Reference no: EM131779801

Management Control System at Procter & Gamble

Setting up management control systems and determining measurement methods and who should be responsible for particular revenues, costs, and information can be a large task. The structure of the organization plays a part in how well a particular measure is likely to work. Ensuring that the goals of the organization are in concert with the management control system is also an important factor. It is not possible to evaluate a company's management control system from an Internet site. What we can do, however, is to use a site as an example and apply some of the concepts of the chapter to measures and tools that would be possibilities for a fi rm.

1. A well-known and well-established company with worldwide acceptance is Procter & Gamble (P&G) . Log on to the company's Web site at www.pg.com . Locate the most recent annual report by following the links under the "Investor/Shareholder Relations" tab to "Financial Reporting."

Examine the "Letter to Shareholders" section of the annual report. What does P&G consider to be the most important factors that drive their growth strategy? How does P&G ensure that managers meet the company's objectives?

2. The company has numerous products, and the Web site divides them into different categories and brands to help customers find relevant product information. Click on "Brands and Innovation."

What are the major categories of brands listed on the Web site? Click on the "Household Care" category. What are some of the brands in this category that you are familiar with? How could a system be set up to help measure the success of the firm's goal to build brands in the "Household Care" category? What would be three possible financial measures? What about three nonfinancial measures?