MANAGEMENT CONTROL SYSTEMS AND STRATEGIC PLANNING MANAGEMENT CONTROL

MANAGEMENT CONTROL SYSTEMS AND STRATEGIC PLANNING

MANAGEMENT CONTROL SYSTEM Management Control System may be described as mechanism whereby the actual performance is measured against the standards and the deviations from the standards are communicated to the top management. It is an inter-related communication structure that facilitates the processing of performance related information for enabling the managers in coordinating parts and activities to attain the organizational objectives.

Characteristics of Management Control System Future Orientation Goal Oriented Dynamism and Continuity Subjectivity

Management Control System Involves: Planning, what is to be done in the organization. Coordination of the activities of the organization and attaining goal congruence. Communicating information and evaluation of information. Deciding about corrective action to be taken and influencing human behaviour.

Purpose of Management Control System To ensure that strategies are carried out for the attainment of organizational objectives. According to Anthony, ‘Management Control System focuses primarily on strategy execution’.

STRATEGIC PLANNING

Meaning of Strategic Planning According to Anthony and Govindarajan, “Strategic Planning is the process of deciding on the programs that the organization will undertake and the approximate amount of resources that will be allocated to each program over the next several years. ”

Meaning of Goals A goal is an expression of what a company desires. It is a statement of targets to be achieved by an enterprise. In the context of Strategic Planning, Goals are also called objectives. Whereas ancillary or subordinate objectives are called goals.

Characteristics of Goals Organizations may have plurality of goals Hierarchy of Goals Continuity and Revision Profitability and Wealth maximization are major goals

PROCESS OF STRATEGIC PLANNING Studying, Reviewing and Revision of the current strategic plans Specifying Assumptions regarding the business environment Preparing the First Draft of the Plan Analysis of the Suggested Plan Second Draft of the Strategic Plan Final Review and Finalisation

BENEFITS OF STRATEGIC PLANNING Substitutes haphazard approach and adhocism Strategic Planning helps in budgeting Managerial Grooming Long Term Focus on Corporate Strategy Supports and Provides framework for short run plans

LIMITATIONS OF STRATEGIC PLANNING Bureaucratic and theoretical exercise Time and Cost Over emphasis on Staff Experts

THANK YOU