The Impact of Effective Management Controls

THE IMPACT OF EFFECTIVE MANAGEMENT CONTROLS
ON SERVICE DELIVERY IN THE MPUMALANGA PUBLIC

HEALTH SYSTEM:
A CASE STUDY OF FIVE SELECTED HOSPITALS AND CLINICS
IN MPUMALANGA
Shepherd Mhlanga
Research report presented in partial fulfilment

of the requirements for the degree of
Master of Business Administration
at the University of Stellenbosch
Supervisor: Professor M de Klerk
Degree of confidentiality: A December 2012

ii
Declaration
By submitting this research report electronically, I, Shepherd Mhlanga, declare that the entirety of
the work contained therein is my own, original work, that I am the owner of the copyright thereof
(unless to the extent explicitly otherwise stated) and that I have not previously in its entirety or in part
submitted it for obtaining any qualification.
S Mhlanga October 2012
Copyright © 2012 Stellenbosch University

All rights reserved
iii
Acknowledgements
Many people made valuable contributions to the success of this research report. It would be
impossible to mention each one by name but I want to sincerely thank everyone for his or her part.
A special thank you to my research supervisor, Professor Manie De klerk, for giving me direction
and guidance. It would be grossly unfair of me not to acknowledge the two people who suffered the
most, but still supported me during my studies: my wife and my daughter. My wife Serrah was truly
a pillar of strength and I would have struggled without her. She did all the typing, scheduling and
formatting of the report. She stayed up with me late into the night and she also sat with me in the
early hours of the morning making me tea when I needed it the most. My daughter Kudzai always
reminded me to finish my research. Thank you ladies, I will forever be indebted to you. I also want
to thank my research assistants for the donkey work they did in distributing and collecting the
questionnaires. You were awesome guys.
Finally, I want to thank God for giving me the strength to press on even when things got difficult. I
have learnt to trust in you all over again.
iv
Abstract
Effective management controls are the hallmark of organisations which are productive and
successful. The report was prompted by the experience the author had at one of the public hospitals
in Mpumalanga. Stanley Vance pointed out management as “the process of decision making and
control over the action of human beings for the express purpose of attaining pre-determined goals.”
There are many honest and hard working managers determined to improve the public health system
in Mpumalanga. This report identified some critical short comings in Mpumalanga which affect the
health delivery service to over 3.5 million people in the province who depend on the public health
institutions. Some of the key findings include the following:
• There are too many acting managers everywhere in the whole department
• Lack of a proper monitoring and evaluation system
• Poorly integrated information systems
• There is no proper reconciliation between set targets and planned activities with the stated
budgets and priorities
This report gave some recommendations, which include an overhaul of the management structure.
Reporting should not just be for the sake of compliance but for highlighting deficiencies and effecting
improvements. There should be a clear distinction and separation of roles between technocrats and
politicians. The health department also needs to develop a clear vision.
This research therefore primarily looked at whether management controls existed in Mpumalanga’s
hospitals and clinics. A twenty-six questionnaire was used to gather information. The results were
analysed as set out in chapter five of this report. The aim of this report was not to criticise but to
identify areas of concern and point them out in the hope of making a meaningful contribution to the
province and possibly the country as a whole.
The limitations to the compilation of this report included lack of time and financial resources to cover
a bigger number of institutions. There are other aspects, which could not be covered in this report
but may equally affect service delivery. In addition to management controls, it would be interesting
to carry out further studies on the role of financial budgets and material resources on service delivery.
Key words:
Compliance
Management
Evaluation
Controls
Monitoring
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Table of contents
Declaration ii
Acknowledgements iii
Abstract iv
List of figures iix
List of formulae x
List of acronyms and abbreviations xi
CHAPTER ONE INTRODUCTION 1
1.1 INTRODUCTION 1
1.2 RESEARCH CONTEXT: BACKGROUND INFORMATION 1
1.3 RESEARCH PROBLEM STATEMENT 2
1.4 RESEARCH OBJECTIVES 3
1.4.1 Primary research objectives 3
1.4.2 Secondary research objectives 4
1.5 RESEARCH QUESTIONS 4
1.6 JUSTIFICATION OF THE STUDY 4
1.7 STRUCTURE OF THE STUDY 4
1.8 CONCLUSION 6
CHAPTER TWO LITERATURE REVIEW 7
2.1 INTRODUCTION 7
2.2 “MANAGEMENT CONTROL” IN THE DOMAIN OF MANAGEMENT 7
2.2.1 What is Management Control? 7
2.3 THE ESSENTIAL ORGANISATIONAL MANAGEMENT CONTROL PRINCIPLES 9
2.3.1 Frederick W Taylor’s Scientific Management Theory 9
2.3.2 Henri Fayol’s Management Control Principles 11
2.3.4 Marx Weber’s Bureaucratic Theory 13
2.3.5 Systems theory 13
2.4 THE THREE BASIC ESSENTIAL STEPS IN THE MANAGEMENT CONTROL
PROCESS 15
2.4.1 Step 1: Establishing Standards 15
2.4.2 Step 2: Measuring and Comparing Actual Results Against Standards 15
2.4.3 Types of control 16
2.4.4 Feed forward Control 16
2.4.5 Concurrent Control 17
2.4.6 Feedback Control 18
2.4.7 Budgetary Controls 19
2.4.8 Financial Statements and Ratio Analysis 19
2.4.9 Internal and External Audit 21
vi
2.4.10 Special Reports 22

2.4.11 Legislations and Established Policies 22
2.4.12 Human Resources Accounting 22
2.5 STEP 3: MANAGEMENT ACTIONS 22
2.6 THE IMPACT OF MANAGEMENT CONTROLS ON ORGANISATIONAL
PERFORMANCE 24
2.6.1 The successful implementation of Plans and Strategies 24
2.6.2 Continuous evaluation of the effectiveness of the existing organisational structure 28
2.6.3 Enables the evaluation of situations in order to determine appropriate leadership styles 28
2.6.7 Improved accountability in Public Institutions 29
2.6.8 The Office of the Auditor-General 30
2.6.9 Parliament Standing Committee on Public Accounts (S.C.O.P.A) 30
2.6.10 The Public Protector 30
2.6.11 Disadvantages 30
2.6.12 Improved Service Delivery 30
2.6.13 Improved Performance 32
2.7 KEY SUCCESS FACTORS FOR THE IMPLEMENTATION OF MANAGEMENT
CONTROL SYSTEMS 33
2.8 CONCLUSION 35
CHAPTER THREE RESEARCH DESIGN AND METHODOLOGY 36
3.1 INTRODUCTION 36
3.2 RESEARCH METHODOLOGY 36
3.2.1 Quantitative research 36
3.3 SAMPLE POPULATION 37
3.4 RESEARCH INSTRUMENT QUESTIONNAIRE 38
3.4.1 A Self-Completed Questionnaire 38
3.5 PILOT TESTING 39
3.6 DATA COLLECTION 39
3.7 DATA ANALYSIS 39
3.8 VALIDITY AND RELIABILITY 40
3.9 LIMITATIONS OF THE STUDY 41
3.10 ETHICAL CONSIDERATIONS 41
3.11 CONCLUSION 43
CHAPTER FOUR FINDINGS AND DISCUSSIONS 44
4.1 INTRODUCTION 44
4.2 SECTION A: PRINCIPLES OF EFFECTIVE MANAGEMENT CONTROLS IN THE
MPUMALANGA PUBLIC HEALTH SYSTEM 44
4.2.1 QUESTION 1: The management control in the Mpumalanga Public Health System
constitutes of a detailed and careful analysis of all processes and tasks within the
organisation to identify each component part 45
vii
4.2.2 QUESTION 2: The management control at Mpumalanga Public Health System

encompasses the review of all routines and working methods. 46
4.2.3 QUESTION 3: The management control in the Mpumalanga Public Health System has
standardised all working methods, equipment and procedures, so that the precise way
in which each task should be done can be laid down and monitored 47
carefully selects and trains workers for their positions 48
4.2.5 QUESTION 5:The management controls in the Mpumalanga Public Health System use
incentives to motivate staff 49
4.2.6 QUESTION 6: The activity of every employee in the Mpumalanga Public Health System
is confined to the performance of a single function to enable the attainment of the
stipulated objectives 50
4.2.7 QUESTION 7:The number of employees under a particular manager are appropriate
for the existence of effective control in the Mpumalanga Public Health System 51
4.2.8 QUESTION 8: There exists the necessary unity of command in the Mpumalanga
Public Health System to ensure that all activities in the organisation are coordinated 52
4.2.9 QUESTION 9: Everyone’s responsibilities are clearly defined making evaluation
possible 52
4.2.10 QUESTION 10: The necessary control mechanisms are ingrained in the planning
process in order to ensure that any stipulated objectives are attained 53
4.2.11 QUESTION 11: The necessary control mechanisms are ingrained within management. 54
4.2.12 QUESTION 12: The necessary control mechanisms are ingrained within the
management function of leading or directing organisational activities 55
4.3 SECTION B: THE IMPACT OF EFFECTIVE MANAGEMENT CONTROLS ON THE
PERFORMANCE OF MPUMALANGA PUBLIC HEALTH SYSTEM 56
4.3.1 QUESTION 13: Management control enables organisation to adapt to the environmental
change 57
4.3.2 QUESTION 14: Management controls enable an organisation to limit the accumulation of
errors 58
4.3.4 QUESTION 15: Management control enables organisations to cope with complexity 59
4.3.5 QUESTION 16: Management controls enable the setting of the necessary performance
standards and the necessary correction of deviations possible 59
4.3.6 QUESTION 17: Effective management control enables economic growth 60
4.3.7 QUESTION 18: Effective management controls usually impact quite positively on
organisational service delivery process 61
4.3.8 QUESTION 19: Effective management controls help reduce riots associated with service
delivery failures 62
4.4 SECTION C: FACTORS HINDERING THE IMPLEMENTATION OF EFFECTIVE
MANAGEMENT CONTROLS IN ORGANISATIONS 63
4.4.1 QUESTION 20: Lack of top management’s support is one of the factors hindering effective
implementation of management controls in the Mpumalanga Public Health System 64
4.4.2 QUESTION 21: Lack of appropriate supporting information systems is the other factor
limiting effective implementation of management controls in organisations 65
4.4.3 QUESTION 22: Lack of management control skills is the main cause of ineffective
implementation of management controls in organisations 65
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4.4.4 QUESTION 23: A negative attitude towards control can hinder the effective
implementation of management controls in organizations 66
4.4.5 QUESTION 24: Poor organisational structure is a hindrance to effective implementation of
management controls at Mpumalanga Public Health System 67
4.4.6 QUESTION 25: Lack of necessary resources for implementation of management control
programmes is one of the hindrances of effective management controls at Mpumalanga
Public Health System 68
4.4.7 QUESTION 26: Lack of accountability is a hindrance to the implementation of effective
controls in the Mpumalanga Public Health System 69
4.5 CONCLUSION 70
CHAPTER FIVE CONCLUSION AND RECOMMENDATIONS 71
5.1 INTRODUCTION 71
5.2 PART 1: CONCLUSION 71
PERFORMANCE OF MPUMALANGA PUBLIC HEALTH SYSTEM 72
5.6 PART 2: RECOMMENDATIONS 73
5.9 CONCLUSION 74
LIST OF REFERENCES 76
APPENDIX 1: DRAFT COVERING LETTER 82
APPENDIX 2: RESEARCH INSTRUMENT 83
APPENDIX 3 DATA ANALYSIS FREQUENCIES AND DESCRIPTIVE STATISTICS 87
ix
List of figures
Figure 2.1: Tolerance Limits 16
Figure 2.2: Break even point 21
Figure 2.3: Negative Feedback 23
Figure 2.4: Positive Feedback 23
Figure 2.5: The Implication of Management Control Systems on Organisational Performance 25
Figure 2.6: Weihrich and Koontz (2005:96)’ System Approach to Management 27
Figure: 2.7: Levels of Customers’ Expectations of Service Quality 32
Figure 4.1: A detailed and careful analysis of all processes and tasks 45
Figure 4.2: The review of all routines and working methods using time and motion study 46
Figure 4.3: Standardisation of all working methods, equipment and procedures, so that the precise
way in which each task should be done can be laid down and monitored 47
Figure 4.4: Careful selection and training of workers for their positions 48
Figure 4.5: Use incentives to motivate staff 49
Figure 4.6: Confinement to the performance of a single function to enable the attainment of the
stipulated objectives 50
Figure 4.7: Span of control 51
Figure 4.8: Unity of command 52
Figure 4.9: Clear definition of responsibilities 53
Figure 4.10: Control mechanisms are ingrained in the planning process in order to ensure that the
stipulated objectives are attained 54
Figure 4.11: Control mechanisms are ingrained within the management function of organizing 55
Figure 4.12: Control mechanisms are ingrained within the management function of leading or
directing organisational activities 56
Figure 4.13: Management control enables organisation to adapt to the environmental change 57
Figure 4.14: Limiting the accumulation of errors 58
Figure 4.15: Ability to cope with complexity 59
Figure 4.16: Setting of the necessary performance standards and the necessary correction of
deviations 60
Figure 4.17: Boosting economic growth 61
Figure 4.18: Positive on health service delivery process. 62
Figure 4.19: Reduction in riots which are associated with service delivery failures 63
Figure 4.20: Lack of top management’s support 64
Figure 4.21: Supporting information systems 65
Figure 4.22: Lack of management skills 66
Figure 4.23: Management and employees’ attitudes 67
Figure 4.24: Poor organisational structure 68
Figure 4.25: Lack of necessary resources 69
Figure 4.26: Lack of adoption of good corporate governance 70
x
List of formulae
optimistic time+Pessimistic Time+4xMost Likely Time

𝐸𝑥𝑝𝑒𝑐𝑡𝑒𝑑 𝑡𝑖𝑚𝑒 = 6 (2.1)
⬚
Current Assets
Liquidity Ratio = Current Liabilities (2.2)
Total Debt
Debt Ratio = Total Assets (2.3)
sales
Inventory Turnover Ratio = (2.4)
Inventory
Sales
Total Assets = Total Assets (2.5)
𝑆𝑎𝑙𝑒𝑠 𝑝𝑟𝑜𝑓𝑖𝑡
𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 = 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 (𝑓𝑖𝑥𝑒𝑑 𝑎𝑛𝑑 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑐𝑎𝑝𝑖𝑡𝑎𝑙) ˣ 𝑠𝑎𝑙𝑒𝑠
(2.6)
(3.1)
(3.2)
(4.1)
xi
List of acronyms and abbreviations

AG Auditor General
ANC African National Congress
BE Break Even
CE Chief Executive
CPA Critical Path Analysis
CPM Critical Path Map
GDP Gross Domestic Product
GNP Gross National Product
MBA Master of Business Administration
MPHS Mpumalanga Public Health System
PERT Programme Evaluation and Review Technique
PFMA Public Finance Management Act
PP Public Protector
SCOPA Standing Committee on Public Accounts
USB University of Stellenbosch Business School
1
CHAPTER ONE
INTRODUCTION
1.1 INTRODUCTION
Studies reveal that the existence of effective management control determines the successful
implementation of plans and strategies. In effect, without effective management controls, any form
of organisational effort undertaken may not lead to the achievement of desired objectives and goals.
In other words, there may be merely a manifestation of a vicious cycle of planning which usually
does not help achieve its intended objectives and goals (Thornhill, 2008, and Tripathi and Reddy,
2006). It is through effective management controls that any deviations from the established plans
are most likely to be identified and corrected and it is through effective management controls that
the extent to which the organisation’s resources are being efficiently and effectively utilised to
achieve its set objectives may be examined and corrected. It is through effective management
controls that organisational leaders are able to identify deviations and influence the workforce
towards the direction, which aids the organisation in attaining its set objectives and goals. Effective
management control therefore is a cornerstone of an organisation’s success: it is the key, without
which any desired level of success may never be attainable. Despite such importance associated
with effective management controls, at Mpumalanga Public Health System, the management
appears to be taking this concept quite lightly, thereby explaining the deteriorating health services,
poor health infrastructures in the province, slow service delivery process, inequitable health services’
distribution, shortage of drugs in hospitals, to name but a few (Pillay, 2006). It is against this
background that this study will investigate and attempt to establish the impact of effective
management control on service delivery in the Mpumalanga Public Health System with specific
reference to five selected hospitals and five clinics in Mpumalanga. The discussion in this paper is
broken into introduction, research context background information, research problem, aim of the
study, research objectives for the study, research questions, justification of the study, literature
review, research design and methodology, and chapter organisation.
Five research assistants were recruited and trained to assist with the distribution and collection of
the questionnaires. Three of them are university graduates, one is a qualified teacher who was on
school holiday and the fifth is a technikon graduate. After the training, the research assistants were
accompanied to their first appointments by the researcher to ensure they were doing the right thing
and guidance was given where necessary.
1.2 RESEARCH CONTEXT: BACKGROUND INFORMATION
Mpumalanga, is one of the nine provinces of South Africa and has a population of about 3 500 000,
as per the 2011 Regional Health Management Information System. There are ten provincial
departments, but the one in charge of health services within the province is the Department of Health
2
and Social Development. The management structure of the department constitutes of two chief
directorates, of which one is for health matters, and the other for welfare, and a sub-directorate of
Gender Affairs, which gives policy support to all the provincial departments. The Department of
Health and Social Development in Mpumalanga inherited a health system, which was fragmented,
inaccessible to the majority, and was curative orientated and hospital based.
The hospital based curative health services consumed the bulk of health resources of the province
at the expense of preventive health services. As a result, patients with preventable conditions
overloaded the hospital services. The overloading of the hospitals by patients with preventable
diseases created a vicious circle, which led to greater demand for more hospitals. Huge investments
were made into the construction and equipping of the hospitals and the training of health workers.
There was little or no allocation of resources for the development of the primary health care system.
Moreover, health care was available to only small numbers of the population, mainly those with ability
to pay and with easy access to hospitals and other facilities situated mainly in the cities and urban
areas.
The other feature of the system inherited was the unequal distribution of resources along geographic
and racial lines. In order to institute the necessary changes, the goal of the Department of Health in
Mpumalanga was to overhaul the health services delivery system in the province. The main aim was
to design a health service delivery system, which can reach the majority of people, employing
measures to prevent and treat preventable diseases and conditions, redirecting the thrust of health
care in the broader context of development, and providing a caring and compassionate service.
These were derived from the National Health Plan, the Reconstruction and Development
Programme, the official policy of the National Department of Health, and the National Programme of
Action for Children.
With all these glorious strategies and programmes, the situation at Mpumalanga Public Health
System does not seem to have changed at all. The majority of the population still does not have
access to health services. They are instead faced with dilapidated infrastructures, shortage of
medicines in hospitals, poor services punctuated by long queues and slow service delivery process.
The question, which therefore remains, is what has gone wrong with the different comprehensive
health plans, which the department planned to implement? This research tries to answer that
question by looking at the impact of effective management controls on service delivery in the
Mpumalanga Public Health System with specific reference to five selected hospitals and five clinics
in Mpumalanga.
1.3 RESEARCH PROBLEM STATEMENT
When the notion of effective management control is examined in the light of the South African Public
Health System, the disadvantages accruing from lack of effective management controls clearly
demonstrate that control is indeed the organisation’s main pillar to success. There is no doubt that
3
the government is striving to ensure that health services are equitably delivered to all South Africans
(ANC, African National Congress, 1994). However, the questions, which remain unanswered, are
why after several plans, and the establishment of different health supporting structures at national,
provincial and local levels, a large segment of the South African population continues to have no
easy access to health care services? Why even with high political will and support does the country
continue to receive complaints of inadequate health services? Although several arguments have
been advanced attributing the explanations to lack of management skills, and lack of resources, it
remains unanswered whether these are the main causes of the problems in the department of health.
South Africa is a highly resourced country, with a GDP and GNP pegged above most of the world
economies. It is not expected to have problems in the health department such as lack of skills and
resources. With the massive resources available, the country is capable of transforming any
previously unskilled management personnel into skilful and dependable management personnel of
any level. It is also capable of having any health plan effectively implemented and to achieve desired
objectives.
Such achievements, as the Mpumalanga Public Health System has demonstrated, may never be
possible, unless all the management activities are accompanied by the necessary management
control mechanisms. Such neglect of control as seen in the Mpumalanga Public Health System has
had quite a negative impact resulting in plans never coming to fruition. The consequences range
from poor health infrastructure, hospitals with no medication, long queues, limited access to health
services especially in the deep rural areas and high mortality rates. It simply becomes a waste of
resources as the intended objectives were never attained (Health System Trust, 2008). Unless the
necessary management controls are established within the Mpumalanga Public Health System, the
set goals and objectives may never be achieved and the current situation can only worsen. This
research will therefore be primarily focused on investigating the impact of effective management
controls on service delivery in the Mpumalanga Public Health System with specific reference to five
selected hospitals and clinics in the Province.
1.4 RESEARCH OBJECTIVES
The primary and secondary research objectives of this study are:
1.4.1 Primary research objectives
The primary research objective of this study is to investigate the impact of effective management
controls on service delivery in the Mpumalanga Public Health Care System, with specific reference
to a case study of five selected hospitals and clinics in Mpumalanga. The study is conducted in order
to determine the measures, which can be used to improve service delivery in the Mpumalanga Public
Health Care System.
4
1.4.2 Secondary research objectives
The secondary research objectives of this study are:

