Project submitted in partial fulfilment of the Requirement for the award of the degree of
(FINANCE)
(OSMANIA UNIVERSITY)
BY SAMEERA
ENROLLMENT:NO: 143-00-1826
ACKNOWLEDGEMENT
At the outset, I would like to express my gratitude to permitting me to take up this project at ACCESS INFOTECH . I owe my special thanks to Mr. MAHMOOD, Branch Manager, for providing me all the facilities and guiding me wherever necessary. My sincere thanks to my guide and faculty member DR. D. SAMEER faculty and internal guide, DEPARTMENT OF BUSINESS MANAGEMENT, OSMANIA UNIVERSITY for his kind cooperation, as a guide and mentor, helped me in completing my project work.
I am grateful to my parents and all my friends for their help and co-operation.
DECLARATION
I hereby declare that this PROJECT REPORT submitted by me to the PGRRCDE, O.U, HYDERABAD, is a bonafide work undertaken by me and it is not submitted to any other university or institution for the award of any degree diploma / certificate or published any time before.
COMPANY CERTIFICATE
This is to inform that MS. SAMEERA belongs to PROF . G . RAM REDDY CENTRE FOR DISTANCE EDUCATION affiliated to OSMANIA UNIVERSITY with H.T No: 143-00-1826 has completed her project work on "MANAGEMENT CONTROL SYSTEM" at our ACCESS INFOTECH COMPUTER TRAINING CENTRE Branch BEGUM BAZAAR under guidance of Mr. MAHMOOD for the period of 25-06-2011 to 25-07-2011, during this period her conduct is good and satisfactory.
CERTIFICATE
This is to certify that the project report titled MANAGEMENT CONTROL SYSTEM submitted in Partial fulfilment for the award of MBA Programme of PGRRCDE O.U. HYDERABAD, was carried out by DR.D.SAMEER under my guidance.
CONTENTS
TABLE OF CONTENT
A Project Report on MANAGEMENT CONTROL SYSTEM SR. No.
TOPIC
INTRODUCTION OF RESEARCH TOPIC
Introduction of Management Control System Meaning of Management Control System Definition of Management Control System Objectives of the Study Limitations of the Study Scope of the Study
PAGE NO.
CHAPTER
1 - 18
CHAPTER
RESEARCH METHODOLOGY
Research Method Source of Data
19 - 22
THEORETICAL FRAMEWORK
Features of Management Control System Purpose and Importance of Management Control System Characteristics and activity of Management Control System Fundamentals and Concept of Management Control System Designing and Elements of Management Control System Boundaries of Management Control System Process of Management Control System
CHAPTER
23 - 41
42 - 44
CHAPTER V RESEARCH DATA ANALYSIS & INTERPRETATION CHAPTER V FINDINGS OF THE STUDY
45 - 55
56 -57
58 - 61
62 - 63
64 - 67
CHAPTER
INTRODUCTION OF RESEARCH TOPIC
A MANAGEMENT CONTROL SYSTEM (MCS) is a system which gathers and uses information to evaluate the performance of different organizational resources like human, physical, financial and also the organization as a whole considering the organizational strategies. Finally, MANAGEMENT CONTROL SYSTEM influences the behavior of organizational resources to implement organizational strategies. MANAGEMENT CONTROL SYSTEM might be formal or informal.
MANAGEMENT CONTROL SYSTEM Is the process of evaluating, monitoring and controlling the various sub-units of the organization so that there is effective and efficient allocation and utilization of resources in achieving the predetermined goals. MANAGEMENT CONTROL SYSTEM is concerned with
o o o
A MANAGEMENT CONTROL SYSTEM is a means of gathering and using information. MANAGEMENT CONTROL SYSTEM guides the behavior of managers and employees. MANAGEMENT CONTROL SYSTEM is defined a set of policies and procedures designed to keep operations going according to plan. MANAGEMENT CONTROL SYSTEM is Useful and simple perspective. MANAGEMENT CONTROL SYSTEM exists either formally but more often informally and empirically.
