Chapter 1,2,14 Essay

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RACHEL CAROLYN TANJUNG 1106075811 CHAPTER 1 - Organizational Tensions to be Managed • Effective managers rely on performance measurement and control systems to set direction, make strategic decisions, and achieve desired goals. Performance measurement & control systems • Performance measurement & control systems: The formal, information based routines and procedures managers use to maintain or alter patterns in organizational activities 1. Purpose is to convey information. These systems focus on data 2. Represent formal routines and procedures 3. Specifically designed to be used by managers 4. Managers use it to maintain or alter patterns in organizational activities • Every businesses seeks to make a profit, so the revenue of goods and services provided to customers must be greater than the expenditure to manufacture and supply those goods and services on an ongoing basis. You should make profit planning systems by: o o Accounting systems To collect information about the transactions of a business to make a profit plan Internal controls systems To provide the checks and balances to ensure that assets are safeguarded and the information collected and processed by the accounting system is accurate o Planning systems To provide the frameworks or template for complete and careful trend analysis consistent assumptions, and thoughtful predictions. Balancing Organizational Tensions • There are 5 major tensions to be balanced in implementing performance measurement and control systems: 1. Balancing profit, growth, and control 2. Balancing short-term results against long-term capabilities and growth opportunities 3. Balancing performance expectation of different constituencies Important constituencies may include owners, managers, employees, customers, suppliers, lenders, and government agencies 4. Balancing opportunities and attention 5. Balancing

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