BUSINESS 42.408* A COST MANAGEMENT SYSTEMS

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BUSINESS 42.408* A
COST MANAGEMENT SYSTEMS
WINTER 2002
INSTRUCTOR:
Dr. Raili Pollanen
Office: 820 DT, Tel. 520-2600, Ext. 2376
Office Hours: Wed.16:00 – 17:30; Thu. 12:00 – 14:00; and
by Appointment
E-mail: [email protected]
COURSE TIME AND
LOCATION:
Lectures: Thursdays, 14:30 – 17:30, 201 PA
PREREQUISITES:
Business 42.308* (with a grade of C- or better)
The School of Business enforces all prerequisites. It is your responsibility to ensure that you meet
the prerequisite requirements for this course. Lack of prerequisite knowledge may lead to failure in the
course. If you think that you have taken courses, possibly in another institution, that are equivalent to the
prerequisites specified for this course, you must show proof to the Undergraduate Adviser. Please bring
in your transcript and course description(s). Failure to document this requirement can lead to mandatory
deregistration any time before the last day of classes. Only the Undergraduate Program Supervisor of
the School of Business can waive prerequisite requirements.
COURSE OVERVIEW AND OBJECTIVES:
This course focuses on managerial planning and control issues using case methodology. It extends the
concepts and systems covered in managerial and cost accounting courses and also integrates relevant
issues from other functional areas of organizations. Specifically, budgeting, cost management, and
performance evaluation and reward systems are examined. Emphasis is placed on the need for different
control techniques in different types of organizations and for balanced integrated systems comprising
both financial and nonfinancial controls.
42.408* Cost Management Systems
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REQUIRED TEXTBOOKS:
Robert N. Anthony and Vijay Govindarajan, Management Control Systems, 10th Ed., McGrawHill/Irwin, 2001 (Packaged with readings from Robert N. Anthony and David W. Young, Management
Control in Nonprofit Organizations, 6th Ed., McGraw-Hill/Irwin, 1999).
Cost Management Systems: Readings Package, Winter 2001 (Photocopied package of additional
readings for sale at the bookstore).
REFERENCE RESOURCES:
Guidelines for Managing Team Meetings (Available at
http://www.business.carleton.ca/academic_programs/groupwork.html)
Charles T. Horngren, George Foster, Srikant M. Datar, and Howard D. Teall, Cost Accounting, 2nd
Can. Ed., Prentice Hall, 2000 (Used in the prerequisite 42.308* course).
Gary Spraakman and Thomas Cheng, Current Trends and Traditions in Management Accounting Case
Analysis, 3rd Ed., Captus Press, 1998 (On reserve in Library).
L.S. Rosen, Introduction to Accounting Case Analysis, 2nd Ed., McGraw-Hill Ryerson, 1981 (On
reserve in Library).
TEACHING METHODOLOGY:
Teaching methodology for this course encompasses assigned readings, case analyses, case
presentations and discussions in class, and a group project. Students are expected to read the assigned
chapter(s), to discuss the assigned cases in groups before each class, and to prepare written analyses
and presentations of selected cases. The cases are then discussed in class to highlight and clarify key
concepts. Students, working in groups, also have an opportunity to apply these concepts to an actual
organization of their choice.
The primary role of the instructor in this course is to encourage and facilitate student learning by helping
students understand and apply key concepts and by providing them with regular feedback on their
progress. It should be emphasized that diligent independent preparation of cases and active participation
in group discussions of cases before class and in class are crucial to the development of effective
problem solving skills in this field.
42.408* Cost Management Systems
EVALUATION METHODS:
Case Outlines (2 x 5%) – Group
Case Outline – Individual
Class Participation – Individual
Case Presentation – Group
Project Presentation – Group
Project Report – Group
Final Examination Case – Individual
Total
3
10%
10%
10%
5%
5%
20%
40%
100%
Case Outlines. Case outlines are one-page typed executive summaries of designated case analyses.
They should contain the highlights of the case analyzed, including the following elements: introduction,
analysis of main issues under appropriate subheadings, conclusion, and recommendations, if applicable.
Select the cases from cases marked with + on the topical schedule, and hand in a completed summary
at the beginning of the class. The individual outline case must be different from the group outline case
and from the group presentation case.