• To determine the essential management control principles for effective service delivery in the
Mpumalanga Public Health System.
• To assess the management control process in the Mpumalanga Public Health Care System.
• To determine the impact of effective management control on Mpumalanga Public Health
System.
• To establish factors hindering the implementation of effective management controls in the
• To determine the necessary mechanisms for establishing effective control measures in the
1.5 RESEARCH QUESTIONS
The research questions for this study are:

• What are the essential management control principles for effective service delivery in the
Mpumalanga Public Health System?
• What steps are followed in the management control processes by the Mpumalanga Public
Health Care System?
• What is the impact of effective management control on the Mpumalanga Public Health
System?
• What factors are hindering the implementation of effective management controls in the
• What are the necessary mechanisms for establishing effective control measures in the
1.6 JUSTIFICATION OF THE STUDY
This study is justifiable on the grounds that it may lead to economic growth of the province and
country because of a healthy workforce, improved service delivery, reductions in riots associated
with service delivery failures, a reduction in mortality rate, and equitable provision of health services
for all those in need within the province.
1.7 STRUCTURE OF THE STUDY
This research report is presented over the following five chapters:
Chapter One: Introduction: This chapter details the road map, which outlines how the study is
presented. The outline includes the introduction, background to the study, problem statement,
research questions, research objectives, justification for the study, overview or structure of the study
and conclusion.
5
Chapter Two: Literature Review: This chapter examined different theories and literature by
different authors pertaining to the topic under study. The discussions were structured based on the
issues contained in the research questions, research objectives, and hypotheses for the study. The
contents of the chapter consequently examined: the essential management control principles, the
management control process, the impact of effective management control, factors hindering the
implementation of effective management controls and mechanism for establishing effective control
measures in organisations.
Chapter Three: Research Design and Methodology: The research design and methodology,
which was used in the primary data collection process for the study, were discussed in this chapter.
The study is quantitative, and the chapter provides the rationale for the selection of a quantitative
research method instead of any other research methods. The chapter addressed the selected
sampling strategy, which is random sampling. Data collection instrument was indicated to be a
questionnaire designed based on the Likert Scale. The questionnaire was administered to 120
respondents of the five hospitals and clinics in Mpumalanga Public Health Care System through a
team of trained researchers who physically met the respondents. In this chapter, it was further
highlighted that when raw data had been collected, Statistical Programme for Social Sciences—
SPSS was used in the data analysis process. Limitations of the study and compliance with the
requisite research ethics were also discussed in this chapter. There was a conclusion highlighting
all the key elements, which were discussed in the chapter.
Chapter Four: Statement of Findings: The findings from the primary research were presented in
this chapter. The findings were presented in Pie Charts contained in Figure 4.1 to 4.26. The Pie
Charts highlighted the summaries of the findings for the variables contained under the respective
sections which included: Section A: The essential management control principles for effective service
delivery in the Mpumalanga Public Health System, Section B: The management control process in
the Mpumalanga Public Health Care System, Section C: The impact of effective management control
on Mpumalanga Public Health System, and Section D: The factors hindering the implementation of
effective management controls in the Mpumalanga Public Health System. These sections were not
only derived from the issues contained in the research objectives and questions of the study, but
were also replicated from the respective sections, which were contained in the research instrument
for the study. Although questions in the questionnaires were designed according to a Likert Scale
grading containing five options, for purposes of easier analysis and interpretation, options 1—
Strongly Agree, and option 2—Agree, were combined under “Agree”, whilst unsure categories under
option 3 were left isolated, and options 4—Disagree and 5—Strongly Agree were combined under
the heading “Disagree”. During the discussions the researcher not only examined the extent to which
the findings were consistent with the secondary data presented in chapter two of the study, but also
assessed whether the research questions had been answered and objectives of the study fulfilled.
6
Chapter Five: Conclusions and Recommendations: Conclusions and recommendations for the
study were discussed in this chapter. The chapter considered the findings from the study, in which
the primary aim of the study, the research objectives and research questions were reiterated. The
chapter then proceeded to deal with the findings from the literature review under the respective
headings: essential management control principles, the management control process, the impact of
effective management control, factors hindering the implementation of effective management
controls, and mechanisms for establishing effective control measures in organisations. The findings
from the primary research were also presented under such similar sections. Subsequently,
discussions were entered marrying both the findings in order to determine the extent to which the
primary aim of the study, the research questions and research objectives were satisfied. In the last
section of the chapter, the recommendations of the study were considered, prior to dealing with the
limitations of the study, areas for further studies, and conclusion.
1.8 CONCLUSION
This chapter generally provided an overview of what this research report is about. Later
discussions in the chapter involved the research context: background information, research
problem, primary and secondary research objectives, significance of the study, scope of the study,
definitions of key concepts, overview of the study, and conclusion. In the next chapter, the
researcher reviews several literature and theories, which are relevant to the topic of this study.
7
CHAPTER TWO
LITERATURE REVIEW
2.1 INTRODUCTION
Generally, this chapter examines theories and literatures, which are relevant to this study. The issues
contained in the research objectives and questions of the study guide the process. Consequently,
the discussions centred on the essential management control principles, the management control
process, the impact of effective management control, factors hindering the implementation of
effective management controls and mechanism for establishing effective control measures in
organisations. The details of the chapter are as presented in sections and sub-sections, which follow.
2.2 “MANAGEMENT CONTROL” IN THE DOMAIN OF MANAGEMENT
The concept of management, though as old as civilisation, is a concept, which many authors have
given different meanings (Agarwal, 2002:2). To ABE (2008:22), management may be best described
according to its essential functions, which involve planning, organizing, directing and controlling the
organisation’s resources in order to achieve the organisation’s goals. Parthasarathy (2006:3) on the
other hand noted the concept of management according to Frederick Wilson Taylor, to refer to “the
art of knowing what you want to do..............in the best and cheapest way”, and thereafter added
what management means to a few other authors. John F. Mee considers management to be “the art
of securing maximum prosperity with a minimum of effort so as to secure maximum prosperity and
happiness for both employers and employee and give the public the best possible service.” Lawrence
A. Appley, treated management as “the development of people and not the direction of
things...............Management is personal administration.” Stoner, Freeman, and Gilbert (1995:3)
further stated that, management according to Functional School is an integrating process designed
to achieve organized and purposeful results. Managers create, direct, maintain and operate
purposive organisations through coordinated and cooperative efforts by a process. To manage is to
forecast and to plan, to organize, to command, to coordinate and to control. Whatever the definition
of management could be, all that can be derived from all these authors is that management is an
essential ingredient of all organized human activity in modern organisations. Without management,
an organisation is most unlikely to obtain any success. That may not be possible without the relevant
control mechanisms to ensure that whatever is intended to be attained by management is achieved.
The details of the notion of control are discussed in the following section.
2.2.1 What is Management Control?
Management control is the process of assessing, evaluating and measuring the executed
organisational activities in order to determine whether the desired strategic goals and objectives are
achievable. On the other hand, management itself is the organisational process, which requires the
execution of strategic plans, setting objectives, managing resources, deploying appropriate
8
resources in order to achieve the desired strategic goals and objectives (Knowledge Management
Terms, 2009). The accomplishment of management tasks as it is always wrongly perceived is not
limited to managers and supervisors only, but also extends and involves the commitment of every
organisational member (Knowledge Management Terms, 2009). It is well established in
management literature that there are four management functions: planning, organising, leading and
controlling (Griffin, 2004:602: Jones, George & Charles, 2000:313: Griffin, 2004:602). Planning is
the process of prescribing and outlining the desired organisational actions, which must be
accomplished according to certain outlined ways in order to render the achievement of the
organisational goals and objectives possible. Generally, a consensus seems to exist among
management experts that planning involves four basic steps: setting objectives and goals in line with
the set organisational mission statement, designing and selecting the most appropriate strategies,
implementing the selected strategies, and monitoring, evaluations and correcting deviations. Despite
the fact that these four essential steps are well outlined in theories, empirical findings reveal that
most organisations usually stop on strategy implementation. Monitoring and evaluation are not
seriously considered as essential. Yet it is through monitoring and evaluation that managers are able
to detect deviations and take corrective action.
Organising is the process of creating structures, job designs and allocating tasks and resources in a
manner, which makes the achievement of the desired strategic goals and objectives possible. There
are several types of organisational structures: tall structures, short or flat structures and matrix
structures. However according to management theories the selection of a particular structure
strongly depends on the nature of the organisation, and management decision as to which structure
is appropriate. Leading on the other hand is the process of influencing the organisation’s activities
in order to make the achievement of the intended objectives and goals possible. From the above
descriptions of the management functions, it is clear that all management activities are channelled
towards ensuring the achievement of objectives and goals. Nonetheless, empirical research has so
far proved that it is unlikely that organisational desired objectives can be achieved, unless the set
objectives are specific, realistic, measurable, and have a specified period.
Management experts also reveal that the achievement of the set goals and objectives is unlikely to
happen, unless the appropriate management control mechanisms are in place. Controlling, studies
reveal that it is the process of evaluating the organisational activities in order to assess or evaluate
whether the organisation’s activities are being executed in the way that will enable the organisation
to achieve its desired strategic objectives and goals. In other words, without control, it is unlikely that
the organisation can achieve the goals and objectives set during the planning stages. Neither may it
possible for the organisation to realise that the established structure or leadership styles are
facilitating the achievement of the desired strategic goals and objectives. In order to achieve these,
organisations usually use a combination of feed foreword, concurrent and feedback management
control techniques, although a significant number of studies have so far indicated that there is a
9
stronger preference for most organisations to use mainly feedback control systems. This is because,
as studies reveal the establishment of concurrent management control systems are costly and
difficult to maintain.
It is clearly demonstrated from the above literature that there are four management functions:
planning, organising, leading and controlling. Recent studies however reveal that modern trends
indicate that the functions, which are executed by managers, exceed these four functions and
encompass the performance of six other additional tasks: decision-making, communication,
motivation, co-ordination, delegation and disciplining. One may easily agree with the architects of
the six additional management functions that indeed the tasks performed by managers far exceed
the four prescribed tasks. Even if it may be so, it is still worth noting that the performance of the six
additional functions may not breed the desired organisational performance, unless accompanied by
the appropriate management control mechanisms. The simultaneous execution of the six additional
management functions and management controls may leave the six additional functions operating
as lubricants, which may render control functions more effective and efficient. For instance, a
decision made may not be effectively implemented, unless there exists effective control mechanisms
to assess whether activities are being executed according to the prescribed management decisions.
Modern research also reveals that control mechanisms can only be effective if employees are
involved and motivated to take ownership. This facilitates self-monitoring by enabling each employee
to ensure that each performed task by him is in accordance with the desire of what the entire
organisation may want to achieve (Jones et al. 2000:313: Gupta & Sharma, 2003:11: Gosh,
2003:422:Griffin, 2004:602: Gosh, 2003:442). Besides intertwining the six additional management
functions with management control, historically, a number of studies have demonstrated that there
is a significant direct positive relationship between establishing certain principles and the
effectiveness and efficiency of a management control mechanism. The following section examines
the extent to which such an assertion is or is not true in the light of changes in the modern business
environment.
2.3 THE ESSENTIAL ORGANISATIONAL MANAGEMENT CONTROL PRINCIPLES
In a bid to ensure that organisations are effectively managed, different theories have been developed
ever since the inception of the management concept to help managers in steering organisational
activities in a manner, which ensures the attainment of its set objectives and goals. These theories
are Frederick W. Taylor’s Scientific Management Theory, Henri Fayol’s Management Theory, Lyndall
Urwick’s Management Control Theory, Marx Weber’s Bureaucratic Management Control Theory,
and Mary Parker’s Management Control Theory.
2.3.1 Frederick W Taylor’s Scientific Management Theory
Frederick W Taylor also dubbed as the “Father of Scientific Management Theory” stated in his book
titled: The Principles of Scientific Management, “that management may never gain effective control
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of activities unless certain principles were clearly considered.” According to Taylor (1911) there must
be:
• A detailed and careful analysis of all processes and tasks within the organisation to identify
each component part.
• Review of all routines and working methods, using time and motion study.
• Standardisation of all working methods, equipment and procedures, so that the precise way in
which each task should be done can be laid down and monitored.
• Scientific selection and training of workers who would then become first class at their particular
jobs.
• Introduction of payment on a piecework basis, which would both be an incentive to maximize
productivity and produce high wages for the workers.
It is true that the application of these principles enhances management’s ability to effectively and
efficiently control the organisation’s activities. For instance, the division of tasks into smaller
manageable units has been proved to render it easy for management to evaluate the contribution of
each employee or unit to the organisational performance. Studies also demonstrate that division of
labour which Taylor (1911) advocated eliminates repetition or duplication of tasks’ performance and
significantly contributes to employees’ improved skilfulness. Further research indicated that Taylor
was not wrong by advocating for detailed and careful analysis of tasks and processes. This is
because such analysis enables management to easily identify deviations and take immediate
corrective action.
It is certainly not doubtful that what Taylor was advocating for has been transposed into the modern
“concurrent control notion”. The standardisation of work processes, methods and machines not only
enables tasks to be easily and efficiently accomplished, but also helps employees to stay abreast
with the standards, which the organisation expects them to adhere. Meanwhile the scientific selection
and training of workers has been noted during empirical studies to reduce the possibility of placing
employees in wrong positions. Placing employees in positions where they do not fit in usually affects
their output and subsequently the organisational performance. If organisations are able to deal with
such issues by adopting Taylor’s (1911) principle, there is no doubt that they can be able to
experience significant improvement, since employees are the main contributors and determinants of
effective organisational performance.
Taylor’s Scientific Management Theory has turned to be the foundation of modern management and
control ideologies in contemporary organisations. However, modern authors have questioned certain
assertions. For instance, Taylor (1911) is noted to have assumed that in organisations managers
and supervisors are the sole decision makers and controllers of activities. In modern organisations,
circumstances have changed. With increasing emphasis on the need for organisational compliance
with labour laws, employees have certainly become more powerful and demanding greater respect
of their rights. It is unlikely that they can be treated as objects, which can be shifted and manipulated
11
around. The emphasis of a dictating management as Taylor advocated may easily land modern
managers into trouble with labour laws, creating a legal liability for the organisation. Studies
conducted have also demonstrated that the application of Taylor’s management control principles in
modern organisations may turn to be unethical and thus affect the reputation of the organisation.
Taylor further undermined the concept of consultation and employees’ involvement, which are quite
essential for effective and efficient control of activities in modern organisations. Critics also argue
that despite the fact that the theory provided the tools to achieve the break down of work processes
into their component tasks, it did not however offer a great deal on how to actually manage the
undertaking of those tasks. Supporters of Taylor argue that criticisms levelled against Taylor’s theory
are questionable, because the principles were devised to suit organisations of Taylor’s time. They
seem to argue that if Taylor was to write today, his approach to management would have been
different. This researcher nonetheless is of the view that even if his approach had been different, it
would not differ much since most of his ideas have remained relevant and are widely used in modern
organisations. For example, most organisations still practice specialisation, standardisation and
constant review and evaluation as the means for improving general organisational performance.
2.3.2 Henri Fayol’s Management Control Principles
It was from such criticisms which Henri Fayol, in 1916, in his book “Administrative Industrielle et
Generale (General and Industrial Management), suggested that work activities in organisations may
be divided into a number of groups made up of technical, commercial, financial, security, accounting
and management. Fayol advocated for:
• The establishment of line of authority by which management may ensure compliance with its
intentions throughout the undertaking.
• A formal plan stipulating job descriptions and duties for each of the posts in the organisation.
• Emphasis on the value of specialisation and division of labour.
• Unity of command.
• Appropriate span of control if supervision is to be adequate.
• Equitable treatment of employees, and fair remuneration, as well as embracement of the
concept of employee participation and involvement.
• Emphasis on training and management development.
In addition to the above theorists, Lyndall Urwick synthesized both Henri Fayol and Frederick
Taylor’s scientific management theory, and articulated the following principles for effective
organisational management:
• Principle of objective: in other words Urwick states that there must be an objective, goal or
mission which the entire organisation strives to achieve.
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• Principle of authority: according to Urwick, there must be well defined line of authority,
outlining the people who are the subordinates and the person to whom the particular employee
must report to.
• Principle of responsibility: well outlined job design and specifications are essential for
determining the responsibility of each employee. This also enables employees to take control
of the activities within the domain of their job specifications.
• Principle of correspondence: can be facilitated through encouraging effective
communication in the organisation. Such communication can be effective if it is two way:
downwards and upwards or horizontal/lateral or diagonal.
• Principle of continuity: constant monitoring and evaluation is essential for ensuring the
continuous achievement of the outlined organisational goals and objectives.
• Principle of specialisation: specialisation through division of labour can enhance the
organisational performance. The extent to which the employees can perform the allocated
tasks efficiently and effectively is improved through the performing repetitive tasks. However,
studies reveal that high levels of specialisation destroy the employee creativity, job satisfaction,
motivation and morale. In order to circumvent these disadvantages of specialisation, studies
reveal that organisations must continuously undertake job rotation, enlargement and
enrichment. This is because these help provide the employee with new and challenging tasks
which outplay boredom that is always associated with specialisation.
• Principle of definition: well defined job specifications and tasks, as well as rules and
regulations facilitate the performance of the assigned tasks. Employees know what is expected
of them and constantly evaluate themselves in order to determine whether they are performing
the assigned tasks according to what is expected of them.
• Span of control: the number of employees allocated under a particular manager can either
enhance the effective control of the departmental activities or can make it quite difficult for the
manager to control effectively. A carefully planned arrangement with the appropriate number
of employees under a particular manager can render control of activities more effective than
when a manager has more employees than he can handle.
• Principle of coordination: this is one of the fundamental activities of accomplishing the
organisation’s set objectives and goals. Coordination enables the assessment of whether the
organisational activities are going according to the desired standards, and are likely to lead to
the achievement of the prescribed goals and objectives.
• Unity of command: although Urwick stated that there is need for decentralisation and
delegation, he noted that this does not mean that the decentralised unit becomes autonomous
of the main management. In order to get each functional area of the organisation working
effectively, there must be unity of command which is the tendency to receive orders from one
unifying figure and to report back to that person.
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There is a significant degree of similarity between, the above discussed theories with Marx Weber’s
theory on bureaucracy, in that all of them emphasise the need for creating effective organisational
structure and rules and regulations as the basis for effectively managing organisational activities.
However, Weber unlike the above theorists stressed the importance of having a multi-layered
organisational structure, which is managed by a combination of a set of rules and regulations.
2.3.4 Marx Weber’s Bureaucratic Theory
Max Webber (1864-1920), was interested in the use of power and authority as a means of gaining
organisational efficiency and effectiveness. He noted that organisations usually develop through
three main stages towards the ultimate rational-legal expression of authority in a bureaucracy. The
three stages are: charismatic basis for authority, traditional basis for authority and the rational-legal
basis for authority. Management and organisations behaviour literature reveals that bureaucracy is
a description of a way of organizing a social institution, incorporating a specification of one approach
to structure, internal relationships, and distribution of authority and working procedures. The main
characteristics of bureaucracy which are similar to the principles contained under Taylor’s scientific
management theory are:
• Specialisation.
• Hierarchy of authority.
• System of rules and procedures.
• Impersonality
• Employment.
In addition to the theories discussed above, systems theory is one of the frameworks, which provides
some of the essential measures or principles of controlling and managing the organisation’s
activities.
2.3.5 Systems theory
The systems theory was developed in the 1950s and 1960s, alongside management science, and
derived from the work being done on mechanical, electrical and biological systems. It is also related
to cybernetics, which is the study of control in various types of system. The systems theory provides
that organisations take inputs from the environment and transform them into outputs. The feedback
loop therefore provides the mechanisms for instituting the necessary control measures to ensure
that all is going according to plan. The nature of an organisation as a system is stated to constitute
sub-systems, boundaries and the environment, and objectives and goals. According to Trist and
Bamforth (2010), the main types of an organisation’s sub-systems are technical system,
psychosocial sub-system, structural sub-system, goals and values sub-systems, and managerial
sub-system. The levels of system in an organisation are technical level, organisational level and
institutional level. Understanding systems approach to management enables managers to
appreciate the view that organisations are systems comprising of different sub-systems, and
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therefore approaching it as such may facilitate the effective management of the organisation’s
activities.
While the systems theory states that there is one best way of managing the organisation’s activities,
the contingency theory differs. The Contingency theory which was pioneered by Joan Woodward,
and Burns and Stalker, contends that there is no one best approach to effectively manage an
organisation. It will depend on the conditions and demands placed upon it. Such a view is not only
inconsistent with the approaches in the theories discussed above, but also other theories. For
instance Peters and Waterman theory which was adopted from the studies of American companies,
and published in the book “In Search of Excellence,” 1983 outlined eight characteristics of excellent,
effective and innovative organisations. These are:
• Bias for action.
• Autonomy and entrepreneurship.
• Close to customer.
• Productivity through people.
• Hands on, value driven.
• Stick to the knitting.
• Simple form and lean staff.
• Simultaneous loose tight properties.
In other words, Peters and Waterman Theory, unlike the advocates of contingency theory prescribes
for certain criteria which must be complied with in order to effective control and manage the
organisation’s activities. As much as Peters and Waterman may be correct, one would certainly
agree with the contingency theory. This is because the modern business environment is fast
changing and therefore sticking with one set of criteria may leave the organisation vulnerable to risks
in case of a serious change which requires assessment of the situation deploying appropriate
strategies. Further to the analysis of such theories which are vulnerable to environmental changes,
is William Ouchi’s Theory Z. This theory provides that for effective control and management of
organisational activities, and to foster commitment to organisational goals, the management must
ensure:
• Secure lifetime employment.
• Consensual, and participative decision making
• Collective responsibility for decisions, standards and performance.
• Slow personal development, evaluation and promotion.
• Implicit, informal control based on the over-riding value system.
• Non-linear and non-specialized career paths.
• Holistic concern for the wellbeing of the organisation and all its employees in the widest sense
possible.
15
In whole although controlling and managing organisations effectively may require the application of
principles which Frederick W. Taylor, Henri Fayol, Urwick, Systems Theory and William Ouchi
articulate, it is also important to note that these theories provide asset of techniques which must be
deployed depending on the situation at hand. In other words, the application of these theories must
be accompanied by considerations of what the contingency theory advocates. However,
management control is a systemic, chronological and dynamic process, and therefore its success is
limited unless such critical processes are followed. Detailed in the next section are the essential
processes for the successful managing and controlling of the activities.
2.4 THE THREE BASIC ESSENTIAL STEPS IN THE MANAGEMENT CONTROL PROCESS
Studies demonstrate that there are three main steps in the organisational control process: setting
standards, measuring and comparing performance, and undertaking corrective actions in case there
are deviations (Robbins and Coulter, 2003:488).
2.4.1 Step 1: Establishing Standards
The first step in the control process is to establish the standards against which assessment can be
based, and the results measured. This means the organisation must identify key areas where
standards can be set. Such areas could be: profitability, productivity, quality, employee development,
employee attitude, accountability, market position, efficiency, or effectiveness. The standards must
be expressed in quantitative terms, and must be very precise rather than vague pronouncements
such as “to reduce inefficiency by 16per cent.” It must also be flexible in that if circumstances change,
then adjustments can be made. The setting of a standard can take a combination or any of the
following types:
• Physical standards: labour hours per unit of output, or units of production per machine hour.
• Cost Standards: direct and indirect costs per unit produced.
• Revenue Standards: average sales per customer.
• Capital Standards: rate of return on capital invested.
• Intangible Standards: competence of managers and employees.
In addition, the standards must emphasise the achievement of results rather than conformance with
rules and regulations. Nonetheless, the setting of standards leads to the second step, which involves
measuring and comparing actual performance to expected performance.
2.4.2 Step 2: Measuring and Comparing Actual Results against Standards
The second step in the control process is to measure the performance and compare it with the
predetermined standards. Measurement can be done by personal observation, traffic lighting or
balanced scorecard. Measurement can also be through a study of the summaries of figures, reports,
charts and statements. This can reveal variations. Some variations are desirable, such as output
above standards or below standards. Other variations are unacceptable such as variations in the
16
delivery schedules agreed with the customer or a variation in the speed limit fixed for all drivers.
Tolerance limits however must be set to determine the performance level acceptable and
unacceptable. Figure 2.1 below illustrates this.
UPPER TOLERANCE LIMIT

