Acct 801 - Executive Case Analysis for Automation Consulting Services

(William) Weiming Zhou

ACCT 801

04/01/2012

Executive Case Analysis for Automation Consulting Services

Part I Management Control System

In general, organizations manage their control systems in an effective way that the benefits of innovation and creativity are not achieved with the expense of control. However, ACS has encountered several challenges by failing to apply an adequate management control system. The organization should modify its management control system in terms of the four levels of control: Diagnostic systems, Boundary systems, Belief systems and Interactive systems, in the following ways.

 Diagnostic systems

ACS failed to take profitability into consideration while monitoring critical performance variables. As the former objective of the organization, revenue growth should be no longer perceived as a top priority due to the fact that some of the managing partners attempted to maximize the achievement of the critical performance variables at the expense of other desired outcomes, such as cross-subsidizing and other expenses issues. For instance, instead of accumulating expenses on a consolidated firm-wide basis, the organization should track each office’s expense level separately. In order to eliminate the burden of constant monitoring and to better track the individual offices, the organizations should also include profit plans, budgets and objectives; and measure them periodically at the discretion of management. Besides, the effectiveness of diagnostic systems could be maximized by integrating it with the Belief systems and Boundary systems.

 Belief systems

As the belief system communicates the core value of the organization and inspire employees to pursue the opportunities in the best interests of the organization as a whole, ACG should have revised and formalized its mission statement based upon the agreement of all the partners. Without a clear belief system, employees within this decentralized firm appear to lack understanding of the core values of the organization. For instance, as mentioned in the San Jose office, an aggressive managing partner like Kyle Ross was the key to ACS’s revenue growth. Those types of employees should be promoted as the organization’s spirit. However, a appropriate Boundary control systems should be established in the ethical and strategic code of conduct to keep activities in line with the mission statement of ACS.

 Boundary control systems

ACS hasn’t created a control system to communicate what an individual office should not do rather than what to do in order to maintain the entrepreneur spirit while keeping activities in line with the organizational guidelines. For example,