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 SystemsContemporary Management Accounting IssuesAccounting 586Chapter 9
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Focus of the Theme & Prior ThemeManagement Accounting & Control System (MACS) Theme 1 focused on how the MACS supports strategy and its formulationTheme 2 focuses on how the MACS supports strategy implementation, monitoring, & control
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Focus of this ChapterDefine & describeControlManagement control systemsDescribes the behavioral aspects of the MACSEmployee incentivesEmployee motivations
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ImportanceEvery management accounting and control system (MACS) depends on peoplePeople make decisions, perform activities etc.… (Usually data from MACS)What people do or how they behave influence the effectiveness of MACSMACS plays an important role in motivating employee behaviors to be matching with organizational objectivesAn effective MACS creates incentives for employeesWell designed: desired behavior: Poorly designed: perverts behaviorGet the behavior you reward
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DefinitionsControl: procedures, tools, measures, systems & Incentives to motivate and guide employees to achieve firm's objectives & follow defined proceduresMACS consists of systematic methods by whichInformation on operations in terms of meeting organizational objectives is collected & distributedPerform evaluation & feedbackIf objectives are being met, organization is said to be in control; if not it is out of controlIf out of control corrective actions are taken
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MACS SummaryProvides data and information forFeedbackPerformance and decisionsControl Corrective actions to keep firm in controlFormal system to collect data, prepare information and distribute these in the organizationNotice the demands on data collective and IT and IS
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Characteristics of a Well-Designed MACSTechnicalAccurate: relevant of informationTimely: up to data informationConsistent: same format, definitions used throughout the organization over timeFlexible: ability to be customized at the local level
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Characteristics of a Well-Designed MACSBehavioralHas an embedded ethical codeHas mixtures ofLong run and short run measuresQuantitative and qualitative measuresE.g. balance scorecardInvolve employee groups in decision-makingProvides incentives to reward desired behavior and punish other behaviors
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Historic Perspective on MACSEarly 1900s: Motivational assumptionsWork objectionableMoney the only motivation to workWorkers need to be given detailed instructionsWorkers require close monitoring and controlTo assure work is done correctly
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Historic Perspective on MACSHuman Resources MovementWorkers need something other than money from workRespect, identity, feeling of contributionThese impact Job satisfaction, morale, quality of work lifeEmployee motivationWant to participate in decision makingWant to creatively control tasks performed
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