RSM322H1- Final Exam Guide - Comprehensive Notes for the exam ( 81 pages long!)
Document Summary
Set selling price to achieve desired profits. Set selling price to achieve positive cash flow. Owners of firm want to maximize firm value. Design performance incentives based on internal accounting measures to motivate employees to take actions that will maximize firm value. Shareholders, bondholders, banks, and analysts (sec, fasb) Useful for decision making about future activities. Measure performance that is relevant to the firm. Focus on projects or processes within a firm. Tendency to ignore information not specifically included in incentive system. Report (cid:862)good(cid:863) (cid:374)u(cid:373)(cid:271)ers to satisfy top management. Over the long term systems survive in competitive markets when the benefits exceed or. Economic darwinism: equal the costs of maintaining those systems. Better systems may exist, but have not yet been discovered. Growing role as internal consultants or business analysts to the point of being viewed as business partners. Balance providing information to other managers for decision making against providing monitoring information used to control behavior of lower-level managers.
