8th edition
Steven P. Robbins
Mary Coulter
What Is Control?
• Control
 The process of monitoring (supervising)
activities to ensure that they are being
accomplished as planned and of correcting
any significant (important) deviations (differences).
• The Purpose of Control
 To ensure that activities are completed in
ways that lead to accomplishment of
organizational goals.
Page 384
Slide 2
Designing Control Systems
• Market Control
 Emphasizes the use of (external) market mechanisms
(processes) to establish the standards used in the
control system.
 External
measures: price competition and relative
market share.
• Bureaucratic Control
 Emphasizes organizational authority and relies
(depends) on rules, regulations, procedures, and
policies.
• Clan Control
 Regulates (influences) behavior by shared values,
norms, traditions, rituals, and beliefs of the firm’s
culture.
Page 384
Slide 3
Designing Control Systems
• Depending on the shape and needs of the organization, when a
manager must decide on a system of control, he/she might choose
one of these three approaches:
Market Control: Which analyses, focuses and relies on the monitoring
of market processes such as price competition, sales figures,
market share, delivery periods, etc...
Bureaucratic Control: Which analyses and focuses on enforcement
or implementation of rules, regulations, procedures and policies of
the organization.
Clan Control: Which analyses and focuses on regulating activities,
based on implications (meanings) of the firm's Culture, such as
values, norms, traditions, rituals and beliefs that are shared by
members of the organization.
No page
Slide 4
Why Is Control Important?
• It is the final link in management functions and the only
way managers know whether organizational goals are
being met and, if not, the reasons why.
 Planning-controlling link
 Controls
let managers know whether their goals and
plans are on target and what future actions to take.
 Control and management
 Managers
need to delegate (give) duties and empower
(authorize) employees to make decisions. But because
managers are responsible for performance results, they
need the feedback mechanism (process) which is
provided by the control system.
Page 386
Slide 5
The Planning–Controlling Link
Exhibit 19.2
Page 386
Slide 6
The Control Process
• The Process of Control
1. Measuring actual
performance.
2. Comparing actual
performance against a
standard.
3. Taking action to correct
deviations (differences) or
inadequate (unsatisfactory)
standards.
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Slide 7
The Control Process
Exhibit 19.3
Page 387
Slide 8
Measuring: How and What We Measure
• Sources of Information
 Personal observation
 Statistical reports
 Oral reports
 Written reports
What we measure is more critical to the
control process than how we measure:
-- The selection of wrong criteria can
result in serious consequences
-- What we measure determines what
people in the organization will attempt to
excel at (to improve).
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• Control Criteria
 Employees

Satisfaction

Turnover

Absenteeism
 Budgets

Costs

Output

Sales
Slide 9
Common Sources of Information for
Measuring Performance
Slide 10
Comparing
• Determining the degree of variation
between actual performance and the
standard.
 It is critical to determine the acceptable
range of variation.
 The
size (large or small) and direction (over or
under) of the variation from the standard
(forecast or budget).
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Slide 11
Defining the Acceptable Range of Variation
Exhibit 19.4
Page 389
Slide 12
Sales Performance Figures for July, Eastern
States Distributors
Exhibit 19.5
Page 390
Slide 13
Taking Managerial Action
• Courses of Action
 “Do nothing”
 Only
if deviation is judged to be insignificant (minor).
 Correct actual performance
 Immediate
corrective action to correct the problem at
once.
 Basic
corrective action looks at how and why
performance has deviated and corrects the source of
the deviation.
Possible corrective actions:
– Change strategy, structure, compensation scheme, or
training programs; redesign jobs; or fire employees.
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Slide 14
Taking Managerial Action
• Courses of Action
Revising the standard
 Examining
the standard to ascertain (check)
whether or not the standard is realistic, and
achievable.
– Resetting goals that may have been too
high or too low.
Page 391
Slide 15
Managerial Decisions in the Control Process
Exhibit 19.6
Page 392
Slide 16
Types of Control
• Feedforward Control
 Focuses on preventing anticipated problems
before they occur.
 It
takes place before the actual work activity.
• Concurrent (simultaneous) Control
 It takes place while a work activity is in progress.
 Direct
supervision: management by walking
around.
 The manager concurrently monitors actions and
corrects problems as they occur.
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Slide 17
Types of Control
• Feedback Control
 Takes place after a work activity is done (after-thefact).
A
major drawback (disadvantage) is that by the time the
manager has the information, the problems have
already occurred. At this point, the manager’s only
option is to try and correct the situation.
 Advantages of feedback
 Feedback
provides managers with information on the
effectiveness of their planning efforts.
 Feedback enhances employee motivation by
providing them with information on how well they are
doing.
Page 394
Slide 18
Types of Control
Exhibit 19.7
Page 393
Slide 19
Types of Control
• Contingency Factors in Control
These factors include:
Size of the organization
One’s position in the organizational hierarchy
Degree of decentralization
Organizational culture
Importance of a work activity
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Slide 20
Types of Control
• Contingency factors in Control
 The size of the organization
A
small organization relies more on informal and
personal control approaches. Larger organizations rely
on formal control systems and highly formalized feedforward and feedback controls.
 One’s position in the organizational hierarchy

