CHAPTER 10

Questions managers ask:

Where are we today? Measure and analyze
What do we need to do to get there? -Decisions
Where do we want to go? Goals

Change: Change is a conscious and sustainable transition to a

higher level of performance & health, based on a fundamental shift
in underlying capabilities
-Achieved through deliberate choices
-Beyond short-term improvement
-Profound in meaning, broad in reach
-Ability to adapt as well as to deliver
-Beyond short term investment

Organizational change: The movement of an organization away from

its present state and toward some preferred future state to increase
its efficiency and effectiveness.
Organizations must be able to control their activities and make their
operations routine and predictable. They also need to feel the
autonomy to depart from routines as necessary to increase
effectiveness.
Benchmarking: Occurs in the last step of the changing process, where
its evaluated how successful the change effort has been in improving
organizational performance. Benchmarking is the process of
comparing ones performance on specific dimensions with the
performance of other high performing organizations.

Organizational control: Mix of people, activities and systems to

monitor and regulate performance

Three types of control:

1) Input stage: Feedforward control ( anticipate problems before
they occur)
2) Conversion stage: Concurrent control (manage problems as
they occur)
3) Output stage: Feedback control (manage problems after they
arise)

Relation between organizational control and change: They are related

because organizations operate in environments that are constantly
changing.

Threeorganizationalcontrolsystems:
Outputcontrol:
Financialmeasuresofperformance:profitratios,liquidityratios,leverageratios,
activityratios
Organizationalgoals
Operatingbudgets:Abudgetthatstateshowmanagersintendtouseorganizational
resourcestoachieveorganizationalgoals.

Behaviorcontrol
-Direct supervision: Direct supervision allows managers at all levels to
become personally involved with their subordinates and allows them
to mentor subordinates and develop their management skills. Its an
effective way of motivating employees abd promoting behaviors that
increase efficiency and effectiveness.
-Management by objectives: A goal setting process in each of his or
her subordinates negotiate specific goals and objectives for the
subordinate to achieve
Bureaucratic control: Control of behavior by means of a
comprehensive system of rules and standard operating procedures.

Clan control
-Control of individuals in an organization by shared values, norms and
standards of behavior.

Problems with output control:

Sometimes output standards dont motivate at all levels.
Sometimes they cause managers to behave in inappropriate ways
to achieve organizational goals.
 If the output is bad, managers may not know why.
The measures are not comparable or contextualized.

Problems with direct supervision

Very expensive because a manager can personally manage only a
relatively small number of subordinates effectively
Can demotivate subordinates if they feel that they are under such
close scrutiny that they are not free to make their own decisions