Levels of Control Mechanism


Strategic management provides overall direction to the enterprise. Strategy formulation requires examining where the company is now, determining where it wants to go, and then determining how to get there. This involves crafting vision statements, mission statements, overall corporate objectives.

Tactical management involves the future vision of the business and tactics involve the actual steps needed to achieve that vision. Tactics are the practical steps needed to implement the strategy.

Operational control serves to regulate the day-to-day output relative to schedules, specifications, and costs.

By Nathan Phillips

 

Types and Systems of Control


Physical resources:  Includes inventory management, quality control and equipment control.

Human resources:  Includes selection and placement, training and development, performance appraisal and compensation.

Information resources:  Includes sales/marketing, forecasting, environmental analysis, public relations, production scheduling and economic forecasting.

Financial resources:  Involves managing the organizations debt, cash flow and receivables/payables.

By Nathan Phillips

 

Process of Control


Standards are the plans or the targets which have to be achieved in the course of business function.  They can also be called as the criterions for judging the performance.  Standards generally are classified into measurable or tangible and non-measurable or intangible. The second major step in controlling is to measure the performance. Measurement of tangible standards is easy as it can be expressed in units, cost, or productivity.  Qualitative measurements become difficult when the performance of manager has to be measured.  Once the deviation is identified, a manager has to think about the cause which has led to deviation. Once the causes and extent of deviations are known, the manager has to detect those errors and take remedial measures to rectify the situation.

By Nathan Phillips

 

Controlling with Other Management Functions


Controlling is the management function that balances the function of management circle. It is the navigational device that connects other management functions – organizing, staffing, and leading to the set planning goals. Planning determines the goals and objectives which becomes the nucleus of control where in hinges the control.

The connectivity between the management functions is demonstrated in the link below:

http://www.smartkpis.com/blog/tag/philip-kotler-marketing-management/

Control can effect an organization in both positive and negative ways.  A manager must be able to access if the controls are more like constraints or a guide for the organization. The manager must ask questions to ensure that the controls are relevant.

1.      Process of Control

Control process involves measuring actual performance, comparing actual performance, and taking managerial action to correct deviations or inadequate standards. What is measured is of critical value to control process than the method used to measure it. What is measured determines what individuals in the organization put excellent effort into to be distinguished.

https://app.smartsheet.com/b/home

Standards are the plans or the targets which have to be achieved in the course of business function.  They are called criterions for judging the performance.  Standards generally are classified into measurable or tangible and non-measurable or intangible. The second major step in controlling is to measure the performance. Measurement of tangible standards is easy as it can be expressed in units, cost, or productivity.  Qualitative measurements become difficult when the performance of manager has to be measured. Once the deviation is identified, a manager has to think about the cause which has led to deviation. Once the causes and extent of deviations are known, the manager has to detect those errors and take remedial measures to rectify the situation.

2.      Types and Systems of Control

Physical resources:  Includes inventory management, quality control and equipment control.

Human resources:  Includes selection and placement, training and development, performance appraisal and compensation.

Information resources:  Includes sales/marketing, forecasting, environmental analysis, public relations, production scheduling and economic forecasting.

Financial resources:  Involves managing the organizations debt, cash flow and receivables/payables.

3.      Operational Control

In contrast to strategic control, operational control serves to regulate the day-to-day output relative to schedules, specifications, and costs, by the formulation of policies and execution of corresponding procedures. Is the output of product or service the proper quality and is it available as scheduled? Are inventories of raw materials, goods-in-process, and finished products being purchased and produced in the desired quantities? Are the costs associated with the transformation process in line with cost estimates? Is the information needed in the transformation process available in the right form and at the right time? Is the energy resource being utilized efficiently?

Operational controls are focused on the near term goals and should not affect the overall survival of an organization.

4.      Nature of Effective Controls

Information Quality

A key factor in the effectiveness of a control system is the quality of the information it receives. Control system information must be accurate and up to date. The best controls get their information from the points where operations generate it. In many cases, control systems can supply data in real time, but systems still have to process a lot of data, leading to delays.

