18-06-2013, 11:38 AM
Management Control System
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1) Define Management Control System which levels of managers are involved in it? How does Management Control system differ from simple Control process?
An organisation consists of a group of people who work together to achieve certain common goals .Organisations are led by a hierarchy of managers with the chief executive officer at the top and the managers of business units, departments, functions and other subunits ranked below him or her in the organisational chart. The complexity of the organisation determines the no. of layers in the hierarchy. All managers other than the CEO are both supervised by the managers to whom they report. The CEO decides on the overall strategies that will enable the organisation to meet its goals. Subject to the approval of the CEO,the various business unit managers formulate additional strategies that will enable their respective units to further these goals. The management control process is the process by which the managers all levels ensure that the people they supervise implement their intended strategies.
Management Control involves a variety of activities including:-
a) Planning what the organisation should do
b) Coordinating the activities of several parts of the organisation
c) Communicating information
d) Evaluating information
e) Deciding what, if any action should be taken
f) Influencing people to change their behaviour
The control process used by managers contains the same elements as those in the simpler control systems. However, there are significant difference between the management control process and the simpler processes
1) Unlike in the thermostat or body temperature systems, the standard is not preset.Rather; it is a result of a conscious planning process. In this process, management decides what the organisation should be doing and part of the control process is a comparison of actual accomplishments with these plans. Thus, the control process in an organisation involves planning. Management control, however involves both planning and control
2) Like controlling an automatic, management control is not automatic. Some detectors in an organisation may be mechanical but the manager often detects important information with her own eyes, ears and other senses. Although she may have routine ways of comparing certain reports, the manager must personally perform the assessor function, deciding for herself whether the difference between actual and standard performance is significant enough to warrant actions and if so what action to be taken. Then because actions intended to alter an organisation’s behaviour involve human beings, the managers must interact with at least one other person to effect change.
3) Unlike controlling an automobile, a function performed by a single individual, management control requires coordination among individuals. An organisation consists of many separate parts and management control must ensure that each part works in harmony with the others, a need that exists only minimally in the case of the various organs that control body temperature and not at all in the case of the thermostat.
4) The connection from perceiving the need for action to determining the action required to obtain the desired result may not be clear. The term black box describes an operation whose exact nature cannot be observed. Unlike thermostat or the automobile driver a management control system is a black box. We cannot know what action a given manager will take when there is a significant difference between actual and expected performance.
5) Much management control is a self-control that is control is maintained not by an external regulating device like the thermostat, but by managers who are using their own judgements rather than following instructions from the superior.