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2017/2018  DIP-DIMAO1003U  Management Control and Financing of Innovation

English Title
Management Control and Financing of Innovation

Course information

Language English
Course ECTS 5 ECTS
Type Mandatory
Level Graduate Diploma
Duration One Quarter
Start time of the course Fourth Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for Graduate Diploma in Business Administration
Course coordinator
  • Sof Thrane - Department of Operations Management (OM)
Main academic disciplines
  • Economics
Last updated on 07-06-2017

Relevant links

Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:
  • Knowledge of the relevant techniques for controlling and financing innovative activities
  • An ability to reflect upon the issues and challenges related to controlling and financing innovative activities
  • An ability to analyze and design solutions to problems related to control and financing of innovation
Management Control and Financing of Innovation:
Exam ECTS 5
Examination form Home assignment - written product
Individual or group exam Individual exam
Size of written product Max. 10 pages
Assignment type Project
Duration Written product to be submitted on specified date and time.
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Summer
Make-up exam/re-exam
Same examination form as the ordinary exam
Description of the exam procedure

Students should identify and analyze a problem related to financing and controlling innovative activities and design and/or analyze possible solutions to the problem using relevant theory. The project may draw on empirical data (specific for the project or secondary data from public sources) or the project may be purely conceptual (based on applying relevant theory). There is no supervision of the project. Students are advised to form groups where they give feedback on each others’ projects. 

Grading will be done according to the learning objectives and the exam evaluation criteria for this course.

Course content and structure

The objective of this course is to conceptualize the dilemma of control and financing of innovative firms, analyze the relevant control and financing mechanisms and discuss how control systems may be used in a way that increases rather than destroys firm value.


The course will help students understand dilemmas of control and financing of innovation as well as the techniques through which innovation is financed and controlled, i.e., it deals with control and financing of innovative firms’ activities. As innovative activities increase in importance for firms’ competitiveness, the need for control of innovative activities becomes more important. Controlling and financing innovation however is not unproblematic as innovative activities are more uncertain compared to other activities. Control and financing of innovation may therefore produce dysfunctions and unintended effects. Despite these potential problems many firms increasingly make innovation activities subject to cost and performance control. With respect to tools and problems, the course will focus on target costing, performance management and incentives, budgeting, real options and financial deal making.


The course is divided in to 4 parts:


Part 1: Management control systems for innovation


The first part focuses on conceptualizing and analyzing the dilemma between control and innovation. This block draws on literature that conceptualizes the dilemma and documents surprising effects of control systems.


Part 2: Performance measures for innovation - stage gate systems, budgets and incentives


This block discusses the use of budgets, stage-gate systems and incentives in innovation processes. It addresses both the elements of control systems and the effects of the use of these systems on learning processes and performance, and further analyzes how uncertainties affect the relevance and use of performance measurement.


Part 3: Cost control in innovation


This part relates to cost control in innovation. The primary focus is on target costing which is a comprehensive system for controlling cost in innovation processes. It will start out with a simulation of the target costing process and will then proceed to discuss the elements and practices of target costing. The block ends with a discussion of how design processes relate to target costing and how it affects inter-organizational relationships.


Part 4: Financing innovation


This part focuses on financing of innovation projects for both established firms and starts-ups. In relation to start-ups the role of venture financing is in focus and alternative forms of financing such as crowdfunding are discussed. In relation to established firms corporate venturing and the real options approach for financial management are analyzed. The block discusses deal structures, agency problems and organizational solutions to agency problems and financing issues.


After this course, students shall have developed knowledge on:

  • The tools for controlling and financing innovation as well as
  • the dilemmas and effects of such efforts


 After this course, students shall have developed the following skills:

  • Develop cost management systems and performance management systems for innovative activities
  • Generate financing of innovative activities and manage a portfolio of innovative activities


The following competences will be achieved after successfully completing the course:

  • Analyze systems and tools for control and financing of innovative activities
  • Design systems of cost and performance management
  • Generate finance and manage a portfolio of innovative activities
Teaching methods
The course will be taught in block-modules on weekends.
It focuses on active participation and learning by participants, which is facilitated by being organized as a CBS Studio course and incorporating blended learning elements. Lectures (including guest speakers) support learning and participation through supplying conceptual, tool- based and reflective inputs. There is furthermore a focus on simulations and case analysis to increase the practical engagement with problems and technologies. Students will additionally have to present and process a control or financing problem related to innovative activities from their organizations.
Feedback during the teaching period
Students will receive ongoing feedback during the Studio workshop sessions
Student workload
Teaching and preparation 100 hours
Exam 38 hours
Expected literature

Available via LEARN

Last updated on 07-06-2017