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Homework Assignment for 4D1165Behavioural Management Control Year 2007Part I: The Homework QuestionsThis, the first section, of my homework assignment contains the twentyhomework questions that have been handed out to us studentsthroughout the course, along with the answers I’ve composed in order ofanswering these.1.One of the causes of management control problems is lack ofdirection. Why does this problem exist?Lack of direction, a fundamental element in many dysfunctionalorganizations, constitutes one of the primary needs for managementcontrol. Employees are likely to perform in an unsatisfactory mannerunless expectations and functions are clarified. Flaws in encouragementand surveillance may loosen the strings between employee andemployees, resulting in confusion. Confusion, in this context, involveshaving people do the wrong things; consequentially leading to decreasedproductivity.Leo’s Four-Plex Theatre, the first case discussed in class, illustrates thesevere effects that a lack of direction may cause. As the personnel of thetheatre were unaware of procedures, uninformed about regulations andseemingly, not well instructed on how to perform simple tasks, mistakesoccurred. Two lines from the case text make this obvious: (1) The cashcounts revealed, almost invariably, less cash than the amounts that shouldhave been collected.1(2) Tickets of the wrong color or with the wrongdates in the stub boxes. Bill Reilly, the manager of Leo’s Four-Plex Theatre, could have solvedmany of the profitability issues stemming from lack of direction, by theimplementation of a relatively cheap control system (as a method toinform and direct the workers).2.What is the controllabilityprinciple?The controllability principle[…] states that people should be heldaccountable for what they control2. People at decision making positions,where rewards (monetary or non-monetary) and punishments are theresults of the organization’s performance, project or individualperformance, should, according to the above sentence, not be affected byactivities which they cannot affect. Results control may be effective inenhancing individuals will to achieve goals and can hence increase the1K. A. Merchant & W. A. Van der Stede. Management Control Systems, Pearson Education Limited, 2003: p 18.2K. A. Merchant & W. A. Van der Stede. Management Control Systems, Pearson Education Limited, 2003: p 460.1
overall effectiveness of many workplaces. The controllability principlecanbe interpreted as the criteria for success of these programs. It’s mostimportant that the areas measured are controllable and provideinformation about what actions were taken to produce the acquiredresults. The logic behind the principle is clear, since people being punishedfor actions beyond their control will soon lose interest and motivation inthe organization.