Foundations of Control

1. Foundations of Control FOM12-1

2. Learning Outcomes • Define control • Describe three approaches to control • Explain why control is important • Describe the control process • Distinguish among the three types of control • Describe the qualities of an effective control system FOM12-2

3. Learning Outcomes(continued) • Identify contingency factors in the control process • Explain how controls can become dysfunctional • Describe how national differences affect the control process • Identify the ethical issues in employee monitoring FOM12-3

4. Control Process of monitoring activities to ensure that what is being accomplished matches plans and corrects significant deviations FOM12-4

5. Controlling Planning Planning- Controlling Linkage Leading Organizing FOM12-5

6. Purpose of Controls Goals and Objectives Organizational Divisional Departmental Individual • Measuring Performance • Comparing to Standards • Taking Corrective Action FOM12-6

7. Three Approaches to Control Systems Market Control Bureaucratic Control Clan Control FOM12-7

8. The Control Process Standard Attained? Do Nothing Yes Compare Performance to Standard No Variance Acceptable? Do Nothing Yes Objectives Measure Performance No Standard Identify Causes Standard Acceptable? Yes No Correct Performance Revise Standard FOM12-8

9. How Do Managers Measure? • Personal observations • Statistical reports • Oral reports • Written reports FOM12-9

10. Information Operations What Managers Measure Finances People FOM12-10

11. Discrepancies Between Goals and Performance Acceptable Upper Limit Acceptable Range of Variation Standard Acceptable Lower Limit t t+1 t+2 t+3 t+4 t+5 FOM12-11

12. CanuckBrew’s Sales for July(in hundreds of cases) Standard Brand Actual Over (Under) Propeller Big Rock Ale Okanagan Spring Garrison Oland’s Export McAuslan’s Granville Island Unibroue’s Nelson After Dark Total Cases 1,075 630 800 620 540 160 225 80 170 4,300 913 634 912 622 672 140 220 65 286 4,464 (162) 4 112 2 132 (20) (5) (15) 116 164 FOM12-12

13. Do Nothing Taking Managerial Action Immediate/Basic Corrective Action Revise the Standard FOM12-13

14. Three Types of Control Input Processes Output Feedforward Control Concurrent Control Feedback Control Anticipates problems Corrects problems as they happen Corrects problems after they occur FOM12-14

15. Feedback Control • Meaningful information • Enhance employee motivation FOM12-15

16. Qualities of an Effective Control System • Accurate • Timely • Economical • Flexible • Understandable FOM12-16

17. Qualities of an Effective Control System (continued) • Reasonable • Emphasis on exceptions • Strategic • Multiple criteria • Corrective action FOM12-17

18. Adjusting Controlsfor National Differences Distance and the Formality of Controls Technology and the Comparability of Data FOM12-19

19. FOM12-21

20. Invasion of Privacy

21. Employee Monitoring FOM12-22

22. E-Mail FOM12-23

23. Inform Employees Control and Ethics Written Policy Monitor for Business Reasons FOM12-24

24. Off-the-Job Behaviour FOM12-25