ØABED4500 Management Control Systems Course description

Management control is essential in all organizations. Inappropriate management control systems can result in underperformance, large financial losses, damaged reputation, and bankruptcy. This course focuses on how management control systems should be designed to achieve value creation in decentralized organizations. Based on economic, psychological, and sociological perspectives on human behavior in organizations, the various forms of responsibility centers, transfer pricing approaches, budgeting processes, performance measures, and incentive systems are discussed aiming to foster holistic understanding of the mechanisms that different management levels can use to stimulate effort and focus on value creation for the stakeholders in line with the organization’s strategy.

None

After completing the course, the student should have the following overall learning outcomes defined in terms of knowledge, skills, and general competence:

Knowledge

The student has

• ability to apply a broad set of perspectives on human behavior in evaluation of the effects of management control levers
• advanced insight into the most important issues relating to elements of management control systems
• very good understanding of the trade-offs associated with different performance measures
• strong capability for critical reflection regarding the relationship between formal reward systems and other forces driving internal and external motivation

Skills

The student is capable of

• applying motivation theory, principal-agent theory, accounting concepts and microeconomic insights to complex management control problems in companies
• relating the choice of management control approaches to the company's strategies at group and entity level

General competence

The student

• can reflect on ethical and moral dilemmas related to management control and strategy
• has developed analytical competence further

The course is taught in plenary lectures, and through students working on different assignments.

The teaching is coordinated with ØABED3400.

The following coursework requirements must have been approved in order for the student to take the exam:

• Coursework 1: Three written assignments must be handed in by set deadlines during the term. Students work individually or in groups of up to four members. The scope of the assignment (number of pages) varies depending on the nature of the assignment. The expected number of pages is less than 20 in total for the three assignments.

The purpose of the work requirement is for the students to achieve a deeper understanding of the syllabus and to develop skills in assessing management control systems.

All required coursework must be completed and approved by the given deadline in order for the student to take the exam. If one or more coursework requirements have not been approved, the student will be given one opportunity to submit an improved version by the given deadline.

The exam in the course is a supervised exam of 4 hours.

The following aids are permitted:

• All written and printed aids
• Calculator (see regulations for the use of calculators in the programme description)

Grade scale A-F

The exam papers are assessed by one internal and one external examiner.

At least 25% of the exam papers will be assessed by two examiners. The grades awarded for the papers assessed by two examiners form the basis for determining the level for all the exam papers.

Einar Belsom

Students who have the subject ØABED3400 Management Control Systems in their bachelor's degree are not allowed to take this course.