MPC summery

6702 words 27 pages
Sem 2 Planning, Control and Management Control Systems
Textbook: ch 1
Management And Control

Management is the process of organizing resources and directing activities for the purpose of achieving organizational objectives.
Other books:
Functions: product (or service) development; operations; marketing/sales; finance.
Resource: people; money; machines; information.
Processes: objective setting; strategy formulation; control
This books focus on control: the backend of management.
Objective setting: knowledge of objectives is a necessary prerequisite for the design of any control or MCS and indeed, for any purposeful activates.
Strategy formulation: strategies define how organizations should use their resources to meet their
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The main problem is that “the performance in the last few years have not been good, sales and profits declining, and the problem was getting worse”. These performance problems seemed to have begun at the time when a large drugstore chain opened a branch two blocks away.
2 What options are available to Thomas Wong?
Continue to operate as it
Close the pharmacy
Change business strategy
Change business strategy
Differentiate product and services (trade and generic brands)
Price matching
Maintain loyalty with customers-loyalty incentive program
Alliance with local medical centres and GPs
Quality in customer service(multi-lingual staff)
3 Is this a control issue? If so, what type of control problem are we dealing with?
This is a strategic control issue. Strategic control involves managers addressing the question: Is our strategy valid? Or in a changing environment: is our strategy still valid?”

Article: Kaplan, RS, 1984, The Evolution of Management Accounting, The Accounting Review

Sem 3 Action, results, personnel and cultural controls
Textbook: ch 2 and 3 result, action, personnel and culture(people)
Chapter 2 Results Controls
Prevalence of result controls
This chapter described an important form of control, results control, which is used at many organization levels in most organizations. Results controls are the implementation of decentralized forms of organization with largely autonomous responsibility centres.