Management Control SystemProgram : MBA Class of : 2014

Credit : 2 Sessions : 22

Semester : IV

Objective: To give s a broad understanding of the control process, control systems and their applications to real life business situations

Learning Outcome: Ability to understand importance of the control systems in an organization and the knowledge to design the control processPrescribed Textbook:

Title Author/ Publications

Management Control Systems Robert Anthony & Vijay Govindarajan; 12th Edition, Tata McGraw-Hill

Case Mapping and Session Plan

Session

Topic Topics Covered Additional Reading Case Title

1

Introduction

to

Management

Control

Systems

Overview of Management

Control System

Discussion on Course Handout

2Nature of Organizations and

need for Management Control

Chapter 1 (RA VG): The Nature of Management Control Systems

ATH Micro Technologies : Making the Numbers (HBS Ref No: 9-108-091)

3The Subsystems and the

Components of Control

Systems.

Chapter 1: Management Control

Systems –By Joseph Maciariello

and Calvin Kirby

Nucor Corp A & B (Case no 1-1 and 3-2 in RA VG

4Understanding Strategies Chapter 2: Understanding

Strategies ( MCS by RAVG)

Becton Dickson: Designing the New Strategic, Operational, and Financial Planning Process (HBS Ref No. 9-197-014)

1

5 Behavior and

Culture for

Control

Systems

Managerial Styles and the

Design of Control Systems -

Corporate Culture and the

Design of Control Systems.

Chapter 4 – Style and Culture

and the

Design of Control Systems (MCS

By Joseph Maciariello and Calvin

Kirby)

Chapter 3- Behavior in

Organizations (MCS By RA VG

Guidant Corporation: Shaping Culture through Systems (HBS Ref No. 9-198-076)

6

Organization

Structure

and Control

Decentralization vs.

Centralization - Evolution of

the Matrix Structure - Matrix

vs. Functional - Divisional

Autonomy

Chapter 5 - Infrastructure I :

Organizing for Adaptive Control

(MCS by Joseph Maciariello and

Calvin Kirby )

Appex Corporation (HBS Ref No.9-491-082)

7&8Responsibility Structure -

Overall Effectiveness

Measures - Standard Cost

Center - Revenue Center -

Profit Center - Investment

Center

Chapter 4 – Responsibility Centers: Revenue and Expense Centers

Chapter 5 – Profit Centers

North County Auto (Case no 5-2 in RA VG)

Higashimaru Shoyu Company, Ltd.(A): Price Control System (HBS Ref No.9-195-050)

9 Transfer Pricing – Objectives – Methods and simple problem in Transfer Pricing

Chapter 6: Transfer Pricing Birch Paper Company (HBS Ref No.9-158-001)

10Budgeting as a control tool Chapter 9: Budget Preparation Empire Glass Company (A) (HBS Ref

No.9-109-043)

11Beyond Budgeting Borealis (HBS Ref No.9-102-048)

2

Management

Control

Process

12 NCP - 1 CLASS TEST - Class Test 1 – 15% Weightage

13Analyzing and reporting

financial performance –

analysis of variances

Chapter 10: Analyzing Financial Performance

Chapter 11: Performance Measurement Systems

Problems on Material & Labor variances

14Performance Measurement -

Interactive Control- Target

Costing - Activity based

costing

Chapter 11: Performance Measurement Systems

Continental Media Group : Business Highlights (HBS Ref No. 5-110-090)

15Management

Compensatio

n &

Communicat

ion

Rewards as a control tool- Characteristics of Incentives-Communication Structures in Support of the Control Process - Impact of Information Technology on Control Systems.

Chapter 12: Management Compensation

Crown Point Cabinetry (Case no 12-2 in RA VG)

16 Management

Control in

Service

Organization

s

Introduction – Nature of Control in service organizationsControl systems in Financial Institutions

Chapter 14: Service Organizations

O’Reilley Associates (Case no 14-1 in RA VG)

3

17 Management

Control in

Multinationa

l

Corporations

Cultural differences and resulting structural design problems

Chapter 15: Multinational Organizations

Labor Unrest at Honda Motorcycle & Scooter India (P) Ltd. ICMR- HROB104

18Transfer Pricing AB Thorsten (Case no 15-1 in RA VG)

19 Management

Control in

Projects

Nature of Planning and Control in Projects – control environment in projects – reporting – project auditing – Evaluation of projects.

Chapter 16 – Management Control of Projects

Turner Construction Company: Project Management Control Systems (HBS Ref No.9-190-128)

20 NCP -2 CLASS TEST - 15% weightage

21Enterprise

Risk

Management

Objectives – types of risks- Risk management process- COSO ERM framework

Countering the biggest Risk of All (HB Article)

Enterprise Risk Management at Hydro One (HBS Ref No.9-109-001

22 Comprehensi

ve view of

Control

System

Turnaround Strategy, Control Systems, Incentives, Organizational & Cultural changes

Other contemporary issues Ranjana Kumar Interview in IIMB Management Review, March 2004

EVALUATION PLAN

It would have four components as follows (with weight):

1. Class Participation : 30% 2. Class Test 1 & 2: 30%3. End term examination: 30%

1. Class participation – 40%

4

CP 1 After 11th Session 15 %

CP 2 After 22nd Session 15%

2. Class Test 1 (15 %) - will be held on the 12th Session

3. Class Test 2 (15%) - will be held on the 20th Session

5