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Management and Organization Behavior. MGMT 3140 Managerial Control. Twins. Planning Control. Types of Business Controls. Bureaucratic control Market control “Clan control” (organization culture). Steps in a Control Procedure. Steps in a Control Procedure.

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Management and organization behavior

Management and Organization Behavior

MGMT 3140

Managerial Control


Twins
Twins

  • Planning

  • Control


Types of business controls
Types of Business Controls

  • Bureaucratic control

  • Market control

  • “Clan control” (organization culture)



Steps in a control procedure1
Steps in a Control Procedure

  • Setting performance standards (plan) (speed)

  • Measuring performance (measure speed)

  • Comparing actual to plan

  • Taking action to correct problems and reinforce success


Common standards
Common Standards

  • Sales level

  • Profit level

  • Number of customers

  • Number of orders

  • Project completion dates (step/milestones dates)

  • Quality measures

  • Time to resolve issues

  • Costs (both variable and fixed)

  • Return on Investment


Measuring performance
Measuring Performance

  • Financial reports (most common)

    • Balance sheet

    • Income statement

    • Cash flow

  • Project reviews

  • MBWA

  • Phone calls, visits

  • Surveys


Principle of exception
Principle of Exception

  • Quality

  • 5 pieces per 1000?

    • Old fashioned standard…


Three approaches
Three Approaches

  • Feedforward (system design)

  • Concurrent

  • Feedback


Six sigma
Six Sigma

  • A statistically based control tool to analyze processes, identify problems or opportunities, make changes, then compare results to insure obtaining the desired improvement


Audits
Audits

  • Internal

  • External

  • Accounting

  • Other


Budget controls
Budget Controls

  • Most common general control

  • Reason for “managerial accounting”

  • Must consider cycles, seasons

  • Can be (and often is) specific projects


Common budgets
Common Budgets

  • Sales

  • Production

  • Cost

  • Cash

  • Capital

  • Master (profit plan)


Making budgets
Making Budgets

  • Top down

  • Bottom up

  • Combination is most common today


Importance
Importance

  • Balance sheet

  • Profit and Loss statement


Balance sheet keys
Balance Sheet Keys

  • Liquidity

  • Investment (ROI)

  • Debt

  • Quality of assets

  • Intangibles


Designing bureaucratic controls
Designing Bureaucratic Controls

  • Make sure that controls don’t bring about unethical behavior

  • Modern control systems


More on controls
More on Controls

  • Use valid standards

  • Use a team approach

  • Watch the “deadly sins (Hammer, Deming)

  • Provide good base information and feedback

  • Balanced scorecard


Market control
Market Control

  • Impact on all

  • Freedman

  • Transfer price


Clan control culture
Clan Control (Culture)

  • People what to use their brains

  • Empowerment

  • “A fish rots at the head first”


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