Management Control System in Manufacturing Companies: A Case of BGI Ethiopia
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Date
2010-06
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Addis Ababa University
Abstract
In general, business environment is becoming more complex and competitive in nature.
Companies in different industries are upcoming with a number of 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, result control group, 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.
In this research, an exploratory case study approach along a qualitative research method for
collecting and analyzing the data are used. The case chosen in this study is BGI Ethiopia
which is one of the brewery companies in the country. The empirical findings were analyzed
through identifying themes from the data, by relying on theoretical propositions derived from
the literature. 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: The new performance measurement literature
indicates, performance measurement system should in corporate any financial and non-
financial measure that provides incremental information on managerial efforts. However,
BGI Ethiopia’s approach to performance measurement is supplementing extensive traditional
financial measure less mix of non – financial measures. The reward and incentive are not
used very significantly. 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
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Keywords
Manufacturing, Bgi ethiopia