Chapter Eleven

Evaluation
And
Control

Learning Objectives
Understand the basic control process
Choose among traditional measures
Use the BSC approach to develop key
performance measures
Apply the benchmarking process to a function or
an activity
Understand the impact of problems with
measuring performance
Develop appropriate control systems to support
specific strategies

Measuring Performance

Appropriate Measure
Types of Control
Activity-Based Costing
Enterprise Risk Management
Primary Measures of Corporate
Performance

Primary Measures of
Corporate Performance
Traditional Financial Measures
Stakeholder Measure
Shareholder Value
1) Economic Value Added (EVA)
2) Market Value Added (MVA)
Balanced Scorecard
Evaluating Top Management and The
BOD

Primary Measures of
Divisional and Functional
Performance
Responsibility Centers
Using benchmark to evaluate
performance

Strategic Information Systems

Enterprise Resource Planning (ERP)
Divisional and Functional IS Support

Problems in
Measuring Performance
Short term orientation
Goal Displacement
1) Behavior Substitution
2) Suboptimization

Strategic Incentives Management

Weighted-factor method
Long-term evaluation method
Strategic-funds method

Types of Control
Behavior Control
Output Control
Input Control