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Unit 1: Introduction to Management Control System

control system is the successful implementation of strategy. They do not consider adaptation Notes
and innovation as an integral part of the Management Control Process.
William Newman in his book Constructive Control Design and Use of Control Systems, considers the
domain of control systems to be the control function of management and believes that “control
is one of the basic phases of managing along with planning, organizing and leading.” Control
is seen as an essential part of the management process and a part of all the managerial efforts of
an organization.

Stafford Beer in his two books, Cybernetics and Management, and Decision and Control, Katz and
Kahn in their important work Social Psychology of organizations and Griesinger in his paper
“Towards a Cybernetic theory of the firm”, have viewed the entire organization as a Control
System. “Control” is seen as a characteristic or attribute of a Control System, it occurs when the
organization is attaining its purpose. Purpose and attainment of purpose are central to the work
of control system.
Joseph A. Maciarello and Calvin Kirvy in their book Management Control System, 2nd Edition,
defines management control both as the control of strategy and the control of operations.
Moreover, as it is concerned with the design of management systems used to steer organization
towards its purpose, it includes the aspects of the planning, organizing and leading the functions
of management, thus, distinguishing it from Newman’s definition. It describes a management
control framework which, when implemented will enhance organizational adaptability and
thus, accelerate productivity and quality improvements. The framework is a part for resolving
inadequacies in current control system, for making organization work towards optimal
performance and for enhancing competitiveness.

Self Assessment

Multiple Choice Questions:
18. “Control is one of the basic phases of managing along with planning, organizing, along
with planning, organizing and leading,” Who said this?

(a) William Newman (b) Stafford Beer
(c) Robert Anthony (d) None of the above
19. Which of the following is defined as the science of communication and control?
(a) Cybernetics (b) Industrial dynamics
(c) Strategic planning (d) None of the above

20. What does the MSSM stand for?
(a) Mutually supportive systems model
(b) Mutual strategic Management system model

(c) Managing strategic and subsystem model
(d) None of these.
21. Who coined the term “cybernetics?”
(a) Richard Mason (b) N.Weiner
(c) Robert Anthony (d) Stafford Beer

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