Definition :: Management Control System is defined a ‘set of policies and procedures designed to keep operations going according to plan”
CHARACTERISTIC FEATURES OF MANAGEMENT CONTROL SYSTEM :
(a) It focuses on ‘programmers’ and “responsibility centers’. Responsibility centre is an unit or sub unit or sub unit of an organization usually headed by a manager, who becomes responsible and accountable for the activities or that unit or sub unit.
(b) For the purpose of control, managers use two types of data, viz. planned data and actual data. Planned data relate to estimate, budget, and standard and forecast details of future events or activities.
(c) The control process is a set of actions such as programming, budgeting, monitoring, evaluating, analyzing and reporting. It is a continuous or an on going process. “Just as the navigator in an aircraft or sea voyage continually takes reading to ascertain whether or not he is relative to a planned course.
(d) It is a ‘total system’ covering all aspects of a company’s operations. This is important because management function assures that all parts are balanced with one another. Unless management obtains information about each of them, coordination between all the activities is not possible.
(e) The system is normally coordinated and integrated so that the same set of information can be used by other units for some other purpose. Management Control system is a set of interlocking sub systems generating a single system. While designing reporting format, this aspect is carefully considered by the systems manager.
(f) The system is usually designed with financial figures and not with physical units of input and output. Because, monetary unit is the only common denominator which can be used to express heterogeneous input and resources, such as, kgs., pcs., litre, machine hour, labour hour, etc.
(g) The system tends to be rhythmic, not ad hoc, one time or occasional. It follows a regular time table like daily, weekly, fortnightly, monthly, quarterly, half yearly and annual, year after year. All reports are prepared and forwarded to the persons mentioned in the circulation list at regular intervals.
(h) Line and staff managers are equally involved in the control process. Line managers are, therefore, the focal points in management control.
(i) G.W. Dalton and P.R. Lawrence added two other features in Management Control System:
(a) Reciprocity. Every living being tries to control its environment as a mean of fulfilling its needs.
(b) Expansibility. Control in an organization is a variable rather than a constant element, because it can expand or contract. The influence of an individual in the organization changes from time to time.
Finally, the purpose of a Management Control System is to encourage managers to take actions that are in the best interests of the company. Although systematic, the Management Control System is by no means mechanical. The process involves interactions among individuals.
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