Financial data Nonfinancial data Formal control system Informal control system
Evaluatin g
S Set goals, D:
Evaluate
Feedback
B:
Plan
C:
Monitor
According to ROBERT. N. ANTHONY (1965) defined MANAGEMENT CONTROL SYSTEM is the process by which managers influence other members of the organization to implement the organizations strategies. Management control systems are tools to aid management for steering an organization toward its strategic objectives and competitive advantage. Management controls are only one of the tools which managers use in implementing desired strategies. However strategies get implemented through management controls, organizational structure, human resources management and culture. According to SIMONS (1995), MANAGEMENT CONTROL SYSTEM are the formal, information-based routines and procedures managers use to maintain or alter patterns in organizational activities. According to MACIARIELLO ET AL . (1994), MANAGEMENT CONTROL SYSTEM is concerned with coordination, resource allocation, motivation, and performance measurement. The practice of management control and the design of management control systems draws upon a number of academic disciplines. Management control involves extensive measurement and it is therefore related to and requires contributions from accounting especially management accounting. Second, it involves resource allocation decisions and is therefore related to and requires contribution from economics especially managerial economics. Third, it involves communication, and motivation which means it is related to and
MANAGEMENT CONTROL SYSTEM discusses the control systems that are required for effective managerial performance. A well designed and implemented control system helps managers take effective and timely decisions.
Such a system requires the involvement of all the functions of management. In other words, a management control system is interdisciplinary in nature. MCS influences the behavior of organizational resources to implement organizational strategies. MCS might be formal or informal.
The purpose of a management control system is to help the management of an organization coordinate and steer activities towards the achievement of the firm's objective.
To facilitate the development of a personalized approach to the analysis of multifunctional organizational problems. To develop students' capacity to think strategically about the implementation issues in an orgnisation and how MCS is an important component of execution, To build students' skills in conducting strategic analyses in a variety of business and organizational context and provide them a stronger understanding of the competitive challenges of a Changing global market environment; To give students hands-on experience in developing and evaluating management control options and figuring out how to implement them effectively. Our understanding of management controls as human activity/social systems and the role of social constraint; Social theory especially relations between human agency and social structure, and emergence within social reality; and At a methodological level, by developing a critical realist approach to the study of management controls.
Increase the efficiency. Decide corrective actions. Co-ordinations. The main of objective of management is to achieve the strategic goal through effective and efficient utilisation of resource.
Our understanding of MANAGEMENT CONTROL SYSTEM as human activity / social systems and the role of social constraint; Social theory especially relations between human agency and social structure, and emergence within social reality.
DESIGN FLAWS: It has been stressed that management control systems must be designed for the specific organization, operations, and environment in which they will function, after careful consideration of the risks involved in that particular situation.
POOR RESPONSE TO REPORTED ANOMALIES: Control systems are designed to callattention to events that depart from normal expectations. For the systems to remain effective, it is essential that supervisors and managers respond properly to such alerts.
COLLUSION: Any system of controls can be defeated if a sufficient number of dishonest key individuals conspire to subvert them and are able to falsify the relevant documents.
WRONGDOING BY TOP MANAGERS: Management controls are designed to help control the organization on behalf of its management, not to control the top managers themselves.
Study is based on the availability of secondary data. some other schemes in Mutual Funds.
Since there was a time limitation for carrying out the study of
Suggestions are only suggestive in nature. The study is limited to OPEN-ENDED Schemes.
CONTROL OVER EXPENDITURE: Capital budget is prepared for the whole concern. Every project is evaluated in terms if the advantage it accrues to the firm. For this purpose capital budgeting, project analysis, study of cost of capital etc are carried out. OVERALL CONTROL: A master plan is prepared for overall controls and all the departments of the concern are involved in this procedure.
CHAPTER
RESEARCH METHODOLOGY
To examine the effectiveness of training in overall development of skills of workforce. To examine the impact of training on the employees. To measure the differential change in output due to training.
RESEARCH DESIGN
Research Design refers to "framework or plan for a study that guides the collection and analysis of data". A typical research design of a company basically tries to resolve the following issues: A) Determining Data Collection Design. B) Determining Data Methods. C) Determining Data Sources. D) Determining Primary Data Collection Methods. E) Developing Questionnaires. F) Determining Sampling Plan.
SAMPLING PLAN
SAMPLE SIZE = 50 EMPLOYEES DURATION = ONE MONTH
SOURCE OF DATA
SOURCE OF DATA
A) Primary Data through Questionnaires. B) Secondary Data through Internet,Magazine,and Website.
