When an organization wants to optimize decentralization, achieve goal-congruent outcomes, and accomplish its mission, management will look to implement a well-designed and well-planned management control system. A system such as this will utilize the four pillars of management control systems to achieve a major impact on employee behavior. Which of the following is an example of the proper usage of one of the pillars?
A) Allowing managers to spend money as it is needed as long as they have an accountable plan and submit their receipts and paperwork in a timely fashion
B) Dividing up work and responsibilities for the company into smaller departments with their own assigned manager
C) Encouraging a department to sell to another internal department at any price they feel is fair, even if it surpasses the current market rate
D) Setting a performance goal for management of a 50% increase in sales when a 10% increase in sales has been realized historically.

Question

Quizplus · Accepted Answer

This question requires familiarity with the four pillars of management and how they can be used to create a well-designed management control system. Choice B is the only choice of the four that appropriately uses one of the four pillars to improve their system. The other three options are likely to lead to a suboptimal outcome as they are not created to improve any existing operations.

When an Organization Wants to Optimize Decentralization, Achieve Goal-Congruent Outcomes