**Introduction
Management control system is a crucial aspect of organizational performance, without which an organization cannot achieve its set objectives. This system involves the use of different management tools, techniques and processes that help to control and monitor the different aspects of an organization. These aspects may include operations, finance, human resources and marketing among others. In this article, we will explore the four elements of management control system that every organization should strive to achieve.
**Element 1: Planning
Planning is an essential element of management control system. It is the process of setting objectives, determining the necessary resources required, and formulating strategies that will help an organization achieve its goals. Planning involves analyzing the organization’s strengths, weaknesses, opportunities and threats, then identifying the best course of actions to pursue. This element is important in providing direction and focus for an organization.
The planning process involves several steps, including establishment of objectives, assessment of resources, forecasting, development of strategies, and selection of the best course of action. A well-implemented planning process enhances the organization’s ability to adapt to changes in the external environment. This in turn increases the organization’s competitiveness and ensures its long-term growth and sustainability.
**Element 2: Control
Control is another element of management control system. It is the process of monitoring activities and ensuring that they are performed in accordance with predetermined plans. This element is vital in ensuring that an organization stays on track towards the achievement of its goals.
The control process involves establishing standards, measuring actual performance, comparing the two, identifying deviations, and taking corrective actions. It provides an opportunity for management to identify areas that need improvement. This element is important in minimizing deviations from expected performance, reducing waste, and improving efficiency.
**Element 3: Coordination
Coordination is another important element of management control system. It is the process of ensuring that different activities within the organization are synchronized and working together towards the achievement of the organization’s goals. This element is crucial in avoiding conflicting actions that may result in poor performance or failure to achieve set targets.
The coordination process involves communication, cooperation, and collaboration among different departments and individuals within the organization. A well-coordinated organization is able to achieve its objectives within the set time frame and with minimal resources. It also enhances the organization’s ability to respond to changes in the external environment.
**Element 4: Communication
Communication is the final element of management control system. It involves the exchange of information, ideas, opinions and instructions among individuals within the organization. This element is crucial in ensuring that everyone within the organization understands the goals, strategies and plans of the organization.
The communication process involves both formal and informal communication. The formal communication includes memos, reports, policies, and procedures, while the informal communication includes face-to-face conversations, emails, and phone calls among others. A well-implemented communication process enhances the organization’s ability to disseminate information and elicit feedback. It also enhances decision-making and ensures that everyone within the organization is working towards a common goal.
**Conclusion
In conclusion, management control system is an essential aspect of organizational performance. It involves the use of four elements, including planning, control, coordination and communication, to ensure that an organization achieves its set objectives. These elements are interrelated and rely on each other for effectiveness. A well-implemented management control system enhances an organization’s ability to adapt to changes in the external environment, improves efficiency, and ensures long-term growth and sustainability.