CHapter 5 alternatives To Incentive Controls

Question 1

Types of Controls

Answer 1

Results Control
Action Controls
Personnel Controls
Cultural Controls

Question 2

Types of Action controls

Answer 2

• Behavioral constraints
• Preaction reviews
• Action accountability
• Redundancy

Question 3

Behavioral constraints (action control)

Answer 3

Negative form of action control.
- Make it impossible for employees to do things that should be done.
- Physical constraints. Ex.:
- Administrative constraints: limits on an employee’s abilities to perform all or a portion of specific acts. Ex.:
- Separation of duties: divide up tasks so that it is impossible for one person to complete the task alone Ex.:

Question 4

Preaction reviews

Answer 4

Action plans of the employees are controlled.
- Actions can be approved or disapproved by reviewers. - Ex.: Budgeting preview

Question 5

Action accountability

Answer 5

Accountable actions can be communicated administratively or socially

• Administratively: work rules, procedures, company codes of conduct
• Rules in writing, training to reinforce rules (e.g., McDonalds, retailers)
• Socially: actions that involve professional judgment.
• Post audits in capital budgeting, peer reviews of auditors, lawyers etc.
  Prof. Dr. Markus C. Arnold ・ Performance Measurement, Evaluation an

Question 6

Redundancy (action control)

Answer 6

Usually expensive

Question 7

Basic purpose of personnel controls

Answer 7

• Help ensure that each employee understands what the organization wants.
• Help ensure that employees are able to do a good job.
• Increase the likelihood that employees will engage in self-monitoring (self-control, intrinsic motivation, ethics, etc.)

Question 8

Methods of personnel controls

Answer 8

Selection and placement of employees
Training
Job design and provision of necessary resources

Question 9

Ways of cultural controls

Answer 9

-Written or unwritten rules
Norm and values
shared values, ideologies, attitudes
Codes of conduct
Group rewards

Question 10

Advantages of personnel and cultural controls

Answer 10

usable in almost every setting, produce fewer harmful
side effects, can be economically beneficial.

Question 11

Rotten Egg

Answer 11

Individual employees can infect others if they don’t follow the culture