Prentice Hall
Business
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ISBN-10: 0273708015
ISBN-13: 9780273708018
Publisher: Prentice Hall
Copyright: 2007
Format: Paper; 872 pp
Published: 04/17/2007
Suggested retail price: $180.00
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With its unique range of case studies, real life examples and comprehensive coverage of the latest management control-related tools and techniques, Management Control Systems is the ideal guide to this complex and multidimensional subject for upper level undergraduates, postgraduates and practising professionals.
- In-depth analysis of the relationship between management theory and practice, with references to a host of specific decision-making situations.
- Case studies and real-life examples drawn from an international range of firms and companies, including Toyota, Citibank, and Lincoln Electric.
- Coverage of ethical and multinational issues, across a variety of businesses, industries and not-for-profit organizations.
- Assessment of management control-related tools, including Balanced Scorecards and EVA™, as well as non-financial measures of performance.
- Discussion of the similarities and differences between management control and internal control, with reference to Sarbanes-Oxley and similar movements worldwide.
- Fresh emphasis on management control systems in relation to corporate governance.
- Additional coverage of Sarbanes-Oxley and similar movements in other countries, which will take us into a discussion of the similarities and differences between management control and internal control. There will also be an extra case on this topic.
- Improved the links to theory and related topics in the text
- Better positioning of management control systems in relation to internal control and corporate governance
- Added coverage of inter-organizational controls (supply chains and strategic alliances).
- Added more discussion of balanced scorecards and non-financial measures of performance.
- Added some discussion of control of projects and a case on the topic.
- Strengthened the discussion of ethics.
- Updated cases where appropriate and relevant.
- Added shorter cases for 'class' or 'workshop' use
- Fully updated the discussions and references in the entirety of the book.
- Included an entirely new set of PowerPoint slides.
- Added a case matrix to the instructor’s manual.
Detailed Contents
Preface
PART I
THE CONTROL FUNCTION OF MANAGEMENT
1 Management and Control
Management and control
Causes of management control problems
Characteristics of good management control
Control problem avoidance
Control alternatives
Notes
Leo’s Four-Plex Theatre
Wong’s Pharmacy
Private Fitness, Inc.
PART II
MANAGEMENT CONTROL ALTERNATIVES AND THEIR EFFECTS
2 Results Controls
Prevalence of results controls
Results controls and the control problems
Elements of results controls
Conditions determining the effectiveness of results controls
Conclusion
Armco, Inc. -- Midwestern Steel Division
Visionary Design Systems: Are Incentives Enough?
HoustonFearless 76, Inc.
3 Action, Personnel, and Cultural Controls
Action controls
Action controls and the control problems
Prevention versus detection
Conditions determining the effectiveness of action controls
Personnel controls
Cultural controls
Personnel/cultural controls and the control problems
Effectiveness of personnel/cultural controls
Conclusion
Atlanta Home Loan
Alcon Laboratories, Inc. (A)
Axeon N.V.
4 Control System Tightness
Tight results control
Tight action controls
Tight personnel/cultural controls
Multiple forms of controls
Conclusion
Lincoln Electric Co.
Controls at the Bellagio Casino Resort
5 Control System Costs
Out-of-pocket costs
Behavioral displacement
Gamemanship
Operating delays
Negative attitudes
Conclusion
Sears Auto Centers (A)
Disctech, Inc.
Philip Anderson
6 Designing and Evaluating Management Control Systems
Understanding what is desired and what is likely
Decision 1: choice of controls
Decision 2: Choice of control tightness
Adapting to change
Keeping a behavioral focus
Maintaining good control
Rabobank Nederland
Airtex Aviation
Puente Hills Toyota
PART III
FINANCIAL RESULTS CONTROL SYSTEMS
7 Financial Responsibility Centers
Advantages of financial results control systems
Types of financial responsibility centers
Choice of financial responsibility centers
The transfer pricing problem
Conclusion
Kranworth Chair Corporation
ToyotaMotor Sales
Zumwald, AG
Global Investors, Inc.
Boise Cascade Corporation
8 Planning and Budgeting
Purposes of planning and budgeting systems
Planning cycles
Performance target setting
Variations in practice
Criticisms of companies’ planning and budgeting processes
Conclusion
Citibank Indonesia(HBS case no. 9-185-061 – same as in prior edition)
HCC Industries (HBS case no. 9-189-096 – same as in prior edition)
Borealis (HBS case no. 9-102-048 – new case)
Patagonia, Inc. (same as in prior edition)
9 Incentive Systems
Purposes of incentives
Monetary incentives
Incentive system design
Criteria for evaluating incentive systems
Group rewards
Conclusion
Superconductor Technologies, Inc.
Loctite Company De Mexico, S.A.de C. V.
Tsinghua Tongfang
PART IV
PERFORMANCE MEASUREMENT ISSUES AND THEIR EFFECTS
10 Financial Performance Measures and their Effects
Value creation: the primary goal of for-profit organizations
Market measures of performance
Accounting measures of performance
Investment and operating myopia
Return-on-investment measures of performance
Residual income measures as a possible solution to the ROI measurement problems
Conclusion
Behavioral Implications of Airline Depreciation Accounting Policy Choices
Las Ferreterías de México, S.A. de C.V.
Industrial Electronics
Berkshire Industries PLC
11 Combinations of Measures and Other Remedies to the Myopia Problem
Addressing the myopia problem
Measure a set of value drivers: combination-of-measures systems
Measure changes in shareholder value directly
Control investments with preaction reviews
Use “improved” accounting profit measures
Extend the measurement horizon (use long-term incentive plans)
Reduce pressure for short-term profit
Conclusion
Catalytic Solutions, Inc.
