Robbins MGMT 11 Chapter 02

Copyright 2012 Pearson
Education,
Inc. Publishing
asPearson Education
Management, Eleventh Edition, Global Edition by Stephen P. Robbins & Mary Coulter
2012
Prentice Hall
18- 1
Chapter 18:
Foundations of
Control
Explain the nature and importance of
control.
Describe the three steps in the control
process.
Explain how organizational
performance is measured.
Describe tools used to measure
organizational performance.
Discuss contemporary issues in
Education,
Inc. Publishing
as Education
2012 Pearson
Prentice Hall
18- 2
What Is Control?
Controlling
- the process of monitoring, comparing,
and correcting work performance.
The Purpose of Control

to ensure that activities are completed
in ways that lead to the accomplishment
of organizational goals.
Education,
Inc. Publishing
as
2012
Pearson Education
Prentice Hall
18- 3
Why Is Control Important?

As the final link in management
functions:
Planning
Controls let managers know whether their goals
and plans are on target and what future actions to
take.
Empowering employees
Control systems provide managers with information
and feedback on employee performance.
Protecting the workplace

Controls enhance physical security and help
minimize workplace disruptions.
Education,
Inc. Publishing
as
2012
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18- 4
Exhibit 18-1: Planning-Controlling

Link

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Inc. Publishing
as
2012
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18- 5
What is the Control Process?

Control process - a three-step
process of measuring actual
performance, comparing actual
performance against a standard, and
taking managerial action to correct
deviations or inadequate standards.

Education,
Inc. Publishing
as
2012
Pearson Education
Prentice Hall
18- 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
or inadequate standards

Education,
Inc. Publishing
as
2012
Pearson Education
Prentice Hall
18- 7
Exhibit 18-2: The Control Process

Education,
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as
2012
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18- 8
STEP 1. Measuring: How and

What
We Measure
- determine what actual

performance is;
Control Criteria (What)
Sources of
Information (How)
Personal
observation
Statistical reports
Oral reports
Written reports
Employees
Satisfacti
on
Turnover
Budge
Absenteei
sm
ts

Education,
Inc. Publishing
as Education
2012 Pearson
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Costs
Output
Sales
18- 9
number of
pizzas
delivered
per day
number of
coupons
redeemed
Education,
Inc. Publishing
as Education
2012 Pearson
Prentice Hall
average delivery tim

18- 10
applications typed
per day
client requests completed per

average time to process paperwork
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Inc. Publishing
as Education
2012 Pearson
Prentice Hall
18- 11
Exhibit 18-3: Sources of

Information
for Measuring Performance

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Inc. Publishing
as
2012
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Prentice Hall
18- 12
STEP 2. Comparing Actual

Performance
Against the Standard
- determines the degree of variation

between actual performance and the
standard.
Range of variation - the acceptable
parameters of variance between
actual performance and the standard.

Education,
Inc. Publishing
as
2012
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18- 13
STEP 2. Comparing Actual

Performance
Against the Standard
Significance of variation is
determined by:
The acceptable range of variation

from the standard (forecast or
budget).
The size (large or small) and
direction (over or under) of the
variation from the standard (forecast
or budget).
Education,
Inc. Publishing
as
2012
Pearson Education
Prentice Hall
18- 14
Exhibit 18-4: Acceptable

Range of Variation

Education,
Inc. Publishing
as
2012
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18- 15
Chris Tanner is a sales manager for Green

Earth Gardening Supply, a distributor of
specialty plants and seeds in the Pacific
Northwest. Chris prepares a report during the
first week of each month that describes sales
for the previous month, classified by product
line.
Education,
Inc. Publishing
as Education
2012 Pearson
Prentice Hall
18- 16
Exhibit 18-5: Green Earth

Gardening
SupplyJune Sales

Education,
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as
2012
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STEP 3. Taking Managerial

Action
Three possible courses of action:
1.Do nothing;
2.Correct the actual performance, and
3.Revise the standards.

Education,
Inc. Publishing
as
2012
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18- 19

Action
DO NOTHING
Only if deviation is judged to
be insignificant.

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as
2012
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18- 20

Action
CORRECT ACTUAL PERFORMANCE
- depending on what the problem is, a manager
could take different corrective actions.

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as
2012
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18- 21

Action
Manager could take different corrective actions
if unsatisfactory work could correct it; such as:
Training Programs,
Change strategy or struc
Disciplinary Action,
Job Redesign
Changes In Compensation
Practices And So Forth
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2012
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18- 22

Action
Immediate corrective action
- corrective action that corrects problems at
once in order to get performance back on
track.
- a quick fix so the problem is contained and
can't get any worse.

