Term
| why do we strive for goal congruence? |
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Definition
| the goals of the organization and those of individuals are not usually the same. we want meshing of the perceived self-interests of the managers and the goals of the organization. |
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Term
| questions to ask when assessing a management control process |
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Definition
1. what actions does it motivate people to take in their own self-interest?
2. are these actions in the best interest of the organization? |
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Term
| informal factors that influence goal congruence |
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Definition
work ethic, mgmt style, culture
external factors
internal factors |
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Term
| external factors that influence goal congruence |
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Definition
norms of desirable behavior in the org. society; these are the work ethic, manifested in their loyal to the organization, their diligence, their spirit, and their pride in their work
some attitudes are societal, others are local, and others are industry-specific |
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Term
| internal factors that influence goal congruence |
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Definition
culture: common beliefs, shared values, norms of behavior, and assumptions
management style: stem from the CEO
the informal organization: relationships that aren't shown on the org. chart
perception and communication: understanding the goals and what should be done to achieve them; different sources conflict with one another |
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Term
| ways in which rules can act (4) |
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Definition
guides
positive requirements
prohibitions
should never be broken under any circumstance |
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Term
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Definition
physical controls: locks, vaults, etc.
manuals: student handbook, guide to operations
system safeguards: passwords
task control systems: often scientific |
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Term
| formal control process steps |
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Definition
1. goals and strategies
2. strategic planning
3. annual budget
4. develop responsibility centers
5. rules govern execution of the plan
6. compare actual to planned performance
7. feedback |
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Term
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Definition
unsatisfactory performance leads to revisions and corrective action
satisfactory performance leads to rewards |
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Term
| 3 types of organizational structures |
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Definition
functional structure
business unit structure
matrix structure |
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Term
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Definition
| each manager is responsible for a specified function. |
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Term
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Definition
each manager is responsible for most of the activities of their unit & functions as a semi-independent part of the company.
also called a division |
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Term
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Definition
| prorammic; functional units have dual responsibilities. |
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Term
| 4 things that HQ always retains power over |
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Definition
1. raising funds and allocating them
2. approving budgets, remuneration, performance evaluation
3. establishing the charter of each unit
4. setting company-wide policies |
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Term
| what does a charter include? |
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Definition
| it state the product lines, geographical territory, and, occasionally, the customers of a unit or division. |
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Term
| problems with the functional structure |
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Definition
timeliness & complication in resolving issues
ineffective for companies with a diverse product line
can prevent cross-functional coordination
makes manager effectiveness difficult to evaluate |
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Term
| two positive things about business unit structure |
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Definition
react to new threats or opportunities with better, more timely decisions because they are closer to the market
excellent training ground for general management |
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Term
| disadvantages of business unit structure |
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Definition
each unit might duplicate some work that could be done at HQ with a different structure.
the layers of unit staff might cost more than the value gained by decentralizing.
units might be unable to attract qualified, skilled specialists.
business unit disputes (and disputes with HQ) may occur. |
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Term
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Definition
| the person who is responsible for designing and operating the management control system |
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Term
| functions of the controller |
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Definition
designing & operating info & control systems
preparing financial statements/reports
preparing, analyzing, and interpreting performance reports, analyzing program and budget proposals and compiling one annualized budget
supervising internal audit and accounting control
developing personnel in the controller organization & educating management in matters related to their function |
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Term
| relation to line organization |
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Definition
| the use of the information collected and reported by the controller's system is the responsibility of line management. the controller does not make or enforce management decisions, although they might develop and analyze control measurements and recommend actions to management. |
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Term
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Definition
business unit GM is the controller's immediate boss and has ultimate authority over their post.
the controller might not be completely objective when reporting budgets & performance to senior management. |
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Term
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Definition
business unit controllers report directly to the corporate controller.
business unit manager might treat the controller as a "spy from the office" rather than a trusted aid. |
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