PART 5: CONTROLLING

CHAPTER 13 - FOUNDATIONS OF CONTROL

LEARNING OUTCOMES
After reading this chapter students should be able to:
1. Explain the nature and importance of control.
2. Describe the three steps in the control process.
3. Discuss the types of controls organizations and managers use.
4. Discuss contemporary issues in control.

Opening Vignette—Baggage Blunders

SUMMARY
Terminal 5 (T5), built by British Airways for $8.6 billion, is London Heathrow Airport’s newest state-of-
the art facility. Made of glass, concrete, and steel, it’s the largest free-standing building in the United
Kingdom and has over 10 miles of belts for moving luggage. After two decades in planning and 100
million hours in manpower, opening day didn’t work out as planned. Endless lines and major baggage
handling delays led to numerous flight cancellations stranding many irate passengers. Airport operators
said the problems were triggered by glitches in the terminal’s high-tech baggage-handling system. With
its massive automation features, T5 was planned to ease congestion at Heathrow and improve the flying
experience for the 30 million passengers expected to pass through it annually. With 96 self-service check-
in kiosks, over 90 fast check-in bag drops, 54 standard check-in desks, and over 10 miles in suitcase
moving belts that were supposed to be able to process 12,000 bags per hour, the facility’s design seemed
to support those goals.
Teaching Tips:
1. Why is the control stage so important?
2. What went wrong?
3. Were the goals accomplished?

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Part 5 - Controlling

I. WHAT IS CONTROL AND WHY IS IT IMPORTANT?

A. Introduction
1. Control is the management function involving the process of monitoring activities to
ensure that they are being accomplished as planned and correcting any significant
deviations.
a) An effective control system ensures that activities are completed in ways that lead to
the attainment of the organization’s goals.
b) The effectiveness of a control system is determined by how well it facilitates goal
achievement.

Right or Wrong?
The practice is called “sweethearting.” It’s when cashiers use subtle tricks to pass free goods to friends,
doing things such as concealing the barcode, slipping an item behind the scanner, passing two items at a
time but only charging for one. It’s impossible for even the most watchful human eyes to keep it from
happening. So retailers are using technology to block it. Surveillance cameras are used to record and
study cashiers staffing checkout lines.
1. What do you think?
2. Is surveillance less invasive when it’s a computer watching instead of a human?
3. How could an organization make sure it’s doing things ethically?

B. Why is Control Important?

1. There is no assurance that activities are going as planned and that the goals managers are
seeking are, in fact, being attained.
2. Control is the final link in the functional chain of management.
3. The value of control lies predominantly in its relation to planning and delegating activities.
a) Objectives give specific direction to managers.
b) The effective manager needs to follow up.
C. The Control Process
1. Three separate and distinct steps: (1) measuring actual performance, (2) comparing actual
performance against a standard, and (3) taking managerial action to correct deviations or
inadequate standards. (See Exhibit 13-1.)
2. The control process assumes that standards of performance are created in the planning
function.
a) Then objectives are set—tangible, verifiable, and measurable.
b) Objectives then are the standards against which progress is measured and compared.
c) Planning must precede control.
Teaching Notes
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 Chapter 13 – Foundations of Control

II. WHAT TAKES PLACE AS MANAGERS CONTROL?

A. Introduction
1. The control process is a three-step process of measuring actual performance, comparing
actual performance against a standard, and taking managerial action to correct deviations
or to address inadequate standards.
2. See Exhibit 13-2.
B. What Is Measuring?
1. The first step in control.
2. How do managers measure?
a) Four common sources of information frequently used by managers to measure actual
performance are personal observation, statistical reports, oral reports, and written
reports.
b) Personal observation provides firsthand, intimate knowledge of the actual activity.
(1) It is not filtered by others.
(2) It permits intensive coverage.
(3) It provides opportunities for the manager to “read between the lines.”
(4) Management by walking around (MBWA)—used to describe when a manager is out
in the work area, interacting directly with employees, and exchanging information
about what’s going on.
(5) Personal observation is often considered an inferior information source.
(a) It is subject to perceptual biases.
(b) Personal observation also consumes a good deal of time.
(c) It suffers from obtrusiveness.
c) Statistical reports (computer outputs, graphs, bar charts, etc.) provide managers
information about actual performance.
(1) It is easy to visualize and effective for showing relationships.
(2) It provides limited information about an activity and generally only reports on a few
key areas.
d) Information can also be acquired through oral reports—that is, through conferences,
meetings, one-on-one conversations, or telephone calls.
(1) The advantages and disadvantages are similar to those of personal observation.
(2) The information is filtered.
(3) It is fast and allows for feedback.
(4) It permits expression and tone of voice, as well as words themselves to convey
meaning.
(5) One of the major drawbacks of oral reports has been the problem of documenting
information for later references—technological capabilities to efficiently tape and
provide permanent record overcomes this drawback.

