Management control systems
Article Review
On
Management control system in innovative technology based startup and small business
Submitted By
Santosh Varun Vemula
Reg.No: 1728920
MBA Executive
Management control system in innovative technology based startup and small business
Synopsis:
This Article gives us insights on to what extent the management control systems are applied in Start-ups and small businesses and also explains the implementation of Control systems in these organizations. Creation of innovations within a business has huge impact on the ability to survive in the long run perspective and also there is great increase in implementation of new technology and innovations in their business. So in order to survive in long run, MCS is a prerequisite.
The purpose of this thesis is to analyze to what extent and in what form MCS’s are applied in innovative, technology based start-up and small businesses.
The visions, strategies, and creative environment are of high importance in innovative, technology. Budgets, cash flows and contribution-and profit margins are commonly used as control elements.
The MCS’s and the implementation of control are explored from two perspective: Business perspective and the venture capitalist perspective.
It involves social controls, information related to product processes and external information about markets, customers, competitors.
The entrepreneur comes up with a creative idea (an innovation) whilst the venture capitalist invests capital (resources), understanding a certain risk. At some point a MCS is implemented, or introduced by the organization itself.
To understand the situation in innovative, technology – based startups and small business. Sweden’s foremost business magazines, providing qualified analyses of companies and branches to business leaders.
The main criteria is that, businesses should have developed unique product or service with great international potential.
Authors Note:
The authors thinking that MCS’s can contribute to help organizations by setting three problems that could comprise the need of control:
- What is expected of the employees?
- Do they get the motivation they need?
- Do they have the right resources?
According to him, there is plenty of research regarding MCS’s in large corporations, which sometimes is applicable in small business affecting the need of further research in a small business context.
To fulfill the organization goals and strategy results, action, social control, Objectives. Organization objective should form the basis for Management Controls.
Organizational Structure:
Employees perform certain actions and this may be through Instructions and rules.
Innovation is an outcome creative idea, which has been successfully implemented with a second criterion is exploration, thus the ability to explore new opportunities that include search, discovery, autonomy, innovation and embracing variation.
MCS and Product Lifecycle
Product Lifecycle consists of 3 phases: the discovery, exploitation and Management phase
The Sequential Implementations of a MCS: