Introduction to management 13th schemerhorn bachrach chapter 09

WHY AND HOW MANAGERS CONTROL Controlling The process of measuring performance and taking action to ensure desired results Has a positive and necessary role in the management process 

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CHAPTER 9

Introduction to Management

13th edition

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PLANNING AHEAD — KEY TAKEAWAYS

 Identify the types of controls used by managers

and the reasons for them

 List and describe the steps in the control

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CHAPTER 9 OUTLINE

1. Managerial Control

 Importance of controlling

 Types of controls

 Internal and external control

2. The Control Process

 Establish objectives and standards

 Measure actual performance

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CHAPTER 9 OUTLINE

3. Control Tools and Techniques

 Project management and control

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WHY AND HOW MANAGERS CONTROL

Controlling

The process of measuring performance and

taking action to ensure desired results

Has a positive and necessary role in the

management process

Ensures that the right things happen, in the

right way, at the right time

Benefit: Organizational learning (Example:

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FIGURE 9.1 THE ROLE OF CONTROLLING IN

THE MANAGEMENT PROCESS

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WHY AND HOW MANAGERS

CONTROL

Feedforward controls

Employed before a work activity begins

Ensures that:

Goal is to solve problems before they

occur

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CONTROL

Concurrent controls

Focus on what happens during work

process

Monitor ongoing operations to make

sure they are being done according to

plan

Goal is to solve problems as they occur

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CONTROL

Feedback controls

Take place after work is completed

Focus on quality of end results

Goal is to solve problems after they

occur and prevent future ones

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FIGURE 9.2 FEEDFORWARD, CONCURRENT,

AND FEEDBACK CONTROLS

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Internal and external control

Internal control

self-discipline in fulfilling job expectations

External control

formal administrative systems

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Self-control

Internal control that occurs through

self-discipline in fulfilling work and personal goals

and responsibilities

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Bureaucratic control

Influences behavior through authority,

policies, procedures, job descriptions,

budgets, and day-to-day supervision

Clan control

Influences behavior through norms and

expectations set by the organizational culture

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Market Control

Influence of market competition on the

behavior of organizations and their members

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FIGURE 9.3 FOUR STEPS IN THE CONTROL

PROCESS

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THE CONTROL PROCESS

Step 1 — establishing objectives and

standards

Output standards

quality, cost, or time

Input standards

expended in task performance

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Step 2 — measuring actual performance

Goal is accurate measurement of actual

performance results and/or performance

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Step 3 — comparing results with

objectives and standards

Need for action = Desired Performance –

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Step 4 — taking corrective action

Taking action when a discrepancy exists

between desired and actual performance

Management by exception

need for action

 Problem situation

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CONTROL TOOLS AND TECHNIQUES

Project Management

 Overall planning, supervision, and control

of projects

a defined time period

required to complete a project

method and program evaluation and review technique

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GANTT CHART

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CPM/PERT CHART

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Inventory control

Ensures that inventory is only big enough to

meet immediate needs

Economic order quantity

predetermined points

Just-in-time scheduling

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Breakeven analysis

Breakeven point

 Occurs where revenues just equal costs

Breakeven analysis

 Performs what-if calculations under different

revenue and cost conditions

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FIGURE 9.4 USE OF BREAKEVEN ANALYSIS TO

MAKE INFORMED “WHAT-IF” DECISIONS

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FIGURE 9.5 BASIC FOUNDATIONS OF A

BALANCE SHEET AND INCOME

STATEMENT

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Basic Financial Ratios

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