Summary of Control Processes and Learning Outcomes môn Principles of Management | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

SUMMARY OF LEARNING OUTCOMES AND KEY POINTS
14-1. Explain the purpose of control, including different types of control and the steps in the control process.
• Control is the regulation of organizational activities so that some targeted element of performance
remains within acceptable limits.
• Control provides ways to adapt to environmental change, to limit the accumulation of errors, to cope
with organizational complexity, and to minimize costs.
• Control can focus on financial, physical, information, and human resources and includes operations,
financial, structural, and strategic levels.
• Control is the function of managers, the controller, and, increasingly, of operating employees.
• Steps in the control process are:
to establish standards of expected performance to measure actual performance
to compare performance to the standards
to evaluate the comparison and take appropriate action.
14-2. Identify the three forms of operations control.
• Operations control focuses on the processes the organization uses to transform resources into products or services:
Preliminary control is concerned with the resources that serve as inputs to the system.
Screening control is concerned with the transformation processes used by the organization.
Post-action control is concerned with the outputs of the organization.
• Most organizations need multiple control systems because no one system can provide adequate control.
14-3. Describe budgets and other tools for financial control.
• Financial control focuses on controlling the organization’s financial resources.
• The foundation of financial control is budgets, which are plans expressed in numerical terms.
• Most organizations rely on financial, operating, and nonmonetary budgets.
• Financial statements, various kinds of ratios, and external and internal audits are also important tools
organizations use as part of financial control.
14-4. Distinguish between two opposing forms of structural control.
• Structural control addresses how well an organization’s structural elements serve their intended purpose.
• Two basic forms of structural control are bureaucratic and decentralized control.
•Bureaucratic control is relatively formal and mechanistic.
•Decentralized control is informal and organic.
• Most organizations use a form of organizational control somewhere between total bureaucratic and total decentralized control.
14-5. Discuss the relationship between strategy and control, including international strategic control.
• Strategic control focuses on how effectively the organization’s strategies are succeeding in helping the organization meet its goals.
• The integration of strategy and control is generally achieved through organization structure, leadership,
technology, human resources, and information and operational control systems.
• International strategic control is also important for multinational organizations.
• The foundation of international strategic control is whether to practice centralized or decentralized control.
14-6. Identify characteristics of effective control including why people resist control and how
managers can overcome this resistance.
• One way to increase the effectiveness of control is to fully integrate planning and control.
• The control system should also be as flexible, accurate, timely, and objective as possible.
• Employees may resist organizational controls because of overcontrol, inappropriate focus, rewards for
inefficiency, and a desire to avoid accountability.
• Managers can overcome this resistance by improving the effectiveness of controls and by allowing
employee participation and developing verification procedures.
QUESTIONS FOR REVIEW
1. What is the purpose of organizational control? Why is it important?
Purpose: Organizational control is the process of monitoring activities to ensure that the organization is
moving toward its goals, and correcting deviations when necessary. In Griffin’s framework, control
ensures that actual performance aligns with planned performance. Importance:
Ensures goal achievement: Helps determine whether plans, strategies, and operations are on track.
Improves efficiency: Detects waste, bottlenecks, or misuse of resources.
Supports quality and customer satisfaction: By setting performance standards and evaluating outputs.
Facilitates coordination: Ensures that different departments are aligned.
Enables adaptation: Allows managers to recognize environmental changes and adjust operations.
Promotes accountability: Individuals and units are evaluated against measurable standards.
2. What are the different levels of control? What are the relationships between the different levels? 1. Strategic Control Performed by top management.
Long-term, broad, external orientation.
Focuses on whether the organization is achieving its strategic goals.
2. Tactical (or Structural) Control Performed by middle managers.
Ensures that the organization’s structures, resources, and processes are being used effectively to implement strategy. 3. Operational Control
Carried out by lower-level supervisors.
Ensures efficiency and effectiveness in day-to-day operations, tasks, routines, and procedures. Relationship Between Levels:
They form a hierarchy: operational control supports tactical control, and tactical control supports strategic control.
