Forsvar Flashcards
What are the four types of responsibility centers?
Expense center, Revenue center, Profit center, Investment center.
Expense center is an organizational segment in which a manager is held responsible only for expenses.
Revenue center is an organizational segment in which a manager is held accountable only for revenues.
Profit center is an organizational segment in which a manager is responsible for both revenues and costs (such as a Starbucks store location or a project).
Investment center is an organizational segment (such as the northern region of Best Buy) in which a manager is accountable for profits (revenues minus expenses) and the invested capital used by the segment.
Is it possible that the OC partners were a different type of responsibility center? If so, which?
The OC partners cant be another responsibility center, but one possible option is an investment center. However, it would be too costly for the various departments if they did, since they need to require assets themselves.
We describe that responsibility centers must have individual goals in the organization - how does this relate to OC?
The OC collaboration have individual goals. Agency theory says that you have to set goals for your agent, who then also helps the overall goal of the principal. You can set 5 goals (milestones on a project), to meet your overall goal. They probably already have individual goals in the organization, their goal is to finish their projects, where the overall goal is to achieve the organization’s mission and vision.
What are the four controls in MCSs from Merchant & Van der Stede’s framework?
Action controls
Results controls
Personnel controls
Cultural controls
How have you defined the themes in the thematic analysis?
Themes:
- Project
- One Company
- Project Management
- Management and Managerial Economics
- Motivation of the Managers and Incentives
What is your study about and why did you choose to research this in particular?
Our study is about how Management Control Systems can improve Project Governance in multi-entity contractors.
This is interesting because:
- For an organization that lives on their economy from the outcome of their projects, it’s interesting to investigate how their Project Governance structure is established at the moment, but also what potential recommendations in relation to MCSs could improve their projects and Project Governance.
- How employees within the largest Danish contractor is motivated and what they are motivated by, within this highly stressed environments in these huge complex projects.
How did your research questions evolve during the research process?
It changed a lot - first of all, we wanted to establish how transfer pricing schemes can be used in the project management of multi-entity companies in the contractor industry to improve the management of additional costs incurred due to delays and ensure the accountability thereof, but due to data limitations, this was not possible. So the focus became agency theory, however, we realized that MCSs could improve decision-making process and found it interesting to explore and was possible to explore with the given data.
How did you decide on which sources to include in your literature review?
Primarily we used the business source database found on AU library and also the search mechanism AU library as well as the actual library found at BSS.
How did you design your study and why did you take this approach?
Research philosophy: interpretivism
Research Approach: inductive
Methodology primary
Method: qualitative
Data collection: interview
Analysis technique: thematic analysis
Software: nvivo
How trustworthy are the findings?
We use a refined concept of trustworthiness by introducing the criteria of credibility, transferability, confirmability and dependability to parallel the assessment criteria of validity and reliability.
Dependability
- Can be achieved when researchers ensure the research is logical, traceable and clearly documented.
Transferability
- Refers to the generalizability of the findings to other settings.
Credibility
- Is when the reader believes the findings. We try to be very transparent, which will increase the credibility.
Confirmability
- Occurs when the findings concur with the participants of the study. Also, it increases confirmability if the three other are fulfilled.
What were the main shortcomings and limitations created by your research design?
Lacking scientific rigour and providing little basis for generalization of results to the wider population.
Researchers’ own subjective feeling may influence the case study (researcher bias).
Difficult to replicate.
Time-consuming and expensive.
The volume of data, together with the time restrictions in place, impacted on the depth of analysis that was possible within the available resources.
Because a case study deals with only one person/event/group we can never be sure if the case study investigated is representative of the wider body of “similar” instances. This means the the conclusions drawn from a particular case may not be transferable to other settings.
Because case studies are based on the analysis of qualitative (i.e. descriptive) data a lot depends on the interpretation the researcher places on the information she has acquired.
What were your key findings in relation to the research question?
The thesis concludes that Management Control Systems can be used to improve Project Governance in contractors.
Four controls have been examined with the findings from the analysis. Personnel control can be used to select the most qualified managers and train them, which will contribute to the decision-making process in the organization’s best interest. Culture controls can limit dysfunctional behavior, as emotional bonds between employees are established. Moreover, social arrangements can increase trust, communication, and project collaboration. Action controls can be used to mitigate the issue by implementing guidelines and rules within a pressured setting. Results controls can ensure managers understand what is under their control and a clear definition. Moreover, the top management’s understanding of the manager’s performance can be improved by implementing results controls and informing them if the Manager is performing poorly. E.g., non-financial measures can explain the quality and productivity of the manager or project.
Were there any findings that surprised you?
It surprised us that:
- The forecasted levels were on point on three out of the four projects (however, the projects are still ongoing).
- No productivity measures other than contribution margin ratio.
- Split-second decision with million kroners impact on the economy.
What biases may exist in your research?
Research bias
- There can be research bias in the sense that we have switched to another RQ and thus tried to fit our interview guides into the new topic and RQ. (MAYBE)
Interview bias
- When the interviewer subconsciously influences the responses of the interviewee. For example with their body language, which might indicate their opinion.
- When the interviewee tries to give the answer they think we want to hear or would be best for them.
