9 step approach, question attached

Golden Moments Ltd. case Golden Moments Ltd. is a service company that provides home care assistance and other services to seniors. Marg Addison started the business five years ago when she witnessed her mother's struggle to live in her own home. Golden Moments offers services not provided by government agencies services include yard maintenance, minor repairs, hanging a picture, setting up a home theatre, or dog walking. Golden Moments can do the grocery shopping, pick up the dry cleaning, or drive seniors to their appointments. It is a for-profit business. Marg began working out of her apartment, and barely five years later, she has a downtown office and 145 employees included 35 part-time students. The employees range from registered practical nurses to plumbers and handy-folk. She incorporated two years ago when the business started its rapid expansion. You, CGA, are her accountant. Last year you explained the need to develop a management control system that would work without her direct involvement. Marg laughed, saying, \"I have an excellent management control system. When a new client makes contact, I meet with them, assess their needs, determine the cost of meeting those needs, assess their ability to pay, and set up a schedule to provide them with the services they need. Each client is assigned a director who will ensure that all services are co-ordinated and who serves as a contact point for the client. When a director has a problem, they let me know and I solve it. When a client isn't satisfied with services, I review the situation and make suggestions for change. I approve all expenditures and do all the banking. I know things are running smoothly when there is money in the bank. When I'm getting too many phone calls from clients or too many questions from staff, I know I have problems. So I solve them.\" But the demands on her time were taking their toll. She had her eye on another exciting business opportunity, and her family was starting to complain that she was never available. Marg finally took your persistent advice and hired Owen Fischer as CEO after a chance meeting at a business networking function. She created his job description and crafted his compensation scheme on her own. Marg decided to limit her involvement in the day-to-day activities of the business but continue to provide oversight and guidance as president and chair of the board of directors. Owen had recently retired from an executive position at SKZ Inc., a large national manufacturing company. Owen saw this as an opportunity for a change of focus and a challenge. Marg thought Owen could help the company through its expansion phase over the next few years and implement an organizational structure that would distribute decision-making rights to various levels of managers. Marg crafted Owen's compensation package, which consisted of a base salary equal to 70% of his total compensation at SZK. Owen could earn a bonus (up to 50% of his salary) based on financial statement net income exceeding the budget. Owen was responsible for implementing a budgeting process. At the end of Owen's first year, you asked Marg how things were going. \"Oh pretty good, I guess. Net profits exceeded our budget by more than 50%, and Owen earned his maximum bonus. However, I have no idea if that was the result of Owen's efforts or just part of our continued growth. I think I was too generous with Owen. After all, the directors selfmotivate without a bonus. They are professionals registered nurses and registered practical nurses. I don't spend as much time in the office as I used to, but I don't feel I am working any less. Last week I had to contact Lilian in accounts payable to explain to her that she needed approval before any cheques could be issued. It seems that Owen had told her she could authorize all expenditures under $500. That just won't work. She needs to have Owen approve them the way I used to. It's a good thing I went in on Sunday to look over the payables list or I wouldn't have even known she was doing that.\" Marg sighed. \"And clients still call me to complain. It seems Owen has set up some policy that allows certain directors to make decisions regarding timing and scheduling of services. Maybe it works, but when a client or their family phones me up and asks for more time to pay or for abetter price well, that's what I do. And Owen wants to fire two of my long-time employees. He says they spend too much time with clients and we end up having to write down the invoices. But I want happy clients. I built this business on client satisfaction. No; I'm just not sure this is working.\" Required As the CGA for Golden Moments Ltd., you have been asked to address Marg Addison's concerns. Based on your knowledge of agency theory, develop a recommendation for a management control system for Marg. Analyze the case using the standard case method and present your solution using the following section headings: a. Identify the main problem and issues: Identify the main problems with Golden Moments' management control systems and operations. b. Analyze the data: Evaluate the problem using the mixed motivational view of agency theory and your understanding of management control system design. c. Generate alternatives: Organizations can be classified as organic and mechanistic. Identify the management control systems (also known as levers of control) that work best for each of these types of organizations. These will be the two alternatives you will evaluate for a potential recommendation in part (e). d. Select the decision criteria: Identify three criteria that can be used to assess the management control system. e. Analyze the alternatives and make a recommendation: Evaluate the alternatives determined in part (c) based on the criteria determined in part (d). Make a recommendation for the appropriate management control system. The case used in this assignment, which is representative of the cases used for MA2 examinations, integrates several topics from the course materials. Remember to carefully review the case content and requirements to determine which components of the course material you should use in your response