Management control information can cover various organizational levels: (a) total organization level, (b) customer/ market level, (c) individual-facility level and (d) individual-activity level. The distinctive MCS features can be categorized into 6 dimensions (a) action/ results controls, (b) formal/ informal controls, (c) tight/loose controls, and (d) restricted/ flexible, (e) impersonal/ interpersonal controls and (f) financial/ non financial information (Auzair, 2011). The management accounting system is a subsystem of the formal part of an MCS in this case. On studying an MNC, a few key considerations usually are pointed out:
a. Centralization vs decentralization
b. Motivation and goal congruence
c. Responsibility centre choice
d. Transfer pricing concern
There is also a discussion on how MCS can affect the impacts of using enterprise resource planning systems in enterprises (Kallunki et al., 2011).
The overall concern of the topic on MCS is how to design an effective MCS which is aligned with an organization's strategy and goals.
References
- Auzair, S.M. (2011) "The effect of business strategy and external environment on management control systems: a study of Malaysian hotels", International Journal of Business and Social Science Vol 2 (13), pp. 236-244.
- Bhimani, A., Horngren,C.T., Datar, S.M. and Foster, G. (2008) Management and Cost Accounting, FT Prentice Hall.
- Kallunki, J.P., Laitinen, E.K. and Silvola, H. (2011) "Impact of enterprise resource planning systems on management control systems and firm performance" International Journal of Accounting Information Systems 12, pp. 20-39.
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