management control systems - gbv
TRANSCRIPT
Management Control Systems
First European Edition
Robert N. Anthony, Vijay Govindarajan, Frank G. H. Hartmann, Kalle Kraus and Göran Nilsson
Mc Graw Hill Education
Higher Education
London Boston BurrRidge, IL Dubuque, IA Madison, WI New York San Francisco St. Louis Bangkok Bogota Caracas Kuala Lumpur Lisbon Madrid Mexico City Milan
Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto
rief Table of Contents "
1 2
3 4
Case grid About the authors Preface Acknowledgements Guided tour
PART 1: Management control and management control systems Introduction to management control Designing management control systems
PART 2: The environment and strategy of organizations 70 Organizations and their environment 72 Strategy and management control 142
PART 3: Management control and the organization's internal structure 192 Decentralization, control and incentives 194 Responsibility centres: revenue and expense centres 227
X
XV
xvi xviii
xix
1 3
34
7
8
9 10
11
Responsibility centres: profit and investment centres Transfer pricing, shared service centres and cross-functional management
PART 4: The management control process Planning and budgeting Performance measurement and analysis Compensation, incentives and motivation
254
289
3 2 9 331
384
420
PART 5: Management control challenges 476
12 Management control challenges in service delivery 478
13 Management control of projects 509 14 Management control and inter-
organizational relationships 552
Company Index 606 Subject Index 613
Detailed Table of Contents illillliiiilii^
Case grid x About the authors xv Preface xviii Acknowledgements xviii Guided tour xix
PART 1 : Management control and managemen t control systems 1 Introduction to management control 3 Introduction 4 Management control: role and position 8 Human behaviour in organizations 13 Road map for the reader 20 Case 1.1: Management Control Problems 24 Case 1.2: Wal-Mart Stores, Inc. 26 Case 1.3: PCL: A Breakdown in the
Enforcement of Management Control 29
Designing management control systems 34 Introduction 35 Management control systems 36 Management control system and processes, in and out of control 39 Delineating management control, strategic control and task control 44 Case 2.1: Management Control Problems 50 Case 2.2: Nucor Corporation (A) 53 Case 2.3: PremiumSofi: Managing Creative
People 62
PART 2 : The environment and strategy of organizations 70 Organizations and their environment 72 Introduction 73 Shareholders and stakeholders 74 Goals of the organization 78 Two major trends 82 The environment of the organization 86 Case 3.1: Corporate Governance in Three
Economies: Germany, Japan, and the United States 93
Case 3.2: The Body Shop: Developing a Roadmapfor Corporate Social Responsibility
Case 3.3: Tough Decisions at Marks and Spencer
Case 3.4: Unintended Acceleration: Toyota's Recall Crisis
Case 3.5: ABB's Hydropower Sustainability Dilemma
Strategy and management control Introduction Strategy from different perspectives Strategic frameworks Strategy and management control systems Case 4.1: William Oliver Bootmaker Case 4.2: Encyclopcedia Britannica, Inc. (A) Case 4.3: Encyclopcedia Britannica, Inc. (B) Case 4.4: Encyclopcedia Britannica, Inc. (C) Case 4.5: Cisco Systems (A) Case 4.6: Cisco Systems (B)
PART 3: Management control and the organization's internal structure Decentralization, control and
99
102
114
125
142 143 144 147 155 168 173 175 177 179 188
192
incentives Introduction Decentralization and control Formal control of decentralized management Should control be tight or loose? Controllership Case 5.1: Management Control Problems Case 5.2: Southwest Airlines Corporation Case 5.3: Governance and Control atAXA
Responsibility centres: revenue a n d e x p e n s e centres Introduction Responsibility centres Revenue centres Expense centres Case 6.1: BookWorm
1 9 4 195 196
197 204 205 210 212 214
227 228 228 233 234 240
Detailed Table of Contents
Case 6.2: MoreSki Case 6.3: Barca Products, S.A. Case 6.4: Grand Jean Company Case 6.5: Vershire Company
Responsibility centres: profit and investment centres Introduction Conditions for delegating profit responsibility Advantages of profit centres Difficulties with profit centres Business units as profit centres Other profit centres Measuring profitability Investment centres Measuring assets employed Case 7.1: BreathEZ Case 7.2: MedalRain Case 7.3: TurnAround Case 7.4:Abrams Company Case 7.5: Quality Metal Service Center
Transfer pricing, shared service centres and cross-functional management Introduction Transfer pricing Transfer pricing methods Pricing corporate services Administration of transfer prices Shared service centres Cross-functional management Case 8.1: Computer Sciences Corporation Case 8.2: Transfer Pricing Problems Case 8.3: Birch Paper Company Case 8.4: North Country Auto, Inc. Case 8.5: BoldFlash: Cross-Functional
Challenges in the Mobile Division
PART 4: The management control process Planning and budgeting Introduction Long-range strategic planning Benefits and limitations of long-range strategic planning The parts and linkages of the budget Budgeting process Budget preparation Beyond budgeting Alternatives to budgeting Critique against beyond budgeting
241 242 246 249
254 255
255 256 256 257 258 260 264 267 275 276 277 278 282
289 290 290 291 297 298 300 302 307 309 314 316
322
329 331
332 335
336 338 341 344 348 349 352
10
11
12
Case 9.1: Sometimes Accountants Fail to Budget 356
Case 9.2: The Case of the Colored Post-It™ Notes 361
Case 9.3: New York Times 363 Case 9.4: Svenska Handelsbanken 373
Performance measurement and analysis Introduction Performance measurement systems Variance analysis Additional considerations and limitations of variance analysis Combining financial and non-financial performance measures Case 10.1: Variance Analysis Problems Case 10.2: Making Balanced Scorecard
Work: The Worldclass Lighting Experience
Case 10.3: The Gail Palmer Ashton Graduate School of Business: The Balanced Scorecard Initiative 416
384 385 385 386
392
396 405
408
Compensation, incentives and motivation Introduction Compensation and incentives Theories on incentives and motivation Case 11.1: What Is CEO Talent Worth? Case 11.2: Arck Systems Case 11.3: Lincoln Electric Company (A) Case 11.4: Disorganization atSemco:
Human Resource Practices as a Strategic Advantage
420 421 422 425 440 446 450
464
PART 5: Management control challenges Management control challenges in service delivery Introduction Service organizations Professional and financial service organizations Management control systems The financial services sector Health-care organizations Non-profit and NGOs Case 12.1: Management Control Problems Case 12.2: Piedmont University Case 12.3: Implementation of Performance
Measurements atHopco Hospital
476
478 479 479
482 483 485 487 489 494 496
499
Detailed Table of Contents x
13 Management control of projects Introduction Nature of projects The control environment Project planning Project execution Project evaluation Agile project management Case 13.1: Project Management Analysis
in the Internet Forecasting Industry
Case 13.2: Interior JV: Teething Problems of a Manufacturing Operation in China
Case 13.3: CMM versus Agile: Methodology Wars in Software Development
Case 13.4: AB Thorsten
»09 510 510 512 514 517 520 522
526
528
532 544
1 4 M a n a g e m e n t control a n d inter-organizat ional relationships Introduction Increased importance of inter-organizational relationships Inter-organizational management control Case 14.1: Ramirent Case 14.2: Working Capital Management Case 14.3: LEGO Group: An Outsourcing
Journey Case 14.4: ECCO A/S - Global Value
Chain Management Case 14.5: Strategic Performance
Measurement of Suppliers at WTC
Company Index Subject Index
552 553
554 555 565 566
567
580
596
606 613