STANDARD SET BY THE ORGANISATION
LOWER TOLERANCE LIMIT
TIME TIME TIME TIME
Figure 2.1: Tolerance Limits
The advantage of using tolerance limit is that it reduces the intervention control unit, as long as the
deviations do not have serious consequences for the organisation. However, one important point to
be considered before introducing a control system is whether measurement and comparison are to
be done at various stages in the total process or at the end. If the purpose of control is to detect
deviation during the production process, then it should be done at strategic points before the end of
the process. Any of the types of control discussed below or a combination can be used depending
on the circumstances the organisation faces.
2.4.3 Types of control
The types of control mechanisms that managers can use are:
2.4.4 Feed forward Control
This is a technique that attempts to predict future problems and opportunities. It uses models to
simulate future conditions and identify alternative scenarios that the organisation may face. A feed
forward control system builds responses in anticipation of the future changes. For effective feed
forward control, the key influences or variables that are acting on the project must be identified and
included in the model. These must be constantly updated so that an accurate picture of the present
can be used to build in possible future developments. The control element must monitor changes
and take appropriate corrective action. The techniques used in feed forward controls are:
17
• Network Analysis and Critical Path Analysis: It is a generic term covering techniques which
depict a project with an arrow diagram showing the sequence and relationship of activities and
events, in order to assist planning and control. It involves breaking down the work carried in a
given part of an organisation into small units, each of which is defined as an activity. When an
activity is completed, it is divided from the next activity by what is termed an event. An activity
is seen as the smallest unit of action that is necessary to control. Each activity is measured
and compared with the time allocated for it. In more complicated networks there may be a
choice in the sequence in which activities are tackled, and some may go on simultaneously.
Each activity is timed, and the best possible sequence of activities is calculated in order to
complete the task with the least wastage of time. This is termed Critical Path (CPA). CPA is
readily adapted to computer programming analysis of the numerous complex network paths to
completion. It is used to identify slack in start and completion times of sub-elements and to
quickly identify new priorities if unexpected events should change the network critical path.
• Programme Evaluation and Review Technique (PERT): This is a more complex form of
network analysis. Although Critical Path analysis uses a single estimate of time, PERT uses
three estimates: optimistic, normal and pessimistic. Optimistic assumes that all goes well,
normal estimates include a reasonable mix of favourable and unfavourable factors, and
pessimistic estimates assume that a great deal goes wrong for the project. The times are
estimated using statistical probabilities to take account of favourable and unfavourable factors.
PERT is expressed by the Formula: Expected Time =
. Whereas CPA and

PERT help the organisations to avoid future problems, they also have some drawbacks.
Managers must have the skills to set up the complex networks, which require appropriate use
of computers, time and cost.
2.4.5 Concurrent Control
This type of control takes place as the activity is in progress. It enables managers to identify a
problem at its earliest stage and take corrective action before it becomes costly. The techniques for
concurrent controls are direct frequent supervision by managers, and programme computers that
alerts whenever an error occurs. Other modern concurrent control techniques are:
• Dashboards: These are commonly colour coded using a traffic light system (RAG: RED-
AMBER-GREEN) to help quickly identify problem areas. In dashboard control, plans are
formulated in consultation with the public, and cascaded down to the lower management. After
implementation the manager meets with his team each week to assess performance. The three
different colours are used to indicate the status of performance in each identified key area.
Green indicates that activities are in accordance with the plans, amber alerts management for
areas off plan, but not yet at a point of intervention and red means activities are off plan and
18
quick intervention is needed. Dashboards help in tracking the performance of an organisation

and its sub-units in a more transparent and accountable way to the public. It enables
performance goals to be known to everyone.
• Traffic Lighting: This used in a strategic direction context to show how headline indicators
are changing. Headline indicators are the indicators that focus on broad strategic direction
which the organisation intends to achieve. Although, it shows the current status of
performance, it does not reveal the causes and the speed of the trends. Traffic lighting uses
green to signify success, yellow for mixed results and red for unsatisfactory. It must however
be approached with caution as it is merely a snap shot of performance, which can change
immediately thereafter for the worse or better. Traffic Lighting has proved useful in tracking
real time performance in modern organisations.
• Balanced Scorecard. This is a set of measures that are directly linked to the organisation’s
strategy. The scorecard allows managers to evaluate the organisation from four perspectives:
financial performance, customer knowledge, internal business processes, and learning and
growth. Inside the balanced scorecard is a concise definition of the organisation’s vision and
strategy. Surrounding the vision and strategy are four additional boxes. Each box contains the
objectives, measures, targets and initiatives for one of the four perspectives. A properly
constructed scorecard is balanced between short and long term measures, balanced between
financial and non-financial measures, and balanced between internal and external
performance perspectives. The balanced score provides real time information about
performances in outlined key areas to enable corrective measures to be undertaken.
• Benchmarking: Is the other concurrent control that helps the organisation to compare
performances between two departments or itself and another well performing organisation.
The corrective measures are taken by adopting the good practices of the well performing
organisation.
2.4.6 Feedback Control
This is the commonly used of all the types of control systems. It has two advantages over feed
forward and concurrent controls. Firstly, it provides managers with meaningful information on how
effective their planning efforts were. Feedback that indicates little variance between standard and
performance is evidence that the planning was generally on target. If the deviation is significant, a
manager can use that information when formulating new plans to make them more effective.
Secondly, feedback control can enhance employee motivation. People want information on how well
they have performed. Feedback control provides that information. However, the major drawback of
feedback control is that by the time the manager has information: the problems have already
occurred and led to waste or damage.
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2.4.7 Budgetary Controls
A budget is a statement of anticipated results over a specific time period expressed in financial and
non-financial terms. A budget is not only a control mechanism, but also prescribes standards in key
areas such as: physical, cost, revenue, capital and intangibles. It involves the use of cost standards.
After the specific duration, the actual performance is compared with the set standard, and if there
are deviations corrective action is taken. The different types of budgets are: sales budget, selling
and distribution costs budget, production budget, capital expenditure budget, cash budget and
master budget. In terms of control, budget has been found to be advantageous because of the
following reasons:
• A budget enables the enterprise to eliminate uncertainties and have a planned approach for
its various activities. This helps to keep every body in the organisation alert and encourages
the optimum use of resources.
• Budgets make it possible to coordinate the work of the entire organisation.
• Since there is consultation in the process of a budget formulation, every employee gets
motivated in accepting and meeting a budget that they have contributed to.
• Through budget controls the deviation from the predetermined standards are easily identified.
• It helps management to learn from the past experience.
• It improves communication in the organisation.
However budgets have also been found to be limited in certain instances in that:
• It is rigid and inflexible to changes.
• It has no solutions to here and now problems that supervisors have.
• Deviations are identified only after extensive damage has already occurred.
2.4.8 Financial Statements and Ratio Analysis
One of the techniques used in Feedback control system is the financial statements and the ratio
analysis. According to Tripathi and Reddy (2006:325), the trading profit and the balance sheet of a
company are the usual financial statements which are prepared ex post to indicate which financial
events occurred since the last statements. The usefulness of these statements for applying control
measures is limited in that they cover only the past events. However, they can provide companies
with useful information about trends. Managers can also use these statements to compare their
organisations with other organisations and thus evaluate their own performances. In addition they
are used by the people outside to evaluate the organisation’s strengths, weaknesses and potential.
Ratio analysis extracts information from a financial statement in a way that allows an organisation’s
financial performance or conditions to be evaluated. It involves selecting two significant figures from
a financial statement and expressing their relationship in terms of a percentage or a ratio. These
ratios are:
20
• Liquidity Ratio: expressed by the formula: measures a company’s ability

to pay back short term debts by converting assets quickly into cash.
• Debt Ratio: expressed as: assesses the company’s ability to meet its long term
commitment.
• Profitability Ratios: these ratios express profits as percentage of sales or total assets to
depict the company’s efficiency of operations.
• Operating ratios: this measures how efficiently the manufacturing and sales are being carried
out. The common operating ratios are: Inventory Turnover Ratio: expressed as:
, a high rate of inventory turnover is a positive sign, and suggests that these assets are being
used efficiently by the firm. Total Assets: expressed as: , this indicates how
effectively are the firm’s assets being used. When it is too low, then there is need for increased
assets’ utilisation.
Return on Investment
Also known as, Du Pont System of financial analysis is expressed by the formula: ROI =
. This ratio is computed based on capital
turnover ( multiplied by earnings as a proportion of sales ( ). The

calculation recognises that one division with a high capital turnover and a lower percentage of
earnings to sales may be more profitable in terms of return on investment than another with a high
percentage of profit to sales but with low capital turnover.
Break- even Analysis
Is another control device used in business firms? It involves the use of charts to indicate the overall
sales volume necessary to cover costs. It is at that point at which the cost and revenue of the
enterprise are exactly equal. In other words, it is that point where the enterprise neither earns a profit
nor incurs a loss. This is illustrated in Figure 2.2 below:
21
80
70 70
60 60
50 50
TOTAL COST CURVE
40 40 40 40
TOTAL REVENUE CURVE
35
30 30
20 20 20
10 10
0
1 2 3 4 5 6
Figure 2.2: Break-even point
As represented in the above Figure 2.2, the break even point is when the Total Revenue Curve
intersects with the Total Cost curve, i.e, where the firm produces at a total cost of 40 and earns total
revenue of 40. Break even analysis can be used both as an aid in decision making and as a control
device. The areas where break even analysis can help in decision making include:
• Identifying minimum sales volume necessary to prevent a loss.
• Identifying the minimum sales volume necessary to meet established profit objectives.
• Providing information useful in making decisions on the effect of raising or lowering prices.
• Providing data helpful in decisions to drop or add product lines.
As an aid to control, break even analysis provides one more yardstick by which to evaluate company
performance at the end of a sales period.
2.4.9 Internal and External Audit
Internal audit is another control technique used by modern management. Internal audit is conducted
by an internal auditor who is an employee of the organisation. He makes an independent appraisal
of financial and other operations. In addition he appraises the company’s policies, plans and
management performance. He pinpoints problem areas in the policies or plans and gives
suggestions for eliminating them. As internal audits are conducted regularly, it also keeps the
employees continuously alert. External audit is an independent appraisal of the organisation’s
financial accounts and statements. The purpose of the external audit is to ensure that the interests
of shareholders and other stakeholders are safeguarded against management malpractices.
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2.4.10 Special Reports
Organisations may also commission reports on the progress of certain mechanisms, as part of the
control mechanisms. However, the provided reports must be of appropriate quality, timely, and of
sufficient quantity and relevance.
2.4.11 Legislations and Established Policies
Managers can also use legislation and policies as means of evaluating and controlling activities in
the organisation.
2.4.12 Human Resources Accounting
It is a control mechanism used to determine the following about the organisation’s human resources:
• Level of intelligence and aptitude
• Level of training
• Levels of performance goals and motivation
• Quality of leadership
• Quality of communication, upward, downwards and lateral
• Quality of decision making
• Quality of control process
• Capacity to acheive effective communication
2.5 STEP 3: MANAGEMENT ACTIONS
After management has measured and compared standards, the next step in the control process is
management actions to tackle deviations. If performance is up to standard, the management may
take no action. However, where performance differs from the standard, then steps must be taken
either to correct performance or examine the standards themselves. Review of the plan or standards
can be undertaken. The appropriate step will depend on correct decisions being made by the control
unit. This in turn will depend on accurate and relevant information and a high quality of interpretation
and analysis. In either case, a new standard or level of performance will be measured and feed back
information to the control unit. If performance reaches the required standard, no further action is
needed, but if performance and standards still diverge, further action can be taken. The obtained
feedback can be negative or positive.
• Negative Feedback: Is where performance deviates from the set standard and therefore
management needs to take action to bring activities on track. This demonstrated by the use of
Figure 2.3 below:
23
45
40
35
30
Standard Production Level
25
20 Actual Production; Changes from control

unit designed to act against falling
15 production
10
0
1 2 3 4 5 6
Figure 2.3: Negative Feedback
• Positive Feedback: This is where the indications are that the organisation should take steps
to push performance in the direction in which it is already going: e.g rising production
performance.
80
70
60
50
Actual Production;Changes from control
unit designed to further improve
40 performance
30 Standard Production Level
20
10
0
1 2 3 4 5 6
Figure 2.4: Positive Feedback
The way in which the management can handle the deviations is through what is refered to as the
control loops. Control loops can be classified into open and closed loops:
24
• Closed loop Control: This type of control simply measures the changes in performance from
the required standard and acts to correct it.
• Open loop Control Systems: This type of control goes beyond measurement and correction
and analyses the acuses of the deviation.
Studies demonstrate that an effective organisational management control process usually lead to a
number of positive effects. These effects are discussed in the next section.
2.6 THE IMPACT OF MANAGEMENT CONTROLS ON ORGANISATIONAL

PERFORMANCE
Theories confirm that the effective use of management control systems usually determine the extent
to which the implementation of the other management functions are successful (Weihrich & Koontz,
2005:97: Gupta & Sharma, 2003:3: ABE, 2008:22). These are discussed at length below:
2.6.1 The successful implementation of Plans and Strategies
Successful implementation of plans means attaining the desired objectives. Planning can be done,
an organisational structure can be created to efficiently facilitate the achievement of the objectives
and employees can be directed and motivated, but that is no assurance that the activities are going
as planned and that the goals are in fact being attained. How this is accomplished is demonstrated
in Figure 2.5.
25
CONTEXTUAL VARIABLES: i.e Internal

and External Environments
PROSPECTOR STRATEGY UNCERTAINTY CUSTOMISED PRODUCTS

ADVANCED TECHNOLOGIES
MANAGEMENT CONTROL SYSTEMS (MCS)
FORMAL MCS: Accounting Systems, Balanced Score

