Chapter 8 : Controlling

1. Chapter 9

2. TABLE OF CONTENTS
• Summary
• What Is Control And Why Is It Important?
• What Takes Place As Managers Control?
• What Should Managers Control?
• What Contemporary Control Issues Do Managers Confront?

3. SUMMARY

4. SUMMARY
• Explain the nature and importance of control. Control is the
management function that involves monitoring activities to
ensure that they’re being accomplished as planned and
correcting any significant deviations. As the final step in the
management process, controlling provides the link back to
planning. If managers didn’t control, they’d have no way of
knowing whether goals were being met. Control is important
because (1) it’s the only way to know if goals are being met
and if not, why; (2) it provides information and feedback so
managers feel comfortable empowering employees; and (3) it
helps protect an organization and its assets.

5. SUMMARY
• Describe the three steps in the control process. The three
steps in the control process are measuring, comparing, and
taking action. Measuring involves deciding how to measure
actual performance and what to measure. Comparing involves
looking at the variation between actual performance and the
standard (goal). Deviations outside an acceptable range of
variation need attention. Taking action can involve: do
nothing, correct the actual performance, or revise the
standards. Doing nothing is self-explanatory. Correcting the
actual performance can involve different corrective actions,
which can either be immediate or basic. Standards can be
revised by either raising or lowering them.

6. SUMMARY
• Discuss the types of controls organizations and managers
use. Feedforward controls take place before a work activity is
done. Concurrent controls take place while a work activity is
being done. Feedback controls take place after a work activity
is done. Financial controls that managers can use include
financial ratios (liquidity, leverage, activity, and profitability)
and budgets. One information control managers can use is an
MIS, which provides managers with needed information on a
regular basis. Others include comprehensive and secure
controls such as data encryption, system firewalls, data
backups, and so forth that protect the organization’s
information. Also, balanced scorecards provide a way to
evaluate an organization’s performance in four different areas
rather than just from the financial perspective.

7. SUMMARY
• Discuss contemporary issues in control. Adjusting controls
for cross-cultural differences may be needed primarily in the
areas of measuring and taking corrective actions. Workplace
concerns include workplace privacy, employee theft, and
workplace violence. For each of these, managers need to have
policies in place to control inappropriate actions and ensure
that work is getting done efficiently and effectively.

8. LEARNING OBJECTIVES
In this chapter we will address the following questions:
• Explain the nature and importance of control.
• Describe the three steps in the control process.
• Discuss the types of controls organizations and managers use.
• Discuss contemporary issues in control.

9. WHAT IS CONTROL AND WHY IS IT IMPORTANT?
Section 1

10. WHAT IS CONTROL?
Control is the management function involving the process of monitoring
activities to ensure that they are being accomplished as planned and
correcting any significant deviations.
• a) An effective control system ensures that activities are completed in ways
that lead to the attainment of the organization’s goals.
• b) The effectiveness of a control system is determined by how well it
facilitates goal achievement.

11. WHY IS CONTROL IMPORTANT?
• There is no assurance that
activities are going as planned
and that the goals managers
are seeking are, in fact, being
attained.
• Control is the final link in the
functional chain of
management.
• The value of control lies
predominantly in planning,
empowering employees,
protecting the workplace.

12. WHAT TAKES PLACE AS MANAGERS CONTROL?
Section 2

14. WHAT IS MEASURING?
• The first step in control
• Four common sources of
information frequently used
by managers to measure
actual performance are
personal observation,
statistical reports, oral
reports, and written reports.
Personal observation
Statistical reports
Oral reports
Written reports

15. WHAT IS MEASURING AND HOW DO MANAGERS MEASURE?

16. WHAT DO MANAGERS MEASURE?
• What is measured is more critical
to the control process than how it
is measured. The selection of the
wrong criteria can result in
serious dysfunctional
consequences. What is measured
determines what people in the
organization will attempt to excel
at. Some control criteria are
applicable to any management
situation. Criteria such as
employee satisfaction or turnover
and absenteeism rates can be
measured. Most managers have
budgets for their area of
responsibility set in monetary
units and keeping costs within
budget can be measured. Any
comprehensive control system
Measured
critical? Control
process?
Wrong criteria?
Dysfunctional?
Measure people
in org?
Some control
criteria is
applicable
Need to recognize
diversity control
system

17. WHAT DO MANAGERS MEASURE?
• Some activities are more difficult to
measure in quantifiable terms. But
most activities can be broken down
into objective segments that allow
for measurement. The manager
needs to determine what value a
person, department, or unit
contributes to the organization and
then convert the contribution into
standards. Most jobs and activities
can be expressed in tangible and
measurable terms. When a
performance indicator cannot be
stated in quantifiable terms,
managers should look for and use
subjective measures. Certainly,
subjective measures have significant
limitations. Any analysis or decisions
made on the basis of subjective
criteria should recognize the
limitations of the data.
Some activities are
difficult to measure
in quantifiable
terms.
Activities are in
tangible and
measurable
Manager should use
subjective measures
if quantifiable
cannot be used

18. HOW DO MANAGERS COMPARE ACTUAL
PERFORMANCE TO PLANNED GOALS?
• The comparing step determines the degree of discrepancy between actual
performance and the standard.
• It is critical to determine the acceptable range of variation.
• In the comparison stage, managers are particularly concerned with the size
and direction of the variation.

