Management Control Systems

Cover
Title Page
Copyright Page
Dedication
Brief Contents
Contents
Preface
Acknowledgements
SECTION 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
		Outline of this text
		Notes
		Leo’s Four-Plex Theater
		Wong’s Pharmacy
		Private Fitness, Inc.
		Atlanta Home Loan
SECTION 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
		Notes
		Office Solutions, Inc.
		Puente Hills Toyota
		Kooistra Autogroep
		Houston Fearless 76, Inc.
	3 Action, Personnel, and Cultural Controls
		Action controls
		Action controls and the control problems
		Prevention vs. 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
		Notes
		Witsky and Associates, Inc.
		The Platinum Pointe Land Deal
		EyeOn Pharmaceuticals, Inc.
		Axeon N.V.
	4 Control System Tightness
		Tight results control
		Tight action controls
		Tight personnel/cultural controls
		Conclusion
		Notes
		Controls at the Bellagio Casino Resort
		PCL: A Breakdown in the Enforcement of Management Control
	5 Control System Costs
		Direct costs
		Indirect costs
		Adaptation costs
		Conclusion
		Notes
		Philip Anderson
		Sunshine Fashion: Fraud, Theft, and Misbehavior among Employees
		Better Beauty, Inc.
		Fit Food, Inc.
		Atlantis Chemical Industries
	6 Designing and Evaluating Management Control Systems
		What is desired and what is likely
		Choice of controls
		Choice of control tightness
		Adapting to change
		Keeping a behavioral focus
		Maintaining good control
		Notes
		Diagnostic Products Corporation
		Game Shop, Inc.
		Family Care Specialists Medical Group, Inc.
SECTION 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
		Notes
		Kranworth Chair Corporation
		Zumwald AG
		Global Investors, Inc.
	8 Planning and Budgeting
		Purposes of planning and budgeting
		Planning cycles
		Target setting
		Planning and budgeting practices, and criticisms
		Conclusion
		Notes
		Royal Wessanen NV
		The Stimson Company
		Multiple Versions of the Plan
		Vitesse Semiconductor Corporation
		VisuSon, Inc.: Business Stress Testing
	9 Incentive Systems
		Purposes of incentives
		Monetary incentives
		Incentive system design
		Criteria for evaluating incentive systems
		Group rewards
		Conclusion
		Notes
		Harwood Medical Instruments PLC
		Superconductor Technologies, Inc.
		Raven Capital, LLC
SECTION IV Performance Measurement Issues and Their Effects
	10 Financial Performance Measures and Their Effects
		Value creation
		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
		Notes
		Behavioral Implications of Airline Depreciation Accounting Policy Choices
		Las Ferreterías de México, S.A. de C.V.
		Industrial Electronics, Inc.
		Haengbok Bancorp
		Corbridge Industries, Inc.
		King Engineering Group, Inc.
		Berkshire Industries PLC
	11 Remedies to the Myopia Problem
		Pressures to act myopically
		Reduce pressures for short-term profit
		Control investments with preaction reviews
		Extend the measurement horizon (use long-term incentives)
		Measure changes in value directly
		Improve the accounting measures
		Measure a set of value drivers
		Conclusion
		Notes
		Catalytic Solutions, Inc.
		Dortmunder-Koppel GmbH
		Johansen’s: The New Scorecard System
		Mainfreight
		Statoil
	12 Using Financial Results Controls 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
		Notes
		Olympic Car Wash
		Beifang Chuang Ye Vehicle Group
		Hoffman Discount Drugs, Inc.
		Howard Building Corporation, Inc.
		Bank of the Desert (A)
		Bank of the Desert (B)
		Fine Harvest Restaurant Group (A)
		Fine Harvest Restaurant Group (B)
SECTION V Corporate Governance, Important Control-Related Roles, and Ethics
	13 Corporate Governance and Boards of Directors
		Laws and regulations
		The Sarbanes-Oxley Act
		Boards of directors
		Audit committees
		Compensation committees
		Conclusion
		Notes
		Arrow Motorcar Corporation
		Golden Parachutes?
		Pacific Sunwear of California, Inc.
		Entropic Communications, Inc.
		Bio/Precise Medical Devices, Inc.
	14 Controllers and Auditors
		Controllers
		Auditors
		Conclusion
		Notes
		Don Russell: Experiences of a Controller/CFO
		Desktop Solutions, Inc. (A): Audit of the St. Louis Branch
		Desktop Solutions, Inc. (B): Audit of Operations Group Systems
		Andrew G. Scavell, Chief Risk Officer
	15 Management Control-Related Ethical Issues
		Good ethical analyses and their importance
		Why do people behave unethically?
		Some common management control-related ethical issues
		Spreading good ethics within an organization
		Conclusion
		Notes
		Two Budget Targets
		Conservative Accounting in the General Products Division
		Education Food Services at Central Maine State University
		The “Sales Acceleration Program”
		The Expiring Software License
		Wired, PLC
		Mean Screens USA, Inc.
		Lernout & Hauspie Speech Products
		Ethics	Cisco
SECTION VI Management Control When Financial Results Are Not the Primary Consideration
	16 Management Control in Not-for-profit Organizations
		Corporations, B corporations, and not-for-profits
		Key differences between for-profit and not-for-profit organizations
		Goal ambiguity and conflict
		Difficulty in measuring and rewarding performance
		Accounting differences
		External scrutiny
		Employee characteristics
		Conclusion
		Notes
		SCI Ontario: Achieving, Measuring, and Communicating Strategic Success
		University of Southern California: Responsibility Center Management System
Index
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