Management Control Systems, Transfer Pricing, and 管理控制系统，转移定价，和.ppt

Financial Performance and Transfer Pricing ACCT7320 Controllership December 1, 2010 Management Control Systems A management control system -- involves gathering and using information for planning and control decisions. A management control system guides the behavior of managers and employees Basis for evaluation and reward Consistent with “agency theory” * Management Control Systems A management control system collects: Financial data such as cost, revenue, and net income Usually an important factor! Nonfinancial data As seen on BSC * Four Types of Financial Responsibility Centers Cost center –manager accountable for costs only. Revenue center –manager accountable for revenues only. Profit center –manager accountable for revenues and costs. Investment center –manager accountable for investments, revenues, and costs. * Evaluating Management Control Systems Motivation – desire to attain a selected goal combined with the resulting drive or pursuit toward that goal. Goal congruence – subordinates’ individual goals are consistent with top management’s goals. Effort – exertion toward a goal. * Organization Structure Total decentralization means minimum constraints, maximum freedom for managers at the lowest levels to make decisions. Total centralization means maximum constraints, minimum freedom for managers at the lowest levels to make decisions. * Benefits of Decentralization Creates greater responsiveness to local needs Leads to gains from quicker decision making Increases motivation of subunit managers Aids management development and learning Sharpens the focus of subunit managers * Recall the Costs of Decentralization Leads to suboptimal decision making (incongruent or dysfunctional decision making due to loss of control) Focuses manager’s attention on the subunit rather than the organization as a whole Increases costs of gathering information Results in duplication of activities * Decentralization in Multinational Companies Multinational corporations