22. WHAT MANAGERIAL ACTION CAN BE TAKEN?
• The third and final step in the control
process is taking managerial action.
• Managers can choose among three courses
of action: they can do nothing; they can
correct the actual performance; or they
can revise the standard.
• Doing nothing is fairly self-explanatory.
• How Do You Correct Actual Performance?
• If the source of the variation has been
deficient performance, the manager will
want to take corrective action.
• Make another decision; take immediate or
basic corrective action? Immediate
corrective action corrects problems at
once and gets performance back on track.

23. WHAT MANAGERIAL ACTION CAN BE TAKEN?
• Basic corrective action asks how and why
performance has deviated and then
proceeds to correct the source of
deviation.
• It is not unusual for managers to
rationalize that they do not have the time
to take basic corrective action and
therefore must be content to perpetually
put out fires with immediate corrective
action.
• Effective managers analyze deviations,
and when the benefits justify it, take the
time to permanently correct significant
variances between standard and actual
performance

24. HOW DO YOU REVISE THE STANDARD?
• It is also possible that the
variance was a result of an
unrealistic standard—that is, the
goal may have been too high or
too low.
• The standard needs corrective
attention, not the performance.
• The more troublesome problem
is the revising of a performance
standard downward.
• It may be true that standards are
too high.
• But keep in mind that if
employees or managers don’t
meet the standard, the first thing
they are likely to do is to attack
the standard itself.

25. WHATTAKESPLACEASMANAGERSCONTROL?
VideoTime–“Creatingorganizationalculturesbasedonvaluesand
performance“
 “Rhoades has proven that when
implemented correctly, this kind of
corporate culture not only creates a
great work environment for employees
but also increases all other performance
measures”
 Ann Rhoades was Vice President of the
People Department of Southwest
Airlines, Executive Vice President of
Team Services for Promus Hotel
Corporation and most recently, the
Executive Vice President of People for
JetBlue Airways where she served for 15
years as a Board Member. She is
President of People Ink, her consulting
company that helps organizations create
unique workplace cultures based on
values and performance.
 https://www.youtube.com/watch?v=Blh
M7vALtUM&t=55s

26. WHAT SHOULD MANAGERS CONTROL?
Section 3

28. WHAT IS FEEDFORWARD CONTROL?
The most desirable type of control—
feedforward control—prevents
anticipated problems.
• It takes place in advance of the actual
activity.
• It’s future-directed.
• The key to feedforward control is
taking managerial action before a
problem occurs.
Feedforward controls allow
management to prevent problems
rather than having to cure them. These
controls require timely and accurate
information that is often difficult to
develop.

29. WHEN IS CONCURRENT CONTROL USED?
• It takes place while an
activity is in progress.
• Management can correct
problems before they
become too costly.
• The best-known form of
concurrent control is
direct supervision.
Technical equipment can
be designed to include
concurrent controls.

30. WHY IS FEEDBACK CONTROL SO POPULAR?
• The most popular type of control
relies on feedback. The control
takes place after the action.
• The major drawback of this type
of control is that by the time the
manager has the information, the
damage has already been done.
It’s analogous to locking the barn
door after the horse has been
stolen.
• Feedback has two advantages
over feedforward and concurrent
control. First, feedback provides
managers with meaningful
information on how effective
their planning efforts were.
Second, feedback control can
enhance employee motivation.

31. KEEPING TRACK: WHAT GETS CONTROLLED?
• Every business wants to earn a
profit and to achieve this goal,
managers need financial.
Traditional financial measures
managers might use include ratio
analysis and budget analysis.
• Next slide summarizes some of
the most popular financial ratios
that managers will analyze.
• Budgets are another type of
financial control tool that are
used for planning and
controlling.
Ratio
analysis
Budget
analysis

32. KEEPING TRACK: WHAT GETS CONTROLLED?

33. KEEPING TRACK OF ORGANIZATION’S INFORMATION
• Managers deal with information
controls in two ways: (1) as a tool to
help them control other
organizational activities and (2) as an
organizational area they need to
control.
• A management information system
(MIS) is a system used to provide
managers with needed information
on a regular basis.
• The term system in MIS implies order,
arrangement, and purpose. An MIS
focuses specifically on providing
managers with information
(processed and analyzed data), not
merely data (raw, unanalyzed facts)

34. KEEPING TRACK OF ORGANIZATION’S INFORMATION
• Managers must have comprehensive
and secure controls in place to
protect that information.
• Equipment such as laptop computers
and even RFID (radio-frequency
identification) tags are vulnerable to
viruses and hacking, so information
controls should be monitored
regularly to ensure that all possible
precautions are in place to protect
important information.

