Managing Organizational Performance - Report Example

The Running Head: Module 1 – Managing Organizational Performance     Your name:   Course name:             Professors’ name: Date: Strategic control This is a process of evaluating strategies that has been formulated by the ministry, strategic control is usually practiced when the strategy is formulated and during its implementation. Many government institutions in UAE usually depend upon their strategies to stay ahead of their competitors, these Institutions are not only planning but they have regular check to see if they are moving forward in line with strategic planning that has been formulated, the forces in macro environment in which an institution operates usually will pose threats to the institution areas of operations. Strategic control in an organization is always an integral part of any company business policies and procedures; it used to protect organization resources against waste, fraud and inefficiency. Strategic control formulated in an organization to do the following: they ensure there is accuracy and reliability in accounting and operating data that are found in the Ministry of Education, the policies of an organization are complying with the current issues which an organization is going through, it ensure the company is at competitive advantage to their threats, it helps the Ministry of Education to anticipate events that might occur in the near future, the organization is able to respond to the new opportunities that may present themselves in the near future, and lastly it help the company to make improvements to the quality of goods and services that they provide in the ministry. Elements of Strategic control Strategic control in a company can be divided into five major components and there as follows: Control environment: this is usually established by the administration in an organization, it main purpose is to set the tone of the company, each department in an organization is required establish control environment that provide discipline and structure to employees in that department. Risk assessment: every organization faces a variety of risks; these risks can either be from an internal sources or external sources. Risk assessment in a company is the identification and analysis of relevant risks that affects an organization; so that the organization can be able to achieve its objectives. This process of identifying of risks that affect an organization is an ongoing one and it is a critical component of an effective control system in the organization. Control Activities: these are policies and procedures in the organization that helps the Ministry of Education to carry out the directive that has been formed in the ministry. These activities that are involved in this process helps the Ministry of Education to make sure necessary actions are taken to address the objective of the Ministry of Education; control activities can be found at all level in an organization (Kaplan 1996). Monitoring: this process that has been put in place in an organization to assesses the quality of system’s performance of the organization. Organization monitoring usually occurs in the ordinary course of operations on the organization and it entails regular management and supervisory activities. This also entails other actions various departments take in performing their duties. Balance Score Card: This will enable the organization to monitor and evaluate both short term progress and long term progress of an organization, and if the strategic objectives of the organization are being achieved. This concept was first published by Kaplan and Norton (1992), although this idea was developed earlier in analogy devises in the 1980’s by Schneiderman (1999). The basic theme of balanced scorecard is that no single measure formulated in the Ministry of Education can provide a clear performance target or focus to the ministry. They are a number of advantages that have been claimed by Kaplan concepts, such as: The concept will provide the ministry of education with information on the four perspectives simultaneously, so combining the disparate element of the Ministry of Education competitive program in one report. The concepts will try to limit on the number of measures, so it prevent information overload whilst concentrating on the few key critical success factors. It guards the Ministry of education against sub-optimization by forcing people in charge of that Ministry to consider all the key operating measures together and how to improve in one area which may be an expense to another area. This concept is able to necessitate the involvement of ministry. Diagnostic control systems This is a system in the Ministry of Education in UAE which has both feedback and control tools that is top-down driven for implementing various strategies as plan. Diagnostic control systems in the ministry will link strategy with critical performance goals of the Ministry of Education, monitor those goals and correct any deviation from the pre-set standards of performance that have been set by the Ministry of Education; this will help the ministry to keep on track on the projects that have been initiated in the Ministry of Education so that they can realized their goals. Diagnostic control is made up of several components, such as: performance measures and the performance measurement segregation. In Performance measurement segregation it provides the framework for the measures of diagnostic control system. This system in the Ministry of Education is held together by the relationship- performance measures and the performance measurement segregation-that exist between the different entities. In order for this system to work in the Ministry of Education it must have the performance measures that have been put in place to provide meaning in the ministry (Wheelen 1998). There are various factors which can make employees in the Ministry of Education