiveness of leaders
 Positive Task-Oriented Traits and Positive/Negative Interpersonal Attributes
o Positive Attributes (Chapter 11)
o Negative Attributes:
 Narcissism: a self-centered perspective, feelings of superiority and a drive for
personal power and glory
 Machiavellianism: displays a cynical view of human nature and condones
opportunistic and unethical ways of manipulating people, putting results over
principles
 Psychopathy: lack of concern for others, impulsive behavior, and a death of
remorse when the psychopath’s actions harm others
 What Do We Know about Gender and Leadership?
o Fact vs Fiction: Women make up more than half the workforce and more than half
of all college students in the United States.
o
Do Men and Women Vary in Terms of Leadership Style of Effectiveness? YES
o Are There Social Forces Working Against Women Leaders? YES
 Are Knowledge and Skills Important? Extremely important; 04 basic skills for leaders:
 04 Conclusions about Leadership Traits
o We cannot ignore the implications of leadership traits
o The positive and “dark triad” traits suggest the qualities you should cultivate and
avoid if you want to assume a leadership role in the future
o Organizations may want to include personality and trait assessments in selection
and evaluation processes
o Cross-cultural competency is an increasingly value task-oriented trait.
A global mindset is your belief in your ability to influence dissimilar others in a global context
3. Behavioral Approaches: Do Leaders Show Distinctive Patterns of Behavior?
Behavioral Leadership Approaches: to determine the key behaviors displayed by effective leaders
 Task-oriented Leader Behaviors: Initiating-structure leadership and Transactional leadership
Task-oriented Leadership Behaviors: ensure that people equipment and other resources are
used in an efficient way to accomplish the mission of a group or organization; 02 kinds of
task-oriented:
o Initiating-Structure Leadership: “Here’s What We Do to Get the Job Done”: leader
behavior that organizes and defines – that is, “initiates the structure for” – what
employees should be doing to maximize output.
o Transactional Leadership: “Here’s What We Do to Get the Job Done and Here Are
the Rewards”: focusing on clarifying employees’ roles and task requirements and
providing rewards and punishment contingent on performance
 Relationship-Oriented Leadership Behavior:
Relationship-Oriented Leadership: concern with the leader’s interactions with his or her
people; 04 kinds of relationship-oriented behaviors:
o Consideration: “The concerns and needs of my employees are highly important”:
concern with group members’ needs and desires that is directed at creating mutual
respect or trust
o Empowering Leadership: “I want my employees to feel they have control over their
work”: which a leader creates perceptions of psychological empowerment in others
 Psychological empowerment: employees’ belief that they have control over
their work.
 04 kinds of behaviors to increase psychological empowerment:
 Leading for Meaningfulness: inspiring and modeling desirable behaviors
 Leading for Self-determination: delegating meaningful tasks
 Leading for Competence: supporting and coaching employees
 Leading for Progress: monitoring and rewarding employees
o Ethical Leadership: “I am ready to do the right thing”: represents normatively
appropriate behavior that focuses on being a moral role model (such as
communicating ethical values to others, rewarding ethical behavior or treating
followers with care and concern)
o Servant-Leadership: “I want to serve others and the organization, not myself”:
 focuses on providing increased service to others – meeting the goals of both
followers and the organization – rather than to yourself
 10 characteristics of the servant-leader
 Passive Leadership: The lack of leadership skills
o Passive Leadership: leadership form that behavior characterized by a lack of
leadership skills
o Another passive type: Laissez-Faire Leadership: leadership form characterized by
a general failure to take responsibility for leading
 Two Key Conclusions for the behavioral approaches:
o A leader’s behavior is more important than his or her traits
o There is no type of leader behavior that is best suited for all situations
4. Situational Approaches: Does Leadership Vary With the Situation?
Situational approach (or contingency approach): people who believe that effective
leadership behavior depends on the situation at hand
 Contingency Leadership Model: Fiedler’s Approach: determines if a leader’s style is taskoriented or relationship-oriented and if that style is effective for the situation at hand
o Two Leadership Orientations: Tasks vs Relationships:
To find out, you or your employees would fill out a questionnaire (known as the least
preferred co-worker, or LPC, scale), in which you think of the co-worker you least
enjoyed working with and rate him or her according to an eight-point scale of 16
pairs of opposite characteristics (such as friendly/unfriendly, tense/relaxed,
efficient/inefficient). The higher the score, the more the relationship-oriented the
respondent; the lower the score, the more task-oriented.
o 03 Dimensions of Situational Control:
 Leader-Member relations – “Do my subordinates accept me as a leader?”
 Task structure – “Do my subordinates perform unambiguous, easily
understood tasks?”
 Position power – “Do I have power to reward and punish?”
o The Most Effective Style:
 The Path-Goal Leadership Model: House’s Approach: holds that effective leader
makes available to followers desirable rewards in the workplace and increases their
motivation by clarifying the paths, or behavior, that will help them achieve those goals
and providing them with support.
o What Determines Leadership Effectiveness: Employee characteristics and
environmental factors affect leader behavior:
 Employee characteristics
 Environmental factors
 Leader behaviors
 Several important implications for managers:
o Use more than one leadership style
o Help employees achieve their goals
o Managers need to alter their leadership behavior for each situation
o Provide what people and teams need to succeed
5. The Uses of Transformational Leadership
Full-range Leadership: leadership behavior varies along a full range of leadership
styles, from passive (such as laissez-faire) “leadership” at one extreme, through
transactional leadership, to transformational leadership at the other extreme.
 Transformational Leaders: transforms employees to pursue organizational goals
over self-interests; they are affected by 02 factors:
o Individual characteristics
o Organizational culture
 The Best Leaders are Both Transactional and Transformational
 04 Key Behaviors of Transformational Leaders
o Inspirational Motivation: “Let me share a vision that transcends us all”
 Charisma: a form of interpersonal attraction that inspires acceptance
and support
 Charismatic leadership: which was assumed to be an individual
inspirational and motivational characteristic of particular leaders
o Idealized influence: “We are here to do the right thing”
o Individualized consideration: “You have the opportunity here to grow and excel”
o Intellectual Stimulation: “Let me describe the great challenges we can conquer
together”
 03 Practical Applications of Transformational Leadership
o It can be used to train employees at any level
o You can prepare and practice being transformational
o It should be used for ethical reasons (Table 14.7)
6. Three Additional Perspectives

