14 Chapter Foundations of Control Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 14-1.

14Chapter

Foundations of Control

Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 14-1

Learning Outcomes

After studying this chapter, you will be able to:• Explain the nature and importance of control.• Describe the three steps in the control

process.• Describe the types of controls organizations

and managers use.• Discuss contemporary issues in control.



The Nature of Control


The Importance of Control



The Control Process


Measuring Performance

Measures of performance:1. Personal observation2. Statistical reports3. Oral reports4. Written reports


Criteria for Measurement


Comparing Performance to Goals


Comparing Performance to Goals (cont.)


Correcting Performance

Immediate corrective actions:• Training

programs• Disciplinary

action• Changes in

compensation practices


Revising the Standard



Types of Control: Feedforward Control


Types of Control: Concurrent Control


Types of Control: Feedback Control


Areas Managers Control


Controlling Information


Balanced Scorecard Approach

Balanced scorecard evaluates four areas of company performance:

1. Financial2. Customer3. Internal processes4. People, innovation, and

growth assets




Contemporary Issues

• Cross-cultural differences

• Workplace concerns

Different Organizational Control Systems


Challenges of Controlling the Workplace


Employee Theft


Workplace Violence


Entrepreneurial Module

Managing Entrepreneurial Ventures


What Is Entrepreneurship?

Entrepreneurship – The process of starting new businesses, generally in response to opportunities


What Do Entrepreneurs Do?

Steps to entrepreneurship:1. Assess the potential for the venture, gather

information, identify potential opportunities, and pinpoint competitive advantages

2. Research the venture’s feasibility3. Develop mission, explore culture issues, and create a

business plan4. Organize the venture and structure how work will

get done


What Do Entrepreneurs Do? (cont.)

5. Launch the venture6. Manage the venture by hiring, training, and

motivating employees and leading effectively7. Manage the venture’s growth


Planning the Venture

Three kinds of business plans:1. Summary business plan2. Full business plan3. Operational business plan


Components of a Full Business Plan

Six major areas:1. Executive summary2. Analysis of opportunity3. Analysis of the context

And . . .


Components of a Full Business Plan (cont.) 4. Description of the business5. Financial data and projections 6. Supporting documentation


Legal Forms of Organization

1. Sole proprietorship2. General partnership3. Limited liability partnership (LLP)4. C corporation5. S corporation6. Limited liability company (LLC)


Organizational Structure

Organizational design decisions revolve around: • Work specialization• Departmentalization• Chain of command• Span of control• Amount of centralization or decentralization• Amount of formalization


Human Resource Management (HRM) Issues


Leading an Entrepreneurial Venture


Motivating Employees

Entrepreneurs motivate employees by:• Empowering employees• Using participative decision making• Delegating decisions or duties


Entrepreneurs as Leaders

Entrepreneurs can lead by:• Drawing out the best in people• Creating a vision for the organization• Developing teams that are empowered, self-

directed, and cross-functional


Control Issues

Control issues facing entrepreneurs include:• Managing growth• Managing downturns• Exiting the venture • Managing personal life choices and challenges


Personal Challenges

Entrepreneurs manage personal challenges by:• Becoming a pro at time management• Identifying competent business advisors• Dealing with conflicts as they arise• Developing a network of trusted friends/peers• Recognizing when stress levels are too high



14 Chapter Foundations of Control Copyright ©2012 Pearson Education, Inc. Publishing as Prentice Hall 14-1.

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