Control Flashcards
Define Controlling
Monitoring progress toward goal achievement and taking corrective action when needed.
Explain the Steps of the Control Process
Standards: A basis of comparison for measuring the extent to which various kinds of organisational performance are satisfactory or unsatisfactory. Standards are set to achieve goals.
Benchmarking: The process of identifying outstanding practices, processes and standards in other companies and adapting them to your company.
Compare actual performance to standards.
Make corrective changes to return to performance standards.
Control is a continuous, dynamic and cybernetic process.
Feedback Control
A mechanism for gathering information about performance deficiencies after they occur.
Concurrent Control
A mechanism for gathering information about performance deficiencies as they occur, thereby eliminating or shortening the time between performance and feedback.
Feed-Forward Control
A mechanism for monitoring performance inputs rather than outputs to prevent or minimise performance deficiencies before they occur.
Is Control Worthwhile?: Control Loss
Control loss: The situation in which behaviour and work procedures do not conform to standards.
Is Control Worthwhile?: Regulation Cost
Regulation Cost: A cost associated with implementing control.
Is Control Worthwhile?: Cybernetic Feasibility
Process of keeping on course. The extent to which it is possible to implement each step in the control process.
Control Methods: Bureaucratic Control
The use of hierarchal authority to influence employee behaviour but rewarding employees for complying with policies or rules of the organisation.
Objective is to make companies more efficient and fair, however is can often have the opposite effect.
Control Methods: Objective Control
The use of observable measures of employee behaviour or outputs to assess performance and influence behaviour.
Focuses on the observation or measurement of worker behaviour or output.
○ Behaviour control: The regulation of the behaviours and actions that workers perform on the job.
Output control: The regulation of workers’ results or outputs through rewards and incentives.
Control Methods: Normative Control
The regulation of employee’s behaviour and decisions through wifely shared organisation values and beliefs.
Created by carefully considering whom they hire and managers/employees learning what they should and should not do by observing experienced employees by listening to the stories they tell about the company.
Control Methods: Concertive Control
The regulation of workers’ behaviour and decisions through work group values and beliefs.
The first phase is that group members learn to work with each other and develop the values that will guide their behaviour.
The second phase is the emergence of objective rules to guide and control behaviour.
Control Methods: Self-Control
A control system in which managers and workers control their own behaviour by setting their own goal, monitoring their own progress and rewarding themselves for goal achievement.
What to Control: Balanced Scorecard
○ Measurement of organisation performance in finances, customers, internal operations and innovation & learning.
○ Looks beyond traditional measures
○ Forces managers to set specific goals and measure performance in each of the four areas.
What to Control: Finances
○ Cash flow analysis: Predicts how changes in a business will affect its ability to take in more cash than it pays out.
○ Balance sheets: Snapshot of a companies financial position at a particular time.
○ Income statement: Accounting statement that shows what is happening to an organisation’s income, expenses and net profit over a period of time.
○ Financial Ratio: Track the cash of business, efficiency and profitability over time compared to others in the industry.
○ Budget: A plan in which managers allocate money to best accomplish goals.
Economic Value Added: The amount by which company profits exceed the cost of capital in a given year.
