MGAD40H3 Final: Crib Final double sided ch.11-14

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pucelouse641

2 May 2011

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Add contingency buffers to protect key diagnostic targets. Provide cushion that allows managers to reforecast profits during year, ensuring key targets not jeopardized. Rom = amt of productive organizational energy released / amt of mgmt time and attention invested. Managers must understand what to do personally and delegated to staff. Each measure (rev growth, store openings, exp reduction, price vs comp) communicates diff set of priorities. Subordinates infer strategic direction top mngrs wish to follow. Frees up top mgmt attention to focus on other things. Signal preferences: where ppl should dedicate their time. Disciplined approach to mgmt working through others. Communicate prospects of the business with stockholders and analysts. Factors must be achieved for intended strategy to succeed: work deductively to identify performance drivers. Performance drivers: variables (1) influence prob of strategy successful implementation (2)provide largest potential for marginal gain over time: identify critical performance variables from list of performance drivers. Any performance variable that could cause strategy to fail.

Related Questions

True-False

Indicate whether each statement istrue (T) or false (F).

___ 1. A companyâsmarket share is an example of external nonfinancialinformation.

___ 2. A good reasonfor using ROI as a performance measure rather than RI is that goalcongruence is more likely to be promoted by using ROI.

___ 3. The DuPontmethod of profitability analysis recognizes two basic ingredientsto profit making: increasing income per dollar of revenues andusing assets to generate more revenues.

___ 4. If companiescompensate managers on the basis of changes in the market price ofthe companyâs stock, this approach tends to shorten managersâ timehorizon because stock prices incorporate the expected future periodeffects of current decisions.

___ 5. Those who favorusing net book value as the investment base in ROI calculationsclaim this approach enables more accurate comparisons to be madeacross subunits.

___ 6. Comparingperformance of the divisions of a multinational company isdifficult because of economic, legal, political, cultural, andcurrency differences.

___ 7. The necessaryand sufficient condition for moral hazard to exist in a company isthat the employeeâs interest differs from the ownerâs interest.

___ 8. Performancemeasures that are sensitive to the managerâs performance motivatethe manager but limit his or her exposure to uncontrollablerisk.

___ 9. It can be costeffective to benchmark a managerâs performance against the bestlevels of performance available within the company or in othercompanies.

___ 10. Holding managers and otheremployees accountable for and rewarding them for achievingperformance goals in diagnostic control systems needs to becounter-balanced with boundary systems, belief systems, andinteractive control systems.

raspberryeel659

what role should accounting play in developing and monitoringmanagement control systems?

1) A properly designed internal control system is a key part of accounting information systems' design, analysis, and performance. True False

2) The use of internal controls provides guaranteed protection against losses due to operating activities. True False

3) Good internal control dictates that a person who controls an asset should also maintain the accounting records for that asset. True False

4) Once a good system of internal control is in place, it rarely needs review. True False

5) Two important limitations of internal control systems are (1) human error or human fraud and (2) cost-benefit. True False

6)The main principles of internal control include which of the following:

Establish responsibilities.

Maintain minimal records.

Use only computerized systems.

Bond all employees.

Require automated sales systems.

7) A good system of internal control:

Urges adherence to prescribed managerial policies.

Insures profitable operations.

Eliminates the need for an audit.

Requires the use of noncomputerized systems.

Is not necessary if the company uses a computerized system.

8) A company's internal control system:

Eliminates the risk of loss.

Monitors and controls business activities.

Eliminates human error.

Eliminates the need for audits.

Is not necessary in large companies.

MGAD40H3 Final: Crib Final double sided ch.11-14

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