Guillermo Team Assignment

Guillermo’s ideal control system must focus on Guillermo’s long and short term goals. “To design a management control system that meets the organization’s needs, managers must identify responsibility centers, develop performance measures, establish a monitoring and reporting structure, weigh costs and benefits, and provide motivation to achieve goal congruence and managerial effort (Horngren, 2008).” Guillermo’s ideal control system must also contain measurability because to effectively manage goals, there must be effective ways to measure progress and attainment. The following measurements should be monitored, and reported for an effective control system (Horngren, 2008):

• Financial strength – Product profitability, gross earnings

• Customer satisfaction – Survey scores, complaints, market share

• Business process improvement – Cycle time, activity costs, and defects

• Organizational learning – Staff, training time, staff turnover, staff satisfaction score

Currently, Guillermo’s management control system should measure cycle time, productivity, and quality. Cycle time refers to the time taken to complete a product or service; a low cycle means quick completion of service or product. “Productivity is the measure of outputs divided by inputs, and quality refers to the assurance that products and services perform to customer standards (Horngren, 2008).” Cycle time control, productivity control, and quality control are relevant key performance indicators that are monitored to ensure that quality products are produced at full capacity and effectively. One method of control not aligned with Guillermo’s goals, is an indication that another method of control may not be in alignment. For example, if cycle time is high, the productivity will most likely be low. Guillermo will also implement a variety of control system techniques such as budgeting, target costing, continuous improvement, benchmarking, total quality...