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 an improper usage of one of the pillars?
A) Asking all new employees to do any physical labor-intensive work to give more senior employees a break, regardless of their department
B) Asking management to create a formalized budget based on historical data for their department
C) Creating a logical and methodical system for determining the transfer price between two internal departments
D) Having yearly performance measurement for management based on department-specific benchmarks

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 A is the only choice of the four above that improperly uses one of the four pillars to improve their system. By dividing up work by a class of people rather than implementing a logical division of work that does not target one specific group, this is an improper use of the pillars. The other three options are likely to lead to an optimal outcome as they are created to improve existing operations.

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