Management Control System of a Bank
MANAGEMENT CONTROL SYSTEM ASSIGNMENT
By
O S Mukundan
08BS0002087
CONCEPT OF VARIABLES AND KEY VARIABLES
In an organization, a variable is considered as an ordinary indicator of any business activity, whose sudden and unpredictable change warrants immediate action by the management. The nature of task, the technology and the environment in which the organization operates are the factors which greatly influence the identification of variables. An important function of an variable is that they indicate to the management the necessity for prompt action. A manager should identify a few variables that are crucial to the attainment of strategy, goals and objectives of the organization. Once they have identified, the manager can rely on these variables to monitor business activities and alert the organization to the changes in business environment that could significantly affect the attainment of management goals. The top management should analyze the reasons for significant changes in the variables on a continuous basis. Some examples of variables include profitability, market position, productivity and employee attitude.
Now, a key variable is a broader term in terms of the indicators of any significant business activity. Any change in its value is expected to have an impact on the performance of the organization. It is the responsibility of every organization to identify key variables as they are true indicators as to the likely success or failure of the business. The nature of key variables differs from organization to organization depending on the nature of the task, the technology and the environment of the organization. Key variables have certain characteristics that help the manager to identify them. However the actual selection of key variables requires a thorough understanding of the business, its operational environment and management goals. The management can identify key variables either for the whole organization or for the major centers of
By
O S Mukundan
08BS0002087
CONCEPT OF VARIABLES AND KEY VARIABLES
In an organization, a variable is considered as an ordinary indicator of any business activity, whose sudden and unpredictable change warrants immediate action by the management. The nature of task, the technology and the environment in which the organization operates are the factors which greatly influence the identification of variables. An important function of an variable is that they indicate to the management the necessity for prompt action. A manager should identify a few variables that are crucial to the attainment of strategy, goals and objectives of the organization. Once they have identified, the manager can rely on these variables to monitor business activities and alert the organization to the changes in business environment that could significantly affect the attainment of management goals. The top management should analyze the reasons for significant changes in the variables on a continuous basis. Some examples of variables include profitability, market position, productivity and employee attitude.
Now, a key variable is a broader term in terms of the indicators of any significant business activity. Any change in its value is expected to have an impact on the performance of the organization. It is the responsibility of every organization to identify key variables as they are true indicators as to the likely success or failure of the business. The nature of key variables differs from organization to organization depending on the nature of the task, the technology and the environment of the organization. Key variables have certain characteristics that help the manager to identify them. However the actual selection of key variables requires a thorough understanding of the business, its operational environment and management goals. The management can identify key variables either for the whole organization or for the major centers of