Page 396
Lower level jobs have clearer definitions of
performance. The higher up one moves in the
hierarchy, the greater the need for multiple (many) sets
of control criteria.
Slide 21
Types of Control
• Contingency factors in Control
 The degree of decentralization

The greater the degree of decentralization, the more
managers need feedback on employees’ decisions and
performance. Because managers are ultimately (in the
end) responsible, they want assurances that their
employees’ actions are effective and efficient.
 The organizational culture

Page 396
In a culture of trust, autonomy (independence) and
openness, we can expect to find informal self-control. In
another of fear, reprisal and mistrust, we find externally
imposed (enforced) and formal control systems.
Slide 22
Types of Control
• Contingency factors in Control
The importance of a work activity
 The
degree of importance of a work activity
influences (determines) whether, and how, it
will be controlled. If an error can be highly
damaging to the organization, extensive
controls are likely to be implemented.
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Slide 23
The Controller and Control
The job of the controller
The controller is the staff person who
assists managers with the controlling
function by gathering (collecting) information
and generating (developing) reports.
 In
smaller organizations, managers may
themselves gather this information and
develop reports. In medium-sized to large
companies, the controller handles this work.
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Slide 24
The Controller and Control
The job of the controller
 The controller is responsible for generating
information managers need to exercise the
control function. He/she usually works
with information about:
1.
2.
3.
4.
5.
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Profits
Revenues (income & taxation)
Costs
Investments
Discretionary (undetermined) expenses.
Slide 25
The Controller and Control
How Much Control is Needed?
 The process of comparing the cost of an
activity with the expected benefit of
implementing the activity is called costbenefit analysis.
 Control activities should be implemented
if the expected benefits of such activities
exceed (are greater than) the cost of these
activities.
Page 400
Slide 26
Power and Control
• Power:
The degree to which an individual is able to
influence others so that they respond to
orders.
 The
greater this ability, the more power an
individual is said to have.
 Orders given by a manager may or may not be
followed precisely (exactly), depending on how
much power the manager has over others.
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Slide 27
Power and Control
•
Total Power
 The total power a manager has is made
up of two different kinds of power.
a)
b)
Page 402
Position power: Power derived (gained) from
the organizational position a manager
holds.
Personal power: Power derived (gained) from
a manager’s relationship with others.
Slide 28
Power and Control
• Increasing Total Power
Managers can increase their total power by
enhancing (increasing) their position power, their
personal power or both.
Importance of developing personal power
 Trying
to control others solely on the basis of
one’s position simply does not work.
 Not many will passively accept and completely
obey a constant stream of orders from someone
just because he/she is the “boss”.
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Slide 29
Power and Control
•
Increasing Personal Power
 To increase personal power managers should
encourage and develop these beliefs and attitudes
in other organization members.
1.
2.
3.
4.
Page 403
A sense of obligation toward the manager.
A belief that the manager possesses a high level
of expertise.
A sense of identification with the manager.
The perception that they are dependent on the
manager.
Slide 30
Increasing Personal Power
1.
A sense of obligation toward the manager: Do
personal favors for people.
2.
A belief that the manager possesses a high level
of expertise: Quietly make your achievements visible to
others, build up a successful track record and a solid
professional reputation.
3.
A sense of identification with the manager:
Behave (act) in ways that other members respect; share
their goals, values and ideals.
4.
The perception that they depend on the manager:
Convey (make known) the amount of authority you have
over organizational resources such as salaries and
bonuses. The Golden Rule: “He who has the gold makes
the rules”.
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Slide 31
Performing the Control function
• Barriers to Successful Controlling
Long-Term Versus Short-Term Production
Quotas (numbers).
 E.g.
To ensure that performance meets the
production quotas (numbers) in the short term,
machines might be “pushed” hard for a higher
output, by managerial decision. This kind of
action could prevent the machines to be
serviced properly, cause them to deteriorate,
and make it impossible to meet long-term
production standards.
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Slide 32
Performing the Control function
• Barriers to Successful Controlling
Employee Frustration (disappointment) and
Morale (team spirit).
 Worker
morale tends to be low when
management exerts too much control and
will not allow them the freedom they need
to do a good job.
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Slide 33
Performing the Control function
• Barriers to Successful Controlling
Filing of Reports.
 Employees
may feel pressured (obliged,
compelled) to falsify (cheat on) reports so that
corrective action concerning their
organizational unit will not be drastic
(forceful) or too severe (strong).
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Slide 34
Performing the Control function
• Barriers to Successful Controlling
Perspective (view) of Organization units.
 Managers
must remember to consider any
corrective action not only in relation to the
specific activity being controlled, but also
in relation to its effect on all other
organizational units.
Page 405
Slide 35
Performing the Control function
• Barriers to Successful Controlling
Means (method) Versus Ends (goals).
 Managers
must keep in mind that the
information gathering and report generating
in the control process can be costly (expensive),
and should only be justified (acceptable) if those
activities yield (provide) benefits that exceed
the cost of performing them.
Page 405
Slide 36
Performing the Control function
•
Making Controlling Successful
 To make the control process more effective,
managers should consider the following
factors.




