AN ASSESSMENT Of MANAGEMENT CONTROL SYSTEM IN CASE OF BGI ETHIOPIA PLC.

Abstract

In general, business environment is becoming more complex and competitive in nature. Companies in different industries are upcoming with several differentiated products and characterized by high quality with the level best required level of innovative skills. These all devotions and efforts are aimed of existing successfully in the industry they belong. Walsh et al, (2005) argue that, appropriate design and use of MCS elements have a direct relationship with the success of the organization in competitive market environment. This paper is aimed at assessing BGI Ethiopia on three selected elements of management control system specifically, evaluating the practice through identifying and relying on theoretical propositions derived from the literature and finally, to recommend on how to improve these elements in their organization. The General objective of this study was to assess BGI Ethiopia’s on selected elements of management control system. The design of the study was descriptive in nature. Primary data and secondary data were used in this study. Since the total populations of employees were known, the student researcher used stratified random sampling techniques for the study. The student researcher conducted the research by taking the sample determination method developed by Carvalho (1984). Accordingly, Eighty employees were selected and presented them with closed-ended questions. However unfortunately, seven employees hadn’t returned the questionnaire and an interview was conducted with the manager. The results show the following facts: Strategy Planning: the strategic planning practice being used by BGI Ethiopia is in line with the theoretical propositions derived from the literature and control by using goals is highly emphasized. Performance Measurement and Evaluation: Performance measurement system should in corporate any financial and non- financial measure that provides incremental information on managerial efforts. The reward and incentive are not used very significantshould give due attention for these problems to take corrective measurement. The system in use extensively consists of monetary rewards; both short term and long-term incentives and do not use non-monetary incentives in greater extent to motivate its employees and the system seems incapable of achieving result control, since they influence employees’ actions by taking rewards to desired results.