Effective control requires alignment: daily activities (operational) must support broader
departmental goals (tactical), which in turn support organizational strategy (strategic).
Feedback flows upward: operational results inform tactical adjustments, which inform strategic evaluations.
3. Describe how a budget is created in most organizations. How does a budget help a manager with financial control?
How a Budget Is Created by following these steps:
1. Establish organizational goals (strategic and departmental).
2. Forecast revenues and expenses based on past performance and expected conditions.
3. Develop budget proposals at the departmental or unit level.
4. Negotiate and revise budgets with upper management.
5. Review and approve the final master budget.
6. Distribute budget targets to departments and managers.
7. Use budgets throughout the year to compare actual and planned financial performance.
Budgeting can be top-down, bottom-up, or zero-based, depending on the organization.
How Budgets Help Managers with Financial Control: the budget is one of the most common and practi tools for financial control.
Set financial standards for performance evaluation.
Allocate resources efficiently, ensuring funds support objectives.
Provide a basis for comparison between actual and planned performance.
Highlight variances, allowing managers to take corrective action.
Help coordinate activities across departments.
Serve as a communication tool, clarifying priorities and constraints.
4. Describe the differences between bureaucratic and decentralized control. What are the
advantages and disadvantages of each? - Bureaucratic Control
+ A control system characterized by: Formal rules
Policies, procedures, and standards Hierarchical authority Clear reporting relationships + Advantages:
High predictability and consistency
Effective for large organizations with routine work
Ensures standardization and compliance Reduces the need for employee discretion + Disadvantages: Can be rigid and inflexible May reduce innovation Slows decision-making
Can create resentment or over-reliance on rules - Decentralized Control + A system that relies on: Shared values and culture Employee empowerment and trust Group norms and self-control
Training and communication rather than strict rules + Advantages:
Greater flexibility and adaptability
Encourages creativity, innovation, and engagement Faster decision-making
Stronger organizational culture and motivation + Disadvantages:
May lead to inconsistency if norms vary
Harder to maintain control across large or diverse organizations
Requires highly skilled and self- disciplined employees
Can create ambiguity about expectations
QUESTIONS FOR ANALYSIS
1. How can a manager determine whether his or her firm needs improvement in control? If
improvement is needed, how can the manager tell what type of control needs improvement
(operations, financial, structural, or strategic)? Describe some steps a manager can take to improve
each of these types of control.
- How to determine whether control improvement is needed
A manager can assess the control system by asking:
Are actual results consistently failing to meet goals or standards?
Are errors, waste, or delays increasing?
Is employee behavior predictable and aligned with goals?
Are competitors performing better with similar resources?
Is the environment changing faster than the firm can respond?
If the answer is “yes,” then control needs improvement. Managers typically use: Performance reports Financial statements Quality measures Benchmarking Customer feedback Internal audits
- How to tell which type of control needs improvement 1. Operations Control Problems Symptoms:
Inefficiency, delays, bottlenecks Low product quality High defect rates
Poor scheduling or workflow issues Steps to Improve: Redesign workflow or layout Improve technology/equipment Implement better training
Strengthen supervision and SOPs
Introduce quality control systems Use just-in-time, lean methods (TQM, SPC) 2. Financial Control Problems Symptoms: Budget overruns Poor cost management Low profitability High debt ratios Weak cash flow Steps to Improve:
Develop more accurate budgeting Strengthen internal audits
Conduct variance analysis regularly Improve forecasting Improve cost-tracking systems
Reevaluate capital spending and cost structures
3. Structural Control Problems (Structural control = control over organizational design: hierarchy,
division of authority, reporting relationship.) Symptoms: Slow decision-making Conflicting responsibilities Excessive bureaucracy Unclear coordination Poor communication between departments Steps to Improve: Redesign the structure (more Use cross-functional teams
decentralization or integration) Reduce unnecessary layers of
Clarify authority and responsibility management Improve communication channels 4. Strategic Control Problems Symptoms:
Strategy not delivering expected results
Competitors constantly outperforming
Products not aligned with market the firm changes Lack of innovation Steps to Improve: Reassess mission, goals, and Improve external scanning environment
