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2019/2020  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 (AA)
Main academic disciplines
  • Finance
  • Accounting
  • Strategy
Teaching methods
  • Face-to-face teaching
Last updated on 11-02-2019

Relevant links

Learning objectives
  • Demonstrate an understanding of the changing capability requirements faced by CFOs and finance and accounting 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. 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) who are familiar with
Activity-Based costing models and discounted cash flow (DCF) valuation techniques. Students who have little or no knowledge of these models will have a VERY hard time keeping up in this course and are generally not recommended to apply for it.
Moreover, active student participation is expected during classes. This is NOT a lecture-based class. This is a case-based class where the learning takes place through interactive case solving 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-point grading 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
Description of the exam procedure

BEFORE the exam date:
- Exam topics/questions are released and uploaded on LEARN


EXAM date:

- Students will draw a random exam topic/question

- Students will get 20 minutes of preparation to time prepare for their meeting with the examiners

- After the preparation time is over students will enter the exam room and discuss their topic with the examiners.

- Students are expected to lead the discussion but questions from the examiners are to be expected

- After the exam is over the student will leave the exam room and the examiners will discuss the grade in private
- When the examiners are done the student will be recalled to the exam room where she will receive her grade incl. some brief feedback on her performance


AFTER the exam:
- Students will be able to see their grade in the system after both examiners have registered the grades


Course content, structure and pedagogical approach

Accounting and finance people are increasingly expected to act as strategic business partners who take an active part in strategy development alongside the line of business. 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 predictive 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:


 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


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 or other strategic or financial advisory positions.


Description of the 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 (tentative – potentially subject to change):


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 (1988): “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 11-02-2019