Page 208 - Introduction to Business

182 PART 2 Managing Business Behavior

LEARNING OBJECTIVE 6
Explain briefly the directing and controlling functions of the management process,
including the use of six sigma initiatives.

Directing
An organization can have all the planning and the best organizational structure in
the world and still be very ineffective in meeting its goals. Employees in the organ-
ization need to be motivated, guided, and led toward achieving what the organiza-
directing Guiding, motivating, and tion wants to achieve. This is called directing.
leading employees toward what an One of the most famous quotes about the directing function is a statement
organization wishes to achieve
made by former president Harry S Truman when former Army General Dwight D.
Eisenhower (Ike) was about to be elected his successor as president. President Tru-
man quipped, “He’ll sit here all day saying do this, do that, and nothing will happen.
23
Poor Ike, it won’t be a bit like the Army. He’ll find it very frustrating.” What Presi-
dent Truman was saying was that President Eisenhower was going to have a much
more difficult time directing the federal government bureaucracy than he did
directing the military.

Controlling

controlling Measuring, monitoring, Controlling, the final step in the management process, involves measuring, moni-
evaluating, and regulating an toring, evaluating, and regulating an organization’s progress toward meeting its
organization’s progress toward meeting goals. How many prescriptions for Viagra do physicians visited by a given Pfizer
its goals
detailer write per month? How many Whirlpool clothes washing machines are sold
at the Hualian commercial store in Huainan, China, in a particular week? What are
the precise dollar sales of Land’s End products in Sears, Roebuck stores in Indiana?
The controlling function, properly implemented, has a major feedback compo-
nent. Organizations establish standards, measure whether performance meets
these standards, and then via feedback take corrective action as necessary. If a
physician in a Pfizer detailer’s territory hasn’t been writing any Viagra prescriptions,
the company might have the detailer bring the doctor more free samples as well as
videotaped testimonials from product users saying that the product really does
work.
One company that puts a great deal of emphasis on the control function is the
Emerson Electric Company of St. Louis, Missouri. Emerson Electric is a major cor-
poration with about $16 billion in sales of a wide range of electric products such as
household waste disposal units and air conditioning system compressors. The
company’s system of control and follow-up turns on having accurate measure-
ments of various aspects of its business. Indeed, at the heart of the company’s man-
agement process is the concept that “you can’t control what you can’t measure.”
Toward this end, the engineers who make up a good part of the company’s leader-
ship spend a lot of time focusing on specific business measures such as free cash
flow and return on capital. 24
One interesting type of control function that has received a lot of recent atten-
six sigma initiatives Organizational tion is that of six sigma initiatives. A number of leading companies including the
initiatives seeking to limit defects to Motorola Corporation, Texas Instruments Corporation, and General Electric have
3.4 per million
adopted six sigma initiatives during the past decade or so. What is a six sigma ini-
tiative? The term sigma is a statistical term that measures how far a given process
deviates from a given norm. A six sigma procedure is one that barely deviates at all
from perfection.

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