Strengthen strategic planning processes Conduct SWOT analysis
Reallocate resources to new priorities Adjust or redesign strategy
2. One company uses strict performance standards. Another has standards that are more flexible.
What are the advantages and disadvantages of each system? Strict performance standards Advantages
Provide clear expectations for
Help ensure efficiency, quality, and employees.
control, especially in routine or high- risk tasks.
Make performance evaluation objective and consistent. Disadvantages
Reduce employee creativity and
Can be too rigid in changing or initiative. uncertain environments.
May cause stress, fear of failure, or resistance. Flexible performance standards Advantages
Allow adaptation to environmental
Increase employee motivation and change. autonomy.
Encourage innovation and problem- solving. Disadvantages
Performance evaluation may become
Harder to compare performance across subjective or inconsistent. individuals or units.
Risk of lower efficiency or unclear expectations.
3. Are the differences in bureaucratic control and decentralized control related to differences in
organization structure? If so, how? If not, why not? (The terms do sound similar to those used to
discuss the organizing process.)
Yes, differences in bureaucratic control and decentralized control are related to differences in
organizational structure, but they are not exactly the same concept. Bureaucratic control
Relies on formal rules, procedures, and hierarchy.
Closely associated with centralized and mechanistic structures.
Decision-making authority is concentrated at higher levels. Decentralized control
Relies on employee judgment, self-control, and shared values.
Common in organic and decentralized structures.
Authority is distributed to lower-level managers and employees.
How structure influences control
Centralized structures support bureaucratic control because rules ensure consistency.
Decentralized structures support decentralized control by giving employees discretion. However:
Control is a management function, while structure is part of the organizing process.
An organization may combine both (e.g., strict rules for safety but decentralized decisions for customer service).
QUESTIONS FOR APPLICATION
1. Many organizations today are involving lower-level employees in control. Give at least two
examples of specific actions that a lower-level worker could take to help his or her organization
better adapt to environmental change. Then do the same for limiting the accumulation of error,
coping with organizational complexity, and minimizing costs.
a. Helping the organization adapt to environmental change: Lower-level employees can:
Report customer feedback and market changes directly to supervisors (e.g., noticing changes in
customer preferences or complaints).
Suggest process improvements when new technology, competitors, or regulations affect daily work.
b. Limiting the accumulation of error: Lower-level employees can:
Stop production or service processes when they detect defects (similar to quality control in lean systems).
Correct small mistakes immediately instead of passing them to the next stage, preventing errors from spreading.
c. Coping with organizational complexity: Lower-level employees can:
Coordinate directly with other departments to solve routine problems without waiting for top management.
Use standard operating procedures (SOPs) and shared information systems to reduce confusion and duplication.
d. Minimizing costs: Lower-level employees can:
Reduce waste of materials, time, and energy by following cost-control guidelines.
Identify inefficiencies (e.g., unnecessary steps, excess inventory) and propose cost-saving ideas.
2. Select two different kinds of organizations with which you have some familiarity. For each one,
identify how its control systems and processes may have changed during the 2020 COVID-19 pandemic.
Organization 1: University / Educational Institution
Changes in control systems included:
Shift from direct supervision to output control, focusing on learning outcomes rather than classroom attendance.
Increased use of digital controls, such as learning management systems (LMS), online exams, and attendance tracking software.
Greater self-control, as students and lecturers managed their own schedules in online learning environments.
Organization 2: Retail or Service Business Changes included:
Stronger health and safety controls, such as temperature checks and sanitation procedures.
Tighter financial controls, including close monitoring of cash flow and operating costs due to reduced revenue.
Decentralized decision-making, allowing store-level employees to respond quickly to local
restrictions and customer needs.
