ch1 mcs the nature
TRANSCRIPT
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THE NATURE OF MANAGEMENT
CONTROL SYSTEMS
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Basic Concepts
Elements of a control system consists of:
1. A detector
2. An assessor
3. An effector
4. A communication network
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1. A detector or sensoris a device that measurewhat is actually happening in the process being
controlled.2. An assessoris a device that determines the
significance of what is actually happening bycomparing it with some standards or
epectations of what should happen.3. An effector (feedback)is a device that alters
behavior if the assessor indicates the need todo so.
4. A communications networkconsist of devicesthat transmit information between the detectorand the assessor and between the assessorand the effector.
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Example: You are driving a car
!etectors" #our eyes
Assessor" #our brain
Effector" #our foot
$ommunication network" #our nerves
system
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#our eyes %detectors&measure actual speed byobserving the speedometer. #our brain
%assessor&compares actual speed with desiredspeed %standard: the highest speed is '(km)hour& to detect a deviation from standard.#our brain %assessor&directs your foot %effector&
to ease up the accelerator if actual speed %*(km)hour&is faster than the standard speed %'(km)hour&+press down the accelerator if the actualspeed %,( km)hour&is slower than standardspeed %'( km)hour&.And+ your nerves%communication network&form thecommunication system that transmits informationfrom eyes %detectors& to brain %assessor& andbrain %assessor& to foot %effector&.
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Boundaries of Management Control
Strategy formulationis the process of
deciding on the goalsof the organi-ation and
the strategiesfor attaining these goals.
Management control%Anthony and
ovindara/an+ 2((4&: is the process by whichmanagers influence other members of
organi-ation to implementthe organi-ation0s
strategies.
Task controlis the process of ensuring thatspecified tasks are carried out effectively and
efficiently.
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Distinctions between strategyformulation and management control:
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Characteristics Strategy Formulation Management Control
System design Unsystematic, Strategicdecision may be madeany time
Rhythmic,predeterminedprocedures
Nature ofinformation
ai!ored"made to facedprob!ems, more e#terna!and predicti$e, !essaccurate
%ntegrated, moreinterna! and historica!,more accurate
&ommunicationof information
Simp!e 'ifficu!t
%n$o!$ed peop!e op management andstaffs
op management and!ine managers
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Distinctions between strategyformulation and management control:
(
Characteristics Strategy Formulation Management Control
Number ofin$o!$ed peop!e
)e* peop!e +any peop!e
+enta! acti$ity &reati$e and ana!ytic dministrati$e andpersuasi$e
'iscip!ine -conomics Socia! psycho!ogy
ime hori.on end to !ong"term end to short"term
-nd products /oa!s, strategies Strategy imp!ementation
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Distinctions between management and taskcontrols:
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Characteristics Management Control Task Control
)ocus ofacti$ity
he *ho!e of operation %ndi$idua! tas ortransaction
Nature of
information
%ntegrated, many financia!
data
ai!ored"made to
indi$idua! tas, morenon"financia! data
%n$o!$ed peop!e +anagement Super$isor or none
+enta! acti$ity dministrati$e andpersuasi$e
)o!!o* direction ornone
-nd products Strategy imp!ementation ass are carried outeffecti$e!y andefficient!y
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Distinctions between management and taskcontrols:
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Characteristics Management Control Task Control
+enta! acti$ity dministrati$e andpersuasi$e
)o!!o* direction ornone
'iscip!ine Socia! psycho!ogy -conomics, physics
ime hori.on ee!y, month!y,annua!!y
'ai!y
ype of cost 'iscretionary costs -ngineered costs
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Examples of decisions in planning and control function:
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Strategy
Formulation
Management
Control
Task Control
-nter a ne* business -#pand a p!ant Schedu!e production
&hange debt toeuity ratio
%ssue ne* debt +anage cash f!o*s
dd direct mai!se!!ing
'eterminead$ertising budget
oo commercia!s
'ecide magnitudeand direction ofresearch
&ontro! of researchorgani.ation
Run indi$idua!research proect
cuire an unre!atedbusiness
%ntroduce ne*product or brand*ithin product !ine
&oordinate orderentry
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