Card, Internal Controls and Profit Plans
INFORMAL MCS: Leadership style (Transformnational),

and Organisational Culture
INTERACTIVE CONTROL BELIEFS AND

DIAGNOSTIC CONTROL
SYSTEMS BOUNDARY SYSTEMS
SYSTEMS
Attention on strategic Mission & Vision
Administrative Control
uncertainties, interactive use of Behavioural Standards
(budgets, and formal
budgeting, Continuous Leadership Style
communication), Internal
Improvement Process, Knowledge (Transformational)
Audits (ISO 9001, ISO
management Organisational Culture
14001, OHSAS 18001), Key
Strategy Formulation
Performance Indicators INOVATIVE LEARNING
Process
DECISION MAKING STRTAEGY IMPLEMENTATION
IMPROVED PERFORMANCE
Figure 2.5: The Implication of Management Control Systems on Organisational Performance
Source: Tekavcic, Peljhan and Sevic (2005:180)
Objectives give specific direction to managers. However, just stating the objectives is no guarantee
that the necessary actions have been accomplished. An effective manager needs to follow up to
ensure that the actions, which others are supposed to take, and the objectives they are supposed to
achieve are on track. Effective management control therefore helps managers with such an
evaluation. According to Tekavcic, Peljhan and Sevic (2005:1) there is a direct positive correlation
between the establishment of an effective control system and the successful implementation of
strategies. They noted that management control systems have been found to be affected and to
26
affect the strategy implementation process. The management control systems provide information,
which makes it possible for strategy implementers to be alerted about the ongoing deviations or the
likely deviations. This enables appropriate corrective measures to be put in place. The positive
impact is more likely to be seen with improved organisational performance. Without an effective
management control system, it can be difficult to have plans and strategies successfully
implemented.
As Chandan (2006:126) noted, planning provides individuals and work units with a clear map to
follow in their future activities, and at the same time, it may allow for individual circumstances, and
changing conditions. It is manifestly clear that planning goes hand in hand with controlling. Weihrich
and Koontz (2005:96) view the management process as a system, which takes consideration of the
variables in the external business environment, and use them to produce for the external
environment.
Weihrich and Koontz (2005:96) seem to assert that the management process is cyclical with the
controlling being at the centre, which connects between where the process starts and where it ends.
Prior to the formulation of a plan, Weihrich and Koontz (2005:98) noted that organisations must
examine the factors existing in their business environment. These factors are human, capital,
managerial and technological. They must consider the interests of different stakeholders such as
employees, consumers, stockholders, suppliers, government and community.
This is further reflected in the essential basic planning steps outlined below:
27
Inputs:
External Environment
Human
Capital
Managerial
Technological
other
Managerial Knowledge, goals of Goals of inputs of
claimants and use of inputs claimants:
Employees Consumers
Suppliers Stockholders
Government Community
external
Facilitated by communication that also links
Planning Others
the
Environment
External
Organising
the
Re-energising
information:
variables
with
system
Staffing
Opportunities
Constraints
organisation
External
Others
Leading
and
environment
the
Controlling
Outputs:
Products Services
Profits Satisfaction
To produce outputs Goal Integration
Others
External Environment
Figure 2.6: Weihrich and Koontz (2005:96)’ System Approach to Management
Source: Adapted from Weihrich and Koontz (2005:96)
Once these are examined the formulation the mission, goals and objectives can commence, and
subsequently there must be a plan, resources must be organised, staffing, leading and controlling to
ensure that these activities achieve the outlined mission, goals and objectives (Weihrich & Koontz,
2005:98). Although Weihrich and Koontz (2005:96) and Stoner et al. (2007:29) disagreed with other
authors by inserting staffing in the management process, they stated that the next step after staffing
is leading or directing.
28
2.6.2 Continuous evaluation of the effectiveness of the existing organisational structure
This is the management process of establishing appropriate organisational structure which can
facilitate the successful implementation of plans (Robbins & Coulter, 2003:498: Certo 2003:7:
Robinns & Decenzo, 2001:7: Weihrich & Koontz, 2005:96). In executing the organising function,
managers determine the amount of resources needed by each department and units in order to
ensure the achievement of the outlined objectives. Even though most management experts and
authors have stated that the next step after organising is leading or directing (Robbins & Coulter,
2003:498: Certo 2003:7: Robinns & Decenzo, 2001:7), Weihrich and Koontz (2005:96) and Stoner,
Freeman and Gilbert (2007:29) revealed that organisations must undertake staffing before
proceeding to leading or directing of activities. Staffing as Weihrich and Koontz (2005:96) highlighted
is the process of executing appropriate job design and determining the skills, attitudes, personalities
and behaviours which fit each occupant in the structure.
Moshal (2006:286) indicated organizing is a process of combining the work which individuals or a
group have to perform with the facilities necessary for its execution, that the duties so performed
provide the best channels for efficient, systematic, positive and coordinated application of the
available efforts. Sivalingam (2005:113) states that organizing is the process of establishing effective
behavioural relationships among persons so that they may work together efficiently and gain
personal satisfaction in doing selected tasks under given environmental conditions for achieving
some goal or objectives. According to ABE (2008:22), although directing arises out of organizing and
it is about ensuring that employees are appropriately engaged in working on activities to meet goals
and plans, organizing on the other hand is the process, which actually arranges for the work to be
done. It is concerned with allocation of resources, and their management into working units and
relationships. Controls still stand out as an essential management function. There must be constant
evaluation and review to ensure that the activities are going according to plan and will enable the
organisation to attain its stipulated goals.
2.6.3 Enables the evaluation of situations in order to determine appropriate leadership styles
This is sometimes also known as influencing, directing or actuating or motivating (Certo 2003:7).
Leading is the process of providing appropriate guidance and motivation to ensure that the
employees in a way, which facilitate the achievement of the mission, goals and objectives outlined
during the planning phase (Robbins & Coulter, 2003:498), execute the organisational activities. One
of the ways of leading is to identify satisfiers or motivators, which can be used to entice employees
to work harder. Motivational theories have demonstrated that besides the provision of adequate
remuneration, employees are also highly motivated by the level of relationship developed by the
managers, communication, leadership skills of directors, employee empowerment, employee
involvement and participation, and the extent of conduciveness of the general work environment (
McCracken & Wallace, 2000:467 : Noe, Hollenbeck, Gerhart & Wright, 2000:302: Cushway,
2004:356: Dessler ,2002:217: Nel, Gerber, Van Dyk, Haasbroek, Schultz, Sono & Werner, 2001:345
29
& Noe, Hollenbeck, Gerhart, and Wright, 2003:273). This leads to the execution of the last
management function of controlling.
The views shared by most of the above authors seem to imply that strategic control is the last function
that managers execute. However, thorough assessment of these theories by the research reveals
that control seems to be executed from the beginning of the planning process right up to the end.
The analysis of the variables in the external business environment, which Weihrich and Koontz
(2005:96) outlined, is a control process in itself. In that the analysis could be treated as part of the
feed-forward control process which informs management about the likely foreseeable changes in
variables, which are bound to either positively or negatively, affect the implementation of plans or
strategies. The setting of goals and objectives during the planning stage provides the standard
against which the effectiveness of activities is measured. The assessment of the suitability of the
structure, job design and the assessment of the candidates for the posts, and the provision of
leadership which constantly checks to determine whether activities are being executed within the
confines of the prescribed plan are all control related. Control is at the centre of the management
functions.
2.6.7 Improved accountability in Public Institutions
Control mechanisms whether in the private sector or in the public sectors lead to improved
accountability. In the private sector, the Chief Executive is held accountable to the stakeholders in
case of any deviation from the planned activities, or failure to attain the desired organisational goals.
The same applies in the public sector, that the public who are the major stakeholders will usually
require accountability of how their money has been spent by the holders of public office. It is only
through the establishment of the effective control mechanisms that this can be possible. In recent
years, there has been increased need for accountability in most public institutions around the world
in the manner incompatible to the institutions in the private sector. Public accountability as Khan and
Chowdhury (2008:2) stated pertains to the obligation of persons or entities entrusted with public
resources to be answerable for the fiscal, managerial and programme responsibilities that have been
conferred on them, and to report to those who have conferred these responsibilities. In order to fulfil
these obligations, most governments around the world have adopted control measures, some typical
of those used in the private sector and others are in form of legislation or policies. According to
Bekker (2009), Davids et al (2009) and Fourier (2007), in South Africa, the government had in 1999
to enact the Public Finance Management Act NO. 1 of 1999 [PFMA]. As reflected in the Government
Gazette No. 19814 of 30 April 1999, the PFMA was intended to:
• Regulate financial management in the national government and provincial governments.

• Ensure that all revenue, expenditure, assets and liabilities of government are managed
efficiently and effectively.
• Provide for accountabilities and responsibilities of persons entrusted with management public
finances.
30
Fourier (2007) noted that the other control mechanism in use in the South African public service is
the Office of the Auditor General.
2.6.8 The Office of the Auditor-General
The role of the office of the Auditor-General is to get the different government departments and
ministries to account for the public funds received and expended (Davids et al, 2009: 55). Specifically
such functions deal with reporting frequently on financial irregularities, lack of proper records and
filings, wrong allocation of funding and fiscal, or budget dumping at the end of the financial year.
According to Davids et al (2009), the parliament standing committee also is one of the institutions
charged with monitoring and controlling activities in the public institutions
2.6.9 Parliament Standing Committee on Public Accounts (S.C.O.P.A)
SCOPA was established in terms of Section 55 of the Constitution of the Republic of South Africa
(1996), to check on the financial irregularities in the public departments. The committee has the
normal powers of any NA committee, including the power to summon any person to appear before
it to give evidence, or to produce documents, or require any person or institution to report to it.
Another institution noted by Bekker (2009), to deal with the control and monitoring of activities in the
South African public sector is the public protector.
2.6.10 the Public Protector
The powers granted to the Public Protector under Chapter 9 of the 1996 Constitution include
strengthening constitutional democracy by investigating and redressing improper and prejudicial
conduct, maladministration and abuse of power in state affairs, resolving administrative disputes or
rectifying any act or omission in administrative control through mediation, conciliation or negotiation.
2.6.11 Disadvantages
Although the above indicated public sector control mechanisms help in improving accountability, in
most instances Fourier (2007) noted that they have been flawed due to the following reasons:
• They are only engaged after the damage has already occurred.
• Corrective measures usually take long to be implemented as damage continues to occur.
• Most of them demand evidence which is usually unavailable in cases of theft of public funds.
• Corruption among staff induces protectionism which makes the effective operations of these
measures difficult.
It is quite difficult to rely on these legislative and policy controls as a means of attaining improved
accountability in the public sector.
2.6.12 Improved Service Delivery
Effective control has also been noted to lead to improved service delivery. This is because it enables
the organisation to constantly review its service delivery processes and where deviations are noted,
31
necessary corrective measures are taken to ensure that the process stays on track. The use of the
control techniques such as PERT/CPM, and traffic lighting enable the organisation to improve on the
services that it provides to its customers. In addition to the above, one of the common control
measures that impacts positively on service delivery, is the customer survey. Customer survey
enables the organisation to be aware of the expectations of its customers, and improve its services
to meet their demands. Different customers according to Valarie, Zeithaml and Bitner (2003:61), hold
different levels of perceptions about the service they receive, and since the knowledge of these levels
are essential to the evaluation of services, three different levels of expectations are explained below:
• Desired Service: is the level of service that the customer wished to receive. It is a blend of
what the customers believe “can be” and “should be” the appropriate level of service offerings
from that company to its customers (Jain and Saakshi, 2006: 151). This is normally brought
about by personal needs of customers. Personal needs according to Valarie, Zeithaml and
Bitner (2003:67) are states or conditions or pivotal factors essential to the physical, social and
psychological wellbeing of the customers, which shape what customers desire.
• Adequate service: Stores are usually willing to attempt to meet their customers’ levels of
desired service as much as possible, but lack of financial resources are the main limitation.
The customers are aware, and are prepared to accept certain levels of service as long as it
doesn’t fall so low. Valarie, Zeithaml and Bitner (2003:61) attribute that to service intensifiers
such as: transitory service intensifiers, perceived service alternatives, self-perceived service
roles and situational factors.
• Zone of Tolerance: this is when the service quality provided falls far below the adequate
service quality that the customers are prepared to accept. Therefore, become dissatisfied and
tend to defect from the store in question in favour of competitor stores (Jain and Saakshi,
2006:151). In whole these levels of customer expectations of service have nevertheless been
diagrammatically summarized in Figure 2.7 appended below:
32
Enduring service
intensifiers
EXPECTED SERVICE
Desired Service
Personal needs
Zone of Tolerance
Zone of
Tolerance
Adequate Service
Figure: 2.7: Levels of Customers’ Expectations of Service Quality
Source: Jain and Saakshi (2006:151)
The organisation’s awareness about these customer expectations enable them to establish the
control standards which can be used to assess whether activities are being done within such
expectations, and to make reviews if activities have deviated. The customer survey also enables the
organisation to identify key areas where management must be focused. Such a practice enables the
organisation to improve its service delivery process.
2.6.13 Improved Performance
The advocates of management control argue that improved general organisational performance is
one of the likely results of an effective control system (Ncayiyana, 1997: 5:87.Ndlovu & Daswa, 2006:
Ogembo-Kachieng & Ogara, 2004: Pillay, 2008). Control system enables constant checks on
employees’ daily performance in terms of quality, efficiency and effectiveness possible. The use of
control mechanisms such as performance appraisal, performance management, and balance
scorecard, enables management to review all activities in the organisation. It also enables thorough
assessment of the general performance of all the employees in the organisation. The result is that
the urge for excellent performance is gradually instilled in the employees as part of the general
acceptable organisational culture. Effective control mechanisms can be said to lead to improved
33
efficiency, effectiveness and general organisational performance (Ncayiyana, 1997: 5:87.Ndlovu &
Daswa, 2006: Ogembo-Kachieng & Ogara, 2004: Pillay, 2008).
As much as the control process may be desired because of the enormous associated benefits, it
cannot pass without noting that it may as well be limited in certan instances. These situations will be
discussed during the study in the section below:
2.7 KEY SUCCESS FACTORS FOR THE IMPLEMENTATION OF MANAGEMENT

CONTROL SYSTEMS
Irrespective of how organised the control process is, its effectiveness may never be realised unless
if the organisation takes into consideration the factors that this study will discuss in the section below.
Several theories reveal that any successful management control system must take the following
factors into considerations:
• Suitability: a control system should be appropriate to the nature and needs of the activity.
• Timely and Forward Looking: the control system should enable the subordinates to inform
their superiors expeditiously about the threatened deviation and failures. The feedback system
should be as short and as quick as possible.
• Objective and Comprehensible: the control system should be both objective and
understandable. Objective controls should specify the expected results in clear and definite
terms and have little rooms for argument by the employees. They avoid red tape and provide
employees with little direct access to any additional information which they may need to
perform their tasks.
• Flexible: the control system should be flexible so that it can be adjusted to suit the needs of
any change in the environment.
• Economical: the benefits derived from a control system should be more than the cost involved
in implementing it.
• Prescriptive and operational: a control system in order to be effective and adequate must
not only detect deviations from the standards but should also provide solutions to the problems
that cause deviations. It must disclose where failures are occurring, who is responsible for
them, and what should be done about them.
• Acceptable to the organisational members: the system should acceptable to the
organisation’s members. When standards are set unilaterally by upper level managers, there
is a danger that employees will regard those standards as unreasonable or unrealistic. They
may then refuse to meet them. Status differences between individuals also have to be
recognised.
• Reveal Exceptions at Strategic Points: a control system should be able to reveal exceptions
at strategic points. Small exceptions in certain areas have greater significance than larger
deviations in other areas.
34
• Motivate People to High Performance: a control system is most effective when it motivates
people to high performance. Since most people respond to a challenge, successfully meeting
a tough standard may well provide a greater sense of accomplishment than meeting an easy
standard. However, if a target is so tough that it seems impossible to meet, it will be more likely
to discourage than to motivate effort.
• Should not lead to less attention to other aspects: control over one phase of operations
should not lead to less attention to other aspects. For example, if controls put pressure on
employees to increase output, the quality of work, care of equipment, and prevention of waste
should not be neglected.
In addition, studies have so far proved the effectiveness of management control is usually limited by
the following factors:
• Magnitude of change: most control process are designed to deal with problems arising from
certain variables, but if there are changes to the other variables, it may not be possible for
management to effectively resolve the problem using the existing control mechanisms.
• Time lag: the time lag between the occurance of the problem and the time that the
management takes to respond to a control system can also be a problem.
• Information Overload: could hinder the ability of managers to effectively evaluate the nature
of the problem, and to recommend appropriate remedies.
• Erroneous Standards: in certain cases there are mistakes in setting standards. This makes
it difficult to evaluate performance.
• Workers’ Resistance: employees may dislike control systems and resist due to: failure to
accept objectives, unreasonable standards, too many controls, inaccurate measurements,
short time span of appraisal, disclosure of unpleasant facts, wrong persons trying to control,
and opposite social pressure.
According to Ncayiyana (1997: 5:87), Ndlovu and Daswa (2006), Ogembo-Kachieng and Ogara
(2004), and Pillay (2008) the followings are the factors which usually hinder effective implementation
of management controls in organisation:
• Lack of top management’s support.
• Lack of appropriate supporting institutions
• Lack of the necessary management control skills
• Management and employees’ attitudes which treat control as not essential.
• Poor organisational structure.
• Lack of necessary resources for implementation of management control programmes.
• Lack of adoption of good corporate governance which emphasizes on accountability and acting
responsibly.
35
It is clear that the successful implementation of a management control system may never be possible
unless accompanied by all the factors discussed above discussed.
2.8 CONCLUSION
It is generally demonstrated that there a number of principles which determine the success
controlling and managing of the organisational activities. The literature review further revealed that
these essential principles do not signify a successful control and management of activities, unless
they are accompanied by the inclusion of the three essential management control processes. If all
these are considered, the literature review indicated that an organisation might realise certain
positive benefits that include the successful implementation of plans and strategies, improved
service delivery and accountability. However, the review of theories still highlighted that management
may also need to pay attention to certain key success factors in order to have an effective
management control system.
The next chapter outlines the research design and methodology, which was used in the primary data
collection for this study.
36
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGY
3.1 INTRODUCTION
This chapter discusses the research design and methodology used in the primary data collection of
this study. Included in the chapter are the rationale of the study, research methodology, quantitative
research, sample population and sample size. Further discussions also covered the research
instrument, questionnaire, pilot study, research process, validity and reliability, limitations of the
study, ethical considerations and a chapter summary.
3.2 RESEARCH METHODOLOGY
A research methodology is a plan stipulating the guidelines for primary data collection. A research
methodology specifies how, when, why, from whom and what form of data is to be collected by the
researcher (Zikmund, 2003:69). It also provides how the collected raw data is to be analysed.
Formulation of a research methodology enables the research process to focus on matters essential
to the study. It enables costs, time and resources’ savings possible. Strydom, Jooste and Cant
(2003:153) reveals that a research methodology could be quantitative, post ad hoc, experimental,
exploratory, qualitative, quantitative or a case study. Gosh, (2003:207) states that there is no one
unique and best research methodology, as it may vary according to the nature of the study being
conducted. In this study, quantitative research was chosen due to the reasons discussed below:
3.2.1 Quantitative research
Quantitative research refers to the research process, which seeks for quantifiable responses. In
other words, it deals with numbers, figures, or percentages, which are used to analyse the nature of
the problems under study. Through the quantifiable responses obtained, quantitative research
enables the researcher and the organisation’s management to assess the causes of the problems
the organisation is facing and what the likely solutions are. Although quite technical and complex,
quantitative research if well mastered is a more simplified research approach as compared to other
research methodologies. For that reason, it was chosen for this study. Quantitative research is also
selected in this study because it suites the nature of this study which is constrained by time and
resources. Besides, unlike in qualitative research, responses on the questionnaires in quantitative
research are easier to analyse. All these therefore make the selection of quantitative research, a
more suitable approach for this study. The respondents for the study comprise of employees of
hospitals and clinics, and therefore it would have been difficult to get them involved in the study, if
lengthy research methods such as qualitative, experimental or the exploratory approach was used.
Through quantitative research, it was easier for the researcher and his assistants to explain to the
respondents that it would take practically three to five minutes to complete the questionnaires. This
37
is because no lengthy explanations were required, but merely indication of responses according to
numbers.
Had therefore other research methods such as exploratory or qualitative research methods been
used, it would not only have been difficult to get respondents to participate, but also the research
would not have been completed within the required period. Other reasons explaining the use of
quantitative research in this study are that: since responses are obtained in terms of figures, it
renders the process of data capturing and analysis quite easier. As the responses are merely
captured on Microsoft Excel and later simply exported or imported into SPSS Software and analysed,
a process that takes less than five hours to accomplish. The same process is not possible through
explorative, experimental or longitudinal research methods. Through quantitative research, the
researcher or any other user of the research report is able to accurately test the validity and reliability
of the findings. In other words, how the researcher arrived at the findings and conclusions of the
research can easily be followed and checked for purposes of veracity without the assistance of the
researcher. Since this study involved making allegations about the employer organisation, it was
considered important that quantitative research be used, as the management would have been able
to easily follow the research process to determine whether there is any substance in the findings.
These were the reasons for using quantitative research. The sampling strategy used in this study is
as described below:
3.3 SAMPLE POPULATION
The sample population refers to the number of sampling units that are included in the investigation
(Strydom, Jooste and Cant, 2003:160). According to Statistics Canada (2003:87), there are two
types of sampling, but the choice of each depends on whether reliable inferences are capable of
being made about the population. Whereas, non-probability sampling mainly uses subjective method
in selecting units of the population, probability sampling deals with the selection of units from
population based on the principle of randomisation or chance. Since it is more complex, and costly
in terms of time and financial resources, the researcher has in this study opted for non-probability
sampling. Although there is difficulty in ensuring that the sample is representative of the target
population, non-probability sampling seemed more suitable for the nature of this study, and it is
quick, easy and inexpensive as compared to probability sampling (Statistics Canada, 2003:87).
Although there are other types of non-probability sampling such: as quota sampling, modified
probability sampling, volunteer sampling and haphazard sampling (Saunders , 2003:151), this
research used judgment sampling. Judgment sampling according to Statistics Canada (2003:87) is
done with previous knowledge of the population composition and behaviour. An expert with greater
understanding of the population decides which unit in the population should be sampled. The expert,
in other words selects what is considered representative of the population. In Mpumalanga Province,
there are 33 hospitals and 386 clinics. That implies in total there are 419 public health care facilities
in the province. In order to determine the appropriate and valid sample size, Yamane (1967:886)’s
38
formula: : was used, wherein N is the target population and e is