SUMMARY OF LEARNING OUTCOMES AND KEY POINTS
14-1. Explain the purpose of control, including different types of control and the steps in the control process.
• Control is the regulation of organizational activities so that some targeted element of performance
remains within acceptable limits.
• Control provides ways to adapt to environmental change, to limit the accumulation of errors, to cope
with organizational complexity, and to minimize costs.
• Control can focus on financial, physical, information, and human resources and includes operations,
financial, structural, and strategic levels.
• Control is the function of managers, the controller, and, increasingly, of operating employees.
• Steps in the control process are:
to establish standards of expected performance to measure actual performance
to compare performance to the standards
to evaluate the comparison and take appropriate action.
14-2. Identify the three forms of operations control.
• Operations control focuses on the processes the organization uses to transform resources into products or services:
Preliminary control is concerned with the resources that serve as inputs to the system.
Screening control is concerned with the transformation processes used by the organization.
Post-action control is concerned with the outputs of the organization.
• Most organizations need multiple control systems because no one system can provide adequate control.
14-3. Describe budgets and other tools for financial control.
• Financial control focuses on controlling the organization’s financial resources.
• The foundation of financial control is budgets, which are plans expressed in numerical terms.
• Most organizations rely on financial, operating, and nonmonetary budgets.
• Financial statements, various kinds of ratios, and external and internal audits are also important tools
organizations use as part of financial control.
14-4. Distinguish between two opposing forms of structural control.
• Structural control addresses how well an organization’s structural elements serve their intended purpose.
• Two basic forms of structural control are bureaucratic and decentralized control.
•Bureaucratic control is relatively formal and mechanistic.
•Decentralized control is informal and organic.
• Most organizations use a form of organizational control somewhere between total bureaucratic and total decentralized control.
14-5. Discuss the relationship between strategy and control, including international strategic control.
• Strategic control focuses on how effectively the organization’s strategies are succeeding in helping the organization meet its goals.
• The integration of strategy and control is generally achieved through organization structure, leadership,
technology, human resources, and information and operational control systems.
• International strategic control is also important for multinational organizations.
• The foundation of international strategic control is whether to practice centralized or decentralized control.
14-6. Identify characteristics of effective control including why people resist control and how
managers can overcome this resistance.
• One way to increase the effectiveness of control is to fully integrate planning and control.
• The control system should also be as flexible, accurate, timely, and objective as possible.
• Employees may resist organizational controls because of overcontrol, inappropriate focus, rewards for
inefficiency, and a desire to avoid accountability.
• Managers can overcome this resistance by improving the effectiveness of controls and by allowing
employee participation and developing verification procedures.
QUESTIONS FOR REVIEW
1. What is the purpose of organizational control? Why is it important?
Purpose: Organizational control is the process of monitoring activities to ensure that the organization is
moving toward its goals, and correcting deviations when necessary. In Griffin’s framework, control
ensures that actual performance aligns with planned performance. Importance:
Ensures goal achievement: Helps determine whether plans, strategies, and operations are on track.
Improves efficiency: Detects waste, bottlenecks, or misuse of resources.
Supports quality and customer satisfaction: By setting performance standards and evaluating outputs.
Facilitates coordination: Ensures that different departments are aligned.
Enables adaptation: Allows managers to recognize environmental changes and adjust operations.
Promotes accountability: Individuals and units are evaluated against measurable standards.
2. What are the different levels of control? What are the relationships between the different levels? 1. Strategic Control Performed by top management.
Long-term, broad, external orientation.
Focuses on whether the organization is achieving its strategic goals.
2. Tactical (or Structural) Control Performed by middle managers.
Ensures that the organization’s structures, resources, and processes are being used effectively to implement strategy. 3. Operational Control
Carried out by lower-level supervisors.
Ensures efficiency and effectiveness in day-to-day operations, tasks, routines, and procedures. Relationship Between Levels:
They form a hierarchy: operational control supports tactical control, and tactical control supports strategic control.
