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publishing as Prentice Hall

CHAPTER 21
Controlling, Information, and Technology
CHAPTER SUMMARY
As the scale and complexity of modern work organizations grow, the problem of control in
organizations gains in significance. Control is making things happen as planned. Controlling is
the process managers go through to control. The controlling process has three main steps: (1) to
evaluate performance, (2) to compare measured performance to standards, and (3) to take
corrective action. To evaluate performance, a unit of measure must be established, and
performance must be observed.
Corrective action is action taken to bring performance up to standard. Corrective action should
focus on planning, organizing, and influencing once the problem has been identified. The human
related aspect of controlling is power. Power is the ability to influence others. The total power of
a manager equals position power plus personal power. Managers can increase personal power by:
(1) making people feel obligated, (2) being seen as an expert in an area, (3) having others identify
with them, and/or (4) increasing perceptions that people are dependent on them. To make the
control process more effective, managers should: (1) verify that controlling suits the situation; (2)
use control to achieve many ends; (3) act on information quickly; and (4) make controlling
understood.
Data are facts or statistics. Information is conclusion derived from data analysis. The value of
information is defined in terms of the benefit that can accrue to the organization through the use
of information. Four primary factors determine the value of information: (1) information
appropriateness, (2) information quality, (3) information timeliness, and (4) information quantity.
Appropriate information is information relevant to the decision. High-quality information
represents reality. Timely information is received in time to benefit the organization. Sufficient
information is needed to justify decisions.
Evaluating information involves determining whether the expected value of the information
exceeds the expected cost. Information technology (IT) uses computers and telecommunication
devices that focus on the use of information in the performance of work. An information system
(IS) gets information to where it is needed. The six-step process for operating an IS involves:
(1) determining what information is needed, (2) gathering data to fit information needs,
(2) summarizing the data, (4) analyzing the data; (5) transmitting the data; and (6) using the
information. IS information should be appropriate for the manager receiving it.
Managing Information Systems involves managing user satisfaction and the IS workforce. As
companies become more dependent on information systems, they are more susceptible to security
issues with these systems. The Generally Accepted System Security Principles (GASSP) is a
guide to prevent security threats.
LEARNING OBJECTIVES
1. A definition of control
2. A thorough understanding of the controlling subsystem
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3.
4.
5.
6.
7.
8.

Insights into the relationship between power and control


An understanding of the steps required to increase the quality of a controlling subsystem
An understanding of the relationship between data and information
Insights regarding the main factors that influence the value of information
An understanding of the importance of an information system (IS) to an organization
Insights regarding how to manage an IS effectively

Chapters Target Skill


Controlling Skill: The ability to use information and technology to ensure that an event occurs as
it was planned to occur.
CHALLENGE CASE
SPERRY VAN NESS: HARNESSING TECHNOLOGY FOR BUSINESS SUCCESS
According to the Challenge Case, issues at Sperry Van Ness involve maintaining and improving
the speed of operations, internal communication, and communication with clients and prospects.
The management function called control can help professionals at Sperry Van Ness and other
organizations improve such issues, and the material in this chapter explains why these activities
would be considered controlling. The following material also elaborates on the control function as
a whole. Major topics in this chapter are (1) fundamentals of controlling, (2) power and control,
(3) information, and (4) information systems.
See all related teaching notes for Challenge Case in the Management Skill Activities

EXPLORING YOUR MANAGEMENT SKILL: PART 1


CHAPTER OUTLINE
CHALLENGE CASE: SPERRY VAN NESS: HARNESSING TECHNOLOGY FOR
BUSINESS SUCCESS
A.
According to the Challenge Case, issues at Sperry Van Ness involve maintaining
and improving the speed of operations, internal communication, and communication with clients
and prospects.
I.

II.

FUNDAMENTALS OF CONTROLLING
A. Defining Control
1. Control is making something happen the way it was planned to happen.
B. Defining Controlling
1. Controlling is the process the manager goes through to control.
2. The Controlling Subsystem (Figure 21.1)
a. The purpose of the controlling subsystem is to help managers enhance the
success of the overall management system through effective controlling.
3. The Controlling Process (See Figure 21.2)
a. Measuring Performance

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1. Before determining what must be done to improve efficiency, the


manager must measure current organizational performance.
2. Before such measurement can be taken, some unit of measure that gauges
performance must be established, and the quantity of this unit generated
by the item being measured must be observed.
3. A wide range of organizational activities can be measured as part of the
control process.
b. Comparing Measured Performance to Standards
1. A standard is a level of activity established to serve as a model for
evaluating organizational performance.
2. Standards are the yardsticks that determine if organizational performance
is adequate or inadequate.
c. Taking Corrective Action
1. Corrective action is managerial activity aimed at bringing organizational
performance up to the level of performance standards.
2. Corrective action focuses on correcting organizational mistakes that are
hindering performance.
3. Problems are factors within organizations that act as barriers to
organizational goal attainment.
4. A symptom is a sign that a problem exists.
III.

