The summary of Management Control Systems – Kenneth A. Merchant [Prentice Hall] Summarized by Mooyoung Son Linkoping University SMIO 2009 http://cyworld.com/zekison

The summary of Management Control Systems
– Kenneth A. Merchant [Prentice Hall]
Summarized by Mooyoung Son
Linkoping University SMIO 2009 http://cyworld.com/zekison Chap 1 : MANAGEMENT AND CONTROL
1)

Causes of Management
-Lack of Direction
-Motivational Problems
-Personal Limitation

2)

Avoidance
-Activity elimination : Eliminate what is not working properly
-Automation
-Centralization
-Risk Sharing

Chapter 2 SECTION II
3)

Result Control : Preventive type Control
Helps Mgr to address strategy, org, employees are performing
- Steps :
1. Define Performance dimension
2. Measure Performance
3. Setting Target
4. Provide Reward
-

Requirement for Effective Result control :
- Knowledge of desired result : Org should know what result are desired
- Ability to influence desired result : Employee have influence on result (Controllable)
-Ability to measure Controllable result effectively : Org can measure result effectively (Measurable)
 Result measure should be : Precise, Objective, Timely, Understandable

Chapter 3
4)

Action Control : To ensure employees act in org’s best interest
a. Form of Action control
- Behavioral constraints – Negative Form (You can’t do this You can’t do that)
- Pre action Review – Scrutiny(详查정밀조사) of action plan (What will they do?)
- Action Accountability – (의무義務) Hold employees for action required (You should do this and that)
 Requires : Define actions acceptable or unacceptable
Communicate definitions to employees
Observe what happens (reaction)
Reward or Punish
- Redundancy (과잉過剩) : Set more Human resource than what they need (Backup)
b. Requirement for effective action control :
- Knowledge of desired action
- Ability