The impact of management control systems on organizational performance: A case study of Dangote Cement Plc
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Background of the Study
Management control systems (MCS) are essential tools for ensuring that organizational activities align with strategic goals, facilitating efficient resource use, and improving performance outcomes. These systems consist of various mechanisms such as budgets, performance evaluations, and internal audits that help managers monitor and control operations within an organization (Ogunyemi & Adeyanju, 2024). Dangote Cement Plc, a leading cement manufacturer in Nigeria and one of the largest producers in Africa, relies heavily on management control systems to ensure that its vast production network, distribution channels, and financial operations are functioning efficiently. The company’s ability to achieve high performance in a competitive market is directly linked to the effectiveness of its MCS, which help to monitor cost efficiency, product quality, and employee performance. However, while it is clear that Dangote Cement employs sophisticated MCS, there is limited empirical research on how these systems impact the company’s overall performance. This study seeks to examine the role of management control systems in improving the organizational performance of Dangote Cement.
Statement of the Problem
Despite the widespread use of management control systems in large corporations, there is limited research on their direct impact on organizational performance in Nigerian manufacturing companies. Dangote Cement, being a major player in the cement industry, utilizes MCS to manage various aspects of its operations. However, the extent to which these systems contribute to organizational performance remains underexplored. This study will investigate how MCS influences Dangote Cement's operational efficiency, financial performance, and competitive positioning.
Objectives of the Study
- To assess the role of management control systems in enhancing organizational performance at Dangote Cement.
- To evaluate the relationship between MCS and key performance indicators such as cost efficiency, product quality, and profitability.
- To recommend strategies for improving the effectiveness of MCS at Dangote Cement.
Research Questions
- How do management control systems contribute to organizational performance at Dangote Cement?
- What specific components of MCS have the greatest impact on Dangote Cement's performance?
- How can Dangote Cement improve its management control systems to optimize performance?
Research Hypotheses
- Management control systems positively impact organizational performance at Dangote Cement.
- The integration of performance evaluations and budgeting mechanisms leads to improved operational efficiency at Dangote Cement.
- The use of management control systems enhances profitability and competitiveness at Dangote Cement.
Scope and Limitations of the Study
This study will focus on Dangote Cement Plc and assess the impact of management control systems on the company’s performance. Data will be collected from company reports, performance evaluations, interviews with management, and employee surveys. Limitations include potential biases in self-reported data and challenges in isolating the effects of MCS from other performance factors.
Definitions of Terms
- Management Control Systems (MCS): A framework of procedures, tools, and policies used by managers to ensure that organizational activities align with strategic objectives.
- Organizational Performance: The ability of an organization to achieve its goals and objectives efficiently and effectively, typically measured through indicators such as profitability, productivity, and market share.
- Performance Evaluation: A process of assessing the effectiveness of individuals, teams, or organizational activities in achieving their objectives.
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