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DESIGNING & EVALUATING MANAGEMENT CONTROL SYSTEM - Coggle Diagram
DESIGNING & EVALUATING MANAGEMENT CONTROL SYSTEM
What is desired?
What is likely to happen?
determines the firm control system
Choice of control
Results control
Advantage
Feasibility
Inexpensive
Disadvantage
Congruence problem
Target can't be optimized
Action control
Advantage
direct control-action link
no need to monitor results
Disadvantage
feasibility limitation
causes behavioral displacement
discourage adaptation innovation & creativity
causes sloppiness & negative attitude
costly
Personnel/cultural control
selection & placement
Training
Provision of necessary resources
Choice of control tightness
What are the potential benefits of tight controls?
What are the costs?
Are there any harmful side effects likely?
Adapting to Change
Organization will adapt their control system from one to another as they need capabilities & environments change
Keeping a behavioral focus
The effectiveness of the management controls used will very depending on the reaction of the employees involved