level of precision. Thus N the population size =419, and e is the level of precision =10per cent.
Therefore, =99.7 (Rounded up for 100

respondents). As derived from this calculation, it was concluded that a sample population of 100
respondents is valid and representative of the target population of 419 public health care facilities in
Mpumalanga Province. Simple random sampling was used to draw the 100 public health care
facilities from the target population of 419 public health care facilities. Primary data was collected
from the 100 respondents using questionnaires and the process described in the next section.
3.4 RESEARCH INSTRUMENT QUESTIONNAIRE
A self-completed questionnaire was used in the primary data collection of this study.
3.4.1 A Self-Completed Questionnaire
Although, according to Statistics Canada (2003:37), there are several methods for data collection
such as personal interview, telephone interviews, a self-completed questionnaire is the main
research instrument, which will be used in this study. According to Bryman and Bell (2007:241), a
self-completed questionnaire, is cheaper to administer, quicker to collect, is not vulnerable to the
interviewer’s influence, and it is convenient for the respondents to complete it at anytime of their
choice. In order to eliminate the disadvantages such as failure of the interviewees to ask the
interviewer in case of misunderstanding of the questionnaires, the researcher provided clear
instructions in the covering letter bearing his telephone number, and clearly indicating how to
complete the questionnaires. Besides the covering letter, the research also enlisted the services of
trained research assistants who carried out personal interviews with the respondents.
Since Saunders, Lewis and Thornhill (2003:46) stated the questionnaire construction must be
formulated in the manner that they are able to address the issues raised in the research topics, the
research questions and research objectives for the study, in this study the construction of the
questionnaire considered issues contained in the research objectives and questions. Consequently
it contained the following sections: Section A: The essential management control principles for
effective service delivery at Mpumalanga Public Health System, Section B: The management control
process for effective service delivery in the Mpumalanga Public Health Care System, Section C: The
impact of effective management control in the Mpumalanga Public Health System, Section D: The
factors hindering the implementation of effective management controls in the Mpumalanga Public
Health System, and Section E: The necessary mechanism for establishing effective control
measures in the Mpumalanga Public Health System. The questionnaire contained closed ended
questions designed along Likert Scale, in which the respondents were asked to rate their responses
39
according to five options ranging from Strongly Disagree ---1, Disagree--2, Unsure--3, Agree--4, to
Strongly Agree---5 (Kindly see Appendix 2).
3.5 PILOT TESTING
In order to test any error in the research instrument, and to thoroughly prepare for the data collection
process, the researcher conducted a pilot testing on 10 respondents. This enabled the wordings and
generally how the questions were structured to be reviewed. Examples of questions reviewed were
questions 4, 8 and 13, which the respondents were unable to immediately understand due to certain
ambiguous terms. Pilot testing also enabled the researcher to test the perceptions of the respondents
about the study. Through pilot testing, the researcher and his assistants were able to acclimatise
themselves to the research process. The pilot testing enabled the researcher to prepare himself for
any impediments, which were bound to arise during the research process. Some of the respondents
to refuse participate because they were too busy but mostly for fear of victimisation by their senior
management. The researcher in such situations prepared ready convincing answers that the process
would take quite short duration. The respondents were also assured that the interviews were strictly
confidential and that their names would not be used on any document.
3.6 DATA COLLECTION
The researcher and his five assistants through randomly choosing hospitals and clinics and sampling
either the hospital manager or Primary Health Care Coordinators accomplished the actual primary
data collection process. Nonetheless, the nature of the research and what we expected from them
were explained. Once they accepted to participate, the researcher or and any of his five assistants
would pull out the questionnaires, and explain how the questionnaires were to be completed. As the
respondents completed the questionnaires with the research assistants, the researcher observed
and stood by, waiting for consultations in case of the respondents’ need for clarity. If there was none,
the researcher left them to proceed with the questionnaire completion. When a questionnaire was
completed, the researcher and his assistants would add it into the basket with other already collected
questionnaires. In order not to rush the process the assistants were carefully instructed to take their
time because the main objective was not to get the 100 respondents in record time but to get
meaningful responses. The interviews were therefore done over three weeks until the desired
sample population of 100 respondents was obtained.
3.7 DATA ANALYSIS
Once the desired sample of 100 respondents had been obtained, the researcher checked whether
all the questionnaires had been properly completed. If there were errors, the researcher would seek
another respondent to complete a replacement questionnaire as soon as possible. Thereafter, the
questionnaires were handed to the Statistician who captured the questionnaires one by one on
Microsoft Excel. The captured data were later imported into SPSS Software, and analysed using
40
frequency and descriptive statistics commands. The results of the analysis were reflected in tables
showing percentages, the means and standard deviations. The researcher then used such results
in drawing interpretations and discussions in chapters four and five.
3.8 VALIDITY AND RELIABILITY
Hussey and Hussey (1997:57) states that validity refers to the extent to which the study findings
accurately reflect what is happening in a particular situation. Cooper and Schindler (2000:400) posts
that validity constitutes of two types: i.e. internal validity and external validity. Internal validity strives
to respond to the question: “Do conclusions we draw about a demonstrated experimental relationship
truly imply cause?” In this study the Questionnaire was designed focusing mainly on issues such as
the essential management control principles for effective service delivery in the Mpumalanga Public
Health System, the management control process for effective service delivery in the Mpumalanga
Public Health Care System, the impact of effective management control on the Mpumalanga Public
Health System, the factors hindering the implementation of effective management controls in the
Mpumalanga Public Health System, and the necessary mechanism for establishing effective control
measures in the Mpumalanga Public Health System.
All possible attempts were made to draft the questions in a more precise manner to eliminate all
possibilities of ambiguities and bias. As far as external validity is concerned, Cooper and Schindler
(2000:400) exposed that it deals with answers to questions such as “Does an observed causal
relationship generalise across persons, settings and times. In order to ensure external validity, the
researcher strived to ensure that the sample population was representative of the total population to
warrant necessary generalisations possible. In order to accomplish this, the researcher ensured
representivity in terms of age, gender, or any other sexual affiliations, or biographical information. In
addition, the respondents as reflected above were left to answer the questions on their own. Due to
the sensitivity of this topic, the respondents were also assured of the necessary anonymity and
confidentiality.
Reliability, according to Swanepoel (1998:313) as supported by Cooper and Schindler (2000:215),

refers to the fact that when a survey is repeated, the same results obtained in the present research
are most likely to be obtained. In order to avoid such bias, the researcher avoided all forms of
pressure on the respondents either in coercing them to adopt the views of the researcher or his
assistants or that of any other person. To that extent, the researcher asserts that the results obtained
by this research are reliable. The researcher also during the drafting of the research instrument,
derived questions from already established theories reflected in chapter two of this study, in order to
ensure further validity and reliability. In order to further determine the validity and reliability of the
research instrument, Cronbach Alpha’s formula: . was used, where k is the

number of items considered and r is the mean of the inter-item correlations the size of alpha which
41
is determined by both the number of items in the scale and inter-item correlations. The result was
0.7, which means the validity, and reliability of the research instrument is good.
The closer the Cronbach Alpha coefficient is to 1.0, the greater the internal consistency of the items
in the scale.
George and Mallery (2003) stated that the outcome as defined by the SPSS scale (the software used
for the analysis) means the following:
3.9 LIMITATIONS OF THE STUDY
Some of the limitations that faced this research were the tendency of the unwillingness of some of
the respondents to participate due to lack of time or fear of victimisation by superiors. As they
asserted, but the researcher attempted to overcome this by convincing them that it would take a few
minutes to participate, and also by being friendly so as to institute some form of inter-personal
relationships. The other limitation was the financial implications of travelling during the course of this
research. The respondents were assured of confidentiality and protection of their identity at all times.
Another huge problem was the long distances travelled and the cost implications related to the hiring
of the research assistants.
3.10 ETHICAL CONSIDERATIONS
Cooper and Schikder (2001:112) state, “Ethics is made up of norms and standards of behaviour that
guide moral choices about our behaviour and our relationship with others. The goal of ethics in
research is to ensure that no one is harmed or suffers adverse consequences from research
activities.” Ethical issues have to guide and regulate every researcher’s activities and engagement
with other individuals especially respondents whose input forms the core of research work. Coldwell
and Herbst (2004:18) point out that although ethics are philosophical in nature and there is no
consensus among philosophers as to what should be considered ethical or unethical, “the rights and
obligations of individuals are usually dictated by societal norms.” These rights and obligations should
act as a guide to what is ethical or unethical.
It is imperative for every researcher to take heed of the above counsel in order to produce scientific
work in business research. A number of issues have to be taken into consideration to ensure that
ethics are taken into consideration throughout any research project. These issues will be discussed
briefly below. The discussion will look at the rights and obligations of the researcher, the respondents
and then the user and how these were accommodated in this research. Some of the other ethical
issues, which were taken into considerations during the primary research process, were:
42
• Rights and Obligations of the Researcher: Coldwell and Herbst (2004:19-20) and Cooper
and Schilder (2001:112-121) advise that every researcher has to take note of and be guided
by the following ethical considerations throughout the research work.
• Purpose of business research: Scholars who have written on this subject agree that the one
and only purpose of business research should be a scientific description and rationalization of
business problems or opportunities. A researcher has to resist the temptation to load a
research with some hidden agenda. This view was taken into consideration during this
research and the researcher made sure that it was solely a business research which focused
on and how to address them. This has remained the sole intention throughout the study.
• Fairness: Coldwell and Herbst (2004) advise that, high moral standards should be upheld by
every researcher, to ensure that the information presented in the research is accurate, based
on fact and free from subjectivity. This research takes this into consideration, in that: it is based
on acceptable theories which have been used in a lot of empirical studies. All research work
was carried out objectively and is without any manipulation.
• Distortion of Research Findings: According to Coldwell and Hebst (2004:19) “the research
professional has a responsibility to both the client and the respondents to analyse the facts
fairly and to report accurately.”To ensure that the results of this research are accurate a
statistical tool, SSPS has been used to analyse all the data collected.
• Confidentiality: Cooper and Schilder (2001:116-117) point out that “all individuals have a right
to privacy and researchers must respect that right. Researchers should restrict access to
information that reveals names, telephone numbers, addresses and other identifying features.”
To ensure anonymity, in this research, all respondents were asked not to write their names on
the questionnaire. It is, therefore, impossible to link any response to a particular respondent.
• Disclosure of defective information: Coldwell and Herbst (2004:19) state that “a research
professional must conduct his/her project according to scientific requirements and complete it
with these in mind.” A project which is scientific in nature yields valid and reliable results. This
has been a guiding principle throughout this research. The quantitative research design used
in this study is an acceptable scientific research method: the theories on which the study is
based have been proven to be correct and accurate through a number of empirical studies,
the research used instrument was refined to guarantee that it measures what it is supposed to
measure. The SSPS which has been used to analyse the data is a reliable and accurate
statistical tool.
• Stealing ideas from other research proposal: While other similar research projects
elsewhere have been consulted for guidance: this study is original and the scholars, whose
ideas have been used, have been acknowledged.
• Rights and obligations of Respondents: Every researcher has an ethical responsibility to
inform respondents about the purpose of any research and its implications on the participants.
According to Coldwell and Herbst (2004:21) “while the respondent is expected to be truthful,
43
he/she has the right to expect that confidentiality and anonymity will be maintained in all
circumstances and at all times by the researcher.” It is the duty of the researcher to ensure
that respondents are protected from unintended effects of research work. The following
discussion deals with the issues of ethics and how they have been addressed in this study to
ensure, that there is no harm to the respondents.
• Privacy: To ensure that privacy prevails during and after research work, Coldwell and Herbst
(2004:21) advise that “lists that contain the names and the corresponding response numbers
should be kept in a secure place.” This researcher never asked for or used respondents’ names
in the data gathering process. This approach was used to ensure that the anonymity of
respondents is safeguarded
• Concealment: There are some circumstances where the researcher decides to conceal
information for whatever reason. Coldwell and Herbst (2004:21) caution against such
temptation and suggest that, “as far as possible there should be no concealment as to the
researcher’s true intent.” All respondents should be made aware of the true intentions of the
study. This has remained the true intentions of this study till its conclusion.
• Informed Consent: Welman and Herbst (2004:115) state that “securing informed consent
from respondents is a matter of fully disclosing the procedures of the proposed survey or other
research design before requesting permission to proceed with the study.” Respondents to this
research were informed about the nature and procedure of this study before their participation.
It was after their consent that the researcher went ahead with the study.
3.11 CONCLUSION
It is generally highlighted in this chapter that the research design and methodology used in the
primary data collection of this study was quantitative, and was reflected that in order to determine
the desired sample size, Yamane (1967:886)’s formula: was

used and it resulted in the sampling of 100 respondents. The 100 respondents were then drawn from
the 419 public health care facilities in Mpumalanga Province. The principal data collection instrument
was indicated to be a questionnaire designed along Likert Scale and comprising of five points:
Strongly Disagree—1, Disagree—2, Unsure—3, Agree—4 and Strongly Agree—5. The chapter also
indicates that prior to data collection, a pilot study was conducted and a Cronbach Alpha was
analysed and proved that the research instrument is valid and reliable. Personal administration is
indicated to have been the main data collection means, and raw data is indicated to have been
analysed using SPSS. Limitations of the study and the ethical considerations were some of the other
issues discussed in the chapter. The next chapter deals with the presentation of the primary findings
of the study.
44
CHAPTER FOUR
FINDINGS AND DISCUSSIONS
4.1 INTRODUCTION
The primary findings of this study are presented and discussed in this chapter. The process is
accomplished according to sections, which are not only aligned to the research objectives and
questions, but also the sections in the research instrument. These sections are: Section A: The
principles for effective management control systems in the Mpumalanga public health system,
Section B: The impact of management control systems on the performance of the Mpumalanga
public health system and Section C: The hindrances of effective implementation of management
control systems in the Mpumalanga public health system. For purposes of easy analysis and
interpretation, options strongly disagree and disagree are combined under “Disagree”, Unsure were
left isolated, whilst Agree and Strongly Agree were summed under “Agree”. These are presented in
Figures 4.1 to 4.20, and immediately thereafter, there are discussions pointing management
implications of the findings and the extent to which the secondary and primary findings of this study
are consonant. Finally, in the analysis, assessments were also undertaken in order to determine the
extent to which the research objectives and questions for the study had been fulfilled. Nonetheless,
the details of the chapter are as shown in the sections and sub-sections following.

