Ch 9 Student Behavioral & Organizational Issues in MACS Theme 2.pptx - Behavioral Organizational Issues in Management Accounting Control Systems

Ch 9 Student Behavioral & Organizational Issues in MACS Theme 2.pptx

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Behavioral & Organizational Issues in Management Accounting & Control Systems Contemporary Management Accounting Issues Accounting 586 Chapter 9
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Focus of the Theme & Prior Theme Management Accounting & Control System (MACS) System which provides information to monitor and manage the implementation of a strategic plan & provide incentives for employee behavior Theme 1 focused on how the MACS supports strategy and its formulation- BSC context Theme 2 focuses on how the MACS supports strategy implementation, monitoring, & control Monitoring feedback and control
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Focus of this Chapter Define & describe MACS Control Describes the behavioral aspects of the MACS Employee Incentives Employee Behaviors
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Importance Every management accounting and control system (MACS) depends on people People implement the strategy through their behavior Decisions, activities, etc. What people do (How they respond) influences the effectiveness of the MACS & implementation of strategy MACS plays an important role in motivating employee behaviors to be congruent with organizational objectives Goal is to build a MACS which aligns the individuals behavior with the organizations desired behavior for these individuals Well defined incentives generate appropriate behavior Poorly designed perverts the behavior
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Definitions Feedback: information on performance & decisions compared to a standard. (Budget, Performance evaluations, benchmarking) Control: Corrective action if significantly different than standard MACS- the formal system used to collect data & distribute information for feedback & control MACS consists of systematic methods by which Information on operations in terms of meeting organizational objectives is collected & distributed If objectives are being met, organization is said to be in control; if not it is out of control If out of control corrective actions are taken
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MACS Summary Provides data and information for for feedback & control Two dimensions/aspects Technical behavioral Formal system to collect data, prepare information and distribute these in the organization for feedback and control
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Characteristics of a Well-Designed MACS Technical Accurate: we can count on the data Timely: data is up to date (not to old) Consistent: consistent format. Knowing how things are formatted and laid out Flexible: Customize at the local level
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