A)
PRIMARY DATA:
Primary data collection is necessary when a researcher cannot find the data needed in secondary sources. Market researchers are interested in primary data about demographic/socioeconomic characteristics, attitudes/opinions/interests, awareness/knowledge, intentions, motivation, and behavior. Three basic means of obtaining primary data are observation, surveys, and experiments. The choice will be influenced by the nature of the problem and by the availability of time and money .
B)
SECONDARY DATA:
Secondary data is the data that have been already collected by and readily available from other sources. Such data are cheaper and more quickly obtainable than the primary data and also may be available when primary data can not be obtained at all.
CHAPTER
THEORETICAL FRAMEWORK
THEORETICAL FRAMEWORK
The first is to synthesize the current state-of-the-art with respect to Management Control Systems, pulling together what we perceive to be some of the existing concepts into a framework which we suggest is useful in identifying gaps in our current understanding. The second is to use the framework to suggest directions in which control systems might be modified to increase their effectiveness. The process of control and the application of control system concepts to Management Control has been talked about and discussed at great length in the literature over the previous twenty years. In its practical form control in organizations today is synonymous with financial control and in particular budgets and the budgeting process. This will continue to be extremely important for all organizations. However, it is apparent from the recent increase in pressure from outside the organization that ones view of control systems will have to be modified if organizations are to continue to run effectively. There is already sample evidence of this shift in the control practices of many organizations and we think we discern three major areas in which these changes are taking place. The need for control systems to be modified to reflect the increasing complexity of the organization's structure because of the evolution of more traditional organizational patterns, such as divisionalized organizations, into say multidimensional structures.
EMPHASIS: MANAGEMENT CONTROL SYSTEM require emphasis both on the search for planning as well as control. Both should go hand in hand to achieve the best results. FUNCTION OF EVERY MANAGER: Manager at entry level as to focus towards future operational and accounting data, taking into consideration on past performance, present trends and anticipated economic and technological changes. The nature, scope and level of control will be governed by the level of manager exercising it. EXISTENCE OF GOALS AND PLANS: MANAGEMENT CONTROL SYSTEM is not possible without predetermined goals and plans. These two provide a link between such future anticipations and actual performance. FORWARD LOOKING: MANAGEMENT CONTROL SYSTEM is on the basis of evaluation of past performance that the future plans or guidelines can be laid down. MANAGEMENT CONTROL SYSTEM involves managing the overall activity of the enterprise for the future. It prevents deviations in operational goals. CONTINUOUS PROCESS: It is a continuous process over the Human and Material Resource. It demands vigilance at every step. Deciding, Planning and regulating the activities of people associated in the common task of attaining the objectives of the organization is the Primary aim of MANAGEMENT CONTROL SYSTEM. PEOPLE ORIENTED: It is the Managers, Engineers and Operators which implement the ideas and objectives of the management. The coordination of the main division of an organization helps in smoother operations and less friction which results in the achievement of the predetermined objectives.
Clearly communicate the organizations goals. Ensure that every manager and employee understands the specific actions required of him/her to achieve organizational goals . Communicate the results of actions across the organization. Ensure that the management control system adjusts to changes in the Environment.
Designing an optimal MANAGEMENT CONTROL SYSTEM is important for an effectivess and long term sustainability of an organization. Low degree of control can result in chaos and confusion. Tight control system may erode creativity and entrepreneurship. A good fit in MANAGEMENT CONTROL SYSTEM arises when controls are used in right balance to promote efficacy and learning. It fits with internal environment in the best manner. It should also fit with external environment .It should allow the organization in preparing the organization for the future face the changes in the environment.
Focuses on programs and responsibility centers. Relies on two types of information viz. planned data and actual data. Aims at assuring that all aspects are in balance and are operating in close co-ordination. Built around financial structures. Follows a definite pattern and time schedule. Co-coordinated and integrated to other subsystems.
Planning what the organisation should do. Coordinating the activity of several parts of the organisation. Communicating information. Evaluating information. Deciding what, if any , action should be taken. Influencing people to change their behavior.
Finally, evaluating, coaching, and rewarding are more effective in the long term than measuring, comparing, and pressuring or penalizing.
Ensure that Resources are mobilised and deployed efficiently and effectively. Methods and procedures adopted by management to provide reasonable assurance that available resources and assets are properly deployed and safe guarded against waste, mismanagement and frauds. Management control covers the administrative, accounting and financial management areas.
