Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
#10 Types of Control
Section 16.1 introduces the control function of management. Controlling is monitoring
performance, comparing it with goals, and taking corrective action. This section describes six
reasons why control is needed and the four steps in the control process. It also describes the three
types of control: feedforward, concurrent, and feedback.
Topics and Tips for Discussion:
1. Discuss the reasons why control is an important managerial activity.
Control is an important managerial activity because it identifies whether corrective
2. Discuss the reasons why control is a difficult managerial function. What are the
challenges involved with controlling?
A difficult aspect of control is establishing appropriate standards. Often managers focus
on quantitative standards that are easy to measure, but they may not be the best
3. Critique how well your company (or a previous one) performs the steps in the control
process. What does the firm need to do better?
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
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it to achieve the standards. For example, the strength of a company’s exports can be
impacted by the value of the country’s currency. Sales may be higher merely because the
nation’s currency is weaker. The corrective action taken by the manager might not
address the root cause of the performance deficiency.
Section 16.1 Key Concepts:
Controlling
● Control is making something happen the way it was planned to happen.
● Controlling is defined as monitoring performance, comparing it with goals, and taking
corrective action as needed.
● There are four management functions:
Why Is Control Needed?
● To Adapt to Change and Uncertainty
● To Discover Irregularities and Errors
● To Reduce Costs, Increase Productivity, or Add Value
o Control systems can reduce labor costs, eliminate waste, increase output, and
increase product delivery cycles.
o Controls can help add value to a product.
● To Detect Opportunities and Increase Innovation
● To Provide Performance Feedback
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● To Decentralize Decision Making and Facilitate Teamwork
Steps in the Control Process
● The four control process steps are: establish standards, measure performance, compare
performance to standards, and take corrective action, if necessary.
● Step 1: Establish Standards
o A control standard, or performance standard or simply standard, is the desired
performance level for a given goal.
● Step 2: Measure Performance
o The second step is to measure performance, such as by number of products sold,
units produced, or cost per item.
● Step 3: Compare Performance to Standards
o The third step in the control process is to compare measured performance against
the standards established.
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
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o Management by exception is a control principle that states that managers should
be informed of a situation only if data shows a significant deviation from
standards.
● Step 4: Take Corrective Action, If Necessary
o This step determines changes that should be made to obtain desirable outcomes.
o There are three possibilities: (1) make no changes; (2) recognize and reinforce
positive performance; or (3) take action to correct negative performance.
Connect® Exercise
CLICK AND DRAG: Steps in the Control Process
Summary of Activity:
In this Click and Drag exercise, students will drop fictitious scenarios into the appropriate area in
a provided chart to correspond with the correct steps in the control process.
Interactive Classroom Material:
EXAMPLE: Steps in the Control Process: What’s Expected of UPS Drivers?
Types of Controls
● There are three types of control: feedforward, concurrent, and feedback.
● They vary based on the timing of when control takes place.
● Feedforward Control
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
● Concurrent Control
o Concurrent control entails collecting performance information in real time.
● Feedback Control
o Feedback control amounts to collecting performance information after a task or
16.2 Levels and Areas of Control
POWERPOINT SLIDES:
#11 Levels of Control
#12 Six Areas of Control
#14 Structural Area
Section 16.2 describes three levels of control—strategic, tactical, and operational. It describes six
areas of control: physical, human, informational, financial, structural, and cultural. The impact of
the type of firm—manufacturing firm or service provider—is also discussed.
Topics and Tips for Discussion:
1. Considering your company (or a previous one), describe the key strategic, tactical, and
operational control issues facing the firm.
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
16–15
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McGraw-Hill Education.
in the university is developing academic programs that are consistent with the skills that
graduates will need when they graduate. It could also include making sure the
department has sufficient faculty to teach all the courses the department wants to offer.
An example of operational-level control issue would be making sure that all the copies of
an exam were printed in time for a faculty member’s test in a large-lecture class.
2. Considering your company (or a previous one), provide examples of relevant control
measures for each of the six areas of control.