Class Participation. Class participation is determined equally by the quantity and quality of student
involvement in class discussions. In each class, each student can gain up to three participation points.
Participation in presenting designated cases does not constitute class participation, as it is evaluated
separately. Furthermore, mere attendance without explicit contribution to discussions does not provide
participation marks.
Case Presentations. Case presentations are 15-20 minute professional presentations of designated
cases. They should contain the highlights of the case analyzed in an organized manner. All group
members must participate in presentations. As a group, select a case from cases marked with * on the
topical schedule. Each presenting group should hand in a copy of the presentation materials and also
distribute a copy to each other group, but no formal report is required. The presentation case for a
group cannot be the same as the group outline case or the individual outline case by any group member.
Project Report. A project report is a comprehensive written report of management control issues of a
selected organization, completed in groups. The report should be 12 – 15 pages in length, doublespaced, excluding major tables, exhibits, appendices, and preliminary matter, and be professional in its
style and format. The reports are evaluated for both content and style. Select an organization from any
field, e.g., manufacturing, merchandising, service, nonprofit, or government, with which at least one
group member is personally familiar, or for which relevant information is publicly available. Prepare an
one-page written proposal for approval by the professor. In writing the report, assume the role of
independent management consultants. Hand in two copies of the final report, if you wish a copy to be
returned to you.
Project Presentations. Project presentations are 20-30 minute professional presentations of the group
42.408* Cost Management Systems
4
projects. They should highlight the main points of the analyses and findings in an organized manner. All
group members must participate in the presentation. Assume the role of management consultants
presenting to the Board of Directors. Each group should distribute a copy of the executive summary to
other groups.
Final Case Examination. The final examination is a comprehensive case requiring a significant degree
of integration of the material covered in the course. The case examination is three hours in length and is
completed in the last class. A minimum mark of 45 percent must be obtained on it in order to pass
the course. Requests for deferred final examinations must be directed to the Registerial Services office
for assessment.
Note: Due to the participative nature of case outlines, class discussions, case presentations, and the
project, no make-up assignments are available for any reason. Only in a case of documented medical
reasons, the weight of a component missed may transferred to the final examination.
Each group member must complete and hand in a peer evaluation form. Each group should maintain
ongoing records of their meetings, tasks assigned, and each member’s performance. Please refer to
guidelines for team meetings at: http://www.business.carleton.ca/academic_programs/groupwork.html
SPECIAL NEEDS ASSISTANCE:
Students with a disability who require special accommodations should first contact a coordinator at the
Paul Menton Centre to complete the necessary forms and then discuss their accommodation needs with
the instructor. In order to allow sufficient time to make the necessary arrangements for examinations,
these forms must be completed at least two weeks prior to the mid-term examination and by March 8,
2002 for the final examination.
EXAMINATION POLICY:
The University policy with respect to examinations is strictly adhered to.
For examination purposes, students are responsible for all material in the assigned readings, cases, and
class discussions and presentations, including any additional material provided by the instructor in class.
Non-programmable calculators without alpha storage capability may be used on examinations.
Supplemental or grade-raising examinations are not available in this course.
ACADEMIC INTEGRITY:
The University regulations and sanctions for instructional offences such as plagiarism and unethical
conduct during examinations and graded class assignments are enforced, and all violations of the
42.408* Cost Management Systems
5
instructional offences policy must be reported.
The Undergraduate Calendar defines plagiarism as follows: “to use and pass off as one’s own idea or
product work of another without expressly giving credit to another.”
Borrowing someone else’s answers and unauthorized possession of examinations, solutions to
examination questions, or material designed to help answer examination questions during examinations
also constitute violations of the policy on instructional offences.
Examinations and graded individual assignments must be the exclusive work of the individual student and
all graded group assignments the exclusive work of the members of that group. All group members are
expected to participate equally in all group assignments.
RELEVANT DATES:
January 3, 2002
January 31, 2002*
February 18 – 22, 2002
March 8, 2002
March 28, 2002*
April 4, 2002
Classes begin
Project outlines due for approval
Winter break, no classes
Last day for withdrawal from courses
Project reports, presentations , and peer evaluations due
Final Case Examination
Note: *The due dates are firm. No late submissions are accepted.
