MZUMBE UNIVERSITY FACULTYOF PUBLIC ADMINISTRATION TERM PAPER- PUB 652 MANAGEMENT CONTROL AND INFORMATION SYSTEMS

MZUMBE UNIVERSITY
FACULTYOF PUBLIC ADMINISTRATION
TERM PAPER- PUB 652
MANAGEMENT CONTROL AND INFORMATION SYSTEMS;
RUKIA M. MUYA- 210550014/T.17
MASTERS IN HUMAN RESOURCE MANAGEMENT
LECTURER DR. MARY RUTENGE
JUNE 2018ACRONYMS AND ABBREVIATIONS
MCS Management Control System
SBT Sugar Board of Tanzania
MANAGEMENT CONTROL SYSTEM
Introduction;
Management Control Systems, as described in the English literature, acquire and use information in order to assist the coordination of planning and organizational control decisions, with the goal of improving the collective decisions within the organization CITATION Hor00 l 2057 (Horngren, 2000) management control system consider that the controls are characterize by the use in business management, covering performance measurement and reward systems by achieving predetermined levels (Otley, 1999)
CITATION Rob95 l 2057 (Simons, 1995) As means for successful implementation of the strategy. Strategic uncertainties assume that decisions and unusual and difficult to evaluate behavior imply limited and insufficient predictive models for desired results. These factors also result in difficulty controlling the formulation of the planning, the performance evaluation and the necessary corrective actions. Thus, the Management Control System involve formal and informal mechanisms and processes used by organizations to quantify, monitor and manage their performance in order to implement strategies and achieve their goals.

From the knowledge from the definitions above, MCS depend much on the flow of information that needs to be structured to meet the system of people equipment, procedures, documents and communications so as to collect, validate, operation performance, transformation, store, retrieve and present data to be used in planning, budgeting, accounting, control and any other management processes for all administrative purposes. The structured flow must be able to measure the level of the evaluated performance, relating strategy to organizational results.

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Before analyzing the management control of the selected organization, first the explanation of the term organization and its structures. So as to create a wide picture.
ORGANIZATIONAL STRUCTURE:
Introduction;
Any organization to exist it has to achieve its goals and objectives. In order of these goals and objectives to be achieved manager must allocate task and activities to the employees, these job are allocated according to their departments the whole process lead to the formation of organization structure. And this organization is useless without the support of well organize system which is management control system.

CITATION Jer11 l 2057 (Greenberg, 2011), define organizational structure as the ‘formal configuration between individuals and groups concerning the responsibilities, allocation of tasks and authority in the organization’
CITATION Hen83 l 2057 (Mintzberg, 1983) Explained that the organizational structure defines how people are organized or how their jobs are divided and coordinated.

Sugar board of Tanzania is the organization that I choose to analyze its management control system.
MANAGEMENT CONTROL SYSTEM OF SUGAR BOARD OF TANZANIA (SBT)
Introduction;
The Sugar Board of Tanzania (SBT) is an autonomous regulatory authority established under the Sugar Industry Act No. 26 of 2001. It is under the Ministry of Agriculture, Food Security and Cooperatives.

The Sugar Board of Tanzania (SBT) is under the Ministry of Agriculture, Food Security and Cooperatives. SBT was established under section 3 of the Sugar Industry Act No. 26 of 2001 which came into operation on 1st July 2003 vide Government Notice. No 329 of 5th July 2002.

The Act was however revised in 2009. Under the revised Act, SBT is now a regulatory and licensing body of the sugar industry financed by the government and from own sources. The Board is also responsible for sustainable development of the country’s sugar industry as well as achievement of sugar self-sufficiency and promotion of export.

The Board is entrusted with the duties of supporting and coordinating the sugar industry in Tanzania.

As a result of the privatization of sugar production, the revised Act requires that, with effect from 1st July 2006, SBT should not be involved in developmental and/or investment activities in the sugar industry as it used to. The factory and farm owners should be responsible for their investments and development of their factories and farms respectively. CITATION kil l 2057 (kilimo, n.d.)TYPE OF ORGANIZATION STRUCTURE
Sugar board of Tanzania has a functional type of organization structure whereby at the organization individuals are groups by specific functions they performed. There are usual departments such as Finance and Administration, legal services, human resources and many others as represented in the figure next page.

Source sugar board of Tanzania
Analysis of Management Control System in relation to Sugar Board of Tanzania;
PLANNING CONTROLS
There are two type of planning control that is, long and short range planning. The short range planning deals with the tactical and its duration is less than one year while the long range is has a duration of more than a year. Both planning set out the targets for the organization which directs the course of behavior, give out standards and set out the expected efforts from the members of organization. It provide cooperation among the employees of the organization and it has a major effect in directing member’s behaviors. Both financial and non-financial planning are all important to the organization. But planning must acknowledge as a process that involve employees’ commitment to the organization. It is the till of deciding on the organization future activities.

The sugar board of Tanzania has set planning control to its members through their mission and vision. As shown in the figure next page.