MPUMALANGA PUBLIC HEALTH SYSTEM
Management control literatures and theories, which are discussed in chapter two, argue that the
successful evaluation, monitoring and controlling of the organisation’s activities is determined by the
extent to which certain principles are considered. Specifically in the arguments of authors such as
Fayol (1911), it is noted that the creation of appropriate structures, rules and regulations division of
labour and unity of command are some of the factors, which determine the evaluations, and control
of the organisations. Such views were found consonant with the views of a number of authors with
Taylor (1916) specifically inclusive. Taylor (1916) advocated for considering principles
encompassing dividing tasks, detailed and careful analysis of how these tasks are accomplished
using time and motion study, and among others review of all routines and work methods. During the
primary research, the first research objective and question involved examining whether these
principles are used in the Mpumalanga public health care system. In order to accomplish this, twelve
variables were incorporated in Section A of the questionnaire and the findings are as presented in
Figures 4.1 to 4.12 and discussed under the sub-sections, which follow.
45
constitutes of a detailed and careful analysis of all processes and tasks within the
organisation to identify each component part
In Figure 4.1, it is indicated that 57per cent of the respondents disagreed that the management
control in the Mpumalanga Public Health System constitutes of a detailed and careful analysis of all
processes and tasks within the organisation to identify each component part. Whereas 13per cent
of the respondents were unsure, 30per cent agreed, this implies that the Mpumalanga public health
care system is unlikely to benefit from the evaluation process, which involve a detailed and careful
analysis of all work processes and tasks.
,0
AGREE, 30%
DISAGREE, 57%
UNSURE, 13%
Figure 4.1: A detailed and careful analysis of all processes and tasks
Taylor’s (1916) argument was that the use of this principle or technique enhances the organisation’s
ability to assess the details of work and activities accomplished. He added that this renders it possible
for management identify areas where improvements can be undertaken. However, since a significant
number of the respondents, about 57per cent disagreed, it means that such benefits, which are
associated with considering this principle, may not accrue.
Nonetheless, it is true that 30per cent of the respondents agreed that this principle is considered,
and therefore indicates that the consequences may not be as bad. Though 13per cent of the
respondents were unsure, the Mean score was 2.8 and standard deviation 1.2. The standard
deviation of 1.2 indicates that the respondents were scattered moderately along the options on the
five point Likert Scale, and in other words support the findings contained in Figure 4.1. However, the
fact remains that, a number of the respondents disagreed; this is reflected in the mean score of 2.8.
In order to determine the skewness of the mean, the scales on the questionnaire of 1, 2, 3, 4, and 5
were used, with 3, treated as the median figure. The process was accomplished with the aid of the
application of Pearson’s Skewness Coefficient formula:
46
= 0, there is complete asymmetry, and the finding
neither supports 1 & 2, the Disagree categories, nor 4 & 5, the Agree categories. If , there
is a positive skewness, it means that mean is greater than 3 the neutral figure, and therefore supports
4 & 5 the Agree categories. If , implies negative skewness. The mean is lesser than 3, and
supports 1 & 2, the Disagree Categories (Wegner, 2007:133). In this variable the mean score is 2.8
and lesser than 3, then it can be construed that then it supports 1 and 2 the disagree categories.
4.2.2 QUESTION 2: The management control at Mpumalanga Public Health System

encompasses the review of all routines and working methods.
The review of all routines and working methods using time and motion study is another management
control principle, which literatures and theories in chapter two emphasise to be important. This
seems not be a problem, since in Figure 4.2, it is revealed that 46per cent of the respondents agreed
that the management control in the Mpumalanga Public Health System encompasses the review of
all routines and working methods using time and motion study.
,0
DISAGREE, 35%
AGREE, 46%
UNSURE, 19%
Figure 4.2: The review of all routines and working methods using time and motion study
However, as Figure 4.2 further reveals 35per cent of the respondents disagreed and 19per cent were
unsure. There is not much difference between 46per cent and 35per cent, this is supported by the
mean score of 3.3, and using Pearson’s Skewness Coefficient formula:
, it can be construed that 3.3 exceeds the neutral figure of 3, by only

3 units. In other words, the findings do not indicate strongly that there is a stronger emphasis on the
use of this principle in the Mpumalanga public health care system. The standard deviation of 1.2,
indicates that not all the respondents agreed or disagreed, but generally using the obtained
47
percentages and the mean score, one would certainly conclude that the findings in this variable
corroborate the findings in the above variable to indicate that generally there is less use of the
essential management control principles in the Mpumalanga public health care system.
4.2.3 QUESTION 3: The management control in the Mpumalanga Public Health System has
standardised all working methods, equipment and procedures, so that the precise way
in which each task should be done can be laid down and monitored
In addition to the above discussed principles, the literature reviews also reveal that another
management control principle involve standardisation of all working methods, equipment and
procedures so that the precise way in which each task should be done can be laid down and
monitored. Although the literature review further reveals that such standardisation is essential for
effective monitoring of the general operational effectiveness, in Figure 4.3, it is illustrated that 58per
cent of the respondents disagreed that the management control at Mpumalanga Public Health
System has standardised all working methods, equipment and procedures, so that the precise way
in which each task should be done can be laid down and monitored.
,0
AGREE, 14%
UNSURE, 28%
DISAGREE, 58%
Figure 4.3: Standardisation of all working methods, equipment and procedures, so that the
precise way in which each task should be done can be laid down and monitored
Figure 4.3 further indicates that during the primary study only 14per cent of the respondents agreed
and 28per cent could not state whether it is used or not. However, one can certainly state that 28per
cent joins the 58per cent who directly disagreed, because if there was standardisation of all working
methods, equipment and procedures, then they would have been able to provide opinion. Inability to
say something means either that standardisation is not used at all or that there is much emphasis
on its use. The standard deviation of 1.1 is nevertheless too low and signifies that a number of the
48
respondents disagreed. This is coupled with the interpretation of the mean score of 2.8, which
according to Pearson’s Skewness Coefficient formula:
, falls below 3, and is skewed towards disagree.
carefully selects and trains workers for their positions
If workers and the organisations in general are to be proficient in the performance of their tasks,
careful selection and training of workers is one of the principles which management control literature
emphasises. In Figure 4.4, whereas 31per cent of the respondents agreed that the management
control at Mpumalanga Public Health System care fully selects and trains workers for their positions,
a significant number of 62per cent of the respondents disagreed and 7per cent were unsure. These
percentages are supported by the mean score of 2.2 and standard deviation 1.1, which all support
the 62per cent of the respondents who disagreed.
,0
AGREE, 31%
DISGAREE, 62%
UNSURE, 7%
Figure 4.4: Careful selection and training of workers for their positions
The implications of the findings in this variable signify that the Mpumalanga public health care system
will be unable to benefit from such improving proficiency and effectiveness, which the management
control literature reveals. The management control literature further reveals that high performing
organisations stress the importance for careful selection and training of employees. This is because
careful selection and training of employees enables them to be autonomous, self-monitoring, efficient
and effective. Other studies found that there is a significant direct positive relationship and improved
performance. However, with a significant number of the respondents of 62per cent disagreeing, it is
unlikely that the Mpumalanga public health care system is likely to experience such improving
performance from their current approach to employee selection and training.
49
4.2.5 QUESTION 5: The management controls in the Mpumalanga Public Health System use
incentives to motivate staff
The effective application of the management control principles, as theories reveal, also
encompasses the use of appropriate motivational strategies. Such strategies, as further theories
indicate, may involve providing appropriate remuneration, creating a conducive work environment
and in certain cases improving relations with employees through adoption of the appropriate
management styles. However, as the findings of the primary research contained in Figure 4.5 reveal,
it is quite clear that such strategies are not effectively used.
,0
AGREE, 36%
DISAGREE, 46%
UNSURE, 18%
Figure 4.5: Use incentives to motivate staff
According to Figure 4.5, 46per cent of the respondents disagreed that the management controls in
the Mpumalanga Public Health System use incentives to motivate staff. Despite the fact that 18per
cent were unsure and 36per cent agreed, the mean score of 2.7 strongly supports the respondents
who disagreed. The standard deviation of 1.3 might suggest that some of the respondents agreed,
but the fact still remains that when the findings in this variable is construed as a whole, it does not
certainly favour that this principle is considered. Management literature further reveals that using
incentives to motivate employees leads to improved morale, commitment and increasing effort
applied. Through these, studies reveal that organisations can realise a significant improvement in
their performance. However, since the findings in this variable do not generally indicate that this
principle is seriously applied, it is unlikely that the Mpumalanga public health care system will
experience a better performance resulting from increasing employee motivation, morale and
commitment.
50
4.2.6 QUESTION 6: The activity of every employee in the Mpumalanga Public Health System
is confined to the performance of a single function to enable the attainment of the
stipulated objectives
Specialisation through confinement to the performance of a single function, theories reveal, is one
of the essential management control principles, which make the achievement of the desired strategic
goals and objectives possible. In Figure 4.6, it is indicated that 43per cent of the respondents agreed
that the activity of every employee in the Mpumalanga Public Health System is confined to the
performance of a single function to enable the attainment of the stipulated objectives.
,0
DISGAREE, 35%
AGREE, 43%
UNSURE, 22%
Figure 4.6: Confinement to the performance of a single function to enable the attainment of
the stipulated objectives
According to management control theories, specialisation enhances the monitoring, evaluation and
control of activities. It is easier to monitor and evaluate divided tasks as compared to undivided tasks.
Although the mean score of 3.2 supports the 43per cent, the fact remains that the ability of the
Mpumalanga public health care system to benefit from such specialisation will be limited. This is
because the standard deviation of 1.2 indicates that not all the respondents agreed, and it is revealed
in Figure 4.6 that 35per cent of the respondents disagreed that the activity of every employee in the
Mpumalanga Public Health System is confined to the performance of a single function to enable the
attainment of the stipulated objectives possible. 22per cent were unsure, and in order to ensure that
maximum benefits are reaped from the application of this principle, the managers in the Mpumalanga
public health care system must investigate why the 35per cent disagreed.
51
4.2.7 QUESTION 7: The number of employees under a particular manager are appropriate for
the existence of effective control in the Mpumalanga Public Health System
The mean score for this variable was 3.1 and using Pearson’s Skewness Coefficient formula:
, it is greater than the neutral figure of 3. In other words, it signifies

that most of the respondents agreed that the number of employees under a particular manager is
appropriate for the existence of effective control in the Mpumalanga Public Health System
,0
AGREE, 42% DISAGREE, 35%
UNSURE, 23%
Figure 4.7: Span of control
This is supported by the findings in Figure 4.7, which reveal that 42per cent of the respondents
agreed, 35per cent disagreed and 23per cent were unsure. The advocates of management control
principles argue that in order to enhance the control of the organisation’s activities, there must be a
manageable number of employees for each manager. This is because studies reveal that it is quite
easy to control and evaluate activities performed by the sufficient number of people than where the
number of the employees allocated to a particular manager is quite large. Since most of the
respondents agreed, it means that the Mpumalanga public health system will have effective and
improving control of its activities. However, as per the primary findings, such ability is not as perfect
as it should have been. This is because the mean score of 3.1 is just 1 unit away from the neutral
figure of 3, and therefore does not suggest that the span of control at the Mpumalanga public health
system is appropriate. In addition, though 42per cent of the respondents agreed, the standard
deviation of 1.2 indicates that the respondents were almost evenly divided on the five point Likert
scale.
52
4.2.8 QUESTION 8: There exists the necessary unity of command in the Mpumalanga Public
Health System to ensure that all activities in the organisation are coordinated
According to the discussions of management control theories in chapter two, unity of command
refers to the process through which emphasis is placed on receiving orders only from one person,
usually the general manager. In terms of the Mpumalanga public health system, all actions must be
channelled towards achieving the objectives and goals, which are outlined in the national plan. In
this variable, Figure 4.8 reveals that during the primary research 54per cent of the respondents
agreed that there exists the necessary unity of command at Mpumalanga Public Health System to
ensure that all activities achieve the national health objectives and goals.
,0
DISAGREE, 20%
AGREE, 54%
UNSURE, 26%
Figure 4.8: Unity of command
The mean score of 3.4 and standard deviation of 1.2, significantly support the 54per cent of the
respondents who agreed. This is perhaps because there is a stronger emphasis and monitoring by
the national department of health to ensure that activities within provinces are in line with the national
health goals and objectives. However, with decentralisation, some provinces usually subvert
activities which are in line with the national health plan, and that could be the reason why 26per cent
of the respondents were unsure, and 20per cent disagreed that there exists the necessary unity of
command in the Mpumalanga Public Health System.
4.2.9 QUESTION 9: Everyone’s responsibilities are clearly defined making evaluation

possible
In order to effectively evaluate, monitor and control the organisation’s activities, the responsibilities
of each employee and manager must be well defined.
53
,0
DISAGREE, 26%
AGREE, 47%
UNSURE, 27%
Figure 4.9: Clear definition of responsibilities
It reduces the chances of employees shifting blame for failures onto other employees, and this
enables management to assess individual employee’s contribution to the departmental and
organisational goals. In this variable the obtained mean score was 3.2, and standard deviation 1.3,
and using Pearson’s Skewness Coefficient formula: , the mean score

of 3.2 exceeds the neutral figure of 3, by 2 points. Although it is weak, it still implies that in the
Mpumalanga public health system, everyone’s responsibilities are clearly defined, making evaluation
possible. However, with the mean exceeding the neutral figure 3 by only 2 points, and the standard
deviation of 1.3 indicating that some of the respondents disagreed, it cannot be concluded that in
the Mpumalanga public health system, responsibilities are well defined to enable effective control.
This is confirmed by the findings in Figure 4.9, which indicates that 26per cent of the respondents
disagreed and 27per cent were unsure. This could be due to the dividing of the clinics, which are run
by local government, and others. Such division blurs the responsibility on who to blame when the
Mpumalanga public health system fails to meet the desired strategic national health objectives and
goals.
4.2.10 QUESTION 10: The necessary control mechanisms are ingrained in the planning
process in order to ensure that any stipulated objectives are attained
Not only must there exist well-defined responsibilities, but also the control mechanisms must be
ingrained in the planning process in order to ensure that any stipulated objectives are achieved. In
Figure 4.10, 46per cent of the respondents agreed that in the Mpumalanga public health system, the
necessary control mechanisms are ingrained in the planning process. 33per cent of the respondents
are indicated to have disagreed and 21per cent were unsure.
54
,0
DISAGREE, 33%
AGREE, 46%
UNSURE, 21%
Figure 4.10: Control mechanisms are ingrained in the planning process in order to ensure
that the stipulated objectives are attained
Although the 33per cent disagreed, the mean score of 3.3 and standard deviation of 1.1 still support
the 46per cent who agreed. This could be because ingraining control mechanisms with plans is a
basic management function, which every manager is aware of. Nonetheless, the mere fact that 33per
cent of the respondents disagreed, still implies that the process of ingraining control mechanisms
with plans is not done effectively.
4.2.11 QUESTION 11: The necessary control mechanisms are ingrained within
management.
Since controlling is one of the four basic management functions, it must not only be ingrained within
planning, but also organising. In other words, the organisation structure and division of tasks must
support the accomplishment of the management functions of controlling. However, in Figure 4.11,
38per cent of the respondents are indicated to have disagreed that in the Mpumalanga public health
system, the necessary control mechanisms are ingrained within the management function of
organizing.
55
,0
DISAGREE, 38%
AGREE, 47%
UNSURE, 15%
Figure 4.11: Control mechanisms are ingrained within the management function of
organizing
Although 15per cent were unsure, 47per cent of the respondents are stated to have agreed. The
mean score of 3.2 and standard deviation of 1.1 support the respondents who agreed. Studies reveal
that ingraining control with organising enables the organisation to effectively evaluate, monitor,
control activities and determine whether activities are being done in line with the desired strategic
goals and objectives. In spite of the fact that the Mpumalanga public health system may need to
consider why some of the respondents disagreed, the findings generally imply that the Mpumalanga
public health system is most likely to benefit from such ingrained organising with control.
4.2.12 QUESTION 12: The necessary control mechanisms are ingrained within the
management function of leading or directing organisational activities
In Figure 4.12, it is revealed that 53per cent of the respondents agreed that in the Mpumalanga
public health system, the necessary control mechanisms are ingrained within the management
function of leading or directing organisational activities. The mean score of 3.4, if interpreted using
Pearson’s Skewness Coefficient formula: , it can be concluded that it

strongly supports the 53per cent of the respondents who agreed.
56
,0
UNSURE, 22%
Figure 4.12: Control mechanisms are ingrained within the management function of leading
or directing organisational activities
This is because it is 4 units away from the neutral figure of 3. The standard deviation of 1, indicates
that a significant number of the respondents chose the agree options 4 and 5. In the management
control literature, it is indicated that ingraining controlling with leading enables the organisation to
influence employees’ compliance with control requirements. In certain cases, it is further noted that
leading when effective, may help employees to be more motivated, committed, and undertake self-
evaluation in order to assess whether their activities will lead to the achievement of the desired
strategic goals and objectives. In this instance, since most of the respondents were found to have
agreed, it is unquestionable that such positive results may arise. However, that will be subject to
identification and correction of the reasons, which led some respondents to disagree or be unsure.
Generally, the discussions in this section have responded accurately to the issues, which were raised
in the first research objective and question. A number of the respondents agreed that most of the
essential principles for effective implementation of a management control system are observed by
the Mpumalanga public health system, even though some of the respondents disagreed or could not
tell. These demonstrate that these principles are not being effectively observed, because had it been
so, then in the next section, the primary findings would have indicated that a number of positive spin
offs are resulting from the application of the current management control systems in the Mpumalanga
public health system.

PERFORMANCE OF MPUMALANGA PUBLIC HEALTH SYSTEM
Management control literature reveals that there is a direct positive relationship between the effective
use of management control mechanisms, and the organisation’s ability to adapt to environmental
change, identify and correct deviations and improve general organisational performance. The
57
application of management control mechanisms has also been noted to lead to cost reduction. It
also improves service and product quality. In the private sector, these benefits lead to customer
satisfaction and a competitive advantage. In the public sector, these benefits lead to citizens’
satisfaction and prevention of riots or strikes, which interfere with the country’s economic, social and
political tranquillity. In this study, one of the objectives and questions was to examine whether the
way control is applied in the Mpumalanga public health system is reaping such benefits. In order to
achieve this, the research instrument incorporated the impact of management controls and its
associated variables in one of its sections and the findings were as discussed in the next sub-
sections.
4.3.1 QUESTION 13: Management control enables organisation to adapt to the

environmental change
According to Figure 4.13, 49per cent of the respondents are indicated to have agreed that
undertaking management controls has enabled the Mpumalanga public health system to adapt to
the environmental changes. The experts argue that the effective evaluation, monitoring and
controlling activities enable organisations to identify social, economic and political changes in its
external business environment, and to adapt accordingly. In the public health care sector, such
changes may include changes in population growth trends and figures, as well as changes in policies
of the government of the day. It is indicated in the primary findings that 49per cent of the respondents
agree and a mean score of 3.4 supports that and standard deviation of 1.It is therefore
unquestionable that the Mpumalanga public health system through its control mechanisms is finding
it easy to identify and adapt to such changes.
,0
DISAGREE, 27%
AGREE, 49%
UNSURE, 24%
Figure 4.13: Management control enables organisation to adapt to the environmental

change
58
However, the fact that 27per cent of the respondents disagreed and 24per cent could not tell whether
or not it is so, implies that there is still some problems in the way the management control
mechanisms are currently being used by the Mpumalanga public health system. This is supported
by the empirical findings, which indicate that the clinics and hospitals remained overcrowded with
insufficient skilled staff, medication and equipment.
4.3.2 QUESTION 14: Management controls enable an organisation to limit the accumulation
of errors
Evaluating, monitoring and controlling means that organisations are able to identify errors and
correct them as sooner. Organisations will not have errors accumulating and subsequently lead to
interference with the efficient and effective general organisational operations. Although this might be
the case in most instances, others dispute and state that not all organisations exercise their control
mechanisms to identify and correct errors immediately. The views of the disagreeing authors are
consonant with the views of the 12per cent of the respondents who are indicated in Figure 4.14 to
have disagreed that management controls have enabled the Mpumalanga public health system to
limit the accumulation of errors. 24per cent of the respondents were unsure. The reason why the
12per cent of the respondents disagreed could be that in public sector enterprises, corrective actions
usually take long even if errors are identified and notified early. This is due to high levels of
bureaucracy and red tape in the public sector which lengthen and delay the decision making process.
,0
DISAGREE,
12%
UNSURE, 25%
AGREE, 63%
Figure 4.14: Limiting the accumulation of errors
Although these respondents expressed dissatisfaction, a significant number of the respondents

