Management Control Systems 6th Edition Anthony, Robert Newton - Solutions

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Explain the main ways for the joint development of interorganizational management control with key customers and/or suppliers.
Explain the main changes of a company’s internal management control system needed to account for better inter-organizational relationships.
Explain the differences between traditional ‘internal’ management control and inter-organizational management control.
Explain the common forms of inter-organizational relationships.
Explain the main drivers behind the development and increased importance of inter-organizational relationships.
Assuming that most of the issues could be resolved to your satisfaction, would you recommend that the profit center idea be adopted, rather than an alternative?
What are the alternatives of a profit center approach?
Do you see other problems with the introduction of profit centers? If so, how would you deal with them?
How should each of the issues described above be resolved?
Explain the existence of special needs for management control in health-care organizations.
Explain similarities and differences between for-profit and not-forprofit organizations regarding the need for and feasibility of management controls.
Explain the existence of special needs for management control in financial services organizations.
Explain similarities and differences between manufacturing and service organizations regarding their need for and feasibility of management controls.
Explain similarities and differences between manufacturing and service organizations regarding the nature of management control problems.
Would you like to work in an environment like that at Lincoln Electric?
What could cause Lincoln’s strategy implementation approach to break down? What are the threats to Lincoln’s continued success?
What is the applicability of Lincoln’s approach to organization and control to other companies? Why don’t more companies operate like Lincoln?
What is the corporate culture like at Lincoln Electric? What type of employees would be happy working at Lincoln Electric?
What are the most important elements of Lincoln’s overall approach to organization and control that help explain why this company is so successful? How well do Lincoln’s organization and control mechanisms fit the company’s strategic requirements?
How would you characterize Lincoln Electric’s strategy? In this context, what is the nature of Lincoln’s business and upon what bases does this company compete?
Should Mynor propose scaling back Lux Software’s commission accelerators? Are there other changes to Lux Software’s compensation plan that he should consider?
Why do you think the two companies’ compensation plans are so different?
A number of elements in the two companies’ compensation plans are different. Which of these differences should most concern Bryan Mynor? Discuss.
Plot the pay-to-performance relationship of Arck and Lux Software’s compensation plans. What are the key drivers of the difference in the pay-to-performance relationship between the two plans?
Why don’t we commonly see explicit calculations of actual value creation by the CEO in proxy statements? Is it not possible for boards to perform this calculation? If not, how does the board make rational decisions regarding pay levels?
Executive compensation is a topic that is filled with much rhetoric(‘nobody is worth $20 million per year’) but somewhat less critical analysis (‘maybe some CEOs are worth $20 million per year while most others are not’). Why isn’t more of the discussion focused on the actual observable
Discuss which theory (if any) you support the most and explain why.
Discuss the critique against the two theories.
Explain motivation crowding theory.
Explain agency theory.
Describe different forms of incentives.
Account for some functions that the compensation system in an organization may fulfil.
If so, how would the change you propose affect a NYTD’s culture and leadership style?b NYTD’s likely budget?c The way NYTD’s performance is judged?d The way new ideas for the websites are generated?
What would you change in NYTD’s existing organizational structure?
What impact do internal perceptions of NYTD’s performance have on its operations?
How does the way NYTD is managed compare to the way a venture capital firm manages a startup? What insight, if any, do you draw from this comparison?
What impact has NYTD had on the rest of the Company?
Describe NYTD’s evolution to date. What is the strategy of NYTD?Are the organization and control consistent with the strategy?
Discuss the critique against, as well as proposed alternatives to, budgeting.
Account for the different steps in budget preparation.
Define top-down and bottom-up budgeting and discuss their respective benefits and limitations.
Describe the different parts of a budget and, to some extent, how they are interlinked.
Explain what a long-range, strategic plan is and discuss its benefits and limitations.
Account for the different purposes a budget may fulfil.
What advice do you have for the owners?
Should profit centers be evaluated on gross profit or ‘full cost’ profit?
North Country incurred a year-to-date loss of about $59,000 before allocation of fixed costs on the wholesaling of used cars (see Note 2 in Exhibit 3). Wholesaling of used cars is theoretically supposed to be a break-even operation. Where do you think the problem lies?
If it were found one week later that the trade-in could be wholesaled for only $3,000, which manager should take the loss?
How should the transfer-pricing system operate for each department(market price, full retail, full cost, variable cost)?
Using the data in the transaction, compute the profitability of this one transaction to the new, used, parts, and service departments. Assume a sales commission of $250 for the trade-in on a selling price of $5,000.(Note: Use the following allocations [new, $835; used, $665; parts, $32;service,
making a decision contrary to the overall interests of the company? If so, what is the opportunity loss to the company in each of the competitive pricing actions described above?
Using the transfer prices calculated in Problem 1, is the manager of Division
Which decisions are to the best economic interests of the company, other things being equal?
