Management Control Systems Assignment
Intro to management control systems
What are the three main causes of management control problems?
What are three methods of control problem avoidance?
Types of controls
What are the main types of controls?
When are each type appropriate?
Give an example of each type of control.
Name 3 ways to shape organizational culture.
Name and describe the elements of results controls.
What does it mean to have tight controls? Is this a good or bad things (or both)? Why?
Cost and design of controls
Which controls are the cheapest?
Name and explain three harmful side effects of controls
For each type of control give an example of a specific control and how it can cause problems if designed or implemented incorrectly.
Financial responsibility centers
Name the types of financial responsibility centers and the scope of responsibility for each.
What are the two types of expense centers? Describe each.
What is challenging about making decisions as an Investment Center manager (what are the things you need to consider)?
Budgeting
What are the purposes of budgeting (name at least 3)?
How can the different purposes of budgeting cause problems?
Name and describe the types of financial performance targets.
Name three criticisms of common planning and budgeting processes.
Financial performance metrics
The two main types of summary measures are:
Name 5 (of the 6) positive qualities of financial performance measures.
Compare and contrast the qualities of the two main types of summary measures (from my discussion in the video lecture).
For both types of performance measures explain how each can be misleading.
Name two performance measures you focus on in your role (can be completely different than what’s in the chapter) and explain how the measure is used (and how you are judged on each).
Case questions (cases are in your Management Control Systems textbook)
Houston Fearless 76, Inc.
Why are Houston Fearless 76, Inc. (HF76) managers unhappy with the company’s existing
sales incentive plan? Are weaknesses in this plan a major cause of the company’s
performance problems?
2. Evaluate the new incentive plan being contemplated. What modifications would you make
to the proposed new plan, if any? How would you address the unresolved issues?
3. Are there any significant impediments to the successful implementation of the new
incentive plan? If so, which?
4. Would you make any changes to the system providing bonuses to sales assistants? If so,
what?
Controls at the Bellagio Casino Resort
1. Focus on three key roles at mainly three levels of authority in the casino—blackjack dealers,
pit bosses, and the vice president of table games. How would you characterize the “control strategy” (e.g., tight vs. loose) used over each of these roles?
2. Prepare a list of the controls described in the case. What control problems are they designed to address? Are the managers interviewed for the case justified in being proud of their company’s control system? Why or why not?
3. Are any of the control systems in place at the Bellagio suitable for firms in other industries?
EyeOn Pharmeceuticals
How would you characterize the control strategy used in the research and development area of EyeOn Pharmaceuticals?
Evaluate the control strategy. What, if anything, would you suggest EyeOn managers do differently?
Mainfreight case
Mainfreight’s top executives, three of whom are qualified accountants, maintain that their company does not prepare budgets. Is that contention accurate? How should one determine whether a company prepares a budget or not?
At the very least, Mainfreight’s management systems are nontraditional.
What are the key elements of Mainfreight’s results control systems?
Why did Mainfreight managers decide to take a nontraditional approach?
How does Mainfreight perform the functions typically fulfilled by budgets? Or are some of those functions really not that important?
Does the Mainfreight system address the limitations of traditional budgets? Does it introduce new limitations?
Is Mainfreight a well-controlled organization?
Should companies that now use an annual budgeting process try to emulate some or all of the management systems used by Mainfreight? Why or why not?
Course project assignment 2
For each of the three problems you listed in assignment 1, explain the process (think like the narratives in the activity diagram chapter that explain business processes, except not as detailed). A paragraph for each problem is sufficient.
1.
Name of the problem:
Description of the process:
2.
Name of the problem:
Description of the process:
3.
Name of the problem:
Description of the process: