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MGMT1003 > Control > Flashcards

Control Flashcards

1
Q

What is control?

A

A regulatory process of establishing standards to achieve organisational goals, comparing actual performance against the standards and taking necessary corrective action to restore performance to those standards.

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2
Q

When is control achieved?

A

Achieved when behaviour and work procedures conform to standards and company goals are accomplished

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3
Q

What are the steps in the control process?

A
  • Establish standards
  • Comparison
  • Corrective action
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4
Q

In the control process, what are standards?

A

A basis of comparison for measuring the extent to which organisational performance is satisfactory or unsatisfactory.
Must be met to accomplish goals set by managers

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5
Q

What must be true of standards in the control process and how can they be determined?

A
  • Must enable goal achievement
  • Can be determined by listening to customers’ comments, complaints and suggestions, by observing competitors’ products and services, or by benchmarking
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6
Q

What is compared in the control process?

A

Actual performance to performance standards

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7
Q

What is true of comparison in the control process and what is an example of a way in which the information may be gathered?

A
  • The quality of comparison largely depends on the measurement and information systems a company uses to keep track of performance
  • Secret shoppers - customer service
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8
Q

The control process is a…

A

Dynamic, cybernetic process

Managers must repeat the entire process again and again in an endless feedback loop

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9
Q

In general, what are the methods of control in terms of timing?

A
  • Feedback control
  • Concurrent control
  • Feed-Forward control
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10
Q

What is feedback control?

A

A mechanism for gathering information about performance deficiencies after they occur

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11
Q

What is concurrent control?

A

A mechanism for gathering information about performance deficiencies as they occur, thereby eliminating or shortening the delay between performance and feedback

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12
Q

What is feed-forward control?

A
  • A mechanism for gathering information about performance deficiencies before they occur by monitoring inputs, not outputs
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13
Q

What is control loss?

A

The situation in which behaviour and work procedures so not conform to standards, preventing goal achievement

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14
Q

What are the considerations of the control process?

A
  • Regulation costs

* Cybernetic feasibility

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15
Q

What are regulation costs as it relates to the control process?

A
  • A cost associated with implementing or maintaining control

- Managers need to asses these when determining whether control is worthwhile

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16
Q

What is cybernetic feasibility as it relates to the control process?

A
  • The extent to which it is possible to implement each step in the control process
  • If one or more steps cannot be implemented, then maintaining effective control may be difficult or impossible
  • e.g. employee discount codes leaking online
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17
Q

What are the methods of control?

A
  • Bureaucratic control
  • Objective control
  • Normative control
  • Concertive control
  • Self-Control
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18
Q

What is Bureaucratic control?

A

The use of hierarchal authority to influence employee behaviour by rewarding or punishing employees for compliance or noncompliance with organisational policies, rules and procedures

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19
Q

What are the pros/cons of bureaucratic control?

A
  • By encouraging managers to apply well-thought-out rules, policies and procedures in an impartial, consistent manner, is supposed to make companies more efficient effective and fair
  • Perversely, it frequently has the opposite effect as managers who use this type of control often emphasises following the rules above all else
  • Due to the rule and policy driven decision making, can make companies highly resistant to change and slow to respond to environmental changes
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20
Q

What is objective control?

A

The use of observable measures of worker behaviour or output to assess performance and influence behaviour

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21
Q

What are the types of objective control?

A
  • Behaviour control

* Output Control

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22
Q

What is behaviour control and what is the logic behind it?

A
  • A type of objective control, involving the regulation of behaviours and actions that workers perform on the job
  • If you do the right things every day, then those things should lead to goal achievement
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23
Q

What is an example of behaviour control?

A

Tracking workers with GPS

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24
Q

What is output control?

A

A type of objective control, involving the regulation of workers’ results or outputs through rewards and incentives

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25
Q

What must be true for output control to be effective?

A
  • Measures must be reliable
  • Employees and managers must believe that they can produce desired results
  • The rewards and incentives tied to outcome control measures must truly be dependant on achieving established standards of performance
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26
Q

What are the pros/cons of output control?

A

Gives managers and workers the freedom to behave as they see fit as long as they accomplish pre-specified, measurable results

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27
Q

What is normative control?

A

The regulation of workers’ behaviour and decisions through widely shared organisational values and beliefs

28
Q

How is normative control implemented?

A
  • Companies are very careful about whom they hire - they are likely to screen applicants based on their attitudes and values
  • Managers and employees learn what they should and should not do by observing experienced employees and by listening to the stories they tell about the company
29
Q

What is concertive control?

A

The regulation of workers’ behaviour and decisions through work group values and beliefs

30
Q

How is concertive control implemented?

A
  • When companies give autonomous work groups complete autonomy and responsibility for task completion
  • The most autonomous groups operate without manages and are completely responsible for controlling work group processes, outputs and behaviour
  • Such groups do their own hiring, firing, worker discipline, work schedules, materials ordering, budget making and meeting and decision making
  • Team members must also make sure that their team members adhere to team values and rules
31
Q

In concertive control, what are the phases of work group development?

A
  • Group members learn to work with each other, supervise each other’s work and develop the values and beliefs that will guide and control their behaviour.
  • The emergence and formalisation of objective rules to guide and control behaviour. The beliefs and values established in phase one usually develop into more objective rules as new members join teams. The clearers the rules, the easier it becomes for new members to figure out how and how not to behave
32
Q

What are the pros/cons of concertive control?

A
  • Because workers develop their values and beliefs themselves, work group members fell strongly about following them
  • May lead to even more stress for workers to conform to expectations than bureaucratic control, as workers behaviour now has to satisfy the rest of their team members instead of only the boss
33
Q

What is self-control?

A

A control system in which managers and workers control their own behaviour by setting their own goals, monitoring their own progress and rewarding themselves for goal achievement

34
Q

How is self-control implemented?

A
  • Leaders and managers provide workers with clear boundaries within which they may guide and control their own goals and behaviours
  • They teach others the skills they need to maximise and monitor their own work effectiveness
35
Q

How do organisations decide what to control?

A

The balanced scorecard

36
Q

What is the balanced scorecard?

A

Measurement of organisational performance in four equally important areas: finances, customers, internal operations and innovation & learning

37
Q

What are the pros/cons of the balanced scorecard?

A
  • Forces managers at each level of an organisation to set specific goals and measure performance in each of the four ares
  • Minimises the chances of sub-optimisation, which occurs when performance improves in one area, but at the expense of decreased performance in others
38
Q

What are the perspectives of the balanced scorecard?

A
  • Financial perspective
  • Customer perspective
  • Internal perspective
  • Innovative and Learning perspective
39
Q

What does the financial perspective of the balanced scorecard address and through what mechanism does it do this?

A

How does the company look to shareholders?

Economic value added

40
Q

What is economic value added?

A

The amount by which company profits (revenues minus expenses & taxes) exceed the cost of capital in a given year

41
Q

What is the basis of using economic value added as a indicator of a company’s finances?

A
  • Based on the idea that capital is necessary to run a business and that capital comes at a cost
  • Most common costs of capital are interest paid on long term bank loans, the interest paid to bondholders and dividends
  • i.e. if a business is to truly grow, its revenues must be large enough to cover bother short and long term costs
42
Q

What are the pros/cons of using economic value added?

A
  • Because it includes the cost of capital, it shows whether a business, division, department, profit centre or product is really paying for itself
  • Because EVA can easily be determined for subsets of a company, such as divisions, regional offices, manufacturing plants and departments, it makes managers and workers at all levels pay much closer attention to their segment of the business
  • i.e. EVA motivates managers and workers to think like small-business owners who must scramble to contain costs and generate enough business to meet their bills each month
  • Doesn’t specify what should or should not be done to improve performance
43
Q

What is market value added?

A

Market value added (MVA) is the cumulative EVA created by a company over time - indicates how much value or wealth a company has created or destroyed in total during its existence

44
Q

How does economic value added provide an indication of a company’s finances when negative/positive?

A
  • Positive when profits exceed the costs of capital in a given year
  • If negative, then the company didn’t make enough profit to cover the cost of capital and it would have destroyed economic value or wealth by taking in more money than it returned
45
Q

What does the customer perspective of the balanced scorecard address and through what mechanism does it do this?

A

How do customers see us?

Customer defections

46
Q

What are the issues associated with collecting information concerning the customer perspective of the balanced scorecard?

A
  • Most customers are reluctant to provide feedback because they don’t know who to complain to or think that complaining will not do any good
  • Customer satisfaction surveys can be misleading because even very satisfied customers will leave to do business with competitors
47
Q

What are customer defections?

A

A performance assessment in which a company identifies which customers are leaving and measures the rate at which they are leaving

48
Q

What are the pros/cons of measuring customer defections?