Leader–member exchange (LMX) model of leadership emphasises that
leaders have different sorts of relationships with different subordinates.
o
LMX focuses on relational quality in leader–follower dyads.
o
LMX assumes that leaders have distinctive relationships with each
follower.
o
02 types of LMX interactions:

In-group exchange: trust and respect

Out-group exchange: lack of trust and respect

Servant leadership focuses on providing increased service to others - meeting
the goals of both followers and the organisation - rather than the goals of oneself.

Humble leaders tend to display five key qualities valued by employees: high
self-awareness, openness to feedback, appreciation of others, low self-focus, and
appreciation of the greater good. (Power of Humility)

Empowering leadership represents the extent to which a leader creates
perceptions of psychological empowerment in others.

Ethical leadership represents normatively appropriate behaviour that
focuses on being a moral role model.

Leaders want followers who are productive, reliable, honest, cooperative,
proactive, and flexible.

Abusive supervision represents supervisors’ sustained verbal and non-verbal
hostility toward subordinates.
Chapter 15: Interpersonal and Organizational Communication
Mastering the Exchange of the Information
1. The Communication Process: What It Is, How It Works

Communication Defined: The Transfer of Information and Understanding
o
Communication: the transfer of the information and understanding
from one person to another
o
Efficient Communicator: transmit your message accurately in the
least time
o
Effective Communicator: intended message is accurately understood
by the other person

How the Communication Process Works
Communication: a process consisting of “a sender transmitting a message
through media to a receiver who responds”
o
o
Sender, Message and Receiver

Sender: the person wanting to share information (or Message)

Receiver: the person for whom the message is intended

Communication Process (Figure 15.1): Sender  Message  Receiver
Encoding and Decoding

Encoding: translating a message into understandable symbols or
language
o

Decoding: interpreting and trying to make sense of the message

Sender [Encoding]  Message  [Decoding] Receiver
The Medium: the pathway by which a message travels:
Sender [Encoding]  Message [Medium] Message  [Decoding] Receiver
o
Feedback: whereby the receiver expresses his or her reaction to the
sender’s message; the process with feedback:

o
Communication accuracy  Paraphrasing
Noise: the disruption at several different points

Noise: any disturbance that interferes with the transmission of a
message


Jargon: terminology specific to a particular profession of a group
Selecting the Right Medium for Effective Communication:
o
Is a Medium Rich or Lean on Information?

