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Unit 1: Introduction to Management Control System
Neha Tikoo, Lovely Professional University

Unit 1: Introduction to Management Control System Notes

CONTENTS
Objectives
Introduction

1.1 Meaning of Management Control System
1.2 Nature
1.2.1 Management

1.2.2 Control
1.2.3 System
1.3 Basic Concepts
1.3.1 Important Features of Management Control Systems
1.4 Impact of the Internet on Management Control

1.5 The Domain of Management Control System
1.6 Summary
1.7 Keywords

1.8 Review Questions
1.9 Further Readings

Objectives

After studying this unit, you will be able to:
 Explain the meaning of management control system

 Discuss the basic concepts involved in management control system
 Recognize the nature of management control system
 Identify the process of management control

 Explain the scope of management control system
 Discuss boundaries of management control
Introduction

The importance of the subject matter covered in the courseware has been felt on the collapse of
companies such as Tyco, Global crossing, WorldCom, and Enron because of the lapse in controls.
CEO and top management compensation in these companies were so heavily tied up with stock
options that executives were motivated to manipulate financials to buoy the short-term stock
price. Similarly long-term success of world class companies such as Emerson electric, Lincoln
Electric, New York Times, Worthington Industries, 3 M Corporation, Nucor Corporation, Dell
Computer, Wal-Mart, South West Airlines, Cisco Systems and Analog Devices were not just
because they have developed good strategies, but more importantly, they have designed systems
and processes that energize their employees to execute these strategies effectively.

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