Education,
Inc. Publishing
as
2012
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18- 23

Action
Basic corrective action
- corrective action that looks at how
and why performance deviated before
correcting the source of deviation.
- take the time to pinpoint and fix the
real cause of the problem at the most
basic level.
Education,
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as
2012
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18- 24

Action
REVISED THE STANDARD
- examining the standard to
ascertain whether or not the
standard is realistic, fair, and
achievable.
Upholding the validity of the standard.
Resetting goals that were initially set
too low or too high.
Education,
Inc. Publishing
as
2012
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Prentice Hall
18- 25
Exhibit 18-6: Managerial Decisions

in the Control Process

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as
2012
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18- 26
Controlling for Organizational

Performance?
These are the few important performance indicators that
executives in the intensely competitive call-center service
industry measures their;
Cost efficiency.
The length of time customers are kept on
hold.
Customer satisfaction with service provided.
- managers in all types of businesses are

responsible for managing organizational
performance with this type of information
Education,
Inc. Publishing
as
2012
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18- 27
What Is Organizational
Performance?
Performance - the end result of an activity.
Organizational performance - the
accumulated results of all the organizations
work activities.
Designing strategies, work processes,
and work activities.
Coordinating the work of employees

Education,
Inc. Publishing
as
2012
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18- 28
Measures of Organizational
Performance
Organizational Productivity
Productivity - the amount of goods or
services produced divided by the inputs
needed to generate that output.
Output: sales revenues (selling price x
number sold)
Inputs: costs of resources (materials, labor
expense, and facilities)
Ultimately, productivity is a measure of how

efficiently employees do their work and thus
decreasing the organizations expenses.
Education,
Inc. Publishing
as
2012
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18- 29
Measures of Organizational
Performance
Organizational effectiveness - a
measure of how appropriate
organizational goals are and how well
those goals are being met.
Industry and company rankings Rankings are a popular way for
managers to measure their
organizations performance.
Education,
Inc. Publishing
as
2012
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Prentice Hall
18- 30
Exhibit 18-7: Popular Industry and

Company Rankings

Education,
Inc. Publishing
as
2012
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18- 31
Exhibit 18-7: Popular Industry and

Company Rankings (cont.)

Education,
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as
2012
Pearson Education
Prentice Hall
18- 32
World's Most Admired Companies 2015 (www.fortune.com)

1
4
9
GE
5
10

Education,
Inc. Publishing
as Education
2012 Pearson
Prentice Hall
18- 33
Philippines Most Admired Companies 208 (Wallstreet Asia Journal)

1
2
7
3
8
4
10
5
Education,
Inc. Publishing
as Education
2012 Pearson
Prentice Hall
18- 34

Education,
Inc. Publishing
as Education
2012 Pearson
Prentice Hall
18- 35

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Copyright 2012 Pearson

The Purpose of Control

Why Is Control Important?

Protecting the workplace

Exhibit 18-1: Planning-Controlling

Copyright 2012 Pearson

What is the Control Process?

Copyright 2012 Pearson

The Control Process

Copyright 2012 Pearson

Exhibit 18-2: The Control Process

Copyright 2012 Pearson

STEP 1. Measuring: How and

- determine what actual

Copyright 2012 Pearson

average delivery tim

client requests completed per

Exhibit 18-3: Sources of

Copyright 2012 Pearson

STEP 2. Comparing Actual

- determines the degree of variation

Copyright 2012 Pearson

STEP 2. Comparing Actual

The acceptable range of variation

Exhibit 18-4: Acceptable

Copyright 2012 Pearson

Chris Tanner is a sales manager for Green

Exhibit 18-5: Green Earth

Copyright 2012 Pearson

Copyright 2012 Pearson

STEP 3. Taking Managerial

Copyright 2012 Pearson

STEP 3. Taking Managerial

Copyright 2012 Pearson

STEP 3. Taking Managerial

Copyright 2012 Pearson

STEP 3. Taking Managerial

Change strategy or struc

STEP 3. Taking Managerial

Copyright 2012 Pearson

STEP 3. Taking Managerial

STEP 3. Taking Managerial

Exhibit 18-6: Managerial Decisions

Copyright 2012 Pearson

Controlling for Organizational

- managers in all types of businesses are

Copyright 2012 Pearson

Ultimately, productivity is a measure of how

Exhibit 18-7: Popular Industry and

Copyright 2012 Pearson

Exhibit 18-7: Popular Industry and

Copyright 2012 Pearson

World's Most Admired Companies 2015 (www.fortune.com)

Copyright 2012 Pearson

Philippines Most Admired Companies 208 (Wallstreet Asia Journal)

Copyright 2012 Pearson

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