C454 - Handout

Prepared by J. Kroeker Sauder School of Business, UBC © 2009

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Management Accounting: Performance Evaluation The Corporate Environment: Corporations are a conglomeration of people with a common purpose. The individuals seek to attain goals for the corporation, with the ultimate goal being profitability over a sustained period of time. Managers will always consider the consequences of their management decisions in light of their own personal utility. Management performs a variety of activities. 1) 2) 3) All three of the key management activities inherently revolve around decision-making and in each activity the management accountant plays a critical role. _______________________ is management. Titan | America's Best Since 1898

How serious is the issue for Titan? What might be the link to the performance evaluation system?


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Forzani Group Ltd. | Home

The Forzani Group Ltd. (FGL) is the largest and only national sporting goods retailer in Canada. The Company sells a vast assortment of sports-related products - from athletic footwear to athletic/leisure apparel to the equipment required for performing a favourite sport. FGL's merchandise mix includes brand name products together with a large complement of private-branded products.

Our Company's attributes can be summarized as emanating from one principal thing - scale. Our size, and our strategy of using that size to our advantage, influences everything we do. Our banners provide unparalleled value to the Canadian consumer because of our extensive product mix and great price points. We truly have a banner and product offering to suit everyone in Canada.

Our strategic focus is a simple one that is easy for all of our 14,000 corporate and franchise employees to embrace. We have a focus on being the best store in town - with a passion for exceptional merchandise, superior customer service and extensive marketing. Welcome to The Forzani Group Ltd.

Bob Sartor Chief Executive Officer

What is the hard sell approach? If they drop it what does this imply for the performance evaluation system? E-reading: On the folly of rewarding A while hoping for B What is the essence of this article, how does it relate to business?


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We need to learn to ask the right questions so we can gather the right information. Hudson's Bay Company

As management accountants we are intimately involved with making decisions. Would you support the idea of using commissions at the Bay?


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Management accounting in a Corporation How does management accounting fit into the corporate world? What is its purpose?


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Management Accounting Roles: 1) 2) What do we mean by “control” within the management accounting context? Can a corporation have “perfect control”? What can a corporation do to achieve or improve its control? 1) 2) 3)


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What or who are Fannie Mae and Freddie Mac? Home Page - Foreclosure Prevention and Mortgage Assistance | Fannie Mae

Freddie Mac's Homepage


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Agency Theory What is it? Examples of agency relationships: The rise and fall of Carly Fiorina: an ethical case study. HP Sued over Fiorina's Severance - - CFO.com


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When an agency relationship exists how does the corporation align the goals of the individual with those of the firm? http://www.radioshack.com/home/index.jsp

Organizational Architecture Designing organizations to create ... - Google Books (Read Pages 1-17) Zimmerman’s organizational architecture 1) 2) 3)


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What is Wal-Mart’s strategy? What are some of the incentives in Wal-Mart’s system which helps them execute their strategy? As of 2008, sales were now $400 billion, profit is $20 billion, # of stores over 6,000, average wage is $9.98 for its 1,300,000 employees. For class, please consider what you might want to change in their system, if you were the human resource manager or store manager?


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How do firms mitigate these agency costs? http://money.cnn.com/2003/10/23/news/companies/walmart_worker_arrests/ 250 arrested at Wal-Mart Workers nabbed on immigration charges; executives facing subpoenas, U.S. official says. October 23, 2003: 5:16 PM EDT

WASHINGTON (CNN) - Federal officials raided Wal-Mart stores across the United States Thursday, arresting about 250 illegal immigrants working on cleaning crews at 61 stores in 21 states. How could this have happened?


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The Settlement! http://www.nytimes.com/2005/03/19/business/19walmart.html


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From a performance evaluation system perspective what concerns/adjustments might need to be considered with this “all day, all night” strategy?


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Xerox Corporation “Leadership through Quality”

http://www.xerox.com/ Over the decades, Xerox has effectively utilized “traditional, financially-based performance measures”. Clearly, they have been very successful as a company. Required Use the space below to provide your response in point form. Be prepared to communicate these ideas in class.

1) Identify and discuss two examples of financially based performance measures that Xerox may have used.

2) Why were these measures deemed to be inadequate in recent years?


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Xerox performance measures:

3) What are the key elements (metrics, measures etc) of Xerox’s MCS and

how do these relate or support Xerox’s corporate strategy? 4) Identify one metric (performance measure) that Xerox should add to its

MCS in order to help Xerox compete in 2009.


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Motorola Inc.

1) Briefly identify and discuss the top two key success factors for Motorola, as per the case in the text.

2) Evaluate the traditional standard cost system by identifying and discussing

several strengths and weaknesses. Weakness 1 Weakness 2 Weakness 3


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Motorola Loses Cell Phone Market Share to Samsung and Nokia

How would the MCS be different for the division responsible for cell phones versus the circuit division (ASIC)?


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Southwest Airlines Inc. Southwest Airlines Careers A) Southwest has a remarkable performance record in an extremely turbulent industry. How has Southwest remained competitive in this environment, (KSF’s)? B) Identify the top three specific items, in order of importance, in their MCS or personnel policy, that have been the catalysts to their success! 1) 2) 3)


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Does the management control system of Southwest Airlines need to adjust to the changes in the economic environment? Why, or why not?


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Why are the old stores more “profitable”? If you were in charge of designing the MCS for Canadian Tire how would you incorporate this reality?

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C454 - Handout