Chapter 18-(Management and Business). Monitoring and Controlling

Chapter 18-(Management and Business).  Monitoring and Controlling

A.      What Is Controlling and Why Is It Important?

Controlling is the process of monitoring, comparing, and correcting work performance. All managers should control even if their units are performing as planned because they can’t really know that unless they’ve evaluated what activities have been done and compared actual performance against the desired standard. Effective controls ensure that activities are completed in ways that lead to the attainment of goals. Whether controls are effective, then, is determined by how well they help employees and managers achieve their goals.

B.      The Control Process

The control process is a three-step process of measuring actual performance, comparing actual performance against a standard, and taking managerial action to correct deviations or to address inadequate standards.

1.       Step 1: Measuring Actual Performance

2.       Step 2: Comparing Actual Performance Against the Standard

3.       Step 3: Taking Managerial Action

C.      Controlling for Organizational and Employee Performance

1.       What Is Organizational Performance?

Performance is all of these things. It’s the end result of an activity. And whether that activity is hours of intense practice before a concert or race or whether it’s carrying out job responsibilities as efficiently and effectively as possible, performance is what results from that activity. Managers are concerned with organizational performance the accumulated results of all the organization’s work activities.

2.       Measures of Organizational Performance

Commonly used ones include organizational productivity, organizational effectiveness, and industry rankings.

3.       Controlling for Employee Performance

Since managers manage employees, they also have to be concerned about controlling for employee performance; that is, making sure employees’ work efforts are of the quantity and quality needed to accomplish organizational goals.

D.      Tools for Measuring Organizational Performance

1.       Feedforward/Concurrent/Feedback Controls

Managers can implement controls before an activity begins, during the time the activity is going on, and after the activity has been completed. The first type is called feedforward control; the second, concurrent control; and the last, feedback control.

2.       Financial Controls

Every business wants to earn a profit. To achieve this goal, managers need financial controls. Budgets are planning and control tools. When a budget is formulated, it’s a planning tool, because it indicates which work activities are important and what and how much resources should be allocated to those activities.

3.       Information Controls

Talk about the need for information controls. Managers deal with information controls in two ways: (1) as a tool to help them control other organizational activities and (2) as an organizational area they need to control.

4.       Balanced Scoreard

The balanced scorecard approach is a way to evaluate organizational performance from more than just the financial perspective. A balanced scorecard typically looks at four areas that contribute to a company’s performance: financial, customer, internal processes, and people/innovation/growth assets.

5.       Benchmarking of Best Practices

Managers in such diverse industries as health care, education, and financial services are discovering what manufacturers have long recognized the benefits of benchmarking, which is the search for the best practices among competitors or noncompetitors that lead to their superior performance. Benchmarking should identify various benchmarks, the standards of excellence against which to measure and compare.

E.       Contemporary Issues in Control

1.       Adjusting Controls for Cross-Cultural Differences and Global Turmoil

The concepts of control that we’ve been discussing are appropriate for an organization whose work units are not geographically separated or culturally distinct. But control techniques can be quite different for different countries. The differences are primarily in the measurement and corrective action steps of the control process.

2.       Workplace Concerms

Today’s workplaces present considerable control challenges for managers. From monitoring employees’ computer usage at work to protecting the workplace against disgruntled employees intent on doing harm, managers need controls to ensure that work can be done efficiently and effectively, as planned.

3.       Workplace Violence

These factors contribute to workplace violence : an uncertain economic environment, job uncertainties, declining value of retirement accounts, long hours, information overload, other daily interruptions, unrealistic deadlines, and uncaring managers play a role.

4.       Controlling Customer Interactions

There’s probably no better area to see the link between planning and controlling than in customer service. If a company proclaims customer service as one of its goals, it quickly and clearly becomes apparent whether that goal is being achieved by seeing how satisfied customers are with their service

A service profit chain is the service sequence from employees to customers to profit. According to this concept, the company’s strategy and service delivery system influence how employees deal with customers; that is, how productive they are in providing service and the quality of that service.

5.       Corporate Governance

Corporate governance, the system used to govern a corporation so that the interests of corporate owners are protected, failed abysmally at Enron, as it has at many companies caught in financial scandals. In the aftermath of these scandals, corporate governance has been reformed. Two areas where reform has taken place are the role of boards of directors and financial reporting.