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Management accounting- R-11
Finance & Accounting
Pages 20 (5020 words)
Finance and Accounting: Management Accounting Name: Course Name: Instructor: Date: Question 2: Compare and contrast the problem of exercising management control in for-profit organisations (private sector) versus non-profit organisation (public sector) Proper management is paramount to the success of any organisation whether it is a public or private organisation.
Private organisations tend to have smoother management control process whereas public organisations experience more turbulence, conflicts and interruptions. Many scholars attribute these differences to the roles and purpose of private and public organisations in the society. Private organisations produce and sell products to consumers in the markets with objective of creating shareholders’ wealth. On the other hand, public organisations, such as state health centers and public schools undertake their operations for public interests. The distinct roles mean that there are diverse kinds of expectations and accountability that may can call for distinctive management control and decision-making processes (Ring & Perry. 1985). The problem of exercising management control in private sector versus public sector The contextual influence in the exercise of management control arises from the role of an organisation in the society. Whereas private organisations are means for creating shareholders’ wealth, public organisations are instruments of public policy. The functions of each sector dictate the governance and leadership arrangements that are necessary to exercise management control for different diverse types of owners and shareholders. ...
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