THE ASSESSMENT OF MANAGEMENT CONTROL SYSTEM IN SELECTED PRIVATE COMMERCIAL BANKS OF ETHIOPIA

Abstract

Banking sector is one of the most successful financial institutions in Ethiopia; however, there is virtually no formidable study on management control system about this sector. The increasing knowledge and understanding on the application of management control system, for the area in which this research was undertaken by benchmarking of the same research undertaken in other country, were taken as the major initiators of this study and were the rationale to the research. This study focused only the assessment of management control system in Ethiopian Private Commercial Banks even if there were different managerial issues in the banking industry at the head and branch offices as well. An institution based descriptive study with analytic components was conducted in Ethiopian private commercial banks which are functioned at Addis Ababa. The study employed both quantitative and qualitative study approaches. Study population for the survey were employees, officers and mangers of the banks. Besides, for the qualitative part, key informant interviews conducted with mangers and officers of the banks. A questionnaire with five Likert scale for the survey which is mainly used for quantitative part, and Semi-structured interview guide for the qualitative were used as data collection tools. SPSS version 20 for windows was employed to perform statistical analysis. EPCBs are frequently planning and controlling their activities such as monthly or quarterly income statements; working capital and its parts; cash flow statements and branch reports and operations. However, some problems are also there; human capital, benefit entitlement, liquidity and responsibility center. Therefore, the private commercial banks need to give due attention for these problems, giving and preparing continuous training for employees and evaluating training results.