SCRIPT

Subject: Management
Chapter 7: CONTROLLING
Topic 2: Type of control and control system.
Slide Nội dung
Welcome to topic 2 of the lecture on “Controlling”. In this lecture, we will focus
on a critical aspect of organizational control - the different types of control and
control systems that organizations use to achieve their desired outcomes. By the
end of this lecture, you will have a clear understanding of the following learning
outcomes:
 Describe the three types of control: feed-forward control, concurrent control,
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and feedback control.
 Identify the three types of control systems used in organizations.
Whether you are a business student, a manager, or simply someone interested in
learning more about organizational control, this lecture is designed to provide a
comprehensive overview of the different control and control systems used in
modern organizations. So, let's get started!
In this topic, we will explore the three types of control that organizations use in
the control process: feed-forward control, concurrent control, and feedback
control. These three types of control correspond to the three stages of the control
process: the input, conversion, and output.
Feed-forward control:
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At the input stage, managers use feed-forward control to anticipate potential
problems before they occur during the conversion process. For example, Coop-
Mart supermarket sends quality control experts to suppliers' vegetable gardens to
ensure that organic vegetables are grown and supplied to the supermarket.
Similarly, in the garment industry, managers must monitor input materials such as
 threads, fabrics, sewing machines, and workers' skills to avoid potential problems
during the conversion process.
Feed-forward control helps prevent problems from occurring and maintains
control over the entire production process.
Concurrent control:
At the conversion stage, concurrent control provides managers with immediate
feedback on how efficiently inputs are being transformed into outputs. This allows
them to correct any problems that arise in real-time. For example, a chef in the
food industry can taste dishes as cooks prepare them to ensure they meet the
required quality standards.
Similarly, In a road construction project, the project manager must provide
technical guidance and oversee control activities such as quality control, cost
control, and progress control.
Concurrent control ensures that the conversion process is monitored and adjusted
as needed to meet the required standards and specifications.
Feedback control:
At the output stage, managers use feedback control to obtain information about
customers' reactions to their organization's goods or services. This information
allows them to take corrective action if necessary. For instance, a feedback control
system may monitor the number of customer returns of defective products,
alerting managers to changes in customer tastes or preferences.
Feedback control enables managers to adjust production levels and improve
products or services based on customer feedback.
Understanding these types of control and the stages of the control process helps
managers manage and improve organizational performance effectively.
Now, let's turn our attention to control systems. In organizational management,
4 control systems are the processes and procedures used to ensure that
organizational goals and objectives are achieved efficiently and effectively. In this
 lecture, we will focus on three main types of control systems: output control,
behavior control, and clan control.
Top managers commonly use financial measures of performance to assess overall
organizational performance. Profit ratios, liquidity ratios, leverage ratios, and
activity ratios are examples of financial measures used in output control.
Profit ratios, like ROI and operating margin, assess resource utilization for
generating profits. ROI enables comparison with other organizations while the
operating margin reflects profitability after deducting all costs.
Liquidity ratios (e.g., current ratio, quick ratio) gauge resource safeguarding for
meeting short-term obligations.
Leverage ratios (e.g., debt-to-asset ratio, times-covered ratio) evaluate debt or
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equity usage for financing operations.
Activity ratios measure value creation from assets: inventory turnover assesses
efficiency in inventory management, and days sales outstanding gauges revenue
collection efficiency.
These measures provide an objective basis for evaluating efficiency, and
effectiveness and making comparisons with other organizations.
By using financial measures, managers can assess an organization's competitive
advantage, identify areas for improvement, and take corrective action when
needed.
Behavior control is a process used by managers to keep their subordinates on
track. It involves three types of control: direct supervision, management by
objectives, and bureaucratic control.
Direct supervision involves actively monitoring subordinates' behavior, teaching
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appropriate behaviors, and taking corrective action when necessary.
Management by objectives is a formal system that evaluates subordinates based
on their ability to achieve specific goals and meet operating budgets.
Bureaucratic control relies on a comprehensive system of rules and standard
 operating procedures to regulate behavior and ensure predictability.
Clan control relies on shared traditions, expectations, values, and norms to
guide and constrain employee attitudes and behavior. It fosters an organizational
culture that emphasizes teamwork and consensus among employees. Managers act
as mentors, and fewer rules and regulations are established. Clan control creates a
family-like atmosphere and promotes trust and employee commitment.
It is important to balance control and flexibility, as excessive control can
negatively impact employee morale and creativity. As a manager, assessing the
situation and using the appropriate control system is crucial.
For example, TechSolutions, a small family-owned software development
company, embraces clan control to cultivate a cohesive work environment. The
company values shared traditions, expectations, and norms that guide employee
behavior. A weekly team lunch tradition fosters camaraderie and a sense of
belonging, promoting teamwork and consensus. Managers serve as mentors,
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providing guidance and support to their team members. With fewer formal rules
and regulations, employees have the freedom to collaborate and innovate. This
family-like atmosphere cultivates trust and commitment among employees,
leading to a motivated and engaged workforce. The balance between control and
flexibility enables employees to thrive and contribute their creativity to the
company's success.
In conclusion, we have covered the three types of control: feed-forward control,
concurrent control, and feedback control. Additionally, we discussed the three
types of control systems: output control, behavior control, and clan control.
Understanding these control types and control systems is essential for effective
management and achieving organizational goals.
Next, let's explore the chapter on "Communication in Management." Stay tuned
for the upcoming lecture.