MGMT 3000 1st edition Lecture 29 Outline of Last Lecture I Nonverbal communication II Listening III Feedback IV Cross cultural communication Outline of Current Lecture I Controlling II Steps of control Process III ENRON IV Control Methods Current Lecture Controlling is monitoring progress toward goal achievement and taking corrective actions when needed Control is a regulatory process of 1 Establishing standards to achieve organizational goals 2 Comparing actual performance against the standards 3 Taking corrective action when necessary The Steps of the control process 1 Establishment of clear standards of performance a Standards are a basis of comparison for measuring the extent to which organizational performance is satisfactory or unsatisfactory b Managers must enable goal achievement and listen to customers c Benchmarking is the process of determining how well other companies though not just competitors perform business functions or tasks 2 Comparing performance to those standards quality of comparison depends largely on measurement and information systems a company uses to keep track of performance 3 Corrective action to repair performance deficiencies a Identify and analyze deviations and develop corrective programs 4 Dynamic cybernetic process a Constant attention to the feedback loop is necessary to keep the company s activity on course b Cybernetic derives from the Greek word kubernetes meaning steersman that is one who steers or keeps on course 5 3 basic methods These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute a Feedback control a mechanism for gathering information about performance deficiencies after they occur b Concurrent control addresses the problems inherent in feedback control by gathering information about performance deficiencies as they occur c Feedforward control addresses the problems inherent in feedback control by gathering information about performance deficiencies as they occur d Control isn t always worthwhile or possible i Regulation costsS whether the costs and unintended consequences of control exceed its benefits ii Unintended consequences sometimes accompany increased control iii Cybernetic feasibility the extent to which it is possible to implement each step of the control process iv Control loss occurs when behavior and work procedures do not conform to standards 1 Also prevents organizations from achieving their goals and a loss in earnings The fraud triangle illustrates that the most important lessons from Enron lie in the way that a corporate culture overcame a sophisticated and widely lauded set of management controls and in the importance of carefully balancing the core concepts of leadership organizational culture and control within organizations Organization wide fraud is only possible when these three variables are configured in a way that enables and even fosters manipulation and fails to prevent compliance failure Control Methods 5 Different methods to achieve control in organizations 1 Bureaucratic Top down managers try to influence employees by rewards and punishment a Emphasize following rules b Highly resistant to change and slow to respond to customers and competitors 2 Objective Use of observable measures of behavior of output to assess performance and influence behavior a Types b Behavior Control regulating behaviors and actions that workers perform on the job i If you do the right things then it should lead to goal achievement c Output control measures the results of the efforts of employees and workers i Gives freedom to behave as they want as long as they can accomplish the measurable results 3 Normative Company s widely shared values and beliefs guide workers behavior and decisions a Created by who companies hire i Screen who they hire for values and attitudes b Created by observing experienced employees and listening to their stories 4 Concretive based on beliefs that are shaped and negotiated by work groups a Group members learn to work with each other supervise each other s work and develop guiding values and self beliefs b Objective rules emerge and are formalized to guide and control behavior 5 Self control Self management Managers and workers control own behavior a Leaders teach others the skills the need to maximize and monitor their own goals and theories b Individuals establish self control by setting their own goals monitoring progress rewarding punishing themselves and constructing positive thought patterns