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Introduction To Management Control by Puttu Guru Prasad
Introduction To Management Control by Puttu Guru Prasad
By:Mruthyunjaya.R
Chapter I
Management Control –
An Introduction
Contents
• Introduction
• Purpose of Management Control System
• Domain of Management Control System.
• Organizational Context of Management Control
System.
• Formal & Informal Control Systems.
• Subsystems & Components of Control Systems
• Cybernetic & System Approach to Control.
• Industrial Dynamics & Management Control.
• Organizational Disasters & Management Control.
• Accounting Database for Control
Introduction
• The role of management is to plan, organize,
integrate, interrelate organizational activities to
achieve their objectives.
• Control system is a set of formal & Informal s/m to
assists organizational goals.
• Control S/m Guides Employees.
• It Gives a challenge tasks.
• It is concerned with the work of coordination,
resource allocation, motivation & performance
allocation.
• It is an interdisciplinary subject concerned with
management in achieving high level of quality.
Purpose of Management Control
System
It involves the following functions:
Planning the activities of an organization.
Coordinating the activities of an
organization.
Communicating information to different
levels of the hierarchical structure.
evaluating the information & deciding the
action to be taken.
Influencing people to change their behavior
Domain of Management Control
Systems
On summarization it includes the following:
Strategic planning
Management Control
Task Control
Control of Strategy
Control of operations
Organizational Context of
Management Control Systems
• Organizations
- Subunits
- Effectiveness & efficiency
- Executive function
• Internal & External Stakeholders
Organizational Survival & Control
Systems
• It should have essential contributions from
the stake holders.
• It should have an control over all
management process.
Assumptions about Human Behavior are:
4. Basic Rationality
5. Creativity
6. Morality
7. Mastery
8. Community
Formal & Informal System
Formal Control System
Management Style & Culture of
organization.
Infrastructure
Rewards
Coordination & integration
Control Process
INFRASTRUCTURE MANAGEMENT STYLE
Organizational & CULTURE
Structure • Prevailing style
Strategy • External / Internal / mixed
Operations • Principal values.
Patterns of autonomy • Norms & benefits
Measurement methods
Responsibility centers
FORMAL CONTROL
Transfer Pricing
PROCESS FIG: Formal
Strategic planning
Control
Capital budgeting
System
Operation planning
Cost accounting
Budgeting
Report systems
Strategy/project
management COORDINATION &
INTEGRATION
REWARDS • Standing Committees
• Individual & Group • Strategy
• Short term & Long Term •Operations
• Promotion Policy • Formal conferences
•Involvement Technique
MANAGEMENT STYLE
& CULTURE
• Prevailing style
• External / Internal / mixed
INFRASTRUCTURE • Principal values.
• Personal contacts • Norms & benefits
FORMAL CONTROL
PROCESS FIG: Informal
Strategic planning
Control
Capital budgeting
System
Operation planning
Cost accounting
Budgeting
Report systems
Strategy/project
management COORDINATION &
INTEGRATION
REWARDS • Standing Committees
• Individual & Group • Strategy
• Short term & Long Term •Operations
• Promotion Policy • Formal conferences
•Involvement Technique