Instructor’s Manual j
Management Control Syste j j
ms
Performance Measurement, Evaluatio j j
n, and Incentives j j
Fourth edition j
Kenneth A. Merchant j j j
Wim A. Van der Stede
j j j j
Forjfurtherjinstructorjmaterialjplease
jvisit:
www.pearsoned.co.uk/merchant
ISBN:j 978-1-292-11056-1
©j Pearsonj Educationj Limitedj 2018
Lecturersj adoptingj thej mainj textj arej permittedj toj downloadj andj photocopyj thej manualj asjrequi
red.
,PEARSONj EDUCATIONj LIMITED
KAOjTwo
jKAOjPar
k
HarlowjCM17j9NAjUnite
djKingdom
Tel:j+44j(0)1279j623623
Web:jwww.pearson.com/uk
Secondjeditionjpublishedj2007jT
hirdjeditionjpublishedj2012jThis
jeditionjpublishedj2018
©j Pearsonj Educationj Limitedj 2018
ThejrightsjofjKennethjA.jMerchantjandjWimjA.jVanjderjStedejtojbejidentifiedjasjauthorsjofjthisjw
orkjhavejbeenjassertedjbyjthemjinjaccordancejwithjthejCopyright,jDesignsjandjPatentsjActj1988.
ISBNj 978-1-292-11056-1
Alljrightsjreserved.jPermissionjisjherebyjgivenjforjthejmaterialjinjthisjpublicationjtojbejreproduc
edjforjOHPjtransparenciesjandjstudentjhandouts,jwithoutjexpressjpermissionjofjthejPublishers,jf
orjeducationaljpurposesjonly.jInjalljotherjcases,jnojpartjofjthisjpublicationjmayjbejreproduced,jst
oredjinjajretrievaljsystem,jorjtransmittedjinjanyjformjorjbyjanyjmeans,jelectronic,jmechanical,jpho
tocopying,jrecording,jorjotherwisejwithoutjeitherjthejpriorjwrittenjpermissionjofjthejPublishersjorj
ajlicencejpermittingjrestrictedjcopyingjinjthejUnitedjKingdomjissuedjbyjthejCopyrightjLicensing
jAgencyjLtd,jBarnard’sjInn,j86jFetterjLane, jLondonjEC4Aj1EN.jThisjbookjmayjnotjbejlent,jresol
d,jhiredjoutjorjotherwisejdisposedjofjbyjwayjofjtradejinjanyjformjofjbindingjorjcoverjotherjthanjt
hatjinjwhichjitjisjpublished,jwithoutjthejpriorjconsentjofjthejPublishers.
PearsonjEducationjisjnotjresponsiblejforjthejcontentjofjthird-partyjinternetjsites.
2
©jPearsonjEducationjLimitedj2018
, Contents
I. Introduction
1. Introduction 8
2. Modelj Syllabi 11
3. Casej Matrix 76
4. Thej Casej Methodj ofj Instruction:j Suggestionsj forj Students 80
II. Teachingj Notesj forj Cases
Chapterj1jCases
1. Leo’sj Four-Plexj Theater 86
2. Wong’sj Pharmacy 88
3. Privatej Fitness,j Inc. 89
4. Atlantaj Homej Loan 91
Chapterj2jCases
5. Officej Solutions,j Inc.§ 96
6. PuentejHillsjToyota 103
7. Kooistraj Autogroep 108
8. HoustonjFearlessj76,jInc. 117
Includesj j (1)j j Teaching Notej j Addendum:j j Studentj j Exam
AssignmentjandjReport;j(2)jthejHoustonjFearlessj76,jInc.j(A):jAfter
mathjcase;jandj(3)jthejHoustonjFearlessj76,jInc.j(B)jcase.
