Chapter 1
- Knowledge of objectives is a prerequisite for the design of any MCS and, indeed, for any purposeful activities – objectives do not have to be quantified and do not have to be financial
- Strategies define how organizations should use their resources to meet these objectives – a well-conceived strategy guides employees in successfully pursuing their organizations’ objectives; it conveys to employees what they are supposed to be doing
- Strategic control involves managers addressing the question: Is our strategy valid/is our strategy still valid, and if not, how should it be changed?
- Management control focuses on execution and it involves addressing the general question: Are our employees likely to behave appropriately? Do our Employees understand what we expect of them? Will they work consistently hard and try to do what is expected of them (will they pursue the organization’s objectives in line with the strategy)? Are they capable of doing a good job?
- Managers addressing strategic control issues have a focus primarily external to the organization; they examine the industry and their organization’s place in it
- Managers addressing management control issues have a primarily internal focus; they reflect how they can influence employees’ behaviors in desired ways
Causes of Management Control Problems
1. Lack of Direction – some employees perform inadequately simply because they do not know what the organization wants from them; therefore, one function involves informing employees as to how they can direct their contributions to the fulfillment of organizational objectives
2. Motivational Problems – even when employees understand what is expected of them, some do not perform as the organization expects because of motivational problems; common because individual and organizational objectives do not naturally coincide as individuals are