Management Control Systems - Assignment Example

Management control system Name of the student Name of the unit Date of submission Question one Disadvantages Inability Is a Problem One of the greatest issues when managing a decentralized business is sheer inability. On the off chance that representatives are not prepared and experienced in the sorts of things that they will be in charge of, then the business is incredibly hurt. Instead of taking a gander at things from a broad point of view, they take a gander at it from their own viewpoint. This might be the case in CBA banks as the bank profitability declines1. The Big Picture is blurred At the point when an excessive amount of center is put on the littler areas of a business, the general target and objectives of the business overall can be skewed. This is the fundamental reason that numerous organizations pick against decentralization. More so in marketing strategies of the CBA banks (Dargaud, et al., 2015). Not a Good Choice for Some In the event that an organization or business hasn't totally settled its method for doing things, their principle objective, are as yet building a name for themselves, then decentralization is normally not the best decision. Just organizations that are entrenched ought to consider this sort of association structure and bank is not good for decentralization. Advances Unhealthy Competition When you put power in lower administration's hands, they take it to heart. They feel as if the accomplishment of their segment falls specifically on them, and from various perspectives it does. This causes these supervisors to start contending with each other. This can result to poor performance like in CBA (Dargaud, et al., 2015). Advantages 1. More Input, Better Results By allowing more people to be incorporated into the decision making process, you are opening up more information for plans and inventive contemplations. This is an awesome favorable position for associations since you can separate the way that the business is continued running from various perspectives. This clarifies the underlying 2. Time for Bigger Things The top individuals in the organization much regularly have greater fish to sear, as opposed to invest their energy settling on littler choices. By appropriating the obligations down the chain in the organization, they can concentrate on more correlated issues and tasks. 3. Quickened Decisions With a decentralized association structure, a business can settle on choices and actualize them much faster than if they worked underneath a unified structure. This is on the grounds that, regularly, the issues and choices that should be taken care of include lower territories of the business. In the event that the force is set specifically into these lower regions hands, then the upper administration doesn't need to manage the issue and a reaction can be achieved much speedier2. 4. Recognizing the Problem Is Easy Usually, people can fly under the radar when they are not doing their occupation, essentially in light of the way that the issues that they cause will fall onto upper organization. Decentralizing a business allows an association to stick point the slight associations in their chain and, in this manner, run the association more gainfully. (i) Evaluate whether the proposed structure is strategically beneficial to CBA Strategically the proposed structure is not beneficial since there is a lot of overhead cost which comes as a result of work duplication. For instance, when it comes to marketing, the company should be having one brand to market and should run one advert covering all the branches. This in essence will help in spreading marketing cost to each and every branch rather than one branch to carry the whole expense by themselves. The top management should be in a position to harmonize the activity of the bank and develop one channel of communication. Customer satisfaction can be improved through proper communication channels where feedback are acted upon by the top management which will trickle it down to individual branches. The decentralization should not be on all the activities where the branches though one unit act independently. Products should be designed by top management and each branch manager should be part of the decision process then they are given opportunity to implement the decisions which has been made by the top management hence uniformity in operations. Question two It is true that towards the budget period month expenses tend to be higher than other months of the budgeting period not only in private institutions but also in government. The tendency of this unprecedented spending by the organization is as a result of not meeting budget objectives. One of the many functions of budget is Planning purposes if the organization failed to meet planning purposes, they will only rush to clear the remaining work which they have not completed during the budget period and failed to plan their activity periodically hence rushing to meet deadlines set by management. Secondly, budget aims at facilitating communication and coordination across the organisation. If the objective of timely communication has failed in the organization the last minute rush to clear the buck lock will continue. If the other departments have ordered the items they required, the purchasing department will be in hurry to meet the other department purchases requisition. This is only possible if there is lack of proper communication. Budget is not used to clear departmental cash floats but should by all means used for the purpose intended and when for controlling purposes. With no proper timeframes and budget control this kind of expenditure will continue (Mowday et al., 2013). The way that costs seemed to rise altogether inside of a month of the end of the financial backing period is bad for the organization operations. In the first place it result into pointless costs which may result to lose to the organization. Racing to spend does not permit the association to investigate the way of suppliers, nature of products they can supply and cross examining different choices. This is bad and might result to expanding in overhead consumption and lower the organization benefit. It can assist results to low quality of item in the division and association on the loose. This sort of spending can likewise influence how directors utilize the data gave by the financial backing framework and how the impacts of such utilize criticism on the data that is gone into the monetary allowance3. On the off chance that the data in the monetary allowance is false and off base, it just infer the directors will be settling on wrong choice to the organization and the finished aftereffect of this sort of choice is misfortune to the organization. The administrators are dependably the pioneers who gives the association course, in this way, they require verifiable choice which are steady. The remarkable spending does not give space for gauging which is bad for association (Mowday et al., 2013). Question three. a) This is a product differentiated strategy which the company is offering. The fact that the product has specific standard features explains why it is product differentiated since the product to be offered in market is different from others b) This is product differentiated since it is a new product in the market being produced by no one in the market, hence it is distinct and unique in the market differentiating it from other product. c) This is a low cost strategy, it aims at selling the product to customer at discounted price. It aims at attracting more customers through low prices d) This is product differentiated since it is a new product in the market being produced by no one in the market, hence it is distinct and unique in the market differentiating it from other product. Bibliography 1. Dargaud, Emilie, and Armel Jacques. "Hidden collusion by decentralization: firm organization and antitrust policy." Journal of Economics 114, no. 2 (2015): 153-176. 2. Mowday, Richard T., Lyman W. Porter, and Richard M. Steers. Employee—organization linkages: The psychology of commitment, absenteeism, and turnover. Academic Press, 2013. 3. Mowday, Richard T., Lyman W. Porter, and Richard M. Steers. Employee—organization linkages: The psychology of commitment, absenteeism, and turnover. Academic Press, 2013. Read More