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48 Cards in this Set
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A system which gathers and uses information to evaluate the performance of different organizational resources |
Management control system |
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different organizational resources |
Human Physical Financial |
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Influences the behavior of organizational resources to implement organizational strategies |
Management control system |
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Are tools to aid management for steering an organization toward its strategic objectives and competitive advantage |
Management control system |
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Are only one of the tools which managers use in implementing desired strategies |
Management control system |
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Strategies get implemented through |
Management controls Organizational structure Human resources management Culture |
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According to Simons,_______ are the formal,information-based routines and procedures managers use to maintain or alter patterns in organizational activities |
Management control system |
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Anthony & Young (1999) showed Management control system as a __ |
Black box |
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Used to describe an operation whose exact measure cannot be observed |
Black box |
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One of the first authors to define Management control systems in his 1972 article "On the idea of a management control system" |
Ernest Anthony Lowe |
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Professor of Accounting and Financial management |
Ernest Anthony Lowe |
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4 reasons for the need for a planning and control system |
-The enterprise has organizational objectives -The managers of the sub-units of the enterprise must necessarily be ambivalent in view of their own personal goals -Business situations are full of uncertainty -There is a necessity to economize |
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The term management control was given of its current connotations by |
Robert N. Anthony |
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According to Maciariello,it is concerned with coordination,resource allocation,motivation and performance measurement |
Management control |
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Management control |
-It involves extensive measurement -It involves resource allocation decisions -It involves communication and motivation |
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Defined management control as the process by which managers influence other members of the organization to implement the organization's strategies |
Anthony and Govindajaran |
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According to __, management controls are exercised on the basis of information received by the managers |
Kaplan |
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3 major subdivisions of management accounting by Anthony & Young |
-Full cost accounting -Differential accounting -Management control or responsibility accounting |
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Mentioned that the terms management accounting,management accounting systems,management control systems and organizational controls are sometimes used interchangeably |
Chenhall |
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Refers to a collection of practices such as budgeting,product costing or incentives |
Management accounting |
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Sometimes used to refer to controls built into activities and processes such as statistical quality control,just in time management |
Organizational controls |
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Characteristics of management control system |
Finance-oriented Operations-oriented |
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Are primarily based on financial accounting data,such as costs,earnings or profitability |
Finance-oriented control systems |
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Are primarily based on non-financial data that focus on operational output and quality |
Operations-oriented control systems |
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According to Horngren,it is an integrated technique for collecting and using information to motivate employee behavior and to evaluate performance |
Management control system |
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Techniques in Management control system |
Activity-based costing Balanced scorecard Benchmarking and Benchtrending Budgeting Capital budgeting JIT Kaizen Program management techniques Target costing Total quality management Incentive system |
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3 distinct elements of MCS |
Management Systems Control |
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Is about organizing people and processes in a manner that helps the organization achieve specific objectives |
Management |
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5 functions of management |
Planning Organizing Staffing Leading Controlling |
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Most common forms of resourcing |
Human resources Financial resources Technological resources Natural resources |
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A set of detailed methods,procedures and routines created to carry out a specific activity,perform a duty or solve a problem |
Systems |
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An organized,purposeful structure that consists of interrelated and interdependent elements |
Systems |
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Every system comes with |
Input Output Feedback mechanism |
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One of the functions of management |
Control |
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Refers to the process of analysis and corrective action |
Control |
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Means of gathering and using information to aid and coordinate the process of making,planning and control decisions throughout the organization and to guide the behavior of its managers and employees |
MCS |
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A tool businesses can use to measure its performance and to compare its desired objectives against its actual objectives |
Management control system |
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Functions of system |
-Document operational objectives -Document the operational strategies and policies -Assess the performance of organizational processes -Compare performance in relation to the objectives and policies |
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2 characteristics of MCS |
Structure Processes |
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It outlines the performance measures and how the information moves within and between the different responsibility structures |
Structure |
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Set of activities the organization takes in order to achieve its objectives |
Processes |
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Refers to the steps of the organization needs to perform in order to set objectives,allocate resources to achieving these objectives and to achieve the objective |
Processes |
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Is about the structure of your management control system |
System's design |
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An indicator of the process of your management control system |
System's performance |
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2 separate nature of MCS |
Informal control system Formal control system |
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MCS' 3 core elements |
-The MCS is aligned with the Organization's strategies and goals -Designed to fit the organizational structure -Motivate people through different reward systems |
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Benefits of management control systems |
-Implementation of an MCS can reduce risks -Organizational efficiency also improves in the form of better facilitation of coordination -MCS naturally provides benefits in a pure managerial point of view -MCS supports organizational decentralization |
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Elements influencing management control systems |
-The size,the reach and the structure of the organization -The nature of the operations and their divisibility -The variety of responsibilities within the organization -The people of the organization and their perceptions |
