Management Control Systems: Paramjit Sharma
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Paramjit SharmaManagement Control Systems: Paramjit Sharma
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Paramjit SharmaManagement Control Systems
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Name some successful companies in India or
Abroad
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Indicate the products produced or
Services offered by them
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What could be secret of their success?
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Some of the secret of Success?
They have
Developed Good Strategies
Designed systems and processes
Energized their employees
Executed Strategies effectively
and efficiently
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What is Management ?
An art of getting things done through other people
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4 functions of
Management
Strategic Preparation
Management of
Financial
Statements
Planning & Management
Decision &
Making Operational
Control
functions of
Management
A strategy is a set of goals and specific
Strategic Action plans that, if achieved, provide
Management the desired competitive advantage
SM involves identifying and implementing
these goals and action plans
4 functions of
Management
Planning & It involves budgeting, profit planning, cash flow,
Decision others decisions related to firm’s operations, such
Making as deciding when to buy or lease a facility, when to
repair or replace a piece of equipment, when to
change a marketing plan and when to begin new
product development
4 functions of
Management
Management
& OC takes place when mid level managers monitors
Operational the activities of operating level managers
Control
MC is the evaluation of mid-level managers
by upper level managers
4 functions of
Management
Preparation
of
Management complies with Financial
financial reporting requirements Statements
as per law
What is Control ?
Picture of Car
Film Director
Formula 1
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What is a System ?
A system is a prescribed and
usually repetitious way of
carrying out activity or set of
activities
Electric Current
Computers
Mobile Phone
Machine
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What is Management Control ?
Management Control Process is a process by which managers
at all levels ensure that the people they supervise implement
their intended strategies
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What is a Control System ?
A Detector An Assessor
An Effecter
A Communication
Network
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2 Assessor
Control Comparison with
Devices
standard
1 Detector
What is happening ? 3Effector
Behaviour alteration
if needed
Entity
Being
Controlled
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Elements of the Control Process
3 examples
Body Automobile
Thermostat Temperature Driver
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Elements of Management Control Systems?
Strategic Planning
Budgeting
Resource Allocation
Performance
Measurement
Evaluation & Reward
Responsibility Centre Allocation
Transfer Pricing
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Boundaries' of Management Control
Strategy Goals, Strategies and Policies
Formulation
Management
Implementation of Strategies
Control
Task Efficient and effective
Control Performance of individual tasks
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Management Control Activities
Planning
Coordination
Communication
Evaluation
Deciding Action
Influencing Behavior
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Management Control Essentials
Goal Congruence
Tasks for implementing
Strategy
Organizational Structure
Financial-NF Factors
Developing New Strategies
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Management Control Essentials- implementing strategy
Managemen
t
Control
Performance
Org HRM
Strategy Structure
Culture
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Simpler Process and Management Control Process
1 No Standard is set
2 No automatic Control
3 Not much clarity
4 Self Controlled
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Strategy Formulation
Strategy Formulation is the process of deciding on the goals
of the Organization and the strategies for attaining these
Goals
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Strategies
Strategies are big plans
Important Plans
Directions in which organization Moves
Need Arise in response to threat
Falling market share
Government Regulations
Change in Customer Behaviour
Development of New Product
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Few More Clarifications
Goals are overall Aims of the Organization
Goals are Timeless, exists until changed
ROI
Market Share
Customer Satisfaction……
Objectives are specific steps to accomplish
Goals
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Strategy Formulation & M Control
SF is process of deciding new Strategies
MC is the process of implementing these
Strategies
Strategic Analysis varies with the nature of
strategy
MC predictable sequence with fixed schedule
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Task Control
Task Control is the process of ensuring that
Specified Tasks
are carried out effectively and efficiently
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Task Control
Task Control •No .of Customer
Orders
Involves performance of individual tasks •Tons of Materials Used
Regulated according to rules •No. Of hrs employee
May not require human beings worked
May be Mechanically Controlled • Cash Disbursed
Many TC activities are scientific
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Task Control & M Control- differences
TC many TC Systems are Scientific
MC cant be reduced to science
MC is behavioral
MC –the focus on entire organization
TC – focus on task or job
MC-judgmental, decisions, constraints..
TC- no judgment may be required
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Strategy Formulation-Task Control & M Control
compared
Strategy Management Task
Formulation Control Control
Devise inventory Decide inventory Reorder an
Speculation policy Levels Inventory item
Schedule
Enter a new Expand a plant Production
Business
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questions
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Case
Discussion
Nucor Wal-Mart
Corporation Stores
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