PMBA2235AccountingControlManagementBehavior.pptVIP

A.H. Lau (some slides taken from Pearson Education Limited) Learning Objectives Defining management control, its purpose and benefits Discuss the relationship between objective setting, strategy formulation and management control Identify the needs for management control Lack of direction Lack of motivation Personal limitations Learning Objectives Describe the characteristics of good management control Understand the four strategies to reduce control Identify various control alternatives Activity elimination, automation, centralization, risk sharing Present an overview of the course Management control … The process by which management: … ensures that people in the organization carry out organizational objectives and strategies; … encourages, enables, or, sometimes “forces” employees to act in the organization’s best interest. Management control includes all the devices / mechanisms managers use to ensure that the behavior of employees is consistent with the organization’s objectives and strategies. Function and benefit …. Purpose / function ... get done what management wants done; influence behavior in desirable ways. Benefit … increased probability that the organization’s objectives will be achieved. Management and its components Management … … the process of organizing resources and directing activities for the purpose of organizational objectives. Process-breakdown … Objective setting; Strategy formulation; Control. Objective setting ... Objectives are … a necessary prerequisite for any purposeful activities. Without objectives, it is impossible … to assess whether the employees’ actions are purposive; to make claims about an organization’s success. Objectives can be … financial versus non-financial; quantified, explicit versus implicit; economic, social, environmental, societal. Strategy formulation ... An organization must select any of innumerableways of seeking to attain its objectives. Strategies define how organizations shoulduse their resources