Management 3131-Fall 2009 Management Control Systems
Instructor: E-Mail: Office: Phone: Class Time: Office Hours: Jim Hayes, CMA, MBA, BComm jhayes@nait.ca T-400 NAIT Campus(Business Center) 471-7419 6:00-8:50 PM Thursday 4:00-6:00 Thursday-UOL Edmonton Campus By Appointment
Course Texts
Cost Accounting: A Managerial Emphasis, Charles T. Horngren, George Foster, Sirkant M. Datar & Howard D. Teall, Fourth Canadian Edition, Prentice Hall. OR Cost Accounting: A Managerial Emphasis, Charles T. Horngren, George Foster, Sirkant M. Datar & Howard D. Teall, Fifth Canadian Edition, Prentice Hall. AND Management Control Systems, Robert N. Anthony & Vijay Govindarajan, Twelfth Edition, McGraw-Hill Irwin.
Course Description
Management 3131 is the second half of a two-semester course in intermediate management accounting. Management accounting is generally divided into two major components-cost accounting and management accounting and control. Management 3130 deals with cost accounting and this course, Management 3131 deals with management accounting and control. Management control is the process by which managers influence other members of the organization to implement the organization’s strategies. As such, it deals with people and behaviour and is often referred to as behavioural accounting. The course shall consist of two types of learning situations. We will use cases from the Anthony and Govindarajan text to develop critical thinking skills, analytical skills, as well as oral and written communication skills. In addition, there are also many technical skills that are used in the management control systems we establish. I want you to be able to analyze a business case but you will need to develop the technical expertise required to do this. It is important that you come to class prepared to participate in the discussions of the case and reading material. When we are involved in mastering technical components we will work on problems together in class as part of the learning process.
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Class Preparation
The most important requirement for this course is a thorough preparation and analysis of the assigned case or solid attempt at any technical problems assigned as well as having read the required reading assigned for the session. When the learning in the class is based on a case it is important to realize that the learning is focused on the thought process in analyzing business situations, not just on the solutions per se. There is often no “correct” solution to the cases we will discuss. In order to derive maximum benefit from the cases, it is essential that you mentally “get inside” the case situation. Do not approach a case as you would a chapter in a book or an article in a magazine. You are not an observer but a participant. If a case centres on a decision that needs to be made, put yourself in the shoes of the decision-maker. Feel the frustration he or she feels with respect to data limitations. Feel the pressures he or she feels with respect to difficult tradeoffs, limited resources, political conflicts, or whatever. Once in class, share your ideas with others as we work jointly to resolve the issues. In preparing cases, the following simple rules may be helpful. 1) Do not automatically assume that a case represents a good or a bad system. 2) Adopt a framework that will provide you the criteria for evaluating each case on its merits. 3) Adopt management’s posture in analyzing every case. 4) Use the assignment questions as a guide only. 5) Your answer should highlight what you, as a manager, see as the strengths or weaknesses in a given situation. 6) Familiarize yourself with the facts of the case. 7) Outline the industry and competitive context and the core strategic tasks that the firm should excel at. 8) You’ll have to evaluate the control system of the firm in the context of its strategy. 9) Support your analysis with the facts from the case. Most cases will not contain all the data that you might like to have. Nevertheless, you’ll be surprised at how easily you can make accurate inferences and useful assumptions if you simply give the current management the benefit of the doubt, IE if you assume (in the absence of contrary data) that they are running the business the way you would run it – smartly! If there is contrary data, it is wise to think again. Maybe, they’re right, and your task then is to understand why the company does what it does. 10) You are encouraged to test your ideas on others prior to the class meeting (your assigned group members). This is the benefit of study groups. For the sake of preparation, you should assume that every class will begin with your being called upon to lead off.
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In the Classroom
My expectation is that you will come to class prepared. You will have completed your reading assignment and any problems assigned or, if a case is being discussed, you will come to class having thought through and analyzed the case. I encourage active student participation in class. I should point out that most students typically tend to underestimate-rather than overestimate-the worth of what they have to say. Thus, if you are ever in doubt, I encourage you to speak up instead of staying quiet. In a case discussion, my role in class is to help facilitate discussion and provide some structure to see that the important points are covered. In part, I serve as a recording secretary, clarifier, and intensive questioner (sometimes playing the devil’s advocate) in order to help you present and develop your ideas. My primary role is to manage the classroom process and to assure that the class achieves an understanding of the case situation. Clearly, there is no single correct solution to any of the cases. There are, however, a lot of wrong solutions. There are also solutions that are inadequately supported with analysis, and there are solutions and analysis that are ineffective because they are not presented in an orderly and persuasive fashion. We should work together to see to it that each class session is as lively, stimulating, and intellectually rewarding venture in group learning. We are individually and collectively responsible for achieving this end.
Evaluation of Class Participation in Case Discussions
The vast majority of managers’ interactions with others are oral. They usually spend very little time reading and even less time writing reports. For this reason, the development of oral skills is given a high priority in this course. The classroom should be considered a laboratory in which you can test your ability to convince your peers of the correctness of your approach. Some of the characteristics of effective class participation are as follows: 1 Are the points that are made relevant to the discussion in terms of increasing everyone’s understanding, or are they merely regurgitation of case facts? 2 Do the comments take into consideration the ideas offered by others earlier in the class, or are the point isolated and disjointed? The best contributions following the lead-off tend to be those which reflect not only excellent preparation, but good listening, and interpretive and integrative skills as well. 3 Do the comments show evidence of a thorough reading and analysis of the case?
