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PowerPointPresentationbyCharlieCookCopyright 2005PrenticeHall Inc Allrightsreserved Copyright 2005PrenticeHall Inc Allrightsreserved 18 2 LEARNINGOUTLINEFollowthisLearningOutlineasyoureadandstudythischapter WhatIsControlandWhyIsItImportant Definecontrol Contrastthethreeapproachestodesigningcontrolsystems Discussthereasonswhycontrolisimportant Explaintheplanning controllinglink TheControlProcessDescribethethreestepsinthecontrolprocess Explainwhywhatismeasuredismorecriticalthanhowit smeasured Explainthethreecoursesofactionmanagerscantakeincontrolling Copyright 2005PrenticeHall Inc Allrightsreserved 18 3 LEARNINGOUTLINE cont d FollowthisLearningOutlineasyoureadandstudythischapter ControllingOrganizationalPerformanceDefineorganizationalperformance Describethemostfrequentlyusedmeasuresoforganizationalperformance ToolsforOrganizationalPerformanceContrastfeedforward concurrent andfeedbackcontrols Explainthetypesoffinancialandinformationcontrolsmanagerscanuse Describehowbalancedscorecardsandbenchmarkingareusedincontrolling Copyright 2005PrenticeHall Inc Allrightsreserved 18 4 LEARNINGOUTLINE cont d FollowthisLearningOutlineasyoureadandstudythischapter ContemporaryIssuesinControlDescribehowmanagersmayhavetoadjustcontrolsforcross culturaldifferences Discussthetypesofworkplaceconcernsmanagersfaceandhowtheycanaddressthoseconcerns Explainwhycontrolisimportanttocustomerinteractions Discusswhatcorporategovernanceisandhowit schanging Copyright 2005PrenticeHall Inc Allrightsreserved 18 5 WhatIsControl ControlTheprocessofmonitoringactivitiestoensurethattheyarebeingaccomplishedasplannedandofcorrectinganysignificantdeviations ThePurposeofControlToensurethatactivitiesarecompletedinwaysthatleadtoaccomplishmentoforganizationalgoals Copyright 2005PrenticeHall Inc Allrightsreserved 18 6 DesigningControlSystems MarketControlEmphasizestheuseofexternalmarketmechanismstoestablishthestandardsusedinthecontrolsystem Externalmeasures pricecompetitionandrelativemarketshareBureaucraticControlEmphasizesorganizationalauthorityandreliesonrules regulations procedures andpolicies ClanControlRegulatesbehaviorbysharedvalues norms traditions rituals andbeliefsofthefirm sculture Copyright 2005PrenticeHall Inc Allrightsreserved 18 7 WhyIsControlImportant Asthefinallinkinmanagementfunctions PlanningControlsletmanagersknowwhethertheirgoalsandplansareontargetandwhatfutureactionstotake EmpoweringemployeesControlsystemsprovidemanagerswithinformationandfeedbackonemployeeperformance ProtectingtheworkplaceControlsenhancephysicalsecurityandhelpminimizeworkplacedisruptions Copyright 2005PrenticeHall Inc Allrightsreserved 18 8 Exhibit18 2 ThePlanning ControllingLink Copyright 2005PrenticeHall Inc Allrightsreserved 18 9 TheControlProcess TheProcessofControlMeasuringactualperformance Comparingactualperformanceagainstastandard Takingactiontocorrectdeviationsorinadequatestandards Copyright 2005PrenticeHall Inc Allrightsreserved 18 10 Exhibit18 3 TheControlProcess Copyright 2005PrenticeHall Inc Allrightsreserved 18 11 Measuring HowandWhatWeMeasure SourcesofInformationPersonalobservationStatisticalreportsOralreportsWrittenreports ControlCriteriaEmployeesSatisfactionTurnoverAbsenteeismBudgetsCostsOutputSales Copyright 2005PrenticeHall Inc Allrightsreserved 18 12 Exhibit18 4 CommonSourcesofInformationforMeasuringPerformance Copyright 2005PrenticeHall Inc Allrightsreserved 18 13 Comparing Determiningthedegreeofvariationbetweenactualperformanceandthestandard Significanceofvariationisdeterminedby Theacceptablerangeofvariationfromthestandard forecastorbudget Thesize largeorsmall anddirection overorunder ofthevariationfromthestandard forecastorbudget Copyright 2005PrenticeHall Inc Allrightsreserved 18 14 Exhibit18 5 DefiningtheAcceptableRangeofVariation Copyright 2005PrenticeHall Inc Allrightsreserved 18 15 Exhibit18 6 