Management Control System Essay

1242 Words Feb 10th, 2014 5 Pages
Management Control System

CHAPTER 1 :
THE NATURE OF MANAGEMENT CONTROL SYSTEMS

By:
Amirul Affan (115020305121001)
Maria Dias Ika S (115020307121009)

FACULTY OF ECONOMICS AND BUSINESS
BRAWIJAYA UNIVERSITY
2014
A. Basic Concepts
Management control system (MCS) is a system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole considering the organizational strategies. MCS influences the behavior of organizational resources to implement organizational strategies. MCS might be formal or informal.
Control
An organization must be controlled to ensure that is strategic intentions are achieved. But
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Communications network
System use to tell managers what is happening and how that compares to the desired state

Differences between the management control process and the simpler processes described above: * The standard is not preset * Management control is not automatic * Management control system requires coordination among individuals * The connection from perceiving the need for action to determining the action required to obtain the desired result may not be clear * Much management control is self-control

Systems
System is a prescribed and usually repetitious way of carrying out an activity or a set of activities. Systems are characterized by: * More or less rhythmic * Coordinated * Recurring series of steps intended to accomplish a specified purpose
The effectiveness of their actions is determined by their skill in dealing with people, not by a rule specific to the system. If all systems ensured the correct action for all situations, there would be no need for human managers.

There are several definition of management control system, such as:
Robert N. Anthony (2007)
Management Control as the process by which managers influence other members of the organization to implement the organization’s strategies. Management control systems are tools to aid management for steering an organization toward its strategic objectives and competitive advantage. Management

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