Using a management control system allows a company to gather and assess information to make organizational decisions. The decisions made often affect large areas in the business, such as the human resource, production, or financial departments. The best tips for selecting a management control system include looking at the current organizational structure, deciding on the purpose for the system, and using specific workers to work it. Other factors may also apply depending on the time and industry in which a company operates. These systems can take some time to implement.
A company’s current organizational structure defines the roles and responsibilities in each position within a business. The roles defined typically go from the highest executive to the lowest worker; a management control system will most likely alter this structure. Executives may need to look at the structure and decide which positions can shift under the new system. The design of the structure may also change. For example, the company may move from product-oriented to function-based.
Deciding on the purpose for the management control system is another factor for this process. A company may decide to use the system as a change agent or as a decision support system. A change agent system often directs a company on how to alter its system. Decision support systems are in close relation to the change agent methodology. A company’s management team often requires copious information on decisions, which leads to the definition for the management control system.
Certain workers in a company may be more suited to work a management control system than others. These systems often require specific tasks and certain levels of education to complete the system’s activities. In many cases, a company may discover workers who balk at the change brought on by the control system. A large shift in a company’s operations may require the use of an outside consultant. The consultant can help the company implement the control system and make it work properly.
Internal controls are often a large part of a management control system. These controls prevent a company from implementing a system that fails to protect the company’s current operations. For example, asking a worker to complete closely related tasks can result in a violation of the segregation of duties. This segregation ensures workers are unable to compromise the system and use company resources for personal gain. Internal controls also ensure a company is compliant with internal regulations.
