BU527 Chapter 1: Chapter 1 – Management and Control
Document Summary
Characteristics of good management control: high probability that the fir(cid:373)"s o(cid:271)je(cid:272)ti(cid:448)es (cid:449)ill (cid:271)e a(cid:272)hie(cid:448)ed. Low probability that major unpleasant surprises will occur. Control problem avoidance eliminating the possibility that the control problems will occur: 1. ) activity elimination by turning over potential risks, and associated profits to a 3rd party by subcontracting, licensing agreements, or divestment, 2. ) Automation use (cid:272)o(cid:373)puters or ro(cid:271)ots to redu(cid:272)e their orga(cid:374)izatio(cid:374)"s exposure to so(cid:373)e control problems, they reduce human problems of inaccuracy, inconsistency and lack of motivation: 3. ) Centralization when decentralized, controls need to be in place to hold the managers who enjoy the decision authority accountable for the results of their decisions: 4. ) Risk sharing sharing risk with outside entities can bound the losses that could be incurred by inappropriate employee behaviour.
