Management Control Systems & The Crafting of Strategy: A Practice Based View

1. Management Control Systems & The Crafting of
Strategy: A Practice Based View

2. Prepared by,
M.K. Jahid Shuvo
Dept. of A&IS
Jahangirnagar University

3. Introduction
 Customer manager relationship is vital
 The concept of the topic is based on the relationship between day to day activity of
management control system (MCS) and activities of Head Office to develop
relationship
 Two related factors are
1. Balance Scorecard (Non-Financial Information)
2. Subsequent development of strategy development, implementation and
refinement
 Provides new insights of strategy & management control

4. Research Design
 Aim to run a fieldwork in the restaurant division of United Kingdom
 Relationship between management control systems and strategy
 Correlated process of identifying, understanding & scheduling systems
 Analysis of customer relationship in different individual restaurants
 Head Office activity & operations of staff on management control system

5. Overview of the Restaurant
 Developed new units
 200 units became profit centers
 Wholly-owned restaurant is run by salaried managers
 Substantial reform of sales and growth were made
 Restaurant is listed in London stock exchange
 Restaurant has limited liability and own Board of Directors

6. Nature of The Research Conducted
 Length of the research was 2 years
 Interviewers, examination of records, direct observation of management and
workshops
 Data collection & processing of a series of semi-structured information

7. Organogram
Group board of
directors
Restaurant Division
managing director
Operations director
Area managers Restaurant managers
Marketing director
Finance and
commercial director
Commercial Finance MIS
Human resources
director
Central financial
services
Based away from Head Office

8. Information on Fieldwork Activity
Functional breakdown of interviews carried out
 Central financial services 1
 Head office—Commercial 6
 Head office—Finance 11
 Head office—HR 4
 Head office—Managing Director 1
 Head office—Marketing 5
 Head office—MIS 2
 Head office—Operations 4
 Area managers 2
 Restaurant managers 9
45

9. Information on Data Collection
 Average interview time was 70 minutes
 Interviews were tape recorded and notes were taken in detail
 Internal planning controls & financial documents
 Head Office managers & all staff specialists across all the functions were studied to
gather information
 15 other restaurants were visited and studied
 Short meeting with assistant managers, chefs and support stuffs helped to gather
information

10. Statements from the managers
“I see the role of the marketing department in driving the sales, driving the top line—
inevitably making sure whatever we do, it doesn’t drive the top line to the detriment of
profit.”
-----Marketing Director
“The brand’s important at the moment because it gives the customer a certain
minimum standard and a reassurance of what they’re gonna get when they go
through the door.”
-----Regional General Manager

11. Process of creating new customers &
maintaining relationship
 Head office strategy must be formulated through management control system
 Ensuring customer satisfaction (Budget constraints in some cases)
 Organized balance of control is to be established

12. Discussion
 Management control system reflects the strategy to be followed
 Developed brand concept
 Emphasizes on specific Head Office activities
 Customer group segmentation is suggested
 Process oriented strategy is to be formulated

13. Findings
 Performance in Head office & management control system both are important to
find the proper strategy to implement
 Detailed relation between high level management and strategic planning
department is necessary
 For management control system, ABC approach was the most important previously
 Economic Value Added is now the most used management control system
 Management control system usage depends largely on the experience of the
managers
 Relationship with customers cannot be represented all-time from ‘Mechanical
Cause and Effect’ relationship