Page 403
Specific organizational activities being
focused on.
Different kinds of organizational goals.
Timely (prompt) corrective action.
Communication of the mechanics (procedure)
of the control process.
Slide 37
Performing the Control function
• Making Controlling Successful
Specific organizational activities being
focused on.
 Managers
must make sure the various aspects
of the control process are appropriate for the
control activity that is being carried out (executed).
 E.g. Standards of measurements concerning
line workers’ productivity are different from
standards of measurements concerning a vice
president’s performance.
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Slide 38
Performing the Control function
• Making Controlling Successful
Different Kinds of Organizational
Goals.
 The
control process can be applied to
many different facets (aspects) of
organizational life. Each of these facets
must be considered to provide maximum
benefit from controlling.
Page 406
Slide 39
Performing the Control function
• Making Controlling Successful
Timely Corrective Action.
 Managers
should take the corrective
action as promptly as possible to
ensure that the situation depicted
(shown) by the control process has not
changed.
Page 406
Slide 40
Performing the Control function
• Making Controlling Successful
Communication of the Mechanics
(procedure) of the Control Process.
 All
individuals involved in controlling
must have a working knowledge of how
the control operates.
Page 406
Slide 41
Contemporary Issues in Control
• Cross-Cultural Issues
 In technologically advanced nations , managers
use indirect control devices -- computer
generated reports and analyses -- in addition to
standardized rules and direct supervision to
ensure that work activities are going as planned.
 In less technologically advanced countries,
managers tend to rely more on direct supervision
and highly centralized decision making for
control.
Page 407
Slide 42
Contemporary Issues in Control
• Workplace Concerns
Workplace privacy
Employee theft
Workplace violence
Page 408
Slide 43
Contemporary Issues in Control
• Workplace Concerns
 Workplace privacy versus workplace monitoring
 Many
companies monitor employee usage of Email, telephone, computer, and Internet.
 Concerns
about offensive messages,
inappropriate images displayed on workers’
computer screens, racial and sexual harassment
(mistreatment, annoyance) including leaking (telling) of
company secrets are reasons for workplace
monitoring.
Page 408
Slide 44
Types of Workplace Monitoring by Employers
Internet use
54.7%
Telephone use
44.0%
E-mail messages
38.1%
Computer files
30.8%
Job performance using video cameras
14.6%
Phone conversations
11.5%
Voice mail messages
6.8%
Source: Based on S. McElvoy, “E-Mail and Internet Monitoring and the Workplace: Do
Employees Have a Right to Privacy?” Communications and the Law, June 2002, p. 69.
Page 408
Exhibit 19.9
Slide 45
Contemporary Issues in Control
• Workplace Concerns
 Employee theft
 The
unauthorized taking of company property by
employees for their personal use.
 Fraudulent
(dishonest) filing of expense reports.
 Removing
equipment, parts, software, and office
supplies from company premises.
 We
can use the concept of feedforward, concurrent,
and feedback control (see slide #46) to identify
measures for reducing employee theft.
Page 409
Slide 46
Control Measures for Employee Theft or Fraud
Sources: Based on A.H. Bell and D.M. Smith. “Protecting the
Company Against Theft and Fraud,” Workforce Online
(www.workforce.com) December 3, 2000; J.D. Hansen. “To
Catch a Thief,” Journal of Accountancy, March 2000, pp. 43–46;
and J. Greenberg, “The Cognitive Geometry of Employee Theft,” in
Dysfunctional Behavior in Organizations: Nonviolent and Deviant
Behavior, eds. S.B. Bacharach, A. O’Leary-Kelly, J.M. Collins, and
R.W. Griffin (Stamford, CT: JAI Press, 1998), pp. 147–93.
Exhibit 19.10
Page 410
Slide 47