Chapterj3jCases
9. Witskyj andj Associates,j Inc.§ 136
10. Thej Platinumj Pointej Landj Deal 139
11. EyeOnj Pharmaceuticals,j Inc.§ 144
12. Axeonj N.V.* 149
Chapterj4jCases
13. Controlsj atj thej Bellagioj Casinoj Resort 159
14. PCL:j Aj Breakdownj inj thej Enforcementj ofj Managementj Control 165
Chapterj5jCases
15. Philipj Anderson 169
16. Sunshinej Fashion:j Fraud,j Theft,j andj Misbehaviorj amongj Employees 175
3
©jPearsonjEducationjLimitedj2018
, 17. Betterj Beauty,j Inc.§ 181
18. Fitj Food,j Inc. 186
19. Atlantisj Chemicalj Industries§ 192
Chapterj6jCases
20. Diagnosticj Productsj Corporation 195
21. Gamej Shop,j Inc. 201
22. Familyj Carej Specialistsj Medicalj Group,j Inc. 209
Chapterj7jCases
23. Kranworthj Chairj Corporation 215
24. Zumwaldj AG* 223
25. Globalj Investors,j Inc. 227
Chapterj8jCases
26. Royalj Wessanenj NV§ 233
27. Thej Stimsonj Company§ 246
28. Multiplej Versionsj ofj thej Plan§ 251
29. Vitessej Semiconductorj Corporation 257
Aj spreadsheetj containingj thej IRRj dataj andj calculationsj isjavailab
lejonlinejonjthejpublisher’sjwebsite.
30. VisuSon,j Inc.:j Businessj Stressj Testing 266
Twoj VisuSon,j Inc.j databasesj arej availablej onlinej onj thejpubli
sher’sjwebsite—onejforjinstructorsjandjonejforjstudents.
Chapterj9jCases
31. Harwoodj Medicalj Instrumentsj PLC 272
32. Superconductorj Technologies,j Inc. 276
33. Ravenj Capital,j LLC 284
Chapterj10jCases
34. Behavioralj Implicationsj ofj Airlinej Depreciationj Accounting
Policyj Choices* 296
35. Lasj Ferreteríasj dej México,j S.A.j dej C.V.* 300
36. Industrialj Electronics,j Inc.* 305
37. Haengbokj Bancorp* 309
38. Corbridgej Industries,j Inc.§ 313
39. Kingj Engineeringj Group,j Inc.§ 319
40. Berkshirej Industriesj PLC 324
4
©jPearsonjEducationjLimitedj2018
Management Control Syste j j
ms
Performance Measurement, Evaluatio j j
n, and Incentives j j
Fourth edition j
Kenneth A. Merchant j j j
Wim A. Van der Stede
j j j j
Forjfurtherjinstructorjmaterialjplease
jvisit:
www.pearsoned.co.uk/merchant
ISBN:j 978-1-292-11056-1
©j Pearsonj Educationj Limitedj 2018
Lecturersj adoptingj thej mainj textj arej permittedj toj downloadj andj photocopyj thej manualj asjrequi
red.
,PEARSONj EDUCATIONj LIMITED
KAOjTwo
jKAOjPar
k
HarlowjCM17j9NAjUnite
djKingdom
Tel:j+44j(0)1279j623623
Web:jwww.pearson.com/uk
Secondjeditionjpublishedj2007jT
hirdjeditionjpublishedj2012jThis
jeditionjpublishedj2018
©j Pearsonj Educationj Limitedj 2018
ThejrightsjofjKennethjA.jMerchantjandjWimjA.jVanjderjStedejtojbejidentifiedjasjauthorsjofjthisjw
orkjhavejbeenjassertedjbyjthemjinjaccordancejwithjthejCopyright,jDesignsjandjPatentsjActj1988.
ISBNj 978-1-292-11056-1
Alljrightsjreserved.jPermissionjisjherebyjgivenjforjthejmaterialjinjthisjpublicationjtojbejreproduc
edjforjOHPjtransparenciesjandjstudentjhandouts,jwithoutjexpressjpermissionjofjthejPublishers,jf
orjeducationaljpurposesjonly.jInjalljotherjcases,jnojpartjofjthisjpublicationjmayjbejreproduced,jst
oredjinjajretrievaljsystem,jorjtransmittedjinjanyjformjorjbyjanyjmeans,jelectronic,jmechanical,jpho
tocopying,jrecording,jorjotherwisejwithoutjeitherjthejpriorjwrittenjpermissionjofjthejPublishersjorj
ajlicencejpermittingjrestrictedjcopyingjinjthejUnitedjKingdomjissuedjbyjthejCopyrightjLicensing
jAgencyjLtd,jBarnard’sjInn,j86jFetterjLane, jLondonjEC4Aj1EN.jThisjbookjmayjnotjbejlent,jresol
d,jhiredjoutjorjotherwisejdisposedjofjbyjwayjofjtradejinjanyjformjofjbindingjorjcoverjotherjthanjt
hatjinjwhichjitjisjpublished,jwithoutjthejpriorjconsentjofjthejPublishers.
