By Aparna A.

Jawalekar

Management
An organisation is a system of interrelated parts working in conjunction with each other for accomplishing its goals and of those of the people involved in it.
Thus the role of a management is to plan, organise, integrate & interrelate organisational activities & resources to achieve the organisations objectives.

Control
Control is an important characteristic of a system. Control concentrates on the prevention & correction of deviations in a systems behaviour from those of standard that have been specified at a given time.

System
A system means a well prescribed way of carrying out a certain activity usually in a repetitive manner.
System is rhythmic, coordinated and involves recurring series of steps taken to accomplish the purpose. It is a well devised, formal, systematic method of accomplishing the task.

Types of Systems
Systems can be of two types: 1. Closed System / Information tight system: The info loop is closed and the control mechanism has the capability to affect the procedure so that the desired output is achieved. E. g. Thermostat. 2. Open System: The system receives signals of changes in the environment and adapts itself in keeping with its characters & goals. E. g. Nations economy, Individuals behaviour.

Nature of Control Function

It is a managerial function.
It is a dynamic process. It is continuous process.

It is a forward looking process.

It is closely dependent on planning. It is restrictive as well as regulative.

Significance of Control
Maximisation of Resource utilisation.
Remove confusion, inefficiency & conflicts. Ensures timely feedback.

Brings discipline in the working.

Expansion of the plan of working.

Thus, Management is incomplete without control.

Performance Standards
Performance standards : Yardsticks to assess the performance level. Help in evaluating the task under consideration.
Performance standards impose restrictions; but with modern & scientific approach. They can be employed as motivators.

Types of Standards
1.
2. 3.

4.
5.

Physical standards Cost standards Revenue standards Capital standards Intangible standards

Advantages of Control systems

Facilitates decision making process.
Provides basis for future course of action. Facilitates autonomy in working.

Leaves out continuous positive feedback on the

people. Facilitates coordination. Facilitates better planning.

Limitations of control systems

Influence of external factors.
Expensive Solely rely on standards.

Behavioral hindrance

What are the Objectives of :

Management ? Control?

Systems?

 The main objective of Management is to ensure that the

entire organisation is marching towards a common goal in the most effective & efficient manner.
The main objective of Control is to ensure the

organisational train is progressing towards the destined goal on the specified track.
System means a well prescribed way of carrying out a

certain activity usually in a repetitive manner. It is rhythmic, coordinated & involves recurring series of steps taken to accomplish a task.

Thus, we can conclude that,

Management Control System is an effort towards designing & implementation of systematic control methods or procedures with an objective to ensure successful strategy execution.

DIAGRAMATIC PRESENTATION
Management

Control

MCS

Successful strategy Execution

System ( Structured Framework )

Strategic Planning
It is the process of deciding on the major programs that the organisation will undertake to implement its strategies & the approximate amount of resources that will be devoted to each. The output of the process is : Strategic plan / Long range plan It is the first step of the management control.

Management Control
It is the process by which the managers influence other members of the organisation to implement the organisations strategies. It involves : Planning, Coordinating, Communicating, Evaluating, Deciding, Influencing.

DISTINCTION : STR PLANNING & MGMT CONTROL

Characteristic 1. Focus of plans 2. Complexities ;Degree of Structure 3. Nature of Information Strategic Planning On one aspect at a time Many variables unstructured & irregular; Each problem different Tailor made for the problem; More external & predictive; Less accurate Management Control On whole organisation Less complex; Rhythmic; Prescribed procedures Integrated; More internal & Historical; More accurate Relatively difficult

4. Relatively simple Communication of Info 5. Purpose of Estimates 6. Persons primarily involved Show expected results Staff & Top Management

Lead to desired results Line & Top Management

7. No. of persons Small involved

Large

Contd.
Characteristic Strategic Planning Management Control

8. Mental Activity
9. Source Discipline 10. Planning & Control 12. End Result 13. Appraisal of the job done

Creative; Analytical
Economics Planning dominant; but some control Policies & Precedents Extremely difficult

Administrative; Persuasive
Social Psychology Emphasis on both : Planning & Control Tends to be short Action within policies & precedents Much less difficult

11. Time Horizon Tends to be long

Set of actions by MCS

1.
2. 3. 4. 5. 6. 7. 8.

Set goals & performance measures Measure achievements Compare achievements with goals Compute variance if any Report variance Determine the causes of variance Take action to eliminate variance Follow up to ensure that the goals are met

Essential Elements of MCS

As per the Cybernetic Paradigm, the essential elements of the MCS are : Environment Goals Decision Maker Sensor Effector Comparator Behaviour Choice Perception Behaviour Repertoire Value Premise Factual Premise

Interaction among elements in Cybernetic Paradigm