Performance Management

Question 1

Name the management styles in Hopwoods studies

Answer 1

Budget constrained, profit conscious amd non-accounting style

Question 2

Budget constrained style - performance evaluation

Answer 2

Manager evaluated on ability to achieve budget in the short term
Manager will be criticised for poor results. For example, if spending exceeds the limit set

Question 3

Budget constrained style - Behavioral aspects

Answer 3

Job related pressure
May result in short-term decision making at the expense of long term gain.
Can result in poor working relations with colleagues
Can result in manipulation of data

Question 4

Profit conscious style - performance evaluation

Answer 4

Manager evaluated on ability to reduce costs and increase profit in the long term.
For example, a manager will be prepared to exceed the budgetary limit in the short term if this will result in an increase in long term profit

Question 5

Profit conscious style - behavioral aspects

Answer 5

Less job related pressure
Better working relations with colleagues
Less manipulation of data

Question 6

Non-accounting style - performance evaluation

Answer 6

Manager evaluated mainly on non-accounting performance indicators such as quality and customer satisfaction

Question 7

Non-accounting style - behavioral aspects

Answer 7

Similar to profit concern style but there is less concern for accounting information
Requires significant and stringent monitoring of performance against budget