Man­age­ment Con­trol Sys­tems

Course content

The aim of the course is to provide the student with both theoretical understanding and practical skills of management control systems and management accounting practices.

Management control systems are perceived as a mechanism to increase the likelihood for an organization to 1) achieve its objectives and 2) utilize resources efficiently when implementing strategies. Included in this section is also introduction to basic concepts and calculations in cost accounting.

Additionally, the management control system can become an early warning system for feeding back information to the strategic planning and control system. Alternatives to traditional management accounting are introduced. However, the main focus is on financial results control systems going from planning and budgeting models to balanced scorecards. This includes introduction  to concepts and calculations in cost accounting.

The student will learn to integrate performance measurement, evaluation, and incentives as part of a management control system so as to be able to influence an organization to actions and behavior that will increase goal congruence and achievement of objectives. The course also deals with important management control roles and ethical issues faced by managers and employees.

The course contains the following elements:

• Management control alternatives (results controls, action controls, and people controls)
• Design criteria for management control systems including analysis of control tightness and cost vs. benefit
• Financial result control systems used in for-profit organizations including

                       • Decentralizing in financial responsibility centers

                       • Allocating resources effectively with the use of transfer prices
                       • Planning and budgeting processes
                       • Determining financial performance measures and targets

• Non-financial perfomance measures
• Designing performance dependent reward systems
• Performance measurement issues and their effects on financial results control systems, most notably the problems of Myopia and Uncontrollable Factors.
• Strategic performance measurement issues with particular focus on the Balanced Scorecard, including non financial performance measures
• Corporate control roles and the organization of Corporate Governance
• Management control related ethical issues