SalesPerformanceFiguresforJuly EasternStatesDistributors Copyright 2005PrenticeHall Inc Allrightsreserved 18 16 TakingManagerialAction CoursesofAction Doingnothing Onlyifdeviationisjudgedtobeinsignificant Correctingactual current performanceImmediatecorrectiveactiontocorrecttheproblematonce Basiccorrectiveactiontolocateandtocorrectthesourceofthedeviation CorrectiveActionsChangestrategy structure compensationscheme ortrainingprograms redesignjobs orfireemployees Copyright 2005PrenticeHall Inc Allrightsreserved 18 17 TakingManagerialAction cont d CoursesofAction cont d RevisingthestandardExaminingthestandardtoascertainwhetherornotthestandardisrealistic fair andachievable Upholdingthevalidityofthestandard Resettinggoalsthatwereinitiallysettoolowortoohigh Copyright 2005PrenticeHall Inc Allrightsreserved 18 18 Exhibit18 7 ManagerialDecisionsintheControlProcess Copyright 2005PrenticeHall Inc Allrightsreserved 18 19 ControllingforOrganizationalPerformance WhatIsPerformance TheendresultofanactivityWhatIsOrganizationalPerformance Theaccumulatedendresultsofalloftheorganization sworkprocessesandactivitiesDesigningstrategies workprocesses andworkactivities Coordinatingtheworkofemployees Copyright 2005PrenticeHall Inc Allrightsreserved 18 20 OrganizationalPerformanceMeasures OrganizationalProductivityProductivity theoveralloutputofgoodsand orservicesdividedbytheinputsneededtogeneratethatoutput Output salesrevenuesInputs costsofresources materials laborexpense andfacilities Ultimately ameasureofhowefficientlyemployeesdotheirwork Copyright 2005PrenticeHall Inc Allrightsreserved 18 21 OrganizationalPerformanceMeasures OrganizationalEffectivenessMeasuringhowappropriateorganizationalgoalsareandhowwelltheorganizationisachievingitsgoals SystemsresourcemodelTheabilityoftheorganizationtoexploititsenvironmentinacquiringscarceandvaluedresources TheprocessmodelTheefficiencyofanorganization stransformationprocessinconvertinginputstooutputs ThemultipleconstituenciesmodelTheeffectivenessoftheorganizationinmeetingeachconstituencies needs Copyright 2005PrenticeHall Inc Allrightsreserved 18 22 OrganizationalEffectivenessMeasures Industryrankingson ProfitsReturnonrevenueReturnonshareholders equityGrowthinprofitsRevenuesperemployeeRevenuesperdollarofassetsRevenuesperdollarofequity CorporateCultureAuditsCompensationandbenefitssurveysCustomersatisfactionsurveys Copyright 2005PrenticeHall Inc Allrightsreserved 18 23 Exhibit18 8 PopularIndustryandCompanyRankings Copyright 2005PrenticeHall Inc Allrightsreserved 18 24 ToolsforControllingOrganizationalPerformance FeedforwardControlAcontrolthatpreventsanticipatedproblemsbeforeactualoccurrencesoftheproblem Buildinginqualitythroughdesign RequiringsuppliersconformtoISO9002 ConcurrentControlAcontrolthattakesplacewhilethemonitoredactivityisinprogress Directsupervision managementbywalkingaround Copyright 2005PrenticeHall Inc Allrightsreserved 18 25 ToolsforControllingOrganizationalPerformance cont d FeedbackControlAcontrolthattakesplaceafteranactivityisdone Correctiveactionisafter the fact whentheproblemhasalreadyoccurred AdvantagesoffeedbackcontrolsFeedbackprovidesmanagerswithinformationontheeffectivenessoftheirplanningefforts Feedbackenhancesemployeemotivationbyprovidingthemwithinformationonhowwelltheyaredoing Copyright 2005PrenticeHall Inc Allrightsreserved 18 26 Exhibit18 9 TypesofControl Copyright 2005PrenticeHall Inc Allrightsreserved 18 27 ToolsforControllingOrganizationalPerformance FinancialControls TraditionalControlsRatioanalysisLiquidityLeverageActivityProfitabilityBudgetAnalysisQuantitativestandardsDeviations OtherMeasuresEconomicValueAdded EVA MarketValueAdded MVA Copyright 2005PrenticeHall Inc Allrightsreserved 18 28 Exhibit18 10a PopularFinancialRatios Copyright 2005PrenticeHall Inc Allrightsreserved 18 29 Exhibit18 10b PopularFinancialRatios Copyright 2005PrenticeHall Inc Allrightsreserved 18 30 