Management Control and

Information Systems
Strategic Planning, Management Control and
Operational Control

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

1
School (IBS) Hyderabad
Strategic Planning, Management Control and Operational Control
Classification of planning and control activities:

1. Strategic Planning
2. Management Control
3. Operational Control

These three planning and control activities are part of the information system
of a company.

The field of information system includes all activities having to do with the
“systematic flow” of information within an organization

Strategic Planning sets the guidelines for management control, and

management control sets the guidelines for operational control
Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business
2
School (IBS) Hyderabad
Strategic Planning, Management Control and Operational Control
The complete management function involves an integration of all these
processes and these processes are complementary

These processes are sufficiently distinct , however, so that those who design
and use planning and control systems will make expensive errors if they fail to
make into account the characteristics of a process and the difference between
the processes

Strategic Planning:

Strategic planning is the process of deciding, on goals of the organization

on changes in these goals, on the resources used to attain these goals and
on the policies that are to govern the acquisition, use and disposition of these
resources
Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business
3
School (IBS) Hyderabad
Strategic Planning, Management Control and Operational Control
Strategic Planning (Continued):

Strategic planning is a process of having to do with the formulation of long-

range, strategic, policy-type plans that change the character or direction of the
organization

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

4
School (IBS) Hyderabad
Strategic Planning, Management Control and Operational Control
Strategic Planning:

Strategic planning is the process of deciding

on goals of the organization

on changes in these goals
on the resources used to attain these goals and
on the policies that are to govern the acquisition, use and disposition of these
resources

Strategic planning is a process of having to do with the formulation of long-

range, strategic, policy-type plans that change the character or direction of the
organization

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

5
School (IBS) Hyderabad
Strategic Planning, Management Control and Operational Control
Management Control:

Management control is the process by which managers assure that resources are
obtained and used effectively and efficiently in the accomplishment of the
organization’s goals.

• Process
• Managers
• Goals
• Efficiency and Effectiveness
• Resources
• Assurance
• System Characteristics

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

6
School (IBS) Hyderabad
Strategic Planning Management Control and Operational Control

Process :
Management control system consists of a process and structure. The process is
the set of actions that take place, and structure is the organizational
arrangements and information constructs that facilitate the process

Managers:

Management control is a process for the use of managers, and it involves the
interaction of one manager with another. Line managers are the focal point in
management control.

They are the persons whose judgements are incorporated in the approved plans

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

7
School (IBS) Hyderabad
Strategic Planning Management Control and Operational Control

Managers (Continued):

Management control is the control that managers exercise over other managers.
Foremen exercise control over production workers, sales managers exercise
control over individual salesmen

Goals:
Goals are set in the strategic planning process

Efficiency and Effectiveness:

Doing things right with minimum cost
Doing the right things

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

8
School (IBS) Hyderabad
Strategic Planning Management Control and Operational Control

Resources

There are two kinds of resources. Tangibles resources such as material and
equipment, and also human resources. Managers are responsible for both
acquisition of these resources and for seeing to it that they are used efficiently
and effectively

Assurance:
Managers assure that the resources are obtained and used effectively and
efficiently. It is not that the managers personally do the work of obtaining and
using the resources. The function is to get the things done by others.

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

9
School (IBS) Hyderabad
Strategic Planning Management Control and Operational Control

Operational Control:

Operational control is the process of assuring that specific tasks are carried out
effectively and efficiently

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

10
School (IBS) Hyderabad
 Strategic Planning Vs Management control

Characteristics Strategic Planning Management Control

Focus of Plans On one aspect at a time On whole organization
Complexities Many Variables Less Complex
Unstructured and irregular : Rythmic :
Degree of structure
each problem different Prescribed procedures

Tailor-made for the problem: Integrated: More internal and

Nature of information More external and predictive : Less historical
accurate more accurate

Communication of
Relatively simple Relatively difficult
information
Purpose of Estimates Show expected results Leads to desired results

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

11
School (IBS) Hyderabad
 Strategic Planning Vs Management control

Characteristics Strategic Planning Management Control

Persons primarily involved staff and top management Line and top management

No of persons involved Small Large

Creative: Administrative:
Mental Activity
Analytical persuasive

Source discipline Economics Social Psychology

Planning and Control Planning dominant, but some control Emphasis on both planning and control

Time horizon Tends to be long' Tends to be short

End Result Policies and precedents Action with in Policies and precedents

Appraisal of the job done Extreamly difficult Much less difficult

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

12
School (IBS) Hyderabad
Strategic Planning Management Control and Operational Control

Operational Control:

Operational control is the process of assuring that specific tasks are carried out
effectively and efficiently

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

13
School (IBS) Hyderabad
 Strategic Planning Vs Management control

Characteristics Management Control Management Control

Focus of Plans On one aspect at a time On whole organization
Complexities Many Variables Less Complex
Unstructured and irregular : Rythmic :
Degree of structure
each problem different Prescribed procedures

Tailor-made for the problem: Integrated: More internal and

Nature of information More external and predictive : Less historical
accurate more accurate

Communication of
Relatively simple Relatively difficult
information
Purpose of Estimates Show expected results Leads to desired results

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

14
School (IBS) Hyderabad
 Strategic Planning Vs Management control

Characteristics Strategic Planning Management Control

Persons primarily involved staff and top management Line and top management

No of persons involved Small Large

Creative: Administrative:
Mental Activity
Analytical persuasive

Source discipline Economics Social Psychology

Planning and Control Planning dominant, but some control Emphasis on both planning and control

Time horizon Tends to be long' Tends to be short

End Result Policies and precedents Action with in Policies and precedents

Appraisal of the job done Extreamly difficult Much less difficult

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

15
School (IBS) Hyderabad
Strategic Planning Management Control and Operational Control

Thank You

Dr. Ajay Prasad Adepu, Assistant Professor ICFAI Business

16
School (IBS) Hyderabad