Management Control Systems

Program Credit Course Code : PGPM : 3 : SL GM 601 Class of Sessions : 2012 : 30

Third Semester

AIM
The course aims to provide a broad understanding about the control process and reporting system within a challenging environment taking into account the structure, culture and style of the organisation with adequate emphasis on key success variables, responsibility centres and management audit.

Learning Outcomes
1. Analyse the need of control mechanism in an organization and design the crucial control process hierarchy. 2. Compare the different schools of thoughts in control and discuss the sector specific key success variables. 3. Demonstrate the different types of organization structure and predict the structural requirement of an adaptive organization. 4. Select various tools for managerial control both qualitative as well as quantitative. 5. Explain the scope and direction of different responsibility centers and apply them for responsibility accounting. 6. Design the control dynamics for a Multi National Corporation and compute transfer price. 7. Prepare control mechanism for service organization, non profit organization and projects. 8. Select the parameters for evaluating management audit. REFERENCE BOOKS Management Control Systems Management Control Systems : Using Adaptive Systems to Attain Control, 2nd e Modern Management Control Systems Text & Cases Management Control Systems : Text and Cases Management Control Systems A Managerial emphasis Management Control Systems Detailed Syllabus INTRODUCTION TO MANAGEMENT CONTROL SYSTEMS Nature of management control- purpose of MCS-the organizational context of MCS-the formal systemsthe informal systems- the subsystems and the components of the control systems- use of information technology on control systems, DESIGNING THE CONTROL PROCESS AND MANAGERIAL CONTROL Introduction- schools of thoughts in control (contingency approach, cybernetics approach) AUTHOR / PUBLICATION Robert Anthony and Vijay Govindarajan Special Indian Edition TMH Maciariello, Joseph A / Kirby, Calvin J. Prentice-Hall, India Kenneth. A Merchant University of Sothern California, Los Angels Anthony, Robert N / Deardon, John. Irwin Inc Pradip Kumar Sinha 2010 edition IUP designing management controls- the control process hierarchy- communication and reporting structures in the control systems. Ethical dimensions in MCS, corporate culture of MCS, organization structures. BEHAVIOUR IN ORGANIZATIONS Goal congruence, Action Control, Result Control, Types of organizations, functions of controller. KEY SUCCESS VARIABLES AND MEASURES OF PERFORMANCE Identifications of key success variables-key success variables and the control paradigm-performance indicators-EVA and profitability measures.

and Business Process Outsourcing Firms RESPONSIBILITY CENTRES Responsibility accounting , Different Types of responsibility Centers (Investment centers, revenue centers, expense centers, administrative and support centers, R&D Centers, marketing centers, profit centers), general considerations/business units as profit centers/measuring loose coupling between inter profit centers BUDGET PREPARATIONS & FINANCIAL REPORTING: Nature of a budget, operating and other budgets, flexible and fixed budgets, budget preparation process, behaviour aspects. Analysing Financial Performance Reports: Calculating variances like material, labour and profit: limitations of variance analysis, tools like standard costing, target costing, life cycle costing and activity based costing.(appropriate numerical examples should be given) MCS IN SERVICE & NON PROFIT ORGANIZATIONS Characteristics, Professional service organizations, Financial service organizations, Healthcare organizations, Non profit organizations. MCS IN MULTINATIONAL CORPORATION Control issues, cultural differences, exchange rates, transfer pricing-objectives, methods, administration of transfer prices. (appropriate numerical examples should be given) EVA and Compensation Management System at Tata Consultancy Services Balanced Scorecard Implementation at Philips Hollinger International The Lord Black Saga BP: Putting Profits before Safety? Corporate Governance at Ahold P&Gs Brand Management System Global Supply Chain Management Best Practices at Li & Fung Limited Amazon.coms Inventory Management Consumer-driven Six Sigma at Ford The AXA Way Improving Quality of Services The Millau Viaduct Project Creating an Engineering Marvel Xerox PARC Innovation without Profit? Human Resource Management System Reforms at Matsushita Outsourcing IT The GM Way CRM Implementation Corporation Failure at Cigna

Governance and Control at AXA Ping Fu Inspiring Entrepreneurship Source: Case studies in Management Control Systems Suggested Schedule of Session Topic Introduction to Management Control Systems No. of Sessions 2 5 3 2 3 4 2 2 3 4 30

MCS IN PROJECTS Nature of projects, control environment, project planning and appraisal, project execution, project evaluation MANAGEMENT AUDIT Concepts, types, process, and applications in various functions. Cases Faculty will be handling eight or more cases Jack Welch and Jeffrey Immelt Continuity and Change in Strategy, Style, and Culture at GE Infosys Global Delivery Model Some HR Dilemmas in Information Technology

Designing the Control Process and Managerial Controls Behaviour in Organizations Key Success Variables and Measures of Performance Responsibility Centres Budget Preparations & Financial reporting MCSs in Service& Non Profit Organizations MCS in Projects MCS of Multinational Corporation Management Audit Total Sessions