2. Context
1. Balancing Tensions in control system
2. Six tensions in control system
3. Profit, growth and control
4. Conflicts between short term and long term goals
5. Conflicts among stake holders
6. Complexities of employee motivation
7. Inter-departments conflicts
3. Balancing Tensions in Control System
Implementing control system in organization will have
several conflicts.
Management Control system of modern days are always
knotted with tensions.
The Katho Upanishad, it is veritably like walking on the
razors edge.
4. Six Sources of Tensions
• Tension between profit, growth and control
• Tensions between long-term and short-term goals
Tensions arising due to the need to make strategic choices
• Tension between stakeholders
• Tension between varying and conflicting motivation of employees
• Tension between different segments of organization
Tensions due to goal divergence
• Tensions between the desire to seek opportunity and constraint due to limitation
of span of control
Tensions due to limitations managerial of cognitive powers
5. 1.Profit, Growth and Control
Profit
GrowthControl
Increase Growth and Market share via
heavy advertising and low pricing.
Controls must be set in place, to ensure
long term sustainability.
Examples
6. Example-2: No Controls on
growth and profit.
Enron, in the late 1990s had reported falsely
staggering numbers of profit by making use of a
loophole in the accounting practices, using the
mark-to-market practice. Eventually, the company
was forced to declare bankruptcy.
Related
link: http://www.investopedia.com/updates/enro
n-scandal-summary/
8. 2. CONFLICTS BETWEEN LONG TERM AND
SHORT TERM GOALS
Short Term Long Term
Methods of measurement of
performance are simpler.
Methods of measurement of
performance are extremely uncertain
and difficult.
Strongly governed by financial output
based on temporary results.
Focused on financial output but
mostly on permanent/long lasting
results.
Less creativity and more process
involved.
More creativity along with a specific
process.
Focused on Results. Focused on Innovation and overall
good.
Rewarding employees regularly. More tuned to long-term achievement.
10. CONCEPT OF GOAL CONGRUENCE
Individuals working towards
their Goals.
Organizational fulfillment of
goals.
In order to synergize ,
motivation and planning are
needed.
Success lies in how close these
two can be brought.
14. 3. Conflict Among stakeholders
Stakeholders include shareholders,
managers or employees, customers,
suppliers, lenders or government
agencies and the public at large.
Areas of interest of each stakeholder
may be different and it can lead to
Control systems will have to satisfy the
expectations of the all the stakeholders.
Balancing the interests of stakeholders
is a continuous process and it can lead to
tensions in the control systems
15. 6. Complexities of employee motivation
• When it comes to employees, MCS – Management Control System all three needs
to be viewed in different angles rather then like a SOP / Macro or Micro
Management or just forming a community where there is no involvement.
• If an Organization needs to be successful then it would need highly motivated
people to run the show by working as groups to achieve towards the goal.
• You might just assume that your staff is motivated by the paycheck that they get
at month end, or by the opportunity to ‘climb the ladder’ as time goes by.
• However, for many people, motivation isn’t quite that simple. Sure, they need the
paycheck in order to pay the bills, but they also need to find motivation in other
forms
16. Complexities of employee motivation
• After the Hawthorne experiment it came to light that some group factors and
social and work factors also have an effect on employee motivation. However, the
degree of the above factors varied from one employee to the next
• It also might differ from one organization to the other based on the cultural
factors and nature of tasks, decision making and reward equity
• In addition the employees’ motivation is affected on the bias of whether their
issues are listened by management particularly, when there are changes
implemented in the organization
17. Complexities of employee motivation
• Here is a theory which we found very interesting from “McClelland’s Human
Motivation Theory”
EMPLOYEE MOTIVATION THE GOOGLE WAY
• Reimbursement of up to $5000 to employees for legal expenses
• Maternity benefits of a maximum of 18 weeks off at about 100 percent pay. The father and mother of the
newborn are given expenses of a maximum of $500 for take-out meals in the initial 3 months they spend
at home with the baby (Take-Out Benefits).
• Financial support for adopting a child (Google’s Adoption Assistance)
• On-site car wash, oil change, bike repair, dry cleaning, gym, massage therapy and hair stylist are available
at the company’s headquarters in Mountain View
• At the Googleplex, there’s an onsite doctor and free fitness center and trainer and facility to wash clothes
among other benefits
• Lunch and dinner is available free of charge, In addition, an assortment of delicious but healthy meals are
available every day, prepared by gourmet chefs.
18. 5. Inter Departmental Conflicts &
Politics Control System
Different Organization need varied types of skills.
Their performance is not measurable in same
way.
organizations also requires regionalization of
their working.
This inevitably results in conflicts between
different groups.
This gives rise to Politics Control System
Designers of control systems will have to control
the reality of this and devise ways to cope with it.
19. Span of control
• Span of control refers to the number of subordinates a supervisor has.
• Any control system would have to be geared to spot opportunities for the organization
and make full use of them.
• it is quite impossible for managers with their limited talent and time to tackle every such
opportunity competently
• Absolute rationality can never be practically achieved as information can never be
perfect. This concept can be tackled by using the concept of ‘Return on Management’.
20. Return on Management (ROM)
• A new ratio that gauges the payback from a company’s
scarcest resource: managers’ time and energy.
• ROM = Amount of Productive Organizational Energy
Released / Amount of Management Time and
Attention Invested.
• It indicates how well managers have deployed this
resource among alternative courses of action.