Question

Discuss the view that management control is a uniform practice that is the same in all contexts.

(1,000words essay)

Answer 1

Management is understood in different ways by different people. Economists regard it as a factor of production. Sociologists see it as a class or group of persons while practitioners of management treat it as a process. For our understanding, management may be viewed as what a manager does in a formal organization to achieve the objectives.

A management control system is a system that gathers and uses the information to evaluate the performance of different organizational resources like human, physical, financial, and also the organization as a whole in light of the organizational strategies pursued.

The management control system is an integrated technique for collecting and using the information to motivate employee behavior and to evaluate performance. Management control systems use many techniques such as

• Activity-based costing
• Balanced scorecard
• Benchmarking and Benchtrending
• Budgeting
• Capital budgeting
• JIT
• Kaizen (Continuous Improvement)
• Program management techniques
• Target costing
• Total quality management (TQM)
• Incentive system

If you consider the process in the forms of steps, control in relation to management would look like this:

• Setting a goal and establishing desired objectives.
• Measuring the achievements of goals and objectives.
• Comparing the achieved goals and objectives with the original goals and objectives.
• Analyzing variances and reporting on them. Determining the underlying causes for the variations.
• Taking corrective action to eliminate the variations.
• Following up and repeating the process.