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Unformatted text preview: ACC 333 (Farrell), Fall 2011, Class 06 1 ACC 333 (Farrel ) Fal 2011, Class 06 1 Objectives for today Brief review Steps involved in making a decisio n Classification into decision management and decision control Delegation of steps to different people Types of decision control systems How use of different types varies across different ownership structures In-class activity A closer look at decision control in open corporations: The board of directors ACC 333 (Farrel ) Fal 2011, Class 06 2 Brief review Alienable rights and decision rights Bundled in markets Separated in firms Agency relationships Goal incongruence, information asymmetry Agency problems Adverse selection, moral hazard Rules of the game / three-legged stool 1) Allocate decision rights to agents 2) Create a performance measurement and control system and tie it to rewards and punishments ACC 333 (Farrell), Fall 2011, Class 06 2 ACC 333 (Farrel ) Fal 2011, Class 06 3 Steps involved in making a decision 1) Initiation – Identifying an opportunity / problem – Developing and assessing ways to capitalize on the opportunity / address the problem – Choosing which is best 2) Ratification – Reviewing the choice from 1) – Deciding whether or not to proceed 3) Implementation – Just do it! 4) Monitoring – Review(s) of implementation to verify best resource use Decision management (agents with specific knowledge) Decision control (principals) ACC 333 (Farrel ) Fal 2011, Class 06...
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This note was uploaded on 03/19/2012 for the course ACCACC 333 taught by Professor Anne during the Fall '11 term at Miami University.
- Fall '11