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e) Actual performance may also be measured by written reports.

(1) They are slower yet more formal.
(2) Formality gives them greater comprehensiveness and conciseness.
(3) Written reports are usually easy to catalog and reference.
f) Comprehensive control efforts by managers should use all four measurement
techniques.
3. What do Managers Measure?
a) What is measured is more critical to the control process than how it is measured.
b) The selection of the wrong criteria can result in serious dysfunctional consequences.
c) What is measured determines what people in the organization will attempt to excel at.
d) Some control criteria are applicable to any management situation.
(1) Criteria such as employee satisfaction or turnover and absenteeism rates can be
measured.
(2) Most managers have budgets for their area of responsibility set in monetary units and
keeping costs within budget can be measured.
e) Any comprehensive control system needs to recognize the diversity of activities
among managers.
f) Some activities are more difficult to measure in quantifiable terms.
(1) But most activities can be broken down into objective segments that allow for
measurement.
(2) The manager needs to determine what value a person, department, or unit contributes
to the organization and then convert the contribution into standards.
g) Most jobs and activities can be expressed in tangible and measurable terms.
h) When a performance indicator cannot be stated in quantifiable terms, managers should
look for and use subjective measures.
i) Certainly, subjective measures have significant limitations.
j) Any analysis or decisions made on the basis of subjective criteria should recognize the
limitations of the data.

C. How do managers compare actual performance to planned goals?

1. The comparing step determines the degree of discrepancy between actual performance and
the standard.
2. It is critical to determine the acceptable range of variation. (See Exhibit 13-3.)
a) In the comparison stage, managers are particularly concerned with the size and
direction of the variation.
3. Becky Simmons is the sales manager for South Atlantic Distributors, example.
4. Exhibit 13-4 presents the standard and actual sales figures for June.
5. Both over-variance and under-variance require managerial attention.

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 Chapter 13 – Foundations of Control

From the Past to the Present

We introduced benchmarking as a way for organizations to promote quality. Benchmarking has been a
highly utilized management tool. Although Xerox is often credited with the first widespread
benchmarking effort in the United States, the practice can actually be traced back much further than that.
The benefits of benchmarking have long been recognized Company plant where he was employed,
Frederick W. Taylor (of scientific management fame) used concepts of benchmarking to find the “one
best way” to perform a job and to find the best worker to perform the job.
Today, managers in diverse industries such as health care, education, and financial services are
discovering the benefits of benchmarking. At its most basic, benchmarking means learning from others.
However, as a tool for monitoring and measuring organizational and work performance, benchmarking
can be used to identify specific performance gaps and potential areas of improvement.
1. How is benchmarking used today?
2. Does it help in the control process? Explain.

D. What Managerial Action Can Be Taken?

1. The third and final step in the control process is taking managerial action.
2. Managers can choose among three courses of action: they can do nothing; they can correct
the actual performance; or they can revise the standard.
a) Doing nothing is fairly self-explanatory.
3. Correct actual performance.
a) If the source of the variation has been deficient performance, the manager will want to
take corrective action.
(1) Make another decision; take immediate or basic corrective action?
(2) Immediate corrective action corrects problems at once and gets performance back on
track.
(3) Basic corrective action asks how and why performance has deviated and then
proceeds to correct the source of deviation.
(4) It is not unusual for managers to rationalize that they do not have the time to take
basic corrective action and therefore must be content to perpetually put out fires with
immediate corrective action.
(5) Effective managers analyze deviations, and when the benefits justify it, take the time
to permanently correct significant variances between standard and actual
performance.
4. Revise the standard.
a) It is also possible that the variance was a result of an unrealistic standard—that is, the
goal may have been too high or too low.
(1) The standard needs corrective attention, not the performance.
(2) The more troublesome problem is the revising of a performance standard downward.
(3) It may be true that standards are too high.
(4) But keep in mind that if employees or managers don’t meet the standard, the first
thing they are likely to do is to attack the standard itself.

