Course Manual Management Control for A&C (EBB102B05) Academic year 2022-2023, bloc 1b Important: Please enrol in a tutorial group and team before November 14th, 24h00. Students not enrolled in a group and team by that time cannot make the assignment, and students without assignment grade cannot validate the course. If you already passed the assignment last year and wish to keep your grade, you do not need to enrol. Introduction In Management Accounting, you have learned how to produce and interpret financial and non-financial information to make value-creating decisions and evaluate performance. In large organizations, decisions are made, and performance generated, by many dispersed persons who cannot easily interact and coordinate with each other because of time constraints or geographic distance. In such conditions, ensuring that employees use properly the resources entrusted to them becomes a great challenge. Therefore, it becomes crucial to orient, influence, and check the decisions and actions they make to ensure an effective and efficient use of scarce resources. This is fundamentally the purpose of management control systems. The course Management Control discusses various instruments, mechanisms, and systems helping managers achieve that purpose by improving both goal congruence and organizational learning. We rely on case studies to train your ability to design, evaluate, and improve management control systems to influence behaviours in desirable ways in realistic situations. A key emphasis is placed on your ability to use theories properly and adapt your recommendations to the specificities of each situation. Intended learning outcomes Upon completion of the course you will be able to: 1. Critically discuss the most important concepts in the field of management control. 2. Identify purposes of management control instruments and techniques and how they can help to control organizations. 3. Consult on the fit between management control practices and contingency factors for real world organizations. 4. Analyze academic papers on management control critically. 5. Interpret and analyze cases about specific management control issues and present/discuss the results to/with an audience of peers. 1 Textbook, papers, and supplementary materials The textbook used in this course is: Anthony, R.N., V. Govindarajan, F.G.H. Hartmann, K. Kraus, G. Nilsson, Management Control Systems, European Edition, McGraw-Hill, London, 2014, ISBN: 139780077133269 / 100077133269, about € 75. In addition, you will have to read the following papers: Ouchi, W.G., 1979, A Conceptual Framework for the Design of Organizational Control Mechanisms, Management Science, Vol. 25, No. 9, pp. 833-848. Get it following this link. Ferreira, A., D. Otley, 2009, The Design and Use of Performance Management Systems: An Extended Framework for Analysis, Management Accounting Research, Vol. 20, No. 4, pp. 263282. Get it following this link. Simons, R., 2005, Designing High-Performance Jobs, Harvard Business Review, Vol. 83, No. 7-8, pp. 54-62. Available without permanent link on EBSCO Business Source Premier. Bartlett, G. D., E.N. Johnson, P.M.J. Reckers, 2014, Accountability and Role Effects in Balanced Scorecard Performance Evaluations When Strategy Timeline Is Specified, European Accounting Review, Vol. 23, No. 1, pp.143–165. Get it following this link. The supplementary materials for the course consist of: Slides used in lectures and tutorials. Recordings of case solutions. An old exam for practicing. All supplementary materials are or will be available on the Student Portal (Brightspace). Lectures and tutorials The course is organized in on-site lectures, online Q&As and on-site tutorials. Each week has at least one on-site class (either Lecture or Tutorial). See Appendix I for a detailed planning. In lectures, key concepts and theoretical frameworks will be introduced and the literature scheduled for that week (textbook and papers) will be discussed. In Q&As, questions regarding pre-recorded