42.408* Cost Management Systems
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TENTATIVE TOPICAL OUTLINE AND SCHEDULE:
Date
Jan.
Topic/Activity
3
Nature of Management Controls and Control Systems
Readings:
10
17
24
31
♦ Anthony and Govindarajan, Ch. 1, The Nature of Management
Control Systems
Control Environment and Control Tightness
Readings:
♦ Anthony and Govindarajan, Ch. 2, Behavior in Organizations
♦ Reading #3, Merchant, Control Tightness (or Looseness)
♦ Reading #2, Pollanen, Management Controls and Their
Organizational and Environmental Context: A Review with
Managerial Emphasis
Cases:
2-3:
1-4:
Rendell Company+
Xerox Corporation (A)*
Responsibility Structures
Readings:
♦ Anthony and Govindarajan, Ch. 3, Responsibility Centers:
Revenue and Expense Centers
♦ Anthony and Govindarajan, Ch. 4, Profit Centers
Cases:
4-3:
3-2:
Boise Cascade Corportion+
New Jersey Insurance Company*
Responsibility Accounting and Transfer Pricing
Readings:
♦ Anthony and Govindarajan, Ch. 5, Transfer Pricing
♦ Anthony and Govindarajan, Ch. 14, Multinational Organizations
References:
♦ Horngren et al. Ch. 23, Management Control Systems, Transfer
Pricing and Multinational Considerations
♦ Horngren et al., Ch. 24, Performance Measurement, Compensation,
and Multinational Considerations
Cases:
5-4: Strider Chemical Company+
14-3: Nestle S.A.*
Strategic Planning
42.408* Cost Management Systems
Readings:
7
♦ Anthony and Govindarajan, Ch. 7, Strategic Planning
♦ Anthony and Govindarajan, Ch. 12, Controls for Differentiated
Strategies
Cases:
Feb.
7
14
7-3: Dairy Pak+
12-3: 3M Corporation*
Budget Control Systems
Readings:
♦ Anthony and Govindarajan, Ch. 8, Budget Preparation
♦ Horngren et al., Ch. 6, Master Budget and Responsibility
Accounting
Cases:
8-1:
Case #6, Package:
Sound Dynamics, Inc.+
The Repertory Theatre (B): Strategic
Budgeting*
Activity-Based Cost Control and Management Systems
Readings:
♦ Reading #4, Cooper and Kaplan, Activity-Based Costing:
Introduction
♦ Reading #5, Cooper and Kaplan, The Promise – and Peril –
of Integrated Cost Systems
Cases:
7-1:
Case #4, Package:
Allied Office Products+
Cost Center Management at Air
Command (B)*
Winter Break, Feb. 18 - 22, no classes
28
Financial Performance Measurement
Readings:
♦ Anthony and Govindarajan, Ch. 6, Measuring and Controlling
Assets Employed
♦ Anthony and Govindarajan, Ch. 9, Analyzing Financial Performance
Reports
References:
♦ Horngren et al., Chs. 7 & 8, Flexible Budgets, Variances, and
Management Control I & II
♦ Horngren et al., Ch. 16, Revenues, Sales Variances, and Customer
Profitability Analysis
Cases:
9-3:
Galvor Company+
42.408* Cost Management Systems
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6-5:
March
7
14
21
28
April
4
Industrial Products Corporation*
Nonfinancial Performance Measurement and Management Compensation
Readings:
♦ Anthony and Govindarajan, Ch. 10, Performance Measurement
♦ Anthony and Govindarajan, Ch 11, Management Compensation
♦ Reading #6, Simons, Building a Balance Scorecard
References:
♦ Horngren et al., Ch. 13, Strategy, Balanced Scorecard, and
Strategic Profitability Analysis
♦ Horngren et al., Ch 19, Cost Management: Quality, Time, and the
Theory of Constraints
Cases:
10-3: Enager Industries, Inc.+
11-4: Wayside Inns, Inc.*
Management Control in Service Organizations/
Management Control of Projects
Readings:
♦ Anthony and Govindarajan, Ch. 13, Service Organizations
♦ Anthony and Govindarajan, Ch. 15, Management Control of
Projects
References:
Horngren et al., Ch. 21, Capital Budgeting and Cost Analysis
Cases:
13-1: O’Reilley Associates+
15-1: Northeast Research Laboratory*
Management Control in Nonprofit Organizations
References:
♦ Anthony and Young, Ch. 2, Characteristics of Nonprofit
Organizations
♦ Anthony and Young, Ch. 10, Budgeting (including Appendix)
♦ Anthony and Young, Ch. 12, Measurement of Output
Cases:
8-3: Riverview+
13-3: Harlan Foundation*
Project Presentations
Final Examination Case
Notes: +Cases designated for summary reports and class discussion.
