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Nature, Concept and Scope of Management Control System

This document discusses the nature, concept and scope of management control systems. It defines control as checking actual performance against agreed standards or plans to ensure adequate progress. A management control system is a mechanism that not only provides a record of past performance but also identifies reasons for results and enables managers to take corrective actions. The key elements of the control process are setting standards, measuring performance, comparing to standards, and correcting deviations. An effective control system should be suitable, simple, objective, economical, flexible, allow for quick reporting, be suggestive, enable self-control, and provide feedback. The scope of a control system includes policies, organization, personnel, costs, methods, capital expenditures, production, research and development, and external

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Pankaj Dogra
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22K views

Nature, Concept and Scope of Management Control System

This document discusses the nature, concept and scope of management control systems. It defines control as checking actual performance against agreed standards or plans to ensure adequate progress. A management control system is a mechanism that not only provides a record of past performance but also identifies reasons for results and enables managers to take corrective actions. The key elements of the control process are setting standards, measuring performance, comparing to standards, and correcting deviations. An effective control system should be suitable, simple, objective, economical, flexible, allow for quick reporting, be suggestive, enable self-control, and provide feedback. The scope of a control system includes policies, organization, personnel, costs, methods, capital expenditures, production, research and development, and external

Uploaded by

Pankaj Dogra
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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NATURE,CONCEPT

AND SCOPE OF
MANAGEMENT
CONTROL SYSTEM
NAME: SAHINA SETHI
ROLL NO: 24
REFRENCES
 STUDY/REFRENCE MATERIAL FOR
PGDBM : MANAGEMENT PRINCIPLES
AND TECHNIQUES [PG: 409-424]
 ESSENTIALS OF MANAGEMENT
 HAROLD KOONTZ AND HEINZ WEIHRICH

[PG: 345-357]
 www.vhcn.com/rpi/mcs.htm

 WWW.CPAJOURNAL.COM

 WWW.CONSOCIATES.COM

 WWW.ERPWEB.COM

 WWW.REPOSITORY.UPENN.EDU
CONTENTS
 MEANING OF CONTROL
 AIM
 DEFINITIONS
 MANAGEMENT CONTROL SYSTEM
 KEY PRINCIPLES
 NATURE
 OBJECTIVES
 PROCESS
 BLOCK DIAGRAM OF CONTOL PROCESS
 CORPORATE EXAMPLE
 ESSENTIALS
 SCOPE
WHAT IS MEANING OF
“CONTROL” ???
 CONTROL IS TO GUIDE

 POWER

 AUTHORITY TO DIRECT

 VERY IMPORTANT FUNCTION AND


ELEMENT OF MANAGEMENT
AIM OF
CONTROL
DEFINITIONS OF CONTROL
 BRECH : “ CONTROL IS THE PROCESS OF CHECKING THE
ACTUAL PERFORMANCE AGAINST THE AGREED STANDARDS
OR PLANS WITH A VIEW TO ENSURING ADEQUATE PROGRESS
OR SATISFACTORY PERFORMANCE AND ALSO RECORDING
SUCH EXPERIENCE AS IT GAINED AS CONTRIBUTION TO
POSSIBLE FUTURE NEEDS ”

 ERNEST DALE : “ THE MODERN CONCEPT OF


CONTROL ENVISAGES A SYSTEM THAT NOT ONLY PROVIDES
A HISTORIC RECORD OF WHAT HAS HAPPENED TO THE
BUSINESS AS A WHOLE BUT ALSO PINPOINTS THE REASONS
WHY IT HAS HAPPENED AND PROVIDES DATA THAT ENABLES
THE CHIEF EXECUTIVE OR THE DEPARTMENTAL HEAD TO
TAKE CORRECTIVE STEPS IF HE FINDS HE IS ON THE WRONG
TRACK ”
MANAGEMENT CONTROL
SYSTEM
BASIC POSTULATES :

 SHORT INTERVAL MEASUREMENT

 FIRST LINE MANAGEMENT


KEY PRINCIPLES
 DELEGATION

 MOTIVATION

 MEASUREMENT OF
ACHIEVEMENT
NATURE OF MANAGEMENT
CONTROL SYSTEM
1. IMPORTANT MANAGEMENT
FUNCTION
2. CONTINUOUS PROCESS
3. MECHANISM
4. DYNAMIC PROCESS
5. FORWARD LOOKING
6. ACTION ORIENTED
7. CO-ORDINATE INTEGRATED
SYSTEM
OBJECTIVES OF MANAGEMENT
CONTROL SYSTEM
1. FINDING OUT WHY A CERTAIN
THING IS HAPPENING
2. COMPARISIONS
3. INCREASE THE EFFICIENCY
4. DECIDE CORRECTIVE ACTIONS
5. CO-ORDINATION
PROCESS OF MANAGEMENT
CONTROL SYSTEM

1. FIXING STANDARDS
2. MEASUREMENT OF PERFORMANCE
3. COMPARISON
4. CORRECTION OF DEVIATION
THE CONTROL PROCESS
MEASUREMENT
DESIRED ACTUAL OF
PERFORMANCE COMPARISON
PERFORMANCE ACTUAL
PERFORMANCE

IMPLEMENTATION PROGRAM ANALYSIS


IDENTIFICATION
OF OF OF
OF
CORRECTIVE CORRECTIVE CAUSES OF
DEVIATIONS
ACTIONS ACTIONS DEVIATION
CORPORATE EXAMPLE

The Vantage venture is a new addition to the


Vantage Healthcare Family of Companies
ESSENTIALS OF MANAGEMENT
CONTROL SYSTEM
1. SUITABILITY
2. SIMPLICITY
3. OBJECTIVITY
4. ECONOMICAL
5. FLEXIBILITY
6. QUICK REPORTING
7. SUGGESTIVE
8. SELF CONTROL
9. FEEDBACK
SCOPE OF MANAGEMENT
CONTROL SYSTEM
1. CONTROL OVER POLICIES
2. CONTROL OVER ORGANISATION
3. CONTROL OVER PERSONNEL
4. CONTROL OVER WAGES AND SALARIES
5. CONTROL OVER COSTS
6. CONTROL OVER METHODS
7. CONTROL OVER CAPITAL EXPENDITURE
8. CONTROL OVER PRODUCTION
9. CONTROL OVER RESEARCH & DEVELOPMENT
10. CONTROL OVER EXTERNAL RELATIONS
11. OVERALL CONTROL
THANK YOU !!
ANY QUERIES
PLEASE ???

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