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4 Does the participant distinguish among different kinds of data; that is facts, opinions, assumptions, and inferences? 5 Is there a willingness to test new ideas or are all comments cautious and “safe”? Take risks! 6 Is the participant willing to interact with other class members by asking questions or challenging conclusions? 7 Clearly, you must participate in a case class if you are going to share your ideas with others. Some of the best contributors are those that do not dominate discussion in every class. Their contributions, however, are insightful and persuasive. The issue is one of quality, not quantity or frequency. With the possible exception of wrap-up at the end of the class, note taking is unnecessary and even undesirable. You should be following and reacting to the class discussion instead of writing. 8 A sign-in sheet shall be present at the beginning of each class. It is very difficult (actually impossible) for you to participate in class if you are not present for the discussion. The following describes how class contributions will be assessed: OUTSTANDING CONTRIBUTOR Contributions in class reflect thorough preparation. Ideas offered are usually substantive, provide one or more major insights as well as direction for the class. Arguments, when offered, are well substantiated and persuasively presented. If this person were not a member of the class, the quality of the discussion would be diminished considerably. GOOD CONTRIBUTOR Contributions in class reflect thorough preparation. Ideas offered are usually substantive, provide good insights and sometimes directions for the class. If this person were not a member of the class, the quality of the discussion would be diminished considerably. ADEQUATE CONTRIBUTOR Contributions in class reflect satisfactory preparation. Ideas offered are sometimes presented, and are fairly well substantiated and sometimes persuasive. If the person were not a member of the class, the quality of the discussions would be diminished somewhat. NON-PARTICIPANT This person has said little or nothing in class. Hence, they have not provided any input into the class. A student in this category would receive a participatory grade of zero. UNSATISFACTORY CONTRIBUTOR Contributions in class reflect inadequate preparation. Ideas in class are seldom substantive, provide few, in any insights, and never a constructive direction for the class. Integrative comments and effective arguments are absent. Class contributions are, at best, “cherry picking’
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or “winging it” efforts making isolated, obvious, or confusing points. If this person were not a member of the class, valuable class time would be saved. If a student fails in this category, their participatory grade would be a negative mark.
Written Work
Case Size-up: The written component of your first three cases will only require a sizeup. A case size-up includes the key problems or issues, the important facts and key recommendations of the case. The key issues and problems need to be substantiated by important case facts. The key components of the size-up are: -typed one page summary of the case -states the problems and or issues in the case -key points of analysis of the case -key recommendations for the case Group Cases The group cases should include an executive summary, Introduction, analysis of the case, alternatives and their pros and cons as well as your final recommendations. The paper should be between eight and ten pages in length. (approximately 2,500 to 3,000 words in length/10 typed pages approximately) This would not include your tables or appendices. All your sources should also be properly noted in your paper.
Examinations
Two exams will be given. The exams will include procedural and technical material from the texts and assignments covered. The best way to prepare for the final exam is to prepare carefully for each of the classes that precede it.
Grade Conversion
A+ A AB+ 95-100 90-94 86-89 82-85 B BC+ C 78-81 74-77 70-73 66-69 CD+ D F 62-65 58-61 57-50 0-49
Make-ups
No make-ups will be given for missed examinations. Students who are unable to do an exam should request permission from the professor before the exam if possible.
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Grading/Mark Allocation
Three case size-ups Group Case Hand-in Class Participation Group Presentation* Midterm** Final** Total [3 @ 3% each] [5 @ 5% each] 9 % 25 % 10 % 10 % 21 % 25 % 100%
*Group presentations will be weighted by peer evaluation. **A weighted average of 50% on examinations is required to receive a passing grade for this course.
Personal integrity is crucial. While it is desirable for you to work together and discuss cases together for the purposes of general case preparation, written assignments must be your own work or that of your group if applicable. Note: Students who fail to write final exams must provide satisfactory evidence of illness or extenuating circumstances AND must have the approval of the Dean for a make-up exam. Students who miss the final exam will be given a final grade of F. The University’s policies are described in the calendar and all students are expected to read and comply with them. Special care should be taken to understand and avoid the Academic Offences of Plagiarism and Cheating listed in the Student Discipline Policy. An occasional “pop” quiz or “problem” may be given and marks for this will be of a bonus nature.
Performance Measurement Management Compensation Group Presentations(10%) No Class Final Exam (25%)
Nov 19
Nov 26 Dec 3 Dec 17
Case 7-5 Dell Computer Corporation(5%) Capital Budgeting Case to be announced(5%) Case 6-3 General Appliance Corporation(5%) Case 11-4 Enager Industries(5%) Case 12-4 Wayside Inns(5%)
NOTE: (1)Student groups will be required to hand in five group cases in the second half of the course worth 5% each. (2)Each student group will present one case in the second half of the course for 10%. The groups will be required to notify me on a first come first serve basis which case they will present.
Case Size-Up Case 3-3 (3%) Case Size-Up Case 5-4 (3%) Case Size-Up Case 9-1 (3%)
Oct 8 Oct 15 Oct 22 Oct 29
Nov 5
Transfer Pricing
Nov 12
Performance Measurement Management Compensation Group Presentations(10%) No Class Final Exam (25%)
Nov 19
Nov 26 Dec 3 Dec 17
Case 7-5 Dell Computer Corporation (5%) Capital Budgeting Case to be announced (5%) Case 6-3 General Appliance Corporation (5%) Case 11-4 Enager Industries (5%) Case 12-4 Wayside Inns (5%)
NOTE: (1)Student groups will be required to hand in five group cases in the second half of the course worth 5% each. (2)Each student group will present one case in the second half of the course for 10%. The groups will be required to notify me on a first come first serve basis which case they will present.