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b) If you believe that the standard is realistic, hold your ground.

(1) Explain your position, reaffirm to the employee or manager that you expect future
performance to improve, and then take the necessary corrective action to turn that
expectation into reality.
Teaching Notes
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III. WHAT SHOULD MANAGERS CONTROL?
A. See Exhibit 13-5.
B. What Is Feedforward Control?
1. The most desirable type of control—feedforward control—prevents anticipated problems.
a) It takes place in advance of the actual activity.
b) It’s future-directed.
c) The key to feedforward control is taking managerial action before a problem occurs.
2. Feedforward controls allow management to prevent problems rather than having to cure
them.
a) These controls require timely and accurate information that is often difficult to
develop.
C. When Is Concurrent Control Used?
1. It takes place while an activity is in progress.
2. Management can correct problems before they become too costly.
3. The best-known form of concurrent control is direct supervision.
a) Technical equipment can be designed to include concurrent controls.
D. Why Is Feedback Control So Popular?
1. The most popular type of control relies on feedback.
a) The control takes place after the action.
2. The major drawback of this type of control is that by the time the manager has the
information, the damage has already been done.
a) It’s analogous to locking the barn door after the horse has been stolen.
3. Feedback has two advantages over feedforward and concurrent control.
a) First, feedback provides managers with meaningful information on how effective their
planning efforts were.
b) Second, feedback control can enhance employee motivation.
4. See Developing Your Performance Feedback Skill

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 Chapter 13 – Foundations of Control

Developing Your Performance Feedback Skill

About the Skill
In this chapter, we introduced several suggestions for providing feedback. One of the more critical
feedback sessions will occur when you, as a manager, are using feedback control to address performance
issues.
Steps in Practicing the Skill
1. Schedule the feedback session in advance and be prepared.
2. Put the employee at ease.
3. Make sure the employee knows the purpose of this feedback session.
4. Focus on specific rather than general work behaviors.
5. Keep comments impersonal and job-related.
6. Support feedback with hard data.
7. Direct the negative feedback toward work-related behavior that the employee controls.
8. Let the employee speak.
9. Ensure that the employee has a clear and full understanding of the feedback.
10. Detail a future plan of action.
Practicing the Skill
Think of a skill you would like to acquire or improve, or a habit you would like to break. For the purpose
of this exercise, assume you have three months to start and all the necessary funds. Draft a plan of action
that outlines what you need to do and when you need to do it, and how you will know that you have
successfully completed each step of your plan. Be realistic, but don’t set your sights too low either.
Review your plan. What outside help or resources will you require? How will you get them? Add these
to your plan.
Could someone else follow the steps you’ve outlined to achieve the goal you set? What modifications
would you have to make, if any?
Teaching notes
Use the instructions above (for “Practicing the Skill”) as standards for the exercise. Share that they (the
students) should
 Be realistic.
 Set goals that will stretch them.
 Review the plan weekly.
 Think about resources and how they will acquire them.
Encourage students to write out a real plan of action by telling them you will call on volunteers in the next
class to share their plans.
Students should keep the plan created in this exercise to less than one page in length.
Encourage students to incorporate feedback into the goal setting/planning process. How will they get
feedback? How can they help the feedback to be delivered in an effective fashion?

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Part 5 - Controlling

E. In What Areas Might Managers Need Controls?

1. Every business wants to earn a profit and to achieve this goal, managers need financial
controls.
2. Traditional financial measures managers might use include ratio analysis and budget
analysis.
3. Exhibit 13-6 summarizes some of the most popular financial ratios that managers will
analyze.
4. Budgets are another type of financial control tool that are used for planning and
controlling.
F. How is an Organization's Information Controlled?
1. Managers deal with information controls in two ways: (1) as a tool to help them control
other organizational activities and (2) as an organizational area they need to control.
2. A management information system (MIS) is a system used to provide managers with
needed information on a regular basis.
a) The term system in MIS implies order, arrangement, and purpose.
b) An MIS focuses specifically on providing managers with information (processed and
analyzed data), not merely data (raw, unanalyzed facts)
3. Managers must have comprehensive and secure controls in place to protect that
information.
4. Equipment such as laptop computers and even RFID (radio-frequency identification) tags
are vulnerable to viruses and hacking, so information controls should be monitored
regularly to ensure that all possible precautions are in place to protect important
information.
G. What is the Balanced Scorecard Approach to Control?
1. A balanced scorecard typically looks at four areas that contribute to a company’s
performance: financial, customer, internal processes, and people/innovation/growth assets.
According to this approach, managers should develop goals in each of the four areas and
then measure whether the goals are being met.
Teaching Notes
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IV. DO CONTROLS NEED TO BE ADJUSTED FOR CULTURAL DIFFERENCES?
A. Do Controls Need to be Adjusted for Cultural Differences?
1. Methods of controlling employee behavior and operations can be quite different in foreign
countries.
2. The differences in organizational control systems of global organizations are primarily in
the measurement and corrective action steps of the control process.