ToolsforControllingOrganizationalPerformance FinancialControls cont d OtherMeasuresEconomicValueAdded EVA Howmuchvalueiscreatedbywhatacompanydoeswithitsassets lessanycapitalinvestmentsinthoseassets therateofreturnearnedoverandabovethecostofcapital Thechoiceistouselesscapitalorinvestinhigh returnprojects Copyright 2005PrenticeHall Inc Allrightsreserved 18 31 ToolsforControllingOrganizationalPerformance FinancialControls cont d OtherMeasures cont d MarketValueAdded MVA Thevaluethatthestockmarketplacesonafirm spastandexpectedcapitalinvestmentprojectsIfthefirm smarketvalue itsstockanddebt exceedsthevalueofitsinvestcapital itsequityandretainedearnings thenmanagershavecreatedwealth Copyright 2005PrenticeHall Inc Allrightsreserved 18 32 ControllingOrganizationalPerformance BalancedScorecardAmeasurementtoolthatusesgoalssetbymanagersinfourareastomeasureacompany sperformance Financial customer internalprocesses andpeople innovation growthassets Copyright 2005PrenticeHall Inc Allrightsreserved 18 33 InformationControls ManagementInformationSystems MIS Asystemusedtoprovidemanagementwithneededinformationonaregularbasis Data anunorganizedcollectionofraw unanalyzedfacts e g unsortedlistofcustomernames Information datathathasbeenanalyzedandorganizedsuchthatithasvalueandrelevancetomanagers Copyright 2005PrenticeHall Inc Allrightsreserved 18 34 BenchmarkingofBestPractices BenchmarkingThesearchforthebestpracticesamongcompetitorsornoncompetitorsthatleadtotheirsuperiorperformance Benchmark thestandardofexcellenceagainstwhichtomeasureandcompare Acontroltoolforidentifyingandmeasuringspecificperformancegapsandareasforimprovement Copyright 2005PrenticeHall Inc Allrightsreserved 18 35 Exhibit18 11 StepstoSuccessfullyImplementanInternalBenchmarkingBestPracticesProgram Connectbestpracticestostrategiesandgoals Identifybestpracticesthroughouttheorganization Developbestpracticesrewardandrecognitionsystems Communicatebestpracticesthroughouttheorganization Createabestpracticesknowledge sharingsystem Nurturebestpracticesonanongoingbasis Copyright 2005PrenticeHall Inc Allrightsreserved 18 36 ContemporaryIssuesinControl Cross CulturalIssuesTheuseoftechnologytoincreasedirectcorporatecontroloflocaloperationsLegalconstraintsoncorrectiveactionsinforeigncountriesDifficultywiththecomparabilityofdatacollectedfromoperationsindifferentcountries Copyright 2005PrenticeHall Inc Allrightsreserved 18 37 ContemporaryIssuesinControl cont d WorkplaceConcernsWorkplaceprivacyversusworkplacemonitoring E mail telephone computer andInternetusageProductivity harassment security confidentiality intellectualpropertyprotectionEmployeetheftTheunauthorizedtakingofcompanypropertybyemployeesfortheirpersonaluse WorkplaceviolenceAnger rage andviolenceintheworkplaceisaffectingemployeeproductivity Copyright 2005PrenticeHall Inc Allrightsreserved 18 38 Exhibit18 12 TypesofWorkplaceMonitoringbyEmployers Internetuse54 7 Telephoneuse44 0 E mailmessages38 1 Computerfiles30 8 Jobperformanceusingvideocameras14 6 Phoneconversations11 5 Voicemailmessages6 8 Source BasedonS McElvoy E MailandInternetMonitoringandtheWorkplace DoEmployeesHaveaRighttoPrivacy CommunicationsandtheLaw June2002 p 69 Copyright 2005PrenticeHall Inc Allrightsreserved 18 39 Exhibit18 13 ControlMeasuresforEmployeeTheftorFraud Sources BasedonA H BellandD M Smith ProtectingtheCompanyAgainstTheftandFraud WorkforceOnline December3 2000 J D Hansen ToCatchaThief JournalofAccountancy March2000 pp 43 46 andJ Greenberg TheCognitiveGeometryofEmployeeTheft inDysfunctionalBehaviorinOrganizations NonviolentandDeviantBehavior eds S B Bacharach A O Leary Kelly J M Collins andR W Griffin Stamford CT JAIPress 1998 pp 147 93 Copyright 2005PrenticeHall Inc Allrightsreserved 18 40 Exhibit18 14 WorkplaceViolence Witnessedyellingorotherverbalabuse42 Yelledatco workersthemselves29 Criedover

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