Fundamental of Management Chap 17

PowerPoint Presentation
to Accompany
Management, 10/e
John R. Schermerhorn, Jr.
Chapter 17:
Fundamentals of Control
Prepared by: Jim LoPresti

University of Colorado, Boulder
Published by: John Wiley & Sons, Inc.
Planning Ahead Chapter 17 Study Questions
Why and how do managers control?
What are the steps in the control

process?
What are the common control

systems and techniques?
Management 10/e - Chapter 17
Study Question 1: Why and how do 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.
Organizational learning and after-action

review.
Figure 17.1 The role of controlling in the

management process.

control?
Feedforward controls
Employed
before a work activity
begins.
Ensures
that:
Objectives are clear.
Proper directions are established.
Right resources are available.
Focuses
on quality of resources.

control?
Concurrent controls
Focus
on what happens during work
process.
Monitor
ongoing operations to make
sure they are being done according to

plan.
Can
reduce waste in unacceptable
finished products or services.


control?
Feedback controls
Take
place after work is completed.
Focus
on quality of end results.
Provide
useful information for
improving future operations.
Figure 17.2 The role of feedforward, concurrent, and

feedback controls in organizations.

control?
Internal and external control

Internal
control
Allows motivated individuals and groups

to exercise self-discipline in fulfilling job
expectations.
External
control
Occurs through personal supervision and

the use of formal administrative systems.

control?
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.
10
Study Question 2: What are the steps in the control

process?
Steps in the control process:
Step 1 establish objectives and

standards.
Step 2 measure actual performance.
Step 3 compare results with objectives

and standards.
Step 4 take corrective action as needed.
11
Figure 17.3 Four steps in the control process.
12

process?
Step 1 establishing objectives

and standards
Output
Measure performance results in terms of

quantity, quality, cost, or time.
Input
standards
standards
Measure effort in terms of amount of work

expended in task performance.
13

process?
Step 2 measuring actual performance
Goal is accurate measurement of actual

performance results and/or performance efforts.
Must identify significant differences between

actual results and original plan.
Effective control requires measurement.
14

process?
Step 3 comparing results with

objectives and standards
Need
for action reflects the difference

between desired performance and actual
performance
Comparison
methods:
Historical comparison
Relative comparison
Engineering comparison
15

process?
Step 4 taking corrective action

Taking
action when a discrepancy exists

between desired and actual
performance.
Management by exception
Giving attention to situations showing the
greatest need for action.
Types of exceptions
Problem situation
Opportunity situation
16
Study Question 3: What are the common control

Employee discipline systems

Discipline
is the act of influencing
behavior through reprimand.

Discipline
that is applied fairly,
consistently, and systematically

provides useful control.
17

Employee discipline systems

Progressive
discipline ties reprimands
to the severity and frequency of the

employees infractions.
Progressive
discipline seeks to achieve
compliance with the least extreme

reprimand possible.
18

To be effective, reprimands should

Be
immediate.
Be
directed toward actions, not

personality.
Be
consistently applied.
Be
informative.
Occur
in a supportive setting.
Support
realistic rules.
19

Project Management
Overall planning, supervision, and control of
projects.
Projects unique one-time events that

occur within a defined time period
Gantt
chart graphic display of scheduled

tasks required to complete a project
CPM/PERT
combination of the critical

path method and program evaluation and
review technique
20

Economic Value Added
a performance measure of economic value

created in respect to profits being higher
than the cost of capital
Market Value Added
a performance measure of stock market

value relative to the cost of capital
21

Basic Financial Ratios
Liquidity
The ability to generate cash to pay bills.
Leverage
The ability to earn more in returns than the cost
of debt.
Asset management
The ability to use resources efficiently and
operate at minimum cost.
Profitability
The ability to earn revenues greater than costs.
22

Balanced Scorecard
Factors used to develop scorecard goals and
measures:
Financial performance
Customer Satisfaction
Internal process improvement
Innovation and learning
23
Figure 17.4 Gannt chart
24
Figure 17.5 CPM/PERT
25
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Prepared by: Jim LoPresti

Planning Ahead Chapter 17 Study Questions

Why and how do managers control?

What are the steps in the control

What are the common control

Management 10/e - Chapter 17

Study Question 1: Why and how do managers

The process of measuring performance and

Has a positive and necessary role in the

Ensures that the right things happen, in the

Organizational learning and after-action

Management 10/e - Chapter 17

Figure 17.1 The role of controlling in the

Management 10/e - Chapter 17

Study Question 1: Why and how do managers

before a work activity

Objectives are clear.

Proper directions are established.

Right resources are available.

Management 10/e - Chapter 17

Study Question 1: Why and how do managers

on what happens during work

ongoing operations to make

sure they are being done according to

reduce waste in unacceptable

finished products or services.

Study Question 1: Why and how do managers

place after work is completed.

on quality of end results.

useful information for

improving future operations.

Management 10/e - Chapter 17

Figure 17.2 The role of feedforward, concurrent, and

Management 10/e - Chapter 17

Study Question 1: Why and how do managers

Internal and external control

Allows motivated individuals and groups

Occurs through personal supervision and

Study Question 1: Why and how do managers

influences behavior through authority,

influences behavior through norms and

Management 10/e - Chapter 17

Study Question 2: What are the steps in the control

Steps in the control process:

Step 1 establish objectives and

Step 2 measure actual performance.

Step 3 compare results with objectives

Step 4 take corrective action as needed.

Management 10/e - Chapter 17

Figure 17.3 Four steps in the control process.

Management 10/e - Chapter 17

Study Question 2: What are the steps in the control

Step 1 establishing objectives

Measure performance results in terms of

Measure effort in terms of amount of work

Management 10/e - Chapter 17

Study Question 2: What are the steps in the control

Step 2 measuring actual performance

Goal is accurate measurement of actual

Must identify significant differences between

Effective control requires measurement.

Management 10/e - Chapter 17

Study Question 2: What are the steps in the control