BU620

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BU620

• Management Controls

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1st Class - Objectives

• Introduction
• Course Outline Objectives
• Expectations
• In class case exercises

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Introduction

• Professor Dr. Laura MacDonald
• Contact Information
• Lmacdona_at_wlu.ca or ext. 2815
• P2052
• Office Hours
• Thursday 1230 130 or by appointment
• Class
• Monday 1- 4 p.m., SBE 2260
• Faculty Assistant
• Sandra Castellanos, SBE2201

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Course Overview

• Performance measurement and control is an
  essential function of management
• ensure that the organizations objectives and
  strategies are carried out effectively.
• it increases the probability of organizational
  success.

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Course Overview

• Management can use a combination of mechanisms to
  achieve organizational control.
• One is to hire good people who can be relied upon
  to serve the firm well (personnel controls).
• ensure that employees do not perform certain
  actions known to be harmful to the organization
  (action controls).
• rewarding individuals for generating good results
  (results controls).

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Course Overview

• We will focus on the use of results controls
• measurement and evaluation of financial and
  non-financial performance.
• Focus on key decisions that must be made in using
  results controls
• performance measures, standards and targets
• performance-based incentives.
• Limitations of traditional measures
• Recently developed approaches

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Course Overview

• The course is designed to be useful to those
  aspiring to be
• Managers
• Compensation consultants or human resource
  specialists
• Management consultants
• Management accountants

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Course Objectives

• After completing this course you will
• Be able to evaluate the efficacy of an existing
  management control system
• Understand the role played by effective
  management accounting and control systems in
  modern organizations
• Be able to design and develop an effective
  management accounting and control systems and,
• Be familiar with a number of emerging ideas and
  concepts in the field of management control.

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Seminar Course

• my role is primarily as a resource person to
  help guide your exploration of the material.
• your role as a student is to contribute to class.
  The real learning comes from
• your preparation for class and
• participating in the exploration of ideas during
  class.
• Your level of preparation for class largely
  decides the value you will take away from each
  session.
• The case method facilitates the exploration of
  the management control issues in a broad range of
  settings

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Expectations

• Prepared for class and ready to contribute
• most of the course will involve a discussion of
  ideas, concepts, opinions, and analysis that
  follow from the cases and readings
• You should therefore come to each seminar ready
  to discuss issues from the assigned readings as
  well as the cases assigned for that day.

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Expectations

• For each case, a number of members of the class
  will be assigned responsibility for presenting
  the basics of each case an overview of the
  firm/industry, an overview of the MCS in place,
  and an overview of the presenting problem
• The class as a whole will be responsible for
  analyzing the situation, proposing alternatives
  and making recommendations.

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Evaluation

• Participation
• Hand-in case summaries 10
• Case Overviews 10
• Classroom contribution 5
• Report and Presentation 40
• Examination 35
• 100

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Hand-in Case Summaries

• Each member of the class will provide a one-page
  summary of the cases at the beginning of the
  class in which the case is discussed.
• This summary will not be graded for correctness
  but only for an honest attempt to consider the
  issues in the case and make a preliminary
  recommendation.
• You must be present at the class for this summary
  to be accepted for grading.
• These items will not be returned to you, as I
  will assemble them into a portfolio of work on
  which I will assess your performance collectively
  over the term. I will also contact any student
  whose case submissions I deem to be unacceptable
  for graduate level work.
• If you fail to submit a case summary, I will
  interpret your not submitting a required hand-in
  as an indication that you did not prepare for
  class and will record your contribution
  accordingly.

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Case Overviews

• For each case, 2-4 members of the class
  (depending on course registration) will be
  assigned responsibility for presenting the
  basics for each case
• an overview of the firm/industry,
• an overview of the MCS in place, and
• an overview of the presenting problem (i.e., the
  symptoms).
• Your job is not to solve the case just to kick
  off the discussion.
• Your grade will reflect your ability to present
  an informative summary and kick start class
  discussion

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Group Formation

• Form groups for purposes of case overviews and
  fiasco report/presentation.
• Allowable group size will be 2-5 (depending on
  enrollment)
• A sign-up sheet listing all cases will be posted
  on Monday, May 7 in class. Students will form
  groups and pick cases.

