Management Control System Case Study

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Management Control System (MCS) is a system used in an organisation to evaluate the performance of the organisation whether it human, physical, or financial. It helps manager to assess the operational performance and have more corporate control. Managers then can use the information gathered to plan any strategies to keep the organisation on tracks with their objectives. MCS begins by specifying the organisation’s goals which what the organisation wants to achieve in the long-run, sub-goals where more focus on daily operations and objectives. By then, responsibility centres is establish where specific activities are assigned to a manager before they can develop performance measures. There are two types of performance measures which are financial and non-financial measures. Financial measures such as budgeting system has been used primarily from a very long time while non-financial information has been importance these days due to increasing in competition, rapidly changes market, and changes in consumer needs and wants. I strongly agree with the statement that organisation should never rely completely only on control system that emphasis …show more content…

Behavioural Agency Theory suggested that the motivational forced is affected by inequity aversion. Study by Adam (1965) shows that people seek balance between what they put or give in their job which include commitment, skills, and energy and what they get in return such as recognition and financial rewards. (Pepper & Gore, 2012). Those are described as input and output respectively. If agent feels that their outputs received is worth with the inputs given, then they will be happy and motivated to do their work at the same or higher level. The opposite will happen if they feel that their inputs are not fairly rewarded by their

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