THE 10 KEY POINTS OF

MANAGEMENT CONTROL

1. Triangle of management control

2. Definition of management control
3. Reason of being
4. Steps of management control
5. Objectives of management control
6. Positionning of management control
7. Organization of management control function
8. Management control and cost accounting
9. Pillars of management control
10.Profile of a management controller
 1. THE TRIANGLE OF MANAGEMENT CONTROL

WILL
(Objective)

Nothing can be judged unless

it is measurable, and nothing

Bu
dg
ess

Re
et
can be measured unless it is
en

Fo e
l ev
t iv

re c
an
fec

c
ast
quantifiable.
Ef

REALISATION Efficiency MEANS

(Budget)
(Control) Budget Control
GAP CAN
Effectiveness : is the relation between achievement (result) and objectives

Efficiency : is the relation between achievement (result) and means

Relevance : is the relation between means and objectives.

A good manager should :

DO
+ WELL + THE RIGHT
THINGS
 2. DEFINITION OF MANAGEMENT
CONTROL

Operational Control Strategical control

MANAGEMENT
CONTROL

Short term Long term

Daily management Strategical
Management control is an intermediate
control between operational control applied
to daily management, and strategical
control applied to strategical management.
It connects the short term with the long
term.
3. THE REASON OF BEING

SIZE INCREASE

TASKS DELEGATION

NEED OF
COORDINATION

HENCE THE
NECESSITY of MC
4. THE STEPS OF MANAGEMENT CONTROL

PLAN

ASSESS BUDGET

ACT
 5. OBJECTIVES OF MANAGEMENT CONTROL

- CONTRIBUTE TO THE DEFINITION OF THE STRATEGY

- PARTICIPATE IN THE PREPARATION OF THE BUDGET

- MONITOR THE IMPLEMENTATION OF THE STRATEGY

- MEASURE PERFORMANCE

- TAKE CORRECTIVE ACTIONS

6. POSITIONNING AND ATTACHMENT OF MC

CASE 1 : Attachment to the General Manager

GM

MC
CASE 2 : Attachment to the Financial Director

GM

FD

MC
 CASE 3: Rake attachment

GM

Financial Commercial Management

direction management Control
7. ORGANIZATION OF MANAGEMENT
CONTROL

Management
Control

Dashboard
Forecast and Cost
and Gap analysis
Budget accounting
Reporting
 1929
Financial crisis Financial crisis

Economic Crisis (Five agents)

Rest of the
Households Companies Government Banks
world
Distribution of
Consumption Production Funding Exchange
wealth
Trade balance
Unemployement Crisis Budget crisis Liquidity crisis
crisis

Profit drops

Increase price P = Price - Costs Decrease costs

Impossible Analyse
Fixed by the
market Cost accounting
Management
9. THE PILLARS OF MANAGEMENT
CONTROL SYSTEM

Objectives
system

Management
control

Information and
Organization
management
system
system
 A. The objectives system
An objective must be dated and quantified.

OBJECTIVES

TIME ORGANIZATION

Short term
Long term Middle term Global Particular
Budget control
Strategical
planning
 An objective must be :

SMART
- S : Specific and precise

- M : Measurable

- A : Acceptable

- R : Realistic

- T : Temporally defined
 B. THE INFORMATION SYSTEM

An information system is a set of organized procedures that

provide the information necessary for decision making and
organizational control
 FUNCTIONS OF AN INFORMATION
SYSTEM

Information system fonctions EG : Accounting information system

COLLECT Supporting documents

SAVE Accounting journal

ANALYZE General ledger and balance

COMMUNICATE Synthetic states

 C. ORGANIZATION SYSTEM

The seven rules for an organization :

1. A leader must have a number of direct and fairly limited subordinates ;

2. Interweaving between power an responsibility

3. Decentralization and delegation of power

4. No one should depend hierarchically on several leaders

5. Intelligible distribution of functions ;
6. Avoid unassigned functions
7. The 360° rule
 10. THE PROFILE OF A MANAGEMENT
CONTROLLER

Ethic and
courage

Thinking Organization

Management
controller

Action Technical

Relational