Presented

by
Team 8
TEAM 8 MEMBERS
YASH DHOND - 21-F-225
MUKRAM SHAIKH - 21-F-341
ROHIT DHANDAR - 21-F-223
TUSHAR GHORPADE - 21-F-235
AMOGH CHAUDHARI - 21-F-210
CHERYLANN GOMES - 21-F-238

BOOKS REFERRED
1. MANAGEMENT (14E) - STEPHEN P. ROBBINS, SAN DIEGO STATE UNIVERSITY, MARY
COULTER, MISSOURI STATE UNIVERSITY AND AGNA FERNANDEZ, LIBA CHENNAI

2. MANAGEMENT CONTROL SYSTEMS: EUROPEAN EDITION - ROBERT N. ANTHONY,

VIJAY GOVINDARAJAN, FRANK G.H. HARTMANN, KALLE KRAUS, GÖRAN NILSSON

3. MANAGEMENT CONTROL SYSTEMS : PRINCIPLES AND PRACTICES (SECOND

EDITION) - DAS SUBHASH CHANDRA
 Introduction to
Management Control
System
Yash Dhond - 21-F-225
Definition
► A Management Control System (MCS) is a set of
interrelated communication structures that facilitates the
processing of information to assist managers in
coordinating the parts and attaining the purpose of an
organization on a continuous basis.

► It is a set of formal and informal systems to assist the

management in steering the organization towards its
goals.

MANAGEMENT CONTROL SYSTEMS : PRINCIPLES AND PRACTICES

1. Management Control Systems: An Introduction - 1.1 Definitions
Purpose of Management Control System
► Coordinating the activities of the firm and in steering those
activities towards achievement of the firm’s overall
purposes, goals and objectives.

► Compare the actual results with the set standards

► Appropriate strategies are implemented to attain its goals.

► They also help the management in decision-making process.

► They also ensure that prompt actions are taken in case of

emergency and uncertainty as well.

MANAGEMENT CONTROL SYSTEMS : PRINCIPLES AND PRACTICES

1. Management Control Systems: An Introduction - 1.2 Purpose of MCS
Elements of Management Control Systems
► MCS into four important elements as follows:

MANAGEMENT CONTROL SYSTEMS : PRINCIPLES AND PRACTICES

1. Management Control Systems: An Introduction - 1.5 Elements of MCS
Why is it necessary to have a good MCS?

► A good MCS must ensure the following:

1.All round success for an organization
2.The goals and objectives of the organization are clearly
defined and adequately communicated to all employees of the
organization
3.Providing adequate and appropriate aid and opportunities to
the employees for accomplishment of their tasks well
4.Putting in place adequate control devices for effective
managerial control so as to minimize the control losses

MANAGEMENT CONTROL SYSTEMS : PRINCIPLES AND PRACTICES

1. Management Control Systems: An Introduction - 1.7 A Good MCS
Types of Management Control Systems
► MCS in an organization generally fall under two
categories:

 Formal Control Systems

 Informal Control Systems

MANAGEMENT CONTROL SYSTEMS : PRINCIPLES AND PRACTICES

1. Management Control Systems: An Introduction - 1.9 Types of MCS
TOOLS OF MCS FOR
MEASURING
ORGANIZATIONAL
PERFORMANCE
▪ BY MUKRAM SHAIKH (ROLL NUMBER – 21-F-341)
▪ PROCESS ENGINEER | UPL LIMITED
(AGROCHEMICAL COMPANY)
 TOOLS OF MCS
Feedforward/Concurrent/Feedback Controls

Information Controls

Financial Controls

Balanced Scorecard

Benchmarking of Best Practices

Book – Stephen P Robbins & Mary Coulter, Chapter 18 Controlling Activities and Operations 642
FEEDFORWARD CONTROL
The most desirable type of control

Helps in preventing the problems

Scheduled preventive maintenance program

However, these controls require timely and accurate information that isn’t
always
easy to get.

Book – Stephen P Robbins & Mary Coulter, Chapter 18 Controlling Activities and Operations 642
 CONCURRENT CONTROL
Takes place while work activity is in progress

Helps in eliminating substandard product.

Management by walking around

Especially helps first line managers

Book – Stephen P Robbins & Mary Coulter, Chapter 18 Controlling Activities and Operations 643
 FEEDBACK CONTROL
The most popular type of control

1. Gives info about how effective planning were

2. Can enhance motivation

In many organization feedback control is utilize

Main problem with this, is that damage is already done

Book – Stephen P Robbins & Mary Coulter, Chapter 18 Controlling Activities and Operations 643
KEY LEARNINGS

Book – Stephen P Robbins & Mary Coulter, Chapter 18 Controlling Activities and Operations 642 14
 INFORMATION CONTROL
• Right information at the right time and in
the right amount to monitor and measure
organizational activities and performance
• They rely on information to help them
develop appropriate courses of action

• A management information system

(MIS) is a system used to provide
managers with needed information on a
regular basis.

Book – Stephen P Robbins & Mary Coulter, Chapter 18 Controlling Activities and Operations 645-646 15
Financial Control
Rohit Dhandar Roll No. 21-F-223
Financial Controls
► Every business wants to earn profit. To achieve this goal, managers need financial
controls.
► Managers use traditional financial measures such as ratio analysis and budget
analysis.
► Managers analyze - quarterly income statement for excessive expenses.
► Managers calculate - financial ratios to
(a) Ensure sufficient cash is available to pay ongoing expenses
(b) Ensure that debt levels have not become too high
(c) Ensure that assets are used productively.
► The ratios are calculated using selected info from P&L and Bal sheet.

