Page 12 - DMGT514_MANAGEMENT_CONTROL_SYSTEMS

Unit 1: Introduction to Management Control System

Self Assessment Notes

Fill in the blanks:
8. In case of ................................. performance, there is feedback to the responsibility center in
the form of praise or other reward.

9. Strategic planning occurs at .......................... management levels; task control at the
........................ levels in the organization and management control is in ........................... .
10. Although systematic, the management control process is not .................................

11. Management control system includes both .................. and ....................... performance
measures.
12. ......................... control calls management attention to organizational developments.

1.4 Impact of the Internet on Management Control

The pace of information revolution accelerated with the invention of the computer, is gaining
momentum in the 1990s with the advent of the Internet.
The Internet provides major benefits in the following ways:
1. Instant access use: On the web, the huge amount of data can be sent to anyone anywhere
in the world in a matter of seconds.
2. Multi-targeted communication: The Internet has a vastly expanded one-to-many reach;
one web entry can reach millions of people.
3. Costless communication: Communication with customers via the internet avoids the costs
of salaries of telephone operator.
4. Ability to display images: The Web enables the customers to see the products being
offered for sale.
5. Shifting power and control to the individual: The individual is the “king”. Consumers
are in control and can use the web 24 hours a day at their own conveyance without being
interrupted or unduly influenced by sales representatives or telemarketers.
With these changes, the Internet has changed the rules of the game in the business – to individual
custom sector.

Example: In July 1995, Amazon.com began offering books for sale on its website and the
customers need not visit the bookstores for purchasing books.
The Internet has also changed business-to-business commerce.

Example: Companies have used the Internet to reconfigure their relationships with
corporate customers. Cisco’s website allows customers to configure products with complex
features with its “intelligent configuration” software rejecting orders where specific components
would be incompatible with other parts.
The impact of the Internet on the world of business has been significant. Management control
systems involve information, and organizations require an infrastructure to process that
information. The Internet provides that infrastructure making the processing of information
easier and faster with fewer errors. On the web, a manager can collect huge amounts of data,
store that data, analyze it in different forms and send it to anyone in the organization. Managers
can also use this information to customize and personalize their reports.

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