The only action that makes sense is a monetary reward, making a compensation change the correct response. A law firm manager finds that the firm loses too many of its civil cases while it wins an inordinately high number of its criminal cases. Which basic corrective action can the manager take?
Answer: D Explanation: D) The only reason to revise standards is when they are proven to be unreasonable or unrealistic for some reason, making that choice the correct response. Whether or not performance measures up to the standard are reasons to take corrective action, not change standards—unless of course, those standards are flawed in some way.
Explanation: B) Immediate corrective action is the simplest corrective action a manager can take. It solves the problem at hand quickly and effectively without necessarily getting at root causes or shaking up the organization.
After comparing performance against control standards, one of three actions can be taken: (a) Maintaining the status quo – When performance essentially matches the standard, no action is needed. (b) Correct the deviation – When there has been deficient performance, a corrective action is required on the part of the manager.
The criterion that determines the effectiveness of a control system is how well it reduces unnecessary costs. Explanation: Goals, not costs, determine the effectiveness of a control system. The more a control system helps the organization achieve its goals, the more effective and successful it is.
An effective control system can help managers delegate authority to employees with confidence. Answer: TRUE. Explanation: Empowering employees can be fraught with dangers unless proper control measures are in place to make sure that work is being put out in an efficient, effective, and timely manner.
Explanation: Feedback control, not feedforward control, is best for motivation, because it provides information so employees can know exactly how their performance measures up. The major drawback of feedback control is that by the time the manager has the information, the problem has already occurred. Answer: TRUE.
The control function is not intended to protect the organization from threats. Answer: FALSE. Explanation: A major function of a control system is to protect the organization from threats that might arise from disruptions, security breaches, unexpected financial events, and other similar problems.
A management information system (MIS) focuses on providing managers with the raw data that pertains to the organization. Answer: FALSE. Explanation: The goal of an MIS is to give managers access to useful, processed data that has been organized and interpreted, not raw data.
Explanation: A spell-checker that corrects words as they are being typed is making the correction as the event occurs, so it is an example of concurrent control, not feedforward control.
Answer: FALSE. Explanation: The control process is a three, not a two-step process that includes measuring performance, comparing performance against a standard, and taking action, if necessary. The development or identification of objectives or standards must precede the control process. Answer: TRUE.
Franklin E. Folts suggested that – after a fixed interval, the whole process and procedure of control should be reviewed. They must be modified according to plans and goals to fit realities as conditions change. Some management experts do not accept it as a step in the process of control but it must be there.
If the actual performance is found to be satisfactory and standards are defective, standards will be changed in the light of observations. Otherwise improvements will have to be made in organisation structure, staffing and direction. Thus, control function may require changes in all other functions of management.
The results are measured in terms of deviations within the efforts of the resources and includes determining the number of errors or wastes created, number of units produced, whether the produced units reached the customer on time, whether the production/service processes deviated (more/less) from the budgeted expenditures, etc. The results also attempt to determine the employee morale, attitude of workers, communication with their superiors, and so on.
Corrective action may be improving the methodology, techniques, organizational structure, proper selection, training and remuneration of workers, or even effective communication and successful motivation. Corrective action may be either to cure or to prevent such deviations.
This is essential because measurement of performance should not become just a ritual or post mortem of past events. If the deviation is significant, then the original standard itself has to be rechecked.
Managers correct the deviations immediately to avoid major problems. In the production process, for example, if deviations occur at the transformation stage, they should be corrected immediately, otherwise the final output will not sell in the market.
Management by exception is also known as control by exception that focuses on identifying and handling specific cases that deviate from the standards or norms. According to this principle, there are possibilities of certain situations that deviate from normal business processes, which need to be cared for, usually through human intervention. For example- a deviation of labour costs by Rs. 5,000 can be reported to the HR manager, but a deviation of labour costs by Rs. 50,000 can be reported to the functional Vice President to take necessary actions.