In general, Abrams Company adopts the lowest cost, differentiation, market focus and ROIstrategies
to accomplish the organization’s goal. Furthermore, In order to implement the
strategies the firm establishes its own management control systems.
Evaluation of Abrams
’
Management Control System:
The current measurement system of the company is ROI.
The ROI target is set based on budget profit divided by actual beginning of the year net assets. Actual ROI is calculating by actual profit divided by actual beginning of the year net asset.
The advantage of the Abrams Company ROI system is it does not consider the investment added during the year, because the investments provide little effort to the year, but more benefit to the future.
However, the ROI measurement system has
some weakness, such as defer asset replacement, short-term focus at the expense of long-term.