Roniel UngsodMBA: Marketing Management

DEFINITION Organizational behavior (OB) is "the study

of human behavior in organizational settings, the interface between human behavior and the organization, and the organization itself

MANAGEMENT CONTROL SYSTEM A management control system (MCS) is a

system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole considering the organizational strategies.

MANAGEMENT CONTROL SYSTEM The central purpose of a management

control system is to ensure a high level of Goal Congruence, in which the actions of people are led in accordance with their self-interest are also the best interest for the organization.

A Good Management Control System influences behavior in a goal congruent manner.

GOAL CONGRUENCE The extent that individuals and groups

perceive their own goals as being satisfied by the accomplishment of organizational goals

The concept of goal congruence is affected by both informal actions and by formal system

INFORMAL FACTORS - EXTERNAL External Factors –desirable behavior that

exist in the society of which the organization is a part.Work ethics – or work attitudes that is

shown in loyalty to the organization, spirit, and pride in doing a good job rather than just putting in time.

Some of this attitude can also be distinguished by city, region, or industry. Ex. Rail industries have has different behaviors or attitudes from those of airline industries.

INFORMAL FACTORS - INTERNAL Internal Factors

Culture of the organization– The common beliefs, shared valves

Management Informal Organization-Relationship with the

organizationPerception and Communication-Creating

channels of communication

FORMAL CONTROL SYSTEM Rules- Rules within the organization- Formal

instructions and controls, including standing instructions, job description, standard operating procedures, manuals, ethic guidelines.Some rules are guidesSome rules are positive requirement that

certain actions can be taken like fire drills

TYPES OF RULES-PHYSICAL CONTROLS Physical Controls – security guards, vaults,

computer password, surveillance, other physical controls that may be part of the control system

TYPES OF RULES-MANUALS Manuals – Specific rules created by the

companyThis can become outdated and can be

reexamined periodically to ensure that it is still consistent with the wishes of the management.

TYPES OF RULES-SYSTEM SAFEGUARDS System Safeguards- to ensure that the

information flowing thru the system is accurate and to prevent fraud at every sort Cross checking Signatures Other evidence that a transaction is authorized

FORMAL CONTROL PROCESS

TYPES OF ORGANIZATION

TYPES OF ORGANIZATION

TYPES OF ORGANIZATION

CASE STUDY – SOUTHWEST AIRLINES

CASE STUDY – SOUTHWEST AIRLINES By January 2005

southwest Airlines Corp year ended marked 21 consecutive years of profitability a record unmatched in the airline industry

Southwest has the lowest operating cost structures and in the domestic airlines

In 2004 it has 31,000 employees and generated total revenue of $6.1 billion passenger load

CASE STUDY – SOUTHWEST AIRLINES In 2005, fortune

magazine recognized Southwest Airline as the most admired airline.

Business ethics magazine listed Southwest airlines in its 100 Best Corporate Citezens.

2005, recognized as leading the industry in customer satisfaction

THE DIFFERENCE CEO Herb Kellher was

so deeply committed to the philosophy 2005, recognized as leading the industry in customer satisfaction of putting employees first “If they are happy, satisfied, dedicated, and energetic they’ll take good care of the customers, in which they will come back.

THE DIFFERENCE Southwest corp. was

filled with photographs of it’s employees

Highest paied in the industry .

Pilots were allowed to fly more hours than other airlines

Southwest employee’s contract were flexible enough to allow them to jump in and help out, regardless of the task at hand.

THE DIFFERENCE More than 1000 married

couples worked for the airlines.

South west’s culture of hard work, high energy, fun, and creativity was reinforced.

Hiring process was unique., pilot hired pilots and gate agents hired gate agents

Southwest hired for attitude than aptitude.

Southwest initiated the first profit sharing plan and offered profit sharing to its employees every year. Employees owned about 10 percent of the company’s stock.

THANK YOU