not to respond to diagnostic control systems that has been put in place in the ministry. These include: Confusing goals; this is whereby the accounting measures that has been put in place in the ministry are conflicting with strategies of Ministry of Education, furthermore, too many measures that may be found in the ministry will also confuse employees. But this days technology facilitates easy collection of information and employees will be tempted to measure too many variables that are found in the ministry. New technology in the ministry should not be allowed to create confusion in the ministry, but it should be harnessed to increase efficiency and effectiveness in the workplace (Houlden 1996). Conflicting incentives; this whereby employee in the ministry of education are being rewarded for behavior that are different from what the ministry expect them to behave- behavior senior managers desire, this is always driven strongly by financial measures. Misalignment of accountability and control; accountability in the Ministry of Education and control sometimes may not aligned. Accountability is usually defined as the range of tradeoffs that will affect the performance measures in the Ministry of Education and it is usually used to evaluate top executives achievement in the Ministry of Education. Individual will be forced to become entrepreneurs in the ministry when the span of accountability will be greater than that of control. According to Simons definition of entrepreneurship, is the process of which individual pursue opportunities without regard to the resources they are currently controlling in an organization, therefore, employees in the Ministry of Education should be very careful not to widen entrepreneurial gap because it may cause frustration or anxieties about failure in the ministry. But in order for employees in the ministry to succeed in such context, they should possess the right attributes such as initiative and resourcefulness. Top- down approach This is whereby the management in the Ministry of Education will apply pressure to subordinates in regards to performance in the Education sector. In this case, the Ministry of Education will select the performance measures and set the targets to the subordinates, the same will be carried down the ministry and is up to the employees in the ministry to achieve the target; if the measure has deviated from the target, effort will be made so that it is or at least heading in the right direction. This approach- top to down - be necessary since the management in the Ministry of Education will see the broad perspective of the organization. The top executive in the ministry will be aware of both internal and external issues, such as new technology, which will have a significant effect- both positive and negative- on the Ministry of Education. With this in mind the top executive will be able to limit the number of performance measures in the ministry, so that they can remain focused in implementing their goals. This approach also will give a chance to employees in the ministry to develop strategies and take action, even if it is only for computer where they work at, to help achieve the goals in the Ministry of Education; this will motivate the employees in the ministry since they have control of their actions. As long as strategies are aligned with the ministry strategies and the employee are motivated, significant improvement can be made in the ministry. Thus, the top executive in the ministry will outline what is required and the subordinates will undertake projects to achieve these goals that have been set in the Ministry of Education. According to Simons, this is what we refer to as top-down pressure; bottom-up strategy. Strengths and Limitation of Diagnostic Control Diagnostic control system implementation in the Ministry of Education has the following strengths; the system can be used to effectively: set goals in the ministry, select suitable performance measures that will be of help to the Ministry of Education, designed incentives that will be given out to employees in the Ministry of Education. However, this system has also it limitation, such as: the target that is set in the ministry with this type of a system is easy, massaging the results that are being realized in the ministry, the results are being transferred from different periods, the system in the Ministry always focuses on good news rather than bad news and lastly, it desperate acts from employees in the Ministry of Education to achieve goals that have been set in the ministry. This type of control system in the Ministry of Education relies on quantitative data and variance analyses within the ministry, top executive within the ministry will use these and other numerical comparisons- budget, auxiliary expenses - that are in the ministry to scan for anything unusual that might bring problems to the Ministry of Education. This system is very useful in detecting problems that may affect the ministry, but they can make both employees and top executive in the Ministry of Education to behave unethically in order to meet the goals set by the ministry; it won’t matter how staff in the ministry will meet their goals- how its done, but their main concentration is to ensure the ministry doesn’t draw any negative attention to a particular department or employee in the ministry. The bonuses for employees in the Ministry of Education are usually based on how well the performance goals in the ministry have been met; measured in quantitative terms. If the goals of the ministry are reasonable and can be met easily, diagnostic system will work well; this will enable top executive to assign work and go to other important things in the ministry, releasing these goals. In this situation, employees in the Ministry of Education are able to work without undue pressure to meet the set out deadline, productivity level or other goals; employees will be able to do