Understanding Management
First Canadian Edition
Slides prepared by Janice Edwards College of the Rockies
Copyright 2009 Nelson Education Ltd.
Chapter 15
Productivity through Management
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Learning Objectives
1.
2.
3. 4.
5.
Define organizational control and explain why it is a key management function. Describe differences in control focus, including feedforward, concurrent, and feedback control. Explain the four steps in the control process. Contrast the bureaucratic and decentralized control approaches. Discuss how to measure and manage productivity.
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Learning Objectives (Contd)
6.
7.
Describe the concept of total quality management (TQM) and major TQM techniques. Explain the value of open-book management and the balanced scorecard approaches to control in a turbulent environment.
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Organizational Control
The systematic process of regulating organizational activities to make them consistent with the expectations established in plans, targets, and standards of performance.
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Organizational Control Focus
FFeedforward: Preliminary or preventive CConcurrent: Monitor ongoing activities FFeedback: Postaction or output control
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Ex. 15.1
Feedforward Control Anticipates Problems Examples Pre-employment drug testing Inspect raw materials Hire only college graduates
Focus is on
Organizational Control Focus
Concurrent Control Solves Problems as They Happen Examples Adaptive culture Total quality management Employee self-control
Focus is on
Feedback Control Solves Problems After They Occur Examples Analyze sales per employee Final quality inspection Survey customers
Focus is on
Inputs
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Ongoing Processes
Outputs
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Budgetary Control
The process of setting targets for an organizations expenditures, monitoring results and comparing them to the budget, and making changes as needed.
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Ex. 15.3
Bureaucratic and Decentralized Methods of Control
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Managing Productivity
Productivity is the organizations output of goods and services divided by its inputs.
Lean manufacturing cut waste, improve quality and productivity.
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Total Quality Management (TQM)
AAn organization-wide commitment to infuse quality into every activity through continuous improvement. FFocuses on teamwork, increasing customer satisfaction, and lowering costs.
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TQM Techniques
Most companies that have adopted TQM have incorporated: Quality circles. Benchmarking. Six sigma quality principles. Reduced cycle time. Continuous improvement.
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Ex. 15.5
Quality Program Success Factors
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International Quality Standards ISO 9000
A set of international standards for quality management systems. Process of application and certification for ISO 9000 is expensive and time-consuming. Recognized standard for evaluating and comparing companies on a global basis.
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Economic Value Added (EVA)
A way to gauge financial performance. A companys net (after-tax) operating profit minus the cost of capital invested in the companys tangible assets.
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Control Systems for Turbulent Times
Open-Book Management Sharing of financial information and results with all employees in the organization. Allows employees to see financial condition of the company. Shows individual employees how his/her job fits into the big picture. Ties employee rewards to the companys overall success.
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Control Systems for Turbulent Times (Contd)
The Balanced Scorecard Balances traditional financial measures with operational measures relating to a companys critical success factors. Measures: Financial performance Customer service Internal business processes Organizations capacity for learning and growth
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Ex. 15.7
The Balanced Scorecard
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