ACCG828: Management Control Systems Design Report Analysis

This report delves into the design of Management Control Systems (MCS), emphasizing action control mechanisms within an organizational context. The analysis centers on Jumbo Interactive Limited, exploring its needs concerning customer retention, operational efficiency, and regulatory compli...Read More

Management Control Systems Design 1
MANAGEMENT CONTROL SYSTEMS DESIGN.
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Management Control Systems Design 2
PART TWO: Management Control Systems.
Management control systems are primarily organizational development tools. For
instance, they are designed with a primary motive of enhancing the management and control of
an organization. Notably, the systems also undertake the measurement of how well
organizational activities are performed concerning the achievement of corporate objectives.
Furthermore, the management and control are aimed at the realization of organizational goals
and operational efficiency. Besides, keeping the diversity of global organizational entities, their
structures and the area of specification they explore, there can be various types of management
control systems. The management systems moreover, can have varied impacts and outcomes on
an organization depending on the type and the suitability in an organization (Lueg and Radlach
2016).
Notably, the design and feasibility of a management control system in most cases is
greatly dependent on various factors. Most importantly, the ability to address specific
management issues concerning personnel, actions, operations and notably the ability to align
with the organization objectives in terms of staff, activities and operational control and
development. Besides, the systems are influential in managerial decisions by the executive
company officials. The importance of the methods is also derived from the existing impacts of
organizational management failure. Therefore, the MCS systems are designed and implemented
to control the probability of mismanagement effects like financial losses and damaged
reputation.
Before introducing our Management control design, an insight into the various types of
controls is essential. Notably, there are multiple types of management control systems, and these
systems also come along with different cost intensity during organizational implementation.
Notably, the action controls of a management system are meant to oversee the alignment of

Management Control Systems Design 3
employee actions to the corporate strategic objective. Besides, some of the advantages of the
action controls are that it is the most direct form of control, efficient in enabling coordination and
also increase the ability to predict actions. Their demerits, on the other hand, include; limited
feasibility, tendency to focus on easily manageable activities and it causes negative attitudes.
Furthermore, besides discouraging creativity, the control is costly, especially where
preaction reviews are involved — cultural restrictions on the other hand work towards ensuring
employee diversity appreciation and cohesion. Besides, the control shapes the organizational
behavioral reputation. Also, personnel controls are meant to ensure the utmost self-efficiency and
productivity out of the employees of the organization (Dumay and Dai 2017). Lastly, result
control systems are intended to provide clarity between the actual and projected results and
design ways and strategies to enhance the organizational outcomes. Besides being motivational,
it involves defining the scope of performance, measuring the performance, setting the
performance targets and providing rewards both intrinsic and extrinsic. On the positive side, the
results-based controls provide effective control even with imperfect knowledge on desirable
actions, it motivates the employees even under autonomy, enhances the employee commitment
and does not attract many costs (Lawrence 2018). On the negative side, there are significant
measuring with precision errors and not all employees are susceptible to being empowered to
productivity as it may seem best to them.
Organizational needs and issues identified
For instance, our organizational needs in the contextual analysis of Jumbo interactive
limited which does the resale of lottery games under the umbrella of Tatts Group -revolved
around enhancing an entertaining experience with customers in order to enable the customer
retention aspect. Furthermore, the analysis of customer trends at jumbo limited reveals an

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increased tendency towards the online purchases. This revelation creates a gap in the company’s
need to enhance operational efficiency in terms of creating an interactive, diverse and highly
capable user interface (Duncan and Duncan Ventures Inc 2005). In addition, since the lottery
business is under quite strict regulations, the company is also supposed to manage and ensure
abiding by the regulations. This involves controlling actions; such as staff actions in the
company that could lead to jeopardy. From the discussion in this paragraph, we can implicitly
note that, the company is need of a control system that would create an environment that
enhances utmost productivity, besides, a control system that would enable the coherence required
by uniting the stuff to focus on what matters for the development of Jumbo business entity.
Components of the action control policy included for recommendation and
implementation
Therefore, the recommendable control system that could be implemented in the company
to achieve focus on developing the welfare of the business could be the action control. The
diversity of the control system in terms of behavioral constraints, action accountability,
redundancy and preaction reviews could implemented collectively to attain the required
objectives (Lawrence 2018).
Particularly, behavioral constraints that could be incorporated in the system could be in
the form of administrative constraints to allocate high profile tasks to executive levels of
management (Dumay and Dai 2017). For instance, at Jumbo, these tasks may entail high regard
for reference to the regulations which can only be undertaken by special niches of the staff. This
prevents cases of negligence if the task is assigned to the general staff. The negligence in such
lottery businesses could bring the risk breaching regulations and damaging the company
reputation which affects its market.

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Furthermore, there should be a protocol addressing the procedure to be undertaken in
case of violation of the administrative constraints. Particularly, there should be procedures
addressing employee activities like unethical business activities and shop lifting by employees
for their unknown reasons that could risk business reputation. Furthermore, such actions by
employees would lead to termination of contract due to regulatory issues and therefore need for
such mechanism (Maas, Schaltegger and Crutzen 2016). Therefore, this form of action
accountability is required.
Besides, the enhancing of preaction review of employee’s action and plans to understand
the strict adherence to regulatory statutes. Furthermore, this will also ensure all employee actions
are aligned to the organizational short term and long-term needs and objectives. For instance,
assessment of the employee actions on either daily or weekly basis to determine adherence to
control regulations and company development strategies. Lastly, to boost the operational
capacity of online customer services, policies like assigning more than the required number of
employees on a certain process can enhance satisfaction on the customers. This redundancy
policy also significant.
Who the policy is attributed to and what the policy intendeds to achieve?
Basing on the prior indication of the gaps and organizational needs identified at Jumbo.
The gaps can therefore be managed by both the management and the employees of the entity.
Therefore, the policies enacted are subject to amending the organizational systems to meet the
organizational needs. Therefore, this action control policy will aim to enhance the required
paradigm shift in the both the management and the staff.
Nevertheless, with the implementation of the components of the policy, there is a higher
chance of success in the operational dimensions. This will be able due the relevant control

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actions that will only focus on enhancing employee focus and productivity. Operational success,
compliance to lottery regulations and human resource development generated from the action
control will enhance the company’s ability to outreach and satisfactorily service and develop its
market share.
Considering the various benefits from the chosen controls, the choice of the action
control significantly depends on their suitability to the organizational needs in the context.
Considering the gap and need to enhance control over operational success to enhance customer
retention alongside revenue and adherence to regulations the relevance of the controls to the
framework is exhibited. Moreover, since the controls have various impacts on the employees, the
compilation of the effects on the multiple stakeholders for instance employees as the critical part
of operational feasibility.

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References
Dumay, J. and Dai, T., 2017. Integrated thinking as a cultural control. Meditari Accountancy
Research, 25 (4), pp.574-604.
Duncan, D.B., Duncan Ventures Inc, 2005. On-line interactive system and method for
transacting business. U.S. Patent 6,934,692.
Lawrence, P., 2018. Management in Action. Routledge. 2(1), pp.45-85
Lueg, R. and Radlach, R., 2016. Managing sustainable development with management control
systems: A literature review. European Management Journal, 34(2), pp.158-171.
Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability assessment,
management accounting, control, and reporting. Journal of Cleaner Production, 136, pp.237-
248.
Saffer, D. (2008). Designing gestural interfaces: touchscreens and interactive devices. " O'Reilly
Media, Inc.". 31(4), pp.45-85