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“Highly achievable budget targets reduce the risk of gameplaying. The stakes associated with budget achievement in most firms, which include bonuses, promotions, and job security, are so significant that managers who are in danger of failing to achieve their budget targets have powerful motivations to play games, either with the numbers or through foolhardy decisions.”
(Kenneth A. Merchant and Wim A.Van der Stede,Management Control System,Performance Measurement Evaluation and Incentives, 3rd Edition, Page 316.)
(a) Critically evaluate the above statement through providing evidence from literature.
(b) Refer to the case of Citibank Indonesia. Based on your analyses in 2 (a) above, do you think Mr. Mehli Mistri and his subordinates will be involved in gameplaying activities? Explain.
P.S. It is better for you guys to find that text book above, if you can’t, contact me with the E-mail I can scan the case and attach them to you. Thank you.
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