BOH4M0 Management Leadership

1. BOH4M0Management Leadership Chapter 8: Planning & Controlling

2. Chapter Overview • How and Why Managers Plan • Types of Plans Used by Managers • Planning Tools and Techniques • The Planning Process • Organizational Controls

3. Organizational ControlsOverview • Management by Objectives • Employee Discipline Systems • Information and Financial Controls • Break-Even Analysis • Operations Management & Control

4. Organizational ControlsManagement by Objectives • “New” School—Y Theory Approach • Process whereby a manager and direct report jointly set goals • Goals set using “SMART” criteria • Process: • Goals jointly set goals (yearly, quarterly) • Employee attempts to achieve the goals, manager supports where needed • Jointly discuss results and impact on next cycle of planning

5. Organizational ControlsManagement by Objectives • Goals are same or similar to the ones we set for BOH: • Increase sales by 10% • Make 50 sales calls per week • Reduce manufacturing defects by 5% • Improve employee relations (often gets translated to a measurable activity like “Hold staff meetings once per week”)

6. Organizational ControlsManagement by Objectives • Pros: • Easy to manage to • Good relationship builder • Identifies key tasks to make things happen • Cons: • Some goals are really hard to measure

7. Organizational ControlsEmployee Discipline Systems • Discipline: the act of influencing behaviour through reprimand • Absenteeism • Lateness • Sloppy work • Missing deadlines • Falsifying records • Sexual harassment • Embezzlement

8. Organizational ControlsEmployee Discipline Systems • Progressive Discipline: tying reprimands to the severity and frequency of misbehavior • Absenteeism • Lateness • Sloppy work • Missing deadlines • Falsifying records • Sexual harassment • Embezzlement

9. Organizational ControlsEmployee Discipline Systems • Stages: • Discussion • Verbal Warning • Written Warning • Dismissal

10. Organizational ControlsEmployee Discipline Systems • Examples: • Inappropriate conduct/language—Verbal Warning • Viewing inappropriate web sites—Written warning • Lying/Theft/Extreme Behaviour—immediate dismissal

11. Organizational ControlsInformation & Financial Controls • Accounting: • Liquidity: Current Ratio • Current Assets / Current Liabilities • Higher the better • Leverage: Debt Ratio • Total Debt / Total Assets • Lower the better • Profitability: Return on Investment • Net Profit After Taxes / Total Assets • Higher the Better

12. Organizational ControlsBreak-Even Analysis • The point at which sales revenue will cover cost • BEP = Fixed Cost / (Price – Variable Cost) • How many will it take? • How long will it take to sell that many? • Use spreadsheets to play with different scenarios—small changes to one or more of the variables can have big impact

13. Organizational ControlsOperations Management and Control • Purchasing Control • Reduce costs by centralizing—bigger purchases lead to a bulk discount • Reduce defects by having supplier guarantee goods • Inventory Control • Economic Order Quantity • Just-in-Time Scheduling (JIT) • Using computers to keep track of how much is being used, when more will be needed and how much to order

14. Organizational ControlsOperations Management and Control • Statistical Quality Control • Checking processes, materials, products and services to ensure that they meet set standards • From selection of raw materials to sale and delivery of the final product • Statistics and sampling • Product inspections • Six Sigma: 99.9997% Defect Free