A
  • Unlike satisfaction surveys, customer defections and retention do have a great effect on profits
  • Customers who have left are much more likely than current customers to voice their complaints
  • Companies that understand why customers leave can not only take steps to fix ongoing problems but can identify which customers are likely to leave and make changes to prevent them
49
Q

What does the internal perspective of the balanced scorecard address and through what mechanism does it do this?

A

At what must we excel? (quality control)

Quality goals

50
Q

What are the different quality controls and why is the choice of them important?

A
  • Excellence, value and conformance to expectations

- The way in which a company defines quality affects the methods and measures that workers use to control it

51
Q

What is the quality goal of excellence?

A

When a company defines its quality goal as excellence, then managers must try to produce a product or service of unsurpassed performance and features

52
Q

What are the pros/cons of the quality control of excellence?

A
  • Promotes clear organisational vision
  • Being/providing the “best” motivates and inspires managers and employees
  • Appeals to customers, who “know excellence when they see it”
  • Provides little practical guidance for managers
  • Excellence is ambiguous
  • Controlling the balance between excellence and cost can be difficult
  • Difficult to measure and control
53
Q

What is the quality control of value and how is this control implemented?

A
  • The customer perception that the product quality is excellent for the price offered
  • When a company emphasise value as it’s quality goal, managers must simultaneously control excellence, price, durability or other features of a product or service that customers strongly associate with value
54
Q

What are the pros/cons of the quality control of value?

A
  • Customers recognise differences in value
  • Easier to measure and compare whether products/services differ in value
  • Can be difficult to determine what factors influence whether a product/service is seen as having value
55
Q

What is the quality control of conformance to expectations (specifications)?

A

When a company defines its quality goal as conformance to expectations, employees must base decisions and actions on whether services and products measure up to standard specifications

56
Q

What are the pros/cons of the quality control of conformance to expectations (specifications)?

A
  • Measuring whether products and services are “in spec” is relatively easy
  • Whilst usually associated with manufacturing, it can be used equally well to control quality in non-manufacturing jobs
  • If specifications can be written, conformance to specification is usually measurable
  • Should lead to increased efficiency
  • Promotes consistency in quality
  • Many products/services cannot be easily evaluated in terms of conformance to specifications
  • Promotes standardisations, so may hurt performance when adapting to changes is important
  • May be less appropriate for services, which are dependant on a high degree of human contact
57
Q

What does the innovative and learning perspective of the balanced scorecard address and how does it do this?

A
  • Can we continue to improve and create value?
  • Involves continuous improvement in ongoing products and services as well as relearning and redesigning the processes by which products and services are created
58
Q

What is the main component of the innovative and learning perspective of the balanced scorecard?

A

Waste and pollution minimisation

59
Q

What are the stages of waste and pollution minimisation?

A
  • Waste disposal
  • Waste treatment
  • Recycle and Reuse
  • Waste prevention & reduction
60
Q

What is involved in the waste disposal stage of waste and pollution minimisation?

A

Wastes that cannot be prevented, reduced, recycled or treated should be safely disposed of in processing plants or in environmentally secure landfills that prevent leakage and contamination of soil and underground water supplies

61
Q

What is involved in the waste treatment stage of waste and pollution minimisation?

A

Companies use biological, chemical or other processes to turn potentially harmful waste into harmless compounds or useful by-products

62
Q

What is involved in the recycle and revise stage of waste and pollution minimisation?

A
  • Wastes are reduced by reusing materials as long as possible or by collecting materials for on or off site recycling.
  • Growing trend if design for reassembly, where products are designed from the start for easy disassemble, recycling and reuse.
63
Q

What is the waste prevention and reduction stage of waste and pollution minimisation?

A

To prevent waste and pollution before they occur or to reduce them when they do occur

64
Q

What are the strategies for the waste prevention and reduction stage of waste and pollution minimisation?

A
  • Good housekeeping
  • Material/Product substitution
  • Process modification
65
Q

What is the good housekeeping technique in the waste prevention and reduction stage of waste and pollution minimisation?

A
  • Performing regularly scheduled preventive maintenance for offices, factories and equipment
  • e.g. quickly fixing leaky valves and making sure machines don’t use more energy then they need to
66
Q

What is the material/product substitution technique in the waste prevention and reduction stage of waste and pollution minimisation?

A

Replacing toxic or hazardous materials with less harmful ones

67
Q

What is the process modification technique in the waste prevention and reduction stage of waste and pollution minimisation?

A

Changing steps or procedures to reduce waste

MGMT1003 (14 decks)

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