Effective control requires alignment: daily activities (operational) must support broader
departmental goals (tactical), which in turn support organizational strategy (strategic).
Feedback flows upward: operational results inform tactical adjustments, which inform strategic evaluations.
3. Describe how a budget is created in most organizations. How does a budget help a manager with financial control?
How a Budget Is Created by following these steps:
1. Establish organizational goals (strategic and departmental).
2. Forecast revenues and expenses based on past performance and expected conditions.
3. Develop budget proposals at the departmental or unit level.
4. Negotiate and revise budgets with upper management.
5. Review and approve the final master budget.
6. Distribute budget targets to departments and managers.
7. Use budgets throughout the year to compare actual and planned financial performance.
Budgeting can be top-down, bottom-up, or zero-based, depending on the organization.
How Budgets Help Managers with Financial Control: the budget is one of the most common and practi tools for financial control.
Set financial standards for performance evaluation.
Allocate resources efficiently, ensuring funds support objectives.
Provide a basis for comparison between actual and planned performance.
Highlight variances, allowing managers to take corrective action.
Help coordinate activities across departments.
Serve as a communication tool, clarifying priorities and constraints.
4. Describe the differences between bureaucratic and decentralized control. What are the
advantages and disadvantages of each? - Bureaucratic Control
+ A control system characterized by: Formal rules
Policies, procedures, and standards Hierarchical authority Clear reporting relationships + Advantages:
High predictability and consistency
Effective for large organizations with routine work
Ensures standardization and compliance Reduces the need for employee discretion + Disadvantages: Can be rigid and inflexible May reduce innovation Slows decision-making
Can create resentment or over-reliance on rules - Decentralized Control + A system that relies on: Shared values and culture Employee empowerment and trust Group norms and self-control
Training and communication rather than strict rules + Advantages:
Greater flexibility and adaptability
Encourages creativity, innovation, and engagement Faster decision-making
Stronger organizational culture and motivation + Disadvantages:
May lead to inconsistency if norms vary
Harder to maintain control across large or diverse organizations
Requires highly skilled and self- disciplined employees
Can create ambiguity about expectations
QUESTIONS FOR ANALYSIS
1. How can a manager determine whether his or her firm needs improvement in control? If
improvement is needed, how can the manager tell what type of control needs improvement
(operations, financial, structural, or strategic)? Describe some steps a manager can take to improve
each of these types of control.
- How to determine whether control improvement is needed
A manager can assess the control system by asking:
Are actual results consistently failing to meet goals or standards?
Are errors, waste, or delays increasing?
Is employee behavior predictable and aligned with goals?
Are competitors performing better with similar resources?
Is the environment changing faster than the firm can respond?
If the answer is “yes,” then control needs improvement. Managers typically use: Performance reports Financial statements Quality measures Benchmarking Customer feedback Internal audits
- How to tell which type of control needs improvement 1. Operations Control Problems Symptoms:
Inefficiency, delays, bottlenecks Low product quality High defect rates
Poor scheduling or workflow issues Steps to Improve: Redesign workflow or layout Improve technology/equipment Implement better training
Strengthen supervision and SOPs
Introduce quality control systems Use just-in-time, lean methods (TQM, SPC) 2. Financial Control Problems Symptoms: Budget overruns Poor cost management Low profitability High debt ratios Weak cash flow Steps to Improve:
Develop more accurate budgeting Strengthen internal audits
Conduct variance analysis regularly Improve forecasting Improve cost-tracking systems
Reevaluate capital spending and cost structures
3. Structural Control Problems (Structural control = control over organizational design: hierarchy,
division of authority, reporting relationship.) Symptoms: Slow decision-making Conflicting responsibilities Excessive bureaucracy Unclear coordination Poor communication between departments Steps to Improve: Redesign the structure (more Use cross-functional teams
decentralization or integration) Reduce unnecessary layers of
Clarify authority and responsibility management Improve communication channels 4. Strategic Control Problems Symptoms:
Strategy not delivering expected results
Competitors constantly outperforming
Products not aligned with market the firm changes Lack of innovation Steps to Improve: Reassess mission, goals, and Improve external scanning environment
Strengthen strategic planning processes Conduct SWOT analysis
Reallocate resources to new priorities Adjust or redesign strategy
2. One company uses strict performance standards. Another has standards that are more flexible.
What are the advantages and disadvantages of each system? Strict performance standards Advantages
Provide clear expectations for
Help ensure efficiency, quality, and employees.
