A Management Control System

EXECUTIVE SUMMARY

This essay is going to set out a Management Control System that is used by Human Resource Department of Accenture, a large management-consulting firm, following an evaluation on the effectiveness of the system.

The plan is initiated with several key actions and key results that are in accordance with the firm's strategies. Then the paper will discuss several contextual elements that need to be considered. Those elements are implementation, control problems and the degree of management's knowledge about processes and outcomes. In the following part, the type of control and its tightness will be defined. Given relevant Key Performance Indicators for both the department and its sub-division, the performance evaluation can be done more precisely. At the end, an overall analysis and an assessment over the system will be provided.

1. INTRODUCTION

The human resources department, as an important division of a large company, has a number of responsibilities. First of all, this department deals with all the people within the company, such as hiring, training and compensation. This report is based on these three aspects to design and evaluate a Management Control System of a large management consulting firm. The analysis examines the organizational context which would influence the design of system and focuses on the features of the Management Control System. It argues the financial and non-financial key performance indicators of the controls and finally analyses and evaluates this system.

1.1 HUMAN RESOURCES DEPARTMENT OBJECTIVES

Based on the research of Accenture, which is a famous international management consulting firm, the objectives of human resources department include:

* Recruit the most suitable employees to support a various of related set of management consulting activities of the company

* Ensure both new and current employees have up-to-date professional knowledge and skills

* Maintain the high talented employees

* Improving job efficiency of the firm's daily operation activities

1.2 KEY ACTIONS

The key actions are related to the objectives and strategies of the organization. They are used to understand what are desired and what are likely to improve probability of success of the management control system (Merchant & Stede, 2007). The key actions of HR departments are listed below:

* To set up recruitment standards and procedures.

* To set up employee training plans.

* To set up performance and reward assessment

* To organize a workshop or seminar regularly

1.3 KEY RESULTS

The key results are expected results what the key actions, or moreover, the MCS want to achieve. In HR department, the key results are as follows:

* Recruitment of highly specialized and qualified staffs who have related management experience or different industry knowledge education background. This will be useful to enhance the work effectiveness and efficiency and minimize the mistakes in their work in certain degree.

* The training plan of employees can ensure the new employees have ability to handle their job and the current employees have up-to-date knowledge and skills to address the rapid changing management environment.

* The appropriate performance assessment will encourage employees in jobs and create cohesion between the team members. Moreover, the well-paid and kindly working environment would help company to maintain the high talented employees.

* Regularly workshop and seminar would improve the job efficiency and create a platform for staff to communicate and solve the complex problems.

2. INFLUENCING FACTORS OF THE DESIGN OF MCS

2.1 IMPLEMENTATION OF ORGANIZATION STRATEGY

HR department as a core competency is responsible for the workforce. The design of its MCS has to consider the organization strategy. Based on the organizational objectives mentioned above, the strategy needs to be set as achievable, such as clear targets and numbers. If the strategy is set as something hard to understand, the MCS cannot success as the organization desired. Moreover, HR department also needs a system to evaluate the implementation of the strategy. For example, evaluation of training process base on past performance data and desired future performance. This would be discussed in detail in the other part of this report.

2.2 MANAGEMENT ASSESSMENT OF CONTROL PROBLEMS

The MCS is aim at address the control problems as much as possible, but the perfect system is not existence. Merchant and Stede (2007) outline the main control problems are made up of three aspects, lack of direction, lack of motivation and personal limitation. According to the research of Accenture, the most fundamental problem is personal limitation. Thus, in the design of MCS, we pay more attention in recruitment and training which can effectively deal with this problem. The MCS also has a control package to address other problems such as regular workshop can help top management to deliver a clear motivation message to employees.

2.3 ASSESSMENT OF MANAGEMENT'S DEGREE OF KNOWLEDGE OF PROCESSES AND OUTPUT

The performance measurements influence the design of MCS. In this report, we focus on the financial results of annual report and the individual performance of employees. The different types of assessment would affect the actual implementation of control mechanism. For instance, the rewards would depend on the profit earn in this period and the group-based job revenues.

3. THE FEATURES OF THE DESIGNED MCS: TYPES OF CONTROLS AND DEGREE OF TIGHTNESS

As Accenture is globally well-known management consulting, technology services and outsourcing company, it is very important for human resources department to develop an efficient and effective management control system to help to achieve organization's goal. The control system designed for HR department includes three types of management controls, which are result control, action control and personnel & cultural control. However, the levels of control are different. Explanation is as follow.