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Management Control – An Overview 

An organization has to make effective and efficient use of its resources to achieve its objectives and succeed in its operations. It should maintain an edge over its competitors in terms of cost and/or quality. Organizations can survive and continue operations in a complex business environment only if it meets its stakeholders’ (customers, suppliers, employees, investors, the government, and society) demands. 

 

In the management context, the traditional concept of control refers to the activities of establishing performance standards, comparing actual performance with these standards, and implementing remedial actions to achieve organizational objectives. This approach assumes that the performance standards are set for operations which will take place in an established environment. However, this assumption may not hold for organizations operating in a complex and volatile business scenario. Organizations need such control systems which will help monitor and adapt to changes in the external environment, ensure best quality, cope with unforeseen change, and in creating faster cycles to market.  

Anthony Ferner defines management control as a process whereby management and other groups are able to initiate and regulate the conduct of activities so that their results accord with the goals and expectations held by those groups. According to Joseph A. Maciariello and Calvin J. Kirby, a management control system is a set of interrelated communication structures that facilitates the processing of information for the purpose of assisting managers in coordinating the parts and attaining the purpose of an organization on a continuous basis. A management control system may also be viewed as a collection of controls that are used to address one or all of the following situations:

Managers and employees lack a clear idea of what is expected of them;  

They have a reasonable idea of what is expected but do not feel inspired, that is, organizational conditions (for example, reward system) fail to motivate; and 

In spite of knowing about the expectations and having sufficient motivation for performance, managers and/or employees are unable to perform. 

Citation: MBA Books available online (ICMR)

Prof. Amrita Jha 

Management Faculty 

profamritacontent@gmail.com

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