Motivational effects on management control systems in assisted living facilities: Study Case

Management Control Systems (MCS) are used to support planning activities and performance evaluations. MCS tend to include incentives for managers, and thereby influence the behavior of leaders and staff. This case study explores the effect of costing systems and transfer prices that are only partially successful in their contributions to managing an assisted living facility. The case illustrates conflicts among divisions and division members, and raises many opportunities to discuss financial as well non-financial initiatives that may solve some of the problems the facility faces.