Selection bias
- Selection of sampling just because it is convenient. (Our managers will share many of the same characteristics) (DET HER SKAL VI SNAKKE OM)
How can your findings be put into practice?
Our findings can be put into practice in a way that takes use of the framework established, and according to our research, the relationship between top management and project managers is not close. If no one informed top management that anything was wrong, they would be unaware of the problem. Therefore, it is essential to establish the connection to provide top management with an overview of the projects. This is accomplished by implementing MCSs.
Moreover, the implementation of the ERP system can help provide overall transparency of the projects to both the top management, project manager and the rest of the stakeholders. However, it is important to remember the issues with implementing a new ERP system, and the distrust it might involve.
How has your research contributed to current thinking in the field?
Niko - Tænker vi lige skal snakke om denne.
The frameworks have been combined as PG sets guidelines for managing a project, where MCSs ensure that the manager’s decisions align with the organization’s interests by influencing the managers’ behavior to ensure that the managers follow the guidelines. In multi-entity organizations where several entities cooperate, internal collaboration issues often arise when each entity prioritizes its department above the organization’s best interests. The organization’s employees must recognize the significance of everyone sharing the same objectives as the organization. This is already established inside the organization, but it has become apparent that there are certain shortcomings that MCSs might assist in resolving. PG is engaged in understanding the reality of employees, which is significantly different from that of other employees. By combining MCSs into their PG, AG may mitigate the identified problems.
One consequence, however, is that the theoretical section also had to be changed quickly. There was not enough time to dive into another literature search, and some of the Transfer Pricing articles were used as they still had some valid points.
If you could redo your research, how would you alter your approach?
The first big change would be the Interview-guides, so they fit the research question better. The interview-guides we have now, is based upon the research question, we made in the start, where we wanted to investigate how transfer pricing schemes can be used in the project management of multi-entity companies in the contractor industry to improve the management of additional costs incurred due to delays and ensure the accountability thereof?
Why is it almost impossible to achieve perfect goal congruence between departments and the overall organization?
Abdallah argues that it’s a very subjective thing, people have different goals. The managers probably also do not think that the work they are doing right now support the organization’s mission and vision, they probably just focus on doing their job.
Can our analysis of variance be used to examine why their goals were not met and what they need to do to meet them? (From theory)
They can only be used to find variances.
The variance analysis was chosen to optimize the results to investigate whether the targets
have been met and if the managers are aware of any variances in their budgets.
Why have we only used the first level, in the variance analysis, when the next levels examine quality and productivity, which is an issue within the organization?
To do so, units, quantity and cost prices were required, that we have not been able to get. But it would have been beneficial for us to go deeper and examine it.
Although we have some cost prices on salaried employees, well then we do not have on all the other direct costs, which is why it is difficult to look at.
What are the two functions of management control?
How do our recommendations help employees behave in a certain way? And how does it help achieve their goals?
- The first is influencing employees to behave in a certain way.
- The second, which is more the benefit, is a higher chance of achieving the organization’s objectives.
The implementation of MCSs would help employees behave in a certain way, and would help ensure that they help achieve the organization’s goals.
Perfect control does not exist, but some are better than others - which ones would we say were the most important for the organization?
The “best” and “easiest” control to implement would be the personnel controls, due to the low cost and small impact on processes already established. These can be implemented by selecting of the most qualified managers, but also making the managers self-monitoring.
The second would be to implement the cultural controls to improve the trust issue in OC. This is done by social arrangements and group monitoring.
The third is the action controls to provide rules and guidelines to ensure thoughtful and quicker decisions.
The last is the results controls, since this might be the most problematic control to implement, since some managers already feel that they are losing control and don’t like being monitored. However, this is where the organization can introduce financial and non-financial performance measures.
How are extrinsic and intrinsic motivation reflected in our solutions/recommendations?
The managers claim they are not motivated by extrinsic motivators such as their salary and bonuses. The managers’ extrinsic motivation would likely be increased by getting rewards depending on the project’s success.
The implementation of cultural and personnel controls will improve the intrinsic motivation for improvement of its own sake and personel rewards.
The implementation of action and results controls will improve the extrinsic motivation, since all employees want to do a good job and not be punished for their work. However, individual reward systems are not advised.
How would it have made the thesis different if the managers had a financial background?
They will have had a different focus - at the moment their focus and mindset is not what it costs, it just has to be done. However, which an economic approach and mindset, they would be more involved with the economy and they could maybe make better financial decisions, but probably not as good decisions in other areas.
What would it have done for the interviews if they had been conducted face-to-face?
By meeting face to face, it gives a more accurate responses due to contextual naturalness and bodily cues (clothing gestures, body language, facial expressions) and greater likelihood of self-generated answers, because we can better build up trust and thereby ask deeper questions.
The interviewee becomes more relaxed, if you go to their environment. We can also get an understanding of the person due to the environment he/she is in, it can explain why the person is behaving as he/she is.
What would it have done for the thesis if we had chosen a different type of analysis? (Thematic analysis) And what others are there?
Thematic analysis: All data is contained in a theme to tell a story about the theme. It helps researchers understand those aspects of a phenomenon that participants talk about frequently or in-depth, and in ways which of those aspects of a phenomenon may be connected.
Content analysis can be used for qualitative analysis, and even in pictures or videos. It tries to determine how words and word patterns are used in context.
