BU247 Chapter Notes - Chapter 9: Human Relations Movement, Management Accounting, Balanced Scorecard

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25 Jan 2013
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BU247 Chapter 9 Behavioural & Organizational Issues in Management Accounting Week 8
& Control Systems
What are Management Accounting and Control Systems?
-Management accounting and control system (MACS) a system that generates and uses information
that helps decision makers assess whether an organization is achieving its objectives. The system
includes the set of procedures tools, performance measures, systems, and incentives that organizations
use to guide and motivate all employees to achieve organizational objectives. The system also
incorporates plan-do-check-act cycle
The Meaning of “Control”
-Control refers to the set of procedures, tools, performance measures, systems, and incentives that
organizations use to guide and motivate all employees to achieve organizational objectives
-The process of keeping it in control includes plan-do-check-act from chapter 1
Characteristics of a Well-Designed MACS
Technical Considerations
1. Accurate
2. Timely
3. Consistent
4. Flexible MACS designers must allow employees to use the system’s available information in a
flexible manner so that they can customize its application for local decisions
Behavioural Considerations
1. Embedding the organization’s ethical code of conduct into MACS design
2. Using a mix of short- and long-term qualitative and quantitative performance measures (or the
Balanced Scorecard Approach)
3. Empowering employees to be involved in decision making and MACS design
4. Developing an appropriate incentive system to reward performance
The Human Resource Management Model of Motivation
-Scientific management school management believed that employees should follow highly detailed
prescribed procedure and that behaviour should be monitored and controlled very carefully through
time-and-motion studies
-Human relations movement employees wanted respect, discretion over their jobs and a feeling that
they contributed something valuable to their organization
-Human resources model of motivation introduces a high level of employee responsibility for and
participation in decisions in the work environment
-The central assumptions of HRMM are that organizations operate under a system of beliefs about the
values purpose, and direction of their organization; that people find work enjoyable; and that people
desire to participate in developing objectives, making decisions, and attaining goals in their work
environment
The Organizations’ Ethical Code of Conduct and MACS Design
-At the centre of many boundary systems is a set of ethical principles, and thus a well-designed MACS
should incorporate the principles of an organization’s code of ethical conduct to guide and influene
behaviour and decision making
-Management pressures:
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