their work in a way that may be new or innovative. However, when the set up goals in the Ministry of Education cannot be achieved easily- unrealistic goals, employees in the ministry may sometimes use their capacity for creativity to manipulate factors which are under their control so that they can please their top executive in the Ministry of Education. Manipulation of factors in the Ministry of Education sometimes will have short- term positive effects and in the long run will have a disastrous effect on the ministry (Fitzgerald 1991). Boundary control This type of system control refers to the way which top executive in the ministry have ability to affect how employees in the ministry divide their time between their work and their private life, this control system can be thought of in terms of “minimum standards” and can help to guard the good name of Ministry of Education, the name of the ministry will be taken as an asset which can be very difficult to rebuild once the ministry name have been damaged. The ministry can protect it integrity in various ways, such as forbidding employees working in the ministry from discussing matters that concern the Ministry of Education from discussing matter outside the office or with anyone who is not an employee of the ministry; including even family members or work with people who are deemed to be “undesirable.” This control system is based on the idea that, it is easier and more effective to set the rules on what is inappropriate in the ministry rather than what is appropriate in the ministry. This kind of control system will allow the employee in the ministry to create and define new solution and methods for the ministry and this will be within defined constraints. These constraints are usually set by the top executive within the ministry, and their purpose is to steer employees clear of certain policies which will affect the ministry negatively. Second, they are intended to focus staffs in the ministry on areas that have been determined to be the best for the Ministry of Education. In many institutions they usually implement boundary control system when their name has been damaged (Stahl 1992). This system of control in the ministry varies with the social class of employees as much with the dominant structures that are found in the Ministry of Education. This is because employees who are found at lower hierarchical levels in the ministry experience more behavior control, while employees that are at higher hierarchical levels experience more of output control that is expected of them in the ministry. As we climb the ladder of hierarchical in the ministry, the overall amount of behavior control and output control decreases. But increase in work hours is expected for those who are at the top of hierarchical ladder, while employees at the lower in the hierarchical ladder are closely monitored in the ministry and their time is controlled by the clock rather than the activities taking place in the Ministry of Education (Porter 1980) ; their has been planned, they are deleted, canceled, or aborted in the eleventh hour (Ewing 1991). Strengths and Limitation of Boundary control There are many strengths and limitation for using this type of control system, but this boundary control system in the Ministry of Education should be thoroughly be examined for future reference. In bureaucratic control, there is general lack of confusion of decision making and expected standards required from the employees of the Ministry of Education; it has clear management roles and responsibilities are cut and dry, but limitation for this type of control system is that the employees in the Ministry of Education will lack morale at their workplace because there is no room for change and innovation. The strict rules that have been set by this type of control system will make employees in the ministry to be undervalued and not to be independent. The advantage of this type of control system in the Ministry of Education is lack of confusion in the expectation of the ministry and standards that is required from the ministry employees. In market control; it major strength is that the system is flexible but it limitation is that it values always changing and employees in the ministry may suffer. Clan control system has some advantages such as it makes employees in the ministry to be innovative and to have ideas that will help the ministry. But one disadvantages of this type of system is that it lacks a direct form of control and this can lead to confusion of responsibility in the ministry; at same time it can cause slack among employees because they will shrug responsibility without guidelines (David 2003). Financial control is used in the Ministry of Education to regulate use of various monetary measures to regulate performance that are found in the ministry, such financial control are; the Ministry of Education will deliberately and approve the annual budgets that will set minimum target; each departments in the ministry will be allocated its own budget and this will be based on its own resources. In this case budget is used by top executive as a controlling tool to evaluate each department; at same time it is used to control both cost and expenses to be incurred in the ministry. It is an indispensable part of financial controlling, every year each department will present and defend their intended plans and project for the top executive in the ministry for approval. Using this strategy the ministry is able to plan ahead and money disbursed in the various departments will be used well in the tended projects; this way it avoid wasted. Because of the quantitative nature of the budget used in the Ministry of Education, it will provide yardsticks for measuring performance and facilitate comparisons in various departments which are found in the ministry. The primary purpose of budget in the ministry is to help the top executive in the ministry to coordinate