Media Richness: how well a particular medium conveys information
and promotes learning

o
Types of media along a continuum ranging
Matching the Appropriate Medium to the Appropriate Situation

Rich Medium: Best for non-routine situations and to avoid
oversimplification

Lean Medium: Best for routine situations and to avoid overloading
2. How Managers Fit into the Communication Process

Formal Communication Channels: Up, Down, Sideways, Outward
o
Vertical Communication: Up and Down the Chain of Command

Downward communication – from top to bottom: flows from a higher
level to a lower level

Upward communication – from bottom to top: flows from a lower
level to a higher level
o
Horizontal Communication: Within and between Work Units: flows within
and between work units; its main purpose is coordination; 03 ways to have:

By Specialization that makes people focus on only their jobs

By Rivalry between workers and work units, which prevents sharing
of information

o
By Lack of Encouragement from management
External Communication: Outside the organization: flows between people
inside and outside the organization

Informal Communication Channels: develop outside the formal structure; not
follow the chain of command; more spontaneous, can skip management levels, cut
cross lines of authority; 02 types of Informal Channels:
o
The Grapevine: the unofficial communication system of the informal
organization. Ex: a network of in-person or online gossip and rumour
o
Face-to-Face Communication: Here are some basic principles to making F2F:

Make time for F2F

Listen more, talk less

Deliver goods news up front; lead in to bad

Hold employee town hall meetings

Use webcasts when you can’t be there
3. Barriers to Communication

Physical Barriers: Sound, Time, Space

Personal Barriers: Individual Attributes that Hinder Communication
o
Variable Skills in communicating effectively
o
Variations in the way we process and interpret information
o
Variations in Trustworthiness and Credibility
o
Oversized egos
o
Faulty Listening Skills: a state of reduced attention. It is expressed in
behavior that is rigid or thoughtless

o
Tendency to Judge others’ messages
o
Generational Differences
Cross-Cultural Barriers: more common in view of globalization; barriers cause
by different in meaning of norms or ethnocentrism

Non-Verbal Communication: How unwritten and unspoken messages may
mislead: consists of messages send outside of the written or spoken word; non-verbal
communication can be used through
o
Eye Contact
o
Facial Expressions
o
Body Movements and Gestures
o

Touch
Gender Differences: Women and men process language in different parts of the
brains  different in ways of communicating
o
Linguistic style: a person’s characteristic speaking patterns – pacing,
pausing, directness, word choice, use of questions, jokes, stories, apologies
and similar devices
o
Differences in communication between men and women (Table 15.4)
4. Social Media and Management
Social Media: web-based and mobile technologies to generate interactive dialogue
with members of a network

Social Media has Changed the Fabric of Our Lives

Social Media and Managerial and Organizational Effectiveness
o
Employment Recruiting
o
Employment Productivity
o
Employer Productivity

Social media benefits for employers:

Essence of social media is connectivity:

Connect with key stakeholders

Connect with varied sources of expertise inside the organization

Connect with varied sources of expertise outside the
organization
o
Social Media and Innovation: Crowdsourcing: using the internet and social
media to enlist a group outside the organization for help solving a problem
o
Social Media and Sales and Brand Recognition: “Effective” social media
 customers and brand recognition because:
o

Increase product/service awareness and generate customer inquiries

Enhance relationships with customers

Increase the ability to reach customers

Foster co-promotion and image

Foster consumers’ conservations about brands
Social Media and Reputation

Create and enforce a social media policy for employees

Appoint experienced managers to monitor your social media
presence and respond quickly and appropriately to negative posts


Acknowledge there is a problem
Downsides of Social Media
o
Cyberloafing: using the Internet at work for personal use
o
Phubbing and FOMO:

Microaggressions (or acts of unconscious bias): include a number of
seemingly tiny but repeated actions, like interrupting others,
mispronouncing or mistaking someone’s name, and avoiding eye
contact

Phubbing: for phone snubbing or ignoring those present in order to
pay attention to a mobile phone.

FOMO: Fear of Missing-Out
o
Security: Guarding against Cyberthreats: a system of safeguards for
protecting information technology against disasters, system failures, and
unauthorized access that result in damage or loss
o
Privacy: Keeping Things to Yourself:

The right of people not to reveal information about themselves

Identity Theft: which thieves hijack your name and identity and use
your good credit rating to get cash or buy things

Managerial Implications of Texting
o
Tips for making the most of texting for work purposes:

As with all social media tools, strictly limit your use for personal
reasons during the work day

Text only important messages


Avoid texting during meetings

Don’t use abbreviations or emojis

As always, proofread
Managerial Considerations in Creating Social Media Policies
o
Social Media Policy: describes the who, how, when and for what purposes
of social media use, and the consequences for non-compliance.
o
Assessing an Organization’s Social Media Readiness:

How supportive management is of creating communities

How well the culture fosters collaboration and knowledge sharing

How widely social media is used to collaborate
5. Improving Communication Effectiveness

Non-Defensive Communication:
o
Defensive Communication: either aggressive, attacking, angry
communication or passive, withdrawing communication
o
Non-defensive Communication: communication that is assertive, direct
and powerful

