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1.1
INTRODUCTION
1.2
1.3
1.
3.
4.
5.
2.3
in formalizing
these control
of use of contractual
more than those in the operative path, since more top management time
would be spent. Given that, a high intensity of use of the operative path should be
expected if task uncertainty is high.
closer to the key activities and decisions regarding those assets, decreasing the risk
of opportunistic behavior. Environmental uncertainty might boost the need for
interactive systems through the managerial path in order to react to the new
situation and define the new terms of the relationship. Task uncertainty is a
strong determinant of the interactive systems through the indirect operative
path. When minor but constant operative joint decisions must be made in order to
get the jobs done in an efficient manner, there is a strong need to be in permanent
contact between client and supplier operative teams. Depending on the type of
decisions in play, however, the interactive systems may be developed through all the
management control paths.
2.4
that they require a great deal of management evaluation, so measures become more
subjective, but thats the way it is, especially as these measures are exceedingly
important to the company. Key processes are derived from the corporate strategy,
which is updated annually at the Strategic business conference, at which key factors
are defined as follows: customer satisfaction, employee satisfaction, good business
results and a positive attitude towards the environment.
2.4
In Bangladesh perspective until now any local company is not following Simons
Levers of Control perfectly and its not impossible to apply Simons Levers of Control
mechanisms thoroughly. Reasons are that the most of the owners are mainly
emphasize on profit maximization without following the balanced scorecard which
relies on non-financial measures.
Local managers gives more importance on minimizing cost by compromising with
quality, cost reduction in research and development, promotional activities,
branding, marketing. These types of decision may helpful for short run goal but in
long run it may become harmful for the company and can directly effect on product
life cycle. Because the company business will gradually loose comparative
advantage which will lead them in extinction.
To establish Simons levers of Controls the top level manager need to play the more
crucial role of an organization. Organizational vision statement, mission statement,
goal must have to be known by all the employees. Organization should have HR
policies and other rules which must has to be ethical. Managers have to understand
their strategies incredibly well. They have to stick to them. They have to understand
the true causal relationships between strategic and operating decisions and how they
are linked to financial performance. As a result, Levers of Control will most likely
prove to be far more valuable to an organization that has already been through a
strategic renewal process and is seeking a rich array of reinforcement mechanisms,
than to a company just starting down the path.
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REFERENCES
Abernethy, M. A., & Brownell, P. (1997). Management control systems in
research and development organizations: the role of accounting, behavior and
personnel controls. Accounting, Organizations and Society, 22(3), 233-248.
Anderson, E. 1988. Transaction costs as determinants of opportunism in
integrated and independent sales forces, Journal of Economic Behavior &
Organisation, 9: 247-264.
Argyres, N. (1996):Evidence on the Role of Firm Capabilities in Vertical
Integration Decisions, Strategic Management Journal, vol. 17, pp. 129-150.
Bisbe, J., Batista-Foguet, J-M and Chenhall, R. 2007. Defining management
accounting constructs: a methodological note on the risks on conceptual
misspecification, Accounting, Organizations and Society, 32:789-820.
http://www.goodreads.com/book/show/565305.Levers_of_Control
http://wetenschap.infonu.nl/economie/81073-levers-of-control-doorsimons.html
http://www.slideshare.net/matsrw/lecture-strategic-management-control
http://www.mbabrief.com/what_is_levers_of_control.asp
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APPENDICES
Appendix A
Abbreviations
MCP: Management Control Paths
LOC: Levers of Control
IOR: Inter-organisational relationships
TCE: Transaction Costs Economics
RBV: Resource Based View of the firm.
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