Management Control System

Prepared By:
Pratima P. Raul Omkar R. Kolhe Pradnya P. Patil Pranita P. Raul Tushar J. Patil

Organizational hierarchies & behavior

Goal Congruence

Informal Factors
Formal Control System Types of Organisation Functions of Controller

Goal Congruence

Goal Congruence means that ,in so far as is feasible, the goals of an organization's individual members should be consistent with the goals of the organization itself .

Goal Congruence

In a Goal Congruence process, the actions people are led to take in accordance with their perceived self-interest are also in the best interest of the organization.

Informal factors that influence Goal Congruence

External Factors

Internal Factors

Informal factors that influence Goal Congruence

External Factors
Work Ethics Attitudes Loyalty Pride in doing job Diligence Type of industry

Informal factors that influence Goal Congruence

Internal Factors
Management Styles Attitude of CEO Attitudes of Subordinates Attitudes of Superiors

Culture Common beliefs Shared Values Norms of Behavior Assumptions

Informal Organization Line Management Communication Relationship

Perception & Communication Channels of Communication Conflict of Interest Information System

The Formal System

Rules

Physical Control

Manuals System

Safeguards

Task Control Systems

Rules

Formal Instructions Job Descriptions Standard Operating Procedures Manuals Guidelines Prohibitions

Rules

Physical Control

Security Guards Locked Showrooms Vaults Computer Passwords Television Surveillance

Rules

Manuals

Written Instructions Procedures Practices

Rules

System Safeguards

Cross Checking Authorization Safeguarding Assets Internal Control Auditing

Rules

Task control system

Automation Responsibilities Checking Reviewing Reporting

Formal Control Process

Goal Strategies Rules Other Information

Reward (Feedback)

Strategic Planning Revise

Budgeting

Responsibility Center Performance

Report actual Versus Plan

Was Performance Satisfactory

Yes

No

Revise

Corrective action

Measurement Feedback Communication

Types of Organizations
1

Functional Structure

2
3

Business Unit Structure Matrix Structure

Functional Structure
CEO
Staff Manufacturing Manager Staff Manager Plant 1 Manager Plant 2 Manager Plant3 Manager Region A

Marketing Manager Staff

Manager Region B

Manager Region C

Business Unit Structure

Plant Manager Manager Business Unit A

Marketing Manager
Plant Manager

CEO

Manager Business Unit B

Marketing Manager

Plant Manager
Manager Business Unit C Marketing Manager

MATRIX ORGANISATION

Functional Manager A Functional Manager B Functional Manager C

Project Manager X

Project Manager Y

Project Manager Z

Functions of the Controller

Designing and operating information & Control Systems Preparing F Statements and F reports Preparing, Analyzing, and interpreting financial reports Supervising internal auditing and accounting control Developing personnel in the controller Organization

Business Unit Controller

Dotted line Relationship Here the controller reports to BU Manager, who is immediate boss, and ultimate authority in hiring, training, transfer, compensation, promotion, and firing

Business Unit Controller

Solid line Relationship Here the controller reports to Corporate Controller who is also boss of the business unit controller and having authority for hiring

THANK

YOU!!!