Samenvatting Management Control Systems. (summary)
85 views 2 purchases
Course
Management Control Systems
Institution
Saxion Hogeschool (Saxion)
Book
Management Control Systems 4th Edition
Another comprehensive summary. This time from the textbook: Management Control Systems. All concepts are described in detail so that the theory can be applied well during the exam.
Success!
Solution manual for management control systems 3rd edition by K.A Merchant and W.A Van der Stede
Samenvatting Strategic Management Accounting Master AF Handelswetenschappen KU Leuven (2021-2022)
Incentives and Control | Seminar questions (Papers)
All for this textbook (6)
Written for
Saxion Hogeschool (Saxion)
Commerciële Economie
Management Control Systems
All documents for this subject (2)
Seller
Follow
maikelvz
Content preview
Inhoud
H1. Management control. ....................................................................................................................... 5
1.1. Management and control. .......................................................................................................... 5
1.1.1. Objective setting. .................................................................................................................. 5
1.1.2. Strategy formulation. ........................................................................................................... 5
1.2.3. Management control versus strategic control. ................................................................... 5
1.1.4. Behavioral emphasis. ............................................................................................................ 6
1.2. Causes of management control problems. .................................................................................. 6
1.2.1. Lack of direction. ................................................................................................................... 6
1.2.2. Motivational problems.......................................................................................................... 6
1.2.3. Personal limitations. ............................................................................................................. 6
1.3. Characteristics of good management control. ........................................................................... 6
1.4. Control problem avoidance. ........................................................................................................ 7
1.4.1. Activity elimination. .............................................................................................................. 7
1.4.2. Automation. .......................................................................................................................... 7
1.4.3. Centralization. ...................................................................................................................... 7
1.4.4. Risk sharing. .......................................................................................................................... 7
1.5. Control alternatives. ........................................................................................................................ 7
H2. Results controls. ............................................................................................................................... 8
2.2. Prevalence of results controls...................................................................................................... 8
2.3. Results controls and the control problems. ................................................................................. 8
2.4. Elements of results controls. ....................................................................................................... 8
2.5. Conditions determining the effectiveness of results controls. .................................................... 9
2.5.1. Knowledge of desired results................................................................................................ 9
2.5.2. Ability to influence desired results (controllability).............................................................. 9
2.5.3 Ability to measure controllable results effectively. ............................................................... 9
2.5.4 Precision. .............................................................................................................................. 10
2.5.5. Objectivity. .......................................................................................................................... 10
2.5.6. Timeliness. .......................................................................................................................... 10
2.5.7. Understandability. .............................................................................................................. 10
2.5.8. Cost efficiency. .................................................................................................................... 10
H3. Action, Personnel and cultural controls. ........................................................................................ 10
3.1. Action Controls........................................................................................................................... 10
3.1.1. Behavioral constraints. ....................................................................................................... 10
3.1.2. Preaction reviews. ............................................................................................................... 11
, 3.1.3. Action accountability. ......................................................................................................... 11
3.1.4. Redundancy. ....................................................................................................................... 11
3.2. Action controls and the control problems. ................................................................................ 11
3.3. Prevention versus detection. ..................................................................................................... 12
3.4. Conditions determining the effectiveness of action controls.................................................... 12
3.4.1. Knowledge of desired action. ............................................................................................. 12
3.4.2. Ability to ensure that desired actions are taken. ................................................................ 12
3.5. Personnel actions. ...................................................................................................................... 12
3.5.1. Selection and placement..................................................................................................... 12
3.5.2 Training. ............................................................................................................................... 12
3.5.3. Job design and provision of necessary resources. .............................................................. 13
3.6. Cultural controls. ....................................................................................................................... 13
3.6.1. Codes of conduct. ............................................................................................................... 13
3.6.2. Group rewards. ................................................................................................................... 13
3.6.3. Other approaches to shape organizational culture. ........................................................... 13
3.6.4. Intraorganizational transfers. ............................................................................................. 13
3.7. Personnel/cultural controls and the control problems. ............................................................ 14
3.8. Effectiveness of personnel/cultural problems. .......................................................................... 14
H4. Control system tightness. ............................................................................................................... 14
4.1. Tight results control. .................................................................................................................. 14
4.1.1. Definition of desired results................................................................................................ 14
4.1.2. Congruence (overeenstemming). ....................................................................................... 14
4.1.3. Specificity. ........................................................................................................................... 14
4.1.4. Communication and internalization. ................................................................................. 14
4.1.5. Completeness...................................................................................................................... 15
4.1.6. Performance management. ................................................................................................ 15
4.1.7. Incentives. ........................................................................................................................... 15
4.2. Tight actions control. ................................................................................................................. 15
4.2.1. behavioral constraints......................................................................................................... 15
4.2.2. Preaction reviews. ............................................................................................................... 15
4.2.3. Action accountability. ......................................................................................................... 15
4.2.4. Action tracking. ................................................................................................................... 15
4.2.5. Action reinforcement. ......................................................................................................... 15
4.2.6. Tight personnel / cultural problems. ................................................................................. 15
H5. Control system costs. ..................................................................................................................... 16
5.1. Direct costs................................................................................................................................. 16
, 5.1.2. Indirect costs. ...................................................................................................................... 16
5.2. Operating delays. ...................................................................................................................... 17
5.2.1. Negative attitudes produces by result controls. ................................................................. 17
5.2.2. Negative attitudes produced by action controls. ............................................................... 17
H6. Designing and evaluating management control systems. .............................................................. 17
6.1. What is desired? And what is likely to happen? ........................................................................ 17
6.2. Choice of controls. ..................................................................................................................... 18
6.3. Personnel / cultural controls as an initial consideration. ........................................................ 18
6.4. Advantages and disadvantages of action controls. ................................................................. 18
6.5. Advantages and disadvantages of result controls. .................................................................... 18
6.6. Choice of control tightness. ....................................................................................................... 19
6.7. Simultaneous tight-loose controls. ............................................................................................ 19
6.8. Adapting to change. ................................................................................................................... 19
6.9. Keeping behavioral focus. .......................................................................................................... 19
6.10. Maintaining good control. ....................................................................................................... 19
H7. Financial responsibility centers. ..................................................................................................... 19
7.1. Advantages of financial results control systems. ....................................................................... 20
7.1.1. Profit centers....................................................................................................................... 20
7.1.2. Revenue centers. ................................................................................................................ 20
7.1.3. Cost centers. ....................................................................................................................... 20
7.1.4. Variations. ........................................................................................................................... 20
7.2. Choice of financial responsibility centers. ................................................................................. 21
7.3. The transfer pricing problem. .................................................................................................... 21
7.3.1 Purposes of transfer pricing. ................................................................................................ 21
7.3.2. Transfer pricing alternatives. .............................................................................................. 21
7.3.3. Market based transfer prices. ............................................................................................. 21
7.3.4. Marginal cost transfer pricing. ............................................................................................ 21
7.4. Transfer pricing. ......................................................................................................................... 21
7.5. Variations. ................................................................................................................................. 21
H8. Planning and budgeting. ................................................................................................................. 22
8.1. Purposes of planning and budgeting. ........................................................................................ 22
8.2. Planning cycles. ......................................................................................................................... 22
8.3. Target setting. ........................................................................................................................... 23
8.3.1. Types of financial performance targets. ............................................................................. 23
8.4. Fixed vs. flexible targets. ............................................................................................................ 23
8.4.1. Internal vs. external targets. ............................................................................................... 23
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller maikelvz. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $6.24. You're not tied to anything after your purchase.