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Classroom Contribution

• You are encouraged to take an active part in the
  course discussions by providing thoughtful,
  constructive, worthwhile comments, questions and
  debate. Oratory skills are a must for
  professionals, so meaningful classroom
  contribution is expected.
• Please use a name card in my class. Grading class
  participation requires that I get to know
  everybody as soon as possible. My expectation is
  that you will come to class every time. If you
  will be absent, please let me know before class
  by email.

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Classroom Contribution

• Good participation grades are assigned to
  students who
• Are always well prepared
• Ask insightful, penetrating questions
• Push the discussion of the case to a higher, more
  sophisticated level
• Help other students understand, in a constructive
  manner, that some of the arguments that have been
  voiced are somehow flawed or incomplete.
• Failing participation grades are assigned to
  students who
• Rarely talk
• Skip classes
• Make irrelevant, shallow comments
• Are unprepared when they are called on.

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Fiasco Report/Presentation

• As part of a 3-5 person team, you will
• identify an organization, (i.e. for-profit,
  not-for-profit, public or private sector) that
  has experienced a major management fiasco and
• prepare a case study of how the companys
  management control system contributed to that
  fiasco.
• This research must be completed from secondary
  sources without contacting the company, so ensure
  you choose a company whose fiasco was widely
  publicized and can be researched from publicly
  available resources.
• Peer evaluation will also be considered on a
  group by group basis, as requested.

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Initial Report

• by June 11 you must provide a brief report to me
  detailing
• the name of the company
• the names of those in the group
• disclose any relationships that group members may
  have with the company
• an overview of the firm and its strategic
  position (i.e., what customers and markets does
  it serve, who are its competitors, what is its
  business model and what are the critical success
  factors for this business).
• an overview (description) of the management
  control fiasco you plan to analyze.
• a research plan specifying how you will collect
  information about the fiasco and control system.
• This document will be worth 10 of the 40 marks
  for this project.

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Final Report

• by July 23 you must provide a final report to me
  in digital and hard copy
• The digital version will be posted on the website
  for the class to read prior to the presentation
• You must also send a copy to Turnitin.com
  address provided on course website
• Your final report should include
• a description of the company and its context,
• a detailed description of the management control
  fiasco
• an overview of the MCS in place,
• an analysis of the MCS and the role it played in
  the fiasco using the concepts in the course,
• your evaluation of the effectiveness of the MCS
• any recommendations for improvement that are
  warranted.
• This document will be worth 20 of the 40 marks
  for this project.

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Presentation

• Each group will present their study to the class
  on July 30 or 31
• Each group will have 30 minutes to present the
  key issues, analysis and recommendations, and to
  answer questions (do not spend a lot of time
  repeating material company information that is
  included in your written description).
• The oral presentation will be graded by the class
  based on the contribution that you make to their
  understanding of management control system
  design/functioning.
• Provide a hard copy of your slides and handouts
  to me at the beginning of the session in which
  your group is scheduled to present.
• All members of your group must be involved in the
  presentation ideally for equal amounts of time.
• This presentation will be worth 10 of the 40
  marks for this project.

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Final Examination

• The examination will be case analysis to be
  completed on an individual basis.
• The Final Exam case and instructions will be
  distributed during the August 1st class.
• You must submit your final examination paper no
  later than 4 p.m. on August 15th to the MBA
  office, as well as an email copy to me and
  turnitin.com.
• Details will be provided closer to the time as to
  requirement for turnitin.com and format, length
  etc.

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Module 1Management Control Alternatives and
their (Dis)advantages

• This module introduces the subject of management
  control, the major management control
  alternatives, and their advantages and
  disadvantages.

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Module 2 Financial Results Control Systems

• Financial results controls dominate in importance
  in managerial levels in most North American
  firms. This module examines the major elements
  of these systems (i.e. responsibility centres,
  planning and budgeting systems, performance
  evaluations and reward structures).

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Module 3 Common Financial Results Control
Problem Areas

• In this module, we explore problems that
  measuring performance in accounting terms create,
  including management myopia, sub-optimization and
  game playing. We also discuss several methods to
  mitigate these problems.

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Module 4 Special Concerns in Management Control

• This module examines control-oriented roles in
  organizations and how to deal with a range of
  control-related ethical issues. As well, we
  discuss control in distinctive circumstances.