POWER AND CONTROL


A. A Definition of Power
1. Power is the extent to which an individual is able to influence others so that they
respond to orders.
2. Authority, often confused with power, is the right to command or to give orders.
B. Total Power of a Manager
1. Total power is the entire amount of power an individual in an organization
possesses, including position power and personal power.
a. Position power is power derived from the organizational position held.
b. Personal power is power derived from the relationship that one person has
with another.
C. Steps for Increasing Total Power
1. Managers increase their total power by increasing their position power and/or
their personal power.
2. Managers may increase personal power by developing:
a. A sense of obligation in other organizational members that is directed toward
the manager
b. A belief in other organization members that the manager possesses a high
level of expertise within the organization.
c. A sense of identification that other organization members have with the
manager.
d. The perception in other organization members that they are dependent on the
manager.
D. Making Controlling Successful
1. Managers should make sure that:
a. Various facets of the control process are appropriate for the specific
organizational activity being focused on.
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b. Control activities should be used to achieve many different kinds of goals.


c. Information should be used as the basis for taking corrective action that is
timely.
d. The mechanics of the control process should be understandable to all
individuals who are in any way involved with implementing the process.
IV.

ESSENTIALS OF INFORMATION
A. Data are facts or statistics.
B. Information is the set of conclusions derived from data analysis.
C. Factors Influencing the Value of Information
1. Information Appropriateness (Figure 21.3)
a. Information appropriateness is the degree to which information is relevant to
the decision-making situation that faces the manager.
b. Generally, when the appropriateness of information increases, the value of
that information also increases.
2. Operational Control, Management Control, and Strategic Planning
a. Three characteristics of information appropriate for decision-making
situations include:
1. Operational control decisions relating to ensuring specific organizational
tasks are carried out effectively and efficiently.
2. Management control decisions relating to obtaining and using the
resources necessary to reach organizational objectives.
3. Strategic planning decisions relating to determination of organizational
objectives and designating the action necessary to reach them.
3. Information Quality
a. Information quality is the degree to which information represents reality.
4. Information Timeliness
a. Information timeliness is the extent to which the receipt of information
allows decisions to be made and action to be taken so the organization can
gain some benefits from possessing the information.
5. Information Quantity
a. Information quantity is the amount of decision-related information a manager
possesses.
D. Evaluating Information (Figure 21.4)
1. The first step is determining the value of the information by pinpointing the data
to be analyzed and then determining the expected value or return to be received
from obtaining perfect information based on this data.
2. Next, this expected value should be reduced by the amount of benefit that will
not be realized because of deficiencies and inaccuracies expected to appear in the
information.
3. Then, the expected value of organizational information should be compared with
the expected cost of obtaining that information.

V.

INFORMATION TECHNOLOGY (IT)


A. This technology uses computers and telecommunication devices that focus on the
use of information in the performance of work.

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VI.

THE INFORMATION SYSTEM (IS)


A. An information system (IS) is a network of applications established within an
organization to provide managers with information that will assist them in decision
making.
B. Describing the IS
1. Operating the IS
a. IS personnel typically perform six sequential and distinct IS operational
steps: (See Figure 21.5)
1. They determine information needs;
2. They pinpoint and collect data;
3. They summarize the data;
4. They analyze the data for its appropriateness;
5. They transmit the data to appropriate managers;
6. The information is used by managers.
2. Different Managers Need Different Kinds of Information
a. For maximum benefits, IS must collect relevant data, transform that data into
appropriate information, and transmit that information to appropriate
managers. (Figure 21.6)
b. Murdick suggests that the degree of appropriateness of IS information for a
manager depends on the activities for which the manager will use the
information, the organizational objectives assigned to the manager, and the
level of management at which the manager functions.
C. Managing Information Systems
1. Managing user Satisfaction
a. User satisfaction is important because of its direct influence on IS
effectiveness.
b. As users become dependent on the IS and integrate the IS into their
routines, the IS becomes effective. This relationship is shown in Figure
21.7.
2. Managing the IS Workforce
a To save costs companies are hiring more IS workers in other countries
b. This trend creates problems such an integrating domestic and nondomestic workforces, managing international languages and cultures,
and defining global work expectations.

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CLASS DISCUSSION HIGHLIGHT: Modern Research and Controlling Skill


Managing IS Road Warriors
The study found that work load had a positive correlation with exhaustion. It also found that
fairness of rewards and autonomy had a negative correlation with exhaustion. This means
that if workers perceived rewards to be fair and also felt that they had autonomy over their
work, their exhaustion level decreased. This indicates that mental, rather than physical
exhaustion is key. In turn, exhaustion affected a persons commitment to the home
organization.
The findings can lead to an interesting discussion on work-life balance and the importance of
mental exhaustion to commitment.

3. Managing IS Security
a. As corporations rely more heavily on information systems, they become
more susceptible to security issues involving these systems.
b. The Generally Accepted System Security Principles (GASSP) was
produced by the International Information Security Foundation as a guide
to prevent security threats. Table 21.1 provides an overview of some of
the broad principles outlined in the GASSP.