The management control process in Sparebank 1 Ringerike

Abstract

The bank market has in recent years undergone several structural changes, and will most likely develop further in future years. Traditionally savings banks have been reluctant to carry out necessary actions to adapt their businesses to the new challenges. With this in mind, we have performed a comprehensive analysis of the Management control process in Sparebank 1 Ringerike.

We have investigated how their current process is suited to face the challenges of a changing market from an interactive and diagnostic view. The thesis thus starts with a presentation of management control theory with an emphasis on interactive and diagnostic control as well as two control systems; the budget and the Balanced Scorecard. It goes on to describe the current Management control process in the bank. The analytical part is concerned with relating this process to the normative theory, and proposes a solution to the gaps found.

During this work we discovered that both the Diagnostic and especially the Interactive process in the bank have considerable shortcomings when compared to the normative processes as presented in the theory. In the Interactive process these are especially related to the lack of involvement of the employees for various reasons. In the Diagnostic process we mainly criticize the use of the budget as a control system. In total the Management control process do not function optimally, a problem on which we have strived to find a solution.