ACCA Strategic Professional · Strategic Business Leader · Management and internal control systems
Danube Pharma operates in a highly innovative research setting. Its directors want scientists to feel free to experiment, but also want them to pursue the company's strategic goals. The CEO uses a mission statement, a clear code of conduct, and boundaries on prohibited activities, while also tracking a small number of strategic uncertainties discussed regularly with managers. Which framework best describes this approach?
Simons' four levers of control fits. The mission statement is a beliefs system, the code and prohibitions are boundary systems, and regular management discussion of strategic uncertainties is an interactive system, balancing freedom to innovate with control over strategic direction.
- ASimons' four levers of controlCorrect
- BMintzberg's five configurations
- CPorter's value chain
- DLewin's three-stage change model
Explanation
Simons' levers comprise beliefs systems (mission), boundary systems (prohibited activities, code of conduct), diagnostic systems and interactive systems (regular discussion of strategic uncertainties). The case maps onto these directly. The other models concern structure, activities and change, not control balance.
Did you get it right without looking?
One question tells you little. A timed set on Management and internal control systems shows your real accuracy, how long you take and where you lose marks.
More Management and internal control systems questions
- Tessaro Group's audit committee receives a report from the external auditor identifying a significant deficiency: sales staff can both raise…
- Wexley Foods operates in several countries. The audit committee wants assurance that employees comply with anti-bribery laws and internal po…
- Zephyr Logistics outsourced its internal audit two years ago. The board now notices that audit findings are generic, the provider rotates ju…
- Marlow Textiles has a head office that sets annual budgets for each factory. Factory managers are rewarded for meeting budgeted cost and out…
- Brindle Retail has an internal audit department that reports to the finance director. The internal auditors recently found significant expen…
- Kestrel Foods' management accepted that its stock counts are unreliable. The audit committee asks for a recommendation that follows a cost-b…