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MGAD40H3 : Using Diagnostic and Interactive Control Systems - ch.10

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pucelouse641
2 May 2011
School
UTSC
Department
Financial Accounting
Course
MGAD40H3
Professor
Prof.Jan Klakurka

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Document Summary

10 using diagnostic and interactive control systems. Diagnostic control systems: levers to communicate critical performance variables, monitor implementation of intended strategies. Interactive control systems: focus organization attention on strategic uncertainties, provide lever to alter strategy as competitive markets change. same profit plan or balanced scorecard either diagnostically or interactively. Diagnostic control systems: formal info systems managers use to monitor outcome and correct deviations from preset standards of performance. Formal info sys can be used diagnostically if: (1) set goal in advance (2) measure outputs (3) compute variances (4) use var info as feedback to alter inputs/processes to bring performance back in line. Common diagnostic control systems: bal scorecards, exp centre budgets, project monitoring sys, brand rev/mkt share monitor sys, hr sys, std cost-acctg sys. Critical performance variables: factors that must be achieved or implemented successfully for intended strategy to succeed top-down monitoring communicate and implement strategy effectively in large complex organizations.

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Related Questions

True-False

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

___ 1. A company’smarket 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 company’s stock, this approach tends to shorten managers’ 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 employee’s interest differs from the owner’s interest.

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

___ 9. It can be costeffective to benchmark a manager’s 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.

Southwest Airlines, diagnose the organization’s level of resistance and construct a solid communication plan. Diagnose the reasons for resistance to change.

Recommend one (1) communication strategy that would be applicable to southwest airlines. Diagnose why this communication strategy is best for your organization.

Create a solid communication plan for your change initiative.

Provide describe a type of management control (i.e., action,personnel, or cultural). What challenges might the organizationalleaders face when implementing it?

What are potential causes of employee frustration and demotivation?How can management control systems (MCS) be leveraged to improveemployee motivation? Please feel free to use an example.