Controlling

Question 1

definition of controlling

Answer 1

monitoring activities to ensure they are being accomplished as planning and to correct significant deviations in order to meet org goals

work of taylor, fayol, weber - concerned with the control of employees for this purpose, e.g. scientific mgmt, lines of authority, formalisation

Question 2

importance of controlling

Answer 2

1) planning - make sure goals are being achieved in the intended manner, and know how to take future action (correct or move on)
2) empower employees - providing info and feedback on performance can empower those with delegated authority and reduce the risk of delegation for responsible managers
3) protect the workplace - controls to prevent security incidents and other disruptions, as well as contingency plans to minimise impact

Question 3

steps of the control process

Answer 3

1) set standards for performance
2) measure performance
3) compare actual performance against standard
4) take managerial action

Question 4

planning-controlling link

Answer 4

1) planning - objective, strategies, tactics
2) organising - structure, HRM
3) leading - motivate, lead, communicate
4) controlling - setting standards then MCA

Question 5

how to measure performance

Answer 5

1) personal observation
2) statistical reports
3) self-monitoring computers
4) oral reports
5) written reports

Question 6

what to measure

Answer 6

• some control criteria for any situation e.g. employee satisfaction/turnover/absenteeism; costs within budget
• most others need to be situation and business specific - e.g. for a pizza business - number delivered per day, delivery time, number of coupons redeemed

Question 7

comparing performance against the standards

Answer 7

• determine a range of variation - acceptable parameters of variance between actual performance and the standard
• only if significant (determine what this is), will need to take action

Question 8

taking action

Answer 8

1) correct performance - either immediate corrective or basic corrective action
2) revise the standard - if unrealistically high or low. Revising downwards is risky because it may lead to complacency. Manager needs to decide whether or not to hold ground

Question 9

immediate and basic corrective action

Answer 9

immediative - corrects problems at once and gets performance back on track

basic - looks at how and why performance deviated to understand what needs to be corrected

immediative done when managers think they ‘don’t have time’ but basic must be done to permanently correct significant performance deviations PROVIDED benefits of doing so outweigh costs

Question 10

what is organisational performance

Answer 10

the accumulated results of all the organisation’s work activities

Question 11

measures of org performance

Answer 11

1) productivity
2) effectiveness - how appropriate org goals are and how well they’re met
3) industry and company rankings - lists on specific performance measures e.g. Fortune’s Best Companies to Work For on employee satisfaction

Question 12

productivity

Answer 12

= output/inputs

outputs = selling price*number sold

• mgmt must increase this ratio; easiest way is increasing price but not easy as price competitiveness becomes more important esp in some industries like retail

Question 13

controlling employee performance

Answer 13

1) effective feedback
2) disciplinary action - used if feedback is ineffective; should be progressive disciplinary action (moves sequentially through steps to ensure the minimum penalty to an offense is imposed)

Question 14

progressive disciplinary action

Answer 14

typically 5 steps: oral warning, initial written warning, final written warning, termination review/suspension, dismissal

is most likely to succeed in claims of unfair dismissal if behaviour and disciplinary actions have been carefully documented and followed steps in order

Question 15

tools to measure organisational performance

Answer 15

1) feedfoward, concurrent and feedback controls
2) information controls
3) financial controls
4) balanced scorecard
5) benchmarking

Question 16

feedforward, concurrent, feedback concurrent

Answer 16

FF - takes place before a work activity is done to prevent problems rather than resolving them and incurring the costs of damage e.g. poor quality products, lost custom and revenue. Not always easy and may have to rely on CC and FB

CC - takes place while a work activity is in progress, e.g. quality assurance procedures during car assembly, to correct problems before they become too costly Most common form is direct supervision by first-line mgmt

FB - takes place after work activity is done, e.g. quality control in manufacturing. Problems are only found after they have occurred and costs of waste/damage/reputation already incurred, but may be only viable form of control e.g. very short production process

EGs:

FF - procedure for making cheeseburgers at McD
CC -
FB -

Question 17

pros of feedback control

Answer 17

1) gives managers info on how effective planning efforts were by showing performance deviations and lets them know how to revise plans
2) can enhance motivation by letting employees know how well theyre doing and how to improve

Question 18

financial controls

Answer 18

these help businesses to achieve their objectives profit and are either RATIOS or BUDGETS

Ratios:

1) liquidity - current and acid test
2) leverage - gearing and times interest earned
3) activity - inventory turnover; asset turnover
4) profitability - profit margin on sales; ROI

Budgets:

• both planning (how much resources should be allocated to diff work activities) and control tools (measure variances and understand reasons to take action)

read what each ratio tells you

Question 19

information controls

Answer 19

Using info to control performance

1) Management information systems - source of info (not raw data!) needed on a regular basis about activities in concerned area; standards; range of variation; to help develop courses of action

Controlling the use of info

1) protect info used to control performance e.g. firewalls, data backups, data encryption. Online sources like search engines and social media may contain leaked sensitive or defamatory info

Question 20

balanced scorecard

Question 21

benchmarking

Answer 21

identifying, analysing and adopting best practices from other organisations (external) or departments within the same org (internal) that lead to superior performance

using benchmarks (standard of excellence against to measure and compare) helps to identify specific performance gaps and gains independent perspective on performance (if external)

read AL flashcards

Question 22

suggestions for internal benchmarking

Answer 22

1) strategies and objectives should dictate what types of best practices to focus on
2) develop best practices knowledge-sharing and reward and recognition systems
3) communicate best practices throughout org
4) nurture org culture of ‘we can learn from everyone’ to encourage improvement and sharing information

Question 23

contemporary issues in control

Answer 23

1) social media as a control tool
2) global differences
3) privacy
4) employee theft
5) corporate governance

Question 24

social media as a control tool

Answer 24

• leverage the growing number of customers, clients and citizens on social media to gather information (flooding!) and feedback (e.g. quality)

Question 25

global differences

Answer 25

measurement and correction steps of control process differ

1) MNCs - distance means more formalised control and extensive formal reports to measure performance
2) more technologically developed nations use more indirect control devices like computer generated reports in addition to standardised rules and direct supervision
3) some laws prohibit closing facilities, laying off employees or bringing in new mgmt team from out of the country
4) comparability - e.g. labour costs per unit b/w scottish manufacturers using more tech than cambodia due to higher labour costs
5) must have feedforward controls to protect workers and other assets during times of global turmoil e.g. conflict in ME

Question 26

workplace privacy

Answer 26

reasons for monitoring:

1) recreational use of the internet costs billions of dollars in lost productivity
2) offensive messages/inappropriate media may lead to lawsuits for hostile work environment
3) ensure company secrets aren’t being leaked

however, employees may react negatively to constant surveillance - must be done respectfully and transparently

Question 27

employee theft

Answer 27

unauthorised taking of company property for personal use

can be tackled with various forms of FF (e.g. prehiring screening, educate on anti-theft policies), CC (treat employees with respect, video/remote surveillance) and FB control (mention incidents and reiterate severity; review culture/managerial relationships with employees)

Question 28

corporate governance

Answer 28

system used to govern a corporation to protect the interests of corporate owners (shareholder value)

• changing role of BOD - greater pressure to act responsibly and increase accountability
• increased scrutiny and transparency of financial reporting and audit
• compliance offices - systems to ensure an org conducts businss in full compliance with all internal and national laws and regulations