Management Control &

Information System

Prof. Guru Prasad

FACULTY MEMBER
INC GUNTUR
pgp4149@gmail.com
 Chapter I

Management Control –
An Introduction
 Contents
• Introduction
• Purpose of Management Control System
• Domain of Management Control System.
• Organizational Context of Management Control
System.
• Formal & Informal Control Systems.
• Subsystems & Components of Control Systems
• Cybernetic & System Approach to Control.
• Industrial Dynamics & Management Control.
• Organizational Disasters & Management Control.
• Accounting Database for Control
 Introduction
• The role of management is to plan, organize,
integrate, interrelate organizational activities to
achieve their objectives.
• Control system is a set of formal & Informal s/m to
assists organizational goals.
• Control S/m Guides Employees.
• It Gives a challenge tasks.
• It is concerned with the work of coordination,
resource allocation, motivation & performance
allocation.
• It is an interdisciplinary subject concerned with
management in achieving high level of quality.
 Purpose of Management Control
System
It involves the following functions:
 Planning the activities of an organization.
 Coordinating the activities of an
organization.
 Communicating information to different
levels of the hierarchical structure.
 evaluating the information & deciding the
action to be taken.
Influencing people to change their behavior
 Domain of Management Control
Systems
On summarization it includes the following:
 Strategic planning
 Management Control
 Task Control
 Control of Strategy
Control of operations
 Organizational Context of
Management Control Systems
• Organizations
- Subunits
- Effectiveness & efficiency
- Executive function
• Internal & External Stakeholders
 Organizational Survival & Control
Systems
• It should have essential contributions from
the stake holders.
• It should have an control over all
management process.
Assumptions about Human Behavior are:
4. Basic Rationality
5. Creativity
6. Morality
7. Mastery
8. Community
 Formal & Informal System
Formal Control System
 Management Style & Culture of
organization.
 Infrastructure
 Rewards
 Coordination & integration
 Control Process
INFRASTRUCTURE MANAGEMENT STYLE
 Organizational & CULTURE
Structure • Prevailing style
 Strategy • External / Internal / mixed
Operations • Principal values.
Patterns of autonomy • Norms & benefits
Measurement methods
Responsibility centers
FORMAL CONTROL
Transfer Pricing
PROCESS FIG: Formal
 Strategic planning
Control
 Capital budgeting
System
 Operation planning
 Cost accounting
 Budgeting
 Report systems
 Strategy/project
management COORDINATION &
INTEGRATION
REWARDS • Standing Committees
• Individual & Group • Strategy
• Short term & Long Term •Operations
• Promotion Policy • Formal conferences
•Involvement Technique
 MANAGEMENT STYLE
& CULTURE
• Prevailing style
• External / Internal / mixed
INFRASTRUCTURE • Principal values.
• Personal contacts • Norms & benefits

FORMAL CONTROL
PROCESS FIG: Informal
 Strategic planning
Control
 Capital budgeting
System
 Operation planning
 Cost accounting
 Budgeting
 Report systems
 Strategy/project
management COORDINATION &
INTEGRATION
REWARDS • Standing Committees
• Individual & Group • Strategy
• Short term & Long Term •Operations
• Promotion Policy • Formal conferences
•Involvement Technique