January 10th, 2008
Håkan Kullvén
ME2028 Behavioural Management Control
6 ECTS
Year 2008, period 3
Aim
The course provides an in-depth understanding of how management control can be used to
influence the behaviour of the employees in an industrial organization. The aim is to provide
you with the ability to design a system for management control that fits the strategic
requirements of the organization, and that influence the behaviour of the employees in the
organisation in the intended way. This means that after the course you should be able to:
1. Describe and understand the concepts of results control, action control, personnel control
and cultural control, and also to categorize different types of control systems in to these
concepts.
2. Understand the meaning with control tightness, and also be able to design different
combinations of control systems with regard to the tightness of the system.
3. Critically evaluate, compare, and choose between different control systems when it comes
to their usefulness, effectiveness and costs.
4. Apply the theoretical concepts of behavioural management control to companies in
various industries, as well as to case study companies.
5. Understand and critically evaluate different forms of reward systems, audits, performance
targets, accounting measures, and responsibility accounting systems when it comes to
behavioural as well as ethical aspects.
6. Understand how problems such as myopia, situational factors and uncontrollable factors
can influence the behaviour in a company, and construct systems that deal with these
problems.
7. Implement different tools for management control in a spreadsheet tool, building on the
theoretical concepts from a behavioural perspective.
8. Critically evaluate and compare management control systems used by companies in
different types of industries from a behavioural perspective.
Course content
The course consists of lectures built up by case analysis that are followed by a discussion of
theoretical concepts and practical examples in the following fields:
1. Different models for management control, such as results control, action control,
personnel control, and cultural control are explored.
2. Discussions on how to design and evaluate a system: Control tightness, control system
costs, and audits.
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3. Models for influencing behaviour, such as planning and budgeting, responsibility
accounting, performance targets, reward systems, and accounting measures, are
discussed.
4. Remedies for myopia, the effect of uncontrollable factors, ethical issues and
situational influences are discussed.
The cases that we use are presented in the schedule. The cases that are in italics are to be
prepared by you; the teacher presents the other cases.
Seminar
During the course there will be a seminar. The seminar will build on a case study that the
group is to analyse. For this reason, you are expected to participate in an active way on the
seminar. You and your group have to attend it and to present a case study for it.
You form the group of 1 to 5 students in whatever way you wish. You should hand in the
presentation by mail (as one power point file) no later than one day & night before the
seminar of group A starts, according to the schedule. You can, but do not have to, use the
possibility of adding teaching notes to the slides as well.
Homework assignment
At the end of the course, there will be a homework assignment, performed by each student
individually. This homework covers all the literature for the course, whether it has been
discussed during the lectures or not. The homework assignment will consist of two parts:
1. Twenty questions on the content of the course, to be answered by the student. At the
end of each lecture, one of the questions will be presented. The reminding questions
will be presented when the homework assignment is handed out.
2. A case study, where an analysis has to be done. The case will be one of the cases used
during the course.
You can use how many words and pages that you wish for the report. A guideline could be
that it is often difficult to explain the topics with less than 2.000 words, and that it often
becomes boring reading with more than 5.000 words. Think about the importance of
readability (key words in e.g. italics, a good structure, easy to see the different parts),
especially for a lengthy report (you do not want the teacher to fall asleep while reading…).
In the report, you should also apply a statement of what you have done during the course: the
answer to the question “What have I done to learn the content of the course?” You will have
one week for constructing the homework assignment. Dates for the homework assignment can
be found in the schedule.
Examination
You will get the following grade on your homework assignment:

If you have captured the content of the course in a satisfying way, you will receive the
grade E. To prove this, you need to write a well prepared report that answers the questions
(in relation to the literature of the course) well, and that discusses the case in a satisfying
way. You need to prove that you can answer the questions with the help of the methods
and models that were treated during the course.
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
If you do not only understand the content of the course in a satisfying way, but also have
the ability to use this understanding by applying the tools on different situations, you will
receive the grade C. To prove this, you need to connect your answers to the literature and
course content by making references (also to some of the cases used during the course)
where appropriate, and also to develop your answers so that they go beyond what is said
in the text books directly connected to the question – e.g. by making connections to other
parts of the literature, by providing examples on how companies use the concepts, and/or
by relating the discussion to your own experiences – and also to analyze the case
thoroughly and with a logical and focused reasoning.

