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2014/2015  BA-BSEMO1009U  Management Control Systems

English Title
Management Control Systems

Course information

Language English
Course ECTS 7.5 ECTS
Type Mandatory
Level Bachelor
Duration One Quarter
Course period Second Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for BSc in Service Management
Course coordinator
  • Jytte Grambo Larsen - Department of Accounting and Auditing (AA)
Main academic disciplines
  • Financial and management accounting
Last updated on 15-08-2014
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:
1) Identifying and analyzing management accounting issues and management control issues
2) Evaluating management control systems and management accounting practices
3) Recommending courses of action for management with respect to their management accounting practices and control systems.
Course prerequisites
English language skills equal to B2 level (CEFR) and math skills equal to Danish level B are recommended
Management Control Systems:
Exam ECTS 7,5
Examination form Oral Exam
Individual or group exam Individual
Duration 20 min. per student, including examiners' discussion of grade, and informing plus explaining the grade
Preparation time With the listed preparation time: 20 Minutes
Grading scale 7-step scale
Examiner(s) Internal examiner and second internal examiner
Exam period December/January
Aids allowed to bring to the exam Limited aids, see the list below:
Literature and notes for the class
Make-up exam/re-exam
Same examination form as the ordinary exam
Description of the exam procedure
The student is expected to describe the subject area, explain the concepts and theory that relate to it, and to illustrate his/her understanding of the subject by applying the concepts and theory to a case. In the beginning the student speaks independently, after which the examinators will ask questions, and at the end the examinators will often take control of the exam to ensure that  specific subjects are covered.
Course content and structure

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. However, the main focus is on financial results control systems going from planning and budgeting models to balanced 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 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
Teaching methods
The course is taught in two interchanging formats. Lectures with smaller cases are used to cover the concepts, theory and models. Analysis and conclusions of longer and more involved cases are used to acquire a deeper understanding of the subjects. 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. In addition some more calculation based exercises are used to promote the understanding of the accounting numbers.
Student workload
Classes 30 hours
Workshop 6 hours
Preparation for class(including exam) 170 hours
Exam 1 hours
Expected literature

- 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 LEARN.

- 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 LEARN.

- 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 LEARN.

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 LEARN.

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 LEARN.

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

Last updated on 15-08-2014