Instructor’s Manual V
Management Control Syste V V
ms
Performance Measurement, EvaluatiV V
on, and Incentives V V
Fourth edition V
Kenneth A. Merchant
V V V
Wim A. Van der Stede
V V V V
ForVfurtherVinstructorVmaterialVplea
seVvisit:
www.pearsoned.co.uk/merchant
ISBN:V 978-1-292-11056-1
©V PearsonV EducationV LimitedV 2018
LecturersV adoptingV theV mainV textV areV permittedV toV downloadV andV photocopyV theV man
ualV asVrequired.
,PEARSONV EDUCATIONV LIMITED
KAOVTw
oVKAOV
Park
HarlowVCM17V9NAVUn
itedVKingdom
Tel:V+44V(0)1279V623623
Web:Vwww.pearson.com/uk
SecondVeditionVpublishedV200
7VThirdVeditionVpublishedV20
12VThisVeditionVpublishedV2
018
©V PearsonV EducationV LimitedV 2018
TheVrightsVofVKennethVA.VMerchantVandVWimVA.VVanVderVStedeVtoVbeVidentifiedVasVa
uthorsVofVthisVworkVhaveVbeenVassertedVbyVthemVinVaccordanceVwithVtheVCopyright,V
DesignsVandVPatentsVActV1988.
ISBNV 978-1-292-11056-1
AllVrightsVreserved.VPermissionVisVherebyVgivenVforVtheVmaterialVinVthisVpublicationVto
VbeVreproducedVforVOHPVtransparenciesVandVstudentVhandouts, VwithoutVexpressVpermiss
ionVofVtheVPublishers,VforVeducationalVpurposesVonly.VInVallVotherVcases,VnoVpartVofVt
hisVpublicationVmayVbeVreproduced,VstoredVinVaVretrievalVsystem,VorVtransmittedVinVany
VformVorVbyVanyVmeans, Velectronic,Vmechanical,Vphotocopying,Vrecording,VorVotherwiseV
withoutVeitherVtheVpriorVwrittenVpermissionVofVtheVPublishersVorVaVlicenceVpermittingVre
strictedVcopyingVinVtheVUnitedVKingdomVissuedVbyVtheVCopyrightVLicensingVAgencyVL
td,VBarnard’sVInn,V86VFetterVLane,VLondonVEC4AV1EN.VThisVbookVmayVnotVbeVlent,Vr
esold,VhiredVoutVorVotherwiseVdisposedVofVbyVwayVofVtradeVinVanyVformVofVbindingVo
rVcoverVotherVthanVthatVinVwhichVitVisVpublished,VwithoutVtheVpriorVconsentVofVtheVPu
blishers.
PearsonVEducationVisVnotVresponsibleVforVtheVcontentVofVthird-partyVinternetVsites.
2
©VPearsonVEducationVLimitedV20
18
, Contents
I. Introduction
1. Introduction 8
2. ModelV Syllabi 11
3. CaseV Matrix 76
4. TheV CaseV MethodV ofV Instruction:V SuggestionsV forV Students 80
II. TeachingV NotesV forV Cases
ChapterV1VCases
1. Leo’sV Four-PlexV Theater 86
2. Wong’sV Pharmacy 88
3. PrivateV Fitness,V Inc. 89
4. AtlantaV HomeV Loan 91
ChapterV2VCases
5. OfficeV Solutions,V Inc.§ 96
6. PuenteVHillsVToyota 103
7. KooistraV Autogroep 108
8. 117
HoustonVFearlessV76,VIn NoteV V Addendum:V V StudentV V Exa
c. m
IncludesV V (1)V V Teaching
AssignmentVandVReport;V(2)VtheVHoustonVFearlessV76,VInc.V(
A):VAftermathVcase;VandV(3)VtheVHoustonVFearlessV76,VInc.V(
B)Vcase.