agreed that the current control mechanisms are helping the Mpumalanga public health system limit
the accumulation of errors. The mean of 3.6 and standard deviation of 0.9 strongly support the 63per
cent of the respondents. However, unless measures are taken to perfect the current management
59
control mechanisms in order to address the concerns raised by the disagreeing respondents, such
benefits might be temporary.
4.3.4 QUESTION 15: Management control enables organisations to cope with complexity
The ability to cope with complexity means the organisation is able to use feed forward control
techniques in order to identify complexity, which may easily interfere with its ability to achieve the
desired strategic goals and objectives. The mean score for this variable was 3.7 and standard
deviation was 1, and all these significantly support the 64per cent of the respondents who are
indicated in Figure 4.15 to have agreed that the application of management control mechanisms
have enabled the Mpumalanga public health to cope with complexity. This is not surprising,
considering that in Figure 4.15 above, it is indicated that a significant number of the respondents
agreed that the application of management control techniques have enabled the Mpumalanga public
health system to adapt to environmental changes. It would have been quite awkward if most of the
respondents had disagreed in this variable.
,0
DISAGREE, 15%
UNSURE, 21%
AGREE, 64%
Figure 4.15: Ability to cope with complexity
According to Figure 4.15, 15per cent of the respondents disagreed, and 21per cent were unsure.
This implies that the Mpumalanga public health system can only have a perfect management control
system, if the concerns of the disagreeing and unsure respondents are addressed.
4.3.5 QUESTION 16: Management controls enable the setting of the necessary performance
standards and the necessary correction of deviations possible
In this variable, the obtained mean score was 3.4 and standard deviation was 1.4, and all support
the 57per cent of the respondents who agreed. The findings generally indicate that the application
of management control mechanisms is helping the Mpumalanga public health system set appropriate
performance standards. This enhances its ability to identify deviations and undertake immediate
corrective actions. The finding is consistent with the secondary findings, which reveal that setting
60
standards facilitate the evaluation of activities and enable the organisation to achieve its desired
strategic actions. During the same primary research, Figure 4.16 also reveals that 26per cent of the
respondents disagreed and 17per cent were unsure. This implies that the standards might not all be
that perfect.
,0
DISAGREE, 26%
AGREE, 57%
UNSURE, 17%
Figure 4.16: Setting of the necessary performance standards and the necessary correction
of deviations
Nevertheless, the 57per cent who agreed is still significant, as compared to the mere 26per cent who
disagreed, unless the 26per cent are highlighting problems which might turn out to be significant in
future.
4.3.6 QUESTION 17: Effective management control enables economic growth
Health care literature indicates that health services, if well serviced, improve the quality of the
population. A healthy population is the source of the country’s productivity, taxes and increasing
economic growth. However, as alternative literature reveals, such healthy population can only be
attained if the country’s health services are effectively provided. Figure 4.17 shows that 60per cent
of the respondents agreed that effective management control enables the boosting of the necessary
economic growth. This could be primarily because South Africa’s health system, still, so far remain
the only health system in Africa where free health services are provided. Although there are
complaints about the quality of services being provided, it remains nonetheless above the standards
and quality of health services, which are provided in most African countries. The mean score of 3.2,
though weak, still supports the assertion of the 60per cent of the respondents who agreed.
61
,0
DISAGREE, 30%
AGREE, 60%
UNSURE, 10%
Figure 4.17: Boosting economic growth
The standard deviation of 1.4 signifies that the respondents did not unanimously agree that effective
management control enables the boosting of economic growth. This is reflected in Figure 4.17, which
shows that 10per cent of the respondents were unsure and 30per cent of the respondents disagreed.
This is because although most of the essential services are provided, studies reveal that since 1994
the quality of the South African public health care services has been gradually declining. In effect,
the 30per cent of the respondents who disagreed could be a reflection of that sentiment.
4.3.7 QUESTION 18: Effective management controls usually impact quite positively on
organisational service delivery process
In the management control literature, it is revealed that effective evaluation, monitoring and
controlling of activities leads to improving organisational efficiency. This is because controlling
enhances the evaluation and improvement of the operational processes, which leads to improved
efficiency and effectiveness. The end result of all these are reflected in improved service delivery.
Such assertions are consonant with the results of the primary research in which it is indicated in
Figure 4.18 that 59per cent of the respondents agreed that effective management controls usually
impact quite positively on organisational service delivery process.
The mean score of 3.4 and standard deviation of 0.9, also support the 60per cent of the respondents
who agreed. Generally, the findings in this variable support the findings in the above variable. In the
above variable, it is found that controlling activities in the Mpumalanga public health have influenced
quite positively on economic growth. It would have been disturbing if the respondents in this variable
were to find otherwise.
62
,0
DISAGREE, 18%
UNSURE, 23%
AGREE, 59%
Figure 4.18: Positive on health service delivery process.
The managers in the Mpumalanga public health system must investigate the reasons why 18per
cent of the respondents disagreed, and 23per cent were unsure. The number of respondents who
disagreed or were unsure is smaller as compared to the 59per cent who agreed.
4.3.8 QUESTION 19: Effective management controls help reduce riots associated with service
delivery failures
In this variable the mean score was 3.6 and the standard deviation 1, which shows that most of the
respondents agreed that effective management controls help reduce riots associated with service
delivery failures. This is because management controls enable the evaluation of health service
delivery processes. Slack in the service delivery process is identified and corrected. This variable is
related to the previous three variables because if management control is enhancing the Mpumalanga
public health system’s contribution to economic growth, then it means its impact on service delivery
is positive. This causes a reduction in riots and strikes, which are usually, associated with service
delivery failures. Since most of the respondents chose the agree options in the last three variables,
it is therefore not surprising that Figure 4.19 reveals that 69per cent of the respondents agreed that
effective management controls help reduce riots associated with service delivery failures.
63
,0
DISAGREE, 17%
UNSURE, 14%
AGREE, 69%
Figure 4.19: Reduction in riots that are associated with service delivery failures
However, recent trends in South Africa show a spat of service delivery related strikes across the
country. The researcher has no doubt there are some slacks arising from ineffective application of
management controls which are still hindering the effective and efficient service delivery. In thIs
question, 17per cent of the respondents disagreed and 14per cent were unsure, it could be attributed
to such slacks.
Overall, it is true that some of the respondents confirmed that there are definite benefits being derived
from the application of management control systems in the Mpumalanga public health system.
However, a number of the respondents also disagreed. This is because in Section A, a significant
number of the respondents were found to have disagreed that the essential principles are considered
during the implementation of management control systems in the Mpumalanga public health system.
Studies demonstrated that there is a significant direct positive relationship between the essential
principles and the benefits that a management control system breeds. It is not surprising that some
of the respondents disagreed on most variables in Section A, and at the same time, they did the
same in this section. What would have been expected was that the management of the Mpumalanga
public health system would consider all the essential factors for the successful implementation of a
management control system. The findings in the next section generally reveal that this has not been
the case.

MANAGEMENT CONTROLS IN ORGANISATIONS
Studies reveal that the extent to which an organisation can effectively implement its management
control systems is determined by the extent to which certain issues are identified and eliminated.
These issues are lack of top management support, lack of supporting information systems, poor
management skills, negative employee and management attitudes, lack of resources and poor
64
emphasis of good corporate governance issues. These issues were covered in the first research
objective and questions. The findings of the primary research on Mpumalanga public health system
were as follows.
4.4.1 QUESTION 20: Lack of top management’s support is one of the factors hindering
effective implementation of management controls in the Mpumalanga Public Health
System
In the implementation of any strategy, top management’s support and middle management’s buy-in
are essential. This is because without management support, priority could be given to other things.
Such an approach may also influence employees to lose focus on critical issues. Insufficient finances
could be allocated for activities, which are less supported managers. In this study, Figure 4.20
reveals that 44per cent of the respondents disagreed that lack of top management’s support is one
of the factors hindering effective implementation of management controls in the Mpumalanga Public
Health System. However, 26per cent agreed and 30per cent were unsure.
Figure 4.20: Lack of top management’s support
The mean score was 3 and standard deviation was 1. Using Pearson’s Skewness Coefficient
formula: : the mean score of 3 falls on the neutral figure of 3 and neither
supports the agree nor the disagree categories. Nevertheless, irrespective of such a conclusion, one
would certainly agree that the 26per cent of the respondents who agreed implies that not all
managers within the Mpumalanga public health system are supporting the implementation of
effective and efficient management control systems. This is because some managers usually fear
that an effective management control system can expose their weaknesses and inefficiencies.
65
4.4.2 QUESTION 21: Lack of appropriate supporting information systems is the other factor
limiting effective implementation of management controls in organisations
According to Figure 4.21, 42per cent of the respondents disagreed that lack of appropriate
supporting information systems is the other factor limiting effective implementation of management
controls in organisations. This implies that the current health information systems support the
monitoring and evaluation of activities within the Mpumalanga public health system. In the literature
review, it is revealed that in the modern increasingly complex and expanding organisations, effective
and efficient evaluation and monitoring of activities is unlikely to be successful in the absence of
effective management information systems.
,0
AGREE, 34%
DISAGREE, 42%
UNSURE, 24%
Figure 4.21: Supporting information systems
Although the mean score is 3 and the standard deviation is 1, and therefore does not support either
agree or disagree respondents. Empirical research reveals that a number of clinics at the community
levels do not use management information systems. Manual accomplishment of tasks is subject to
possible errors and lowers the effectiveness of a management control system, and it could be due
to such reasons that 24per cent were found to have been unsure.34per cent agreed that lack of
appropriate supporting information systems is the other factor limiting effective implementation of
management controls in organisations. Even though a significant number of the respondents
disagreed, management must seriously investigate the views of the respondents who agreed, if they
are to fully support and implement an effective management control system in the Mpumalanga
public health system.
4.4.3 QUESTION 22: Lack of management control skills is the main cause of ineffective
implementation of management controls in organisations
Theories reveal that the successful implementation of a management control system is also
determined by the extent to which employees possess appropriate management skills. This seems
66
not to be a problem, since in Figure 4.22, it is indicated that 59per cent of the respondents disagreed
that the lack of management control skills is the main cause of ineffective implementation of
management controls in organisations.
,0
AGREE, 29%
DISAGREE, 59%
UNSURE, 12%
Figure 4.22: Lack of management skills
This assertion is strongly supported by a mean score of 2.5 and a standard deviation of 1. 29per
cent of the respondents agreed that lack of the necessary management control skills is the main
cause of ineffective implementation of management controls in organisations. While 12per cent were
unsure. This is because lack of management skills is one of the factors which empirical research
revealed to be a problem in the health department. Most of the employees are only trained in the
medical field. It would have been surprising if all the respondents had agreed that lack of
management skills is not a hindrance for effective implementation of management control systems
in the Mpumalanga public health system.
4.4.4 QUESTION 23: A negative attitude towards control can hinder the effective
implementation of management controls in organizations
In this variable, there was no consensus among the respondents as to whether Management and
employees attitudes which treat control as not essential is the other factor hindering effective
implementation of management controls in organisations. This is proved by the mean score 3, which
if interpreted using Pearson’s Skewness Coefficient formula: , implies

that it neither supports the agree categories nor the disagree categories. It falls on the neutral figure
of 3. In addition, the standard deviation of 1.4 also demonstrates that there was lack of consensus
and the respondents were divided almost equally along the five point Likert scale questionnaire.
67
,0
UNSURE, 18%
Figure 4.23: Management and employees’ attitudes
This is demonstrated by the obtained percentages, which are quite close to each other. 39per cent
disagreed, 18per cent were unsure and 43per cent agreed that management and employees
attitudes which treat control as not essential is the other factor hindering effective implementation of
management controls in organisations. Lack of a consensus does not mean that the managers in
the Mpumalanga public health system must not consider the views of the respondents who agreed.
They demonstrate that the current management and employees’ attitudes are not appropriate for the
successful implementation of a management control system.
4.4.5 QUESTION 24: Poor organisational structure is a hindrance to effective

implementation of management controls at Mpumalanga Public Health System
In addition, studies reveal that the implementation of a management control system may never be
successful in the absence of appropriate organisational structure. In terms of the findings of the
primary research, Figure 4.24 reveals that 46per cent of the respondents agreed that poor
organisational structure is a hindrance to effective implementation of management controls at
Mpumalanga Public Health System. The mean of 3 and standard deviation of 1, do not support any
category of the respondents though.
68
,0
DISAGREE, 35%
AGREE, 46%
UNSURE, 19%
Figure 4.24: Poor organisational structure
Despite the fact that 35per cent of the respondents disagreed that poor organisational structure is a
hindrance to effective implementation of management controls in the Mpumalanga Public Health
System, and 19per cent were unsure, the researcher’s findings generally indicate that the current
structure within the Mpumalanga public health system is inappropriate for the successful
implementation of management control systems.
4.4.6 QUESTION 25: Lack of necessary resources for implementation of management control
programmes is one of the hindrances of effective management controls at Mpumalanga
Public Health System
Although the obtained mean score in this variable was 3 and standard deviation 1, and therefore do
not support any of category of the respondents, Figure 4.25 still indicates that 35per cent of the
respondents agreed that lack of necessary resources for implementation of management control
programmes is one of the hindrances of effective management controls in the Mpumalanga Public
Health System. According to the literature review, appropriate allocation of resources facilitate the
purchase of hardware, software, hiring of consultants and constant maintenance of the health
information systems. However, since 35per cent of the respondents agreed that lack of necessary
resources for implementation of management control programmes is one of the hindrances of
effective management controls in the Mpumalanga Public Health System, it means that the
management control systems at the Mpumalanga public health will remain ineffective. This is
because they will be unable to afford the relevant and essential things.
69
,0
AGREE, 35%
DISAGREE, 42%
UNSURE, 23%
Figure 4.25: Lack of necessary resources
It is true that 42per cent of the respondents disagreed that lack of necessary resources is one of the
hindrances of effective management controls in the Mpumalanga Public Health System, and 23per
cent were unsure. However, the mere fact that 35per cent of the respondents agreed, is significant
because the provision of resources is important for effective operation of a management control
system.
4.4.7 QUESTION 26: Lack of accountability is a hindrance to the implementation of

effective controls in the Mpumalanga Public Health System
Good corporate governance, as the literature review reveals stresses accountability, responsibility,
fairness, and justice in work places. The application of good corporate governance means that most
of the employees and managers will undertake self-monitoring and improvement measures.
Although the mean score was 3 and standard deviation 1, and therefore do not support any side, in
Figure 4.26, it is indicated that 41per cent of the respondents agreed that lack of adoption of good
corporate governance which emphasizes accountability and acting responsibly is another hindrance
of effective implementation of controls in the Mpumalanga Public Health System.
70
,0
UNSURE, 24%
Figure 4.26: Lack of adoption of good corporate governance
Even though 35per cent disagreed and 24per cent were unsure, the fact remains that the current
lack of accountability is affecting the effective implementation of management control systems in the
Mpumalanga public health care system possible.
A significant number of the respondents pointed out that there are quite a few factors hindering the
effective implementation of management control systems in the Mpumalanga public health system.
There does not seem to be much effort to deal with the factors that are pointed out as hindrances.
Nevertheless, the discussions in this chapter have fulfilled the third research objective and question
that were intended to assess the factors hindering the implementation of management control
systems in the Mpumalanga public health system.
4.5 CONCLUSION
Generally, the discussions in this chapter have provided accurate responses to the issues that were
raised in the research objectives and questions for this study. The research questions for the study
concerned evaluating: management control principles, the impact of management control systems
and factors hindering the implementation of management control systems in the Mpumalanga public
health system. This is because in Section A, it was noted that as much as a number of the
respondents agreed that essential management control principles are observed, a number of the
respondents were found to have disagreed as well. The researcher to be the reason why there is a
less positive impact from the current management control systems in the Mpumalanga public health
system interpreted this. It was also noted that it seems managers in the Mpumalanga public health
system are not putting much effort to deal with the problems observed. The researcher concludes
that the research objectives and questions for this study have nevertheless still been fulfilled.
71
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
5.1 INTRODUCTION
This chapter gives the general conclusion and recommendations of the study and is divided into two
parts. Part 1 covers the conclusion and the process is accomplished according to the sections that
are aligned to the research objectives and questions. These sections are: Section A: The principles
for effective management control systems in the Mpumalanga public health system, Section B: The
impact of management control systems on the performance of the Mpumalanga public health system
and Section C: The hindrances of effective implementation of management control systems in the
Mpumalanga public health system. Part 2 covers the recommendations, and the process is done
according to the sections, which are aligned to the research objectives and questions. These
sections are: Section A: The principles for effective management control systems in the Mpumalanga
public health system, Section B: The impact of management control systems on the performance of
the Mpumalanga public health system and Section C: The hindrances of effective implementation of
management control systems in the Mpumalanga public health system.
5.2 PART 1: CONCLUSION
This study examined the impact of effective management control systems on service delivery in the
Mpumalanga public health system. The study was based on five public hospitals and clinics in the
Mpumalanga province, and the ancillary motive of the study was to suggest measures, which could
be used to improve the implementation and use of management control systems in the Mpumalanga
public health system. In order to achieve this primary research objective, the study was guided by
the secondary research objectives which encompassed: determining the essential management
control principles for effective service delivery in the Mpumalanga Public Health System, assessing
the management control process in the Mpumalanga Public Health Care System, evaluating the
impact of effective management control on Mpumalanga Public Health System, establishing factors
hindering the implementation of effective management controls in the Mpumalanga Public Health
System and analysing the necessary mechanism for establishing effective control measures in the
Mpumalanga Public Health System. These research objectives were transposed into research
questions and read as: What are the essential management control principles for effective service
delivery at Mpumalanga Public Health System?, What is the impact of effective management control
on the Mpumalanga Public Health System?, What factors are hindering the implementation of
effective management controls in the Mpumalanga Public Health System?, and What are the
necessary mechanisms for establishing effective control measures in the Mpumalanga Public Health
System? The primary and secondary findings were as presented in the following sections. The
sections are aligned to the research questions and objectives.
72

Frederick W Taylor’s Scientific Management Theory states that the essential principles include a
detailed and careful analysis of all processes and tasks within the organisation to identify each
component part and review of all routines and working methods, using time and motion study. The
literature review further notes that Frederick W Taylor’s Scientific Management Theory stated that
other essential principles include: standardisation of all working methods, equipment and
procedures, so that the precise way in which each task should be done can be laid down and
monitored, scientific selection and training of workers who would then become first class at their
particular jobs, and introduction of payment on a piecework basis, which would both be an incentive
to maximize productivity and produce high wages for the workers. On the other hand, Henri Fayol
(1916) stressed that the essential management control principles encompass the establishment of
line of authority by which management may ensure compliance with its intentions throughout the
undertaking, a formal plan stipulating job descriptions and duties for each of the posts in the
organisation, and emphasis on the value of specialisation and division of labour.
Further review of theories noted that Fayol (1916) highlighted that other essential management
control principles include unity of command, appropriate span of control if supervision is to be
adequate, equitable treatment of employees, and fair remuneration, as well as embracing the
concept of employee participation and involvement, and emphasis on training and management
development. Although not different from what Fayol (1916) advocates, the secondary findings
indicate that Lyndall Urwick stated that the effective implementation of a management control system
is determined by principles of: objective, authority, responsibility, correspondence, continuity, and
specialisation, and definition, span of control, coordination, and unity of command. Other theories
discussed in the literature review included Marx Weber’s Bureaucratic Theory, in which he stated
that the essential management control principles encompass specialisation, hierarchy of authority,
system of rules and procedures, impersonality and employment. Although these principles are well
outlined in the secondary findings, the primary findings reveal that not all these principles are being
observed. Even the ones that are being observed, other respondents pointed out that they are not
being implemented effectively. Among the less observed are: span of control, planning, organising,
leadership, detailed study and analysis of work processes and specialisation.

PERFORMANCE OF MPUMALANGA PUBLIC HEALTH SYSTEM
During the secondary research, it was noted that a number of authors have concluded that there is
a significant direct positive relationship between the implementation of a management control
system, and the successful implementation of plans and strategies, and the continuous evaluation
of the effectiveness of the existing organisational structure. It was also noted that the implementation
of a management control system enables the evaluation of situations in order to determine
73
appropriate leadership styles, accountability in public institutions, improving service delivery and
performance possible. During the primary research, a number of respondents confirmed the potential
benefits resulting from the implementation of management control systems in the Mpumalanga
public health system even though other respondents disagreed. It was then concluded that it is
because in Section A, a significant number of the respondents were found to have disagreed that
the essential principles are considered during the implementation of management control systems
in the Mpumalanga public health system. In this section, it was therefore not surprising that some of
the respondents disagreed on most variables in Section A, and at the same time, they did the same
in this section.