PearsonjEducationjisjnotjresponsiblejforjthejcontentjofjthird-partyjinternetjsites.
2
©jPearsonjEducationjLimitedj2018
, Contents
I. Introduction
1. Introduction 8
2. Modelj Syllabi 11
3. Casej Matrix 76
4. Thej Casej Methodj ofj Instruction:j Suggestionsj forj Students 80
II. Teachingj Notesj forj Cases
Chapterj1jCases
1. Leo’sj Four-Plexj Theater 86
2. Wong’sj Pharmacy 88
3. Privatej Fitness,j Inc. 89
4. Atlantaj Homej Loan 91
Chapterj2jCases
5. Officej Solutions,j Inc.§ 96
6. PuentejHillsjToyota 103
7. Kooistraj Autogroep 108
8. HoustonjFearlessj76,jInc. 117
Includesj j (1)j j Teaching Notej j Addendum:j j Studentj j Exam
AssignmentjandjReport;j(2)jthejHoustonjFearlessj76,jInc.j(A):jAfter
mathjcase;jandj(3)jthejHoustonjFearlessj76,jInc.j(B)jcase.
Chapterj3jCases
9. Witskyj andj Associates,j Inc.§ 136
10. Thej Platinumj Pointej Landj Deal 139
11. EyeOnj Pharmaceuticals,j Inc.§ 144
12. Axeonj N.V.* 149
Chapterj4jCases
13. Controlsj atj thej Bellagioj Casinoj Resort 159
14. PCL:j Aj Breakdownj inj thej Enforcementj ofj Managementj Control 165
Chapterj5jCases
15. Philipj Anderson 169
16. Sunshinej Fashion:j Fraud,j Theft,j andj Misbehaviorj amongj Employees 175
3
©jPearsonjEducationjLimitedj2018
, 17. Betterj Beauty,j Inc.§ 181
18. Fitj Food,j Inc. 186
19. Atlantisj Chemicalj Industries§ 192
Chapterj6jCases
20. Diagnosticj Productsj Corporation 195
21. Gamej Shop,j Inc. 201
22. Familyj Carej Specialistsj Medicalj Group,j Inc. 209
Chapterj7jCases
23. Kranworthj Chairj Corporation 215
24. Zumwaldj AG* 223
25. Globalj Investors,j Inc. 227
Chapterj8jCases
26. Royalj Wessanenj NV§ 233
27. Thej Stimsonj Company§ 246
28. Multiplej Versionsj ofj thej Plan§ 251
29. Vitessej Semiconductorj Corporation 257
Aj spreadsheetj containingj thej IRRj dataj andj calculationsj isjavailab
lejonlinejonjthejpublisher’sjwebsite.
30. VisuSon,j Inc.:j Businessj Stressj Testing 266
Twoj VisuSon,j Inc.j databasesj arej availablej onlinej onj thejpubli
sher’sjwebsite—onejforjinstructorsjandjonejforjstudents.
Chapterj9jCases
31. Harwoodj Medicalj Instrumentsj PLC 272
32. Superconductorj Technologies,j Inc. 276
33. Ravenj Capital,j LLC 284
Chapterj10jCases
34. Behavioralj Implicationsj ofj Airlinej Depreciationj Accounting
Policyj Choices* 296
35. Lasj Ferreteríasj dej México,j S.A.j dej C.V.* 300
36. Industrialj Electronics,j Inc.* 305
37. Haengbokj Bancorp* 309
38. Corbridgej Industries,j Inc.§ 313
39. Kingj Engineeringj Group,j Inc.§ 319
40. Berkshirej Industriesj PLC 324
4
©jPearsonjEducationjLimitedj2018
