Management Control Systems

by Anthony, Robert N.; Govindarajan, Vijay

• ISBN13: 9780256168785
• ISBN10: 0256168784
• Edition: 9th
• Format: Hardcover
• Copyright: 1997-09-01
• Publisher: McGraw-Hill College

Table of Contents

An Overview
1 The Nature of Management Control Systems	1	(48)
Basic Concepts	1	(5)
Boundaries of Management Control	6	(8)
Road Map for the Reader	14	(3)
Summary	17	(32)
Case 1-1: General Electric Company (A)	19	(14)
Case 1-2: Xerox Corporation (A)	33	(7)
Case 1-3: Stewart Box Company	40	(9)
PART I The Management Control Environment	49	(257)
2 Understanding Strategies	49	(44)
Goals	49	(4)
The Concept of Strategy	53	(1)
Corporate Level Strategy	54	(6)
Business Unit Strategies	60	(9)
Summary	69	(24)
Case 2-1: T&J's	71	(5)
Case 2-2: General Motors Corporation	76	(6)
Case 2-3: DairyPak	82	(11)
3 Behavior in Organizations	93	(35)
Goal Congruence	93	(1)
Informal Factors That Influence Goal Congruence	94	(4)
The Formal Control System	98	(2)
Types of Organizations	100	(6)
Functions of the Controller	106	(3)
Summary	109	(19)
Case 3-1: Rendell Company	111	(9)
Case 3-2: National Tractor and Equipment Company	120	(8)
4 Responsibility Centers: Revenue and Expense Centers	128	(42)
Responsibility Centers	128	(4)
Revenue Centers	132	(2)
Expense Centers	134	(6)
Administrative and Support Centers	140	(2)
Research and Development Centers	142	(3)
Marketing Centers	145	(2)
Summary	147	(23)
Case 4-1: New Jersey Insurance Company	149	(7)
Case 4-2: Whiz Calculator Company	156	(5)
Case 4-3: Westport Electric Corporation	161	(5)
Case 4-4: Grand Jean Company	166	(4)
5 Profit Centers	170	(40)
General Considerations	170	(6)
Business Units as Profit Centers	176	(2)
Other Profit Centers	178	(3)
Measuring Profitability	181	(6)
Summary	187	(23)
Case 5-1: Profit Center Problems	189	(1)
Case 5-2: North Country Auto, Inc.	190	(7)
Case 5-3: Polysar Limited	197	(9)
Case 5-4: Abrams Company	206	(4)
6 Transfer Pricing	210	(42)
Objectives of Transfer Prices	210	(1)
Transfer Pricing Methods	211	(10)
Pricing Corporate Services	221	(3)
Administration of Transfer Prices	224	(3)
Summary	227	(1)
Appendix: Some Theoretical Considerations	228	(24)
Case 6-1: Transfer Pricing Problems	231	(5)
Case 6-2: Birch Paper Company	236	(2)
Case 6-3: General Appliance Corporation	238	(9)
Case 6-4: Strider Chemical Company	247	(3)
Case 6-5: Medoc Company	250	(2)
7 Measuring and Controlling Assets Employed	252	(54)
Structure of the Analysis	253	(3)
Measuring Assets Employed	256	(11)
EVA versus ROI	267	(5)
Alternative Approaches to Evaluating Managers	272	(3)
Evaluating the Economic Performance of the Entity	275	(1)
Summary	276	(30)
Case 7-1: Investment Center Problems (A)	278	(4)
Case 7-2: Investment Center Problems (B)	282	(4)
Case 7-3: Quality Metal Service Center	286	(8)
Case 7-4: Industrial Products Corporation	294	(7)
Case 7-5: Marden Company	301	(1)
Case 7-6: Lemfert Company	302	(4)
PART II The Management Control Process	306	(270)
8 Strategic Planning	306	(67)
Nature of Strategic Planning	306	(7)
Analyzing Proposed New Programs	313	(3)
Analyzing Ongoing Programs	316	(8)
The Strategic Planning Process	324	(3)
Summary	327	(1)
Appendix: Merck's Research Planning Model	328	(45)
Case 8-1: Codman & Shurtleff, Inc.	331	(14)
Case 8-2: Copley Manufacturing Company	345	(6)
Case 8-3: Allied Stationary Products	351	(8)
Case 8-4: Emerson Electric Company	359	(14)
9 Budget Preparation	373	(48)
Nature of a Budget	373	(6)
Other Budgets	379	(2)
The Budget Preparation Process	381	(4)
Behavioral Aspects	385	(3)