42.408* Cost Management Systems
*Cases designated for presentations and class discussions.
9
42.408* Cost Management Systems
10
EVALUATION CRITERIA FOR PROJECT AND CASE REPORTS
Criteria
Mark
1. Introduction: relevant background;
clear identification of key issues and/or
problems; clear description of scope of
research and report
10%
2. Analysis: clear identification of
alternative courses of action, if
applicable; clear description of criteria
for evaluating alternatives or issues;
thorough logical analysis of all relevant
factors; application of relevant
theoretical concepts and frameworks
40%
3. Conclusion and Recommendations:
consistency of conclusions and/or
recommendations with analysis;
plausibility of recommendations, if
applicable; identification of
implementation considerations, if
applicable
20%
4. Structure and Style: presence of all
appropriate standard elements (e.g.,
cover letter, executive summary, table of
contents, exhibits/illustrations,
references, and appendices in long
reports); use of appropriate headings;
appropriate grammar, spelling, and
typographical accuracy; highly
professional appearance
20%
5. Overall Research Effort: scope of
research; quality and quantity of
references; appropriate supporting
documentation
10%
TOTAL/OVERALL
100%
Comments
42.408* Cost Management Systems
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EVALUATION CRITERIA FOR PRESENTATIONS
Please evaluate each group’s performance based on the seven criteria in the table. Use the following as a guide in
assigning scores to each criterion: 10=outstanding; 9=excellent; 8=very good; 7=good; 6=satisfactory;
5=minimally satisfactory; 4=somewhat unsatisfactory; 3=unsatisfactory; 2=very unsatisfactory; 1=extremely
unsatisfactory. The overall presentation mark for each group is the arithmetic average of the scores submitted by
all other groups and the professor.
Group Number
Criteria
1
2
3
4
5
6
7
8
9
10
1. Logical organization
2. Appropriateness to audience
3. Effective use of visual aids
4. Overall clarity
5. Effective use of time
6. Professionalism
7. Quality of content
AVERAGE
PEER EVALUATORS
Name (Please print)
Student Number
Signature
1. _________________________
___________________
___________________________
2. _________________________
___________________
___________________________
3. _________________________
___________________
___________________________
4. _________________________
___________________
___________________________
5. _________________________
___________________
___________________________
6. _________________________
___________________
___________________________
7. _________________________
___________________
___________________________
42.408* Cost Management Systems
12
Date: _____________________________________
CRITERIA FOR PEER EVALUATION
Please evaluate each group member’s performance based on the ten criteria in the table below. Use the following as
a guide in assigning scores to each criterion: 10=outstanding; 9=excellent; 8=very good; 7=good; 6=satisfactory;
5=minimally satisfactory; 4=somewhat unsatisfactory; 3=unsatisfactory; 2=very unsatisfactory; 1=extremely
unsatisfactory. PLEASE PROVIDE ADDITIONAL COMMENTS ON THE REVERSE SIDE TO JUSTIFY YOUR
EVALUATION OF EACH MEMBER.
Group Member
Criteria
1
2
3
4
5
6
7
8
1. Attendance at group meetings
(No. of meetings =
)
2. Quality of contribution to group
discussions
3. Quality of contributions to
writing assignments
4. Quality of contributions to
organizing assignments
5. Amount of time spent on group
assignments relative to other
members
6. Quality of initiative when
something needed to get done
7. Reliability in completing
assigned responsibilities
8. Leadership in completing
assigned responsibilities
9. Commitment to the group
10. Your willingness to work with
member again
AVERAGE
Date:
____________________________________
Name:
____________________________________
Signature: ____________________________________
Student Number: _______________________
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