1. Management and control
(1) Management is the process of organizing resources and directing activities for the purpose of achieving organizational objectives”
(2) Distinguish three elements of management process
a. Objective setting
Knowledge of objectives is a kind of necessary prerequisite for the design of MCS, but objectives do not have to be quantified and financial.
Employees must have a basic understanding of what the organization is trying to accomplish. Otherwise no one could claim that any of the employees’ actions are purposive, and no one could ever support a claim that the organization was successful.
b. Strategy formulation
Strategy is defined how organizations should ...view middle of the document...
Behavioral orientation is critical aspect in management, which can lead employees do what the organizations want.
2. Cause of management control problems
(1) Lacks of direction---employees do not know the expectation of their organization.
(2) Motivational problems---employees without enough motivation to do things according to their organizations’ interests. Employees sometimes act in their own personal interests at the expense of their organization’s interests. The misdirected behaviors(fraud and misconduct) of employees can have severe impacts, such as impaired business relations, lost revenue from damage reputations.
(3) Personal limitation---employees without enough competency or information to do things arranged by their organizations.
3. Characteristics of good management control
Management control includes all devices managers use to ensure that the behaviors and decisions of employees are inconsistent with the organization’s objectives and strategies.
In reality, perfect control does not exist. Good control will take place when there is a high probability that the firm’s objectives are achieved (objectives-driven) and a low probability that major unpleasant surprises will occur(future-oriented). The good control is to purse the control losses smaller than costs of control (economically desirable).
4. Control problem avoidance
Management can not avoid all control problems, but they can avoid some of them by:
(1) Activity elimination
Managers can sometimes avoid the control problems associated with a particular entity or activity by turning over the potential risks, and the associated profits, to a third party through such mechanisms as subcontracts, licensing agreements, or divestment.
Managers can sometimes use computers, robots, expert systems and other means of automation to reduce their...