Planning

Raw control system information is not useful to management unless a comparison to established benchmarks and targets is possible. To allow such a comparison, a tight integration of the control system with the planning process is essential. The focus of the control system must match the focus of the strategic or operational plan.

Flexibility

An effective control system is highly flexible. If the data collected from one source are no longer reflective of the actual situation, management must be able to identify other, better sources of data and adapt the system.

Objectivity

Managers must be able to make decisions and act on the basis of control system results. They can do so credibly only when the decisions are seen to be based on objective data and evaluations. To achieve such objectivity, control systems must be transparent and relevant to the business.

Economics

The cost of a control system must be reasonable compared to the business it controls. The purpose of the system is to reduce unexpected costs and reach competitive goals, and an expensive or intrusive control system increases costs and reduces competitiveness.

5.      Behavioral Control

Managers monitor employee behaviors, directing and evaluating based on subjective measures of abilities and activities; not just outcomes. The manager makes sure that employee input and behavior reflects his expectations. Managers make decisions to increase or decrease salaries, promote or sanction employees’ using more complex, subjective evaluations not based on measurable outcomes. Managers dictate the level of performance required. Management cost increases because more monitoring is required, which allows for consistent, perpetual updates to strategy, whereas output-control only allows for periodic assessment.

Behavior-systems afford managers more control over employees through interaction and relationships, employee participation and corporate culture. Managers impose their own ideas of what salespeople should be and do to achieve results. Managers can have employees’ focus on the firm’s long-term strategy as opposed to their individual goals. Emphasis is placed on enhanced customer service, goodwill and reputation, and pioneering new product lines instead of focusing on the products that are easier to sell.

6.      Monitor Control

Identifying the Factors to Monitor

A basic rule is to monitor those aspects of the business that are most critical in fulfilling the managers’ long term goals.  In selecting which factors to monitor, the manager will want to guard against too many or few factors. There is no reason to monitor something that has no significant impact on whether the business reaches its goals. On the other hand, inadequate monitoring may result in potential problems being overlooked.

Specifying a Range of Performance

A performance standard is a goal that, when fulfilled, assures the organization is on track to fulfill the managers’ long-term goals. These benchmarks serve as criteria against which current performance can be compared to determine whether changes are needed.  They should offer a challenge, as well as a focal point for the resources and efforts of the organization.  Using a standard that reflects historical performance allows the manager to assess the long-term trends of the business.

Who Should Monitor

Monitoring will not occur if not assigned to someone (laborer, manager, or advisor).  If the task of monitoring is assigned to someone other than the individuals who developed the monitoring process, these individuals need to be educated on the process and the outcomes.

When to Monitor

An effective monitoring system provides information to the decision makers in a timely manner. The information needs to be available when it can still be used. The information needs to be gathered at the correct time, not too early as to indicate failure before completion.

How is Performance Measured

The procedure for measuring performance can vary; it could be subjective, or objective. For each factor that will be monitored, a sensor or trigger should be identified. The sensor or trigger will have to reflect the specific task being monitored.

Maintaining a Record of Performance

The control system must include a system for maintaining a record of performance. Keeping track of inputs and outputs as part of the monitoring process also may serve as a means of collecting the detailed information necessary to analyze the organization’s business process.

Making Comparisons

Compare the observed performance to the range of satisfactory performance established for the organization. The comparison should be quantitative and qualitative.

Response

Correct what is causing performance to be outside the expected range. The factor will influence the response of the decision maker; and therefore, developing a detailed response ahead of time may not be effective. The response needs to be timed and appropriate to scale so it will not be disruptive to other functions of the organization.

Review and Revise the Monitoring Process

Like the entire business, the monitoring process will need to be revised over time. Changes occur at a more rapid pace and an effective manager must be able to notice change in his profession.

 

By Anthony Esochagi

 

Change and Innovation


Organization Change:

Organization change happens when there is a significant adjustment to a part of an organization including and organization’s structure and design, technology and operations, the employee’s attitudes and behaviors, business processes, and organizational development. These changes are caused by either external or internal forces. Change can be either planned or it can come about as a response to unforeseen circumstances, or reactive change.

