Karteikarten
Financial Control L1
Karten in diesem Stapel (51)
- 1Define management?All related processes of organising resources and directing activities for the purpose of achieving organisational objectives.
- 2What are the components of management?- Objective setting
- Strategy formulation
- Management control - 3Explain objective setting?- Prerequisite for any purposeful activities
- Impossible to asses whether employees are purposive and a firms success
- Can be: non/financial, quantified/ implicit, economic, social, environmental or societal - 4Explain strategy formulation?- How organisations use their resources to meet their objectives
- Strategies are the constraints organisations place on employees to achieve organisational goals - 5Explain management control?- Focus on encouraging employees to undertake desirable actions through behavioural orientation
- "Are our employees likely to behave appropriately?" - 6What are the management control problems?- Lack of direction
- Motivational issues
- Personal limitations - 7Explain how a lack of direction causes management controls issues?- Employees do not understand what the organisation expects from them
- Effective communication and reinforcement of how they may maximise their contributions to organisational objectives. - 8Explain how motivational problems cause management controls issues?- Lack of goal congruence (personal and organisational goal are asymmetric, as people are self-interested)
- Self-interested behaviour (Through effort-aversion will determine the least amount effort required for tasks while still looking co - 9Explain how a personal limitations cause management controls issues?- Employees may know what is expected of them and highly motivated but unable to perform to standards.
- Promoted above their level of ability
- Lack of: Knowledge, information, training or poor job design. - 10Are all management controls cybernetic in nature?- No, only highly routine tasks benefit from the use of detectors,assessors and effectors.
- Many do not focus on tangible measures of performance (codes of conduct, hiring standards and direct supervision) - 11What is the difference between proactive and reactive controls?- Proactive controls are designed to prevent control problem any adverse effects occur.
- Reactive controls are designed to respond to adverse effects and remove or reduce their impact. - 12What is the purpose of control problem avoidance?- To eliminate the possibility that control problems will cause the organisation harm.
- Not all issues can be avoided but an organisation may reduced its exposure to certain types and sources. - 13What are the prominent avoidance strategies?- Activity elimination
- Automation
- Centralisation
- Risk sharing - 14Explain activity elimination?- Avoidance of problem associated with a particular entity or activity, by passing risk and associated profits to a third party.
- Why, managers may not have the resources, legal understand or structural limitations.
- (sub-contracting, licensing agreements or divestment) - 15Explain automation and issues in its use?- The use of computers, expert systems etc, to reduce organisational exposure to control problems.
- Reduce human error in: Accuracy, consistency, motivation and personal limitation.
- Issues:
Feasibility - humans more talented and can make more complex judgements
Costly - only justifiable if there is an improvement in productivity and control
Risk - centralisation and duplication of documents obscures the audit trail and presents a security risk. - 16Explain centralisation?- The division of decision-making at various organisational levels.
- "who makes what decisions and what level" - 17Explain risk sharing?- The spreading of risk with external entities to reduces losses which could be incurred by inappropriate behaviour.
- (insurance and joint ventures spread risk and profits) - 18Define and explain results controls?- Controls designed to reward or punish the output of individuals.
- Designed to create a meritocracy by causing employees to be concerned with their actions
- They empower actions which will produce the desired results. - 19How do result controls alleviate control problems?- RCs are preventative, and reduce motivational problems by aligning organisational objectives with employee rewards.
- Personal limitations are reduced by attracting and retaining employees who confident in their abilities.
- Encourages self evaluation and aid management to evaluate performance. - 20What are the elements of results controls ?- Defining performance dimensions
- Measuring performance
- Performance targets
- Providing rewards and punishments - 21Explain defining performance dimension of result controls ?- Ill-defined measurements dimensions which are not congruent with organisational objectives or strategies with foster employees to take the wrong actions.
- 22Explain measuring performance within result controls ?- The assignment of numerical values to objects or tasks, over a given time.
- These measures can be non/financial, accounting based or subjective. - 23Explain performance targets within result controls ?- These should be specified for all performance dimensions to be measured.
- Clear targets allow employees and managers to assess performance and adjust their actions. - 24Explain providing rewards (or punishments) within result controls.- Incentive can be non/monetary but must be considered valued and cost effective.
- Extrinsic (money) or intrinsic (sense of accomplishment)
- Expectancy theory - the strength of motivation is motivational effort that their expectations will result from their behaviour and their strength of preference for those outcomes. - 25What are the conditions for effective result controls ?- Knowledge of the desired results
- Ability to influence results (controllability)
- Ability to measure results effectively - 26Explain what is meant by "the knowledge of desired result" for effective result controls ?- Organisations must know which results are desired in the areas they wish to control, and communicate these effectively to the relevant employees.
- 27Explain is meant by "the ability to influence results (controllability)" for effective result controls?- individuals whose behaviour is being controlled must be able to affect results in a meaningful way in the given period.
