ABSTRACT
The main aim of a management control system is to induce individuals to behave in ways which will lead to the achievement of the organisation’s objectives. The principal three reasons why individuals may fail to act in an organisation’s best interest include: (i) a lack of direction, because individuals do not understand what the organisation expects; (ii) a lack of motivation, as incentives are not adequate to motivate individuals to perform in the organisation’s interest; and (iii) a lack of abilities, such that individuals are not able to perform in the organisation’s interest. A failure to implement management control systems to protect the organisation against these problems may cause individuals on whom the organisation relies to perform inadequately. The purpose of this chapter is to examine the role that budgetary control practices can play in this.