resources and projects of the Ministry (David 2003). On the plus side, budget used in the Ministry of Education facilitate effective control; it enable the top executive to monitor operations in the ministry better and pinpoint problems areas that is affecting the ministry. Second, budget is able to facilitate coordination and communication between the management and departments; this is because they express diverse activities in a common denominator. Three, the use of budget will help the top executive to maintain records of ministry performance and are usually logical complement to earning; in other words, top executive are able to develop plans and simultaneously consider control measures to accompany this plans that have been formulated. Four, the top executive in the ministry are able to used budget to link plans developed and controlling tools; this is because developing budgets is part of the plan and then the top executive at the ministry will use budgets as part of controlling tool (Stahl 1992). On the other hand, top executive in the ministry will apply budgets too rigidly in departments, two, budget in the ministry are intended to serve as frameworks, but top executive in the ministry sometimes fail to recognize that changing circumstances and sometimes this changing circumstances may warrant change in allocation of budgets in departments. Three, this process of developing budget that suit each department in the ministry may sometimes be very time consuming. Finally, allocation of different budgets in departments may limit innovation and change, in other words when all funds in departments are allocated to a specific operating budgets, it will be impossible for departments to procure additional funds from the management to take advantage of an unexpected opportunity which as arise. Indeed, for these very reasons stated above, the ministry is working to scale back its budgeting systems, although the aim of the ministry is likely to allocate same budgets to departments, the goal here is to make these allocation less confining and rigid in the ministry (Costin 1998). Recommendation One aspect which makes these control system to be effective is sound management; this will include senior executive in the ministry through to team leaders. Top executive in the ministry will be in a position to guide employees and the ministry to realize its goals. In the world today, the Ministry of Education should place a high regard on management. At the Ministry of Education, bonus scheme should be put in place and should be open to employees to encourage them to work harder and push for improvement within the ministry. Kaplan discuss that performance schemes at the ministry must be aligned with the organizational performance measures; lack alignment between the two will cause conflicts between employee targets and those targets that have been set by the Ministry of Education. When there is conflict, one area which will suffer will be the ministry, such conflicts is like in boundary control, employees at the lower in the hierarchical ladder are closely monitored in the ministry and their time is controlled by the clock rather than the activities taking place in the Ministry of Education, this behavior does not bring innovation and self determination in employees. According to Kaplan employees who feel they are innovative and are not satisfied will tend to look for another job where they feel their efforts are being recognized. At the ministry the top executive should be assessed from those measures which they have control; this is because if top executive are assessed by external factors- which sometimes are susceptible, then it will be unfair and they will not be motivated. The Ministry of Education should consider what to come first either the compensation plan or the performance measures in the ministry but ideally it should be the performance measures that are found in the ministry. According to Simons, he believes human nature is an endogenous design variable in any institution, the top executive must create environment for employee in the Ministry of Education to display the desirable behaviors. Commitment to others is an important factor which should be encouraged in the ministry. Another improvement which can be made to the system; it should be made in such a way that it can bring on board other stakeholders in the Education sectors such as society and regulators. In the system model supplier performance of the Ministry of Education is only included as a subset of the ministry process dimension, but the system should be improved so that other performances shall be included, the Ministry of Education should not only copy the original four dimension of the balance scorecard but it should tailor the dimension of balance score card to meet their own needs and standards (Costin 1998). Reference Lists Costin, H. Readings in Strategy and Strategic Planning. Fort Worth, TX: The Dryden Press, 1998. David, R. Strategic Management: Concepts and Cases. Upper Saddle River, NJ: Prentice Hall, 2003. Ewing, P. The balanced scorecards at ABB Sweden-the EVITA project. Presented at the International Workshop on cost Management, Venice, Italy, June 27-29 Fitzgerald, L. Performance measurement in service businesses. London: CIMA Publishing, 1991. Houlden, B. Understanding Company Strategy: An Introduction to Analysis and Implementation. Cambridge, MA: Blackwell Publishers, Inc., 1996. Hunger, J. Essentials of Strategic Management. Reading, MA: Addison Wesley, 1997. Porter, M. E. Competitive Strategy. New York, NY: The Free Press, 1980. Kaplan, R.S. The balanced scorecard-translating strategy into action. Boston MA:Harvard Business School Press, 1996. Stahl, J. Strategic Management for Decision Making. Massachusetts: PWS-KENT Publishing, 1992. Wheelen, L. Strategic Management and Business Policy: Entering 21st Century Global Society. Reading, MA: Addison Wesley, 1998 Read More