MANAGEMENT CONTROL SYSTEMS

 Mutually Supportive Management Systems(MSM)

Mutually Supportive Management Systems (MSM) The effective

operation of control systems is a culmination of the mutual support of
several systems, most of all the formal and informal. They are however,
somewhat discursive in the description of the mutual supportive
systems. A more explicit conceptual support for the concept is from the
Mackenzie framework of the Seven S’s.

7s mckinsey Model

Models of organizational effectiveness go in and out of fashion, but the

McKinsey 7-S framework has stood the test of time.

The model was developed in the late 1970s by Tom Peters and Robert
Waterman, former consultants at McKinsey & Company. They identified
seven internal elements of an organization that need to align for it to be
successful.
The Seven Interdependent Elements of McKinsey model:

 The basic premise of the model is that there are seven internal
aspects of an organization that need to be aligned if it is to be
successful
Hard Elements

 Strategy - Strategy is defined as the set of actions that a firm

plans in response or anticipation of changes to its external
environment. These actions allow a firm to improve its
competitive positioning. Purpose of the business and the way
the organization seeks to enhance its competitive advantage.
 Structure - Structure allow the firm to focus on areas that are
deemed important for its evolution. This includes division of
activities; integration and coordination mechanisms.
 Systems - These include formal and informal procedures for
measurement, reward and resource allocation.

Soft Elements

 Shared Values - These values define the firm's key beliefs and
aspirations that form the core of its corporate culture.
 Skills - The organization's core competencies and distinctive
capabilities. It is argued that old skills can often act as
hindrance in developing new skills.
 Staff - Staff considers people as a pool of resources, which
need to be nurtured, developed, guarded, and allocated. It
includes organization's human resources, demographic,
educational and attitudinal characteristics.
 Style - Typical behaviour patterns of key groups, such as
CEOs, managers, and other professionals.
Usage

 Improve the performance of a company

 Examine the likely effects of future changes within a company
 Align departments and processes during a merger or
acquisition
 Determine how best to implement a proposed strategy
Summary

A system is a prescribed way of carrying out any activity or set of

activities. The systems used by management to control the activities of
an organisation are called the management control system.
Management control is the process by which managers influence other
members of the organisation to implement the organization’s strategies.
Management control is facilitated by a formal system that includes a
recurring cycle of activities.

Fijaz Ahmed
20397040