Diagnostic Control Systems: Implementing Intended Strategies Essay

The boundary authors, Johnson and Kaplan looks at how counselling accounting has evolved all over the years and within diverse industries and how those precaution accounting reports have disregarded to help mangers make decisions to reduce be and improve productivity. The authors state that contemporary trends in competition, technology, and management demand major changes in the way organizations measure and manage costs and how they evaluate short- and semipermanent performance.The article takes a look at management accounting over varies periods of times and specific industries and discusses how at each period of time the management reports were used. For example, in the 19th century after the Industrial Revolution it was find that gains could be earned by managing a hierarchical organization. The management establishment at the time focused on conversion costs and produced that summary results.Fast-forward a several years to roughly around 1925, we converge that the management accounting practices that argon practiced today had been developed by that time. They had been evolved to serve the crack and informational needs of managers of increasingly complex and diverse organizations. As time progressed it is non until after the 1920s that the authors believe that evolution of management accounting did not keep the pace with the improvement in corporations product and process technologies.It is stated that the systems today provide misleading targets for managerial review. They fail to provide the relevant set of measures that reflect the technology, products, processes and competitive environments. Which has resulted in what they accept as todays problems distorted product costs, delayed and likewise aggregated process control information, and short-term performance measures that do not reflect the increases or decreases in the organizations economic position.Johnson and Kaplan reason out by stating that if companies fail to make modificati ons in their management accounting systems, their expertness to be effective and efficient global competitors will be inhibited. diagnostic Control Systems Implementing Intended Strategies In chapter four, Robert Simons introduces what is known as the third pry of control diagnostic control systems. These systems are defined as the good sense of traditional management control, and are designed to ensure predictable inclination achievement.The other levers (Belief systems, Boundary Systems and Interactive Control Systems) are mentioned in the interpreting as well, however the focus of chapter four is to discuss the diagnostic control systems. He highlights three 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 make up deviations from standards. The chapter goes on to describe vital performance variables.Those variab les as defined are those factors that must be achieved or implemented successfully for the intended dodging of the business to work. The term, key 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 balanced scorecard to describe a systematic way of analyzing critical performance variables and measures associated with intended strategies.This method allows managers to use measures from each of the four categories (Financial, Customer, inhering Business and Innovation & Learning Measures) simultaneously to guide their business toward the desired goals. The author conveys the message that equipping management systems to control strategy is not an easy task. Managers have to understand their strategies and be able to recognize the relationships amongst strategic and operating decisi ons and how they affect the bottom line.