Nama : Dessy Puspitasari

NIM

: 1131002020

Tugas : SPM

Case Leos Four Plex Theather

Cultural

controls

a type

of control

that encourages

mutual

monitoringand it builds a lot upon group pressure. The main idea of

cultural control is to get the employees to watch over each other and to
create a culture that has certain things that you specifically do ordont do.
It aims to set up shared beliefsand normsin that company, rules of
behaving that everyone abides by.The case of Leos FourPlex Theater has
a number of control problems that I can identify.
They are as follows:

Discrepancies in the cash counts of the ticket booths. Most likely

caused by a lack of Motivation that leads to employee theft and

neglecting of duties.
The employees working in the refreshment stand sometimes do not
collect cash from customers or doesnt register the sale on the cash
register. This is also most likely caused by a lack of motivation, it
cant be lack of direction since they know what they should do and
neither could it be a personal limitation since they know how to
operate the machine and how to collect payment. The problem

seems to be that they dont know why they should collect the cash.
Test counts reveal that the number of tickets sold or put into the
stub box isnt equal to the amount of customers entering and
leaving the theater. This seemed to be caused by three factors:
1. The attendants at the turnstile arent checking the tickets
carefully enough since tickets with wrong dates and colors go
into the wrong stub boxes. Most likely caused by a lack of

motivation, the employees arent motivated to check the tickets

carefully.
2. Bill Reilly, the manager, gives out a significant number of free
tickets with his signature on them. Could be caused by a lack of
motivationhe isnt motivated to not give out a lot of free tickets,
or a lack of directionno one has told him that he shouldnt give
out too many free tickets.
3. Attendants give free passage to their friends who hasnt
purchased tickets. This is likely caused by a lack of motivation,
they dont have any good enough reason in their opinion asto
why they shouldnt let their friends in.
The above problems could all be solved with cultural control. All that
really should suffice is a few simple steps. The first step is to create
codes of conduct for the theater. They need to staterules of behavior and
attitudein an official document, e.g.that you should always collect
payment from customers and always register it in the sales register;
andalso that you arent allowed to put money into your own pocket,
without calling the employees thieves, of course. These rules should also
be clearly motivated as to why they are to be heeded. To make sure that
we get the wanted effects of the codes of conduct it is also important that
the employees get to influence and discuss these. Time should therefore
be spent on formal discussion sessions with the employees to make sure
that everyone takes the codes seriously.
The second step is to get Bill Reilly to set a good example and not
give out too many free tickets. The tone from the top should be
consequent. It should suffice to just talk to Bill and explain that the
company doesnt benefit from him giving out too many free tickets.As a
last step, we need something to motivate the employees aside from the
codes of conduct. Rewards like a bonus that is granted when there are no
discrepancies in the cash count could be used. Punishments could also be
used, e.g. the missing amount of cash each month gets taken from the
employees paychecks. Regarding cultural control, I took notice of a
problem with it during last summer when I worked in a Swedish telecom
company. They had a very strong culture and everyone was told to always

follow the company values, which were printed on posters hanging on the
walls of most offices. If you faced a situation where you had to make a
decision and asked a manager for advice you would most often get told to
follow the values, which sometimes didnt help at all. My conclusion is that
cultural control may sometimes not be sufficient to solve some lack of
direction problems, since its very loosely defined and doesnt give a clear
course of action. However, with the use of the above steps the problems
could be solved with a high probability.
Case Study Wongs Pharmacy
Thomas Wong was the owner/manager of Wongs Pharmacy, a small,
single-location drugstore. It had operated for 30 years. All of the
employees who worked in the store were family members. But their
performance in the last few years had not been good, sales and profit
were declining. It seemed to have begun approx. at the time when a large
drugstore chain opened a branch two blocks away.
As a consultant, I suggested Wongs Pharmacy improves their services.
Because, it is undoubtful that the new store sells their goods in a good
and better service. For example, Wong needs to improve their building,
customer services, and technology for customers so they dont have to
wait too long for the medicine to be delivered.
Case Study Private Fitness, Inc.
Private Fitness, Inc. is a small health club in Rancho Palos Verdes,
California. Rosemary Worth opened Private Fitness, Inc. in order to take
advantage of her own fitness reputation and knowledge as well as wanting
to have more time to spend at home with her two young children.
Rosemary used money from her personal savings account and took out a
bank loan in order to open Private Fitness, Inc. Private Fitness, Inc. offered
personal training as well as different types of classes, which included
aerobics, spinning, kickboxing, hip-hop, and yoga. Rosemary hired friends
and fellow fitness instructors to teach classes at the club and hired her

friend of many years Kate Hoffman to be the clubs manager and handle
all of the bookkeeping. (Merchant, 2003) Rosemary began suspecting cash
money was disappearing from the drawers when she witnessed $60 in the
drawer upon arriving at the club and when she left there was only $20
remaining. Rosemarys suspicions were confirmed when an instructor
commented to Rosemary on what a good job Kate was doing as she was
bringing in new clients, however there was no record or money evidence
to show for this new client. Once confronted Kate admitted to pocketing
cash from clients and admitted the new client paid her with a check
directly. Kate apologized to Rosemary and promised never to steal again.
Case Study Atlanta Home Loan
Atlanta Home Loan (AHL) was a mortgage lending and financing
company based in Atlanta, Georgia. Albert (Al) Fiorini founded the
company in April 2002 with an initial investment of about $40,000. He
started operating the company from his home. AHLs business grew
rapidly in its first quarter of operation. By the summer of 2002, eight loan
officers, all of whom worked from their homes. Telecommuting was
convenient for the employees because Atlanta was a large city with heavy
traffic. Joe Anastasia was one of AHLs loan officers. Although Al had
known him only about two months, his initial judgements about Joe were
quite favorable. In July 2002, Al and Joe reached a verbal partnership
agreement. Joe would invest $8,400 which was used to rent an office and
to purchase some office equipment and Joe and Al would share AHLs
profits equally. However, Joe showed a bad attitude to Al when he didnt
show up for the meeting with new landlord and could not find him for two
days. Al not comfortable with Joe so he made a deal to terminating their
agreement but since Al need to go to Los Angeles so he desperate to find
someone to run the company, Al give one chance to Joe. So, Al and Joe
reinstated the previous agreement. However, Joe went to the office only
four times after Al left and Joe took a large batch of loan files home and
did not return to the office for three days. In September 2002, Al turned to
Wilbur Washington whom Al had been introduced by Joe several months

earlier after made decision he could not trust Joe anymore. Wilbur had
considerable experience in mortgage banking and quite good at sales also
so Al signed a written partnership and licensing agreement with Wilbur.
Wilbur asked for authority to sign checks written against AHLs main bank
account, but Al refused because he gesture of good faith to Letitia Johnson
(office manager) four signed, blank checks written against the main
account. Later the month, when Joe found what happening he wanted his
$8,400 investment back but Al refused until he returned all of AHLs lead
and loan files in his possession. In late September, Wilbur hired a new
processor but Al noticed him that his processor to loan officer ratio was
too high but Wilbur angry and want to do with his own ways without Al. At
the time, Wilbur took over the operation of AHL. Al decided not trust
Wilbur and asked a friend to act as his agent to fire all the employees in
AHL but all them refused to go. Al called the police but Wilbur told the
police that he was the owner not Al, the police just left.
On October 15, Wilbur opened a new account at Citizens Bank &
Trust (CBT) where he did his personal business and where he knew
personally. Wilbur wired the funds being held in AHLs corporate name at
the offices of the closing attorneys into this new bank account. Al
discovered the second bank account and called bank personnel and
informed the manager that Wilbur had opened a fraudulent account with
CBT but CBT refused to freeze the account or return the money. Then, Al
called the FBI but they did not interest with the case. Wilbur renegotiated
a lease with the landlord and establishes AHL as his own company. Al
suspected that Wilbur had used all his means of persuasion to mislead the
employees in order to break their bonds with Al. At the last, Al lost at least
$15,000 in licensing fees lost his company. At the end, Al was forced to
sell his home. Elements of Results Controls Albert (Al) Fiorini should
continue running his business of Atlanta Home Loan (AHL) which is
mortgage lending and financing company. He needs to fight to regain
control over AHL perhaps only about $25,000 worth of equipment left. In
other to get back his business Al can apply elements of results controls
which require four steps.