The six areas of organizational control are physical, human, informational, financial,
structural, and cultural. Continuing with the university example, physical control would
3. Discuss the ways that the control function is more difficult for service firms compared to
manufacturing firms.
One of the reasons why the control function might be more difficult for service firms
compared to manufacturing firms is that most services are performed by humans, while
Section 16.2 Key Concepts:
Levels of Control
● There are three levels of control that correspond to the three principal managerial levels:
strategic, tactical, and operational.
● The three levels frequently interact.
● Strategic Control
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
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McGraw-Hill Education.
o Strategic control is monitoring performance to ensure that strategic plans are
being implemented, and taking corrective action as needed.
o Strategic control is mainly performed by top managers who have an organization–
wide perspective.
● Tactical Control
o Tactical control is monitoring performance to ensure that tactical plans—those at
the divisional or departmental level—are being implemented, and taking
corrective action as needed.
o Tactical control is done mainly by middle managers.
● Operational Control
Areas of Control
● The six areas of organizational control are (1) physical, (2) human, (3) informational,
(4) financial, (5) structural, and (6) cultural.
● Physical Area
o The physical area includes buildings, equipment, and tangible products.
● Human Resources Area
o The human resources area includes controls used to monitor employees, such as
personality tests, drug testing, performance tests, performance evaluations, and
employee surveys.
Interactive Classroom Material:
EXAMPLE: Adidas Cares About Fair Labor Practices
This Example details how Adidas controls labor conditions throughout its supply chain network
of about 800 independent factories in 55 countries. Without adequate controls, Adidas would not
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
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● Informational Area
o The informational area includes controls of information resources, such as
production schedules, sales forecasts, and environmental impact statements.
● Financial Area
o The financial area would include such considerations as: Are bills being paid on
time? How much money is owed by customers? How much money is owed to
suppliers? Is there enough cash on hand to meet payroll obligations?
o An organization’s financial controls can affect the other three preceding types.
● Structural Area
o The structural area refers to the organization’s arrangement from a hierarchical or
structural standpoint.
o Two examples are bureaucratic control and decentralized control.
▪ Decentralized control is an approach to organizational control that is
characterized by informal and organic structural arrangements.
● Cultural Area
o The cultural area is an informal method of control that influences the work
process and performance through norms that develop from the values and beliefs
of an organization’s culture.
Connect® Exercise
CLICK AND DRAG: Areas of Control
Summary of Activity:
In this Click and Drag exercise, students will match each area of control with its corresponding
description.
Controlling the Supply Chain
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
● The supply chain is the sequence of suppliers that contribute to creating and delivering a
product, from raw materials to production to final buyers.
Control in Service Firms
● Service providers differ from manufacturers in several ways, including the fact that
service companies cannot hold any inventory of their services, which are intangible.
16.3 The Balanced Scorecard and Strategy Maps
POWERPOINT SLIDES:
#15 The Balanced Scorecard
#16 and #17 The Balanced Scorecard: Four Perspectives
#18 The Visual Representation of a Balanced Scorecard
#19 The Strategy Map
Section 16.3 discusses the balanced scorecard and strategy maps. The balanced scorecard
establishes goals and performance measures according to four “perspectives” or areas—
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
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McGraw-Hill Education.
balanced scorecard for an organization of their choice, either their current employer or an
organization where they would like to work after graduation.
Topics and Tips for Discussion:
1. Discuss how advances in information technology are changing how organizations can
measure and evaluate their effectiveness.
Advances in technology make it easier and faster for managers to access the data they
2. Use the four perspectives of the balanced scorecard to develop performance metrics for
your university or academic institution. What grade would you give your school on these
metrics?
The four perspectives of the balanced scorecard are (1) customer satisfaction, (2)
internal processes, (3) innovation and improvement activities, and (4) financial
measures. The customer satisfaction perspective for a university would consider not only
3. Use course concepts to explain the motivational impact of a strategy map.
A strategic map shows relationships among a company’s strategic goals. This would
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
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McGraw-Hill Education.