If you really master the course content, and also have the ability to critically reflect upon
this knowledge, you will receive the grade A. To prove this you need to provide
outstanding references to the literature and to the cases used during the course, but also
discussions focused on (at least) one relevant academic article from the last three years –
or to use other ways to prove an outstanding knowledge in the area. By outstanding
knowledge is meant not only the ability to show it and apply it, but also to ”turn it inside
out”, to twist it by e.g. relating it to recent landmarks in the area.

The grades B and D are middle-forms, that is, the grade B is awarded when your
assignment is close to an A but has some problems, and the grade D is awarded when your
contribution fulfils the requirements for an E in a distinguished way, but do not motivate
the grade C.
For some students, who have made distinguishing contributions on the lectures (by taking an
active part in the discussions), these extra contributions can be reflected in the grade.
The requirements to pass the course are:

Pass on the case study,

Active participation at the seminar,

Pass (grade E or above) on the homework assignment.
Complaints regarding assessments will only be considered in written form.
Teacher and responsible
for the course:
Håkan Kullvén (HK)
Tel +46 8 790 60 52, +46 73 500 4580
E-mail: hakan.kullven@indek.kth.se
Sing-sing room 354. Open: Mondays 10-12
Local student office:
Sing-sing, second floor
Open Monday to Friday 9.30-15.30 (closed for lunch 11.3012.30)
Tel: +46 8 790 78 61
Homepage:
http://www.kth.se/student/programkurser/kurshemsidor/kurshemsidor-itm
Literature

Management Control Systems. Merchant K.A., and Van der Stede W.A. Prentice
Hall. ISBN 0273655965. Text in 265 pages (rest is cases). Price approx SEK 650.

Handouts. Articles distributed during the course.
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ME2028 Spring 2008
Week, day and time
4
January 21 Monday
5
6
7
8
9
10
L = Lecture, S = Seminar
15-17
January 22
Tuesday
15-17
January 23
Wednesday
15-17
January 24
Thursday
15-17
January 28
Monday
15-17
January 29
Tuesday
15-17
January 30
Wednesday
15-17
January 31
Thursday
15-17
February 4
Monday
15-17
February 5
Tuesday
15-17
February 6
Wednesday
15-17
February 7
Thursday
15-17
February 11
Monday
15-17
February 12
Tuesday
15-17
February 13
Wednesday
15-17
February 14
Thursday
10-12
February 14
Thursday
13-15
February 14
Thursday
15-17
February 18
February 18
Monday
Monday
15
15-17
February 25
Monday
15
February 28
Thursday
8-17
February 29
Friday
8-17
March 3
Monday
8-17
March 4
Tuesday
8-17
Content, teacher and book chapters
L
Introduction Chapter 1
Leo’s Four-Plex Theatre
L
Results Controls Chapter 2
Armco
L
Action, Personnel, Cultural Chapter 3
Alcon Laboratories
L
Control Tightness Chapter 4
Controls at the Bellagio Casino Resort
L
Control System Costs Chapter 5
Disctech, Inc
L
Design and Evaluate Chapter 6
AirTex Aviation
L
Responsibility accounting Chapter 7
Zumwald AG
L
Planning and Budgeting Chapter 8
Borealis
L
Incentive Compensation Chapter 9
Tsinghua Tongfang Co
L
Financial Measures Chapter 10
Berkshire Industries PLC
L
Remedies for myopia Chapter 11
Catalytic Solutions
L
Uncontrollable Factors Chapter 12
Beifang Chuang Ye Vehicle Group
L
Audit + Governance Chapters 13 & 14
Landale PLC
L
Ethics + Governance Chapter 15
Lernout & Hauspie Speech Products
L
Situational influence Chapter 16
University of Southern California
S
Seminar group A
Pacific Sunwear of California
S
Seminar group B
Pacific Sunwear of California
S
Seminar group C
Pacific Sunwear of California
Homework assignment is handed out
L
Nonprofit Chapter 17
University of South California
Homework assignment to be handed in
at the latest
S
Individual discussion booked as
half an hour per student
S
Individual discussion booked as
half an hour per student
S
Individual discussion booked as
half an hour per student
S
Individual discussion booked as
half an hour per student
080110
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Place
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