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Management Control Systems are important mechanisms enabling organization
development, learning and innovation, as die primary objective ofManagement Control
Systems is to ensure the achievement of organizational goals and objectives. The
manufacturing industry in Sri Lanka which is the main contributor to the industry sector of the
country has been growing steadily since the reintroduction of open economic policies in
1978. The main objective of this study is to analyse the extent to which management control
systems are used in the Sri Lankan manufacturing sector. Review of literature on the subject
indicates that the use of MCS in Sri Lankan companies is extremely low and that basic MCS
are the main MCS used by these firms in the industry. Data for study was collected from a
structured seif-administered questionnaire which was forwarded to a sample population of
83 public quoted manufacturing companies operating in Sri Lanka. Of these companies
71 responded to the questionnaire. Structured interviews weresubsequently conducted with
the Chief Operating Officers of these companies to ensure accurate completion of
questionnaire and to authenticate the data provided.Analysis of data reveal that basic, cost
and risk MCS are used extensively by public quoted companies operating in the
manufacturing sector of the country, whilst the use of revenue MCS is limited. In addition,
findings from the study also reveal a positive correlation between MCS and firm size, and
MCS and firm financial performance.
