Management control system

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Management control system

In exhibit 2, it is evident that the sales department was involved in taking care of sales, prices, delivery schedule and mix. On the other hand, it was the responsibility of the plant manager to oversee all the plant operations, as well as profits. In exhibit 3, there is an analysis of several components that determine performance of any given firm. The performance evaluation system that the exhibits are subjected through possesses strengths that can lead the company into profit making heights. They possess comparison between manufacturing efficiency and fixed and variable costs that can be found across the plant.

The assessment of the performance evaluation also points out at the fact that only managers of firms who are capable can benefit from promotions. The assessment is impartial in the sense that only managers who perform well are subject to better compensation packages. This is important in that it challenges them to work diligently and achieve profit budgets. The comparative efficiency charts that were compiled every month appear to be publicized by managers despite the fact that there is an inherent unfairness in the comparison of plants producing diverse products. This is because the different products require different setup times. Some of the plants under scrutiny seemed to run internal competitions between production lines and departments as a way of reducing cost items, as well as rewarding foremen and departmental heads.

Finally, the assessment performed crucially in ensuring that competition between plant managers was healthy and fair in all dimensions. This ensured that there would lack bias in rewarding those who performed well. On the other hand, those who performed dismally would not be subjected to any promotion or profits.