Management Control Systems Essay

Pages: 2 (667 words)  ·  Style: Harvard  ·  Bibliography Sources: 2  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business - Management

Management Control Systems

The current economic situation throughout the world has caused great concern among businesses and managers. The drive to remain viable in a volatile marketplace has brought about strategies to cut costs and increase controls, with emphasis on improving productivity. While this is a successful approach in the short-term, some authors warn that there are long-term dangers in terms of waning productivity and profits (Accel-Team 2009). At the basis of this danger is the implication that the human factor may be lost by emphasizing accounting performance measures to determine the level of managerial performance.

According to the Accel-Team Website (2009), there are two types of control systems; those that are past-action-oriented on the one hand, and those known as steering controls, which are future-oriented. The first type generally fails, because of its focus on actions and strategies completed in the past, with little possibility of improvement. Employees are made aware of the results of past mistakes without the possibility of correcting these mistakes. At best, employees and managers can learn from their previous mistakes and apply these lessons to future actions. This type of control system tends to be demoralizing and demotivating.

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The steering control system on the other hand provides a climate that is motivating, as adjustments are allowed before the end of the control period. This is a more efficient system, because adjustments are immediate and applicable to the project at hand. Both managers and employees are then able to work more efficiently and effectively.

Essay on Management Control Systems Assignment

Control is a vital function of management planning. It provides information regarding the efficiency and effectiveness of the company. In order to benefit from a management control system, a company needs to integrate its planning strategies with such a system. Another important consideration is the human factor in terms of the management accounting function. Employees are more motivated by evaluation, coaching, and rewarding than only quantitative functions such as measuring, comparing and penalizing. These strategies can be used in combination to extract the highest… [END OF PREVIEW] . . . READ MORE

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