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  1. 1. Controlling: Purpose and ProcessMultiMedia by 2002 South-
  2. 2. Six Sigma• A process quality goal.• Highly disciplined process.• Helps companies focus on developing and delivering near-perfect products and services.• Statistical goal: 3.4 defects per million transactions.MultiMedia by 2002 South-
  3. 3. Controlling The function in which managers set and communicate performance standards for people, processes, and devices. Is about managing risks. A standard is any guideline or benchmark established as the basis for the measurement of capacity, quantity, content, value, cost, quality, or performance. MultiMedia by 2002 South-
  4. 4. Risk Managers Monitor people and processesHelp transform functional managers into advisers and consultants Teach others how to deal with the risks that haunt their areas of expertise MultiMedia by 2002 South-
  5. 5. Bittel (1989) “Controlling is the function that brings the management cycle full circle. It is the steering mechanism that links all the preceding functions of organizing, staffing, and [leading] to the goals of planning.”MultiMedia by 2002 South-
  6. 6. Control ProcessMultiMedia by 2002 South-
  7. 7. Establishing Performance Standards Use a quantitative or qualitative Point 1 measuring device. Point 2 Designed to monitor people, money, capital goods, or processes.MultiMedia by 2002 South-
  8. 8. The Nature of a Standard Depends On• Who designs, works with, • Where monitoring efforts and receives the output will take place (location and from controls. functional area).• What is being monitored. • When controls will be used.• What is to be achieved • What resources are available through monitoring. to expend on the controls. MultiMedia by 2002 South-
  9. 9. Productivity The amount of output achieved from the use of a given amount of inputs. Can be measured quantitatively. Can be measured qualitatively.MultiMedia by 2002 South-
  10. 10. Quality Is customer satisfaction. Begins with the standards and methods used to recruit, hire, train, evaluate, and reward employees. Must exist within every person and process. Must be a core value within an organization’s culture.MultiMedia by 2002 South-
  11. 11. To Control Quality Companies create standards and quality assurance (QA) systems. A QA system focuses on constant incremental quality improvement [kaizen] measurements and results. MultiMedia by 2002 South-
  12. 12. Measuring Performance• Measure actual performance to determine variation from standard.• Mechanisms for this purpose can be extremely sensitive.• Computers are increasingly important as tools for measuring performance.MultiMedia by 2002 South-
  13. 13. Comparing Measured Performance to Established Standards 1. Compare actual 2. If deviations exist, performance to the the evaluator must standards set for that decide if they are purpose. significant. 5. May require 4. The source of a examining the3. The evaluator must deviation may lie standards being determine what is beyond the employee applied and thecausing the variance. who first discovers it. accuracy of the measurement and comparison processes. MultiMedia by 2002 South-
  14. 14. Productivity and Quality-Centered Environment of Today• Workers and managers are often empowered to evaluate their own work for: – Quality – Productivity – Cost improvements• Individuals and groups are being given the responsibility to control their behavior and operations. MultiMedia by 2002 South-
  15. 15. Types of Controls for Restaurant OperationsMultiMedia by 2002 South-
  16. 16. Feedforward Controls Focus on operations before they begin. Sometimes called preliminary, screening, or prevention controls. Intended to prevent defects and deviations from standards. MultiMedia by 2002 South-
  17. 17. Concurrent Controls Apply to processes as they are happening. The most important concurrent control in any undertaking is often the skilled and experienced operator. MultiMedia by 2002 South-
  18. 18. Feedback Controls Focus on the results of operations. After-the-fact, or postperformance, controls. Information is fed back into the process or to the controller. MultiMedia by 2002 South-
  19. 19. Control SystemsFeedforward, concurrent , and feedback controls should be viewed as part of an overall control system. Managers integrate suitable control combinations to enforce standards.Make sure elements function smoothly with one another.Ensure that resources are used effectively and efficiently. MultiMedia by 2002 South-
  20. 20. Controls Focus on Inputs Outputs ProcessesMultiMedia by 2002 South-
  21. 21. Critical Control Points• All the operations that directly affect the survival of an organization.• Should focus on: – Those points at which failures cannot be tolerated. – Where time and money costs are greatest.• The objective is to apply controls to the essential aspects of a business, not the peripheral ones. MultiMedia by 2002 South-
  22. 22. Six Characteristics Of Effective Controls  Economic  Integration Feasibility  Acceptability  Accuracy  Timelines  ComprehensibilityMultiMedia by 2002 South-
  23. 23. Controls are Effective as Long as They Do what they are intended to do.Do not generate Do not result in costs opposition. greater than the benefits they provide.MultiMedia by 2002 South-
  24. 24. Controls are Designed to Deal With 1. Specific people 2. Processes 3. CircumstancesMultiMedia by 2002 South-
  25. 25. Changes that Require Reexamination of Controls  Changes to Mission  Structural Changes  Changes in Decision Making  Changes in Human Relations  Technological ChangesMultiMedia by 2002 South-