Textbook Notes (381,055)
CA (168,340)
UTSC (19,304)
MGA (381)
MGAD40H3 (7)
Chapter 1

Chapter 1 Notes

3 Pages
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Department
Financial Accounting
Course Code
MGAD40H3
Professor
Prof.Jan Klakurka

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Chapter 1 – Organizational Tensions to be Managed
Systems for Performance Measurement and Control
Performance measurement & control systems: The formal, information based routines and
procedures managers use to maintain or alter patterns in organizational activities
1. Purpose is to convey information. These systems focus on data
2. Represent formal routines and procedures
3. Specifically designed to be used by managers
4. Used by managers to maintain or alter patterns in organizational activities
Profit Planning Systems
Accounting systems: Collect information about the transactions of a business
Internal control systems: Set of procedures that dictate how and by whom information should be
recorded and verified
Profit plan: A summary of future financial inflows and outflows for a specified future accounting
period. Profit plans involve analyzing past trends, making assumptions concerning cause and
effect, and predicting expected outcomes. They are supported by planning systems. Managers
must determine:
1. The quantity and type of resources that should be committed to a business
2. The resources that will be provided by the business
Planning systems: Recurring procedures to routinely disseminate planning assumptions, gather
market information, provide details about relevant analyses, and prompt managers to estimate
resource needs and performance goals and milestones
Performance Measurement Systems
Business strategy: How a company creates value for customers and differentiates itself from
competitors in the marketplace
Business goals: The measurable aspirations that managers set for a business
Performance measurement systems: Assist managers in tracking the implementation of business
strategy by comparing actual results against strategic goals and objectives. Two types of
decisions must be made by the designer of a performance measurement system:
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Description
Chapter 1 Organizational Tensions to be Managed Systems for Performance Measurement and Control Performance measurement & control systems: The formal, information based routines and procedures managers use to maintain or alter patterns in organizational activities 1. Purpose is to convey information. These systems focus on data 2. Represent formal routines and procedures 3. Specifically designed to be used by managers 4. Used by managers to maintain or alter patterns in organizational activities Profit Planning Systems Accounting systems: Collect information about the transactions of a business Internal control systems: Set of procedures that dictate how and by whom information should be recorded and verified Profit plan: A summary of future financial inflows and outflows for a specified future accounting period. Profit plans involve analyzing past trends, making assumptions concerning cause and effect, and predicting expected outcomes. They are supported by planning systems. Managers mus
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