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Chapter1:
Management
andControl
Management
control
a The processby which management:
ensures people
tnat inthe organization
- cerry
outorganizational
objectives
andstrategies;
encourages,
- enables,or, sometlmes
employeesto act Inthe organlzatlon'sbest Interest.
a Management
controlincludes
allthedevices/mechanisms
managers
useto ensure
thatthe behaviorof employees
is
consistent
withtheorganization's
objectives
andstrategies.
ffi@ds,tlfuokF..*|hdd
Function
and benefit
a Purpose/function
geidonewhatmanagement
- wantsdone;
influence
behaviorindesirable
- ways.
f Benefit
probability
- increased thattheorganization's
objectiveswill beachieved.
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Managementanditscomponents
Objectivesetting
o Objectives
 are
, prerequisite purposeful
anecessary forany activities.
. Wlthoutobjectives,it is impossible
) toassesswhethertheemployees' purposive;
actionsare
D
tomakeclaimsaboutanorganization'ssuccess.
a Objectivescanbe
, financialyersusnon-financial;
, quantned,oxplicilvelsus implicit;
, sconomic,social,environmental,societal.
Strategyformulation
a Anorganizationmustselect innumerable
anyof
waysofseeking
to attainitsobjectives.
r Strategiesdefinehoworganizations
should
usetheir resources
to meettheir objectives.
a Hence,
put
strategies constraintsonemployeesto
focusactivitiesonwhattheorganizationdoes
bestorareaswlrereithasanadvantage
over
competitors.
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Kevouestions
c Areouremployeeslikelyto behave
appropriately?
Do whatwe
- theyunderstand expectofthem?
Will work hard what
- they consistently andtrytodo
isexpectedofthem?
- Are they capableof doingwhat is expectedof them?
problem
Thebasiccontrol
a Managementcontrolisaboutencouraging
PEOPLE
totakedesirableactions,
 , guards posEibilities
i.s., it againsl lhe that employees will
do something the organizalion does not wantlhem to do,
or, fail to do somelhing they should do.
Hence,management
a controlhasa
BEHAVIORAL
ORIENTATIONI
personnel
a lfall couldalwaysbereliedonlodowhatis
bestfortheorganization,there be need
would no fora
managemenlcontrolsystem.
Basic
controlissues
a Threeissues:
E Do they understandwhat we expecl of th€m
* Lackof direction
, Willtheywork consistentlyhardand try to do what
is expecled of them
* Lackof motivation
r Are they capableof doingwhat is expectedof them
* Personallimitations
,fficd!)e,/&hort|s€ddb|!ddt
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Lack
ofdirection
r Employees not
do knowwhat
theorganization
wantsfromthem.
a Whenthislackof direction
occurs,thelikelihood
of
thedesired
behaviorsoccurringisobviously
small.
+
COMMUNICATION
REINFORCEMENT
!
problems
Motivational
 a Whenemployees'choose' perform
notto as
theirorganizationwouldhavethemperform.
a Because
- Lackotgoal congruonco
r g@ls
Individual do goals.
notcoincidewithorganizational
- Self-lnterested behaylor
r Genorally,individu€lsare proneto being'lazf
. e.9,,
lakelonglunches,oveBpend
onthings
thatmake
lifemorepleasanl,
useofsickleaveswhennotsick,etc.
D Moreexlt€meexamples problems:
of motivational
qdme
. Employee (fEudandlheft).
Personal
limitations
people job
. Sometimes, are'unable'to doa good
because personal
ofcertain limitations
theyhave.
o SomeexampleVcauses:
lackot rsquisiteknowledge,
- training,experience;
employees promoted
- are abovetheir levelof competence;
- someiobs are notdesignedproperly;
- etc.
TRAINING
JOB ASSIGNMENT
JOB DESIGN
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Note
that
o Management
controlsdo not involve
always a simple
cyberneticsystemlikea thermostat
r Datactor ) measuG perfomance;
 , Aslslor ) @mparc with pcssl standard;
r Effetor ) tak8 @rective action,
a Manycontrols performance
don'tfocuson measured
r E.9.,direc-tsuperyision,smployee hiring standards,
@ds8 of @nduc{.
o Many proactive
controlsare rather
thanreactive
I i.e.,they aE designed to prcvent @ntrol prcblems before lhe
organiation suffsF Eny adveBe eflecis on perfoman@.
Control
canbeachievedthrough:
r ControlProblemAvoidance
o Management
Control Systems
D ActionControls;
D Results
Controls;
D People
Controls.
Control-problem
avoidance
. Three
oossibilities:
- Activity ellmlnation
r e.9.,subcontracts,
licensingagroements,
divestmenl
- Automation
r Computers/robotseliminats pmblems
the human
of inaccuracy,in@nsist6ncy,and lackof molivaton;
, Onlyappli€ble to relativ€ly
easydecisionsituations;
, Aulomation€n be very costly.
- Centrallzation
DSup€rioB reserv€for thsmselvesthe mostcriti€l
decisions.
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Controlalternatives
o Controls focus
can on:
 lhe actions taken ACTION
- CONTROLS
- the rssultsorodu@d RESULTSCONTROLS
- the types of poople PEOPLECONTROLS
employedandtheir
shared valuss and
Oranycombination
Depending
on
Abilityto measurerewlts on impoflantperfoman@ dimensions
Actlon Control
and/or Actlon Control
(s.9. prcjscls)
R$ults Control larg€
ResultsControl
Poople Control
(e.9.
movie
dircctor, (e.9.
ressarchlab)
enlitymsnager)
Overview
peoplE
can beavoided? ye
- --l .|l"*fi;*;-l
(e.g.automation,entmlizstjon)
svoialance
I
can )/ouFly on p€opteinvolved?-yg--l-----------l
lt{o -- | PeoplecontrcbI
you people
Can mak€ reliablo? -YU-l
lNo
Haw knowledge
aboutwhat ..I:f- Abloto assess
whether
specificactionsaredesirable? specificac,lionwastaken?
t-..-..-.., - ..-..--..-..-... - ...1._
I Ho 116
I _,, Actioncontrols
I I
Hav€knowledgeaboutwhaiy6