BUS 424 Chapter 6: Lecture 3

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 424
• Professor: Johnny Jermais

Document Summary

The discrepancy between what is desired and what is likely will determine the choice and the tightness of the management control system. Begin with objectives and strategies: strategies that are derived from a good understanding of the objectives provide important guides to the actions that are expected, especially if they are specific. E(cid:454)a(cid:373)ple: (cid:862)(cid:271)e(cid:272)o(cid:373)e a leader i(cid:374) the i(cid:374)dustr(cid:455)(cid:863) (cid:448)s. (cid:862)(cid:1005)5% roi a(cid:374)d (cid:1006)(cid:1004)% sales gro(cid:449)th(cid:863) Identify the key actions (ka: actions that must be performed to provide the greatest probability of success. Identify the key results (kr: the few key areas where things must go right for the business to flourish. The control problems that are present or will occur: lack of direction, motivational problems, personal limitations. As firms grow, their controls evolve usually towards. Increased formalization of procedures for action accountability purposes: development of more elaborate information systems for results control purposes. Setting and negotiating goals: desired directions and level of achievement. Designing incentives: contingent upon performance (goal)