EFFECTIVENESS OF MANAGEMENT CONTROL SYSTEM
IN ORGANISATION...
INTRODUCTION
A management control system (MCS) is a system which gathers and uses information to evaluate the
performance of different organizational resources like human, physical, financial and also the organization as a
whole in light of the organizational strategies pursued.
Management control system influences the behavior of organizational resources to implement organizational
[Link] control systems are tools to aid management for steering an organization toward
its strategic objectives and competitive advantage.
Management controls are only one of the tools which managers use in implementing desired strategies.
A major objective of management control is to encourage goal congruence, which means that as people work
to achieve their own goals, they also work to achieve the goals of the company. People must have
incentives to work toward the company’s goals. To accomplish that objective, managers must assign
responsibilities and develop performance evaluation criteria that motivate employees to work toward the
company’s goals
A management control system is most effective when it establishes evaluation criteria that encourage goal-
congruent behaviour and is implemented through a responsibility accounting system that employees trust to report
their performance.
Management control systems designed in an organisation should be closely aligned to an organisation’s
strategies and goals. It should be designed to fit the organisation’s structure and the decision-making
responsibility of individual managers. Effective management control systems should motivate managers and
employees to exert efforts toward attaining organisation goals through a variety of rewards tied to the
achievement of those goals.
The MCS is required to measure the progress of a company. It verifies that everything is going as per the plan
that was adopted and the instructions that were [Link] objective of the management control system is to
help the manager in detecting and identifying the change to take proper action against any [Link]
objective of implementing a management control system is to detect and rectify the deviation in the form of
a mistake to avoid another one.
An effective management control system facilitates the gathering of relevant data and offering the information
to management so that operations can continue [Link] communicates the goals of an organization in a
precise and clear [Link] that the manager, as well as other employees, understand the particular
action plan to reach company goals. The system helps to generate feedback at every stage.
The goal of management control system is to improve the collective decisions within an organisation in an
economically feasible way.”
IMPORTANCE OF EFFECTIVE MANAGEMENT CONTROL SYSTEM
A management cotrol system generally follows two paths. The formal and informal [Link] essentially
has an informal and a formal control system. Let’s examine them in detail:
Formal control system
The formal control system are laid down according to the need and goals of the organisation. Which ave to
be realised through the control mechanics. The organization has clear procedures, rules and guidelines in place
to explain the different managerial requirements. These guide, motivate and direct the management, as well as
the subordinates, to perform their tasks in a manner that helps achieve the operational goals. They are also used
to co-ordinate behaviors of superiors and subordinates.
A formal control system consist of the following sub system;
Management style and culture of the organisation
Infrastructure
Reward
Cordination and integrtaion
Control tools and process
Informal control system
Orgaisations have their own informal system in place. These consist of interaction between individuals
and groups. Informal system helps to make the organisation more conductive to work and enhance the
employees willingness to work for the organisation.
The organization will also have informal and unwritten processes in place for management [Link] are
aimed to provide higher motivation amongst the employees and ensure organizational goals and strategies are
appropriately [Link] control systems also boost goal congruence
9 principles of the effective control system are;
Matching controls to plans and position.
Ensuring flexibility to control.
Ensuring accuracy.
Seeking objectivity of controls.
Achieving the economy of controls.
Tailoring control to individual managers.
Pointing up exceptions.
Fitting the system of control to the organizational culture.
Ensuring corrective action through control.
Management control system influences the behavior of organizational resources to implement organizational
[Link] control systems are tools to aid management for steering an organization toward
its strategic objectives and competitive advantage.
Management controls are only one of the tools which managers use in implementing desired strategies.
To design an effective control system without error for the organization; these 9 principles must be followed.
They are more than just principles.
A management control system (MCS) is a system which gathers and uses information to evaluate the
performance of different organizational resources like human, physical, financial and also the organization as a
whole in light of the organizational strategies pursued.
Management control system influences the behavior of organizational resources to implement organizational
strategies. Management control system might be formal or informal.
CONCLUSION
The system can provide real benefits to organizational efficiency – you are more able to notice problems, plan
your strategies and ensure better co-ordination amongst the different departments and units. Not to
mention it can make the world of management easier.
We all know how hard it can be to be a manager, but with an MCS, your workload is reduced,
you’ll become better at communicating and controlling the different functions, and you can ensure other
people take responsibility to get things [Link] effective control system is important for an organization to
run properly and achieve its goals. Any good control system will pass these 9 [Link] any part of it is
ignored; then controlling the organization’s resources will be very difficult for managers.A management
control system is most effective when it establishes evaluation criteria that encourage goal-congruent
behaviour and is implemented through a responsibility accounting system that employees trust to report their
performance.
REFERANCE
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[Link] control-system-
definition-characteristics-and-factors/52963
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