CHAPTER 9

FOUNDATIONS OF CONTROL
 What is Control?
• Control
– Monitoring activities to ensure that they’re being
accomplished as planned and correcting any
significant deviations.
– The more control system helps managers achieve
their organization’s goals, the better it is.
 Why is Control Important?
1. Planning
– If managers didn’t control, they’d have no way of
knowing whether their goals and plans were
being achieved and what future actions to take.
2. Empowering employees
– Provide information and feedback on employee
performance and minimize the chance of
potential problems.
Why is Control Important? (cont…)
3. Protecting the organization and its assets.
– Protect organization assets from threats such as
natural disasters, financial pressures and
scandals, workplace violence, supply chain
disruptions, security breaches, and even terrorist
attacks with comprehensive controls and backup
plans.
 Control Process
• It is a three step process of:
i. measuring actual performance
ii. comparing actual performance against a
standard
iii. taking managerial action to correct deviations or
to address inadequate standards.
 How do Managers Measure?
• Four common sources of information:
1. Personal observation – firsthand, intimate
knowledge of the actual activity where
information is not filtered.
2. Statistical reports – such as graphs, bar charts,
and numerical displays of any form that
managers can use for assessing performance.
How do Managers Measure? (cont…)
3. Oral reports – through conferences, meetings,
one-to-one conversations, or telephone calls.
4. Written reports – slower yet more formal than
firsthand or secondhand oral measures.
 What do Managers Measure?
• Employee satisfaction or turnover
• Absenteeism
• Budgets (dollars, pounds, francs, euro)
• Value of a person, department, or units
contributes to the organization and convert
the contribution into standards
 Compare Actual Performance and the
Standard
• Range of variation
– The acceptable parameters of variance between
actual performance and a standard.
What Managerial Action Can be Taken?

• Three (3) possibilities:

1. Do nothing
2. Correct the actual performance
– Take immediate corrective action: which
corrects problems at once to get performance
back on track.
– Basic corrective action: looks at how and why
performance deviated before correcting the
source of deviation.
What Managerial Action Can be Taken?
(cont…)
3. Revise the standards
– If it is unrealistic standard: change the
standards.
– If performance too good: revise the goal and if it
is too easy, it needs to be raised.
 Types of Control
1. Feedforward control
2. Concurrent control
3. Feedback control
 Feedforward Control
• Feedforward control – prevents problems
because it takes place before the actual activity.
• The key is to take managerial action before a
problem occurs.
• Eg: Send e-mails to McDonald’s in Russia to
help Russian farmers learn techniques for
growing high-quality potatoes and help bakers
learn processes for baking high-quality breads.
 Concurrent Control
• Concurrent control – takes place while a work
activity is in progress.
• Eg: word-processing software that alerts you
to a misspelled work or incorrect grammatical
usage.
 Feedback Control
• Feedback Control – the control that takes
place after the activity is done.
• Two advantages:
– Give managers meaningful information on how
effective their planning efforts were.
– Feedback can enhance motivation.
 How is an Organization’s Information
Controlled?
• Mangers deal with information controls in two
ways:
– As a tool to help them control other organizational
activities.
– As an organizational area they need to control.
 How is an Organization’s Information
Controlled? (cont…)
• As a tool to help them control other organizational
activities:
– to monitor and measure organizational activities:
managers need information about what is happening
within their area or responsibility and about the
standards in order to be able to compare actual
performance with the standard.
– Rely on information to help them develop
appropriate course of action.
 How is an Organization’s Information
Controlled? (cont…)
• As an organizational area they need to control:
– Management information system (MIS) is a system
used to provide managers with needed information
on a regular basis.
– Term system implies order, arrangement, and
purpose.
– Focuses specifically on providing managers with
information (processed and analyzed data), not
merely data (raw, unanalyzed facts).
 How is an Organization’s Information
Controlled? (cont…)
– Because information is important, managers must
have comprehensive and secure controls in place to
protect that information.
– Eg: data encryption to system firewalls to data
backups and others.
– Sensitive, defamatory, confidential, or embarrassing
organizational information can be found at search
engine.
 Contemporary Issues in Control
1. Cross-cultural differences
2. Workplace concerns
 Cross-cultural Differences
• Methods of controlling employees behavior
and operations can be different in different
countries.
– Expatriates working at local organization are not
controlled by home office because they relies on
extensive, formal reports for control.
 Cross-cultural Differences (cont…)
• Technology are different between advanced
nations (US, Japan, Great Britain, Germany
and Australia) and primitive countries.
– Advanced nations use indirect control devices
such as computer-related reports and analyses
plus standardized rules and direct supervision.
– Less advanced countries use direct supervision
and highly centralized decision making are the
basic means of control.
 Cross-cultural Differences (cont…)
• Comparison in collecting data
– Labor intensive facility vs. blue collar office.
– Eg: to control cost might be impossible because in
labor intensive facility will use more costs that the
other one.
 Workplace Concerns
• Privacy at work – NONE!
– Managers monitor because employees are hired
to work not to surf the Web.
– Managers monitor because they don’t want to risk
being sued for creating a hostile workplace
environment because of offensive messages or an
inappropriate image displayed on a coworker’s
computer screen.
• Racial and sexual harassment where companies
monitor and keep backup copies of all e-mails.
 Workplace Concerns (cont…)
– To ensure that company secrets aren’t being
leaked where companies monitoring instant
messaging, blogs, and other social media outlets
and ban phone cameras in the office.
– Workplace monitoring policies which can control
employees behavior in a nondemeaning way and
employees should be informed about those
policies.
 Workplace Concerns (cont…)
• Employee theft
– Any unauthorized taking of company property by
employees for their personal use.
– From embezzlement to fraudulent filing of
expense reports to moving equipments, parts,
software, or office supplies from company
premises.
 Workplace Violence
• Reasons for violence at work:
– Employee driven by time, numbers and crises.
– Rapid and unpredictable change
– Destructive communication style from managers
such as excessive teasing.
– Authoritarian leadership such as rigid, militaristic
managers.
– Handling conflict by being defensive, yelling,
intimidation or avoidance by managers.
 Workplace Violence (cont…)
– Double standards in terms of policies, procedures,
and training opportunities for managers and
employees.
– Unresolved grievances where they are ignored.
– Emotionally troubled employees and no attempt
by managers to get help for these employees.
– Repetitive, boring work and little chance for doing
something else or for new people coming in.
– Faulty and unsafe equipment or deficient training
 Workplace Violence (cont…)
• Hazardous work environment in term of
temperature, air quality, repetitive motions,
overcrowded spaces, noise levels, and excessive
overtime.
• Failure to hire additional employees when
workload becomes excessive.
• History of individual violence or abuse, violent
or explosive role models, or tolerance of on the
job alcohol or drug abuse.