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Management Control Systems in a

Service Organizations

Characteristics

‡Absence of Inventory Buffer ‡Difficulty in Controlling Quality ‡Labour Intensive ‡Multi-Unit Organizations

Classification

‡Professional Organizations ‡Financial Service Organizations ‡Health Care Organizations ‡Non-Profit Organizations

Management Control Systems

‡Pricing ‡Profit Center & Transfer Pricing ‡Strategic Planning & Budgeting ‡Control of Operations ‡Performance Management & Appraisal

PSG Special Characteristics

‡Goals ‡Professionals ‡Output and Input Management ‡Small Size ‡Marketing

‡Financial Service Organization

Financial Service Organization

‡Commercial Banking ‡Investment Banking ‡Retail Brokerage ‡Insurance


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Financial Service Organizations

Huge Economic Contribution Use Of Information Technology Need for Control Systems New Forms of Instruments New Research

FSO- Special Characteristics

‡Monetary Assets ‡Time Periods of ‡ Transactions ‡Risk and Reward Technology

Health Care Organizations

Health Care Organizations---special characteristics

‡Difficult Social Problems ‡Change in Mix of Providers ‡Third Party Payers ‡Professionals ‡Quality Control

HCO-

Management Control Systems

‡Budget Preparation ‡Strategic Planning ‡Acquiring New Equipments ‡Quick availability of Information ‡Financial Performance ‡Identifying Variances

Non Profit Organizations

What are Non-Profit Organizations ?

NPO- Special Characteristics

‡Absence of Profit Measure ‡Contributed Capital ‡Fund Accounting ‡Governance

NPO- management control systems

‡Product Pricing ‡Strategic Planning ‡Budget Preparation ‡Operation & Evaluation

Case Discussion

Harlan Foundation

Metropolitan Bank