Chapter 8

Chapter 8

1. Organizational Control

   • Importance of Organizational Control
     • Provides information about: the efficiency in resources and production of goods and services, gives managers feedback on product quality. Effective managers create a control system that monitors the quality of goods and continuous improvement that provides competitive advantage.
   • Control Systems and IT
     • Formal target-setting, monitoring, evaluation, and feedback systems that provide managers with information about how well the organization’s strategy and structure are working.

2. The Control Process

   • Output control
     • Mechanisms of control: Financial measures of performance, organizational goals, operating budgets
   • Behaviour control
     • Mechanisms of control: Direct supervision, management by objectives, rules and standard operating procedures
   • Organizational culture/clan control
     • Mechanisms of control: Values, norms, socialization
   • Feedforward control
     • Control that allows managers to anticipate problems before they arise
   • Concurrent control
     • Gives managers immediate feedback on how efficiently inputs are being transformed into outputs so managers can correct problems as they arise
   • Feedback control
     • Control that gives managers information about customers’ reactions to goods and services so corrective action can be taken if necessary

3. Behavior Control

   • Direct supervision
     • Managers who actively monitor and observe the behavior of their subordinates, teach the appropriate and inappropriate behaviors and intervene to take corrective action as needed. Allows managers to become personally involved with their subordinates
   • Management by objectives
     • A goal-setting process in which a manager and each of his or her subordinates negotiate specific goals and objectives for the subordinate to achieve and then periodically evaluate the extent to which the subordinate is achieving those goals
   • Bureaucratic Control
     • Control of behavior by means of a comprehensive system of rules and standard operating procedures. shapes and regulates the behavior of divisions, functions, and individuals
   • Operating budget
     • A budget that states how managers intend to use organizational resources to achieve organizational goals