What Should Managers Control?

  1. 15-3 Discuss the types of controls organizations and managers use.

Cost efficiency. The length of time customers are kept on hold. Customers being satisfied with the service provided. These are just a few of the important performance indicators that executives in the intensely competitive call-center service industry measure. To make good decisions, managers in this industry want and need this type of information so they can control work performance.

How do managers know what to control? In this section, we’re first going to look at the decision of what to control in terms of when control takes place. Then, we’re going to discuss some different areas in which managers might choose to establish controls.

When Does Control Take Place?

Management can implement controls before an activity commences, during the activity, or after the activity has been completed. The first type is called feedforward control, the second is concurrent control, and the last is feedback control (see Exhibit 15–5).

Exhibit 15–5

“When” Does Control Take Place?

A flow diagram presents the situations when control takes place.

What Is Feedforward Control?

The most desirable type of control—feedforward control—prevents problems because it takes place before the actual activity.19 For instance, when McDonald’s began doing business in Moscow, it sent company quality control experts to help Russian farmers learn techniques for growing high-quality potatoes and to help bakers learn processes for baking high-quality breads. Why? McDonald’s demands consistent product quality no matter the geographical location. They want french fries in Moscow to taste like those in Omaha. Still another example of feedforward control is the scheduled preventive maintenance programs on aircraft done by the major airlines. These schedules are designed to detect and hopefully to prevent structural damage that might lead to an accident.

The key to feedforward controls is taking managerial action before a problem occurs. That way, problems can be prevented rather than having to correct them after any damage—poor-quality products, lost customers, lost revenue, etc.—has already been done. However, these controls require timely and accurate information that isn’t always easy to get. Thus, managers frequently end up using the other two types of control.

Photo of Ray Nichols in his office.

Photo shows the Recycle logo, comprising three bent green arrows forming a triangle.Microsoft uses concurrent control to track its energy usage. Shown here at its operations center, control technician Ray Nichols monitors real-time data on heating, cooling, and other systems in the company’s buildings that will help Microsoft achieve its goals of improving its carbon footprint and reducing its impact on the environment.

Elaine Thompson/AP Images

When Is Concurrent Control Used?

Concurrent control, as its name implies, takes place while a work activity is in progress. For instance, the director of business product management at Google and his team keep a watchful eye on one of Google’s most profitable businesses—online ads. They watch “the number of searches and clicks, the rate at which users click on ads, the revenue this generates—everything is tracked hour by hour, compared with the data from a week earlier and charted.”20 If they see something that’s not working particularly well, they fine-tune it.

Technical equipment (such as computers and computerized machine controls) can be designed to include concurrent controls. For example, you’ve probably experienced this with word-processing software that alerts you to a misspelled word or incorrect grammatical usage. Also, many organizational quality programs rely on concurrent controls to inform workers whether their work output is of sufficient quality to meet standards.

The best-known form of concurrent control, however, is direct supervision. For example, Nvidia’s CEO Jen-Hsun Huang had his office cubicle torn down and replaced with a conference table so he’s now available to employees at all times to discuss what’s going on.22 All managers can benefit from using concurrent control because they can correct problems before they become too costly. MBWA, described earlier in this chapter, is a great way for managers to do this.

Why Is Feedback Control So Popular?

The most popular type of control relies on feedback. In feedback control, the control takes place after the activity is done. For instance, remember our earlier Denver Mint example. The flawed Wisconsin quarters were discovered with feedback control. The damage had already occurred even though the organization corrected the problem once it was discovered. And that’s the major problem with this type of control. By the time a manager has the information, the problems have already occurred, leading to waste or damage. However, in many work areas—the financial area being one example—feedback is the only viable type of control.

Feedback controls do have two advantages.23 First, feedback gives managers meaningful information on how effective their planning efforts were. Feedback that shows little variance between standard and actual performance indicates that the planning was generally on target. If the deviation is significant, a manager can use that information to formulate new plans. Second, feedback can enhance motivation. People want to know how well they’re doing, and feedback provides that information.

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