35. KEEPING TRACK USING A BALANCED SCORECARD APPROACH
• A balanced scorecard typically
looks at four areas that
contribute to a company’s
performance: financial,
customer, internal processes,
and people/innovation/growth
assets. According to this
approach, managers should
develop goals in each of the four
areas and then measure whether
the goals are being met.

36. WHAT SHOULD MANAGERS CONTROL?
Feedforward, concurrent, and feedback controls - Questions
• Contrast feedforward, concurrent, and feedback controls.
• Why do you think feedback control is the most popular type of
control? Justify your response

37. WHAT SHOULD MANAGERS CONTROL?
Feedforward, concurrent, and feedback controls - Answers
Contrast feedforward, concurrent, and feedback controls.
• Feedforward controls take place before a work activity is done.
Concurrent controls take place while a work activity is being done.
Feedback controls take place after a work activity is done.
Why do you think feedback control is the most popular type of
control? Justify your response
• Students’ responses will vary but might include things like: managers
have experience with feedback; it’s natural to want to wait and see
what outcomes are before making adjustments, the difficulty in
establishing the information systems needed for feed forward
control, etc. In the end, it may be more cost effective for companies
to get the product out of the door and then hope that the customer
does not complain than to spend money on the other types of
controls.

38. WHAT CONTEMPORARY CONTROL ISSUES DO MANAGERS CONFRONT?
Section 4

39. DO CONTROLS NEED TO BE ADJUSTED FOR CULTURAL
DIFFERENCES?
• Methods of controlling employee
behavior and operations can be quite
different in foreign countries.
• The differences in organizational
control systems of global
organizations are primarily in the
measurement and corrective action
steps of the control process.
• Managers of foreign operations of
global corporations tend not to be
closely controlled by the home office.
Distance keeps managers from being
able to observe work directly. The
home office of a global company
often relies on extensive formal
reports for control. The global
company may also use the power of
information technology to control
work activities.

40. DO CONTROLS NEED TO BE ADJUSTED FOR CULTURAL
DIFFERENCES?
• Technology’s impact on control is most
evident in comparing technologically
advanced nations with more primitive
countries. Organizations in technologically
advanced nations use indirect control
devices—particularly computer-related
reports and analyses— in addition to
standardized rules and direct supervision to
ensure that activities are going as planned.
• In less technologically advanced countries,
direct supervision and highly centralized
decision making are the basic means of
control.
• Constraints on what corrective action
managers can take may affect managers in
foreign countries. Laws in some countries do
not allow managers the option of closing
facilities, laying off employees, or bringing in
a new management team from outside the
country.
Technology impact on control
i.e. indirect control device
Less technologically advanced
countries – use basic control
Constraint of corrective
action globally- need to
follow law of home countries.

41. WHAT CHALLENGES DO MANAGERS FACE IN
CONTROLLING THE WORKPLACE?
• Is my work computer really mine? Do you think you have a right to
privacy at your workplace?
• Employers can, among other things: read your e-mail (even confidential
messages), tap your work telephone, and monitor your computer work.
• Managers feel they must monitor what employees are doing because
employees are hired to work, not to surf the Web checking stock prices,
placing bets at online casinos, or shopping for presents for family or
friends. Recreational on-the-job Web surfing.
• A survey of U.S. employers said that 87 percent of employees look at non
work-related Web sites while at work and more than half engage in
personal Web site surfing every day.

42. WHAT CHALLENGES DO MANAGERS FACE IN
CONTROLLING THE WORKPLACE?
• Managers don’t want to risk
being sued for creating a hostile
workplace environment because
of an offensive message or
inappropriate images displayed
on a co-worker’s computer
screen. Federal law views a
company’s e-mail no differently
than if offensive materials were
circulated on a company’s
letterhead.
• Managers want to ensure that
company secrets aren’t being
leaked.
• The consequences of
inappropriate workplace
computer usage can be serious
for employees and companies.