Using Empathy
o
Empathy: ability to recognize and understand another person’s feelings
and thoughts
o

03 distinct types of empathy

Cognitive empathy

Emotional empathy

Compassionate empathy
Being an Effective Listener
Active listening: process of actively decoding and interpreting verbal messages
o
Understand your listening style or styles:

Active – I’m fully invested

Involved – I’m partially invested

Passive – It’s not my responsibility to listen

o


Detached – I’m uninterested
Concentrate on the Content of the Message (Table 15.10)
Being an Effective Writer
o
Start with Your Purpose
o
Write Simply, Concisely and Directly
o
Know Your Audience
o
Don’t Show Ignorance of the Basics
Being an Effective Speaker
o
Tell them what you’re going to say
o
Say it
o
Tell them what you said
Chapter 16: Control Systems and Quality Management
Techniques for Enhancing Organizational Effectiveness
1. Control: When Managers Monitor Performance
Controlling: monitoring performance, comparing it with goals, and taking corrective
action as needed


Why Is Control Needed?
o
To adapt to change and uncertainty
o
To discover irregularities and errors
o
To reduce costs, increase productivity, or add value
o
To detect opportunities and increase innovation
o
To provide performance feedback
o
To decentralize decision making and facilitate teamwork
Steps in the Control Process:
o
Establish Standards: “What is the Outcome We Want?”:

Control standard (or performance standard or simply standard): the
desired performance level for a given goal

o
Use balanced scorecard to establish standards
Measure Performance: “What is the Actual Outcome We Got?”: 05 sources
of performance data:
o

Employee behavior and deliverables

Peer input or observations

Customer feedback

Managerial evaluations

Output from a production process
Compare Performance to Standards: “How Do the Desired and Actual
Outcomes Differ?”: To compare measured performance against the
standards established

Control charts: a visual statistical tool used for quality control
purposes; is used to monitor the amount of variation in a work
process

Management by Exception: a control principle that managers should
be informed of a situation only if data show a significant deviation
from standards.
o
Take Corrective Action, if necessary: “What changes should we make to
obtain desirable outcomes?” (Make no changes/Recognize and Reinforce
positive performance/Take action to correct negative performance)

Types of Control
o
Feedforward Control: focuses on preventing future problems
o
Concurrent Control: entails collecting performance information in real time
o
Feedback Control: amounts to collecting performance information after
a task or project is done
2. Levels and Areas of Control

Levels of Control:
o
Strategic Control by Top Managers: monitoring performance to ensure
that strategic plans are being implemented and taking corrective action as
needed
o
Tactical Control by Middle Managers: monitoring performance to ensure
that tactical plans – those at the divisional or department level – are
being implemented and taking corrective action as needed
o
Operational Control by First-line Mangers: monitoring performance to
ensure that operational plans – day-to-day goals – are being implemented
and taking corrective action as needed.

06 Areas of Control
o
Physical Area: includes buildings, equipment and tangible products; use
equipment control, inventory-management control and quality control
o
Human Resource Area: uses personality tests, drug tests, performance
tests, employee surveys, and the like as controls to monitor people
o
Informational Area: uses production schedules, sales forecasts,
environmental impact statements and the like to monitor the
organization’s various resources
o
Financial Area: uses financial control
o
Structural Area

Bureaucratic Control: an approach to organizational control that
is characterized by use of rules, regulations, and formal
authority to guide performance

Decentralized Control: an approach to organizational control that is
characterized by informal and organic structural arrangements
o
Cultural Area: influences work process and levels of performance through
the set of norms that develop as a result of the values and beliefs that constitute
an organization’s culture

Controlling the Supply Chain: the sequence of suppliers that contribute to
creating and delivering a product, from raw materials to production to final buyers

Control in Service Firms
3. The Balanced Scorecard and Strategy Maps

The Balanced Scorecard: A Dashboard-like View of the Organization
Balanced Scorecard: top managers a fast but comprehensive view of the organization via
04 indicators: customer satisfaction, internal processes, innovation and improvement
activities, financial measures
o
The Balanced: Scorecard: 04 Perspectives

Financial Perspective: “How do we look to shareholders?”

Customer Perspective: “How do customers see us?”

Internal Business Perspective: “At what must we excel?”

Innovation and Learning Perspective: “Can we continue to improve
and create value?”