Quantitative Techniques	388	(1)
Summary	389	(32)
Case 9-1: Sound Dynamics, Inc.	391	(12)
Case 9-2: Pasy Company	403	(7)
Case 9-3: Boston Creamery, Inc.	410	(11)
10 Analyzing Financial Performance Reports	421	(38)
Calculating Variances	421	(8)
Variations in Practice	429	(5)
Limitations of Variance Analysis	434	(2)
Behavioral Considerations in Performance Evaluation	436	(6)
Summary	442	(17)
Case 10-1: Variance Analysis Problems	443	(2)
Case 10-2: Solartronics, Inc.	445	(2)
Case 10-3: Galvor Company	447	(12)
11 Performance Measurement	459	(51)
Information Used in Control Systems	459	(2)
Performance Measurement	461	(10)
Interactive Control	471	(3)
Summary	474	(36)
Case 11-1: Analog Devices, Inc.	476	(14)
Case 11-2: Warren Insurance Company	490	(10)
Case 11-3: General Electric Company (B)	500	(6)
Case 11-4: Enager Industries, Inc.	506	(4)
12 Management Compensation	510	(66)
Research Findings on Organizational Incentives	510	(1)
Characteristics of Incentive Compensation Plans	511	(6)
Incentives for Corporate Officers	517	(1)
Incentives for Business Unit Managers	518	(9)
Agency Theory	527	(4)
Summary	531	(45)
Case 12-1: Lincoln Electric Company (A)	534	(15)
Case 12-2: Lincoln Electric Company (B)	549	(1)
Case 12-3: Anita's Apparel	550	(6)
Case 12-4: Wayside Inns, Inc.	556	(9)
Case 12-5: Mary Kay Cosmetics, Inc.	565	(11)
PART III Variations in Management Control	576	(274)
13 Controls for Differentiated Strategies	576	(57)
Corporate Strategy	577	(5)
Business Unit Strategy	582	(12)
Top Management Style	594	(2)
Summary	596	(37)
Case 13-1: United Instruments, Inc.	598	(2)
Case 13-2: NuCor Corporation	600	(10)
Case 13-3: 3M Corporation	610	(4)
Case 13-4: Texas Instruments and Hewlett-Packard	614	(4)
Case 13-5: Texas Instruments	618	(15)
14 Modern Control Methods	633	(35)
Just-in-Time (JIT)	633	(3)
Total Quality Management	636	(3)
Computer Integrated Manufacturing	639	(3)
Decision Support Systems	642	(2)
Summary	644	(24)
Case 14-1: Iron River Paper Mill	646	(10)
Case 14-2: Motorola Inc.	656	(8)
Case 14-3: Responsibility Accounting versus JIT	664	(4)
15 Service Organizations	668	(48)
Service Organizations in General	668	(3)
Professional Organizations	671	(7)
Health Care Organizations	678	(2)
Nonprofit Organizations	680	(4)
Government Organizations	684	(3)
Merchandising Organizations	687	(1)
Summary	688	(28)
Case 15-1: Cookie, Inc.	690	(5)
Case 15-2: Williamson and Oliver	695	(9)
Case 15-3: Harlan Foundation	704	(3)
Case 15-4: Piedmont University	707	(3)
Case 15-5: Riverview	710	(6)
16 Financial Service Organizations	716	(45)
Financial Service Organizations in General	716	(3)
Commercial Banks and Thrift Institutions	719	(6)
Securities Firms	725	(5)
Insurance Companies	730	(3)
Summary	733	(28)
Case 16-1: Chemical Bank	735	(12)
Case 16-2: Metropolitan Bank	747	(7)
Case 16-3: Citibank Indonesia	754	(7)
17 Multinational Organizations	761	(57)
General Considerations	761	(1)
Transfer Pricing	762	(8)
Exchange Rate	770	(11)
Summary	781	(1)
Appendix: Foreign Currency Translation	782	(36)
Case 17-1: AB Thorsten	785	(8)
Case 17-2: Vick International Division: Tom McGuire	793	(12)
Case 17-3: Nestle S.A.	805	(9)
Case 17-4: Xerox Corporation (B)	814	(4)
18 Management Control of Projects	818	(32)
Nature of Projects	818	(3)
The Control Environment	821	(4)
Project Planning	825	(4)
Project Execution	829	(6)
Project Evaluation	835	(3)
Summary	838	(12)
Case 18-1: Northeast Research Laboratory	840	(8)
Case 18-2: Modern Aircraft Company	848	(2)
Company Index	850	(5)
Topical Index	855