Summaries Management Control
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Session 1: Chapters 1,2,3 & 4
Chapter 1 Management and control
Management control – all devices or systems managers use to ensure that behaviors and decisions of their employees are consistent with the organizations objectives and strategies (MCS)
* Back end of management process * Involves managers taking steps to help ensure that employees do what is best for the org.
Primary function of MC: to influence behaviors in a desirable way
Benefit of MC: increased probability that organization’s objectives will be achieved
Addressing types of problems: theft, fraud, unintentional error, etc
Disadvantageous of MC: suppress initiative,
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Sometimes subjective judgement is required.
Link result measures to rewards. Sometimes subjective judgement is required.
(1) Defining performance dimensions on which results are desired or not e.g.: Profitability, Customer Satisfaction, Product defects, etc. “What you measure is what you get!”, so define correctly * (2) Measuring performance assign numbers to performance in specific time period Financial measures: net income, EPS, ROA,… Non-fin measures: market share, growth (in units), customer satisfaction,… There’s a difference if top management or lower level employees re measured Often mngt must translate fin goals into operational goals for employees If more than one result measure per employee than weights are required * (3) Setting performance targets /standards for every perf. dimension that is measured Why important? -1) Improve motivation and stimulate action, and 2) allow employees to interpret their own performance -> key: compare actual with std performance * (4) Providing rewards or incentives – anything employee values * Extrinsic rewards: monetary and non-monetary awards (bonus, training, recognit..) * Intrinsic rewards: sense of accomplishment for achieving the desired results
All these conditions must be met, for RCs to
Management is the allocation of scarce resources against an organization 's objective, the setting of priorities, the design of work and the achievement of results. Most important, it 's about controlling.
Ahrens and Chapman go on to introduce their article by giving a background knowledge of modern perceptions of management control systems through their mention of related literature. Some key points discuss pertain to the author’s
Overall Strength: in general, the article provides structure to a concept that is very intangible by: (a) describing the nature and the functions of control; (b) segregating the MCS into categories: core control system, organizational structure, and organizational culture; (c) illustrating how to apply the control model (satisfied my approach) (d) provides a basis for designing and evaluating the system. The manner, in which the model is presented, with its use of figures, further emphasizes the structure of the model. See below on further emphasis on parts (a) -(c).
The second aspect of management used to investigate the issue is Controlling. Control is a concern that is facing every manager in every organisation today. Many businesses continually look to improve relationships between all levels of staff in order for a healthy working environment. To effectively control a business the organisation requires information about
Through this process, it will ensure to be successful and rewarding to each individual in the organization.
Management Controls are used to put procedures and policies into place that would allow an organization to be able to function in a secure manner from all of its levels, to include the ground floor to the top floor.
Management: Activities undertaken to plan and control the activities of others to achieve defined objectives, including Planning, Organising, Staffing, Directing, and Controlling.
* In addition to proper Job Descriptions – build a proper organizational hierarchy and reporting structure with performance reviews
Controlling is monitoring the performance of the organization, identifying deviations between planned and actual results, and taking corrective action when necessary. With all these four functions that are involved in the process of management, if all are followed correctly the organization will be properly ran and will have few complications.
Is the last process of management operations, which depends on the imposition of control and control of the workflow through control and ensure its implementation.
The act of directing and controlling a group of people for the purpose of coordinating and harmonizing the group towards accomplishing a goal beyond the scope of individual effort. Management encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources.
* Management needs to be transparent and make sure to communicate with employees, especially when the organizations is making
Management Control Systems are systems that are put into place within organisations to help ensure that managers within organisation’s act
A good control system provides timely information to the manager which is very much useful for taking various decisions. Control simplifies supervision by pointing out the significant deviations from the standards of performance. It keeps the subordinates under check and brings discipline among them.
The purpose of this case study is to describe and analyse the features of the management control system (MCS) of University of Southern California (USC). Before commencing the analysis a brief background of USC is provided.