ACCT 463 Lecture Notes - Lecture 4: Organizational Culture

• School: McGill University
• Department: Accounting
• Course: ACCT 463
• Professor: Philippe Levy

Document Summary

Lecture 4: design & evaluation of control systems and responsibility. Designing and evaluating systems: consider what will likely happen control costs/behavioral issues. Low cost and few harmful side effects: always important to find the right person for the right job, examples: selection and placement; training; provision of resources; organizational culture. Action controls operating and enforcement: centralized organizational structure: top down information, top executives have the knowledge and will specify actions to subordinates, example: supervisors observe behavior; manager makes decisions. Operating action controls: give specific behavioral instructions; restrictive: enforcement of the control: detect violations; administer punishment. When designing and evaluating control systems: 1. What you measure is what you get: measure sales will increase sale: sell easy low profit sales, measure costs will cut costs: slow down innovation and brand development; safety, 2. Specificity: company as a whole: profit, roi, eva, division: segment profit, roa, department: costs or revenues.