Strategy Mapping: Visual representation of the path to organizational
effectiveness: “visual representation of a company’s critical objectives and the
crucial relationships among them that drive organizational performance”
4. Some Financial Tools for Control

Budgets: Formal Financial Projections
Budget: a formal financial projection of planned activities for a given period of time
o
Incremental Budgeting: increased or decreased funds to a department by
using the last budget period as a reference point; only incremental changes
in the budget request are viewed
o
Fixed vs Variable Budgets (02 incremental budgets)

Fixed budgets – where resources are allocated on a single estimate of
costs: resources on the basis of a single estimate of costs

Variable budgets – where resources are varied in proportion with
various levels of activity: allows the allocation of resources to vary in
proportion with various levels of activity

Financial Statements: Summarizing the Organization’s Financial Status: a
summary of some aspect of an organization’s financial status
o
The Balance Sheet: Picture of Organization’s Financial Worth for a specific
point in time: an organization’s overall financial worth (assets and liabilities)
at a specific point of time
o
The Income Statement: Picture of Organization’s Financial Results for a
Specified Period of Time: an organization’s overall financial results
(revenues and expenses) over a specific period of time

Audits: External vs Internal: formal verifications of an organization’s financial
and operational systems
o
External Audits – Financial Appraisals by Outside Financial Experts
(outside experts)
o
Internal Audits – Financial Appraisals by Inside Financial Experts (own
professional staff)
5. Total Quality Management (TQM)

Deming Management: The Contributions of W. Edward Deming to Improved
Quality: proposed ideas for making organizations more responsive, more
democratic, and less wasteful
o
Quality should be aimed at the needs of the consumer
o
Companies should aim at improving the system, not blaming workers
o
Improved quality leads to increased market share, increased company
prospects, and increased employment
o
Quality can be improved on the basis of hard data, using the PDCA cycle
(Plan-Do-Check-Art cycle: observed data for continuous improvement of
operations)

Core TQM Principles: Deliver Customer Value and Strive for Continuous
Improvement: a comprehensive approach – led by top management and supported
throughout the organization – dedicated to continuous quality improvement (such as
Kaizen), training and customer satisfaction; 02 Core Principles of TQM:
o
o
People Orientation – Focusing Everyone on Delivering Customer Value:

Delivering customer value is most important

People will focus on quality if given empowerment

TQM requires training, teamwork and cross-functional efforts
Improvement Orientation – Focusing everyone on continuously improving
work processes

Continuous
improvement:
ongoing,
small,
incremental
improvements in all parts of an organization

Improvement orientation makes these assumptions:

It’s less expensive to do it right the first time

It’s better to make small improvements all the time

Accurate standards must be followed to eliminate small
variations

There must be strong commitment from top management

Kaizen: Japanese philosophy of small continuous improvement to
involve everyone at every level of the organization in the process of
identifying opportunities and implementing and testing solutions

Applying TQM to Services

Some TQM Tools, Techniques and Standards
o
Outsourcing: Let outsiders handle it: the subcontracting of services and
operations to an outside vendor
o
Reduced Cycle Time: Increasing the speed of work processes: reduction in
steps in a work process
o
Statistical Process Control: Taking periodic random samples: a technique that
uses periodic random samples from production runs to see if quality is being
maintained within a standard range of acceptability
o
Six Sigma and Lean Sigma: Data-driven ways to eliminate defects

Six Sigma: a rigorous statistical analysis process that reduces defects
in manufacturing and service-related processes

Lean Six Sigma: focuses on problem solving and performance
improvement – speed with excellence – of a well-defined project
o
ISO 9000 and ISO 14000: Meeting Standards of Independent Auditors

ISO 9000: a series consists of quality-control procedures companies
must install – from purchasing to manufacturing to inventory to
shipping – that can be audited by independent quality-control experts
(or registrars)

ISO 14000: a series extend the concept, identifying standards for
environmental performance
6. Managing Control Effectively

The Keys to Successful Control Systems:
o
They are Strategic and Results Oriented
o
They are Timely, Accurate and Objective

Timely – when needed

Accurate – correct

Objective – impartial
o
o

They are Realistic, Positive and Understandable and encourage Self-control

Be realistic

Be positive

Be understandable

Encourage self-control
They are Flexible
Barriers to Control Success
o
Too much control
o
Too little employee participation
o
Overemphasis on means instead of ends
o
Overemphasis on paperwork
o
Overemphasis on one instead of multiple approaches
7. Managing for Productivity

What is Productivity?

Why is Increasing Productivity Important?
o
Productivity track record
o
Role of Information Technology (IT): Much of productivity growth is
thought to result from the implementation of information technology,
including enterprise resource planning (ERP) systems, though wages in most
industrialized countries have not kept up. Productivity depends on control.

What Processes Can be Used to Increase Productivity?
o
Benchmarking
o
Best Practices: a set of guidelines, ethics or ideas that represent the most
efficient or prudent course of action