Management Control System

Table of Contents

Introduction3

Discussion4

Purpose of Management Control System4

Effective Control System5

Poor Control System6

Conclusion7

References8

Management Control System

Introduction

The responsibility of the management in the company is to allocate resources of the organization effectively and efficiently, which would enable the company to achieve its long-term goals and objectives which is to increase the profitability and maintain growth and sustainability in the market (Lere & Portz, 2005). With rapid changes in environment it has become more important for the management to control the business operations in an effective manner to ensure success. They need to maintain a fit between the changes that occur in the external environment and internal organization. Effective control system would benefit the organization by increasing the productivity of the work force and simultaneously decreasing the cost of production along with maintaining the quality of the goods and services that are supplied to the market (Flamholtz,1996).

Ineffective or poor control system would create a negative impact on the company's performance. Thus it is important for the management to ensure that business activities are managed accordingly and with the aim to reduce cost and increase productivity (247wallst.com). The most important aspect is to control the human resource of the business if the organization intends to achieve success. Simultaneously accounts of the companies should be controlled effectively to achieve long-term objectives. The management control tends to revolve around certain issues that may include achieving objectives of the organization, developing strategies and implementing plans for achieving the target successfully that have been set. Control system may also include motivating employees by initiating reward system and gathering their feedback (Nyabwa, 2009).

Discussion

Control system does not only tends to determine the qualitative aspects of the businesses, but also examines the quantitative perspectives of the businesses, along with measuring the performance of its and motivating them through reward system to reinforce their positive behavior, it also focuses on financial performance of the business. It is important for the management to control company's cost and also control it employees for minimizing waste and leading the workers for achieving effective results (www.referenceforbusiness.com).

Purpose of Management Control System

The management control system can be defined as the tool to effectively implement the change in an organization. It influences the behavior of the employees for efficiently implementing the change that has been planned by the management. These may include three variables that are essential for management control these factors are reviewing employees' performance, rewarding them on their positive behavior to encourage them and later monitor the outcome that are achieved as a result of implementing strategy to determine the effectiveness of the plan that has been implemented (Lere & Portz, 2005).

Management control cannot be limited or restricted to administrative function of the organization however it is a process which requires involvement of the entire organization at all levels of the company and from different functions of the company. The most significant purpose of management control system is to provide the company with information that will be useful in making decision making, planning and ...