Sugar Board of Tanzania Planning Control Tools;
Planning control structure Control Implements
Long range planning: Vision, Mission
Management and committee Team function
Strategy and policy
Budget Preparation
Performance evaluation
Short range planning: Strategic projects
Business plan
Budget
Source sugar board of Tanzania
According to SBT members, Long range planning are set by the senior management level involving all the direction from the board of directors. Management team formulates these strategy and targets, and is in charge of daily operations and decision-making. Management team’s presence is visible in daily management, and everyone has an own control area. According to current management control system, long range strategic planning are set in every five years considering, government policy changes, and sugar market situations. Long range planning is important and helps to align goals towards same direction. Despite the strategies have varied and strategic periods have been short, the mission and vision have replaced the meaning of strategy in creating guidance for operations.

And the Short range planning, this involves the strategic projects that are implemented throughout the whole organization. At SBT business planning is conducted yearly with all financial analysis and the targets are set for the whole year. The budget involves both planning and cybernetic control tools for the upcoming year and also monitoring instruments, this is when measuring performance.

CYBERNETICS CONTROL;
Norbert Wiener, defined Cybernetics control in management as the science that includes the biological and mechanical systems using feedback, that is a good regulations, supervisions and communication in any business setting, this can help the managers to intervene in any complex situations. Cybernetics control involves budgets, financial measurements system, and non-financial measurement systems
Sugar Board of Tanzania has a system of targeting and measuring financial and performance along the organization. There are different projects that have been started to create common data which unify performance evaluation and clarify decision making.
There are several ongoing and incoming projects at SBT, such as Accompanying Measures for Sugar Protocol (AMSP) 2011-13 Project, East African Sugar Development Project (EASDP) and others. Most of these projects are funded by the European Union (EU) but the board does all the budgeting, performance and all other non-financial measurement systems control. As shown figure below.
Sugar Board of Tanzania Cybernetic Control Tools;
Cybernetic Control Control Tools
Short term performance follow-up Budgeting of the project
annual regular projection
Full year finance forecast
Financial measurement system Monthly reporting; revising of Finance, Sales and Operations in the projects
Product Development Performance of the projects
Weekly reporting; revising and controlling weekly performance, tasks and operational changes
Projects controlling and analysis
Non-financial measurement system SBT Meetings
Strategy Follow-up
Strategic Projects Follow-up
Weekly Reporting, Status update and Management Meeting
Personnel and project development surveys
Source sugar board of Tanzania
REWARD AND COMPENSATION CONTROLS;
Every organization must ensure reward and compensation system is effectively, reward and recognitions plays an important part in motivating members of the organization and improving their performance. When there is a careful designed reward system it helps to increase organization’s effectiveness and productivity. Organizations are focused on total compensation packages for their employees and also the organizations are developing complex recognition programs which focused on non-monetary rewards for their employees.

Which are provide extensive training plans, create a monthly office theme day to boost morale, a handwritten thank you note, Give them a new, improved job title and many others.

In the case of SBT rewards and compensation system is more related to salary-based incentives and non-monetary rewards such as career development and continuous development in workplace, promotion, extensive training plans and others. Also the organization provide some monetary rewards which comes as allowances such as
Overtime allowance
This is provided to an employee who is working over and beyond the normal work hours of the organization.

House Rent Allowance
SBT provide their employees accommodation allowances which help them in paying house rent.

Annual Recreation Allowance
At Sugar Board of Tanzania every year employees are taken to any recreation destination for the purpose of relaxing. This is been paid by the organization and the employees also are getting paid.
Transport/ Conveyance allowances
This also is provided to the employees at SBT, it is offered to the employees so as they can compensate their travelling cost to and from the work place/location. And this is provided because there is no transportation provided by the organization to their employees like buses etc.

All these and others make the employees at Sugar Board of Tanzania perform well and increase their work rate and morale and that is why the board performances well.

ADMINISTRATIVE CONTROLS;
This is a very important part of an organization’s internal control system, it purpose is to ensure full and timely operation of the management’s policies and plans are effectively undertaken. This system controls the employees’ behavior putting different individuals and groups so as to monitoring their behaviors and to see how task are performed.
Through the help of governance systems, the structure of the organization and the procedures Sugar Board of Tanzania’s administrative control structure is as in the below figure.

Sugar Board of Tanzania Administrative Control Tools;
Administrative Control Structure Control Tools
The Governance System Ministry of Agriculture, Livestock and Fisheries
Board of Directors
Management
Public institution governance policies for decision-making
Governance and Operative Policies
Organization Structure Legal team
Finance and administration
Policies and procedures Public institution governance policies
Unit-special policies and working behaviors
Trainings
Source sugar board of Tanzania
At the organization I found out some benefits of management control system and these are.

