The Utilization Of Proper Management Control

Formal control systems consist of input control, process controls and output controls. According to ICFAI University (2006), input controls are measures that guide the organization on the right path in order to achieve organizational goals. The process controls takes place when the organization wants to guide an ongoing activity to achieve desired organizational goals (ICFAI University, 2006). While according to Armesh et al (2010), output control focus on actual results of the organization, where results are measured, monitored and compared (against expectations), afterwards improvements will be made when needed. A formal management control system will have the benefits when used in a centralized organization; the decision-makers will

Internal control is a business process for assuring achievement of an organization’s objectives. Firstly, internal control plays an important role in safeguarding the organization’s assets. With carefully examination and monitor, internal control is able to discover any anomalies inside the organization, such as inventory spoilage. Moreover, internal control can help improve the efficiency and effectiveness of business processes. For example, through internal control in a manufacturing company, the manager can explore some non-value added activities. Eliminating non-value adding activities can save significant organization’s resources for better development. Additionally, internal

The success of Management by Objectives (MBO)I.  The appraisal system is one of the most important tools an employer has. At my job the best method to use is management by objectives. Management by objectives is best suited to my position because it helps guide employees by setting goals, allowing for objectives to be clearly established.II. My position is manager of the Department of Integral development for the Colombian Embassy. The key responsibilities for a manager in this department are to follow-up and participate in the political dialogue discussion. Additionally, one must negotiate important resolutions for the Colombian government in the area of integral development. Also important is coordinating and verifying the progress of

The first of these controls, establishment of responsibility, is the assignment of responsibility to certain employees. It has been found that “control is most effective when

Management by Objectives, MBO, is a management process where managers and employees decide together what goals the employee should work to achieve. The goals set for the employee are agreed upon by both the employee and the manager. The employee is evaluated based on these goals and may be given a raise or a promotion if they have achieved the set goals within some set period of time. This management process was first introduced by Peter Drucker in his 1954 book “The Practice of Management” with the intention to provide a way to empower employees. (Drucker)

Organizational control is the systematic process through which managers regulate organizational activities to make them consistent with expectations established in plans, targets and standards of performance (Kuratko, 2001). These organizational expectations are a collection of goals and accountabilities represented in the budget, which help establish performance metrics, document actual performances, allow comparison between the estimated and actual performance, and allow for corrective actions (Jones-George-Hill, 2003).

Control is the final stage of management design, making sure the specific goals and objectives of the team is met by all those who are placed within the organization to complete specific task. It is at this stage that all members must perform the work that is within the organizations scope of business. Controls can be strong and visible, such as are needed in a maximum security prison, or they can be more relaxed and invisible, such as are needed in a group of volunteers working at the local food bank. The four steps in the process of control in the Mainstream and Multistream managerial processes according to Nuebert & Dyck 2010 are “Establishing Performance Standards, Monitoring Performance, Evaluating Performance, and Responding

The Committee of Sponsoring Organization’s Internal Control Integrated Framework is a study that establishes a common definition of internal control so as to meet the needs of various parties and it provides a standard in which organizations can use to assess their control systems and determine if and how to improve them. Since internal control is a process and addresses the achievement of objectives, not all controls are relevant to an audit; the controls that may affect the reliability of financial reporting are relevant to an audit.

Management by Objectives, or MBO as it is affectionately called, is a concept expressed by Peter Drucker more than 50 years ago. This strategy for managing people, which focuses on managing teams based on their ability to complete individual and team goals, has been used in larger organizations since its inception. Small to midsize organizations, however, can also benefit from adopting this strategy, particularly if you also take on the S.M.A.R.T. (specific, measurable, attainable, realistic, and time-linked) method of implementation.

“Management control describes the means by which the actions of individuals or groups within an organization are constrained to perform certain actions while avoiding other actions in an effort to achieve organizational goals” (Management Control, 2016). Today’s managers use strategic methods to improve their business foundations to add value to their customers, their own excellence and performance. There are methods that organizations use to sustain excellence through controls, monitoring performance and financial aspects. Quality plays a definitive role in organizations regardless of the product or service they provide. How organizations create control processes, measure and conform to the necessities to reach their objective and

For implementation of the management control system (MCS) of the organisation in a dynamic and ambiguous environment, it is necessary to analyse and assess the external and internal factors, as well as predicting how they will change over time, given the unpredictability of certain factors of the environment: tight competition, accelerating changes in the environment, dynamic changes in consumer demands, the sudden appearance of new business opportunities (Chenhall 2003). The objective of designing MCS in such a situation is to help the organisation to achieve its goal. Thus, according to Danneels (2002, cited in Asel 2009), management need to continuously

Control mechanisms are hard to define as they vary from organisation to organisation and sometimes, even managers in the same

Management by Objectives (MBO) method involves setting specific measurable goals with each employee and then periodically reviewing the progress made.

To achieve predictable results management employs controls, which according to Anthony & Govindarajan (2007) include (a) planning (budgeting and forecasting), (b) organizing (processes and line of reporting), (c) staffing, and (d) directing employees (training and coaching). Under this view, management takes the objectives of the strategic plan, and establishes financial goals for each department through the forecasting/budgeting system. Then management administers control over employee performance via the evaluation process. Hence, the classic view concentrates on the results of the department over the company as a whole and focuses on the amount of work done by an employee (efficiency) versus the resulting contribution of the employees work toward the company’s objectives (effectiveness). It also emphasizes managerial knowledge over tangible assets, human resources and the financial imperatives (Bontis, 2001).

This chapter presents an analysis of data collected from researchers’ study with the aid of the study’s questionnaires and interview done by them in the past. The result of the study had been presented according to the objectives of this research. Data collected were compared with the systems of internal controls prescribed by the management of the organization using related literature as basis of data analysis and discussion of the relevant findings.