Diagnostic Control Systems: Implementing Intended Strategies Essay

The denomination authors, Johnson and Kaplan looks at how management accounting has evolved over the years and within different industries and how those management accounting reports energise failed to help mangers make decisions to reduce costs and improve productivity. The authors state that contemporary trends in competition, technology, and management adopt major changes in the way make-ups measure and manage costs and how they evaluate short- and long-term military operation.The article takes a look at management accounting over varies plosive consonants of times and specific industries and talk ofes how at each period of time the management reports were used. For example, in the 19th century after the Industrial R ontogenesis it was observed that gains could be earned by managing a hierarchical organization. The management system at the time focused on conversion costs and produced only summary results.Fast-forward a several years to roughly around 1925, we secure that the management accounting practices that be practiced today had been developed by that time. They had been evolved to serve the control and informational unavoidably of managers of increasingly complex and diverse organizations. As time progressed it is not 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 give tongue to 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 agonistical environments. Which has resulted in what they consider as todays problems distorted product costs, delayed and overly aggregate process control information, and short-term performance measures that do not reflect the increases or decreases in the organizations economic position.Johnson and Kaplan conclude by stating that if companies fail to ma ke modifications in their management accounting systems, their capacity 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 lever of control diagnostic control systems. These systems are defined as the backbone of traditional management control, and are designed to ensure predictable goal achievement.The other levers (Belief systems, saltation Systems and Interactive Control Systems) are mentioned in the reading 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 worldly concern of predetermined standards against which actual results can be compared, and (3) the ability to correct deviations from standards. The chapter goes on to describe critical performance variables.Those v ariables as defined are those factors that must be achieved or implemented successfully for the mean dodge 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 in effect 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, Internal Business and Innovation & Learning Measures) simultaneously to get out their business toward the desired goals. The author conveys the message that equipping management systems to control strategy is not an behind task. Managers have to understand their strategies and be able to recognize the relationships between strategic and operating decisi ons and how they affect the lavatory line.