- 28What does the controllability principle state ?- If results are totally uncontrollable then the controls tell us nothing about the actions taken.
- Positive actions will not always lead to goods results and vice-versa. - 29Explain what is meant by "the ability to measure results effectively" for effective results controls ?- To evoke the correct behaviour and congruence results should be: precise, objective, timely and understandable.
- 30What does precision mean?- The degree of randomness within a measure, without precision information loses its value and the likelihood incorrect valuations rises.
- 31What does objectivity mean?- Freedom from bias, measures should be conducted by parties independent of the process or verified by an independent party.
- 32What does timeliness mean within effective result controls ?- The lag between employees' performance and the measurement of results.
- Employees required constant short-term performance pressure to perform to reduce complacency
- This stimulates creativity as employees vary their approach to achieve desired results. - 33What does Understandability mean within effective result controls ?- Employees must understand what they are held accountable for, and how they can influence measures.
- 34What are the advantages of result controls?- Behaviour can be influenced while providing autonomy.
- Yields greater employee commitment and motivation.
- Inexpensive since performance measures for various other reasons. - 35What are the disadvantages of result controls ?- Less that perfect indicator of whether good actions have been taken.
- Shifts risk to employees requiring a premium for risk adverse employees.
- Conflicting functions, motivation to achieve and communication among entities. - 36Define action controls and their purpose?- Designed to control the actions of employees so they perform actions beneficial to the organisations.
- Only feasible when managers know what actions are (un)desirable and have the ability to ensure that the (un)desirable actions (do not) occur. - 37Define personnel controls and their purpose?- Designed to make it more likely that employees will perform tasks at satisfactory level on their own.
- 38Define cultural controls and their purpose?- Exist to shape organisational behavioural norms and encourage employees to monitor and influence each others behaviour.
- 39Name the types the of action controls?- Behavioural constraints
- Pre-action reviews
- Action accountability
- Redundancy - 40Explain behavioural constraints ?- Type of preventative action control, designed to make it difficult or impossible for individuals to make undesired actions.
- They can be physical (passwords) or administrative (separation of duties) *cannot stop collusion. - 41Explain pre-action reviews ?- Preventative AC
- Scrutiny of action plans of employees being controlled.
- Reviews can approve or disapprove the proposal actions or request modifications (planning and budgeting) - 42Explain action accountability and the considerations for implementing them ?- Holding employees accountable for their actions.
- 1) defining what actions are (un)acceptable 2) communicating those definitions to employees 3) observation and tracking what happens 4) rewarding good actions and punishing actions deviating from the acceptable. - 43Explain redundancy and the issues of this approach ?- Assigning more employees (or machines) to a task than necessary or back ups.
- Increases the probability a task will be completed to a satisfactory level.
- Common to security function and computer facilities, but is costly and multiple employees can produce conflict, frustration and boredom. - 44What are the advantages of action controls?- Most direct form of control
- Documentation of accumulated memory (organisational memory)
- Efficient way of coordination (increases the predictability of actions and reduces the amount of inter-organisational information flows) - 45What are the disadvantage of action controls ?- only suitable for highly routinised tasks
- May discourage creativity, innovation and adaptation
- May cause sloppiness, negative attitudes and costly - 46Which action controls alleviate which control problems ?- BC, effective at eliminating motivational issues
- PR & AA, address all issues as they involve communication with employees about desired actions (by fear)
- R, motivational issues and personal limitations - primarily focused on the accomplishment of particular tasks - 47What is the differences between preventative and detective action controls?- PC, most powerful form of control as non of the cost from undesirable behaviour will be produced.
- DC, after the occurrence of the behaviour only AA is both preventative and detective as it cannot be verified if appropriate actions have been taken until evidence of actions have been gathered. - 48Define personnel controls and their purpose ?- Build on employees natural tendencies to control and/or motivate themselves through self-monitoring.
- SM, use employee conscience to want to do a good job to derive positive emotions of self-respect and satisfaction commit to organisational goals. - 49What are the consideration when implementing personnel controls, and why?1) Selection and placement of employees - finding the right people for a particular job while provide a good work environment and required resources
2) Training - providing employees with a greater sense of professionalism, create interest by helping employees to understand their job better.
3) Job design & provision of resources - good job design allows motivated and qualified employees a high probability of success. - 50What are cultural controls and their purpose ?- Designed to encourage mutual monitoring through group pressure on individuals deviating from norms an values.
- Effective due to emotional ties between members, as cultures are built on shared: traditions, norms, belief, ideologies and attitudes. - 51What are the five ways to shape culture ?- Codes of conduct (Formal documentation corporate values)
- Group-based rewards (employee ownership etc)
- Intra-organisational transfers (identification with organisations as a whole as opposed to sub-units)
- Physical and social arrangements (décor, dress codes)
- Tone at the top (management statements)
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- Karteikarten am Financial Control L1, erstellt von Eric Sea am 23/12/2015.
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- Eric Sea
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