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Management meeting and exceeding customer expectation 8th ch18

Controlling:
Purpose and Process

Chapter 18

MANAGEMENT
Meeting and Exceeding Customer Expectations
EIGHTH EDITION
Prepared by
Deborah Baker
Texas Christian University
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

1


learning objectives
1. Describe the relationship between controlling
and the other four functions of management

2. List and describe the four steps in the control

process

3. Describe the nature and importance of
feedforward, concurrent, and feedback controls

Chapter 18

4. Describe the importance of a control system
5. Explain the characteristics of effective controls
6. Explain the steps managers can take to make
controls more effective
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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Controlling

Six
SixSigma
Sigma

A highly disciplined process that
helps companies focus
on developing and delivering
near-perfect products
and services

 Process quality goal
 Statistical goal:

Chapter 18

only 3.4 defects per million transactions

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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Chapter 18

Controlling

Controlling
Controlling

The process through which
standards for the performance of
people and processes are set,
communicated, and applied

Standard
Standard

Any established rule or basis of
comparison used to measure
capacity, quantity, content,
value, cost, quality, or
performance

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

4


Risk Managers
 Monitor people and processes
 Help transform functional managers into
advisers and consultants

 Teach others how to deal with the risks

Chapter 18

that haunt their areas of expertise

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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11

Controlling
The
The role
role of
of controlling
controlling in
in other
other
management
management functions
functions
Planning
Planning and
and controlling
controlling
Organizing
Organizing and
and controlling
controlling

Chapter 18

Staffing
Staffing and
and controlling
controlling
Leading
Leading and
and controlling
controlling
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The Control Process

Chapter 18

22

Step
Step 11

Establishing
Establishing performance
performance
standards
standards

Step
Step 22

Measuring
Measuring performance
performance

Step
Step 33

Comparing
Comparing measured
measured performance
performance
to
to established
established standards
standards

Step
Step 44

Taking
Taking corrective
corrective action
action

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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Chapter 18

22

The Control Process

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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Chapter 18

22

Establishing Performance
Standards
Who
Who

designs,
designs, works
works with,
with, and
and receives
receives
the
the output
output from
from controls
controls

What
What

is
is being
being monitored
monitored

Where
Where

monitoring
monitoring efforts
efforts will
will take
take place
place

When
When

controls
controls will
will be
be used
used

How
How

monitoring
monitoring will
will be
be used
used

What
What

resources
resources are
are available
available to
to expend
expend
on
on the
the controls
controls

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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Productivity

22

Productivity
Productivity

The amount of output achieved
from the use of a given amount
of inputs

Chapter 18

 Measured:


Quantitatively



Qualitatively

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

10


Quality

22

Quality…
Quality…

 Is customer satisfaction
 Begins with the standards and methods
used to recruit, hire, train, evaluate, and
reward employees

 Must exist within every person and
process

 Must be a core value within an
Chapter 18

organization’s culture

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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22

Quality
Controlling
ControllingQuality…
Quality…

 Companies create standards and quality
assurance (QA) systems

 A QA system focuses on constant

Chapter 18

incremental quality improvement
[kaizen] measurements and results

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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22

Performance
Measuring
MeasuringPerformance
Performance

 Measure actual performance to determine
variation from standard

 Mechanisms for this purpose can be
extremely sensitive

 Computers are increasingly important as

Chapter 18

tools for measuring performance

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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22

Comparing Performance to
Standards

Comparing
ComparingMeasured
Measured Performance
Performance
to
toEstablished
EstablishedStandards
Standards

1. Compare actual performance to the standards set
for that performance

2. If deviations exist, the evaluator must decide if
they are significant

3. The evaluator must determine what is causing the
variance

4. The source of a deviation may be beyond the
employee who first discovers it

Chapter 18

5. The cause may require examining the standards
being applied and the accuracy of measurement
and comparison processes
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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22

Taking Corrective Action
 Policies and procedures may prescribe
the actions

 May be automatic
 May call for exceptions to prescribed

Chapter 18

modes of behavior

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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33

Types of Controls

Chapter 18

Feedforward
Feedforward
Control
Control

A control that prevents defects
and deviations from standards.
Focuses on operations before
they begin

Concurrent
Concurrent
Control
Control

A control that applies to
processes as they are
happening

Feedback
Feedback
Control
Control

A control that focuses on the
outputs or results of operations

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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Chapter 18

33

Types of Controls

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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44

Control Systems

Chapter 18

Control
Control
Systems
Systems

Feedforward, concurrent, and
feedback controls operate in
harmony to ensure that
standards are enforced, goals
are reached, and resources are
used effectively and efficiently

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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55

Effective Controls
What
What Makes
MakesControls
ControlsEffective?
Effective?
Focus
Focus on
on
Critical
Critical Control
Control
Points
Points

Chapter 18

Acceptability
Acceptability

Accuracy
Accuracy

Integration
Integration

Timeliness
Timeliness

Economic
Economic
Feasibility
Feasibility

Comprehensibility
Comprehensibility

Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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66

Monitoring Organizational Impacts

Techniques
Techniques for
for
Monitoring
Monitoring the
the
Impact
Impact of
of
Controls
Controls

Before-and-after
Before-and-after
comparisons
comparisons
Surveys
Surveys of
of employees
employees
affected
affected by
by controls
controls

Chapter 18

Controlled
Controlled experiments
experiments

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66

Updating Controls
Changes
Changes to
to Mission
Mission
Structural
Structural Changes
Changes
Changes
Changes in
in Decision
Decision Making
Making

Chapter 18

Changes
Changes in
in Human
Human Relations
Relations
Technological
Technological Changes
Changes
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved

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