Introduction to management 13th schemerhorn bachrach chapter 09
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9
John R. Schermerhorn, Jr.
Daniel G. Bachrach
Introduction to
Management
13th edition
Chapter 9
Fundamentals of Control
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
process.
Explain the use of common control tools and
techniques.
Copyright ©2015 John Wiley & Sons, Inc.
Chapter 9 Outline
1.
Managerial Control
2.
Importance of controlling
Types of controls
Internal and external control
The Control Process
Establish objectives and standards
Measure actual performance
Compare results with objectives
Take corrective action
Copyright ©2015 John Wiley & Sons, Inc.
Chapter 9 Outline
3.
Control Tools and Techniques
Project management and control
Inventory control
Breakeven analysis
Financial controls
Balanced scorecards
Copyright ©2015 John Wiley & Sons, Inc.
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:
After-action review)
Copyright ©2015 John Wiley & Sons, Inc.
Figure 9.1 The role of controlling in the management
process
Copyright ©2015 John Wiley & Sons, Inc.
Why and How Managers Control
Feedforward
controls
Employed before a work activity begins
Ensures that:
Objectives are clear
Proper directions are established
Right resources are available
Goal is to solve problems before they
occur
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Why and How Managers 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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Why and How Managers 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
Copyright ©2015 John Wiley & Sons, Inc.
Figure 9.2 Feedforward, concurrent, and feedback
controls
Copyright ©2015 John Wiley & Sons, Inc.
Why and How Managers Control
Internal
Internal control
and external 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
Copyright ©2015 John Wiley & Sons, Inc.
Why and How Managers Control
Self-control
Internal control that occurs through selfdiscipline in fulfilling work and personal goals
and responsibilities
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Why and How Managers Control
Bureaucratic
Influences behavior through authority,
policies, procedures, job descriptions,
budgets, and day-to-day supervision
Clan
control
control
Influences behavior through norms and
expectations set by the organizational culture
Copyright ©2015 John Wiley & Sons, Inc.
Why and How Managers Control
Market
Control
Influence of market competition on the
behavior of organizations and their members
Copyright ©2015 John Wiley & Sons, Inc.
Figure 9.3 Four steps in the control process
Copyright ©2015 John Wiley & Sons, Inc.
The Control Process
Step
1 — establishing objectives and
standards
Output standards
Measure performance results in terms of quantity,
quality, cost, or time
Input standards
Measure effort in terms of amount of work
expended in task performance
Copyright ©2015 John Wiley & Sons, Inc.
The Control 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
Copyright ©2015 John Wiley & Sons, Inc.
The Control Process
Step
3 — comparing results with
objectives and standards
Need for action = Desired Performance –
Actual Performance
Comparison methods:
Historical comparison
Relative comparison
Engineering comparison
Copyright ©2015 John Wiley & Sons, Inc.
The Control 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
Copyright ©2015 John Wiley & Sons, Inc.
Control Tools and Techniques
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
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Gantt Chart
Copyright ©2015 John Wiley & Sons, Inc.
CPM/PERT CHART
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Control Tools and Techniques
Inventory
Ensures that inventory is only big enough to
meet immediate needs
Economic order quantity
control
Places new orders when inventory levels fall to
predetermined points
Just-in-time scheduling
Routes materials to workstations just in time for use
Copyright ©2015 John Wiley & Sons, Inc.
Control Tools and Techniques
Breakeven
Breakeven point
analysis
Occurs where revenues just equal costs
Breakeven analysis
Performs what-if calculations under different
revenue and cost conditions
Copyright ©2015 John Wiley & Sons, Inc.
Figure 9.4 Use of breakeven analysis to make
informed “what-if” decisions
Copyright ©2015 John Wiley & Sons, Inc.
