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Chapter 8


process where managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve organizational goals

Control Systems

formal, target-setting, monitoring, evaluation, and feedback systems that provide managers with information about how well the organizations strategy and structure are working

A Good Control System Should...

-be flexible so managers can respond as needed
-provide accurate information about the organization
-provide information in a timely manner

Types of Control

control that allows managers to anticipate problems before they arise

Types of Control

give managers immediate feedback on how efficiently inputs are being transformed into outputs so that managers can correct problems as they arise

Types of Control

control that gives managers information about customers' reactions to goods and services so that corrective action can be taken if necessary

Four Steps to Organizational Control

1. establish the standards of performance, goals, or targets against which performance is to be evaluated
2. measure actual performance
3. compare actual performance against chosen standards of performance
4.evaluate the result and initiate corrective action if the standard is not being achieved

Output Control

financial measures of performance
organizational goals
operating budgets

Behavior Control

direct supervision
management by objectives
rules and standard operating procedures

Organizational Culture/Clan Control


Organizational Goals should be SMART


Operating Budget

a blueprint that states how managers intend to allocate and use the resources they control to attain organizational goals effectively and efficiently

Problems with Output Control

managers must create output standards that motivate at all levels
standards should not cause managers to behave in inappropriate ways to achieve organizational goals

Direct Supervision (Behavior Control)

managers who: actively monitor and observe the behavior of their subordinates
teach subordinates the behaviors that are appropriate and inappropriate
intervene to take corrective action as needed

Management by Objectives (MBO)

a goal setting process in which managers and subordinates negotiate specific goals and objectives for the subordinate to achieve and then periodically evaluate their attainment of those goals

Bureaucratic Control

control through a system of rules and standard operating procedures (SOP) that shapes the behavior of divisions, functions, and individuals

Problems with Bureaucratic Control

rules easier to make than discarding them, leading to bureaucratic "red tape" and slowing organizational reaction times to problems
firms become too standardized and lose flexibility to learn, to create new ideas and solve to new problems

Organizational Culture

the shared set of beliefs, expectations, values, norms, and work routine that influence how members of an organization interact with one another and work together to achieve organizational goals

Clan Control

control exerted on individuals and groups in an organization by shared values, norms, standards or behavior and expectations

Adaptive Culture

cultures whose values and norms help an organization to build momentum and to grow and change as needed to achieve its goals and be effective

Inert Culture

culture that leads to values and norms that fail to motivate or inspire employees

Organization Change

movement of an organization away from its present state and toward some desired future state to increase its efficiency and effectiveness

Why People Resist Change

Fear of losing something of value
Individual Resistance
Fear of the Unknown
Belief that change is not good for the organization

Reducing Resistance to Change

Education and Communication
Facilitation and Support
Manipulation and Co-optation

Steps in the Organizational Process
----Assess the Need for Change

recognize that there is a problem
identify the source of the problem

Steps in the Organizational Process
----Decide on the Change to Make

decide what the organization's ideal future state would be
identify obstacles to change

Steps in the Organizational Process
----Implement the Change

decide whether change will occur from the top down or from the bottom up

introduce and manage change

Steps in Organizational Process
----Evaluate the Change

compare prechange performance with postchange performance

use benchmarking

Organizational Learning

process through which managers try to increase organizational members' abilities to understand and appropriately respond to changing conditions

Top-Down Change

a fast, revolutionary approach to change in which top managers identify what needs to be changed, decide what to do, and then move quickly to implement changes throughout the organization

Bottom-Up Change

a gradual or evolutionary approach to change in which managers at all levels work together to develop a detailed plan for change


process of comparing one company's performance on specific dimensions with the performance of other high performance organizations

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