Carefully review all of the learning material in chapter 16 before responding to this discussion, you are likely to score less than 50% if you do not use the learning input. View the video extract from the movie Blackhawk Down. The US military has a formal structure with advanced planning capabilities and centralized controls. However, the military of most other countries have strong autocratic controls. Against this backdrop, consider the need for control in achieving organizational objectives for a specific business or government department. Include objectives to create increased value, reduced risks, and reduced costs – thereby achieving optimal outcomes. The cases on pages 412 to 415 may provide ideas for students with limited work experience. Required:1. Provide an initial posting that describes your selected organization (in less than 30 words). Then describe the value and role of control to achieve optimal outcomes in a second posting of 150 to 225 words.2. Use formal writing. Errors will reduce your grade.3. Grading will only consider content relating to management concepts.
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Control Systems & Quality Management
Techniques for Enhancing Organizational
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Major Questions You Should Be Able to Answer
16.1 Why is control such an important managerial
16.2 How do successful companies implement
16.3 How can three techniquesa balanced
scorecard, strategy maps, and measurement
managementhelp me establish standards
and measure performance?
16.4 What are the financial tools I need to know
Major Questions You Should Be Able to Answer
16.5 How do top companies improve the quality of
their products or services?
16.6 What are the keys to successful control, and
what are the barriers to control success?
16.7 How do managers influence productivity?
Control: When Managers Monitor Performance
Defined as monitoring performance, comparing it with
goals, and taking corrective action as needed
Figure 16.1 Controlling for effective performance
What you as a manager do to get things done, with controlling shown in relation to the three other
management functions. (These are not lockstep; all four functions happen concurrently.)
Jump to Appendix 1 for
Why Is Control Needed?
1. To adapt to change and uncertainty
2. To discover irregularities and errors
3. To reduce costs, increase productivity, or add value
4. To detect opportunities
5. To deal with complexity
6. To decentralize decision making and facilitate
Steps in the Control Process (1 of 4)
Jump to Appendix 2 for
Steps in the Control Process (2 of 4)
1. Establish standards
Performance standard: the desired performance level for a
Best measured when they can be made quantifiable
2. Measure performance
Usually obtained from written reports, oral reports, and
Steps in the Control Process (3 of 4)
3. Compare performance to standards
Management by exception: control principle that says
managers should be informed of a situation only if data
show a significant deviation from standards
Steps in the Control Process (4 of 4)
4. Take corrective action if necessary
Make no changes.
Recognize and reinforce positive performance.
Take action to correct negative performance.
A UPS driver fails to perform according to the standards
set for the route and traffic conditions. A supervisor
rides along and gives suggestions for improvement.
This is the ____________ stage of the control process.
A. compare performance to standards
B. establish standards
C. take corrective action
D. measure performance
Levels of Control
Monitoring performance to ensure that strategic plans are
being implemented and taking corrective action as needed
Monitoring performance to ensure that tactical plans
those at the divisional or departmental levelare being
Levels of Control
Monitoring performance to ensure that operational plans
day-to-day goalsare being implemented and then
taking corrective action as needed
Six Areas of Control
A drug test employed by an organization in its hiring
process is an example of a(n) _______ resource control.
An approach to organizational control that is characterized
by use of rules, regulations, and formal authority to guide
An approach to organizational control that is characterized
by informal and organic structural arrangements
The Balanced Scoreboard
Gives top managers a fast but comprehensive view of the
organization via four indicators
1. Customer satisfaction
2. Internal processes
3. Innovation and improvement activities
4. Financial measures
The Balanced Scorecard: Four Perspectives (1 of 2)
Jump to Appendix 3 for
The Balanced Scorecard: Four Perspectives (2 of 2)
Profitability, growth, shareholder values
Priority is taking care of the customer
Quality, employee skills, and productivity
Innovation and learning
Learning and growth of employees
The Visual Representation of a
Visual representation of the four perspectives of the
balanced scorecard that enables managers to
communicate their goals so that everyone in the company
can understand how their jobs are linked to the overall
objectives of the organization
The Strategy Map
Jump to Appendix 4 for
Jeffs sales goal was to improve sales. Which barrier
to measurement is this?
