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Management Planning and Control Chapter 1 Summary

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1. Management and control
(1) Management is the process of organizing resources and directing activities for the purpose of achieving organizational objectives”
(2) Distinguish three elements of management process
a. Objective setting
Knowledge of objectives is a kind of necessary prerequisite for the design of MCS, but objectives do not have to be quantified and financial.
Employees must have a basic understanding of what the organization is trying to accomplish. Otherwise no one could claim that any of the employees’ actions are purposive, and no one could ever support a claim that the organization was successful.
b. Strategy formulation
Strategy is defined how organizations should use their resources to meet these objectives. A well-conceived strategy guides employees in successfully pursuing their organizations’ objectives and conveys to employees what they are supposed to be doing. Strategy formulation is useful for make MCs, but is not mandatory.
c. Management control
I. Management control vs. strategic control
1) Strategic control
-focus on external changing environment to identify the valid strategy
-compete with other firms in industry based on the analysis of strengths, weakness, opportunities and limitations
2) Management control
-focus on internal employees
-employees should know what company expect them to do; employee really do what they need to do; employee have ability to do; solutions to the control problems.
From a management control perspective, strategic should be viewed as useful but not absolutely necessary to the proper design of MCS. When strategies are formulated more clearly, more control alternatives become feasible, and it become s easier to implement each form of management control effectively. Managers can, however, design and operate some types of MCS without having a clear strategy in mind.
II. Behavioral emphasis…...

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