IMPLEMENTATION OF STRATEGIES
TASK CONTROL
ESTABLISH STANDARDS
MEASURE PERFORMANCE
COMPARE TO STANDARDS
NEED
To ensure that the MANAGEMENT CONTROL SYSTEM adjusts to changes in the environment.
CHAPTER V
COMPANY PROFILE
INTRODUCTION OF COMPANY
o
ACCESS INFOTECH is an Information Technology company which provides technology solutions to a wide spectrum of customers across India, spanning a range of verticals Banking & Insurance, Manufacturing, Contracting, Retail & Distribution and Government.
development & website design with interactive flash & multimedia animation. This is a new generation business consulting firm that partners with clients to achieve break through performance. We provide a wide range of consulting services, from defining strategy to implementing solutions.
ACCESS INFOTECH offers a comprehensive range of software and IT solutions, including packaged applications for the , Manufacturing, Contracting, and Retail & Distribution industries. In addition, it offers a broad range of software services such as Custom Software Development, IT Consulting, Enterprise Application Integration (EAI), Managed IT Service, among others.
We are a software development company providing services to many industries including Central and state government offices, Educational Institutions.
ACCESS INFOTECH is committed to maintain 100% students satisfaction by certain values Precious Timekeeping & Highest level of Accuracy Potential Leadership with an Energetic Team Sufficient Infrastructure for anytime Expansion Continuous Growth & 100% Success
CHAPTER V
NO.OF.RESPONDENTS 24 16 6
PERCENTAGE 48 32 12
More Than 40
The above chart indicates that 48% of employees have attended less than 10 training programmes whereas 32 % of employees have attended .10-20 training programmes, it means in every MONTH there was 1 training programme attended in the organization in last ONE YEAR.
10 3
20 6
The above graph indicates that 74% of employees are agreed that training is a part of organizational strategy.
The above graph indicates that 50% of employees felt that training is given mostly on the basis of requirement whereas, 20% of employees felt that it is given to junior and new staffs.
The above graph indicates that 40 % of employees felt that, most important barrier to Training and Development in the organization is Non-availability of skilled trainers whereas, time and lack of interest by the trainees are also a barrier to Training and Development programme.
The above graph indicates that 36% of employees felt that programmed instruction is mostly used in the organization whereas,external training and conference/discussions are also used in the organization. It means that these 3 programmes are mostly used by the organization.
The above graph indicates that 30% of employees felt that technical training is the most important training which is being imparted for new recruitments in the organization ,it means that the organization is insisting more on technical training.
The above pie chart shows that 56% of employees felt that time duration for a training programme is sufficient whereas 24% of employees felt that ,it should be shortened.
The above graph shows that 84% of employees are agreed that training programmes helps in their career advancement.It means training programmes are helpful in career advancement also.
The above graph indicates that 40% of employees felt that the organization takes less than 1 month to implement the trained process.
CHAPTER V
92% of Employees are satisfied with ACCESS INFOTECH LIMITED. are experienced with ACCESS
About
ACCESS through
CHAPTER V
CONCLUSION
CONCLUSIONS
In this article we have introduced the concept of management control based on the need for all organisations to avail of the processes and mechanisms that enable them to create the most favourable conditions for these organisations to attain their objectives, while at the same time ensuring an effective and efficient use of their resources. The management control system seeks to orient in the decisionmaking process and influence the behaviour of the organisation members so that their performance increases its chances of achieving its objectives. Throughout the exposition developed in this article it has been seen that the theories on management control in organisations have gradually evolved as new internal and external variables have been considered that could affect an organisations performance. It may be considered that this development has been the result of societys transformation, of market changes and internationalisation, and increased competition in many sectors. Initially, we have looked at mechanistic and formal control systems, which include the classic theories and contingency theory.