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 Chapter 13 – Foundations of Control

3. Managers of foreign operations of global corporations tend not to be closely controlled by

the home office.
a) Distance keeps managers from being able to observe work directly.
b) The home office of a global company often relies on extensive formal reports for
control.
c) The global company may also use the power of information technology to control
work activities.
4. Technology’s impact on control is most evident in comparing technologically advanced
nations with more primitive countries.
a) Organizations in technologically advanced nations use indirect control devices—
particularly computer-related reports and analyses— in addition to standardized rules
and direct supervision to ensure that activities are going as planned.
b) In less technologically advanced countries, direct supervision and highly centralized
decision making are the basic means of control.
5. Constraints on what corrective action managers can take may affect managers in foreign
countries.
a) Laws in some countries do not allow managers the option of closing facilities, laying
off employees, or bringing in a new management team from outside the country.
6. Another challenge for global companies in collecting data is comparability.
Teaching Notes
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Technology and the Manager's Job
Monitoring Employees
Summary
Technological advances have made the process of controlling much easier. But these advances have also
brought with them difficult questions regarding what managers have the right to know and how far they
can go in controlling employee behavior. Although controlling employees’ behaviors on and off the job
may appear unjust or unfair, nothing in our legal system prevents employers from engaging in these
practices. Managers typically defend their actions in terms of ensuring quality, productivity, and proper
employee behavior.
1. When does management’s need for information about employee performance cross over the line and
interfere with a worker’s right to privacy?
2. Is technology being misused?
3. Is any action by management acceptable as long as employees are notified ahead of time that they
will be monitored?

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B. What Challenges do Managers Face in Controlling the Workplace?

1. Is my work computer really mine? Do you think you have a right to privacy at your
workplace?
2. Employers can, among other things: read your e-mail (even confidential messages), tap
your work telephone, monitor your computer work.
a) Nearly 80 percent of all businesses surveyed by the American Management
Association indicate they monitor employees.
3. Managers feel they must monitor what employees are doing because employees are hired
to work, not to surf the Web checking stock prices, placing bets at online casinos, or
shopping for presents for family or friends.
a) Recreational on-the-job Web surfing has been said to cost a billion dollars in wasted
computer resources and billions of dollars in lost work productivity annually.
b) A survey of U.S. employers said that 87 percent of employees look at non work-
related Web sites while at work and more than half engage in personal Web site
surfing every day.
4. Managers don’t want to risk being sued for creating a hostile workplace environment
because of an offensive message or inappropriate images displayed on a co-worker’s
computer screen.
a) Federal law views a company’s e-mail no differently than if offensive materials were
circulated on a company’s letterhead.
5. Managers want to ensure that company secrets aren’t being leaked.
6. The consequences of inappropriate workplace computer usage can be serious for
employees and companies.
a) Examples: New York Times, Xerox, Salomon Smith Barney, Lockheed Martin.
C. Is Employee Theft on the Rise?
1. Nearly 85 percent of all organizational theft and fraud is committed by employees—not
outsiders.
2. It’s estimated that U.S. companies lose about $29 billion annually from employee theft
and fraud.
3. Employee theft is defined as any unauthorized taking of company property by employees
for their personal use.
a) It can range from embezzlement to fraudulent filing of expense reports to removing
equipment, parts, software, and office supplies from company premises.
4. A recent survey of U.S. businesses indicated that more than 35 percent of employees
admitted to stealing from their employers.
5. Why do employees steal?
a) The industrial security people propose that people steal because the opportunity
presents itself through lax controls and favorable circumstances.
b) Criminologists say it’s because people have financial-based pressures (such as
personal financial problems) or vice-based pressures (such as gambling debts).

