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2010/2011  BA-HAS_MACS  Management Control Systems

English Title
Management Control Systems

Course Information

Language English
Point 7,5 ECTS (225 SAT)
Type Mandatory
Level Bachelor
Duration One Quarter
Course Period Third Quarter
Time Table Please see course schedule at e-Campus
Study Board
Study Board for BSc in Service Management
Course Coordinator
Jytte Grambo Larsen
Main Category of the Course
  • Financial and management accounting
Last updated on 29 maj 2012
Learning Objectives
After having completed the course the students should be able to
a) describe the theories and models that are taught in the course (as described in the course content and its elements)
b) Apply the theories and models of the course in case study settings by:

  • Identifying and analyzing management accounting issues and management control issues
  • Evaluating management control systems and management accounting practices
  • Recommending courses of action for management with respect to their management accounting practices and control systems.
Students not enrolled in BSc in Business Administration & Service Management must document a level in English equal to TOEFL 575, and A level in mathematics equal to Danish level B
Management Control Systems
Assessment Oral Exam
Marking Scale 7-step scale
Censorship Internal examiners
Exam Period Spring Term
Duration 72 Hours
The final exam is a 72-hour group project. The project can be maximum 10 pages in length and the group size should be 2-3 students. The project will be followed by an individual, 20 minutes oral exam, which takes its point of departure in the group project, but also natural relations to theory and models from syllabus. The individual assessment is based on a combined evaluation of the written group project and the individual oral exam.
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.

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 but the main focus is on financial results control systems going from planning and budgeting models to balance scorecards.

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 targets
• Designing performance dependent reward systems
• Management control considerations for not-for-profit organizations.
• Performance measurement issues and their effects on financial results control systems, most notably the problems of Myopia and Uncontrollable Factors.
• Control remedies to performance measurement issues with particular focus on the Balanced Scorecard
• Corporate control roles and the organization of Corporate Governance
• Management control related ethical issues e.g. earnings management; corporate fraud issues e.g. Enron; and the Sarbanes-Oxley legislations and its effect on management accounting and control systems
• Situational influences (e.g. corporate strategy) on management control systems

Teaching Methods
The course is taught with the use of many case studies and active class participation is required as well as effective communication skills in order to train for effectively applying management accounting practises outside the classroom in real life organizations.

- Kenneth A. Merchant & Wim A. Van der Stede: Management Control Systems: Performance Measurement, Evaluation and Incentives; Latest edition; Prentice Hall, Pearson Education. Available at the Campus Book Store.

- Kenneth A. Merchant: The Case Method of Instruction: Suggestions for Students; Pearson Education Limited, 2004. Available at SiteScape.

- Dearden, John. 1987. Measuring Profit Center Managers. Harvard Business Review (Sept. Oct.): p. 84-88. Available through the CBS Library. A link will be provided at SiteScape.

- Kaplan, Robert S. Kaplan and David P. Norton: The Balanced Scorecard – Measures That Drive Performance. Harvard Business Review, January-February 1992 (p. 71-79). Available through the CBS Library. A link will be provided at SiteScape.

- Kaplan, Robert S. Kaplan and David P. Norton: Having Trouble with Your Strategy? Then Map It. Harvard Business Review, September-October 2000 (p. 167-176). Available through the CBS Library. A link will be provided at SiteScape.

Kaplan, Robert S. & David P. Norton: “Mastering the Management System”. Harvard Business Review, January 2008 (p. 62-77). Available through the CBS Library. A link will be provided at SiteScape.

- Deechow, P.M, and D.J. Skinner. 2000. Earnings Management: Reconciling the Views of Accounting Academics, Practioners, and Regulators. Accounting Horizons 14(2): p.235-250. Available through the CBS Library. A link will be provided at SiteScape.

Sherman, David H., Dennis Carey & Robert Brust: “The Audit Committee’s New Agenda”, Harvard Business Review, June 2009 (p. 92-99). Available through the CBS Library. A link will be provided at SiteScape.

Please note, minor changes may occur. The teacher will uploade the final reading list to sitescape/learn two weeks before the course starts.