case solutions will be addressed (or any other issues related to the course). In tutorials, students will present case studies. Suggested problem formulations and recommendations will be discussed by other students as well as the lectures. Attendance rules Attendance of the two onsite tutorials is mandatory and attendance to other onsite classes is highly recommended. If not attending one of the onsite tutorials you will not receive an assignment grade and thus not be able to pass the course (except you did the assignment in the previous year). Issues discussed in onsite classes (lecture or tutorial) may not be covered in the literature and may not appear in the slides. Yet, everything discussed in onsite classes may be tested at the examination. 2 Case study assignment Each team has to address one of the case studies and present the results in the tutorial (max. 12-minutes. Your presentation will be stopped, whether you have finished your presentation or not, after 12 minutes). The presentation should cover the following 3 major points: (1) presentation of the situation, (2) formulation of a problem from a management control perspective, and (3) recommendation to address this problem. More detailed instructions will be provided in a separate document after the first lecture. The presentation of each group will be graded. All students in a team will receive the same grade for the case presentation. Moreover, each group will also act as discussant for other groups and the participation will also be included in the grade. Written examination The written examination should be on Friday, January 27th, 2023, from 11:45 to 13:45 (2 hours). It is expected to happen on-site (Exam Hall 3 D17 - L24, Blauwborgje 4). Note that this date and location are provisional; please check the schedule generator shortly before the examination. Subject to examination are: The issues discussed in lectures, Q&As and tutorials. The mandatory readings (textbook and papers). The additional materials published on the Student Portal (Brightspace). The examination is closed book and composed of a multiple-choice questionnaire and open questions on a specifically designed case study. Assessment The final grade for this course will be determined by two components: The collective grade on the case study assignment (20%). The individual grade on the written examination (80%). To pass the course, you must have completed the case study assignment. Without an assignment grade, the maximum final grade will be 5. Furthermore, your grade on the written examination must be at least 5, and your final grade (examination and assignment) must be at least 5.5. If your grade on the written examination is lower than 5, the maximum final grade will be 5. If you do not pass the examination, you can do the resit in block 2.1 and your grade on the assignment will remain valid. If you attempt the resit, the best grade of the final or resit will be kept. If neither the course nor the weight of the assignment have changed, your grade on the assignment will remain valid for this resit. Contact Please address any question regarding the course organization, exams, grading, etc. to the course coordinator: Dr. Sebastian Firk (DUI-807, s.firk@rug.nl) The teachers for the lectures and tutorials are: Dr. Sebastian Firk Dr. Ann Tank The secretary of the Department of Accounting is: Drs. Jessica Bakker (tel. 050 - 363 3535, i.j.bakker@rug.nl); 3 Appendix I: General Planning Organization Self-studying (Homework) Topics Readings (before classes) Week Teacher 1 Sebastian Firk Introduction; Course content, structure and objectives Course manual 2 Sebastian Firk Designing management control systems Textbook chapters 1, 2 & 3 Case 2.2 (Textbook): Nucor Videos to Watch (before Q&A) Nothing to watch Pre-recorded Case Solution: Nucor Classes Lectures (Room: Blauwe Zaal Duisenberg) Q&As (Room: Online) Monday, November 14th, 17:00-19:00 No Q&A No tutorial Monday, November 21th, 17:00-19:00 Thursday, November 24th, Starts at 9:00 No tutorial Tutorials [Mandatory] (Room: see next page) 1. 