43. IS EMPLOYEE THEFT ON THE RISE?
• Nearly 85 percent of all
organizational theft and fraud is
committed by employees—not
outsiders.
• Employee theft is defined as any
unauthorized taking of company
property by employees for their
personal use.
• It can range from embezzlement
to fraudulent filing of expense
reports to removing equipment,
parts, software, and office
supplies from company premises.

44. WHY DO EMPLOYEES STEAL?
• The industrial security people propose
that people steal because the
opportunity presents itself through lax
controls and favorable circumstances.
• Criminologists say it’s because people
have financial-based pressures (such as
personal financial problems) or vice-
based pressures (such as gambling
debts).
• Clinical psychologists suggest that
people steal because they can
rationalize whatever they’re doing as
being correct and appropriate behavior
(“everyone does it,” “they had it
coming,” “this company makes enough
money and they’ll never miss anything
this small,” “I deserve this for all that I
put up with,” and so forth).
• What can managers do? The concept of
feedforward, concurrent and feedback
control is useful for identifying
measures to deter or reduce employee
theft
Opportunity presents
Finance-based
pressures
Can’t rationalize
correct or appropriate
behavior
Manager need to use
feedforward,
concurrent and
feedback control

45. CONTROLLING EMPLOYEE THEFT

46. CONTROLLING EMPLOYEE THEFT

47. WHAT CAN MANAGERS DO ABOUT WORKPLACE VIOLENCE?
• The U.S. National Institute of
Occupational Safety and Health
says that each year, some 2
million American workers are
victims of some form of
workplace violence such as
verbal abuse, yelling at
coworkers, purposeful damage
of machines or furniture, or
assaulting coworkers.
• Anger, rage, and violence in the
workplace are intimidating to
coworkers and adversely affect
their productivity.
• The annual cost to U.S.
businesses is estimated to be
between $20 billion and $35
billion.

48. DYSFUNCTIONAL WORK ENVIRONMENTS ARE CHARACTERIZED BY:
• Employee work driven by TNC
(time, numbers, and crises).
• Rapid and unpredictable change
where instability and uncertainty
plague employees.
• Destructive communication style
where managers communicate in
excessively aggressive,
condescending, explosive, or
passive-aggressive styles;
excessive workplace teasing or
scapegoating.
• Authoritarian leadership with a
rigid, militaristic mind-set of
managers versus employees;
employees aren’t allowed to
challenge ideas, participate in
decision making, or engage in
team-building efforts.
Employee work driven
by time, numbers and
crises
Rapid and unpredictable
change
Destructive
communication
Authoritarian leadership

49. DYSFUNCTIONAL WORK ENVIRONMENTS ARE CHARACTERIZED BY:
• Defensive attitude where little or no
performance feedback is given; only
numbers count; and yelling,
intimidation, and avoidance are the
preferred ways of handling conflict.
• Double standards in terms of policies,
procedures, and training opportunities
for managers and employees.
• Unresolved grievances because there
are no mechanisms or only adversarial
ones in place for resolving them;
dysfunctional individuals may be
protected or ignored because of long-
standing rules, union contract
provisions, or reluctance to take care of
problems.
• Emotionally troubled employees and
no attempt by managers to get help for
these people.
Defensive attitude
Double standards
policies
Unresolved
grievances
Emotionally
troubled employees

50. DYSFUNCTIONAL WORK ENVIRONMENTS ARE CHARACTERIZED BY:
• Repetitive, boring work where there’s
no chance for doing something else or
for new people coming in.
• Faulty or unsafe equipment or deficient
training, which keeps employees from
being able to work efficiently or
effectively.
• Hazardous work environment in terms
of temperature, air quality, repetitive
motions, overcrowded spaces, noise
levels, excessive overtime, and so forth.
To minimize costs, no additional
employees are hired when workload
becomes excessive leading to
potentially dangerous work
expectations and conditions.
• Culture of violence where there’s a
history of individual violence or abuse;
violent or explosive role models; or
tolerance of on-the-job alcohol or drug
abuse.
Repetitive,
boring work
Faulty or unsafe
equipment
Hazardous work
environment
Culture of
violence

51. CONTROLLING WORKPLACE VIOLENCE

52. WHATCONTEMPORARYCONTROLISSUESDOMANAGERSCONFRONT?
VideoTime–“BullyingandCorporatePsychopathsatWork”
 The evidence and effects of toxic
leadership, and in particular the
influence of the presence of corporate
psychopaths on various workplace
outcomes, including on levels of conflict
and bullying at work.
 Clive Boddy, a Professor of Leadership
and Organizational Behavior at
Middlesex University in England, studies
the evidence and effects of toxic
leadership, and in particular the
influence of the presence of corporate
psychopaths on various workplace
outcomes, including on levels of conflict
and bullying at work.
 https://www.youtube.com/watch?v=tlB
1pFwGhA4