The forces, or reasons, for change can be external or internal. External forces come from the general and task environments. An example of an external force would be the economic downturn that occurred in 2008. A change as such would require an organization to make changes in order to not only continue to grow and succeed, but simply to survive. Internal forces are exactly that: Forces that come from the inside of an organization. An example would be one of an organizations internal customers becoming increasingly unhappy with the service provided by that organization’s IT department. This would be a force for change as you need to keep employee moral up and provide them with better service for the tools they need to be productive.

Managing Change in Organizations:

Change, no matter if it’s in our personal lives or professional lives, is complex in nature. There are a number of models outlining the steps for change. One such model is the Comprehensive Model as noted in Griffin, 2013.

A second model is the Kotter 8-step Process for Leading Change by Dr. John Kotter.

Resistance to change is a factor that will play into any organization change and needs to be anticipated, thoroughly understood, and dealt with. Causes of resistance to change can be caused by uncertainty, threatened self-interests, different perceptions, and feelings of loss.

A manager may have to employ several different techniques for overcoming resistance to change. Some may be more effective than others, depending on the situation. These techniques may include allowing their employees participate in planning and implementing a change as it leads to a better understanding of the change, educating employees the need for a specific change and communicating to them in regards to that change during the entire process, facilitating the changes, and attempting to minimize or remove some of the forces acting against the change.

Organizational Innovation:

nnovation is necessary for an organization to stay competitive. Innovation is the element of change that introduces new products or services or new uses for present products or services in order to meet new requirements or needs. The innovation process includes six steps that consist of innovation development, innovation application, application launch, application growth, innovation maturity, and innovation decline.

Promoting Innovation:

Promoting innovation in your organization may assist in resisting failure to innovate for reasons such as lack of resources, failure to recognize opportunities, and resistance to change. Promoting innovation will keep fresh ideas flowing and foster a mindset of change for improvement. Some ideas on how to promote innovation can be viewed here:

 

By Rachael Mattern 

 

Leadership


Think of the first job you had as a teenager. Maybe you worked for a fast-food establishment; maybe you stocked shelves at the local grocery store. Was your boss someone who inspired you, who challenged you on your strengths or did your boss primarily create your work schedule and give you tasks? If you answered yes to the latter, you most likely had a shift manager and probably not a very good one. In fact, if you were in your teens, your shift manager was probably only in their twenties, with only a little more life experience than you. There is a monumental difference between being a manager and being a manager who is also a leader. Some people are natural-born leaders, most can evolve into greatness with a willingness to learn, an open mind and a confident spirit. The graphic below from Mindtools.com illustrates the transformation of a person just ordering everyone around into a true leader.

Evolving Into a Leader

There are people with great ideas who are not comfortable with their people and communication skills. Fantastic career paths are out there for brilliant minds, but for the introverted personality, management it not the right path. It is imperative to be able to not only communicate effectively with subordinates, but with vendors, the executive team, the public and, of course, customers. Each exchange with each of these groups requires tact, charm and confidence. A leader has to be the champion of her team to her boss, as well as be the embassador of the executive officers to her subordinates. A leader assuages fears and rumors, articulates progress to stakeholders, charms potential investors, and is the symbolic figurehead to the public when she is networking.

A manager-leader is intuitive and has a passion about helping her team be the best they can be with the strengths and talents they uniquely possess. She can sense when one of her teammates is discouraged, unchallenged, stuck and anxious. She has patience to listen but has the discipline to keep the conversation on tangent. She recognizes each of her subordinates’ currency. This means she knows what kind of recognition and/or reward has the most value. She doesn’t play favorites; she shields her worries and concerns, especially of the personal nature, from her team; she keeps a real perspective, and with her, the glass is always half-full.

Did this section describe your first manager? Does it describe your current manager? Is this you? Take our leadership quiz and find out!

How Good Are Your Leadership Skills?

By Lisa Landis 

New Challenges to Offer Your Emerging Leader*


• Participate in new company projects
• Participation on teams to meet new challenges
• Introduce them to new groups in the organization and community
• Have them attend seminars and conferences
• Include them in the organizational decision-making process

*Goldstein, J & Tripoli, C. (2010). How to Turn Good Managers Into Great Leaders. RestaurantOwner.com (May 21)

By Lisa Landis