Business Organisations Should Never Rely Completely On A Control System

1647 Words Dec 5th, 2016 7 Pages
To succeed in today’s highly uncertain environment, business organisations should never rely completely on a control system that emphasises financial (or quantitative) targets.
Management control systems have been the subject of much research and debate ever since their inception under traditional tools such as budgeting and planning. Their definition has never been fully clarified, though an approximate definition can be given; management control systems (MCS) are vehicles for both creating and conveying strategy throughout a business and can do so through a wide range methods such as; creating a sense of culture and behavioural expectations, managing the performance of employees and managers (Drury, 2016). Financial targets are a more traditional means of approaching management control, gathering financial information, typically through budgeting and setting goals for specific managers and sub-divisions of the business with the aim to aid the company as a whole in achieving its objectives (CIMA, 2009). As the business world has become more complex, it has become harder to quantify every aspect of risk and as such, uncertainty has become more important to plan for and acknowledge through management control systems. Uncertainty is basically an inability to predict and quantify the future and the impacts of such events (Otley, 2014). It is the rise of uncertainty and extensive research into possible failings of the financial targeting tool that has led to many academics,…

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