Management Control Systems

Basic concepts

Management Organisations are led by a hierarchy of managers. They lead the organisation, a group of people who work together, to work towards a common goal. The management control process is the process by which managers at all levels ensure that the people they supervise implement their intended strategies.˚v

Control is about ensuring that the organisations strategic intentions are achieved. It requires that devices are in place that intervene when it is required.

Systems A system is a prescribed and usually repetitious way of carrying out an activity or a set of activities. Most management actions are unsystematic. Managers encounter situations that require action on the spot, where no rules are defined.

Elements of a management control system

A management control system has at least four elements:

1. A detector that measures what is actually happening.
2. An assessor that determines the significance of what is actually happening by comparing it with some standard or expectation of what should happen.
3. An effector that alters behaviour if the assessor indicates the need to do so.
4. A communications network that transmits information between detector, assessor and effector.