Question

Rick is lead scientist for X Ltd, a pharmaceutical company that is working on a Covid-19 vaccine. Developing a vaccine requires a great deal of trial and error, creativity, and there is no guarantee of project success. Indeed, in more general pharmaceutical production, only about 1 in 10,000 projects are ultimately successful.

Required:

The CEO of X Ltd is concerned about Rick's performance on the Covid-19 project, costs are high and there is no guarantee of success. The CEO wants to implement a control system to measure Rick's performance. Evaluate the use of "Action Controls" as part of a control system to assess Rick's performance.

Answer 1

This is the most direct form of management control because it involves taking steps to ensure that employees act in the organization’s best interest by making their actions themselves the focus of control.

Here are Action ontrols to assess Rick's Performance:

1.Behavioral constraints :

This is a negative form of action control. These controls make it impossible, or at least more difficult, for employees to do things that should not be done.

A psychical constraint is for example a lock on a desk, passwords, and limits to areas.

An administrative constraint can be used to place limits on an employee’s ability to perform all or a portion of specific acts. An example is the restriction of decision-making authority or separation of duties (so that one person cannot perform the entire task). Separation of duties is required for good internal control but cannot prevent collusion (between different persons).

2. Preaction reviews: This involves the scrutiny of the action plans of the employees being controlled.

3. Action Accountability :

This control involves holding employees accountable for the actions they take. For the implementation there are four things important:

• Defining what actions are acceptable or unacceptable

• Communicating those definitions to employees

• Observing or otherwise tracking what happens

• Rewarding good actions or punishing actions that deviate from the acceptable

Action controls are most effective if the desired goals are well communicated. The actions for which employees are to be held accountable can be communicated either administratively (rules, policies, contracts, codes of conduct) or socially. Actions can be tracked directly (supervision or monitoring) or by examining evidence.

4. Redundancy : This control involves assigning more employees to a task than necessary. It increases the probability that a task will be satisfactorily accomplished.