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Role of Management Control System

In: Social Issues

Submitted By jesicamurano
Words 3664
Pages 15
Robert H. Chenhall
Monash University
Matthew Hall
London School of Economics and Political Science
David Smith
Monash University

Social capital
The role of management control systems in NGOs
Research executive summary series
Volume 6 | Issue 6

Key findings:
• Non-governmental organisations (NGOs) are being confronted with the competitive nature of acquiring funds and need to demonstrate that they have particular competencies to funders, while at the same time continuing to adhere to their traditional welfare or development values.
• The evidence shows that developing formal management controls can help NGOs to develop networks with government departments, funding agencies, other service providers and clients. However, formal management controls also have the potential to damage the internal bonding between employees.
• Developing belief systems to incorporate financial concerns, along with traditional welfare goals, would seem a useful starting point in the move towards managing in a more competitive NGO sector.

Overview and objectives
In recent years non-governmental organisations (NGOs) have become increasingly important in addressing humanitarian issues relating to welfare and developmental aid. NGOs face increasing pressure to demonstrate service delivery in cost efficient ways. This creates tension over delivering welfare services while operating within the constraints of cost management. The application of management control systems has the potential to help in the effective and efficient delivery of services, but such an approach is relatively new and is sometimes at odds with the customary informal controls that have been applied in NGOs. For NGOs to be successful, it is also important to develop close connections with other agencies and individuals involved in NGO activities, and that agencies and

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