Week 3 : Management Control Systems in NGOs

Question 1

What went wrong with Activity-Based Costing?

Answer 1

ABC should not be seen as a machine you plug in, rather someone that requires human interaction. The fate of ABC depends on goals, strategies and top managers.

Question 2

How do we enhance ABC implementation? (Sheids)

Answer 2

1) gain support from top-managers

2) Linkage of cost management to performance evaluation

3) Sufficient internal resources

4) Training in designing and implementing such system.

5) Make sure all employees are clear on whats expected of them.

Question 3

What is a Non Governmental Organisation (NGO) ?

Answer 3

A voluntary group with a social mission.
E.g. Climate change, poverty

Question 4

How do NGOs influence society?

Answer 4

• May provide services that the government cannot/ do not provide.
• Raise awareness on important topics

Question 5

How do NGOs use accounting?

Answer 5

Management control systems are used to assist in attracting economic capital and delivering welfare services.

Question 6

What are formal controls?

Answer 6

Deliberate articulated practices and formal planning systems such as budgets and control mechanisms

Question 7

What are organic controls?

Answer 7

Informal processes, loose structures and open communication and include a free flow of information and flexibility for adaptive decision making

Question 8

What is bonding capital vs bridging social capital?

Answer 8

Bridging social capital is associated with weaker ties that apply across broad social networks and link different social groups. Bonding social capital is associated with strong ties that bind smaller, denser networks together more closely.

Question 9

What is social capital?

Answer 9

social capital is a set of shared values or resources that allows individuals to work together in a group to effectively achieve a common purpose.