Importance of management control in the organization

The variety of responsibilities within the organization.

Management control structure

According to Anthony Lowe, an organization would need to establish a specific system to control and plan the different operations it is going through. It is an important function because it helps to check the errors and to take the corrective action so that deviation from standards are minimized and stated goals of the organization are achieved in desired manner. If you want the system, i. It also provides information on the basis of which better plans can be formulated in the future. The furnace-activating circuit is turned off as the temperature reaches the pre-selected level. More recently, writers have tended to differentiate the control process between that which emphasizes the nature of the organizational or systems design and that which deals with daily operations. MCS is not there to transform the organization, but ensure it operates with maximum efficiency! Co-ordination in action.

As long as a plan is performed within allowable limits, corrective action is not necessary; this seldom occurs in practice, however. So, controlling is the way which focuses on uncertainty and to attain the goals. Relationship between the elements of control and information Information is the medium of control, because the flow of sensory data and later the flow of corrective information allow a characteristic or condition of the system to be controlled.

Management control system example

Supervision is smoother and more focused on spotting the actual problems and deviations in the system. These controls can include setting rules or procedures for financial transactions, employee behavior and specific practices for all or individual departments. An essential part of a closed-loop system is feedback; that is, the output of the system is measured continually through the item controlled, and the input is modified to reduce any difference or error toward zero. You can clearly notice this is the essence of the business system. The management process wants to ensure different parts work together to attain these goals. In essence, you are combining the functions you have at hand — planning, staffing and so on — with the resources, such as financial resources. Rewards for meeting or exceeding standards may range from special recognition to salary increases or promotions. First, implementation of an MCS can reduce risks. Importance of Controlling source:www. Open-loop system A Street-lighting system controlled by a timing device is an example of an open-loop system. The organization will also have its unique delegation and decentralization strategies in place, which must be considered as an influence on the MCS.

Managerial accountability. The final key element of the implementation should be focused on the reward structures you will use as part of MCS.

Financial controls can also include the production of regular reports such as cash-flow and profit-and-loss statements, and labor, overhead and production expense reports. Edmunds has a bachelor's degree in journalism.

importance of management control system
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