Around 2006, Jiang Wei, CFO of China Resources Corporation, was attempting to implement numerous new management control systems in the complex varied corporation throughout a time period of rapid economic expansion in where you live now China. Instilling efficiency, productivity, management, and control into that which was a real traditional condition-possessed enterprise posed challenges on many fronts. The case enables legal representative of the numerous ways in which balanced scorecards and strategy maps might be integrated with traditional management control systems to manage strategy implementation in the varied corporation. In addition, it allows students to know the benefits and challenges of employing highly formal performance management systems when faced with proper uncertainty.
1. What is Jiang Wei trying to accomplish with the incentive systems, i.e., performance contracts and EVA-based incentive plans? Does CRC need both incentive systems? Why or why not? Hint: Identify what each system is accomplishing.
2. Would managers behave differently if the performance contract were eliminated? Why not use the EVA-based plan to provide incentives and balanced scorecards to provide information?
3. In the last two paragraphs on page 10 of the case, CRC Chief Financial Officer Jiang Wei identifies his concerns going forward. Do you share his concerns? If so, what recommendations do you have to ensure that CRC does not become too inward focused?