BENEFITS OF THE MANAGEMENT CONTROL SYSTEM AT SUGAR BOARD OF TANZANIA;
MCS is bond to bring benefits to any organization and its employees. The follow are some of the benefits that SBT gain from the system.
Risks Reduction;
Through observation and the experience of working in the organization MSC I observe that the MCS has help the organization in risk management even if there are some changes in management personnel such as the managing director. Despite these heavy changes still the organization still run the same.

Improvement of Communication;
Through the observation and experience of working for the organization, I have observe that there effective information flow and co-ordination within the organization. Whereby the management and other parts of organization are in a very good communication. With the help of MCS employee’ tasks and objectives are aligned with management’s.

Every department with the organization are linked so everybody knows what is going on. That is common communication within the organization.

Increase performance
There are several aspect within the organization that lead to the increase of employee’s performers, which are clarified reward system, harmonized practices these lead to the increasing work pride, commitment, work satisfaction, empowerment Clarification of goals, setting Improving efficiency and task management of workers within the organization.

Improving flexibility and self-control
The workers at SBT has seen the development of their self-control and flexibility. This can be seen when they make some decisions in solving problems without the centralized decision making approval and this leads to quicker responses and makes the workers aims for a common goals.

After seen the benefits of management control system now let’s analyze the factor that hinder management control system to be successful at Sugar Board of Tanzania.
FACTORS HINDERING THE SUCCESS OF MANAGEMENT CONTROL SYSTEM AT SUGAR BOARD OF TANZANIA;
There is one major factor hindering the success of management control system at Sugar board of Tanzania and this is the management of the organization. This is explained below.

SBT is under the Ministry of Agriculture, Livestock and Fisheries and the board of directors. Therefore every decision the managers within the organization has to take must first consult the board and the minister. This affect the management control system in broad way. Below is a figure that show this.

Factors Hindering the Success of Management Control System at Sugar Board of Tanzania;
Factor Hindering Affected Areas
Uncertainty decisions Communication and participation, delays forecasting accuracy.

Changing of Director General Confusion of company direction, hindering implementation of new methods and plans
Limited reward system
Employee morale, performance and Motivation.

All the data and information was obtained through various methods and these are.

METHODOLOGY
In order to get the best information and data, I choose SBT because is the place where I work so this make it to information through various research methods, the following are the methods which have been used.

Participant Observation
Due to the fact that the case study that is the organization I choose is the one I work for, this type of methodology was used in collecting information needed been one of the employee it made it easy to get all the facts about the management control system as I was one the victims, I was able to know various aspect of the organization concerning the management control system such as, the reward and compensation controls systems and many others.

Interviews
This is the primary method used in this case, whereby I interview some of members of the organization to get their knowledge about the control management systems. There some question which were prepared to facilitate the interview process. The interview was conducted in various departments within the organization, below are the respondents of the interview method.

One board member
Director General
Director of Development, Planning and Liaison
Director of Legal Services
HR Manager (former)
Legal Officer
Accountant
Driver
Documentation
Documentation provide very important information about the management control systems with the organization, it also help in the whole process of writing this paper. Documents give the full picture on how Sugar Board of Tanzania utilize the MCS. It give the organization settings, structure, and the chains of operations. This is a very key method in build up this paper. Most of the documents were found in the organization as the fact that I work there so it was easy to obtain them. But also so of the documents were from the internet where the organization has put out so as other people can learn more about it.

CONCLUSION
As the findings explained management control system provide the best guidance and processes that an organization such as Sugar Board of Tanzania should use. Through MCS not only the organization but also all the employees are benefit from it. There is harmonized environment within the organization and this will make the worker performance to improve and make the organization successful.

REFERENCES
BIBLIOGRAPHY brown, M. ;. (2008). Management control systems as a package—Opportunities, challenges and research directions.
Greenberg, J. (2011). Behavior in Organizations, 10th Edition.
H. Chenhall, R. (2003). Accounting, Organizations and Society.
Horngren, F. ;. (2000). Cost Accounting: A Managerial Emphasis, 13th Edition.
http://www.kilimo.go.tz/index.php/en/stakeholders/view/sugar-board-of-tanzania-sbt. (n.d.). http://www.kilimo.go.tz/index.php/en/stakeholders/view/sugar-board-of-tanzania-sbt. Retrieved from http://www.kilimo.go.tz/index.php/en/stakeholders/view/sugar-board-of-tanzania-sbt.

kilimo. (n.d.). kilimo. Retrieved from http://www.kilimo.go.tz/index.php/en/stakeholders/view/sugar-board-of-tanzania-sbt.

Margaret A. Abernethy, W. F. (2006). Accounting and Control in Health Care: Behavioural, Organisational, Sociological and Critical Perspectives.
Mintzberg, H. (1983). Structure in Fives: Designing Effective Organizations.
SBT. (n.d.). http://www.sbt.go.tz/pages/organization-structure.

Simons, R. A. (1995). Levers of Control.
Tanzania, S. B. (n.d.). http://www.sbt.go.tz/pages/organization-structure. Retrieved from http://www.sbt.go.tz/pages/organization-structure.