ChapterV3VCases
9. WitskyV andV Associates,V Inc.§ 136
10. TheV PlatinumV PointeV LandV Deal 139
11. EyeOnV Pharmaceuticals,V Inc.§ 144
12. AxeonV N.V.* 149
ChapterV4VCases
13. ControlsV atV theV BellagioV CasinoV Resort 159
14. PCL:V AV BreakdownV inV theV EnforcementV ofV ManagementV Control 165
ChapterV5VCases
3
©VPearsonVEducationVLimitedV20
18
, 15. PhilipV Anderson 169
16. SunshineV Fashion:V Fraud,V Theft,V andV MisbehaviorV amongV Employees 175
17. BetterV Beauty,V Inc.§ 181
18. FitV Food,V Inc. 186
19. AtlantisV ChemicalV Industries§ 192
ChapterV6VCases
20. DiagnosticV ProductsV Corporation 195
21. GameV Shop,V Inc. 201
22. FamilyV CareV SpecialistsV MedicalV Group,V Inc. 209
ChapterV7VCases
23. KranworthV ChairV Corporation 215
24. ZumwaldV AG* 223
25. GlobalV Investors,V Inc. 227
ChapterV8VCases
26. RoyalV WessanenV NV§ 233
27. TheV StimsonV Company§ 246
28. MultipleV VersionsV ofV theV Plan§ 251
29. VitesseV SemiconductorV Corporation 257
AV spreadsheetV containingV theV IRRV dataV andV calculationsV is
VavailableVonlineVonVtheVpublisher’sVwebsite.
30. VisuSon,V Inc.:V BusinessV StressV Testing 266
TwoV VisuSon,V Inc.V databasesV areV availableV onlineV onV th
eVpublisher’sVwebsite—
oneVforVinstructorsVandVoneVforVstudents.
ChapterV9VCases
31. HarwoodV MedicalV InstrumentsV PLC 272
32. SuperconductorV Technologies,V Inc. 276
33. RavenV Capital,V LLC 284
ChapterV10VCases
34. BehavioralV ImplicationsV ofV AirlineV DepreciationV Accounting
PolicyV Choices* 296
35. LasV FerreteríasV deV México,V S.A.V deV C.V.* 300
36. IndustrialV Electronics,V Inc.* 305
37. HaengbokV Bancorp* 309
38. CorbridgeV Industries,V Inc.§ 313
4
©VPearsonVEducationVLimitedV20
18
Management Control Syste V V
ms
Performance Measurement, EvaluatiV V
on, and Incentives V V
Fourth edition V
Kenneth A. Merchant
V V V
Wim A. Van der Stede
V V V V
ForVfurtherVinstructorVmaterialVplea
seVvisit:
www.pearsoned.co.uk/merchant
ISBN:V 978-1-292-11056-1
©V PearsonV EducationV LimitedV 2018
LecturersV adoptingV theV mainV textV areV permittedV toV downloadV andV photocopyV theV man
ualV asVrequired.
,PEARSONV EDUCATIONV LIMITED
KAOVTw
oVKAOV
Park
HarlowVCM17V9NAVUn
itedVKingdom
Tel:V+44V(0)1279V623623
Web:Vwww.pearson.com/uk
SecondVeditionVpublishedV200
7VThirdVeditionVpublishedV20
12VThisVeditionVpublishedV2
018
©V PearsonV EducationV LimitedV 2018
TheVrightsVofVKennethVA.VMerchantVandVWimVA.VVanVderVStedeVtoVbeVidentifiedVasVa
uthorsVofVthisVworkVhaveVbeenVassertedVbyVthemVinVaccordanceVwithVtheVCopyright,V
DesignsVandVPatentsVActV1988.
ISBNV 978-1-292-11056-1
AllVrightsVreserved.VPermissionVisVherebyVgivenVforVtheVmaterialVinVthisVpublicationVto
VbeVreproducedVforVOHPVtransparenciesVandVstudentVhandouts, VwithoutVexpressVpermiss
ionVofVtheVPublishers,VforVeducationalVpurposesVonly.VInVallVotherVcases,VnoVpartVofVt
hisVpublicationVmayVbeVreproduced,VstoredVinVaVretrievalVsystem,VorVtransmittedVinVany
VformVorVbyVanyVmeans, Velectronic,Vmechanical,Vphotocopying,Vrecording,VorVotherwiseV
withoutVeitherVtheVpriorVwrittenVpermissionVofVtheVPublishersVorVaVlicenceVpermittingVre
strictedVcopyingVinVtheVUnitedVKingdomVissuedVbyVtheVCopyrightVLicensingVAgencyVL
td,VBarnard’sVInn,V86VFetterVLane,VLondonVEC4AV1EN.VThisVbookVmayVnotVbeVlent,Vr
esold,VhiredVoutVorVotherwiseVdisposedVofVbyVwayVofVtradeVinVanyVformVofVbindingVo
rVcoverVotherVthanVthatVinVwhichVitVisVpublished,VwithoutVtheVpriorVconsentVofVtheVPu
blishers.