3 Sebastian Firk The influence of contextual factors on management control systems 2. Textbook chapter 4 Papers: Ouchi (1979); Ferreira & Otley (2009) Case 4.6 (Textbook): Cisco Systems (B) 3. Monday, November 28th, 17:00-19:00 No Q&A 4. 5. 6. 4 Sebastian Firk Strategy and performance measurement; Balanced Scorecard; Variance analysis is excluded Textbook chapter 10 Case 10.2 (Textbook): Making Balanced Scorecard Work: The Worldclass Lighting Pre-recorded Case Solution: Making Balanced Scorecard Work Textbook chapters 5, 6, & 7 Case 7.5 (Textbook): Quality Metal Service Textbook: chapters 8 & 12 Paper: Simons (2005) Case 12.2 (Textbook): Piedmont University 5 Ann Tank Defining authority and accountability; Financial responsibility centres 6 Ann Tank Mismatches between authority and accountability; Incentive contracts No lecture Thursday, December 8th, Starts at 9:00 No tutorial Pre-recorded Case Solution: Quality Metal Service Monday, December 12th, 17:00-19:00 Guest Lecture: Belsimpel Thursday, December 15th, Starts at 9:00 No tutorial Pre-recorded Case Solution: Piedmont University Monday, December 19th, 17:00-19:00 Thursday, December 22th, Starts at 9:00 No tutorial 1. 2. 7 Ann Tank Transfer prices; Informal controls; Conclusion Wednesday, November 30th, 9:00-11:00 Wednesday, November 30th, 11:00-13:00 Wednesday, November 30th, 15:00-17:00 Thursday, December 1th, 9:0011:00 Thursday, December 1th, 13:0015:00 Thursday, December 1th, 15:0017:00 3. Textbook chapter 11 Paper: Bartlett et al. (2014) Case 11.2 (Textbook): Arck Systems Monday, January 9th, 17:00-19:00 No Q&A 4. 5. 6. 4 Wednesday, January 11th, 9:0011:00 Wednesday, January 11th, 11:0013:00 Wednesday, January 11th, 15:0017:00 Thursday, January 12th, 9:0011:00 Thursday, January 12th, 13:0015:00 Thursday, January 12th, 15:0017:00 Appendix II: Detailed Tutorial Planning Number 1 2 3 4 5 6 Tutorial Groups 1.1, 1.2, 1.3 & 1.4 2.1, 2.2, 2.3 & 2.4 3.1, 3.2, 3.3 & 3.4 4.1, 4.2, 4.3 & 4.4 5.1, 5.2, 5.3 & 5.4 6.1, 6.2, 6.3 & 6.4 Date & Time Nov. 30th, 9:00-11:00 Nov. 30th, 11:00-13:00 Nov. 30th, 15:00-17:00 Dec. 1st, 9:00-11:00 Dec. 1st, 13:00-15:00 Dec. 1st, 15:00-17:00 Week 3 Location 5416.0163 5416.0163 5416.0151 5412.0028 5419.0245 5419.0237 Week 7 Set-Up Group 1.1 & 1.2 present solution for Case 4.6 Group 1.3 & 1.5 acts as the Cisco Board and Group 1.4 as the Cisco TMT Group 2.1 & 2.2 present solution for Case 4.6 Group 2.3 & 2.5 acts as the Cisco Board and Group 2.4 as the Cisco TMT Group 3.1 & 3.2 present solution for Case 4.6 Group 3.3 acts as the Cisco Board and Group 3.4 as the Cisco TMT Group 4.1 & 4.2 present solution for Case 4.6 Group 4.3 acts as the Cisco Board and Group 4.4 as the Cisco TMT Group 5.1 & 5.2 present solution for Case 4.6 Group 5.3 & 5.5 acts as the Cisco Board and Group 5.4 as the Cisco TMT Group 6.1 & 6.2 present solution for Case 4.6 Group 6.3 acts as the Cisco Board and Group 6.4 as the Cisco TMT 5 Date & Time Jan. 11th, 9:00-11:00 Jan. 11th, 11:00-13:00 Jan. 11th, 15:00-17:00 Jan. 12th, 9:00-11:00 Jan. 12th, 13:00-15:00 Jan. 12th, 15:00-17:00 Location Set-Up Group 1.3, 1.4 &1.5 present solution for Case 11.2 5416.0163 Group 1.1 acts as the Arck Systems Board and Group 1.2 as the Arck Systems TMT Group 2.3, 2.4 & 2.5 present solution for Case 11.2 5416.0163 Group 2.1 acts as the Arck Systems Board and Group 2.2 as the Arck Systems TMT Group 3.3 & 3.4 present solution for Case 11.2 Group 3.1 acts as the 5416.0151 Arck Systems Board and Group 3.2 as the Arck Systems TMT Group 4.3 & 4.4 present solution for Case 11.2 Group 4.1 acts as the 5412.0028 Arck Systems Board and Group 4.2 as the Arck Systems TMT Group 5.3, 5.4 &5.5 present solution for Case 5414.0120 11.2 Group 5.1 acts as the (different room then the Arck Systems Board and week before) Group 5.2 as the Arck Systems TMT Group 6.3 & 6.4 present solution for Case 11.2 Group 6.1 acts as the 5419.0237 Arck Systems Board and Group 6.2 as the Arck Systems TMT