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 Chapter 13 – Foundations of Control

c) Clinical psychologists suggest that people steal because they can rationalize whatever
they’re doing as being correct and appropriate behavior (“everyone does it,” “they had
it coming,” “this company makes enough money and they’ll never miss anything this
small,” “I deserve this for all that I put up with,” and so forth).
6. What can managers do?
a) Under certain circumstances as part of a theft investigation in the organization, an
employer could require an employee to submit to a polygraph (lie detector test).
b) Look at some suggestions for managing employee theft. (See Exhibit 13-7.)
D. What Can Managers do About Workplace Violence?
1. The U.S. National Institute of Occupational Safety and Health says that each year, some 2
million American workers are victims of some form of workplace violence such as verbal
abuse, yelling at coworkers, purposeful damage of machines or furniture, or assaulting
coworkers.
2. Anger, rage, and violence in the workplace are intimidating to coworkers and adversely
affect their productivity.
3. The annual cost to U.S. businesses is estimated to be between $20 billion and $35 billion.
4. Dysfunctional work environments are characterized by:
a) Employee work driven by TNC (time, numbers, and crises).
b) Rapid and unpredictable change where instability and uncertainty plague employees.
c) Destructive communication style where managers communicate in excessively
aggressive, condescending, explosive, or passive-aggressive styles; excessive
workplace teasing or scapegoating.
d) Authoritarian leadership with a rigid, militaristic mind-set of managers versus
employees; employees aren’t allowed to challenge ideas, participate in decision
making, or engage in team-building efforts.
e) Defensive attitude where little or no performance feedback is given; only numbers
count; and yelling, intimidation, or avoidance are the preferred ways of handling
conflict.
f) Double standards in terms of policies, procedures, and training opportunities for
managers and employees.
g) Unresolved grievances because there are no mechanisms or only adversarial ones in
place for resolving them; dysfunctional individuals may be protected or ignored
because of long-standing rules, union contract provisions, or reluctance to take care of
problems.
h) Emotionally troubled employees and no attempt by managers to get help for these
people.
i) Repetitive, boring work where there’s no chance for doing something else or for new
people coming in.
j) Faulty or unsafe equipment or deficient training, which keeps employees from being
able to work efficiently or effectively.

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k) Hazardous work environment in terms of temperature, air quality, repetitive motions,

overcrowded spaces, noise levels, excessive overtime, and so forth. To minimize
costs, no additional employees are hired when workload becomes excessive leading to
potentially dangerous work expectations and conditions.
l) Culture of violence where there’s a history of individual violence or abuse; violent or
explosive role models; or tolerance of on-the-job alcohol or drug abuse.
5. Exhibit 13-8 summarizes suggestions for managers to control workplace violence.
Teaching Notes
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REVIEW AND APPLICATIONS

CHAPTER SUMMARY
13.1 Explain the nature and importance of control. Control is the management function that
involves monitoring activities to ensure that they’re being accomplished as planned and correcting
any significant deviations. As the final step in the management process, controlling provides the link
back to planning. If managers didn’t control, they’d have no way of knowing whether goals were
being met. Control is important because (1) it’s the only way to know if goals are being met and if
not, why; (2) it provides information and feedback so managers feel comfortable empowering
employees; and (3) it helps protect an organization and its assets.
13.2 Describe the three steps in the control process. The three steps in the control process are
measuring, comparing, and taking action. Measuring involves deciding how to measure actual
performance and what to measure. Comparing involves looking at the variation between actual
performance and the standard (goal). Deviations outside an acceptable range of variation need
attention. Taking action can involve: do nothing, correct the actual performance, or revise the
standards. Doing nothing is self-explanatory. Correcting the actual performance can involve different
corrective actions, which can either be immediate or basic. Standards can be revised by either raising
or lowering them.
13.3 Discuss the types of controls organizations and managers use. Feedforward controls take
place before a work activity is done. Concurrent controls take place while a work activity is being
done. Feedback controls take place after a work activity is done. Financial controls that managers can
use include financial ratios (liquidity, leverage, activity, and profitability) and budgets. One
information control managers can use is an MIS, which provides managers with needed information
on a regular basis. Others include comprehensive and secure controls such as data encryption, system
firewalls, data backups, and so forth that protect the organization’s information. Also, balanced
scorecards provide a way to evaluate an organization’s performance in four different areas rather than
just from the financial perspective.
13.4 Discuss contemporary issues in control. Adjusting controls for cross-cultural differences may
be needed primarily in the areas of measuring and taking corrective actions. Workplace concerns
include workplace privacy, employee theft, and workplace violence. For each of these, managers need
to have policies in place to control inappropriate actions and ensure that work is getting done
efficiently and effectively.