The classic theories are based on the scientific and rational view of the companies, of management systems and on the scientific organisation of the work, premises under which it is assumed that employees are passive subjects whose performance may be totally controlled by formal mechanisms. Contingency theory is based on the premise that no control system is applicable to all organisations and all circumstances, but rather that it depends on each organisations specific circumstances, whether in relation to its environment, technology used, type of organisational structure, competition, management style, etc. Furthermore, it has been proven that mechanistic systems are characterised by clearly established objectives and measurable outputs, so that the latter are compared with the established objectives for the taking of appropriate corrective actions. The chief limitation of mechanistic and formal control systems is that, while they are applicable to organisations performing mechanistic and repetitive activities, they are difficult to adapt to changes in the environment and do not take the psychosocial aspects of individuals into account. In order to surpass the limitations of mechanistic systems, approaches have to be developed in which the passive, rational behaviour of individuals is substituted by a greater consideration for the organisational and motivational factors that influence behaviour, accepting that the crucial aspects for the design and implementation of the control systems are not limited solely to those of a formal nature. Control systems based on psychosocial mechanisms include trends based on human relations, human information processing and open systems theory. The trend that has researched into human relations has more deeply examined the analysis of the effects of individuals behaviour on the design of the control system, considering that people are moved not only by financial motivations but also by the satisfaction of other needs. The trend centred on human information processing introduces the
variable of decision-making by the management in the design of the control system. And too, the open systems 50 theory relates the control system with the environment and analyses the need for the ongoing adaptation of the control system to environmental changes. Finally, a line of research has been developed which has emphasised the organisations cultural and anthropological aspects as part of its control system, either as an internal variable that conditions the behaviour of individuals, their relationships and their motivation, or else as a metaphor, in other words an ideology that must be transmitted and communicated to individuals. All of these research trends view culture as a key factor in ensuring the efficiency of control systems, since this variable contributes to the identification of the individuals with the organisations objectives, thus facilitating their achievement. Likewise, we have succeeded in proving that accounting information has at all times been oriented towards facilitating decision-making by its users and that it provides a language capable of including all areas of the organisation; it constitutes an important boost to the development of management control systems, even though today it is accepted that, in addition to the formal aspects of the accounting information system, it is vital to consider the effect of psychosocial and cultural aspects. In other words, the current trend is to combine the use of formal systems, having quantitative and qualitative indicators, with informal systems, because it is considered that through the sole use of mechanistic systems it is impossible to control the relevant variables for an organisation to achieve its objectives.
CHAPTER V (A)
SUGGESTIONS
SUGGESTIONS
Complaints should be received from the employees and appropriate actions should be taken.
Pricing aspects: you can explain your features by comparing to other like: A)Computers. B) A/C Rooms. C) Internet Accessing Speed. D)Special Packages. E) All at one Place means urgent Printing,Scanning etc.
Steps should be taken to reduce the fee charges. Steps should be taken to provide some discounts. Privacy needed to the employees. Some more guides are required to engage the employee problems.
CHAPTER V (B)
RECOMMENDATION
AND BIBLIOGRAPHY
RECOMMENDATIONS
The first recommendation for any training program development is that it be focused on very specific themes or skills and knowledge gaps as identified by an organization. This training should also be deliverable in a very short period of time not to exceed three days. Organizations are expressing very strong opinions that any structured training for staff must be timely. We recommend ongoing evaluation and needs assessment for faculty development. A lifelong learning approach should be adopted to training and development in An ACCESS INFOTECH LIMITED. It is recommended that a continuum of training be developed along which ACCESS INFOTECH LIMITED will progress throughout their career. This training aims to equip members of An ACCESS INFOTECH LIMITED with the skills, knowledge and behaviour required to improve the service delivery provided by the organisation to the public. It is proposed that training should advance personal development, thereby improving personal and organisational performance. Regardless of rank or career path, training and development should be a continuous progression throughout a career in An ACCESS INFOTECH LIMITED.
BIBLIOGRAPHY
BIBLIOGRAPHY
REFERENCES: The Following are the References made during the development of this project work. TEXT BOOKS: MANAGEMENT CONTROL SYSTEM by KENNETH A. MERCHANT and WIM A. VAN DER STEDE (2ND Edition Printice Hall,2007). MANAGEMENT Edition). MANAGEMENT CONTROL SYSTEM by N.GHOSH and (Paperback Edition). MANAGEMENT CONTROL SYSTEM by R.S. AURORA and S.R.KALE. MANAGEMENT PHERWANI. WEBSITES:
www.google.com
CONTROL
SYSTEM
by
ROBERT
CONTROL
SYSTEM
by
GAUTHAM
www.yahoo.com www.wikipedia.com
THANKING YOU
Success is getting what you want. Happiness is wanting what you get. Dale Carnegie . Knowledge speaks, but wisdom listens. Jimi Hendrix.