Contingency approach in

Management Control
System
By
Tarun Gupta
07bs4596
Type of technology,
environment, and other
contextual factors determine
what is the effective structure

Reactive Approach

“If then”- Relationship

• 1950s and 1960s need for considering
environmental contingencies.

• Fred Fielder, in the 1960s and 1970s, was

an early pioneer in this area

• NASA, ISRO etc used this system most

because there is huge uncertainties
attached to each mission
 Need for Contingency
approach for Management
Control System
• Cultural differences
• Customer diversity
• Employee diversity
• Different accounting standards
• legal regulations
• Technology
• Organizational Structure
• Environment
 Indian Railways
Konkan Railways have different timetable
for Monsoon Season.

Railway, in order to avoid rush in long

distance train during summer holidays
railways attach additional bogies according
to the reservation status.

Tatkal Seva in daily long distance long

trains.

Reduce AC fares to avoid competition from

 Kodak Goes Digital
• Changed its main Business Photographic
Film making to Digital photography after
realizing that their profit is declining day by
day

• Company’s business had been

significantly affected by the quicker than
expected shift of consumer to the film less
digital cameras
 Case Study
Rise and fall of Gopal maji
Gopalji maji was divisional manager of Howrah division of Best
Keen and Johnson company. In order to make this company
profitable he reduced working strength by 25 % and modernize
machinery to get good quality and quantity. In second year he
reduce the consumption of raw material and enhancement of
labor productivity. Company made huge profits. In Third year he
reduce the planning, purchase & design department by 30%
expecting huge profits.

But he fail to perceive the environmental change i.e. liberalization

occur. Many new manufacturer come with new products. Many
orders come into his way he accepted all of them. But many staff
member resigned on their own. He can not meet the dead line and
company just broke up.

In fourth year order started drying up and company made huge

losses.
THANK YOU
 Case Study
Rise and fall of Gopal maji
Gopalji maji was divisional manager of Howrah division
of Best Keen and Johnson company. In order to make
this company profitable he reduced working strength
by 25 % and modernize machinery to get good
quality and quantity. In second year he reduce the
consumption of raw material and enhancement of
labor productivity. Company made huge profits. In
Third year he reduce the planning, purchase & design
department by 30% expecting huge profits.

But he fail to perceive the environmental change i.e.

liberalization occur. Many new manufacturer come
with new products. Many orders come into his way he
accepted all of them. But many staff member
resigned on their own. He can not meet the dead line
and company just broke up.

In fourth year order started drying up and company

made huge losses.