Controlling

Controlling is the function of every manager from CEO to supervisor. Although the scope of control varies among managers, those at all levels have responsibility for the execution of plans, and control is therefore and essential managerial function at every level Planning and controlling are closely related. Without objectives and plans, control is possible,because performance has to be measured against some established criteria.

Control
The regulation of organizational activities so that some targeted element of performance remains with in acceptable limits. The process of monitoring activities to ensure they're being accomplished as planed and of correcting any significant deviations Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are being accomplished.

Purpose of control

Adapt to environmental change

Limit the accumulation of error

Control helps the organization..

Cope with organizational complexity

Minimize costs

Steps in control process

1. Establish standards

2. Measure performance

3. Compare Performance and standards

4. Evaluate Performance And take action

Maintain the Status quo

Correct the deviation

Change Standards

The control process

Compare actual Performance With standard

Yes
Is standard Being attained?

Do nothing

No Is variance acceptable

Yes Do nothing Yes

Identify Cause of variation

Objectives

standard

Measure Actual performance

No Is standard acceptable No Revise standard

Correct Performance

Types of control
Operational control Financial control Structural control Strategic control Behavioral control

 Operational control: focuses on the processes the organization uses to transform resources into products or services
Input Processes Output

Primary control Focus is on inputs to the organizational system

Feedforward control anticipates problem

Screening control Focus is on how inputs are being transformed into outputs
Concurrent control corrects problems as they happen

Postaction control Focus is on outputs from the organization system

Feedback control corrects problems after they occur

Financial control
Concerned with the organizations financial resources. Budget : a plan expressed in numerical terms

Types of budget
Type of Budget
Financial budget Cash-flow or cash budget Capital expenditures budget Balance sheet budget Operating budget

What budget shows

Sources and uses of cash All sources of cash income and cash expenditures in monthly, weakly, or daily periods Costs of major assets such as a new plant. Machinery, or land Forecast of the organization's assets and liabilities in the event all other budgets are met Planned operations in financial terms

Sales or revenue budget Expense budget Profit budget

Income the organization expects to receive from normal operations Anticipated expenses for the organization during the coming time period Anticipated expenses for the organization during the coming time period

Type of Budget Nonmonetary budget Labor budget

What budget shows Planned operations in nonfinancial terms Hours of direct labor available for use

Space budget
Production budget

Square feet or meters of space available for various functions

Number of units to be produced during the coming time period.

Other tools of Financial control Financial statement: a profile of some aspect of an organization's financial circumstances Balance sheet: list of an organization's assets and liabilities at a specific point in time. Income statement: a summary of financial performance over a period of time. Ratio analysis: the calculation of one or more financial rations to assess some aspect of the organization's financial health. Audit: an independent appraisal of an organizations accounting, financial and operational systems.

 Structural control: concerned with how the elements of the organization's structure are serving their intended purpose. Bureaucratic control: a form of organizational control characterized by formal and mechanistic structural arrangements. Clan control: an approach to organizational control based on informal and organic structure arrangement

Organizational control
Bureaucratic control
Goal of control approach Employee compliance Strict rules, formal controls, Rigid hierarchy Directed toward minimum levels of acceptable performance Tall structure, top-down influence Directed at individual Performance Limited and formal Employee commitment

clan control

Degree of formality
Performance expectations

Group norms, culture, self-control Directed toward enhanced Performance Above and beyond the minimum Flat structure, shared influence Directed at group Performance

Organization design

Reward system

participation

extended and informal

Strategic control: focuses on how effectively the organization's strategies are succeeding in helping the organization meet its goals. Behavioral control: Direct supervision Performance appraisal: the evaluation of an individual's work performance in order to arrive at objective personnel decisions Multiple comparisons: in which individuals are compared to one another Group order ranking: a performance appraisal approach that groups employees into ordered classifications. Individual ranking: ranks employees in order from highest to lowest Paired comparison: in which each employee is compared to every other employee and rated as either the superior or weaker member of the pair. 360 degree feedback: that uses feedback from supervisors subordinates, and co-workers- the full circle of people with whom the manager interacts.

Characteristics of effective control

Integrating with planning Flexibility Accuracy Timeliness Objectivity

Resistance to control
Overcontrol Inappropriate focus Rewards for inefficiency Too much accountability

Overcoming resistance to control

Encourage employee participation Developing verification procedures

Organizational Learning
Defines Organizational Learning as the process of detection and correction of errors, Defines organizational learning as the process of improving actions through better knowledge and understanding. The way firms build supplement, and organize knowledge and routines around their activities and within their cultures and adapt and develop organizational efficiency by improving the use of the broad skills of their workforce.

 Learning organization: is a firm that purposefully constructs structures and strategies, to enhance and maximize organizational learning. The concept of learning organisation has become popular since organizations want to be more adaptable to change. Learning is dynamic concept and it emphasizes the continually changing nature of organizations. The focus is gradually shifting from individual learning to organizational learning. Learning is essential for growth of individuals; it is equally important for organizations. Since individuals form the bulk of the organization, they must establish the necessary forms and processes to enable organizational learning in order to facilitate change.

Three types of Organizational Learning

Single-loop learning:( or adaptive learning or lower level learning) this occurs when errors are detected and corrected and firms continue with their present policies and goals. Double-loop learning: ( or generative learning or higher-level learning )this occurs when, in addition to detection and correction of errors, the organization questions and modifies its excising norm, procedures, policies, and objectives.

Total quality management

Quality: the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs Eight dimensions of Quality: Performance Features Reliability Conformance Durability Serviceability Aesthetics Perceived value

 Total quality management:- A real and meaning full effort by an organization to change its whole approach to business to make quality a guiding factor in everything the organization does.

Strategic commitment

Employee Involvement

Materials

Technology

Methods

Quality improvement

TQM Tools and Techniques

Benchmarking : the process of learning how other firms do exceptionally high-quality things. Outsourcing: the process of subcontracting services and operations to other firms that can perform them cheaper or better (or both) Speed: the time needed by the organization to get its activities including developing, making, and distribution products or services, accomplished ISO 9000: A set of quality standards created by the international organization for standardization. Statistical quality control: a set of statistical techniques that can be used to monitor quality; includes acceptance sampling and in process sampling Acceptance sampling :involves sampling finished goods to ensure that quality standards have been met. In-process sampling:involves evaluating products during production so that needed changes can be made.

Teams
A group of workers that functions as a unit, often with little or no supervision, to carry out organizational functions. Types of Teams: Problem-solving team: most popular type of team; comprises knowledge workers who gather to solve a specific problem and then disband. Management team: consists mainly of managers from various functions like sales and production; coordinates work among other teams Work team: an increasingly popular type of team, work teams are responsible for the daily work of the organization; when empowered, they are self managed teams. Virtual team: a new type of work team that interacts by computer; members enter and leave the network as needed and may take turns serving as leader.

 Quality circle: declining in popularity, quality circles, comprising workers and supervisors, meet intermittently to discuss workplace problems Cross functional team: an organizational arrangement in which a hybrid grouping of individuals who are experts in various specialties(or functions)work together Venture team: team to start up business: management teams put together to establish a new business secure financing and execute a business plan.