Book – Stephen P Robbins & Mary Coulter Page 643

Financial controls (Ratios)

Book- Stephen P Robbins & Mary Coulter Page 644

Financial Control (Budgets)

► Budgets are planning and control tools.

► Budgets (Planning tool) – what work activities are important, how much
resources to be allocated.
► Budgets (Control tool) – They provide managers with quantitative standards
for measuring / comparing. If deviations are significant, managers will
analyze and take corrective action. Eg- Personal Budget for monitoring and
controlling personal expenses. If misc expenses exceed, you may cut back on
spending in other area.

Book – Stephen P Robbins & Mary Coulter Page 645

Management controlling System
MFM 2021-24

Tushar Dnyandeo
Ghorpade
Roll Number:- 21-F-235
 Chapter 18, Stephen P. Robbins and Mary A. Coulter 14 E Page no.28
Tools for
Measuring
Organization
al
Performance

Feedforward
/Concurrent/
Feedback
Controls
What is Balanced Scorecard :-
It was launched by Robert Kaplan and David Norton in 1992

The balanced scorecard approach is a way to evaluate organizational

performance from more than just the financial perspective

A balanced scorecard typically looks at four areas that contribute to a

company’s performance: financial, customer, internal processes, and
people/innovation/growth assets. According to this approach managers
should develop goals in each of the four areas and then measure whether
the goals are being met.

In 2002, World class launched the business balanced scorecard, for

which the organization was divided into four perspectives

Chapter 18 Auth. Stephen P. Robbins and Mary A. Coulter 14 E Page no.646

 Customer perspective

Nilsson page no. 710

Robert N. Anthony, Vijay Govindarajan, Frank G.H. Hartmann, Kalle Kraus and Göran
Financial perspective
*how do we look to
* how do customers see us?
shareholders?

=BALANCED SCORECARD=
Vision and strategy

Launched by Robert Kaplan and

David Norton in 1992

Innovation and learning

Internal business perspective perspective
* what must we excel at? * can we continue to improve
and create value?
 Balanced Scorecard
1.Financial perspective 3. Customer perspective
Financial perspective
* Economic Value added Sales (- /+) * Deliveries
* Income from operation * Complaints
* Working Capital * Market Share
* Cash flow * Survey

vision
Strategy
2. Internal business perspective 4. Innovation and learning perspective
(Process)
* Leadership
* Marketing and sales * Capability
* Purchasing * Six sigma Training( define, Measure,
* Cycle Time analysis, improve, control)
* Manufacturing * Quality Improvement

Robert N. Anthony, Vijay Govindarajan, Frank G.H. Hartmann, Kalle Kraus and Göran Nilsson page no. 729
 *Key Points*
Relying solely on financial measures is inadequate and can, in fact, be -
dysfunctional for the company. therefore, discussed how non-financial
performance measures can be incorporated into the management control process.

The key belief behind the scorecard is that measurement will drive change as the
organization conforms to what is being measured. The BSC systematizes the
performance measures into a number of perspectives.

There are many Points that a company needs to consider when trying to
implement a scorecard, such as top management commitment and employee
involvement, and analysing system support when choosing measures.

Chapter10 Author. Robert N. Anthony, Vijay

Benchmarking of Best Practices

Amogh Chaudhari (21-F-210)

 Benchmarking of Best Practices
What is Benchmarking?
► Benchmark is standard of excellence against which to measure and compare.
► Tool for monitoring and measuring organizational performance-
► Identify specific performance gaps and potential areas of improvement

► Intent-
► Use the data gathered in your benchmarking process to identify areas of
improvements. Here improvements can be made by finding outs where firm
can achieve high performance.

Ref.-
MANAGEMENT by Stephen P. Robbins and Mary A. Coulter 14 E
Chapter 18 Page no. 646-647
 Benchmarking of Best Practices
► Step For Process the Benchmarking

Ref.-
MANAGEMENT by Stephen P. Robbins and Mary A. Coulter 14 E
Chapter 18 Page no. 669-670
Contemporary Issues
BY CHERYLANN GOMES
(21-F-238)
FOUR CONTROL ISSUES THAT MANAGERS
FACE
•Cross - Cultural Differences
•Workplace Concerns
•Customer Interactions
•Corporate Governance
Book – Stephen P Robbins & Mary Coulter, Chapter 18 Controlling Activities and Operations
1. CROSS CULTURAL DIFFERENCES / ADJUSTING CONTROL FOR
CROSS CULTURAL DIFFERENCES

Challenges – Adapt –

• Different communication skills • Communication

• Different attitude towards conflict • Be Flexible
• Different decision-making styles • Motivation
• Technology • Team work

Book – Stephen P Robbins & Mary Coulter, Chapter 18 Controlling Activities and Operations
 2. WORKPLACE CONCERNS

Challenges/Concerns Factors
• Monitoring Employees • Unrealistic deadlines
• Employee Theft • Long working hours
• Workplace Violence • Unresolved grievances
• Workplace Privacy • Repetitive/Boring work
• Faulty or unsafe equipment’s /
Control deficient training
• Respect & Dignity
• Restriction of sites
• Frauds & Threats • Training
Book – Stephen P Robbins & Mary Coulter, Chapter 18 Controlling Activities and Operations
3. CUSTOMER INTERACTIONS

How do we handle customer

interactions?
• Show Empathy
• Be Transparent
• Communicate

Book – Stephen P Robbins & Mary Coulter, Chapter 18 Controlling Activities and Operations
4. CORPORATE GOVERNANCE FACTORS

• Managing cash flow challenges, shareholders

• Improves Trust and Reputation
• Proves to investors that things are done in a right way
• Business is responsible and ethical
• Improves compliance
• Attracts more investors

Book – Stephen P Robbins & Mary Coulter, Chapter 18 Controlling Activities and Operations