Diagnostic Products Corporation
Bank of the Desert (A) and (B)
First Commonwealth Financial Corporation
12 Using Financial Results Control in the Presence of Uncontrollable Factors
The controllability principle
Types of uncontrollable factors
Controlling for the distorting effects of uncontrollables
Other uncontrollable factor issues
Conclusion
Olympic Car Wash
Hoffman Discount Drugs, Inc.
Formosa Plastics Group, Inc.
Southern CaliforniaEdison
Beifang Chuang Ye Vehicle Group
PART V: CORPORATE GOVERNANCE, IMPORTANT CONTROL-RELATED ROLES, AND ETHICS
13 Corporate Governance and Boards of Directors
The Sarbanes-Oxley Act of 2002
Boards of directors
Audit committees
Compensation committees
Conclusion
Pacific Sunwear of California, Inc.
Financial Reporting Problems at Molex, Inc.
Golden Parachutes?
Vector Aeromotive Corporation
14 Controllers and Auditors
Controllers
Auditors
Conclusion
Don Russell: Experiences of a Controller/CFO
ITT Corporation: Control of the Controllership Function, 1977 vs. 1991
Desktop Solutions, Inc. (A): Audit of the St. LouisBranch
Desktop Solutions, Inc. (B): Audit of Operations Group Systems
Landale PLC
15 Management Control-Related Ethical Issues and Analyses
The importance of good ethical analyses
Ethical models
Analyzing ethical issues
Why do people behave unethically?
Some common management control-related ethical issues
Spreading good ethics within an organization
Conclusion
Two Budget Targets
Conservative Accounting in the General Products Division
Education Food Services at CentralMaineStateUniversity
The “Sales Acceleration Program”
Expiring Software License
The PlatinumPointeLandDeal
Lernout & Hauspie Speech Products
PART VI
SIGNIFICANT SITUATIONAL INFLUENCES ON MANAGEMENT
CONTROL SYSTEMS
16 The Effects of Environmental Uncertainty, Organizational Strategy, and Multinationality on Management Control Systems
Environmental uncertainty
Organizational strategy
Multinationality
Conclusion
Conagra Grocery Products Company
LincolnElectric: Venturing Abroad
Teco Electric & Machinery Co. Ltd.
Driessen Autogroep
17 Management Control in Non-Profit Organizations
Differences in for-profit and non-profit organizations
Goal ambiguity and conflict
Difficulty in measuring performance
Accounting differences
External scrutiny
Legal constraints
Employee characteristics
Services provide
Conclusion
BostonLyric Opera
City of Yorba Linda, California
Waikerie Co-Operative Producers Ltd.
Universityof Southern California: RevenueCenterManagement System
Index
Management Control Systems: Performance Measurement, Evaluation and Incentives
Merchant & Van der Stede
© 2003 | Prentice Hall | Paper; 716 pages | Instock
ISBN-10: 0273655965 | ISBN-13: 9780273655961
Brief Description | Buy from myPearsonStore
Based on Kenneth Merchant¿s ¿Modern Management Control Systems¿, this new book comprehensively addresses the complex and multidimensional subject of management control systems (MCSs). The discussions in the book assume a basic level of knowledge of management accounting, but the book is suitable for upper level undergraduates who have taken a prior management accounting course as well as for postgraduates and practicing professionals. The book presents an all-encompassing framework within which to consider management control issues. It also presents the needed technical subject content and summaries of the relevant research literature. But perhaps most importantly, it helps students developing their skills of applying the material to specific decision-making situations. This is done with real world text examples and an extensive set of case studies, which reflect the complexity that managers face when using MCSs. While the book focuses on the use and effects of "financial results controls," it also describes situations where financial controls are either not effective or are actually counterproductive and discusses alternatives that managers can use in those situations.
Management Control Systems
Performance Measurement, Evaluation and Incentives
Second Edition
Kenneth A. Merchant and Wim A. Van der Stede
With its unique range of international case studies, real-life examples and comprehensive coverage of the latest management control-related tools and techniques, this second edition of Management Control Systems is the ideal guide to this complex and multidimensional subject.
The authors approach management control from an accounting perspective as they discuss issues of performance measurement and evaluation in detail. They also provide a broad perspective on control systems, with a focus on issues such as planning and budgeting systems, internal controls, corporate culture, corporate governance, and ethics. Their unique treatment of the subject is thorough, logical, and easy-to-read, and is perfect for upper level undergraduates, postgraduates and practising professionals.
“If this book were fiction, I would refer to it as a real page-turner.”
Eddy Vaassen, Universityof Maastricht
Features
- In-depth analysis of the relationship between management theory and practice, with references to a host of specific decision-making situations.
- Case studies and real-life examples drawn from an international range of firms and companies, including Toyota, Citibank, and Lincoln Electric.
- Coverage of ethical and multinational issues, across a variety of businesses, industries and not-for-profit organizations.
- Assessment of management control-related tools, including Balanced Scorecards and EVA™, as well as non-financial measures of performance.
- Discussion of the similarities and differences between management control and internal control, with reference to Sarbanes-Oxley and similar movements worldwide.
- Fresh emphasis on management control systems in relation to corporate governance.
The authors
Kenneth A. Merchant is the Deloitte & Touche LLP Chair of Accountancy at the University of Southern California. He is well-known internationally in the field of management accounting, and is a part-time research professor at the University of Maastricht.
Wim A. Van der Stede is Professor of Management Accounting at the London School of Economics and Political Science. An author and teacher, he brings a European perspective and a wealth of experience to this book.
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Pearson Higher Education offers special pricing when you choose to package your text with other student resources. If you're interested in creating a cost-saving package for your students contact your Pearson Higher Education representative.