control, especially in routine or high- risk tasks.
Make performance evaluation objective and consistent. Disadvantages
Reduce employee creativity and
Can be too rigid in changing or initiative. uncertain environments.
May cause stress, fear of failure, or resistance. Flexible performance standards Advantages
Allow adaptation to environmental
Increase employee motivation and change. autonomy.
Encourage innovation and problem- solving. Disadvantages
Performance evaluation may become
Harder to compare performance across subjective or inconsistent. individuals or units.
Risk of lower efficiency or unclear expectations.
3. Are the differences in bureaucratic control and decentralized control related to differences in
organization structure? If so, how? If not, why not? (The terms do sound similar to those used to
discuss the organizing process.)
Yes, differences in bureaucratic control and decentralized control are related to differences in
organizational structure, but they are not exactly the same concept. Bureaucratic control
Relies on formal rules, procedures, and hierarchy.
Closely associated with centralized and mechanistic structures.
Decision-making authority is concentrated at higher levels. Decentralized control
Relies on employee judgment, self-control, and shared values.
Common in organic and decentralized structures.
Authority is distributed to lower-level managers and employees.
How structure influences control
Centralized structures support bureaucratic control because rules ensure consistency.
Decentralized structures support decentralized control by giving employees discretion. However:
Control is a management function, while structure is part of the organizing process.
An organization may combine both (e.g., strict rules for safety but decentralized decisions for customer service).
QUESTIONS FOR APPLICATION
1. Many organizations today are involving lower-level employees in control. Give at least two
examples of specific actions that a lower-level worker could take to help his or her organization
better adapt to environmental change. Then do the same for limiting the accumulation of error,
coping with organizational complexity, and minimizing costs.
a. Helping the organization adapt to environmental change: Lower-level employees can:
Report customer feedback and market changes directly to supervisors (e.g., noticing changes in
customer preferences or complaints).
Suggest process improvements when new technology, competitors, or regulations affect daily work.
b. Limiting the accumulation of error: Lower-level employees can:
Stop production or service processes when they detect defects (similar to quality control in lean systems).
Correct small mistakes immediately instead of passing them to the next stage, preventing errors from spreading.
c. Coping with organizational complexity: Lower-level employees can:
Coordinate directly with other departments to solve routine problems without waiting for top management.
Use standard operating procedures (SOPs) and shared information systems to reduce confusion and duplication.
d. Minimizing costs: Lower-level employees can:
Reduce waste of materials, time, and energy by following cost-control guidelines.
Identify inefficiencies (e.g., unnecessary steps, excess inventory) and propose cost-saving ideas.
2. Select two different kinds of organizations with which you have some familiarity. For each one,
identify how its control systems and processes may have changed during the 2020 COVID-19 pandemic.
Organization 1: University / Educational Institution
Changes in control systems included:
Shift from direct supervision to output control, focusing on learning outcomes rather than classroom attendance.
Increased use of digital controls, such as learning management systems (LMS), online exams, and attendance tracking software.
Greater self-control, as students and lecturers managed their own schedules in online learning environments.
Organization 2: Retail or Service Business Changes included:
Stronger health and safety controls, such as temperature checks and sanitation procedures.
Tighter financial controls, including close monitoring of cash flow and operating costs due to reduced revenue.
Decentralized decision-making, allowing store-level employees to respond quickly to local
restrictions and customer needs.