The process whereby managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals.
Formal target setting, monitoring, evaluation, and feedback systems that provide managers with information about how well the organization's strategy and structure are working.
Control that gives managers immediate feedback on how efficiently inputs are being transformed into outputs so that managers can correct problems as they rise.
Control that gives managers information about customers' reactions to goods and services so that corrective action can be taken if necessary.
The control process
Step 1: establish the standards of performance, goals, or targets against which performance is to be evaluated.
Step 2: Measure actual performance.
Step 3: Compare actual performance against chosen standards of performance.
Step 4: Evaluate the result and initiate corrective action if the standard is not being achieved.
Measure how efficiently managers are using the organization's resources to generate profits.
Measure how well managers have protected organizational resources to be able to meet short term obligations.
Measure the degree to which managers use debt or equity to finance ongoing operations.
A budget that states how managers intend to use organizational resources to achieve organizational goals.
Management by objectives
Rules and standard operating procedures
Involves the management of costs and expenses in order to control them in relation to budgeted amounts.
Operating budgets: profit
Difference between revenues generated and the budgeted costs of making those goods and services.
Actively monitor and observe the behavior of their subordinates. Teach subordinates & reinforce the behaviors that are appropriate and inappropriate. Intervene to take corrective action as needed.
Problems with direct supervision
Very expensive, Can demotivate subordinates, Might not be feasible, Privacy issues.
Problems with bureaucratic control
Easy to make rules, hard to discard them. Firms become too standardized. Incompatible with innovation.
The set of values, norms, standards of behavior, and common expectations that controls the ways in which individuals and groups in an organization interact with one another and work to achieve organizational goals.
The control exerted on individuals and groups in an organization by shared values, norms, standards of behavior, and expectations.
Organizational change process
Assessing the need to change, deciding on what change to make, Implement the change, evaluate the change
Assessing the need to change
Recognizing that there is a problem and identify the source of the problem.
Deciding on what change to make
Decide what the ideal future state would be and identify obstacles to change.
Reducing obstacles to change
Improve communication, emphasizing group or shared goals and empowering employees
Implement the change--Top to down
Quicker to implement. Top managers identify the need to change, decide what to do, and the move quickly to implement it.
Implement the change--Bottom to up
Is more gradual. Top managers consult with middle and first line managers. Develop a plan for change. Reduces resistance from employees.
Evaluate the change--compare pre change to post change
Using various performance measures: market share, profits, or the ability of the managers to meet their goals.