CONTROL AND CHANGE

TRAM NGUYEN, PH.D

TRAM.NTB@OU.EDU.VN
KEY
CONTENTS What is organizational control?

Output and behavior control

Corporate culture control

Organizational change
 • Controlling is the process whereby managers
WHAT IS monitor and regulate how efficiently and
ORGANIZATIONAL effectively an organization and its members are
performing the activities necessary to achieve
CONTROL? organizational goals.
• Control does not mean just reacting to events
after they have occurred, but also, keeping an
organization on track, anticipating events that
might occur, and then changing the organization
to respond to whatever opportunities or threats
have been identified.
• Control is concerned with keeping employees
motivated, focused on the important problems
confronting the organization, and working
together to make the changes that will help an
organization perform better over time.
THE IMPORTANCE OF ORGANIZATIONAL
CONTROL

• To determine how efficiently they are using their resources, managers must be able to
accurately measure how many units of inputs (raw materials, human resources, and
so on) are being used to produce a unit of output
• A control system contains the measures or yardsticks that let managers assess how
efficiently the organization is producing goods and services.
• Without a control system in place, managers have no idea how well their organization
is performing and how its performance can be improved
CONTROL SYSTEMS
AND IT
• Control systems are formal target-setting, monitoring,
evaluation, and feedback systems that provide managers with
information about whether the organization’s strategy and
structure are working efficiently and effectively
• An effective control system has three characteristics: flexible
enough to allow managers to respond as necessary to
unexpected events; provides accurate information about
organizational performance; and gives managers information in a
timely manner because making decisions on the basis of
outdated information is a recipe for failure.
• New forms of IT have revolutionized control systems because
they facilitate the flow of accurate and timely information up and
down the organizational hierarchy and between functions and
divisions.
THREE TYPES OF CONTROL
 THE CONTROL PROCESS

Step 1 Step 2 Step 3 Step 4

Establish the standards Measure actual Compare actual Evaluate the result and
of performance, goals, performance. performance against initiate corrective action
or targets against which chosen standards of (that is, make changes)
performance is to be performance. if the standard is not
evaluated. being achieved.
THREE ORGANIZATIONAL
CONTROL SYSTEMS
OUTPUT CONTROL
FOUR MEASURES
OF FINANCIAL
PERFORMANCE
PROFIT
ORGANIZATIONAL GOALS
OPERATING
BUDGETS
• An operating budget is a blueprint that states how
managers intend to use organizational resources to
achieve organizational goals efficiently.
• Large organizations often treat each division as a
singular or stand-alone responsibility center
PROBLEMS
WITH • Output control is a useful tool for keeping
OUTPUT managers and employees at all levels
CONTROL •
motivated and the organization on track
It is only a guide to appropriate action.
• Managers must be sensitive in how they use
output control and must constantly monitor
its effects at all levels in the organization—
and on customers and other stakeholders.
BEHAVIOR CONTROL
BEHAVIOR
CONTROL • Direct supervision
• Management by objectives (MBO) is a formal system of evaluating
subordinates on their ability to achieve specific organizational goals
or performance standards and to meet operating budgets.
• Step1: Specific goals and objectives are established at each
level of the organization
• Step 2: Managers and their subordinates together determine
the subordinates’ goals
• Step 3: Managers and their subordinates periodically review
the subordinates’ progress toward meeting goals
• Bureaucratic control is control by means of a comprehensive system
of rules and standard operating procedures (SOPs) that shapes and
regulates the behavior of divisions, functions, and individuals
 ORGANIZATIONAL CULTURE AND
CLAN CONTROL
• Organizational culture is the shared set of beliefs,
expectations, values, norms, and work routines that
influences how members of an organization relate to one
another and work together to achieve organizational
goals.
• Clan control is the control exerted on individuals and
groups in an organization by shared values, norms,
standards of how organizational behavior, and
expectations
• Organizational culture functions as a kind of control
system because managers can deliberately try to
influence the kind of values and norms that develop in an
organization—values and norms that specify appropriate
and inappropriate behaviors and so determine the way its
members behave
ADAPTIVE CULTURES
• Adaptive cultures are ones whose values and norms help
an organization to build momentum and to grow and
change as needed to achieve its goals and be effective.
• Organizations with strong adaptive cultures invest in their
employees by rewards.
• An adaptive culture develops an emphasis on
entrepreneurship and respect for the employee and
allows the use of organizational structures, such as the
cross-functional team structure, that empower employees
to make decisions and motivate them to succeed
INERT
CULTURES
• Inert cultures are those that lead to
values and norms that fail to motivate
or inspire employees
• In an inert culture, employees are
content to be told what to do and have
little incentive or motivation to perform
beyond minimum work requirements.
• The emphasis of inert culture is on
close supervision and hierarchical
authority, which result in a culture that
makes it difficult to adapt to a
changing environment.
ORGANIZATIONAL
CHANGE
• Organizational change is the
movement of an organization away
from its present organizational
control state toward some preferred
future state to increase its efficiency
and effectiveness.
ORGANIZATIONAL CHANGE PROCESS
BE THE MANAGER