A. Objectives are fuzzy.
B. Managers put too much trust in informal feedback systems.
C. Employees resist new measurement systems.
D. Companies focus too much on measuring activities.
Budgets: Formal Financial Projections
Formal financial projection
Allocates increased or decreased funds to a department by
using the last budget period as a reference point
Only incremental changes in the budget request are
Types of Budgets
TYPE OF BUDGET
Cash or cashflow budget
Forecasts all sources of cash income and cash expenditures for
daily, weekly, or monthly period
Capital expenditures budget
Anticipates investments in major assets such as land, buildings, and
Sales or revenue budget
Projects future sales, often by month, sales area, or product
Projects expenses (costs) for given activity for given period
Projects organizations source of cash and how it plans to spend it in
the forthcoming period
Projects what an organization will create in goods or services, what
financial resources are needed, and what income is expected
Deals with units other than dollars, such as hours of labor or office
Fixed Versus Variable Budgets
Allocates resources on the basis of a single estimate of
Allows the allocation of resources to vary in proportion
with various levels of activity
Summarizes an organizations overall financial worth
assets and liabilitiesat a specific point in time
Summarizes an organizations financial resultsrevenues
and expensesover specified period of time
Indicate how easily a firms assets can be converted to cash
Debt management ratios
Degree to which a firm can meet its long-term financial
How effective management is generating a return or profit
Audit formal verification of an organizations
financial and operational systems
External performed by outside experts
Internal performed by organizations own
1. Quality should be aimed at the needs of the
2. Companies should aim at improving the system, not
3. Improved quality leads to increased market share,
increased company prospects, and increased
4. Quality can be improved on the basis of hard data,
using the PDCA cycle.
The PDCA Cycle
Jump to Appendix 5 for
Total Quality Management
Total quality management (TQM)
A comprehensive approachled by top management and
supported throughout the organizationdedicated to
continuous quality improvement, training, and customer
Two Core Principles of TQM
1. People orientation
Everyone involved in the organization should focus on
delivering value to customers.
2. Improvement orientation
Everyone should work on continuously improving work
Delivering customer value is most important.
People will focus on quality if they feel empowered.
TQM requires training, teamwork, and crossfunctional efforts.
Its less expensive to do it right the first time.
Its better to do small improvements all the time.
Accurate standards must be followed to eliminate
There must be strong commitment from top
Applying TQM to Services
Enables customers to rate the quality of a service along five
Some TQM Techniques
Reduced cycle time
ISO 9000 and 14000 Series
Statistical process control
Six Sigma & Lean Six Sigma
In Harvey’s job, he takes random samples of production
runs to ascertain quality. His job involves
B. statistical process control.
C. reduced cycle time.
D. feedforward control.
The Keys to Successful Control Systems
1. They are strategic and results oriented.
2. They are timely, accurate, and objective.
3. They are realistic, positive, and understandable and
4. They are flexible.
Barriers to Control Success
1. Too much control
2. Too little employee participation
3. Overemphasis on means instead of ends
4. Overemphasis on paperwork
5. Overemphasis on one instead of multiple
Managing for Productivity
Outputs divided by inputs where:
Outputs are the goods and services produced.
Inputs are labor, capital, materials, and energy.
Managing for Productivity and Results
Jump to Appendix 6 for
The Role of Information Technology
Enterprise resource planning (ERP)
Software systems, information systems for integrating
virtually all aspects of a business, helping managers stay on
top of the latest developments
Keys to Your Managerial Success (1 of 2)
Find your passion and follow it.
Encourage self-discovery, and be realistic.
Every situation is different, so be flexible.
Fine-tune your people skills.
Keys to Your Managerial Success (2 of 2)
Learn how to develop leadership skills.
Treat people as if they matter, because they do.
Draw employees and peers into your management
Be flexible, keep your cool, and take yourself lightly.
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