Controlling the Organization: The Role and Process of Control

1. Lecture # 21 Chapter 16 – Controlling the Organization

2. Control as a Management Function • Controlling: process of regulating organizational activities so actual performance conforms to expected organizational standards and goals. • Control System: Set of mechanisms designed to increase probability of meeting organizational standards and goals.

3. Significance of the Control Process Controlling function is related to the other 3 management functions: planning, organizing and leading. • It builds on the planning function by allowing monitoring and adjusting performance so plans can be reached. • It also supports organizing and leading functions by ensuring resources are used for organizational objectives.

4. Role of Control Control can help managers avoid the following problems: • Coping with uncertainty (customer demand, technology and raw material availability). • Detecting irregularities (poor quality, cost overruns or staff turnover). • Identifying opportunities • Handling complex situations • Decentralizing authority

5. Levels of Control • Strategic control: managers monitor critical environmental factors which could affect viability of strategic plans, assessing effects of organizational strategic actions, and ensuring strategic plans are implemented. • Tactical control: this focuses on assessing implementation of tactical plans at department levels, monitoring and taking corrective actions.

6. Operational control: it helps in overseeing implementation of operating plans, monitoring day to day results, and taking corrective actions as required.

7. The Control Process • Determine areas to control • Establish standards (goal incongruence) • Measure performance • Compare performance against standards (management by exception) 5. A Recognize positive performance 5. B Take corrective actions as necessary 6. Adjust standards and measures as necessary

8. 4 Conditions for Control First two conditions refer to whether controls are needed or not, and second two assess whether control is feasible and practical. • High dependence on the resource • Strong chance expected resource flow will be unacceptable • Ensure the control process feasibility • Ensure cost acceptability

9. Types of Control • Feed forward: regulation of inputs to ensure they meet standards necessary for the transformation process. • Concurrent: regulation of ongoing activities which are part of the transformation process to ensure they conform to organizational standards. • Feedback: regulation exercised after a product or service has been completed to ensure the final output meets standards and goals.

10. Multiple controls • Multiple control systems: systems using two or more of the feedforward, concurrent and feedback control processes and involving several strategic control points. • Strategic control points: performance areas chosen for control because they are important in meeting organizational goals.

11. Cybernetic & Non-cybernetic • Cybernetic control system: self-regulating control system which, once operating, can automatically monitor the situation and take corrective actions when necessary. • Non-cybernetic control system: control system relying on human discretion as a basic part of its process.

12. Managerial Approaches to Implementing Control • Bureaucratic control: approach relying on regulation through rules, policies, supervision, budgets, schedules, reward system, and other administrative mechanisms aimed at ensuring employees exhibit appropriate behaviors and meet performance standards. (table 16.1) • Clan control: managerial approach relying on values, beliefs, traditions, corporate culture, shared norms, and informal relationships to regulate employee behaviors and facilitate reaching of organizational goals.

13. Market control: approach relying on market mechanisms to regulate prices for certain clearly specified goods and services needed by an organization.

14. Dysfunctional Aspects of Control Systems • Behavioral displacement: condition in which individuals engage in behaviors encouraged by controls and reward systems though they are inconsistent with organizational goals. • Game playing • Operating delays • Negative attitudes

15. Overcontrol Vs. Undercontrol • Over control: limiting individual job autonomy to the point where it seriously inhibits effective job performance. • Under control: granting autonomy to an employee to the point where the organization loses its ability to direct individual effort towards achieving.

16. Charactertics of an Effective Control System • Future oriented • Multi-dimensional • Cost effective • Accurate • Realistic • Timely • Monitorable • Acceptable to organization members • Flexible

17. Lecture # 22 Chapter 17 – Managing Organizations through Change & Conflict

18. The Change Cycle • Performance gap • Identify a desired future • Recognize need for change • Problem diagnosis • Development of alternatives • Selection of appropriate alternatives • Implementation • Evaluation against desired outcomes

19. Why Individuals resist change • Self interest • Misunderstanding and lack of trust • Differential assessment • Some individuals have low tolerance for change

20. Overcoming Resistance to Change • Education & communication • Participation & involvement • Facilitation & support • Negotiation & agreement • Manipulation & co-optation • Explicit & implicit coercion

21. Force-field analysis: it analyses two types of forces, driving and restraining forces, that influence any proposed change, then assessing how best to overcome resistance. • Driving forces: factors pressuring for a particular change. • Restraining forces: factors pressuring against a change.

22. Managing Conflict Conflict: perceived difference between two or more parties resulting in mutual opposition.

23. Causes of Conflict • Communication factors • Structural factors • Size • Participation • Line-staff distinctions • Reward systems • Resource interdependence • Task interdependence

24. Power • Personal behavior factors • Communication styles • Workforce diversity • Reward structures • Differences in perceptions • Increased demand for specialists

25. Reducing & Resolving Conflict • Changing situational factors • Appeal to superordinate goals • Use an interpersonal conflict-handling mode • Avoidance • Accommodation • Competition • Compromise • collaboration

26. Types of Intergroup Conflict • Functional conflict: confrontation between groups which enhances and benefits organizational performance. • Dysfunctional conflict: confrontation or interaction between groups that is harmful to the organizations or hindering goal achievement.