PearsonVEducationVisVnotVresponsibleVforVtheVcontentVofVthird-partyVinternetVsites.
2
©VPearsonVEducationVLimitedV20
18
, Contents
I. Introduction
1. Introduction 8
2. ModelV Syllabi 11
3. CaseV Matrix 76
4. TheV CaseV MethodV ofV Instruction:V SuggestionsV forV Students 80
II. TeachingV NotesV forV Cases
ChapterV1VCases
1. Leo’sV Four-PlexV Theater 86
2. Wong’sV Pharmacy 88
3. PrivateV Fitness,V Inc. 89
4. AtlantaV HomeV Loan 91
ChapterV2VCases
5. OfficeV Solutions,V Inc.§ 96
6. PuenteVHillsVToyota 103
7. KooistraV Autogroep 108
8. 117
HoustonVFearlessV76,VIn NoteV V Addendum:V V StudentV V Exa
c. m
IncludesV V (1)V V Teaching
AssignmentVandVReport;V(2)VtheVHoustonVFearlessV76,VInc.V(
A):VAftermathVcase;VandV(3)VtheVHoustonVFearlessV76,VInc.V(
B)Vcase.
ChapterV3VCases
9. WitskyV andV Associates,V Inc.§ 136
10. TheV PlatinumV PointeV LandV Deal 139
11. EyeOnV Pharmaceuticals,V Inc.§ 144
12. AxeonV N.V.* 149
ChapterV4VCases
13. ControlsV atV theV BellagioV CasinoV Resort 159
14. PCL:V AV BreakdownV inV theV EnforcementV ofV ManagementV Control 165
ChapterV5VCases
3
©VPearsonVEducationVLimitedV20
18
, 15. PhilipV Anderson 169
16. SunshineV Fashion:V Fraud,V Theft,V andV MisbehaviorV amongV Employees 175
17. BetterV Beauty,V Inc.§ 181
18. FitV Food,V Inc. 186
19. AtlantisV ChemicalV Industries§ 192
ChapterV6VCases
20. DiagnosticV ProductsV Corporation 195
21. GameV Shop,V Inc. 201
22. FamilyV CareV SpecialistsV MedicalV Group,V Inc. 209
ChapterV7VCases
23. KranworthV ChairV Corporation 215
24. ZumwaldV AG* 223
25. GlobalV Investors,V Inc. 227
ChapterV8VCases
26. RoyalV WessanenV NV§ 233
27. TheV StimsonV Company§ 246
28. MultipleV VersionsV ofV theV Plan§ 251
29. VitesseV SemiconductorV Corporation 257
AV spreadsheetV containingV theV IRRV dataV andV calculationsV is
VavailableVonlineVonVtheVpublisher’sVwebsite.
30. VisuSon,V Inc.:V BusinessV StressV Testing 266
TwoV VisuSon,V Inc.V databasesV areV availableV onlineV onV th
eVpublisher’sVwebsite—
oneVforVinstructorsVandVoneVforVstudents.
ChapterV9VCases
31. HarwoodV MedicalV InstrumentsV PLC 272
32. SuperconductorV Technologies,V Inc. 276
33. RavenV Capital,V LLC 284
ChapterV10VCases
34. BehavioralV ImplicationsV ofV AirlineV DepreciationV Accounting
PolicyV Choices* 296
35. LasV FerreteríasV deV México,V S.A.V deV C.V.* 300
36. IndustrialV Electronics,V Inc.* 305
37. HaengbokV Bancorp* 309
38. CorbridgeV Industries,V Inc.§ 313
4
©VPearsonVEducationVLimitedV20
18
