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Adirondack Accounting Associates Is an Organization That Has Undergone a Dramatic

question 25

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Adirondack Accounting Associates is an organization that has undergone a dramatic transformation over the last few years. Earlier, employees were managed using a wide array of rules, regulations, and procedures. Offending employees were punished for their violations. Today, under the leadership of the new CEO, Agatha, employees are encouraged to make decisions and come up with innovative solutions to problems they encounter. Most employees are much more satisfied under the new arrangement. The group is much more cohesive and is committed not only to the overall success of the organization but also to its standards and reputation. Despite the improved employee morale under Agatha, the other top managers have expressed a strong desire to reign in what they see as excessive employee freedoms and institute more formalized rules. Meanwhile, the middle managers have expressed their desire to base operations on costs and prices, and outsource certain tasks if it is more profitable. Agatha discusses the issue with an outside consultant, who recommends that the company focus on creating a strong culture with values that all employees accept and understand. Which type of control system did the organization most likely use in the past?

Definitions:

Zero-based Budget

A budgeting technique where all expenses must be justified for each new period, starting from a "zero base," rather than basing budgets on the previous year's expenditures.

Fixed Amount

A specific, unchanging quantity of money, goods, or services.

Strategic Planning

The process by which an organization defines its strategy, or direction, and makes decisions on allocating its resources to pursue this strategy.