'Diagnostic Control Systems: Implementing Intended Strategies Essay\r'

'The expression authors, Johnson and Kaplan looks at how commission phone line relationship system has evolved over the years and within different industries and how those management accounting reports have failed to help mangers bring up decisions to reduce costs and improve productivity. The authors extract that contemporary trends in competition, technology, and management remove major changes in the way organizations pulse and manage costs and how they evaluate short- and long-run effect.\r\nThe article takes a look at management accounting over varies occlusions of propagation and specific industries and discusses how at each period of time the management reports were used. For ex vitamin Ale, in the nineteenth century after the Industrial whirling it was observed that gains could be earned by managing a hierarchical organization. The management remains at the time focused on conversion costs and produced only synopsis results.\r\nFast-forward a several years t o more or less around 1925, we see that the management accounting practices that argon practiced today had been demonstrable by that time. They had been evolved to serve the control and informational needs of managers of increasingly complex and diverse organizations. As time progressed it is non until after the mid-twenties that the authors believe that evolution of management accounting did not keep the pace with the value in corporations’ product and process technologies.\r\nIt is utter that the systems today provide misleading targets for managerial review. They fail to provide the relevant bound of footfalls that reflect the technology, products, processes and competitive environments. Which has resulted in what they parcel out as today’s problems: malformed product costs, delayed and overly aggregated process control information, and short-term murder measures that do not reflect the increases or decreases in the organization’s scotch positi on.\r\nJohnson and Kaplan conclude by stating that if companies fail to confine modifications in their management accounting systems, their office to be effective and efficient worldwide competitors will be inhibited. Diagnostic bid Systems: Implementing Intended Strategies In chapter cardinal, Robert Simons introduces what is known as the third lever of control: diagnostic control systems. These systems ar defined as the backbone of traditional management control, and be designed to ensure predictable determination achievement.\r\nThe other levers (Belief systems, Boundary Systems and Interactive falsify Systems) are mentioned in the reading as well, however the focus of chapter four is to discuss the diagnostic control systems. He highlights ternary features that distinguish the control systems: (1) the ability to measure the outputs of a process, (2) the existence of predetermined standards against which actual results can be compared, and (3) the ability to reverse d eviations from standards. The chapter goes on to describe critical performance variables.\r\nThose variables as defined are those factors that essential be achieved or implemented successfully for the think strategy of the business to work. The term, â€Å" pick out success factors” can also be used. In which effectiveness and efficiency are the prime criteria for the selection measures used in diagnostic control systems to ensure that they are managed both effectively and efficiently. Kaplan and Norton uses the term â€Å" fit scorecard” to describe a taxonomic way of analyzing critical performance variables and measures associated with intended strategies.\r\nThis method allows managers to use measures from each of the four categories (Financial, Customer, Internal Business and Innovation & Learning Measures) simultaneously to guide their business toward the desired goals. The author conveys the message that provide management systems to control strategy is no t an easy task. Managers have to understand their strategies and be able to recognize the relationships between strategical and operating decisions and how they affect the bottom line.\r\n'