Pa 212 - Discussion Notes.docx

I. INTRODUCTION FOCUS OF THE STUDY Organization - It has purpose or goals - Consists of human beings - Human beings work together in an organization Management - It selects strategies for achieving organization goals - It deals with the specifics of organization activities - A person who is responsible for obtaining results through the actions of other people - A grey area is observed between managers and first-line supervisors (refer to Robert Anthony ‘s The Management Control function, chapter 1) Control - It is used in assuring implementation of strategies - Although there are differences between the two, control can (and usually) occurs alongside the planning process o Control does not necessarily means assuring adherence to plans - The four steps of the control process o A standard of desired performance is specified o Identifying the means of sensing what is happening in the organization and communicating information to a control unit (detector) o Compares information to the standard (assessor) o Correction action is decided upon and implemented (effector) - The thermostat analogy (refer to Robert Anthony ‘s The Management Control function, chapter 1) BOUDNARIES OF MANAGEMENT CONTROL Management Control - One of the three types of planning and control activities (the other two being strategic planning and task control) that occur in an organization - It is the process by which managers influence other members of the organization to implement the organization’s strategies Strategic Planning - It is the process of deciding on the goals of the organization and the strategies for attaining these goals - Unlike management control, strategic planning is considered unsystematic because of the following: o The need for a strategic decision can arise at any time o In many types of nonbusiness organizations (e.g. the government), strategic planning is considered unsystematic and difficult because leaders have differing opinions about what the organization’s goals should be - Strategic planning is done by the top management

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o Contrasting it o management control, management control is systematic and inclusive in a sense that it is a planning process that is done regularly, participated by managers at all levels, involves the whole organization, and it involves a large amount of personal interaction and relatively less judgement Strategic planning sets the boundaries within which management control takes place

Task Control - It is the process of ensuring that specific tasks are carried out effectively and efficiently - Key distinctions between task control and management control: o Management control systems are basically similar throughout the organization while task control is more specific depending on the task at hand o In task control, interaction is between a manager and a nonmanager o Task control relates to activities where little or no judgement is required as to what is to be done o Management control focuses equally on planning and on execution; task control focuses primarily on execution MANAGEMENT CONTROL ENVIRONMENT - It has two principal aspects: o The way in which the entity is organized o Environmental influences that affect the behaviour of people in the organization Organization Structure - Management control focuses on the activities of responsibility centers o A responsibility centre is an organization unit headed by managers who is responsible for its activities o It receives inputs (materials and services) from the environment, and it processes theses inputs to produce outputs Environmental Influences - Management control is also influenced by the organization’s culture, or climate o More so by the attitude that permeates downwards from the top management - Factors inherent in the nature of the work also affect culture, or climate Behavioural Consideration - Given that the management control process is primarily behavioural (ensuring that the organization’s strategies are implemented and goals are attained), there is a for goal congruence between the managers and the organization MANAGEMENT CONTROL OF OPERATING ACTIVITIES