With the transfer prices calculated in Problem 2, is Division C better advised to maintain its present price at $28.00 or to follow competition in each of the instances above?
With transfer price calculated in Problem 1, is Division C better advised to maintain its price at $28.00 or to follow competition in each of the instances above?
Explain the management control considerations related to crossfunctional management.
Explain the main characteristics of cross-functional management.
Explain the management control considerations related to shared service centres.
Explain the main characteristics of shared service centres.
Explain the key considerations involved in the administration of transfer prices.
Qualitatively and quantitatively explain different transfer pricing methods.
Explain the four objectives that an appropriate transfer pricing system should accomplish.
Evaluate Quality’s incentive compensation system. Does the present system motivate district managers to make decisions which are consistent with the strategy of the firm? If not, make specific recommendations to improve the system.
While computing district profits for performance evaluation purposes, should there be a charge for income taxes? Should corporate overheads be allocated to districts? Should profits be computed on the basis of historical costs or on the basis of replacement costs? Evaluate these issues from the
In deciding the investment base for evaluating managers of investment centers, the general question is: What practices will motivate the district managers to use their assets most efficiently and to acquire the proper amount and kind of new assets? Presumably, when his return on assets is being
Comment on the general usefulness of ROA as the basis of evaluating district managers’ performance. Could this performance measure be made more effective?
Should Ken Richards send that proposal to home office for approval?
Is the capital investment proposal described in Exhibit 3 an attractive one for Quality Metal Service Center?
What is your overall evaluation of Abrams’ management control system? Describe any strengths or weaknesses that you identified but did not include in answering the previous question. What changes, if any, would you recommend to top management?
Evaluate each of the concerns expressed by top management, and if necessary, make recommendations appropriate to the circumstances described in the case.
Qualitatively and quantitatively explain the measurement problems involved in investment centres.
Qualitatively and quantitatively explain the advantages and disadvantages of return on investment (ROI), residual income (RI) and economic value added (EVA®) for evaluation of investment centres.
Explain the main characteristics of investment centres and how they are evaluated.
Explain the measurement problems involved in profit centres.
Explain the advantages and difficulties with profit centres.
Explain the main characteristics of profit centres and how they are evaluated.
On balance, would you redesign the management control structure at Vershire Company? If so, how and why?
How do you assess the performance evaluation system contained in Exhibits 2 and 3?
Should the plant managers be held responsible for profits? Why? Why not?
Trace the profit budgeting process at Vershire, starting in May and ending with the Board of Directors’ meeting in December. Be prepared to describe the activities that took place at each step of the process and present the rationale for each.
Outline the strengths and weaknesses of Vershire Company’s planning and control system.
If Grand Jean’s manufacturing plants were treated as profit centers, three alternatives were suggested for recording revenues for each plant:a Use the selling price recorded by Grand Jean’s sales personnel for pants sold to retailers and distributors.b Use full standard manufacturing cost per
One plant manager recommended that plants be operated as profit centers because it would overcome some of the problems discovered by Mia Packard and the casewriter. This plant manager commented,‘[My] competitor is the nearby independent manufacturer that makes the same pants for Grand Jean as my
Evaluate the current management planning and control system for the manufacturing plants and the marketing departments. What are the strengths and weaknesses?
How would you describe the goal(s) of the company as a whole? Is this, or are these, the same as the goal(s) of the company’s marketing organization and the company’s 25 managers of manufacturing plants?Explain.
How much should it cost?
Should the function be performed in this way?
What should the quality level be? Are we doing too much?
Should the function under review be performed at all? Does it add value from the standpoint of end-use customers?
Critically examine and comment on the centrally managed functions by AXA and the functions, which the company decentralized. Do you think AXA was able to achieve the required balance between centralization and decentralization of its operations? Explain.
Comment on the respective roles of the management board and supervisory board at AXA. How did the company benefit by having a dual governance structure? What, according to you, are the drawbacks of a dual governance structure?
Comment on the globalization efforts of AXA. What strategy did the company adopt while acquiring new companies in foreign countries?What changes were brought within AXA to make it a ‘truly multinational’ company? Explain.
How do Southwest’s control systems help execute the firm’s strategy?
What is Southwest’s strategy? What is the basis on which Southwest builds its competitive advantage?
Explain the role of the controller in operating and maintaining the management control system in a decentralized organization.
Explain the differences between formal management control systems and informal forms of management control.
Explain the relationship between organizational architecture and management control.
Explain why organizations’ need for management control stems from decentralization.
Explain the importance of decentralization to organizations and the trade-offs involved in terms of the costs and benefits of organizations.
Can Cisco measure its innovative efforts? Tie compensation to these efforts? If so, how?

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Management Control Systems 6th Edition Anthony, Robert Newton - Solutions

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