Management Control in Organization

MANAGEMENT CONTROLJ
E
S
S
S
I
C
A
P.
G
U
T
I
E
R
R
E
Z
Prepared
by:
Control Management Control System
Managerial
Function

CONTROL
-is the process of guiding a set of
variables to attain a preconceived goal
or objectives. It is a broad concept
applicable to people, things,
situations, and organizations.
-“to determine the behaviour or
supervise the running of, to maintain,
influence or authority over...to
regulate...”

MANAGEMENT
CONTROL
-the actions used by the management
to guide people, machines, and
functions to attain organizational goals
and objectives.

MANAGEMENT
CONTROL SYSTEM
-an organized systematic process and
structure that management uses in
management control.

The Nature of Control
An organization of managers and
workers must be motivated and
guided to do things its leaders want it
to do and must be corrected when it
departs from the pursuit of
management goals. If management
loses control and the organization
goes out of control, undesirable things
happen to many people.

DEFINITIONS OF
MANAGEMENT CONTROL
-is one of the managerial functions like
planning, organizing, staffing and
directing. It is an important function
because it helps to check the errors
and to take the corrective action so
that deviation from standards are
minimized and stated goals of
organization are achieved in desired
manner.(Wikipedia)

-Control of an undertaking consists of
seeing that everything is being carried
out in accordance with the plan which
has been adopted, the orders which
have been given, and the principles
which have been laid down. Its object
is to point out mistakes in order that
they may be rectified and prevented
from recurring
(Henry Fayol,1916)

- Control is checking current
performance against pre-determined
standards contained in the plans, with
a view to ensure adequate progress
and satisfactory performance.
(Edward Francis Leopold Brech)

- Management Control is the process by
which managers influence other
members of the organization to
implement the organization’s
strategies.
(Robert N. Anthony,2007)

Management control is concerned with
coordination, resource allocation, motivation, and
performance measurement. The practice of
management control and the design of
management control systems draws upon a
number of academic disciplines.
1. Management control involves extensive
measurement and it is therefore related to
and requires contributions from accounting
especially management accounting.
2. It involves resource allocation decisions and
is therefore related to and requires
contribution from economics especially
managerial economics.
3. It involves communication, and motivation
which means it is related to and must draw
contributions from social psychology
especially organizational behavior.
According to Maciariello et al. (1994),

Management Control Principles
1. Principle of Assurance of Objective- The
basic purpose of management control is the
attainment of objectives does this by
detecting failures, in plans
2. Principle of Efficiency of Controls. A
management control system should detect
and highlight the causes of deviations from
plans with minimum possible costs and
unwanted consequences.
3. Principle of Control Responsibility. The
primary responsibility for the exercise of
control lies with the manager charged with
the execution of plans. His responsibly
cannot be waived or rescinded without
changing the organization structure.

4. Principle of Forward Looking. Control, like
planning should be forward looking. The principle
is often disregarded largely because control has
been depend up accounting and statistical data
instead of upon forecasts and projections.
5. Principle of Direct Control. Most, controls used
today are based on the fact that human being
make mistakes. They are often used as indirect
controls aimed at catching errors, often after the
fact. Where ever is possible, direct controls
aimed at preventing errors should be used.
6. Principle of Reflection of Plans. Controlling is the
task of making sure that plans are carried out
effectively. Therefore, control techniques must
reflect the specific nature and structure of plans.
7. Principle of Organizational
Suitability. A management control system fit the
manage authority area and it should reflect
the organization structure.

8. Principe of Individuality of
Controls. Controls become effective
when they are consistent with the
position, operational responsibility,
competence, and needs of the individual
concerned.
9. Principle of Critical Point Controls. While
exercising control, a manager should
focus attention on the factors, which are
critical to appraising performance.
10. Principle of Action. Control is a waste
of time unless the corrective action is
taken. Corrective action may involve
redrawing plans, reorganization,
replacement or training of a subordinate,
motivation of staff, etc.

Management Control in Organization

Management Control in Organization

More Related Content

What's hot (20)

Viewers also liked (12)

Similar to Management Control in Organization (20)

Recently uploaded (20)

Management Control in Organization