Chapter 11

Organizational
Control and
Change
 Learning Objectives
• Understand what is controlling and its relationship to planning.

• Describe and apply the criteria for assessing the effectiveness of a

controlling system.

• Understand the importance of Controlling

• Understand and apply the types of ‘Operational Controls’.

• Construct a controlling system by following the four controlling steps.

• Discuss the relationship between organizational control

and change, and explain why managing change is a vital
management task.
 Topics

Controlling Characteristics Importance

Operational Process Change

Controls Management
Controlling

Controlling is one of the

managerial functions.
Controlling

Monitor Measure Evaluate Regulate

Performance
 Controlling

Process whereby managers monitor and

regulate how efficiently and effectively an
organization and its members are
performing the activities necessary to
achieve organizational goals.
 Control Systems

• Formal, target-
setting, monitoring,
evaluation, and
feedback systems
that provide
managers with
information about
whether the
organization’s
strategy and
structure are
working efficiently
 In Bahrain, the Education, Training
Quality Assurance (ETQA) mission is

“Sustainable improvement of quality and

competitiveness in performance of education and
training sectors through independent, fair and
reliable evaluation that contributes to national
capacity-building”.
 Controlling & Planning

Planning Controlling

In controlling the
attainment of targets
Planning In planning the targets and
and plans is
plans are decided
& Controlling measured, evaluated
and corrected
highly related
Characteristics of Effective Control System

Flexibl Can be modified according to requirements

e

Accurate Based on precise and verified information

For a control system to be effective, it must

Timely-Information provides information when needed as
information has value. The value of the
information partly relates to the time of the
attainment the information; as a rule, the
quicker the more valuable.
 Control Systems and IT

FAT
The revolution in the information technology enabled
the control systems to be
more accurate,
More flexible and
enabled quick access and retrieve of information.
The Importance of Organizational Control

Efficiency

Effectiveness

Sales Representatives
Responsiveness to
Customers Needs

Innovation
Efficiency

Minimum Input : Maximum Output

Effectiveness Appropriateness Input
Processes
Output
Feedback

Feedback
 Assess how well customer-contact
Sales Representatives
employees are performing their jobs,
Responsiveness to managers can make their organizations
Customers Needs more responsive to customers.
Monitoring employee behavior can help
managers find ways to increase
employees’ performance levels
Sales Representatives
Responsiveness to
Customers Needs
Sales Representatives
Responsiveness to
Customers Needs

CRM –
Customer
Relationship
Management
Sales Representatives
Responsiveness to
Customers Needs
Innovation

Innovation
New ideas, inputs, process, output, feedback

Empowerment Decentralization Risk-taking

Innovation

Managers create organizational setting in which

employees feel empowered to be creative and in which
authority is decentralized to employees so they feel free
to experiment and take control of activities and
encouraged to take risks.
Innovation

Caterpillar lean initiative empowered

employees to find new ways of
reduction of all functional areas. As a
result, in 2016, variable cost reduced by
$675 million.
 Types of Operational Controls

Types of
Operational
Controls
 Types of Operational Controls

Types of
Operational
Controls

Raw Plastic

Glass
Production
Machine
 Types of Operational Controls

Types of
Operational
Controls
 Evaluate &

Increase By end of 1.2 m 1m Extremely

customers 2016, the Satisfied
by 1 million number of
by the end customers
of 2016 is 1.2
million
 The Control Process

1. Establish standards of
performance, goals, or targets
against which performance is to
be evaluated.
• Managers decide on the standards of
performance, goals, or targets that
they will use in the future to evaluate
the performance of the entire
organization or part of it.
 The Control Process

2. Measure actual performance.

• Behavior Measures - Managers or
measure the behavior themselves.
• Example: Absenteeism

• Output Measures - Measure outputs

resulting from worker behavior
• Example: Number of products produced
 The Control Process

3. Compare actual performance

against chosen standards of
performance.
Managers evaluate whether, and to
what extent, performance deviates
from the standards of performance
chosen in step 1.

• Actual is more than Planned

• Actual is equivalent to Planned
• Actual is lower than Planned
 The Control Process (4 of 4)

4. Evaluate the result and initiate

corrective action if the standard
is not being achieved.
• If managers decide that the level of
performance is unacceptable, they
must try to change the way work
activities are performed to solve
the problem.
Controlling Measuring Evaluating Correcting Changing

Performance
If an organization does not have effective control over it may not be able to change or
its activities, adapt in response to a changing
environment.
Controlling Measuring Evaluating Correcting Changing

Performance

The highest-performing
organizations are considered to be
those that are constantly changing—
and thus become experienced at
doing so—in their search to become
more efficient and effective.
 Organizational Change

Movement of an
organization away
from its present
state and toward
some desired
future state to
increase its
efficiency and
effectiveness
Organizational Control and Change
Lewin’s Force-Field Theory of Change

Wide variety of forces arise from the way

an organization operates—from its
structure, culture, and control systems—
that makes it resistant to change
Lewin’s Force-Field Theory of Change

A wide variety of forces arising from a

changing task and general environment
that push organizations toward change.
Lewin’s Force-Field Theory of Change

When the forces are evenly balanced,

the organization is in a state of inertia
and does not change.
Lewin’s Force-Field Theory of Change

To get an organization to change,

managers must find a way to increase
the forces for change, reduce
resistance to change, or do both
simultaneously.
Lewin’s Force-Field Theory of Change

Decrease resistance to change

Increase forces for Change

Lewin’s Force-Field Theory of Change
Type of Change
 Evolutionary Change

 Gradual,
incremental, and
narrowly focused.

 It is constant
attempt to
improve, adapt,
and adjust
strategy and
structure
incrementally to
accommodate
 Evolutionary Change Instruments

Sociotechnical systems theory and total quality

management, or kaizen, are two instruments of
evolutionary change. Such improvements might entail using
technology in a better way or reorganizing the work
process
 Revolutionary

 Rapid, dramatic, and

broadly focused

 Involves a bold attempt

to quickly find ways to
be effective

 Likely to result in a
radical shift in ways of
doing things, new goals,
and a new structure for
the organization
 Revolutionary Change Instruments

• Reengineering, restructuring, and innovation are

three important instruments of revolutionary change.
The process has repercussions (consequences) at
all levels in the organization—corporate, divisional,
functional, group, and individual.
Four Steps in the Organizational Change
Process
1. Assess the Need for Change

Change

Root Cause of the problem

2. Decide on the Change to Make

Typically, Strategy, Structure and Leadership

Found at the corporate, divisional, departmental, and individual levels

3. Implement the Change
 Implementing the Change

Top-down change
A fast,
revolutionary
approach to
change in which
top managers
identify what
needs to be
changed and then
move quickly to
implement the
changes
throughout the
 Implementing the Change

Bottom-up
Change
A gradual or
evolutionary
approach to
change in which
managers at all
levels work
together to
develop a
detailed plan for
change
 4. Evaluate the Change

The process of
comparing one
company’s performance
on specific dimensions
with the performance of
other, high-performing
organizations