BUS400E Management Control

• Topics

  When companies reach a certain size it will become difficult for owners or leaders to give all employees detailed instructions on how to perform certain tasks. Management control mechanisms are then important to guide the managers in the company, so that they contribute in the best possible way to the total value creation of the company. In this course we discuss, for example, what responsibilities each unit in the organization should have, what goals to set for the units, how to measure the value creation of the units, how to use incentives in the organization, principles of transfer pricing, and different tools such as budgeting and balanced scorecard.

• Learning outcome

  Knowledge

  Upon successful completion the student

  • Understands the basic mechanisms for management control in large companies and how the organization of a company can help to sustain value creation.
  • Understands how coordination mechanisms and management control tools can affect the activities in different ways in different companies.
  • Has thorough knowledge on intra-organizational incentives and their interaction with different performance measures.
  • Understands how various planning methods can be used in a company, to set targets and follow up managers; e.g. budgets, balanced scorecards.
  • Understands how the different management tools may work together (or against each other) in a company.
  • Understands the motives behind transfer pricing and be able to develop transfer pricing principles for a company.

  Skills

  Upon completion of the course the student

  • Is able to use economic models to find optimal incentives in simple settings.
  • Is able to calculate the cost of capital of a company and different financial performance measures (e.g. ROCE and Residual Income), and understand how the measures are affected by depreciation plan and growth.
  • Is able to determine the theoretically correct transfer price based on market prices or costs and be able to discuss what the transfer price should be based on its purpose.

  General Competence

  Upon completion of the course the student

  • Is able to reflect on how components of a management control system interact.
  • Is able to reflect on what positive and negative effects a new management control system may have in a specific organization.
  • Has acquired the competence to master the advanced classes of the program.
  • Can analyze relevant literature and has the insights to connect theory with practice.
  • Can reflect critical on theories, methods, tools and data within the field.

• Teaching

  Lectures, online exercises, group assignment.

• Credit reduction due to overlap

  The course cannot be combined with the course BUS400N "Styring av større foretak", which is a very similar course in Norwegian.

• Compulsory Activity

  One group assignment (2-4 students in each group).

• Assessment

  4 hour digital school exam. The exam can only be written in English.

• Grading Scale

  A - F

• Literature

  To be announced on Canvas

• Permitted Support Material

  Calculator

  One bilingual dictionary (Category I)

  All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 Permitted support materialhttps://www.nhh.no/en/for-students/regulations/https://www.nhh.no/en/for-students/regulations/and https://www.nhh.no/en/for-students/examinations/examination-support-materials/https://www.nhh.no/en/for-students/examinations/examination-support-materials/