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 Chapter 13 – Foundations of Control

To check your understanding of outcomes 13.1 – 13.4, go to mymanagementlab.com and try the chapter
questions.

UNDERSTANDING THE CHAPTER

1. What is the role of control in management?
Answer – Control is the process of monitoring activities to ensure that they are being accomplished
as planned and correcting any significant deviations. An effective control system ensures that
activities are completed in ways that lead to the attainment of the organization’s goals. Control is
the final link in the functional chain of management. The value of control lies mostly in its
relation to planning and delegating activities.
2. Describe four methods managers can use to acquire information about actual work
performance.
Answer – Four common sources of information frequently used by managers to measure actual
performance are personal observation, statistical reports, oral reports, and written reports. Personal
observation provides firsthand, intimate knowledge of the actual activity. Computers and
sophisticated software systems give managers realtime statistical reports for measuring actual
performance. Statistical reports can also be presented as graphs, bar charts, or numerical displays of
any form that managers can use for assessing performance. Information can also be acquired through
oral reports—that is, through conferences, meetings, one-on-one conversations, or telephone calls.
Actual performance may also be measured by written reports. Comprehensive control efforts by
managers should use all four.
3. How are planning and control linked? Is the control function linked to the organizing and
leading functions of management? Explain.
Answer – The control process assumes that standards of performance already exist. They are created
in the planning function. Objectives are the standards against which progress is measured and
compared. An effective control system ensures that activities are completed in ways that lead to the
attainment of the organization’s goals. So control is linked to all functions of management, not just
organizing and leading.
4. In Chapter 7 we discussed the white water rapids view of change. Do you think it’s possible to
establish and maintain effective standards and controls in this type of atmosphere? Discuss.
Answer – Yes. The control cycle—when measurements are taken, building an acceptable controls are
vital regardless of industry or market dynamics and volatility. A key quality of effective controls is
flexibility. Effective controls must be flexible enough to adjust to adverse change or to take advantage
of new opportunities.
5. Why is what is measured in the control process probably more critical to the control process
than how it is measured?
Answer – What is measured is more critical to the control process than how it is measured. The
selection of the wrong criteria can result in serious dysfunctional consequences. What is measured
determines what people in the organization will attempt to excel at. For the most part, controls are
directed at one of several areas: information, operations, finances, or people.

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6. Why do you believe feedback control is the most popular type of control? Justify your response.
Answer – Students’ responses will vary but might include things like: managers have experience with
feedback, it’s natural to want to wait and see what outcomes are before making adjustments, the
difficulty in establishing the information systems needed for feed forward control, etc.
7. “Every individual employee in an organization plays a role in controlling work activities.” Do
you agree with this statement, or do you think control is something that only managers are
responsible for? Explain.
Answer: Student responses will vary. Yes, every employee has an obligation to control work
activities to accomplish the organization's goals of productivity and profitability. Employees work
for the common goals of the firm and everyone plays an integral part.
8. How could you use the concept of control in your personal life? Be specific. (Think in terms of
feedforward, concurrent, and feedback controls as well as specific controls for the different
aspects of your life—school, work, family relationships, friends, hobbies, etc.)
Answer – The most desirable type of control—feedforward control—prevents anticipated problems.
It takes place in advance of the actual activity. It's future-directed. The key to feedforward control is
taking managerial action before a problem occurs. Feedforward controls allow management to
prevent problems rather than having to cure them. This concept can be applied to all facets of life.
The specific examples will vary by student.

UNDERSTANDING YOURSELF
How Good Am I at Disciplining Others?
Disciplining employees is probably one of the most difficult things a manager does. However, it’s an
important managerial tool. This instrument is based on the literature defining preferred discipline
techniques. It’s not a precise tool, but it will give you some insights into how effective you might be in
using discipline in the workplace.
INSTRUMENT This test contains eight disciplining practices. For each statement, select the answer that
best describes you. Remember to respond as you have behaved or would behave, not as you think you
should behave. If you have no managerial experience, answer the statements assuming you are a manager.
Use the following scale to express your response:
1 = Usually
2 = Sometimes
3 = Seldom
When disciplining an employee:
1. I provide ample warning before taking formal action. 123
2. I wait for a pattern of infractions before calling it to the employee’s attention. 123
3. Even after repeated offenses, I prefer informal discussion about correcting the problem rather 123
than formalconfronting
4. I delay disciplinarythe
action.
employee about an infraction until his or her performance-appraisal 123
review.
5. In discussing an infraction with the employee, my style and tone are serious. 123
6. I explicitly seek to allow the employee to explain his or her position. 123
7. I remain impartial in allocating punishment. 123
8. I allocate stronger penalties for repeated offenses. 123