First, Al must define the dimensions. He must defining the right

performance dimensions although is critical because the goals that are set
and the measurements that are made shape employees views of what is
important. In this case Al must defined AHL dimensions on which results
are desired such as for profitability, customer satisfaction or product
defects. This dimension will help company to achieve the target. Second
elements

of

dimensions.

results
In

this

control

is

elements

measuring

performance

measurement,

which

on

involves

these
the

assignment of numbers to objects, is a critical element of a results control

system. Al will measure his company performance after defined it in the
first elements. It might many different results measures can be linked to
rewards. Al can measure of financial such as net income, earnings per
share and return on assets or in nonfinancial measures such as market
share, growth, customer satisfaction and the timely accomplishment of
certain tasks. Besides that, Al can use measurements involve subjective
judgements. For example,evaluators, may be asked to judge whether a
manager is being a team player or developing employees effectively and
to record their judgements on a crude, ordinal measurement scale. Third
elements are setting performance targets for employees to strive for.
Performance targets or standards are another important results control
system element. In a results control system, target should be specified for
every performance dimension that is measured. In this case Al can choose
two basic ways to affect behavior. First, stimulate action by providing
conscious goals for his employees to strive for but most people prefer to
be given a specific target to shoot for. Or second Al can allow his
employees to interpret their own performance. So, Al can run his business
by setting the performance targets for employees to achieve it. The last
elements in results control are providing rewards to encourage the
behaviors that will lead to the desired results. Rewards included in
incentives contracts can be in the form of anything employees value, such
as salary increases, bonuses, promotions, job security, job assignments,
training opportunities, freedom, recognition and power. Al can reward his

employees by anything employees values as to appreciate them with the

effort that they give to the company. Punishments
is the opposite of rewards? They are things employees dislike, such as
demotions, supervisor disapproval, failure to get rewards earned by peers
or at the extreme the threat of dismissal.
Sometimes, Al maybe needs to give punishment to his employees to
give them lesson as what mistaken that they have done. Action Controls
Besides from results control, Al must take an action control as the most
direct form of management control because they involve taking steps to
ensures that employees act in the organizations best interest by making
their actions themselves the focus of control. Action controls take any of
four basic forms. First basic are behavioral constraints. It is negative form
of action control. They make it impossible or at least more difficult for
employees to do things that should not be done. In the case of AHL,
constraints can be applied physically or administratively. For example Al
uses multiple forms of physical constraints, including locks on desks,
computer passwords and limits on access to areas where valuable
inventories and sensitive information are kept. So, not everyone can
access to areas where valuable without permission or knowledgeable from
Al. For administrative constraints can also be used to place limits on an
employees abilities to perform all or a portion of specific acts. By using
this constraints Al can restrictions of decision making authority to his
employees so they cannot take any action for their own benefits.
Next the pre-action reviews involving the scrutiny of the action plans
of the employees being controlled. Reviewers can approve or disapprove
the proposed actions, ask for modifications or ask for more carefully
considered plan before granting final approval. In AHL, Al can form of preaction review during planning and budgeting processes characterized by
multiple levels of reviews of planned actions and budgets at consecutively
higher organizational levels. Then, the basic form in action control is
action accountability. It involves holding employees accountable for the
actions they take. The implementations of action accountability controls
require

defining

what

actions

are

acceptable

or

unacceptable,

communicating those definitions to employees, observing or otherwise

tracking what happens and rewarding good actions or punishing actions
that deviate from acceptable. Al can take action control to the employees
by looks for the four implementations. Al might need to communicate to
his employees either administratively or socially. Administrative modes of
communication include the use of work rules, policies and procedures,
contract provisions and company codes of conduct. The desired actions do
not have to be communicated in written form but Al can be communicated
face to face in meetings or in private to his employees.
Employees action can be observed directly and nearly continuously
as is done by direct supervisors on production lines. Besides that, Al also
can track by examining evidence of actions taken such as activity reports
or expenses documentation. Action accountability is usually implemented
with negative reinforcements. That is, Al might be defined more often
linked with punishments than with rewards to his employees. The last one
is redundancy which involves assigning more employees (or machine) to a
task than is strictly necessary at least having back up employees (or
machine) available also can be considered an action control because it
increases the
probability that a task will be satisfactorily accomplished. In AHL Al can
assign more back up computer since his business running by using
telemarketers because his worked from their home using telecommuting
systems.