Management Control Systems
Introduction
With recent changes to the pharmaceutical benefits scheme, there has been increased pressure on local community pharmacies to improve both financial and non-financial measures of performance. With such pressure there has been increased attention given to management control systems as a means of ensuring effective use of resources and improved organisational functioning. To illustrate the use of management control systems and management accounting, this report will analyse the current practices at the community pharmacy Pharmasave. The primary function of Pharmasave pharmacy is the supply of both prescription and non-prescription medication, in conjunction with providing advice and primary health care. With reference to theory and frameworks, this report will highlight the effectiveness of the management control systems in place at Pharmasave Pharmacy. In turn recommendations will be made to improve the organisation’s current management control system based on the results of the analysis.
Management Control Systems
According to Anthony (1965), management control systems can be defined as “ the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of organisational objectives”. Management control systems (MCS) encompass the organisational structure and the set of formal and informal information based routines, procedures, processes, and practices that can be used to influence goal attainment within organisations.
Chenhall (2003) argue that the definition of management control systems has evolved towards a more comprehensive view encompassing a larger scope of information. MCSs are seen as comprising external contextual information on customers, markets and competitors, as well as non-financial and predictive information. A more complete list of management control systems includes budgets, recruitment, training, supervision, performance appraisal, policies and procedures, rewards systems
With recent changes to the pharmaceutical benefits scheme, there has been increased pressure on local community pharmacies to improve both financial and non-financial measures of performance. With such pressure there has been increased attention given to management control systems as a means of ensuring effective use of resources and improved organisational functioning. To illustrate the use of management control systems and management accounting, this report will analyse the current practices at the community pharmacy Pharmasave. The primary function of Pharmasave pharmacy is the supply of both prescription and non-prescription medication, in conjunction with providing advice and primary health care. With reference to theory and frameworks, this report will highlight the effectiveness of the management control systems in place at Pharmasave Pharmacy. In turn recommendations will be made to improve the organisation’s current management control system based on the results of the analysis.
Management Control Systems
According to Anthony (1965), management control systems can be defined as “ the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of organisational objectives”. Management control systems (MCS) encompass the organisational structure and the set of formal and informal information based routines, procedures, processes, and practices that can be used to influence goal attainment within organisations.
Chenhall (2003) argue that the definition of management control systems has evolved towards a more comprehensive view encompassing a larger scope of information. MCSs are seen as comprising external contextual information on customers, markets and competitors, as well as non-financial and predictive information. A more complete list of management control systems includes budgets, recruitment, training, supervision, performance appraisal, policies and procedures, rewards systems