Analyzing Management Control Systems: Bellagio Casino Case

This case study solution examines the management control systems implemented at the Bellagio Casino Resort. It defines good controls in organizational management as processes that ensure reliable financial reporting, efficient operations, and asset safeguarding, underpinned by effective leadership. The analysis identifies potential problems in the casino environment, including regulatory compliance, operational management in a crowded setting, and the risk of fraudulent activities. The solution then lists primary action controls at the Bellagio, classifying them as behavioral constraints, pre-action reviews, or redundancy measures, and detailing how each control addresses specific problems like competition, fraud, and regulatory adherence. Key roles such as blackjack dealers, pit bosses, and the vice president of table games are discussed, along with the controls ensuring their performance. Finally, the solution assesses the action controls' effectiveness based on flexibility, information dissemination, integration with organizational values, and cost-benefit considerations, concluding that the controls are strategically placed and capable of identifying and analyzing deviations in the gaming environment.

Running head: MANAGEMENT CONTROL SYSTEMS 1
Management Control Systems
Student’s name
Institutional affiliation

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Management control systems
Question 1
Good control can be defined as a process placed by the management of an n organization
to help in achieving the set objectives of the organization. The effectiveness of a control system
can be categorized into sections (Agyemang & Broadbent, 2015). They include; reliable financial
reports, effective and efficient operations. With an effective control system in management, the
organization will be able to safeguard its assets and also share reliable information. Good control
within an organization will be characterized by effective leadership (Bedford, Malmi & Sandelin,
2016). As a result, operations within the business/organization will be carried out with minimum
challenges.
Question 2
Bellagio is located in a central place in Las Vegas strip. In this kind of environment, there
are numerous problems that are likely to occur. First, there is the problem of laws and regulation.
Being that the area has a huge potential of attracting many customers, owners of casino have to
pay heavy taxes and comply with the strict rules and regulation placed by the authority. As a
result, violation of these rules and regulation could result in severe disciplinary actions within
and outside the jurisdiction. Being a crowded environment, managing and running the place may
be a challenging experience. As an illustration, within the Bellagio casino environment, there are
different control systems that have to manage properly (Conaty & Robbins, 2018). They include
daily counting of the cash and coins, observations and daily recording of the gaming activities,
and constant monitoring of the computer. All these activities require a trained and experienced
personnel. Without them, it will be difficult to operate in such an environment. The casino

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environment in Bellagio is a busy environment, therefore, there may be fraudulent cases taking
place or false analysis from independent operators. This may affect the performance of the
overall business (Davila, Foster & Jia, 2015).
Question 3
The controls found at Bellagio resort include;
 Locking cash boxes on the casino floor
 Daily counting the money collected from the casino by independent employees
 Constantly observing and supervising the gaming environment inside the casino.
 Observing and recording the whole casino environment using hidden cameras
 Timely analysis of deviations from the expected performances
 Constantly checking the computer being used in operation.
When it comes to action controls, there are four types of controls. They include; behavioral
constraints, pre-actions reviews, actions accountability and redundancy. Based on the controls
found and Bellagio Resort, they can be classified based on the four types of controls. Their
classification includes;
Control Classification
Locking cash boxes on the casino floor Behavioral (physical constraint)
Daily counting the money collected from the casino by
independent employees
Behavioral constraint
Constantly observing and supervising the gaming
environment inside the casino.
Redundancy
Observing and recording the whole casino environment Pre-action reviews

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using hidden cameras
Timely analysis of deviations from the expected
performances
Pre-action reviews
Constantly checking the computer being used in
operation.
Redundancy
The first problem to be addressed is competition and increase attraction of customers.
Competition and attraction of customers falls under timely analysis of deviation from expected
performances. Analysis of the performances of the casino help in evaluation any success being
made and changes that could be made when planning for any operations regarding the
performance of the casino (Van der Kolk & Schokker, 2016). Additionally, within such as an
environment, there are cases of fraud that may take place. The control actions addressing this
problem are timely observations and supervision of the gaming environment. There is also daily
cash and coin counts. The daily cash and coin counts are done by independent employees. This
limits cases of money getting lost or unaccounted for after any game has taken place. With these
approaches, the Bellagio resort can be certain of the money collected after the games are
completed. A major problem that was mentioned is the adherence to the laws and regulations.
This is being addressed by two control systems installed by the resort. They include;
• Continuous surveillance and supervision of the gaming environment
• Observation and recording of the gaming environment and other areas through closed circuits
televisions.

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The two control systems will be responsible for checking any illegal activities taking place
within the casino environment. This will include looking for under aged children playing the
games.
Question 4
The primary levels of authority include; the deputy president of table games, pit bosses
and blackjack dealers. Besides, the blackjack dealers may pay winning wagers or sell chips to
customers. According to the casino environment, dealing requires an experienced employee.
Consequently, the company employees’ dealers who have more than two years of experience
(Lowe & McInnes, 2015). Additionally, another control system being used is observation and
taking records of the gaming environment. When it comes to pit bosses, they supervise table
games and directs employees on the things they should be doing (Berry, Broadbent, J., & Otley,
2016). The control system fitted for their role include locked cash boxes at the casino floor,
constant observation and supervision of the gaming environment. The vice president of table
games is in charge of directing the table games. The control system ensuring that the vice
president performs his function is timely analysis of the expected performances.
Question 5
A good control system is characterized by the following: increased flexibility, ensuring
that information reach decision makers within the organization, ability to integrate with
organizational values and culture to ensure that all operations are carried in harmony. Another
characteristic includes; cost of the control system should be able to reflect on its economic

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benefits (Hsiao, Liao, Wu, Chen, Miao, Hwang & Zhang, 2016). From this explanation, the
action controls used at the Bellagio Casino can be considered as good since there are
strategically placed and they can be able to identify any deviations and carry out their analysis of
any gaming environment.

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References
Agyemang, G., & Broadbent, J. (2015). Management control systems and research management
in universities: An empirical and conceptual exploration. Accounting, Auditing &
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Bedford, D. S., Malmi, T., & Sandelin, M. (2016). Management control effectiveness and
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Society, 51, 12-28.
Berry, A. J., Broadbent, J., & Otley, D. T. (Eds.). (2016). Management control: theories, issues
and practices. Macmillan International Higher Education.
Conaty, F., & Robbins, G. (2018). A stakeholder salience perspective on performance and
management control systems in non-profit organisations. Critical Perspectives on
Accounting.
Davila, A., Foster, G., & Jia, N. (2015). The valuation of management control systems in start-up
companies: international field-based evidence. European Accounting Review, 24(2), 207-
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Hsiao, T. C., Liao, Y. T., Wu, P. K., Chen, T. L., Miao, M. T., Hwang, J. H., & Zhang, L. (2016,
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Innovation (ICASI), 2016 International Conference on (pp. 1-4). IEEE.
Lowe, E. A., & McInnes, J. M. (2015). Control in socio-economic organisations: a rationale for
the design of management control systems (Section II). International Journal of Critical
Accounting, 7(5-6), 411-426.

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Van der Kolk, B., & Schokker, T. (2016). Strategy implementation through hierarchical
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Management Control, 27(2-3), 129-154.