According to the principles of expectancy theory, employees will have higher motivation
if the outcomes have a positive valence. According to the principles of the job
characteristics model, a strategy map will help employees to understand the task
significance of their work, creating meaningfulness of work, which will lead to positive
work outcomes. Finally, goal-setting theory contends that employees will be motivated by
goals that are specific and challenging.
Section 16.3 Key Concepts:
The Balanced Scorecard
● The balanced scorecard gives top managers a fast but comprehensive view of the
organization via four indicators: (1) customer satisfaction, (2) internal processes,
(3) innovation and improvement activities, and (4) financial measures.
● The balanced scorecard establishes goals and performance measures according to these
four ‘‘perspectives’’ or areas.
● Financial Perspective
● Customer Perspective
o Customer perspective assesses, ‘‘how do customers see us?’’
● Internal Business Perspective
o The internal business perspective focuses on what the organization must excel at
to effectively meet its financial objectives and customers’ expectations.
● Innovation and Learning Perspective
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
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o The innovation and learning perspective assesses, ‘‘can we continue to improve
and create value?’’
Connect® Exercise
CLICK AND DRAG: The Balanced Scorecard
Summary of Activity:
SELF-ASSESSMENT 16.1
Assessing the Innovation & Learning Perspective of the Balanced Scorecard
This 15-question Self-Assessment measures students’ employers’ innovation and learning, based
Group Exercise #1: Applying the Balanced Scorecard
1. To gain practice at creating a balanced scorecard.
2. To consider how a balanced scorecard can be used to manage over time.
Strategy Maps
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● A strategy map is a visual representation of a company’s critical objectives and the
crucial relationships among them that drive organizational performance.
Connect® Exercise
CASE ANALYSIS: McDonald’s Controls Its Supply Chain
Summary of Activity:
In this Case Analysis, students will first read about how McDonald’s controlled its supply chain
after more than 500 patrons contracted an intestinal disease after eating at locations in 16 states.
Then, students will respond to 4 multiple-choice questions to measure comprehension.
Follow-Up Activity:
Instructor should break students into small groups. Each group is tasked with discussing the
following questions:
1. Did McDonald’s follow a sound control process? Why or why not?
2. How can organizations and managers make sure that their control systems are yielding
effective results?
3. How can managers overcome a break in the control process?
16.4 Some Financial Tools for Control
POWERPOINT SLIDES:
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
financial status. Audits are formal verifications of an organization’s financial and operational
systems.
Topics and Tips for Discussion:
1. Discuss the advantages and disadvantages of fixed versus variable budgets.
A fixed budget does not allow for adjustment over time. This provides a level of certainty
with costs and helps to keep costs from spiraling out of control. This level of rigidity can
2. Discuss the risks to organizations when their employees lack competencies in personal
financial management. Should organizations provide personal financial training to all of
their employees? Explain your point of view.
As discussed in The Wall Street Journal article “Companies Pay Workers to Get Savvier
with Money,” the strain of living paycheck to paycheck affects employee productivity,
stress and well-being. Workers with financial worries are carrying that stress into the
3. Discuss how having competencies in personal financial management could help you in
your career. What should you do to improve your competency in this area?
ONLINE
ONLINE
ARTICLE
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
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management, you may make poor workplace decisions about how to use resources. If you
want to improve your financial literacy, see what resources your university and/or
Section 16.4 Key Concepts:
Budgets
● A budget is a formal financial projection.
● A budget states an organization’s planned activities for a given period of time in
quantitative terms.
● Budgets are prepared for the organization as a whole and for the divisions within it.
● The point of a budget is to provide a yardstick against which managers can judge how
well they are controlling monetary expenditures.
● Incremental budgeting allocates increased or decreased funds to a department by using
the last budget period as a reference point; only incremental changes in the budget
request are reviewed.
● A fixed budget or static budget allocates resources on the basis of a single estimate of
costs.
● A variable budget or a flexible budget allows the allocation of resources to vary in
proportion with various levels of activity.
Financial Statements
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● There are two basic types of financial statements: the balance sheet and the income
statement.
o A balance sheet summarizes an organization’s overall financial worth—assets
and liabilities—at a specific point in time.
