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Welfare Economics:
Information System Underlying Concepts and
Thoughts
May 8, 2019
Evaluation and control action is guided by adequate information from the beginning to the end.
Management information and management control systems are closely interrelated which the information
system is designed on the basis of control system. Every manager in the organization must have adequate
information about his performance, standards and how he is contributing to the achievement of
organizational objectives. There must be a system of information tailored to the specific management
needs at every level, both in terms of adequacy and timeliness.
Planning System
Planning is the basis for control in the sense that it provides the entire spectrum on which control function
is based. In fact, these two terms are often used together in the designation of the department which
carries production planning, scheduling and routing. It emphasizes that there is a plan which directs the
behavior and activities in the organization. Control measures these behavior and activities and suggests
measures to remove deviation. Thus, there is a reciprocal relationship between planning and control.
Motivation System
Motivation system is not only related to evaluation and control system but to the entire organizational
processes. Lack of motivation on the part of managers is a significant barrier in the process of evaluation
and control. Since the basic objective of evaluation and control is to ensure that organizational objectives
are achieved. Motivation plays a central role in this process. It energizes managers and other employees in
the organization to perform better which is the key for organizational success.
Appraisal System
Appraisal or performance appraisal system involves systematic evaluation of the individual with regard to
his performance on the job and his potential for development. While evaluating an individual, not only his
performance is taken into consideration but also his abilities and potential for better performance. Thus,
appraisal system provides feedback for control system about how individuals are performing.
Development System
Development system is concerned with developing personnel to perform better in their present positions
and likely future positions that they are expected to occupy. Thus, development system aims at increasing
organizational capability through people to achieve better results. These results become the basic for
evaluation and control. Role of organizational systems in strategic evaluation should not be undermined.
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