Management theory Flashcards
What is the structuration theory?
The interaction of an agent with the structure within an organisation.
Agents can shape social forces like value
Assumes individuals have free choice
What is the actor-network theory?
Actors are a part of social networks
Actors can be humans/tools/techniques
(Doesn’t tell you how/why networks are formed)
How can the structuration theory be applied to MA?
Considering individual decision makers using MA info in an organisation with its own culture/values
How can actor-network theory be applied to MA?
By considering the relationship between MA tools
E.g. Balance scorecards and people/systems designed to implement in within an organisation
What is contingency theory?
There is no single best way to manage and organisation
The optimal course of action depends on a unique blend of internal and external factors
How can contingency theory be applied to MA?
By considering the options when faced with a decision using MA info, and what factors are likely to lead to a successful decision
What are the issues in MA research? 4
- practices/processes are messy and complicated
- too many borrowed theories, not enough development
- no suggestions of way to improve practice
- domination of quantitative methods
What is the beyond budgeting approach?
A generic term for a set of practices intended to replace budgeting.
Includes:
-rolling forecasts
-using financial and non financial measures for control
-benchmarking outside the organisation
-more info allowing for communication and rapid responses to changing market conditions
What are the criticisms of the budgeting process? 5
- top down approach:lack of ownership
- lack of accountability or involvement of operating management
- need for a better process
- budget preparation is time consuming and costly
- some dysfunctional consequences of incentive schemes
What improvements are needed to the budgeting process? 4
- more alignment with the strategy
- more meaningful reporting
- more flexible use of budgets
- use a more bottom up process
What are the main points of the behavioural aspects of performance evaluation?
- performance measurement is important and gets more difficult as the business gets larger
- management needs to evaluate financial and non financial performance
- management needs to evaluate individual managers’ performance
What is goal congruence?
Alignment between organisational goals and manager’s goals will help motivate managers to act in the best interest of the business
What is mcgregors theory x and theory y?
Theory x:authoritarian leadership style. Persuade, reward and punish employees
Theory y: more democratic and participative leadership style. Management is about maximising employees’ potential and goal congruence
What are the 3 ways organisations can link budgets to performance evaluation? (Hop wood)
- budget constrained:budget information is the main basis in which performance is evaluated (reward and punishment directly linked to budgetary performance)
- profit conscious style:managers performance evaluated in his ability to increase the effectiveness of his unit in relation to long term organisational goals
- non accounting style:budget performance performs a relatively unimportant role in performance evaluation. Could lead to a lack of efficiency
What are the factors affecting performance evaluation?6
- Psychological:performance measures can counteract role ambiguity. Reduce or exacerbate role conflict
- participation and explanation:having a voice in setting budgets is important (but has to be balanced)
- fairness and trust:measures, traders and budgets need to be seen as fair (consistency and objectivity)
- turbulence:the performance evaluation system need to be sufficiently flexible
- alignment with strategy:performance evaluation Starnes will only be useful if they measure what’s important to the firm
- gaming the system:easier in a pure budgetary system
What are the best practices in performance evaluation? 6
- balance of financial and non financial measures
- encourage manager participation
- explain differences in suggestions by managers and final budget
- measures and targets should be aligned with overall strategy of firm
- system should be flexible enough to adapt to changes
- target should be flexible yet achievable
What is managing profitability? 4
- Extracting and evaluating info about profitability of products/services
- highlights attention to areas where improvements can be made
- allowing better management of current and ongoing operations
- no single technique
What is activity based budgeting?
- aim is for the budget to authorise only the supply of resources that are needed to perform activities required to meet budgeted production
- more precise than traditional budgeting
What is activity based management?
Using an ABC approach to cost management but only using first 3 stages (don’t have to use for product costing)
Can be expensive and time consuming to implement.
What is the aim of activity based management?
To ensure that customer needs are met while reducing cost of business to do this
Activities consume costs (use resources). If you reduce them You reduce costs
In activity based management, how are activities categorised?
Value added:customers think this activity adds value to the product/service
Non value added:opportunity for cost reduction without affecting the final product
Kaplan thinks this is too simplistic (lots of activities somewhere in the middle) suggest a 5 point scale-highly efficient to highly inefficient
What are the main points about ABM and the value chain? 2
- Some activities may cut across departments
- customer feedback can be used to find out which activities customers value
What are the factors for a successful activity based approach? 5
- don’t have too many activities
- engage users
- focus on critical needs first
- needs too management support
- larger organisation size
What do management accounting researchers do?
Investigate topics linked to changes in business over 20 years
