Management Control Packages
7,5 ECTS-credits
Spring 2013
Course content
This course covers different perspectives on management control. The course is divided into
sections, where the first considers the link between the organizational design and different
forms of control. Both behavioral and practical consequences of different control forms are
discussed. Students further learn how to deal with a variety of challenges regarding results
control. In addition, students are trained in the procedural connection between profitability,
financing and growth, related to different types of risk. Analytical skills are acquired by
solving theoretical and practical assignments. Oral and written communication skills, as well
as training in information search are acquired through written group assignments, which are
presented and discussed orally. Presentations by practitioners increase students’ understanding
of the issues management accountants and controllers are facing in business organizations in
practice.
Learning outcomes
Upon completion of the course the student will
1. based on the course literature, be able to describe, discuss and problematize management
control from different perspectives
2. have the knowledge to see the connection between organization’s profitability, financing
and growth, related to different types of risk
3. anchored in theoretical knowledge and based on group cases, identify and formulate both
problems and solutions in management control, and train the ability to report and
communicate, orally and in writing, the results of your teamwork
Assessment
The assessment is done through a written exam and two group assignments. Learning
outcomes 1 and 2 are assessed through a written exam. Learning outcome 3 is assessed
through two written group assignments and oral presentations and discussions, where group as
well as individual participation and activity will be evaluated.
Examination
The examination consists of
1) Written exam
2) Case 1
3) Case 2
Total possible:
max 30 points
max 10 points
max 10 points
max 50 points
You need 25 points for Pass of which at least 15 points must derive from the written
examination. For Pass with distinction you need at least 37.5 points of which 22.5 points must
derive from the written examination. The points for each case will be presented together with
the points from the written examination after the course is finished.
Attendance is mandatory for seminars and guest lectures. Failure to appear results in the
reduction of one point each time.
Education
The course will start in January 2013 and further comments on the course content will be
provided during the first lesson. The class will be divided into groups containing 3-4 students
in order to solve the two group assignments. It is up to the students to create the teams. As
responsible teachers we will help to organize that all students will be included in a group.
It is important to realize that only a small part of the content of the course will be discussed
during the lessons. You have to spend a great amount of time to study the literature included
in the course. In the written exam you can have questions on all “required reading” (se below)
literature included in the course.
Language
The course will be held in English, which means that group assignments and examination
must be written in English and that all presentations and discussions will be held in English as
well.
Cases
Good quality teamwork in order to solve the two group assignments is a very important part
of the education. All students in the team must be involved in the solution and be prepared to
answer questions during the case discussions. Each team must have a written solution of the
cases (normally 8-10 pages, exclusive attached material) and hand it over to the teacher when
the seminar starts or earlier (more precise information on the group assignments will follow
when the cases will be introduced).
The case should be accompanied by a written statement about each individual’s contribution
to the report.
The following two cases are included in the examination:
1) Financial analysis of an annual report of a particular company.
2) A Dynamic Control Package: The case of Handelsbanken.
Required reading
Books
Johansson, S-E. The Profitability, Financing, and Growth of the Firm, Studentlitteratur, Lund 1998 (chapter 5, 9
and 12 are not included)
Merchant, K.A., Van der Stede, W.A. Management control systems: Performance measurement, evaluation and
incentives. 3nd edition. Prentice Hall, 2011 (2 nd editions is ok as well)
Articles
The following articles can be downloaded from the Economic Library’s website:
Ahrens, T., Chapman, C.S. (2004), "Accounting for flexibility and efficiency: a field study of management
control systems in a restaurant chain", Contemporary Accounting Research, 21, 2, 271-301.
Alvesson, M., and Kärreman, D. (2004), "Interfaces of control. Technocratic and socio-ideological control in a
global management consultancy firm", Accounting, Organizations and Society, 29, 3-4, 423-444.
Clarke, T. (2005), Accounting for Enron: shareholder value and stakeholder interests. Corporate Governance: An
International Review, Sep 2005, Vol. 13 Issue 5, pp. 598-612.
Davis, J.H., Schoorman, F.D. and Donaldson, L. (1997), Toward a Stewardship Theory of Management.
Academy of Management Review, 22, 1, 20-47.