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 Chapter 13 – Foundations of Control

SCORING KEY Add up the points for questions 2, 3, and 4. For the other 5 questions (1, 5, 6, 7, and 8),
reverse score them by giving a “1” response 3 points and a “3” response 1 point.
ANALYSIS AND INTERPRETATION Your score on this test will range from 8 to 24. A score of 22
or higher indicates excellent skills at disciplining. You understand that effective discipline involves
providing ample warning, acting in a timely fashion, using a calm and serious tone, being specific about
the problem, keeping the process impersonal, and that disciplinary action should be progressive and
consider mitigating circumstances. A score in the 19 to 21 range suggests some deficiencies. A score
below 19 indicates considerable room for improvement.
Overview
To understand how discipline works, it is important to have a foundation in how humans learn. Learning
is going on all the time. A more accurate definition of learning, therefore, is any relatively permanent
change in behavior that occurs as a result of experience.
How do we learn? Learning is built upon the law of effect, which says, “Behavior is a function of its
consequences.” Behavior that is followed by a favorable consequence tends to be repeated; behavior
followed by an unfavorable consequence tends not to be repeated. Consequence, in this terminology,
refers to anything a person considers rewarding (i.e., money, praise, promotions, a smile). If your boss
compliments you on your sales approach, you are likely to repeat that behavior. Conversely, if you are
reprimanded for your sales approach, you are less likely to repeat it.
Teaching Notes
The keys to the learning process are the two theories, or explanations, of how we learn. One is shaping
and the other is modeling.
When learning takes place in graduated steps, it is shaped. Managers shape employee behavior by
systematically reinforcing, through rewards, each successive step that moves the employee closer to the
desired behavior. Much of our learning has been done by shaping. When we speak of “learning by
mistakes,” we are referring to shaping. We try, we fail, and we try again. Through such series of trial and
error, we master skills like riding a bicycle, playing a musical instrument, performing basic mathematical
computations, and answering multiple-choice tests.
In addition to shaping, much of what we have learned is the result of observing others and modeling our
behavior after them. Whereas the trial-and-error learning process is usually slow, modeling can produce
complex behavioral changes quite rapidly. For instance, most of us, at one time or another, when having
trouble in school or in a particular class, look around to find someone who seems to have the system
down pat. Then we observe that person to see what he or she is doing that is different from our approach.
If we find some differences, we then incorporate them into our behavior repertoire. If our performance
improves (a favorable consequence), we are likely to make a permanent change in our behavior to reflect
what we have seen work for others. The process is the same at work as it is in school. A new employee
who wants to be successful on her job is likely to look for someone in the organization who is well
respected and successful and then try to imitate that person’s behavior.
Although the learning process clearly works better when there is positive reinforcement, sometimes
discipline does need to occur. It is important to understand what the potential side effects are of
punishing workers.

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Part 5 - Controlling

Exercises
1. WRONG! Start a class discussion on a timely management topic. Ask the students questions. For
those that respond to the questions, have some sort of mild “punishment” for them. Tell them their
answer was wrong, interrupt them, or do other things that insure nobody else wants to participate.
After doing this for a while, switch your method to “reinforcement.” You can do this by giving out a
small reward, such as candy, or you could give a few bonus points. You should see much more
participation, which clearly illustrates the laws of effect.
Learning Objective(s): To compare and contrast the use of positive reinforcement to punishment.
Preparation/Time Allotment: This activity should take about 30-minutes. You can do the activity
while discussing any management topic, so you may want to use the entire class.
Advantages/Disadvantages/Potential Problems: After completing the exercise, reinforce with the
students that you were role-playing on the punishment side. You do not want students thinking you
were saying negative things like “you are wrong,” or that you were really interrupting them.
Although it should seem obvious once the exercise is complete, point it out again for those that may
not have been paying attention. You also should conclude this by relating the concept back to
discipline, and in finding the best ways to discipline employees, when necessary.
2. Small Group Sharing. Divide this class into small groups. Have them discuss various experiences
that they have had with being disciplined. This can be work or non-work related. Have them
compare how the various methods influenced their future behavior, both short and long-term.
Learning Objective(s): To illustrate the outcomes of discipline through real-life examples.
Preparation/Time Allotment: This should be about a 30-minute class discussion.
Advantages/Disadvantages/Potential Problems: Make sure they discuss the impact of the discipline,
not just how “bad” their boss or parents were. You want to get to the root of the issue and that is how
certain discipline techniques affect human behavior.

