Management Control System

Program : MBA Credit : 3 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 process Prescribed Textbook: Title Author/ Publications
Management Control Systems Case Mapping and Session Plan
Sessi on 1 Topic Topics Covered Overview of Management Control System 2 Introduction to Management 3 Control Systems Nature of Organizations and need for Management Control The Subsystems and the Components of Control Systems. Chapter 1 (RA VG): The Nature of Management Control Systems Chapter 1: Management Control Systems By Joseph Maciariello and Calvin Kirby 4 The Cybernetic Paradigm of Control - The Control Process Hierarchy MCS By Joseph Maciariello and Calvin Kirby Chapter 2 - Designing Managerial Controls Helmut Nechansky, Cybernetics as the science of Decision Making ATH Micro Technologies : Making the Numbers (HBS Ref No: 9-108-091) Nucor Corp A & B (Case no 1-1 and 3-2 in RA VG Additional Reading Discussion on Course Handout Case Title

Class of : 2013 Sessions : 33

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

http://www.emeraldinsight.com/journals.htm?articl eid=1921807&show=html.

Understanding 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)

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)

7&8

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 ) Chapter 4 Responsibility Centers: Revenue and Expense Centers Chapter 5 Profit Centers

Appex Corporation (HBS Ref No.9-491-082) Codman & Shurleff, Inc. Planning and Control System (HBS Ref No.9-187-081)

9&10 Organization Structure and Control 11

Responsibility Structure - Overall Effectiveness Measures - Standard Cost Center - Revenue Center Profit Center - Investment Center Transfer Pricing Objectives Methods and simple problem in Transfer Pricing Budgeting as a control tool

North County Auto (Case no 5-2 in RA VG) Higashimaru Shoyu Company, Ltd.(A): Price Control System (HBS Ref No.9-195-050)

Chapter 6: Transfer Pricing

Birch Paper Company (HBS Ref No.9-158-001)

12

Chapter 9: Budget Preparation

Empire Glass Company (A) (HBS Ref No.9109-043)

13

Beyond Budgeting

Borealis (HBS Ref No.9-102-048)

14 Management Control Process 15

Analyzing and reporting financial performance analysis of variances Performance Measurement Interactive Control

Chapter 10: Analyzing Financial Performance

Compagnie du Froid, S.A (HBS Ref No.9-197085)

Chapter 11: Performance Measurement Systems

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

16

Target Costing - Activity based costing

Activity Based Management at WS.Industries (A) (HBS Ref. No.9-102-063)

17 , 18 & 19 20 Management 21 Compensation & Communication

MCS Group Presentations - Groups of 6 each Weightage 15% Rewards as a control toolCharacteristics of IncentivesCommunication Structures in Support of the Control Process Impact of Information Technology on Control Systems. Review of Control Systems GEs Digital Revolution : Redefining the E in GE (HBS Ref No.9-302-001) Chapter 12: Management Compensation Lincoln Electric Company (HBS Ref No.9-376028) Crown Point Cabinetry (Case no 12-2 in RA VG)

22

23

Management Control in Service

24

Organizations

Introduction Nature of Control in service organizations Control systems in Financial Institutions Control systems in Professional Service Organizations Control systems in nonprofit organizations

Chapter 14: Service Organizations

OReilley Associates (Case no 14-1 in RA VG)

Automation Consulting Services (HBS Ref No.9-190-053)

25

Chapter 14- Service Organizations

American Cancer Society: Access to Care (HBS 9-109-015)

26 27

Class Test NCP 2 - Weightage 15% Management Control in Cultural differences and resulting structural design problems Transfer Pricing Chapter 15: Multinational Organizations Labor Unrest at Honda Motorcycle & Scooter India (P) Ltd. ICMR- HROB104 AB Thorsten (Case no 15-1 in RA VG)

28

Multinational Corporations

29

Management Control in Projects

Nature of Planning and Control in Projects control environment in projects reporting project auditing Evaluation of projects. Objectives types of risks- Risk

Chapter 16 Management Control of Projects

Turner Construction Company: Project Management Control Systems (HBS Ref No.9190-128)

30 Enterprise Risk Management 31

Countering the biggest Risk of All (HB Article)

management process- COSO ERM framework Enterprise Risk Management at Hydro One (HBS Ref No.9-109-001) Internal Control Systems Societe Generale (A): The Jerome Kerviel Affair (HBS Ref No.9-110-029) Financial Audit, Cost Audit, Management Audit, Audit Committee, Board of Directors

32

Management Audit

33

Comprehensive 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. 2. 3. 4. Class Participation : 40% Group presentation: 15% Class Test: 15% End term examination: 30%

1. Class participation 40% CP 1 CP 2 CP 3 After 11th Session After 22 Session After 33 Session
rd nd

10 % 15% 15%

2. Group Assignment (15 %) -This is a group task. The groups have to choose an Indian Business firm, collect information about the control systems in the organizations and analyze it. The control parameters to be analyzed are Organization structure, Management Style and Culture, Control Process, Rewards and Coordination & Communication. Prepare a report based on the analysis. Each group need to make a presentation for 10 minutes. All the group members need to make the presentation will be held on 17th & 18th session. 3. Class Test (15 %) - will be held on the 25th session 4. End term examination (30 %) would examine grasp of concepts & analytical ability. 30% multiple choice questions & 70% case analysis.