Further theoretical analysis in chapter two revealed that factors hindering the successful
implementation of a management control system might include lack of top management’s support,
appropriate supporting institutions, necessary management control skills, and management and
employees attitudes. Other identified hindrances encompassed: poor organisational structure, lack
of necessary resources for implementation of management control programmes, and lack of
adoption of good corporate governance, which emphasizes on accountability and acting responsibly.
In the primary research, although a significant number of the respondents agreed that these factors
are hindering the successful implementation of management control systems in the Mpumalanga
public health system, it was noted that there seems to be less effort placed towards ameliorating
such hindrances.
Nevertheless, in the light of the above findings, it is imperative that the Mpumalanga public health
system considers the suggestions made in the following section.
5.6 PART 2: RECOMMENDATIONS
If the Mpumalanga public health system is to have a perfect management control system, it is
imperative that the following recommendations are considered:

The findings reveal that the principles for the successful implementation of management control
systems are poorly considered by the Mpumalanga public health system. In order to deal with these
issues and render its management control system more effective, the managers must adopt the
following principles:
• Constantly undertake detailed and careful analysis of all its work processes and activities.
• Standardise the working methods, equipment, tools and procedures so that it can be easier to
evaluate, monitor and control activities.
74
• During recruitment it must carefully select and train workers in order to develop attitudes, skills
and behaviours which facilitate the successful implementation of a management control
system.
• It must adopt specialisation and division of labour in order to enhance the evaluation,
monitoring and control of activities.
• It must develop appropriate rules and regulations which prescribe how activities must be
accomplished and the consequences of any deviation.
• It must emphasise effective leadership in order to influence and motivate employees to
accomplish the assigned tasks effectively and efficiently.
• Appropriate and well defined organisational structure must be established.
• Well established plans must form the basis for implementing an effective management control
system.

Under this section, the primary findings revealed that a number of factors are hindering the effective
implementation of management control systems in the Mpumalanga public health system.
In order to deal with these hindrances:

• Top managers, middle and line managers must be encouraged to support the implementation
of an effective management control system.
• Sufficient resources and finances must be allocated for the effective implementation of
management control systems during the budgeting process.
• There must be training of employees in order to change their attitudes towards the
implementation of management control systems. They must be made to understand that
control systems do not mean witch-hunting.
• Effective management information systems must be implemented in order to enhance the
control of activities in all units and structures.
• Good corporate governance principles must be encouraged, since it enhances employees’ and
managers’ self evaluation and controls
The researcher believes that if management looks at the outlined principles and key success factors,
then a number of positive benefits may result from the management control systems in the
Mpumalanga public health system.
5.9 CONCLUSION
Generally, this study has revealed that the Mpumalanga public health system lacks a perfect and an
effective management control system. Nevertheless, this study stresses that if the relevant officials
consider the recommendations outlined above, it is almost certain that the status quo can be
75
changed. The suggested area for further study could be “The impact of employee involvement on
the successful implementation of a management control system in the Mpumalanga public health
system.”
76
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82
APPENDIX 1:
DRAFT COVERING LETTER
Dear Respondent
I am a student at Stellenbosch University, and am conducting a research on the above-mentioned

topic for the dissertation of the Master of Business Administration (MBA). The primary aim of this
study is to investigate on the impact of effective management controls on service delivery at
MPUMALANGA PUBLIC HEALTH SYSTEM with specific reference to a case study of five selected
hospitals and clinics in Mpumalanga.
And the research objectives for this study are:

• To determine the essential management control principles for effective service delivery at
• To determine the impact of effective management control on Mpumalanga Public Health
System.
• To establish factors hindering the implementation of effective management controls at
• To determine the necessary mechanism for establishing effective control measures at
In effect, kindly grant me permission to administer my questionnaires to your staff members. We

guarantee confidentiality for all information, which will be obtained in the process of this study.
Your cooperation will be highly appreciated.
Yours Sincerely
MHLANGA SHEPHERD
MBA STELLENBOSCH UNIVERSITY

83
APPENDIX 2:
RESEARCH INSTRUMENT
KINDLY RESPOND TO THE FOLLOWING QUESTIONS ACCORDING TO THE SCALE
PROVIDED: STRONGLY AGREE=1, AGREE=2 UNSURE=3, DISAGREE=4, STRONGLY
DISAGREE=5
SECTION A: PRINCIPLES OF EFFECTIVE MANAGEMENT CONTROLS
QUESTION 1. The management control at Mpumalanga Public Health System constitutes of a

detailed and careful analysis of all processes and tasks within the organization to identify each
component part.
1 2 3 4 5
QUESTION 2.The management control at Mpumalanga Public Health System encompasses the
review of all routines and working methods.
1 2 3 4 5
QUESTION 3. The management control at Mpumalanga Public Health System has

standardised all working methods, so that the precise way in which each task is done can be
laid down and monitored.
1 2 3 4 5
QUESTION 4. The management control at Mpumalanga Public Health System carefully selects and
trains workers for their positions.
1 2 3 4 5
QUESTION 5. The management controls at Mpumalanga Public Health System use incentives to
motivate staff.
1 2 3 4 5
QUESTION 6. The activity of every employee at Mpumalanga Public Health System is confined to
the performance of a single function to enable the attainment of the stipulated objectives.
1 2 3 4 5
84
QUESTION 7. Number of employees under a particular manager is appropriate for the existence of
effective control at Mpumalanga Public Health System.
1 2 3 4 5
QUESTION 8. There exists the necessary unity of command at Mpumalanga Public Health System
to ensure that all activities in the organization are coordinated.
1 2 3 4 5
QUESTION 9. Everyone’s responsibilities are clearly defined making evaluation possible.
1 2 3 4 5
QUESTION 10. The necessary control mechanisms are ingrained in the planning process in order
to ensure that any stipulated objectives are attained.
1 2 3 4 5
QUESTION 11. The necessary control mechanisms are ingrained within the management.
1 2 3 4 5
QUESTION 12. The necessary control mechanisms are ingrained within the management function
leading or directing organizational activities.
1 2 3 4 5
SECTION B. THE IMPACT OF EFFECTIVE MANAGEMENT CONTROLS ON ORGANIZATIONAL

PERFORMANCE
QUESTION 13. Management control enables organization to adapt to the environmental change.
1 2 3 4 5
85
QUESTION 14. Management controls enables an organization to limit the accumulation of error.
1 2 3 4 5
QUESTION 15. Management control enables organizations to cope with complexity.
1 2 3 4 5
QUESTION 16. Management controls enable the setting of the necessary performance standards
and the necessary corrections of deviations possible.
1 2 3 4 5
QUESTION 17. Effective management control enables economic growth.
1 2 3 4 5
QUESTION 18. Effective management controls usually impact quite positively on organizational
service delivery process.
1 2 3 4 5
QUESTION 19. Effective management controls help reduce riots associated with service delivery
failures.
1 2 3 4 5
SECTION C: FACTORS HINDERING THE IMPLEMENTATION OF EFFECTIVE MANAGEMENT

CONTROLS IN ORGANIZATIONS
QUESTION 20. Lack of top management’s support is one of the factors hindering effective
implementation of management controls at Mpumalanga Public Health System.
1 2 3 4 5
QUESTION 21. Lack of appropriate supporting institutions affects management controls in

organizations.
1 2 3 4 5
86
QUESTION 22. Lack of the necessary management control skills is the main cause of ineffective
implementation of management controls in organizations.
1 2 3 4 5
QUESTION 23. A negative attitude towards control can hinder the effective implementation of
management controls in organizations.
1 2 3 4 5
QUESTION 24. Poor organizational structure is a hindrance to effective implementation of

management controls in the Mpumalanga Public Health System.
1 2 3 4 5
QUESTION 25. Lack of necessary resources for implementation of management control

programmes is one of the hindrances of effective management controls in the Mpumalanga Public
Health System.
1 2 3 4 5
QUESTION 26. Lack of accountability is a hindrance to the implementation of effective controls in

the Mpumalanga Public Health System.
1 2 3 4 5
END OF QUESTIONS
87
APPENDIX 3
DATA ANALYSIS FREQUENCIES AND DESCRIPTIVE STATISTICS
VAR00001
Frequency Percent Valid Percent Cumulative Percent
Valid 1.00 7 6.9 7.0 7.0
2.00 50 49.0 50.0 57.0
3.00 13 12.7 13.0 70.0
4.00 17 16.7 17.0 87.0
5.00 13 12.7 13.0 100.0
Total 100 98.0 100.0
Missing System 2 2.0
Total 102 100.0
VAR00002
Valid 1.00 2 2.0 2.0 2.0
2.00 33 32.4 33.0 35.0
3.00 19 18.6 19.0 54.0
4.00 27 26.5 27.0 81.0
5.00 19 18.6 19.0 100.0
Total 100 98.0 100.0
Total 102 100.0

88
VAR00003
Valid 2.00 36 35.3 36.0 36.0
3.00 22 21.6 22.0 58.0
4.00 28 27.5 28.0 86.0
5.00 14 13.7 14.0 100.0
Total 100 98.0 100.0
Total 102 100.0
VAR00004
Valid 1.00 58 56.9 58.0 58.0
2.00 4 3.9 4.0 62.0
3.00 7 6.9 7.0 69.0
4.00 23 22.5 23.0 92.0
5.00 8 7.8 8.0 100.0
Total 100 98.0 100.0
Total 102 100.0

89
VAR00005
Valid 1.00 36 35.3 36.0 36.0
2.00 10 9.8 10.0 46.0
3.00 18 17.6 18.0 64.0
4.00 24 23.5 24.0 88.0
5.00 12 11.8 12.0 100.0
Total 100 98.0 100.0
Total 102 100.0
VAR00006
Valid 1.00 8 7.8 8.0 8.0
2.00 27 26.5 27.0 35.0
3.00 22 21.6 22.0 57.0
4.00 25 24.5 25.0 82.0
5.00 18 17.6 18.0 100.0
Total 100 98.0 100.0
Total 102 100.0

90
VAR00007
Valid 1.00 9 8.8 9.0 9.0
2.00 26 25.5 26.0 35.0
3.00 23 22.5 23.0 58.0
4.00 30 29.4 30.0 88.0
5.00 12 11.8 12.0 100.0
Total 100 98.0 100.0
Total 102 100.0
VAR00008
Valid 1.00 12 11.8 12.0 12.0
2.00 8 7.8 8.0 20.0
3.00 26 25.5 26.0 46.0
4.00 41 40.2 41.0 87.0
5.00 13 12.7 13.0 100.0
Total 100 98.0 100.0
Total 102 100.0

91
VAR00009
Valid 1.00 17 16.7 17.0 17.0
2.00 9 8.8 9.0 26.0
3.00 27 26.5 27.0 53.0
4.00 33 32.4 33.0 86.0
5.00 14 13.7 14.0 100.0
Total 100 98.0 100.0
Total 102 100.0
VAR00010
Valid 1.00 2 2.0 2.0 2.0
2.00 31 30.4 31.0 33.0
3.00 21 20.6 21.0 54.0
4.00 31 30.4 31.0 85.0
5.00 15 14.7 15.0 100.0
Total 100 98.0 100.0
Total 102 100.0

92
VAR00011
Valid 2.00 38 37.3 38.0 38.0
3.00 15 14.7 15.0 53.0
4.00 32 31.4 32.0 85.0
5.00 15 14.7 15.0 100.0
Total 100 98.0 100.0
Total 102 100.0
VAR00012
Valid 1.00 2 2.0 2.0 2.0
2.00 23 22.5 23.0 25.0
3.00 22 21.6 22.0 47.0
4.00 36 35.3 36.0 83.0
5.00 17 16.7 17.0 100.0
Total 100 98.0 100.0
Total 102 100.0

93
VAR00013
Valid 1.00 3 2.9 3.0 3.0
2.00 24 23.5 24.0 27.0
3.00 24 23.5 24.0 51.0
4.00 33 32.4 33.0 84.0
5.00 16 15.7 16.0 100.0
Total 100 98.0 100.0
Total 102 100.0
VAR00014
Valid 1.00 3 2.9 3.0 3.0
2.00 9 8.8 9.0 12.0
3.00 25 24.5 25.0 37.0
4.00 50 49.0 50.0 87.0
5.00 13 12.7 13.0 100.0
Total 100 98.0 100.0
Total 102 100.0

94
VAR00015
Valid 1.00 8 7.8 8.0 8.0
2.00 7 6.9 7.0 15.0
3.00 21 20.6 21.0 36.0
4.00 37 36.3 37.0 73.0
5.00 27 26.5 27.0 100.0
Total 100 98.0 100.0
Total 102 100.0
VAR00016
Valid 1.00 17 16.7 17.0 17.0
2.00 9 8.8 9.0 26.0
3.00 17 16.7 17.0 43.0
4.00 27 26.5 27.0 70.0
5.00 30 29.4 30.0 100.0
Total 100 98.0 100.0
Total 102 100.0

95
VAR00017
Valid 1.00 22 21.6 22.0 22.0
2.00 8 7.8 8.0 30.0
3.00 10 9.8 10.0 40.0
4.00 50 49.0 50.0 90.0
5.00 10 9.8 10.0 100.0
Total 100 98.0 100.0
Total 102 100.0
VAR00018
Valid 1.00 5 4.9 5.0 5.0
2.00 13 12.7 13.0 18.0
3.00 23 22.5 23.0 41.0
4.00 51 50.0 51.0 92.0
5.00 8 7.8 8.0 100.0
Total 100 98.0 100.0
Total 102 100.0

96
VAR 00019
Valid 1.00 4 3.9 4.0 4.0
2.00 13 12.7 13.0 17.0
3.00 14 13.7 14.0 31.0
4.00 54 52.9 54.0 85.0
5.00 15 14.7 15.0 100.0
Total 100 98.0 100.0
Total 102 100.0
VAR00019
VAR00020
Valid 1.00 3 2.9 3.0 3.0
2.00 41 40.2 41.0 44.0
3.00 30 29.4 30.0 74.0
4.00 13 12.7 13.0 87.0
5.00 13 12.7 13.0 100.0
Total 100 98.0 100.0
Total 102 100.0

97
VAR00021
Valid 1.00 3 2.9 3.0 3.0
2.00 39 38.2 39.0 42.0
3.00 24 23.5 24.0 66.0
4.00 21 20.6 21.0 87.0
5.00 13 12.7 13.0 100.0
Total 100 98.0 100.0
Total 102 100.0
VAR00022
Valid 1.00 31 30.4 31.0 31.0
2.00 28 27.5 28.0 59.0
3.00 12 11.8 12.0 71.0
4.00 22 21.6 22.0 93.0
5.00 7 6.9 7.0 100.0
Total 100 98.0 100.0
Total 102 100.0

98
VAR 00023
Valid 1.00 27 26.5 27.0 27.0
2.00 12 11.8 12.0 39.0
3.00 18 17.6 18.0 57.0
4.00 28 27.5 28.0 85.0
5.00 15 14.7 15.0 100.0
Total 100 98.0 100.0

VAR00023
Total 102 100.0
VAR00024
Valid 1.00 20 19.6 20.0 20.0
2.00 15 14.7 15.0 35.0
3.00 19 18.6 19.0 54.0
4.00 27 26.5 27.0 81.0
5.00 19 18.6 19.0 100.0
Total 100 98.0 100.0
Total 102 100.0

99
VAR00025
Valid 1.00 25 24.5 25.0 25.0
2.00 17 16.7 17.0 42.0
3.00 23 22.5 23.0 65.0
4.00 24 23.5 24.0 89.0
5.00 11 10.8 11.0 100.0
Total 100 98.0 100.0
Total 102 100.0
VAR00026
Valid 1.00 14 13.7 14.0 14.0
2.00 21 20.6 21.0 35.0
3.00 24 23.5 24.0 59.0
4.00 29 28.4 29.0 88.0
5.00 12 11.8 12.0 100.0
Total 100 98.0 100
TOTAL
102 100.0
100
N Minimum Maximum Mean Std. Deviation

VAR00001 100 1.00 5.00 2.7900 1.20013
VAR00002 100 1.00 5.00 3.2800 1.17275
VAR00003 100 2.00 5.00 2.8000 1.08246
VAR00004 100 1.00 5.00 2.1900 1.10886
VAR00005 100 1.00 5.00 2.6600 1.47175
VAR00006 100 1.00 5.00 3.1800 1.24219
VAR00007 100 1.00 5.00 3.1000 1.18492
VAR00008 100 1.00 5.00 3.3500 1.17529
VAR00009 100 1.00 5.00 3.1800 1.28220
VAR00010 100 1.00 5.00 3.2600 1.11573
VAR00011 100 2.00 5.00 3.2400 1.12025
VAR00012 100 1.00 5.00 3.4300 1.08484
VAR00013 100 1.00 5.00 3.3500 1.10440
VAR00014 100 1.00 5.00 3.6100 .93090
VAR00015 100 1.00 5.00 3.6800 1.17963
VAR00016 100 1.00 5.00 3.4400 1.43773
VAR00017 100 1.00 5.00 3.1800 1.35870
VAR00018 100 1.00 5.00 3.4400 .98801
VAR00019 100 1.00 5.00 3.6300 1.02154
VAR00020 100 1.00 5.00 2.9200 1.08879
VAR00021 100 1.00 5.00 3.0200 1.11898
VAR00022 100 1.00 5.00 2.4600 1.32131
VAR00023 100 1.00 5.00 2.9200 1.44725
VAR00024 100 1.00 5.00 3.1000 1.41064
VAR00025 100 1.00 5.00 2.7900 1.35061
VAR00026 100 1.00 5.00 3.0400 1.24657
Valid N (list wise) 100

The Impact of Effective Management Controls - Edited

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ON SERVICE DELIVERY IN THE MPUMALANGA PUBLIC

Research report presented in partial fulfilment

Supervisor: Professor M de Klerk

Degree of confidentiality: A December 2012

S Mhlanga October 2012

Copyright © 2012 Stellenbosch University

2.4.10 Special Reports 22

4.2.2 QUESTION 2: The management control at Mpumalanga Public Health System

optimistic time+Pessimistic Time+4xMost Likely Time

List of acronyms and abbreviations

1.2 RESEARCH CONTEXT: BACKGROUND INFORMATION

1.3 RESEARCH PROBLEM STATEMENT

1.4 RESEARCH OBJECTIVES

The primary and secondary research objectives of this study are:

1.4.1 Primary research objectives

1.4.2 Secondary research objectives

The secondary research objectives of this study are:

1.5 RESEARCH QUESTIONS

The research questions for this study are:

1.6 JUSTIFICATION OF THE STUDY

1.7 STRUCTURE OF THE STUDY

This research report is presented over the following five chapters:

2.2 “MANAGEMENT CONTROL” IN THE DOMAIN OF MANAGEMENT

2.2.1 What is Management Control?

2.3 THE ESSENTIAL ORGANISATIONAL MANAGEMENT CONTROL PRINCIPLES

2.3.1 Frederick W Taylor’s Scientific Management Theory

2.3.2 Henri Fayol’s Management Control Principles

2.3.4 Marx Weber’s Bureaucratic Theory

2.3.5 Systems theory

2.4.1 Step 1: Establishing Standards

2.4.2 Step 2: Measuring and Comparing Actual Results against Standards

UPPER TOLERANCE LIMIT

TIME TIME TIME TIME

Figure 2.1: Tolerance Limits

2.4.3 Types of control

The types of control mechanisms that managers can use are:

2.4.4 Feed forward Control

. Whereas CPA and

2.4.5 Concurrent Control

quick intervention is needed. Dashboards help in tracking the performance of an organisation

2.4.6 Feedback Control

2.4.7 Budgetary Controls

2.4.8 Financial Statements and Ratio Analysis

• Liquidity Ratio: expressed by the formula: measures a company’s ability

. This ratio is computed based on capital

turnover ( multiplied by earnings as a proportion of sales ( ). The

Break- even Analysis

Figure 2.2: Break-even point

2.4.9 Internal and External Audit

2.4.10 Special Reports

2.4.11 Legislations and Established Policies

2.4.12 Human Resources Accounting

2.5 STEP 3: MANAGEMENT ACTIONS

20 Actual Production; Changes from control

Figure 2.3: Negative Feedback

30 Standard Production Level

Figure 2.4: Positive Feedback

2.6 THE IMPACT OF MANAGEMENT CONTROLS ON ORGANISATIONAL

2.6.1 The successful implementation of Plans and Strategies