Management by results
Introduction
Management control is the administrative process of planning, executing and controlling the quality and compliance of the strategies and objectives proposed by organizations, both private and public.
There are important differences between the classical and modern conceptions of management control. The first is one that includes only operational control and develops it through an information system related to cost accounting, while the second integrates many more elements and contemplates a continuous interaction between management, planning and control. The new concept of management control is full and integrated as it includes the administrative process itself and requires a strategic orientation that gives meaning to its most operational aspects.
Management control system
The SCG has the diagnosis or analysis to understand the root causes that condition the behavior of physical systems, allows establishing the functional links that link the technical-organizational-social variables with the economic result of the company and is the starting point for the improvement of standards; Through planning, it guides actions in accordance with the established strategies, towards better results; and, finally, it has control to know if the results satisfy the established objectives.
Introduction and summary
Taylor (1895) was one of the initiators of industrial CG, he introduced analytical accounting, the timing of direct labor times, standards, the allocation of indirect costs, and remuneration for performance. Brown (1907) established the formula for return on capital. Even today, many examples are observed in companies. CG revolves around the control of the company's internal efficiency, focusing attention on the resources it consumes, the immediate benefit and external financial information.
In the second half of the century, substantial changes have occurred in the environment, which has gone from stable with fixed rules of the game to turbulent and highly competitive. These environmental changes have triggered a large number of internal changes in companies, in variables such as customer orientation, technological development and innovation, the guiding role of strategic management, quality approaches, the role of human resources in the organization, information management and others. Business success therefore requires continuous adaptation of the company to its environment and competitiveness becomes the economic criterion par excellence to guide and evaluate performance inside and outside the company.