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MANAGEMENT CONTROL SYSTEMS – Prof Ganachari

QUESTIONS ( University papers)

Q1) Define MCS? Which level of managers is involved in it? How does MCS differ from simple

control process?Explain the likely features of an ideal Management control system in an

organization? Illustrate the significance of human behavior? (May11,06,05)

Q2) Describe Responsibility center, engineered expense center, discretionary expense center,

revenue center, profit center? How is the performance of the head of these centers evaluated? How

is the budget prepared? Map the process of evolution from one state to another with the help of

illustrations/situations prevailing in the business world. List & explain with sketches.(May11, 08,

07, 05)

Q3) Every SBU is a profit center, but every profit center may not be a SBU? Explain? Under what

conditions, production, marketing & service department are converted into profit center? (11,07)

Q4) When are market based transfers prices most appropriate? (May11)

Q5) How do we deal with condition of limited market situation of excess/shortage of capacity?

(May11)

Q6) What do I understand by investment center? Explain two methods by which performance of

these centers are measured? Also discuss their relative merits/demerits? Which method would you

recommend? (May11,07)

Q7) Briefly describe functional, divisional & matrix organization? Which is the most appropriate

from point of view of control? (May11)

Q8) What do you understand by Not-for-profit organizations? How do these organizations price their

products? What criteria are used to measure their performance? (May11)

Q9) What are organizational structures and management control? What are the implications of

corporate level strategies? (May11)

Q10) Write short notes on (Any two)

Balance score card, Interactive control, Approach to marketing by professional service

organizations? (May11)

Q11) Briefly describe overall framework of Mgmt. Control? How does it relate to Strategic planning

& operations control? (May 10)

Q12) Briefly describe Engineered centers & Discretionary centers. How is budget prepared in each?

How is performance evaluated in each? (May 10)

Q13) Short notes on: (May-10,09,07,05)

a) Zero based budgeting b) Free cash flow c) MCX in matrix org d) Internal control

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Q14) What is SBU? What are conditions required to create an SBU? How is performance of an

SBU measured? Give the advantages & disadvantages of creating an SBU? (May 10)

Q15) What are the objectives of transfer pricing? What are the different methods to arrive at the

same? Discuss the application of each method? Explain with examples. (May10)

Q16) How is an investment center different from profit center? State the different methods? (May10)

Q17) What is balance score card? Why is it considered to be superior to other methods of

performance appraisal? Give illustrations, steps involved in implementation, difficulties & reasons

for failure. (May10, 08, 07, 06, 05)

Q18) How does service organization differ from manufacturing organizations? How does a

Professional Service organization differ from normal Service organization? How is pricing &

Marketing done by Prof Service organization? State the pricing problems in corporate services.

(May10, 06)

Q19) How does Corporate level strategies differ from Business level strategies? (May10)

Q20)Explain types of strategic missions at SBU level. How they affect Strategic planning process &

Budgeting at SBU level? How is Budgeting done at SBU level under different strategic mission?

(May10,07)

Q21) Explain briefly the various stages of Management Control Process citing salient features of

each? (May09, 06)

Q22) Every SBU is a profit center but the reverse is not true. What are the conditions that should be

fulfilled for an org unit to be converted into a profit center? What are the different ways to measure

the performance of profit center? Give its Merits & Demerits. (May09, 07)

Q23) Transfer pricing is not an Accounting tool? (a) Comment with illustrations (b) Market price is

ideal transfer price even in limited markets. Please Comment. (May09,06)

Q24) Enumerate the differences among following types of Audit. (May09)

(a) Financial Audit (b) Cost Audit (c) Efficiency Audit (d) Management Audit

Q24) Organizations with business divisions (Profit Center) Format have observed that the controllers

experience divided loyalty in carrying out their functions causing a possible dysfunction. How can

this be resolved? Define role of controller which suits your organizations? (May09,06)

Q25) What do you understand by Goal congruence? What are the informal factors that influence the

same? (May09,07)

Q27) Internal audit is one of the techniques of control available to the top management for ensuring

continuous improvement for better performance? Comment upon this statement? Kindly highlight its

benefits accruing to the top management.Illustrate the difference between Financial & Management

Audit. (May08,05)

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Q28) What are the considerations involved in regulating R&D functions by the top management,

Especially in view of the challenges faced on account of globalization. (May08,05)

Q29) Explain the subtle differences amongst the following? What are the challenges faced in pricing

corporate services provided to business units operating as Profit centers? (May08)

a) Quality Audit b) Technical Audit c) Management Audit

Q30)a)What is 2 step transfer pricing & profit sharing approach?Give merits & demerits.(May08,06)

b) Adopting a profit center approach may not be an appropriate solution always. Agree/Disagree.

Give reasons.

Q31) Explain ROI, EVA as a technique of management control is considered by some as superior to

ROI? In some cases, EVA does not do justice to the evaluation of investment

centers,explain.Analyze the statement & give your comments. Quote illustrations/situations

prevailing in the business world. (May08, 06)

Q32) Draw a plan of ideal management control system in a corporate engaged any of the segments of

services sector, stating the segment specifically.(May 08)

Q33) Discuss & illustrate differences between a) strategy formulation & task control, b)

Management Control & task control? (May 08,05)

Q34) State the objectives of transfer pricing? What is the ideal transfer price in the situation of a)

Limited Market, b) Shortage of capacity in the industry. When do you use cost-based transfer price?

(May 07)

Q35) What are the charachteristics of Professional Service organisations? How is marketing done in

them? How do you evaluate the performance of a professional? Explain non-profit organization, how

is its performance evaluated? (May 07)

Q36) Explain Responsibility centers? List & explain different types wiith sketches? (May 06)

Q37) Explain various features of Financial, operational & management Audit. Illustrate with

examples? Describe the factors which impact service organisations? Explain special charachteristics

of professional orgs which would have bearing on their control systems? (May 06)

Q38) Describe the inherent difficulties in creation of profit centers, causes & possible advantages.

Under which situations, creation of profit centers is undesirable? (May 06)

Q39) Which MCPractices is followed in performance measurement of investment centers are likely

to include ‘Goal congruence’ in respect to the following assets.(a) Idle, Intangible assets, Leased

assets. (b) Cash, receivables, Inventories. (May 05)

Q40) Explain some factors which may influence top management style & their implications on

Management control?(May 05)

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