Management Organization

One behavior of concern to businesses that is related to control is employee use of the Internet during business hours for personal reasons, e.g., shopping, personal email, watching movies, etc.

Evaluate whether control in this area is worthwhile and determine which kind of control method is appropriate. Discuss each of the five control methods contained in Section 16-2 as to how each would or would not be appropriate for this situation.

Are there companies for which it would be more important to implement strict internet-use controls? What type of company and why.

Before responding to this assignment, review the definition of control. Keep in mind that personal use of the internet during business hours results in a loss of productivity, thus has cost implications for the company.

The format must follow the guidelines listed below:
A number of you have been ignoring these guidelines so please get on board.
1. The assignment must be typed using 12-point font. You must use either Times New Roman or Arial font.
2. 1-inch margins
3. Single spaced
4. Double space between paragraphs
5. One-page limit
6. Spell and grammar check your document. No more than five (5) errors in spelling, punctuation, grammar, etc., will be accepted and points will be deducted. More than five (5) errors will result in 0 points.
7. Your name, assignment name and date must be placed at the top of the page using the Word header function.
8. This must be your own original individual work.

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and key terms the definition of the key term in a separate file  

Control

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Control

16

1

Describe the basic control process

Discuss the various methods that managers can use to maintain control

Describe the behaviors, processes, and outcomes that today’s managers are choosing to control in their organizations

Learning Outcomes

LEARNING OUTCOMES

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2

Control versus Standards

Regulatory process of establishing standards to achieve organizational goals, comparing actual performance against the standards, and taking corrective action when necessary

Control

Basis of comparison for measuring the extent to which various kinds of organizational performance are satisfactory or unsatisfactory

Standards

LO 1

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3

Setting Standards

Standards are determined by:

Ensuring whether they enable goal achievement

Listening to customer feedback

Benchmarking

Involves:

Identifying the company against which to benchmark those standards

Collecting data to determine performance standards of other companies

LO 1

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4

Comparison to Standards and Corrective Action

Comparison to standards

Quality of comparison between actual performance and actual standards depends on the organization’s measurement and information systems

Corrective action

Involves identifying performance deviations, analyzing those deviations, and developing and implementing programs to correct them

LO 1

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5

16.1 Cybernetic Control Process

LO 1

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Exhibit

6

Basic Control Mechanisms

Gathers information about performance deficiencies after they occur and uses the same information to correct or prevent performance deficiencies

Feedback control

Gathers information about performance deficiencies as they occur, thereby eliminating or shortening the delay between performance and feedback

Concurrent control

Monitors performance inputs to minimize performance deficiencies before they occur

Feedforward control

LO 1

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7

Maintaining Control

Control loss: Occurs when behavior and work procedures do not conform to standards

To determine if control is worthwhile, managers must carefully assess:

Regulation costs: Associated with implementing or maintaining control

Cybernetic feasibility: Extent to which it is possible to implement each step in the control process

LO 1

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8

Control Methods

Bureaucratic control

Objective control

Normative control

Concertive control

Self-control

LO 2

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9

Bureaucratic Control

Use of hierarchical authority to influence employee behavior

Involves rewarding or punishing employees for compliance or noncompliance with organizational rules, policies, and procedures

Characteristics

Emphasis on following rules and policies

Higher resistance to change and slower response to competitors and customers

LO 2

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Objective Control

Use of observable measures of worker behavior or outputs to assess performance and influence behavior

Types

Behavior control: Regulation of behaviors and actions that workers perform on the job

Output control: Regulation of workers’ results via rewards and incentives

LO 2

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Normative Control

Regulation of workers’ behavior and decisions through widely shared organizational values and beliefs

Created in two ways

Hiring based on attitudes and values

Managers and employees learning about what should and shouldn’t be done by observing and listening to stories recited by experienced personnel

LO 2

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Concertive Control

Regulation of workers’ behavior and decisions through work group values and beliefs

Arises when firms assign work groups complete autonomy and responsibility for task completion

Leads to more stress for workers to conform to expectations than bureaucratic control

LO 2

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Self-Control or Self-Management

Managers and workers control their own behavior by:

Setting their own goals

Monitoring their own progress

Rewarding or punishing themselves for achieving or for not achieving their self-set goals

LO 2

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Balanced Scorecard

Measurement of organizational performance in the following areas:

Finances

Customers

Internal operations

Innovation and learning

LO 3

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15

Balanced Scorecard – Advantages

Forces managers to set specific goals and measure performance in the four areas

Minimizes the chances of suboptimization

Suboptimization: Improved performance in one part of an organization at the expense of decreased performance in another part

LO 3

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16

Controlling Finances

Cash flow analysis

Balance sheets

Income statements

Financial ratios

Budgets

Economic value added (EVA)

LO 3

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17

Economic Value Added (EVA)

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

Cost of capital shows whether a business, division, department, profit center, or product is really paying for itself

Makes managers and workers at all levels pay closer attention to their segment of the business

LO 3

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Controlling Customer Defections

Customer defections: Performance assessment in which companies:

Identify which customers are likely to leave

Measure the rate at which customers are leaving

LO 3

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19

Controlling Customer Defections (continued)

Advantages

Impact on retention of profits

Higher likelihood of receiving honest feedback

Ability to determine who will leave and prevent it from happening

LO 3

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16.5 Advantages and Disadvantages of Different Measures of Quality

LO 3

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Exhibit

21

Innovation and Learning Perspective

Involves:

Continuous improvement in ongoing services and products

Relearning and redesigning creation processes

LO 3

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22

Innovation and Learning Perspective (continued)

Maximizing sustainability

Levels of sustainability – Waste prevention and reduction; recycle and reuse; waste treatment; and waste disposal

LO 3

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Key Terms

Control

Standards

Benchmarking

Cybernetic

Feedback control

Concurrent control

Feedforward control

Control loss

Regulation costs

Cybernetic feasibility

Bureaucratic control

Objective control

Behavior control

Output control

Normative control

Concertive control

Self-control (self-management)

Balanced scorecard

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KEY TERMS

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Key Terms (continued)

Suboptimization

Cash flow analysis

Balance sheets

Income statements

Financial ratios

Budgets

Zero-based budgeting

Economic value added (EVA)

Customer defections

Value

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KEY TERMS (continued)

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Summary

Control is achieved when behavior and work procedures conform to standards and when company goals are accomplished

Managers use five different methods to achieve control in their organizations

Successful companies find a balance that comes from doing three or four things right

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HIST4 | CH6

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SUMMARY

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Chapter 16 –

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