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Orgnaization and controlling
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- 2. Planning How do managersplan? What types of plans do managers use? What are the useful planning tools and techniques? What is the control process? What are the common organizational controls?
- 3. How do managersplan? Planning – The process of setting objectives and determining how to best accomplish them. Objectives – Identify the specific results or desired outcomes that one intends to achieve. Plan – A statement of action steps to be taken in order to accomplish the objectives.
- 4. Steps inthe planning process: – Define your objectives. – Determine where you stand vis-à-vis objectives. – Develop premises regarding future conditions. – Analyze and choose among action alternatives. – Implement the plan and evaluate results.
- 5. The roles ofplanning and controlling in the management process.
- 6. Benefits of planning: –Improves focus and flexibility. – Improves action orientation. – Improves coordination. – Improves time management. – Improves control.
- 7. A sample means-endschain for total quality management.
- 8. What types ofplans do managers use? Short-range and long-range plans – Short-range plans = 1 year or less – Intermediate-range plans = 1 to 2 years – Long-range plans = 3 or more years People vary in their capability to deal effectively with different time horizons. Higher management levels focus on longer time horizons.
- 9. What types ofplans do managers use? Strategic and operational plans – Strategic plans — set broad, comprehensive, and longer-term action directions for the entire organization. – Operational plans — define what needs to be done in specific areas to implement strategic plans. • Production plans • Financial plans • Facilities plans • Marketing plans • Human resource plans
- 10. Policies and procedures –Standing plans • Policies and procedures that are designed for repeated use. – Policy • Broad guidelines for making decisions and taking action in specific circumstances. – Rules or procedures • Plans that describe exactly what actions are to be taken in specific situations.
- 11. Budgets and projectschedules – Single-use plans • Only used once to meet the needs and objectives of a well- defined situation in a timely manner. – Budgets • Single-use plans that commit resources to activities, projects, or programs. • Fixed, flexible, and zero-based budgets. – Projects • One-time activities that have clear beginning and end points. • Project management and project schedules.
- 12. What are theuseful planning tools and techniques? Forecasting – Making assumptions about what will happen in the future. – Qualitative forecasting uses expert opinions. – Quantitative forecasting uses mathematical and statistical analysis. – All forecasts rely on human judgment. – Planning involves deciding on how to deal with the implications of a forecast.
- 13. Contingency planning –Identifying alternative courses of action that can be implemented to meet the needs of changing circumstances. – Contingency plans anticipate changing conditions. – Contingency plans contain trigger points.
- 14. Scenario planning – Along-term version of contingency planning. – Identifying alternative future scenarios. – Plans made for each future scenario. – Increases organization’s flexibility and preparation for future shocks.
- 15. Benchmarking – Use ofexternal comparisons to better evaluate current performance and identify possible actions for the future. – Adopting best practices of other organizations that achieve superior performance.
- 16. Use of staffplanners – Coordinating the planning function for the total organization or one of its major components. – Possible communication gaps between staff planners and line management.
- 17. Participation andinvolvement – Participatory planning requires that the planning process include people who will be affected by the plans and/or will help implement them. – Benefits of participation and involvement: • Promotes creativity in planning. • Increases available information. • Fosters understanding, acceptance, and commitment to the final plan.
- 18. How participation andinvolvement help build commitments to plans.
- 19. What is thecontrol process? 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.
- 20. Steps in thecontrol 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.
- 21. Four steps inthe control process.
- 22. 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.
- 23. 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.
- 24. 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
- 25. 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
- 26. 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.
- 27. 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.
- 28. Feedback controls … –Take place after work is completed. – Focus on quality of end results. – Provide useful information for improving future operations.
- 29. The role offeed forward, concurrent, and feedback controls in organizations.
- 30. What are thecommon organizational controls? Management by Objectives (MBO) – A structured process of regular communication. – Supervisor/team leader and workers jointly set performance objectives. – Supervisor/team leader and workers jointly review results.
- 31. Management by objectivesas an integrated planning and control framework.
- 32. What are thecommon organizational controls? MBO involves a formal agreement specifying … – Workers’ performance objectives for a specific time period. – Plans through which performance objectives will be accomplished. – Standards for measuring accomplishment of performance objectives . – Procedures for reviewing performance results.
- 33. The MBO process: –Supervisor and workers jointly set objectives, establish standards, and choose actions. – Workers act individually to perform tasks; supervisors act individually to provide necessary support. – Supervisor and workers jointly review results, discuss implications, and renew the MBO cycle.
- 34. Types ofMBO performance objectives – Improvement – Personal development – Maintenance Criteria for effective performance objectives – Specific – Time defined – Challenging – Measurable
- 35. Pitfalls to avoidin using MBO – Tying MBO to pay. – Focusing too much attention on easily quantifiable objectives. – Requiring excessive paperwork. – Having managers tell workers their objectives.
- 36. Advantages of MBO –Focuses workers on most important tasks and objectives. – Focuses supervisor’s efforts on important areas of support. – Contributes to relationship building. – Gives workers a structured opportunity to participate in decision making.
- 37. Employee discipline systems –Discipline is the act of influencing behavior through reprimand. – Discipline that is applied fairly, consistently, and systematically provides useful control.
- 38. To beeffective, reprimands should … – Be immediate. – Be directed toward actions, not personality. – Be consistently applied. – Be informative. – Occur in a supportive setting. – Support realistic rules.
- 39. Employee discipline systems –Progressive discipline ties reprimands to the severity and frequency of the employee’s infractions. – Progressive discipline seeks to achieve compliance with the least extreme reprimand possible.
- 40. Important financialaspects of organizational performance … – 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.
- 41. Break-even analysis… – Determination of the point at which sales revenues are sufficient to cover costs. – Break-Even Point = Fixed Costs / (Price – Variable Costs) – Used in evaluating: • New products • New program initiatives
- 42. Graphical approach tobreak-even analysis.
- 43. Purchasing control… – A productivity tool – Trends in purchasing control: • Leveraging buying power • Committing to a small number of suppliers • Working together in supplier-purchaser partnerships
- 44. Inventory control –Goal is to ensure that inventory is just the right size to meet performance needs, thus minimizing the cost. – Methods of inventory control: • Economic order quantity • Just-in-time scheduling
- 45. Statistical qualitycontrol – Quality control involves checking processes, materials, products, and services to ensure that they meet high standards. – Statistical quality control involves: • Taking samples of work. • Measuring quality in the samples. • Determining the acceptability of results.