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Chapter 7

Management styles

Hopwood identified three distinct styles for management performance
appraisal.

Budget constrained – manager’s reward linked to achievement of
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short-term financial targets, e.g. ROCE used as a target

 should ensure short-term targets are met but

 perhaps to the detriment of long-term performance (stifles
flexibility and ingenuity)

 can also result in creative accounting and workplace stress

Profit-conscious – manager’s reward linked to achievement of
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long-term profitability, e.g. project NPV used as a target

 should result in the achievement of long-term profitability but

 perhaps results in a loss of short-term control

Non-accounting – manager’s reward linked to achievement of non-
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financial aspects primarily, e.g. employee satisfaction, productivity
 should focus on the drivers of long-term positive performance
but

 may neglect the financial implications of decisions

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