Fichas
BUS066
Fichas del conjunto (48)
- 11920s PMProductivity Management
- Supply focus - 21950s PMQuality Management
- Increase supply and manage quality
- Financial indicators
- Globalization - 31960s-1980s PMIntegrated Performance Measurement
- Demand focus
- Multidimensional (quality, time, customer needs) - 41990s PMIntegrated Performance Management
- PM converge with strategic control
- Emergence of models and frameworks - 52000s PMFocus on use of PM
- Alignment of PM with organizational goals, key objectives and processes - 6Strategic PMDoing the right things
- What to measure and how these things are connected to strategy
- Deal with complex tasks, turbulent environment, knowledge-intense contexts
- support strategy development
- long-term
- ROC focus - 7Relevance lost1987
Critique against financial accounting
- Info comes too late, is too aggregated, and too distorted (acc.based)
- Cannot be efficiently used for decision-making, planning, and control
- Lagging measures - 8Use of PM1. Operational use (op.planning, process monitoring, diagnostic system).
2. Incentive use (target setting, rewards, influence behaviors)
3. Exploratory use (strategic priority setting, interactive systems, strategy management)
4. Communication (external/internal stakeholders)
5. Legitimization - 9Traditional PMFor implementation of strategy
- Short-term
- Cost focus - 10Simons' LOC Strengths1. Focuses on strategic issues and its implications for control system
2. Broad perspective, but also how it is used
3. Provides typology for the alternative use of MCs - 11Simons' LOC Weaknesses1. Insufficient emphasis given to socio-ideological (socialization) controls
2. Focused on top management
3. Does not consider informal controls (Norms, shared values that are inherent in organization)
4. Does not consider MC at different org. levels - 12Management Control"The process by which managers ensure the organizational members implement the strategic objectives"
- 13Ferriera and Otley's definition of PMS1. evolving formal and informal mechanisms, processes, and systems,
2. used by organizations for conveying key objectives and goals elicited by management,
--> Managing performance
--> Assist strategic process - 14Simons' Levers of Control (and key control issues)1. BELIEF SYSTEM- Core values
2. BOUNDARY SYSTEM- Risks to be avoided
3. DIAGNOSTIC SYSTEM- Critical Performance Variables
4. INTERACTIVE SYSTEM- Strategic Uncertainties - 15Coercive ControlSpecifies organizational rules with the aim of producing a foolproof system
Gives workers limited options for action
Imposes design and logic on org members
Policing adherence to preplanned objectives and standards - 16Enabling ControlReckons with intelligence of workers
Enables workers to deal more effectively with contingencies
Supports users' decision making- empowering
Increases autonomy, empowerment, and engagement - 17Design Principles of Enabling Control1. Repair
- Capability to fix breakdown
2. Flexibility
- Ability to override standards, and use controls selectively
3. Local transparency
- See local processes internally
4. Global transparency
- how local processes fit into organization as a whole - 18Belief SystemShared values, purpose, and direction
- Provides guidance
Addresses control issues in core values
Created through missions statements, visions creedos, and statements of purpose - 19Boundary SystemStated limits and rules
- Allows for creativity within defined limits
Addresses control issues in risks to be avoided
Created through codes of conduct, strategic planning - 20Diagnostic SystemMonitor performance and evaluate against preset standards
- Provide motivation and information to ensure achievement of organization strategy
Addresses control issues in critical performance variables
Created through budgets, BI systems - 21Interactive SystemManagement involvement in subordinate decision activities
- Focus organization attention to strategic issues
- Promote emergence of new strategic initiatives
Addresses control issues in strategic uncertainties
Created through meetings with employees, involvement. Any system can be made interactive - 22S in SMARTSpecific
- Target a specific area for improvement - 23M in SMARTMeasurable
- able to quantify an indicator of progress - 24A in SMARTAssignable
- Designates who will do it - 25R in SMARTRealistic
- achievable within given time frame and resources - 26T in SMARTTimely
- Specifies a time-frame for completion - 27Production ModelStructure/Input
Process
Results
Outcomes - 28First part of Production modelStructure/Input
- Training and facilities - 29Second part of Production modelProcess
- Compliance to guidelines, activities - 30Third part of Production modelResults
- Short-term, measurable, results of activities - 31Fourth part of Production modelOutcomes
- Long-term, harder to measure, outcomes of results - 32Challenges in Implementing PMS1. Alignment between individual goals and strategic goals
- Rewarding A, hoping for B
- Box ticking, Crowding out
2. Alignment between PMS and strategic objectives
- Not linking measures to strategy (choice of metrics, causal link)
- Not validating the links (proving causality)
- Not setting the right targets (80/20, time lags)
- Measuring incorrectly (relevant and measurable) - 33Mitigating Challenges to PMS1. Instrumental Approach (Ittner & Larckner, 2003)
- Develop causal model
- Pull together data
- Continuously test model and links
- Plan, Do, Check, Act
2. Participatory Approach
- Involving employees in developing PM
- Improve "employee initiative": work-related motivation (intrinsic), through improving Attitude, Norms, and Capability in PMS - 34Hidden Traps in Decision Making (9)1. Framing
2. Endowment Effect (Status quo)
3. Short-termism
4. Confirmation Bias
5. Sunk Costs
6. Representativeness / Recallability
7. Anchoring
8. Overconfidence
9. Overcautiousness - 35How to improve decision making1. Awareness
2. Formalization (procedures)
3. Visualization (dashboards)
4. Outside view (change of perspective, type 2) - 36Performance Measurement"Regular collection and feedback of data concerning resources, results, and outcomes"
- 37Balanced Scorecards Key IdeasLink performance to strategy
- Only includes measures with link to strategy
Strategy is everyone's idea
Holistic approach and balance between dimensions - 38BSC Traditional PerspectivesFinancial
Customer
Process
Learning - 39BSC CritiqueConnection of all metrics to strategy?
Too many metrics, which ones are the most important? (Measuring too much)
Causal links to performance lacking - 40Financially Focused Control Systems+ Comparable and Simple
+ Useful for benchmarking
Large pressure from investors and capital market for financial metrics
Too backward looking?
Relevant for future decision making?
Lagging?
Easier to tamper with- accounting based - 41Intangible assets and future valueOften little connection between measurement of intangible assets and performance- lacking causal links (preconceptions)
Also, implementation issues: difficulties in reliably measuring intangible assets - 42Value-based measuresSupply-side driven management accounting measures based on financial theory
Comparability over time is the aim - 43EVAMeasure income relative to cost of capital
+ Simple to use
- Accounting-based, dependent on accounting measures
Used for compensation, creating incentives - 44Creating intrinsic motivation (Fowler) 3 focus areasAutonomy
Relatedness
Competence - 45Anchoring TrapGiving disproportionate weight to the first information it receives
- 46Status Quo Trap Endowment effectBias toward alternatives that perpetuate status quo
- 47Sunk-cost trapOld investments that have become unrecoverable- leads to suboptimal decisions
- 48Confirmation biasFinding information that confirmation current stance
Avoiding information that contradicts it
Información
- Descripción
- (ISM) Business/Economics Fichas sobre BUS066, creado por Anton Lindfors el 16/12/2021.
- Creado por
- Anton Lindfors
- Visitas
- 0
- Valoración