Mikes, A. (2009), "Risk management and calculative cultures", Management Accounting Research, 20, 1, 18-40.
Mundy, J. (2010), Creating dynamic tensions through a balanced use of management control systems.
Accounting, Organizations and Society, 35, 5, 499-523
Murthy, N. R. (2006), Good Corporate Governance – A checklist or a mindset? Robert P. Maxon Lecture,
George Washington University, February 06, 2006 (will be on GUL).
Rappaport, A. (2006), 10 ways to create shareholder value. Harvard Business Review, Sep2006, Vol. 84 Issue 9,
pp. 66-77.
Simons, R. (1994), How new top managers use control systems as levers of strategic renewal. Strategic
Management Journal, 15, 3, pp. 169-189.
Optional reading
Albanese, Robert; Dacin, M. Tina; Harris, Ira C.; Davis, James H.; Schoorman, F. David; Donaldson, Lex.
(1977), Academy of Management Review, 22, 3, 609-613.
Jensen, M.C. & Meckling, W. H. (1976) ”Theory of the firm: Managerial behaviour, agency costs and ownership
structure”. Journal of Financial Economics, 3, 305-360.
Malmi, T., and Brown, D. A. (2008), "Management control systems as a package - Opportunities, challenges and
research directions", Management Accounting Research, Vol. 19, No. 4, pp. 287-300.
Ouchi, W. (1977), The relationship between organizational structure and organizational control. Administrative
Science Quarterly, 22, 95-113.
Please note:
Some articles / book excerpts / chapters are discussed and explained more deeply and others
less in the lecture context. Note that this is not necessarily a signal of what is more or less
relevant, but rather that we judge that some parts need to be explained/discussion more
intense than others. The content of the lectures and other types of seminars and the literature
to the particular sessions is outlined below.
Course Responsibles:
Peter Beusch, peter.beusch@handels.gu.se
Mikael Cäker, mikael.caker@handels.gu.seThe outline of the course
Type
Teacher
Content
Literature
Intro
F1
PB &
MC
21/1
10-11
Introduction to Management Control Systems
Course outline, the cases, etc.
F2
MC
21/1
11-13
Management Control System
Merchant & Van der Stede
according
to Merchant & Van der Stede: Chapter 1 to 6
F3
F4
PB
MC
24/1
11-13
Introduction to Financial Performance Measures
28/1
10-13
Financial Results Control
Different Perspectives in Management Control
Studies
The case of incentives
Levers of Control
Merchant & Van der Stede:
Chapter 10 - 12
Merchant & Van der Stede: Chapter 7-9
Davis et al, 1997, pp 20 – 30.
Simons, 1994
F5
PB
4/2
10-13
Financial Performance Measures: their relationships Johansson: Chapter 1 – 4
and (wanted and unwanted) effects
F6
PB
7/2
11-13
A deeper analysis of financial relationships Johansson: Chapter 6 - 9
Introduction of Case 1
S1
PB
7/2
13-15
Accounting lab: Financial performance measures
Johansson: Chapter 1 - 9
F7
PB
11/2
11-13
Merchant & Van der Stede: Chapter 13 -17
Clarke (2005), Rappaport (2006),
Murthy (2006)
Merchant & van der Stede, Chapter 1 – 9
S2
MC
14/2
9-11
Corporate Governance and MCS,
MCS and Ethics
Special situations and their influences on MCS
Questions on F2 & F4
Factors influencing management control
External regulations
Organizational processes
S3
PB
18/2
10-13
Accounting lab: Financial relationship exercise 2
Johansson: Chapter 1 - 9
S4
MC
21/2
9-11
Enabling and Coercive control
Levers of control in action
Introduction of case 2
Ahrens & Chapman, 2004
Mundy, 2010
Cäker, 2010 and your own material on
Handelsbanken
F8
RIO
S6
MC
7/3
9-11
Case 2: Presentation and Opposition
S5
PB
11/3
10-13
Case 1: Presentation and Opposition
18/3
8-12
Exam
Guest: Management Control at AstraZeneca
PB = Peter Beusch
MC = Mikael Cäker
RIO = Rikard Olsson, AstraZeneca
Mikes, 2009
Alvesson & Kärreman, 2004