Management Control System: Chapter 1: The Nature of Management Control System
CHAPTER 1: THE NATURE OF MANAGEMENT CONTROL SYSTEMS
Element of MCS : Strategic planning, budgeting, resource allocation, and transfer pricing
Control -> devices must be in place to ensure that its strategic intention are achieved.
Element of Control Systems:
1. Detector -> measure what actually happening in the process being control.
2. Assessor -> what is actually happening by comparing with some standard/expectation.
3. Affector -> feedback.
4. Communication Network -> transmit information between the three above.
Management Control process is the process by which managers at all levels ensure that the people they supervise implement their intended strategies. Management Control process characteristics:
1. The standar is not preset -> management decide what organization should do.
2. Management control is not automatic.
3. Management Control requires coordination among individuals
4. The connection from perceiving the need for action to determining the action required to obtain the desired result may not be clear.
5. Much Management Control is self control.
System is a prescribed and usually repetitious way of carrying out an activity or a set of activities.
Boundaries of Management Control:
1. Budget -> conforming to budget is not necessarily good and departure from budget is not necessarily bad.
2. Goal congruence -> it means that, insofar as is feasible, the goals of organization’s individual members should be consistent with the goals of the organization itself.
3. Tool for implementing strategy -> organizational structure specifies the roles, reporting relationship and division of responsibilities that shape decision making within an organization. Human resource management is the selection, training, evaluation, promotion and termination of employees so as to develop the knowledge and skills required to execute organizational strategy. Culture refers to the set of common beliefs, attitudes, and norms that explicitly or implicitly
Element of MCS : Strategic planning, budgeting, resource allocation, and transfer pricing
Control -> devices must be in place to ensure that its strategic intention are achieved.
Element of Control Systems:
1. Detector -> measure what actually happening in the process being control.
2. Assessor -> what is actually happening by comparing with some standard/expectation.
3. Affector -> feedback.
4. Communication Network -> transmit information between the three above.
Management Control process is the process by which managers at all levels ensure that the people they supervise implement their intended strategies. Management Control process characteristics:
1. The standar is not preset -> management decide what organization should do.
2. Management control is not automatic.
3. Management Control requires coordination among individuals
4. The connection from perceiving the need for action to determining the action required to obtain the desired result may not be clear.
5. Much Management Control is self control.
System is a prescribed and usually repetitious way of carrying out an activity or a set of activities.
Boundaries of Management Control:
1. Budget -> conforming to budget is not necessarily good and departure from budget is not necessarily bad.
2. Goal congruence -> it means that, insofar as is feasible, the goals of organization’s individual members should be consistent with the goals of the organization itself.
3. Tool for implementing strategy -> organizational structure specifies the roles, reporting relationship and division of responsibilities that shape decision making within an organization. Human resource management is the selection, training, evaluation, promotion and termination of employees so as to develop the knowledge and skills required to execute organizational strategy. Culture refers to the set of common beliefs, attitudes, and norms that explicitly or implicitly