ACCA Performance Management (F5) Certification Practice Exam

What is an example of management control?

1. Revenue growth assessment

2. Long-term investment strategies

3. Budgetary and productivity measures

4. Daily payroll processing

The correct answer is: Budgetary and productivity measures

Management control involves the processes that organizations implement to ensure that their resources are used effectively and efficiently towards achieving their goals. An example of this is the use of budgetary and productivity measures, as these tools provide a framework for planning, monitoring, and evaluating performance. Budgetary measures help in setting financial targets and controlling expenditures, while productivity measures assess the efficiency of resource utilization and output generation. These controls enable managers to make informed decisions, identify areas for improvement, and ensure alignment between operational activities and strategic objectives. By analyzing budget versus actual performance, management can take corrective actions whenever variances occur, thereby maintaining control over organizational performance. In contrast, while revenue growth assessment, long-term investment strategies, and daily payroll processing are important business activities, they do not directly exemplify the comprehensive aspect of management control. Revenue growth assessment relates to performance evaluation rather than control, long-term investment strategies focus on future planning rather than ongoing management, and daily payroll processing is more of a transactional task rather than a control mechanism. Thus, budgetary and productivity measures stand out as quintessential examples of management control.