Copyright 2012 Pearson

Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing asPearson Education, Inc. publishing as Prentice Hall
2012
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Explain the nature and importance
of control
Describe the three steps in the
control process
Explain how organizational
performance is measured
Describe tools used to measure
organizational
performance Copyright 2012 Pearson
Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing as Education, Inc. publishing as Prentice Hall
2012 Pearson
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What Is Control?
Controlling - the process of
monitoring, comparing, and
correcting work performance.
The Purpose of Control
To ensure that activities are completed
in ways that lead to the
accomplishment of organizational
goals.

Copyright 2012 Pearson

Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing as
2012 Pearson Education, Inc. publishing as Prentice Hall
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Why Is Control Important?
As the final link in management functions:
Planning
Controls let managers know whether their goals
and plans are on target and what future actions to
take.
Empowering employees
Control systems provide managers with information
and feedback on employee performance.
Protecting the workplace
Controls enhance physical security and help
minimize workplace disruptions.

Copyright 2012 Pearson

Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing as
2012 Pearson Education, Inc. publishing as Prentice Hall
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Exhibit 18-1: Planning-Controlling
Link

Copyright 2012 Pearson

Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing as
2012 Pearson Education, Inc. publishing as Prentice Hall
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The Control Process

The Process of Control

1.Measuring actual performance
2.Comparing actual performance
against a standard
3.Taking action to correct deviations
or inadequate standards

Copyright 2012 Pearson

Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing as
2012 Pearson Education, Inc. publishing as Prentice Hall
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Exhibit 18-2: The Control Process

Copyright 2012 Pearson

Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing as
2012 Pearson Education, Inc. publishing as Prentice Hall
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 Step1 Measuring: How and
What
We Measure
Sources of Control Criteria
Information (What)
(How) Employees
Personal Satisfaction
observation Turnover
Statistical Absenteeism
reports
Budgets
Oral reports
Costs
Written reports Output
Sales
Copyright 2012 Pearson
Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing as Education, Inc. publishing as Prentice Hall
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 Exhibit 18-3: Sources of
Information
for Measuring Performance

Copyright 2012 Pearson

Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing as
2012 Pearson Education, Inc. publishing as Prentice Hall
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 Step 2: Comparing Actual
Performance
Against the Standard
Determining the degree of variation
between actual performance and the
standard
Range of variation - the
acceptable parameters of variance
between actual performance and the
standard.

Copyright 2012 Pearson

Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing as
2012 Pearson Education, Inc. publishing as Prentice Hall
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 Exhibit 18-4: Acceptable
Range of Variation

Copyright 2012 Pearson

Education,
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Step 3: Taking Managerial
Action
Immediate corrective action -
corrective action that corrects
problems at once in order to get
performance back on track.
Basic corrective action -
corrective action that looks at how
and why performance deviated
before correcting the source of
deviation. (Training)
Copyright 2012 Pearson
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Controlling for Organizational
Performance
Organizational performance - the
accumulated results of all the
organizations work activities.

Copyright 2012 Pearson

Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing as
2012 Pearson Education, Inc. publishing as Prentice Hall
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 Measures of Organizational
Performance
1. Productivity - the amount of goods or
services produced divided by the inputs needed
to generate that output.
2. Organizational effectiveness - a measure
of how appropriate organizational goals are and
how well those goals are being met.
3. Industry & Company Rankings - Rankings
are a popular way to measure organizations
performance. Rankings are determined by
specific performance measures and create a
equal platform for other comparable companies.
Copyright 2012 Pearson
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Exhibit 18-7: Popular Industry and
Company Rankings

Copyright 2012 Pearson

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Types of Control
Feed forward
control - control
that takes place
before a work
activity is done.
Concurrent
control - control
that takes place
while a work activity
is in progress.

Copyright 2012 Pearson

Education,
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Types of Control (cont.)
Management by
walking around - a
term used to describe
when a manager is out
in the work area
interacting directly
with employees.
Feedback control -
control that takes
place after a work
activity is done.
Copyright 2012 Pearson
Education,
Management, Eleventh Edition by Stephen P. Robbins & Mary Coulter Inc. Publishing as Education, Inc. publishing as Prentice Hall
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Exhibit 18-8: Types of Control

Copyright 2012 Pearson

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Financial Controls
Traditional Controls
Ratio analysis
Liquidity
Leverage
Activity
Profitability
Budget Analysis
Quantitative standards
Deviations

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Exhibit 18-9: Popular Financial
Ratios

Copyright 2012 Pearson

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Exhibit 18-9: Popular Financial
Ratios (cont.)

Copyright 2012 Pearson

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What is the Balanced
Scorecard?
Balanced scorecard - a performance
measurement tool that examines more
than just the financial perspective.
Measures a companys performance in
four areas:
Financial
Customer
Internal processes
People/innovation/growth assets

Copyright 2012 Pearson

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Information Controls
Management information system
(MIS) - a system used to provide
management with needed
information on a regular basis.
Data - an unorganized collection of raw,
unanalyzed facts (e.g., an unsorted list of
customer names).
Information - data that has been analyzed
and organized such that it has value and
relevance to managers.
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Benchmarking of Best
Practices
Benchmarking - the search for the
best practices among competitors or
non-competitors that lead to their
superior performance.
Benchmark - the standard of
excellence to measure and compare
against.

Copyright 2012 Pearson

Education,
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2012 Pearson Education, Inc. publishing as Prentice Hall
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