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The primary objective of an organization's management accounting control system is to influence its employees to behave in ways that support the...

The primary objective of an organization's management accounting control system is to influence its employees to behave in ways that support the strategic objectives of the organization. Management accounting control systems enhance the decision making process by providing direction and evaluating performance to ensure goals are achieved. Typically, they are formal processes that organizations use to implement strategy and effect change.
Further, Kaplan and Norton (1996, 2001) advocate the systematic analysis of the activities that generate costs and emphasize the balancing of financial and non financial information from the view point of business strategy. They recommend the "change of strategy into action" in which strategy is formed by the whole organization and made to permeate it entirely. They argue that, in the Balanced Scorecard, financial and non financial measures must be part of the information system for employees at all levels of the organization. Not only must the front-line employees understand the financial consequences of their decisions and actions, but senior executives must also understand the drivers of long term financial success.
Required:
(a) Discuss and evaluate the place and roles of financial and non financial
performance indicators in contemporary organizations.
(b) Discuss and elaborate the factors to be considered for the
establishment of a prudent Performance Management System for an
organization going for global market place. What are the characteristics
of a prudent Performance Management System?

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