Management Control Session 1 PDF

MANAGEMENT CONTROL Dr. AIT OUFKIR Abdellah [email protected] AIT OUFKIR Abdellah CONTENT 1 GENERAL GUIDELINES 2 SOME DEFINITIONS OF MANAGEMENT CONTROL EVALUATION CRITERIA 3 4 DEFINITION OF CONTROL MANAGEMENT CONTROL TOOLS 5 STUDENTS INSIGHTS  GENERAL GUI...

MANAGEMENT CONTROL Dr. AIT OUFKIR Abdellah [email protected] AIT OUFKIR Abdellah CONTENT 1 GENERAL GUIDELINES 2 SOME DEFINITIONS OF MANAGEMENT CONTROL EVALUATION CRITERIA 3 4 DEFINITION OF CONTROL MANAGEMENT CONTROL TOOLS 5 STUDENTS INSIGHTS  GENERAL GUIDELINES DEVELOPMENT MISSION The primary mission of management Around the 1920s, the function of control was cost management through "management control" emerged in some cost accounting (analytical accounting). large American industrial companies. In Nowadays, management controllers are Europe, management control developed in assigned advisory and organizational the early 1970s. steering tasks (performance management).  SOME DEFINITIONS OF MANAGEMENT CONTROL: (ANTHONY, 1965) (GARMILIS, ARNAUD & (BURLAUD AND VIGNON, 1988) SIMON, 1997) "The process by which "A set of actions, attitudes, "A system for regulating managers ensure that tools, and procedures that human behavior in the resources are obtained and enable a company to exercise of their used effectively and establish long-, medium-, profession, especially efficiently to achieve the and short-term objectives when it takes place within organization's objectives." and to continuously ensure an organization." their achievement."  THIS GIVES RISE TO THREE EVALUATION CRITERIA FOR MANAGERS: RELEVANCE: EFFECTIVENESS: EFFICIENCY: The suitability of the means The ability to achieve the The use of the minimum used in relation to the objective, meaning to attain resources necessary to objectives. a result that aligns with the achieve the result. goal.  THE MANAGEMENT CONTROL TRIANGLE Objectives Relevance Effectiveness: Ressources Efficiency Results DEFINITION OF CONTROL 01 The notion of “control” refers to “mastery”, not “supervision”. “Management must have control over the management of the company in the same way that a driver must have control over his vehicle. To control a situation: to be able to master it and direct it in the 02 The purpose of control is to measure the results of desired direction. desired one or more actions, and to compare the with the direction objectives set in advance, to determine whether there is agreement or divergence  CONTROL = MASTERY This implies being able to conduct The goal of management control is to a causal analysis that leads to help the company stay on its assigned corrective action proposals. course. Its mission is often associated with the concept of steering or piloting. Example: In everyday language, the expression "control your vehicle" means to master or have control over it.  The objectives of management control are to: 01 MANAGEMENT Measure, Analyze, CONTROL = MASTERY And improve the company's performance. OF MANAGEMENT This mastery is ensured by operational managers and general The notion of control is used in 02 management. the sense of mastering management. The role of the management controller is to assist them in 03 achieving this mastery by implementing: The necessary tools for defining objectives, Developing action plans, And monitoring performance. MANAGEMENT CONTROL = MASTERY 01 Objectives (seen as a trajectory), OF MANAGEMENT 02 Forecasting, As a system for steering the company's performance, this 03 The ability to measure outcomes, system includes several elements: 04 Comparing outcomes with forecasts, 05 The ability to take corrective actions.  ITEMS CONSUMED UNIT UNDER CONTROL OBTAINED RESULTS MEASUREMENT CONFORMITY DIFFERENCE REFERENCE CORRECTIVE ACTIONS CAUSE ANALYSIS  01 Management Accounting or Managerial accounting Management accounting involves the calculation and analysis of costs, which MANAGEMENT are essential for forecasting, measuring, and controlling results. CONTROL TOOLS It provides useful information to the company's leaders and managers to support decision-making and contributes to improving the organization's performance. 02 Budgets and Budgetary Control A budget is a quantified forecast allocation of objectives and/or resources to responsibility centers for a specified short-term period. Management control has many tools to carry out its various 03 Balanced Scorecard tasks. Balanced Scorecards are short-term management tools focused on action. The main tools will be briefly They include a limited number of clear, relevant indicators that can be quickly introduced and later developed obtained, reflecting the competitive factors of the company or a responsibility in detail. center. 04 Internal Transfer Prices Internal transfer prices are the prices that value transactions between responsibility centers. They allow for the measurement of each center's contribution to the overall results of the company. An internal transfer pricing system aims to convey market constraints within the organization to energize and motivate the managers of these centers. THANK YOU FOR YOUR ATTENTION Dr. AIT OUFKIR Abdellah [email protected] AIT OUFKIR Abdellah