FYIA (For Your Immediate Action)

Collins State College—School of Accountancy
To: Matt Wrobeck, Ethics Committee Chair
From: Dr. Rebecca Rodriguez, Director
Subject: Minimizing student cheating
Matt, you’ve probably heard that several of our faculty members want to develop some specific controls
to minimize opportunities for our students to cheat on homework assignments and exams. As the ethics
committee chair, I’d like you to work with them on developing some suggestions.
1. How would you develop ways to control cheating (1) before it happens, (2) while in-class exams or
assignments are being completed, and (3) after it has happened?

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 Chapter 13 – Foundations of Control

Case Application
Off Course
Summary
Just after midnight on March 22, 2006, the Queen of the North ferry, part of the BC Ferries system, hit rocks off Gil
Island, south of Prince Rupert. It was immediately clear that the ferry was in trouble, and within 15 minutes, “all” the
passengers and crew were off the ship and in the ferry’s lifeboats. Initial media reports celebrated the fact that all 99
passengers and crew had managed to get off the ferry safely and with no major injuries.
On day two, passengers were reported missing. How could the ferry crew not know there had still been people
onboard? While international maritime regulations require that ferries record identifying information about all
passengers (name, gender, and whether they are adults, children, or infants), the Canadian government doesn’t require
BC’s ferry fleet to meet international standards. Passenger names aren’t collected and ferry staff don’t even take a head
count after loading. The number of passengers is only roughly determined by the number of tickets sold. There is no
system in place to count passengers as they move from the ship to lifeboats, should such a situation arise.
The internal investigation BC Ferries conducted after the incident concluded that “human factors were the primary
cause” of what happened. The report stated that the fourth officer “failed to make a necessary course alteration or
verify such alteration was made in accordance with pre-established fleet routing directives and good seamanship.”
During the investigation, crew members responsible for navigating the ship that night claimed that they were unfamiliar
with newly installed steering equipment. In addition, they had turned off a monitor displaying their course, because they
could not turn on the night settings. The report also concluded that the crew maintained a “casual watch-standing
behavior,” had “lost situational awareness,” and “failed to appreciate the vessel’s impending peril.” Transcripts of radio
calls that evening noted that music was heard playing on the bridge.
Discussion Questions
1. Describe the type(s) of control that could be used to improve the BC Ferries service to prevent an accident
such as this occurring again. Be specific.
Answer: All four types of control should have been in place as a comprehensive plan. Personal observation,
statistical reports, oral reports, and written reports on a regular basis would have illuminated many of the issues that
surfaced after the incident. Personal observation provides firsthand, intimate knowledge of the actual activity.
Computers and sophisticated software systems give managers real time statistical reports for measuring actual
performance. Statistical reports can also be presented as graphs, bar charts, or numerical displays of any form that
managers can use for assessing performance. Information can also be acquired through oral reports—that is,
through conferences, meetings, one-on-one conversations, or telephone calls. Actual performance may also be
measured by written reports. Students can apply each control to the individual problems that surfaced during this
accident.
2. Assume that you are the president of BC Ferries. You have read the report of the investigation and noted
some of the problems found. What would you do? Explain your reasoning.
Answer: Student answers may vary. Clearly, planning, training and controls were not in place from the proper
procedures, following policy, any oversight, etc. managers and individuals at all levels could have been a part of the
solution in advance to avert this incident. People should be held accountable and a strict adherence to guidelines
should have been followed versus this entire series of follies, that probably resulted in death and further liability.
3. Would some types of controls be more important than others in this situation? Discuss.
Answer: The use of feedforward control may have anticipated a number of these problems before they
occurred. This scenario was an accident waiting to happen without any controls in place. Planning and control
would have taken place in advance of this disaster and possibly prevented this incident.

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