Contemporary Issues in Control
• Workplace Concerns
 Workplace violence
 Anger,
rage, and violence in the workplace is affecting
employee productivity.
 Factors
contributing to workplace violence include
employee stress caused by rising layoffs (firings), long
working hours, unrealistic deadlines and uncaring
managers.
 The
competitive demands of succeeding in a global
economy put pressure on organizations and employees
in many ways.
 We
can use the concept of feedforward, concurrent, and
feedback control (see slide #49) to identify actions for
managers.
Page 410
Slide 48
Workplace Violence
Witnessed yelling or other verbal abuse
42%
Yelled at co-workers themselves
29%
Cried over work-related issues
23%
Seen someone purposely damage
machines or furniture
14%
Seen physical violence in the workplace
10%
Struck a co-worker
Source: Integra Realty Resources, October-November Survey of Adults
18 and Over, in “Desk Rage.” BusinessWeek, November 20, 2000, p. 12.
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2%
Exhibit 19.11
Slide 49
Control Measures for
Deterring or Reducing
Workplace Violence
Sources: Based on M. Gorkin, “Five Strategies and Structures for
Reducing Workplace Violence,” Workforce Online (www.workforce.com).
December 3, 2000; “Investigating Workplace Violence: Where Do You
Start?” Workforce Online (www.forceforce.com), December 3, 2000;
“Ten Tips on Recognizing and Minimizing Violence,” Workforce Online
(www.workforce.com), December 3, 2000; and “Points to Cover in a
Workplace Violence Policy,” Workforce Online (www.workforce.com),
December 3, 2000.
Exhibit 19.12
Page 412
Slide 50
C H A P T E R R E V I E W 1/6
What Is Control and Why Is It Important? (slides 2~5)
1)
2)
3)
4)
5)
Page 415
Define control.
Contrast the three approaches to designing
control systems.
Discuss the reasons why control is important.
Explain the planning-controlling link.
What is the role of control in management?
Slide 51
C H A P T E R R E V I E W 2/6
The Control Process (slides 7, 9~11, 14, 15)
6)
7)
8)
9)
Page 386
Describe the three steps in the control process.
Name four methods managers can use to
acquire information about actual performance.
Explain why what is measured is more critical
than how it’s measured.
Explain the three courses of action managers
can take in controlling.
Slide 52
C H A P T E R R E V I E W 3/6
Types of Control (slides 17, 18, 20~23)
10)
Contrast feedforward, concurrent, and feedback
controls.
11)
What types of contingency factors will affect the
design of an organization’s control system?
The controller and Control (slides 24~26)
12)
What is a controller?
13)
What would a typical job description for a controller
include?
14)
How are cost-benefit analysis and controlling related?
Page 415
Slide 53
C H A P T E R R E V I E W 4/6
Power and Control (slides 27~31)
15)
What is power?
16)
Discuss the relationship between power and
control.
17)
What is total power?
18)
Define position power.
19)
Define personal power.
20)
How can managers increase their total power?
21)
What steps can managers take to increase
personal power?
Page 402
Slide 54
C H A P T E R R E V I E W 5/6
Performing the Control Function (slides 32~41)
22)
Discuss long- and short-term production quotas as
barriers to controlling
23)
How can employee frustration and morale be barriers
to controlling?
24)
How can filing reports be a barrier to controlling?
25)
How can the perspective of organization members
affect controlling?
26)
Discuss means versus ends as a factor affecting
controlling.
27)
What tactics can managers use to make controlling
successful?
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Slide 55
C H A P T E R R E V I E W 6/6
Contemporary Issues in Control (slides 42~44, 46, 48)
28)
Describe how managers may have to adjust
controls for cross-cultural differences.
29)
Discuss the types of workplace concerns
managers face and how they can address
those concerns.
Page 415
Slide 56