▪ Assets are the resources that an organization controls and consist of
current assets and fixed assets.
o The income statement summarizes an organization’s financial results—revenues
and expenses—over a specified period of time, such as a quarter or a year.
Audits
● Audits are formal verifications of an organization’s financial and operational systems.
● An external audit is a formal verification of an organization’s financial accounts and
statements by outside experts.
o External auditors are certified public accountants (CPAs) who work for an
accounting firm that is independent of the organization.
● An internal audit is a verification of an organization’s financial accounts and statements
by the organization’s own professional staff.
SELF-ASSESSMENT 16.2 CAREER READINESS
CAREER
READINESS
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
Click for follow-up activity.
Connect® Exercise
VIDEO CASE: Control at Threadless
Summary of Activity:
Follow-Up Activity:
Step 1: Instructor should open the floor for students to discuss control systems. Students should
be encouraged to share from their personal and professional experiences.
16.5 Total Quality Management
POWERPOINT SLIDES:
#25 Deming Management
#26 The PDCA Cycle: Plan-Do-Check-Act
#27 Total Quality Management
#28 Two Core Principles of TQM
#29 People Orientation
#30 Improvement Orientation
#31 Applying TQM to Services
#32 Some TQM Techniques
Section 16.5 discusses total quality management, or TQM, which is dedicated to continuous
quality improvement, training, and customer satisfaction. The four principles of Deming
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
16–27
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McGraw-Hill Education.
facing Legos as it looks to develop plant-based plastics to recreate its iconic Lego bricks. For a
supplemental activity, you could have the students discuss how Lego can use the principles and
methods of TQM in its quest to find alternative materials for its petroleum-based plastic
products.
Topics and Tips for Discussion:
1. Discuss the total quality management principles and tools that are used at your company
(or a previous one).
Total quality management (TQM) is dedicated to continuous quality improvement,
2. Discuss the importance of the human resource management function in implementing
total quality management.
3. One of the principles of TQM is that people will focus on quality if given empowerment.
Evaluate the extent to which you believe that principle is true. What factors influence the
extent to which the principle holds true?
Empowerment gives workers the power to make decisions and take corrective actions to
Section 16.5 Key Concepts:
Deming Management
● Deming management proposed ideas for making organizations more responsive, more
democratic, and less wasteful.
● Deming management includes four principles:
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
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o Quality should be aimed at the needs of the consumer.
o Companies should aim at improving the system, not blaming workers.
Connect® Exercise
CLICK AND DRAG: PDCA Cycle
Summary of Activity:
In this Click and Drag exercise, students will match each area of the PDCA cycle with its
corresponding description.
Core TQM Principles
● Total quality management (TQM) is defined as a comprehensive approach—led by top
management and supported throughout the organization—dedicated to continuous quality
improvement, training, and customer satisfaction.
● There are four components to TQM:
● The two core principles of TQM are people orientation and improvement orientation.
● People Orientation
o With people orientation, everyone involved with the organization should focus on
delivering value to customers.
o Organizations adopting TQM value people as their most important resource.
o Assumptions of the people orientation:
Kinicki/Williams, Management, 9e: Chapter 16 Control Systems and Quality Management: Techniques for
Enhancing Organizational Effectiveness
Interactive Classroom Material:
EXAMPLE: Hyundai Takes on the Luxury Car Market
This Example shows how Hyundai Motor Co. is now second only to Kia in initial quality of its
● Improvement Orientation
o With improvement orientation, everyone should work on continuously improving
the work processes.
o Continuous improvement is defined as ongoing small, incremental improvements
in all parts of an organization.
o Assumptions of an improvement orientation:
▪ It’s less expensive to do it right the first time.
o Kaizen is a Japanese philosophy of small continuous improvement that seeks to
involve everyone at every level of the organization in the process of identifying
opportunities and implementing and testing solutions.
Interactive Classroom Material:
EXAMPLE: Kaizen Principles in Action
Connect® Exercise
CLICK AND DRAG: Core TQM Principles
Summary of Activity:
In this Click and Drag exercise, students will match the different core TQM principles with their
appropriate examples.
Applying TQM to Services