Académique Documents
Professionnel Documents
Culture Documents
& Control
J. DAVID HUNGER
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Cont,
results. Each standard usually includes a tolerance range
that defines acceptable deviation. Standards can be set
not only for final output but also for intermediate stages
of production output.
Measure performance : measurement must be made at
predetermined times.
Compare actual performance with the standard: if actual
performance results are within the desired tolerance
range. The measurement process stop here.
Take corrective action: if actual results fall outside the
desired tolerance range action must be taken to correct
Prentice Hall, Inc. 2008
11-5
Cont,
the deviation, the following questions must be answered:
1. Is the deviation only a chance fluctuation?
2. Are the process being carried out incorrectly?
3. Are the process appropriate to the achievement of the
desired standard? Action must be taken will not only
correct the deviation but also prevent it is happening
again.
4. Who is the best person to take corrective action?
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Measuring performance
The end result of activity. Which measures to select
assess performance depends on the organizational unit
to be appraised and the objective to be achieved. The
objectives that were established earlier in the strategy
formulation part of strategic management process
(dealing with profitability, market share, and cost
reduction, among others) should certainly be used to
measure corporate performance once the strategies
have been implemented
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Types of control
Control can be establish to focus on actual
performance results (out put), on the
activities that generate the performance
(behavior), or on resources that are used
in performance (input)
11-9
Types of Controls
Behavior controls
Some examples of behavior controls are
company procedures, quotas of sales calls to
potential customers, and rules regarding
attendance and tardiness.
Behavior controls are very appropriate when
results are hard to measure and a clear causeeffect exists between activities (behaviors) and
results.
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Types of Controls
Output controls
What is to be accomplished; focus on end
result through performance targets.
Some examples of output controls are sales
quotas, cost reduction or profit objectives, and
surveys of customer satisfaction.
11-11
Types of Controls
Input controls
Resources skills, abilities, values, motives.
Input controls are the least useful and are most
appropriate when output is difficult to measure
and there is no clear cause-effect relationship
between behavior and performance (such as in
college teaching).
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Types of Controls
Behavior controls
ISO 9000 Standards Series is a way of
objectively documenting a companys high level
of quality operation.
ISO 14000 Standards Series is a way of to
document the companys impact on the
environment.
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Types of Controls
Activity Based Costing (ABC)
Allocation of indirect and fixed costs to
individual products or product lines
Based on value-added activities
More accurate charge of costs
11-14
Types of Controls
Enterprise Risk Management (ERM)
(ERM) is a corporate wide, integrated process for
managing the uncertainties that could negatively or
positively influence the achievement of a corporations
objectives. In the past, was done in a fragmented
manner functions or business units. Individuals would
manage process risk, safety risk, and insurance,
financial and other assorted risks. As a result of this
fragmented approach, companies would take huge risks
in some areas of the business while over managing
substantially smaller risks in other areas.
Prentice Hall, Inc. 2008
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Types of Controls
Enterprise Risk Management (ERM)
Identify risks: using scenario analysis or
brainstorming or performance risk self
assessments.
Rank risks: using some scale of impact and
likelihood.
Measure risks: using some agreed upon
standard.
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Using Benchmarking
Continual process of measuring products,
service, and practices against the toughest
competitors or those companies recognized
as industry leaders
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Strategy Review
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Strategy Review
Strategy Evaluationthe 3 Basics
Strategy Review
Effective Strategy Evaluation
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Strategy Review
Strategy Evaluation
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Strategy Review
Four Criteria (Richard Rumelt):
Consistency
Consonance=fit or harmony
Feasibility
Advantage
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Consistency=uniformity
A strategy should not present inconsistent
goals and policies
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Feasibility
Strategy must neither overtax available
resources nor create unsolvable subproblems.
Strategy Review
Contemporary
Strategy
Evaluation
Difficulties
Increase in environments
complexity
Increasing number of
variables
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Strategy Review
Contemporary
Strategy
Evaluation
Difficulties
Rate of obsolescence of
even the best plans
Strategy Review
Process of Evaluating Strategies:
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