Management Control Functions

In this chapter you will learn to:

Identify the key aspects of accounting and financial controls.

Identify the processes of material resource procurement and distribution.

Identify the components and processes contained within a performance management system.

On The Job Training

Your friend Marcy is working with a food and beverage controller for a hotel as part of her school internship. Since Marcy is your roommate, she shares the details of each day of work with you.

After Marcy’s first day on the job, she tells you that she is going to have a chance to troubleshoot the controls for the banquet department of a hotel. She admits, ‘I don’t know what all this will be about, but I’ll bet it will give me some insights about how resources are used in a complex environment like a resort hotel.’

A few months have passed since your friend Marcy started her internship. One night you are sitting with a bunch of friends and one of them, Jason, starts talking about the restaurant he is working at. He mentions that the place is a mess, with many servers engaged in theft and the constant lack of materials needed to do the job. You smile and tell everyone, ‘Well, Marcy is our resident controller, maybe she can tell you how that problem might be fixed.’

‘Well,’ Marcy chimes in, ‘I’m no expert, but I did have a chance to participate in a controls turnaround as part of my internship at the hotel.’ The others look interested and chide, ‘Tell us about it, Marcy.’

Marcy begins to tell her tale. She says, ‘Well when I started there three months ago, the F&B controller told me I would be in for a real learning experience. I had no idea how bad the controls can get in a poorly managed operation.’ She continues, ‘In this case, it was the banquet department that had all the problems – very similar to the ones you described, Jason.’ This piques Jason’s interest.

Marcy continues, ‘As it turns out, it was simply a lack of financial and material resource controls.’ She said, ‘The F&B controller was famous for saying if they steal our stuff, shame on them, if we can’t control it, shame on us.’ Marcy continued by saying, ‘It’s all about checks and balances. We implemented controls from inventory requisitioning through the POS system. We placed locks on working inventories that required manager access and we frequently audited their beverage storeroom.’ Marcy concluded by saying, ‘After about 30 days, all the costs were back in line and we identified a captain who was fired for stealing liquor.’

Jason looked at Marcy and said, ‘Wow, you did learn a lot in a short period of time.’ Marcy replied, ‘Yup, I know exactly what controls to put in place for the future.’