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management control systems (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, MCS influences the behavior of
organizational resources to implement organizational strategies. MCS might be formal or informal. The
term ‘management control’ was given of its current connotations by Robert N. Anthony (Otley, 1994). [1]

Robert N. Anthony (2007) defined Management Control is the process by which managers influence other
members of the organization to implement the organization’s strategies. Management control systems are
tools to aid management for steering an organization toward its strategic objectives. 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.[2] Anthony & Young (1999) showed management control system as a black box.
The term black box is used to describe an operation whose exact nature cannot be observed. MCS
involves the behavior of managers and these behaviors cannot be expressed by equations. Anthony &
Young (1999) showed that management accounting has three major subdivisions: full cost accounting,
differential accounting and management control or responsibility accounting. [3]

According to Horngren et al. (2005), management control system is an integrated technique for collecting
and using information to motivate employee behavior and to evaluate performance.[4]. According to
Simons (1995), Management Control Systems are the formal, information-based routines and procedures
managers use to maintain or alter patterns in organizational activities [5]

Chenhall (2003) mentioned that the terms management accounting (MA), management accounting
systems (MAS), management control systems (MCS), and organizational controls (OC) are sometimes
used interchangeably. In this case, MA refers to a collection of practices such as budgeting or product
costing. But MAS refers to the systematic use of MA to achieve some goal and MCS is a broader term
that encompasses MAS and also includes other controls such as personal or clan controls. Finally OC is
sometimes used to refer to controls built into activities and processes such as statistical quality control,
just-in-time management.[6]

According to Maciariello et al. (1994), management control 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 must draw contributions from
social psychology especially organizational behavior (see Exhibit#1).[7]

Exhibit#1: Management control as an interdisciplinary subject

Management control systems use many techniques such as

 Balanced scorecard

 Total quality management (TQM)

 Kaizen (Continuous Improvement)

 Activity-based costing

 Target costing

 Benchmarking and Benchtrending


 Budgeting

 Capital budgeting

 Program management techniques, etc.

Total quality management

From Wikipedia, the free encyclopedia

Total Quality Management (or TQM) is a management concept coined by W. Edwards Deming. The basis
of TQM is to reduce the errors produced during the manufacturing or service process, increase customer
satisfaction, streamline supply chain management, aim for modernization of equipment and ensure
workers have the highest level of training. One of the principal aims of TQM is to limit errors to 1 per 1
million units produced.

The application of TQM can vary tremendously from business to business, even across the same