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2017/2018  KAN-CCMVV2604U  Strategic Cost Management and Corporate Value Creation

English Title
Strategic Cost Management and Corporate Value Creation

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration One Semester
Start time of the course Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 60
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Morten Holm - Department of Accounting and Auditing (AA)
Main academic disciplines
  • Finance
  • Accounting
  • Strategy
Last updated on 05-07-2017

Relevant links

Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:
  • Demonstrate an understanding of the changing capability requirements faced by CFOs and finance and accouting employees in order to become strategic business partners to executive management and the line of business.
  • Demonstrate an ability to apply the tools and techniques for measuring and managing profitability and corporate value creation across customers, products, channels, markets etc. for to facilitate strategy development in firms.
  • Be able to critically discuss the underlying assumptions of strategic cost management techniques and the value-based management framework.
Course prerequisites
The course is targeted at second year master students (at CBS) from one of the following specializations: AEF, ASC, FIR, FSM and FIN. Important: The students are expected to be familiar with costing models and discounted cash flow (DCF) firm valuation techniques. Active student participation is expected during classes.
Strategic Cost Management and Corporate Value Creation:
Exam ECTS 7,5
Examination form Oral exam
Individual or group exam Individual exam
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 Winter
Aids Open book: all written and electronic aids
The student is allowed to bring to the preparation room: Simple writing and drawing utensils, laptop/tablet as a reference book (NB: there are no electric outlets available), any calculator, books including translation dictionaries, compendiums, notes. PLEASE NOTE: Students are not allowed to communicate with others during the preparation time.
Make-up exam/re-exam
Same examination form as the ordinary exam
Course content and structure

Chief Financial Officers (CFOs) are increasingly expected to act as strategic business partners who take an active part in strategy development alongside executive management. Consequently, the required capabilities of the CFO and the finance and accounting staff are expanding beyond the traditional domains of bookkeeping and cost controlling towards more future-oriented analysis of the business and financial as well as non-financial drivers of shareholder value.


During this course students get to work with cost, profit and value creation tools and techniques which can help provide a fact-based financial foundation for strategic decision making. The pivotal element throughout the course is to establish transparency on the financial impact of the firm’s strategic options in terms of current and future profitability. This is achieved through quantitative analyses of costs, profitability and value creation potential across the firm’s activities and business environment.  The firm’s strategic options can hereby be linked to corporate value and the amount of value created to shareholders – a key objective in many commercial enterprises and therefore a key area of interest to many boards of directors. Hence, the course combines the strategic cost management techniques of accounting, with valuation and the value-based management framework.


The course is structured around two main building blocks and the key themes are as follows:


 Introduction: The Strategic CFO as a financial business partner to the organization


Strategic Cost Management

  • The role of cost management and value creation in strategy

  • Strategic costing techniques and cost driver analysis

  • Strategic profitability analysis


 Corporate value creation

  • Economic profit and the Value-Based Management (VBM) framework

  • Value-based strategy development and decision making

  • Value-based performance management


 Wrap-up: What makes a successful financial business partner?


The frameworks, tools and techniques presented and discussed in this course are relevant both to students who envision a career in finance & accounting departments and to students with an ambition of pursuing a career in management consulting.


Teaching methods
The course is conducted in 3-hour lecture form, albeit with extensive use of cases. Cases are carefully selected to provide students the opportunity to actively work with “number-crunching” for costing, profitability and valuation analyses. Hence, during case discussions there will be an emphasis on understanding how the quantitative elements in terms of revenues, costs and financial value creation potential contribute to inform strategic decisions. The lectures are mainly conducted by academic staff. However, a number of external guest speakers from management consulting and finance/accounting departments have been invited to provide a practice-oriented perspective on the issues discussed in class.
Feedback during the teaching period
Part of ongoing case discussions in class.
Student workload
Classes 33 hours
Preparation 140 hours
Exam 30 hours
Expected literature

The course literature consists of academic articles and cases. Below are a couple of examples of academic articles that will be included. More will be added  when the course starts. In addition to the academic articles a case pack with the case studies that will be covered in the course will be announced prior to course start as well.


Key academic articles ( examples):


Balakrishnan, Labro, and Sivaramakrishnan (2012): “Product Costs as Decision Aids: An Analysis of Alternative Approaches” (Part 1 & 2), Accounting Horizons


Burkert & Lueg (2013): “Differences in the sophistication of Value-based Management – the role of top executives”, Management Accounting Research


Cooper, R. & R. Slagmulder (2003): “Strategic Cost Management: Expanding Scope and Boundaries”, Journal of Cost Management


Kaplan (1997): “Using ABC to Manage Customer Mix and Relationships”, Harvard Business Press


Noreen (1991): “Conditions Under Which Activity-Based Cost Systems Provide Relevant Costs”, Journal of Management Accounting Research


Porter, M.E. (1996): “What is strategy?”, Harvard Business Review


Shank & Govindarajan (1992): “Strategic Cost Management: The Value Chain Perspective”, Journal of Management Accounting Research


Shank, J.V. & V. Govindarajan (1998): “Making Strategy Explicit in Cost Analysis: A Case Study”, MIT Sloan Mgmt Review



The following book can be recommended as supplementary reading (not mandatory) to establish a thorough understanding of the Value-Based Management framework:


Copeland, Goedhart & Wessels (2010): “Valuation: Measuring and Managing the Value of Companies”, Fifth Edition, McKinsey & Co.



Last updated on 05-07-2017