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Assignments should be completed in Microsoft Word and files should be attached below. The target length of the assignment is one single-spaced (12-point font) page with normal margins.

Chapter 11 presents three ways in which managers can attempt to control the behavior of subordinates. Read the case study "The Case of the Tempormental Talent" (attached). Use the three behavioral control techniques described in Chapter 11 to describe three specific management tactics that "Bob" could use to control the behavior of "Ken". Then, indicate which of the three tactics you've presented you think will be the most effective and support your answer.

The Case of the Tempormental Talent.pdf

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Chapter 11 Organizational Control Organizational Control • Monitoring the efficiency and effectiveness of activities necessary for achieving org. goals. • Anticipating future events – Responding to opportunities & threats • Evaluating strategy & structure • Keeping employees motivated Control Systems • Formal feedback systems that provide information about org. performance • Effective control system: – Provides an accurate picture of org. performance – Provides info. in a timely manner – Is flexible enough to allow managers to respond to unexpected events • Revolutionized by IT Three Types of Control Feedforward Control • Input stage • Anticipate problems before they occur • Examples: – Monitor changes in trends – Coordinate with suppliers Concurrent Control • Immediate feedback about how efficiently inputs are being turned into outputs • Allows for problems to be corrected as they arise • Total Quality Management Feedback Control • Provides information regarding customer’s reactions • Example: – Number of customer returns – Number of complaints The Control Process • Step 1: Establish Performance Standards – Thousands to choose from – Must be consistent with company strategy – Overemphasis on any one can have negative consequences The Control Process • Step 2: Measure Actual Performance – Measure outputs of behaviors • Easier to measure • More objective – Measure behaviors themselves • Routine are easy to measure • Non-routine are hard to measure The Control Process • Step 3: Compare actual performance against standards. • Three possibilities – Higher – Lower – Same as performance standard The Control Process • Step 4: Evaluate and take corrective action • If performance was unacceptable: – Changes in the way resources are used are needed • Technology, training, structure, motivation, etc. Three Control Systems Financial Measures of Performance • Profit Ratios – How efficiently resources are used to generate profits • Return on Investment – Net Income Before Taxes / Total Assets • Gross Profit Margin – (Sales – COGS) / Sales Financial Measures of Performance • Liquidity Ratios – How easily short term obligations can be met. • Current Ratio – Current assets / current liabilities • Quick Ratio – (Current assets – inventory) / current liabilities Financial Measures of Performance • Leverage Ratios – how much debt vs. equity was used to buy org. resources • Debt-to-Assets Ratio – Debt / Assets • Times-covered Ratio – EBIT / Interest Expenses Financial Measures of Performance • Asset Activity Ratios – How efficiently are org. resources being used • Inventory Turnover – COGS / Inventory • Days Sales Outstanding – Accounts Receivable / Average Daily Sales Organizational Goals • Too low – Not motivating • Too High – Discouraging…not motivating • Stretch Goals – Appropriately Challenging Operating Budgets • Plan for how managers intend to used org. resources in order to create org. performance • Resources are divided up and allocated down the hierarchy • Managers are evaluated by their ability to meet budget – Revenue, cost control, profitability Problems with Output Control • Tendency to focus on short-term • High standards might promote unethical behavior Behavior Control • Direct Supervision • Management by Objectives (MBO) • Bureaucratic Control Direct Supervision • Managers actively monitor subordinates – Teach appropriate behaviors – Intervene when corrective action is needed – Can be effective • Problems with Direct Supervision – Expensive – Can decrease motivation – Not feasible/appropriate in all circumstances Management by Objectives • Control system based on subordinate’s ability to meet goals & performance objectives – Specific goals are set at each level of the firm. – Goal setting is participatory – Periodic reviews of subordinates’ progress toward goals are held – pay raises and promotions are tied to goal attainment Bureaucratic Control • Control by a system of rules & SOPs. – Tells workers what to do (standardized actions) so outcomes are predictable. – There is still a need for output control to correct mistakes. – Best used for routine problems in stable environments. Problems with Bureaucratic Control • Easy to have too many rules – Too much “red tape” • People will blindly follow rules – Too standardized – No ability to learn – No ability to innovate Organizational Culture • A shared set of values, beliefs, & assumptions • Employees internalize organizational values – Creates an internalized control system – Eliminates the need for externally imposed controls • Works in situations where behavior & output control don’t • Can be created to focus on long-term performance Organizational Change • Fundamental tension between 2 control forces: – To standardize & make performance predictable – To be responsive to changes / flexible • Because environments are dynamic, – The highest performing companies are those that are able to constantly change • Four step process Assessing the Need for Change • Recognizing that there is a problem – Scanning external environment & internal controls systems • Identifying its source – Organizational Diagnosis Deciding on the Change to Make • What is the ideal future state – Strategy, structure, technology, etc. • Identify sources of resistance to change – Fear of ambiguity – Fear that they will not be successful after change – Can be overcome through participation & adequate information Implementing the Change • Top-Down – Top managers decide & tell people what to do – Quick • Bottom-Up – Group / Participatory process – More gradual – Better chance for buy-in Evaluating Change • Use output controls & behavior controls • Benchmarking
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Behavioral Control Technique
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Behavioral Control Technique
An organization structure does not offer any specific mechanism that allows managers or
other employees to behave in a way that the structure work or improve it. Thus, it is important
for managers to find a way to control employee’s behaviors. In this scenario, Morris, Bob, and
Harold all have the responsibilities of controlling the behavior of Ken, but since Ken report to
Bob, he is in the best position to control his behavior. The three beha...

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