Management control models are tools or methodologies that organizations use to supervise and direct their activities, ensuring that resources are used efficiently and effectively to achieve strategic objectives. These models help align daily operations with strategic objectives, providing key metrics and indicators for decision-making.
Description: Developed by Robert Kaplan and David Norton, this model focuses on balancing financial objectives with other key factors such as organizational learning, internal processes, and customer satisfaction. It allows measuring the performance of an organization from various perspectives.
Description: It consists of the planning of financial resources and the periodic comparison of actual results with the budgeted ones. It is a traditional and effective model for controlling expenses and income.
Description: The COSO (Committee of Sponsoring Organizations of the Treadway Commission) framework offers a model to evaluate internal control systems within an organization, with the objective of guaranteeing operational efficiency, reliability of financial information, and compliance with the laws and regulations.
Description: Proposed by Peter Drucker, this model focuses on establishing clear and measurable objectives, both at the organizational and individual levels. The objectives are agreed upon between management and employees, and their compliance is evaluated based on the results achieved.
Advantages: Promotes the alignment of efforts and motivation through clarity of objectives.
Description: This model assigns costs to the activities carried out instead of distributing them generally. It is used to better understand the true cost of products or services and improve profitability.
Key approaches: Identification of activities, assignment of direct and indirect costs to specific activities.
Description: It is a continuous process of measuring and comparing a company's processes and practices with those of other leading companies in the sector. The objective is to identify best practices that can be adapted or implemented in the organization itself.
Types of benchmarking: Internal, competitive, and functional.
Description: It is aimed at aligning corporate strategy with the execution of projects and operations. It seeks to ensure that the activities carried out contribute to the achievement of long-term strategic objectives.
Tools: Dashboards, KPIs (Key Performance Indicators), OKRs (Objectives and Key Results).
Description: It is a document that establishes the steps to do something in a clear and concise manner.
Tools: Process maps in flowcharts, quantitative standards, qualitative standards, and monetary value standards.
Each of these models has advantages and challenges depending on the nature and needs of the organization. The appropriate choice of a management control model depends on factors such as the size of the company, its structure, its sector, and its specific objectives.