Compare and contrast different strategic control-and-reward systems.
■ Strategic control-and-reward systems are internal governance mechanisms put in place to align the incentives of principals (shareholders) and agents (employees).
■ Strategic control-and-reward systems allow managers to specify goals, measure progress, and provide performance feedback.
■ In addition to the balanced-scorecard framework, managers can use organizational culture, input controls, and output controls as part of the firm’s strategic control-and-reward systems.
■ Input controls define and direct employee behavior through explicit and codified rules and standard operating procedures.
■ Output controls guide employee behavior by defining expected results, but leave the means to those results open to individual employees, groups, or SBUs.