Strategies MCS
12. Strategies & MCS
Impact of different strategies on design MCS , Role of MCS in identifying relevant and potential strategies & strategic uncertain.
1. Impact of different strategies on design MCS:
Strategic missions and competitive strategies are important to MCS designers because they define to everyone in the organization what is critical to success. A business’s critical success factors should, in turn, be directly related to the results measures included in a result measures included in a result control system.
In Simon (1990)’s article, statistical analysis and interview data indicated that control system differ systematically between prospector and defender firms. Successful prospectors use a high degree of forecast data in control reports, set tight budget goals and monitor outputs carefully. Cost control is reduced. Moreover, large prospectors emphasize frequent reporting and use uniform control system that are modified frequently. These results led to speculation that prospectors use their management control systems intensively to monitor uncertain and changing environments. Defenders, by contrast, use management control system less actively. Negative correlations were calculated between profit performance and attributes such as tight budget goals and the monitoring of outputs. Defenders, operating in stable environments, emphasize bonus remuneration based on achieving budget targets and report little change in their control systems over time.
More complex organization often specify two levels of strategy: a corporate strategy (often called diversification strategy) and a business strategy within each of their so-called business strategy units (often called competitive strategy). Strategies at both levels constrain organizations to focus on what they do best and constitute important situational factors for the design of effective MCSs.
An organization’s corporate strategy determines what business it wants to be in and how resources should be
Impact of different strategies on design MCS , Role of MCS in identifying relevant and potential strategies & strategic uncertain.
1. Impact of different strategies on design MCS:
Strategic missions and competitive strategies are important to MCS designers because they define to everyone in the organization what is critical to success. A business’s critical success factors should, in turn, be directly related to the results measures included in a result measures included in a result control system.
In Simon (1990)’s article, statistical analysis and interview data indicated that control system differ systematically between prospector and defender firms. Successful prospectors use a high degree of forecast data in control reports, set tight budget goals and monitor outputs carefully. Cost control is reduced. Moreover, large prospectors emphasize frequent reporting and use uniform control system that are modified frequently. These results led to speculation that prospectors use their management control systems intensively to monitor uncertain and changing environments. Defenders, by contrast, use management control system less actively. Negative correlations were calculated between profit performance and attributes such as tight budget goals and the monitoring of outputs. Defenders, operating in stable environments, emphasize bonus remuneration based on achieving budget targets and report little change in their control systems over time.
More complex organization often specify two levels of strategy: a corporate strategy (often called diversification strategy) and a business strategy within each of their so-called business strategy units (often called competitive strategy). Strategies at both levels constrain organizations to focus on what they do best and constitute important situational factors for the design of effective MCSs.
An organization’s corporate strategy determines what business it wants to be in and how resources should be