SIMC Master Program

Fundamentals in
Management Control

Dr. Christoph Feichter

Dr. Kate Patterson
Who are we?

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Who are we?

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 Contact details

• Christoph Feichter • Katharine Patterson

• [email protected] • [email protected]
• Tel: +43-1-313 36-6198 • Tel: +43-1-313 36-6361
• D5. 6.048 • D5. 6.038

• Office hours: per appointment

or
• “IfU Lounge”

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 Plan for today
• Introduction to Fundamentals in Management Control
• Get to know you
• Course setup
• Course content

• Organizing for Performance: Four Vignettes

• Introductions to Management Control, Control Problems,

and Management Control Systems

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 Get to know you
• At which university did you do your Bachelor Studies?
• What was your major about?

• What do you do when you are not studying?

• Where do you see yourself in the future?

Entrepreneur Consultant Professor

CEO

• If you have experience with management control systems, what is your experience?

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 What is Management Control?

• “The best-laid strategies of any organization are useless without proper implementation.”
(The Economist Intelligence Unit 2013)

• “Management control involves managers taking steps to help ensure that the employees
do what is best for the organization. ... Management controls are necessary to guard
against the possibilities that people will do something the organization does not want them
to do or fail to do something they should do” (Merchant and Van der Stede 2017)

• “Economics is, at root, the study of incentives: how people get what they want, or need,
especially when other people want or need the same thing. […] An incentive is a bullet, a
lever, a key: an often tiny object with astonishing power to change a situation. We all learn
to respond to incentives, negative and positive, from the outset of life.” (Dubner and
Lewitt, Freakonomics)

The purpose of a management control system is therefore encouraging, enabling and

sometimes even forcing employees to act in the organization’s best interest.

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Learning Objectives
Content
• Gain a profound understanding of management control.

• Understand and discuss the meaning and importance of

management control as a basic part of managerial
activity.

• Understand and assess the interaction between control

problems and organizational arrangements, such as
performance evaluation and budgeting practices.

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Learning Objectives
Skills and Competences

• Obtain skills to adequately address control problems in

practice (i.e., leadership-, technical-, analytical-,
interpersonal-, communication-, decision-making skills).

• Learn to acquire knowledge to address complex questions

themselves (e.g., reading academic research)

• Translate theoretical management control insights to real-

life managerial
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Learning Approach

Case-Based Teaching

Group Work Session Facilitation

Proper Preparation

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Evaluation

1. Individual preparation and participation 30%

2. Group performance as session facilitator 15%
3. Group performance on hand-in case 15%
4. Written final exam 40%

Final Grade 100%

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 Individual preparation and participation
(30% of final grade)

Preparation In-class Contribution

Readings, cases, and other materials Quality & Quantity of contribution
Quiz(zes) by midnight on Sundays Qualitative Feedback about half-way

Assessment on a Professionalism Presence at Every

scale from 0 – 10 Session*

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*Please let us know beforehand if special circumstances prevent you from being present
Group performance as session facilitator
(15% of final grade)

Facilitation Overview Criteria that will be evaluated:

• Facilitation does not mean that the • Achievement of session objectives;
subgroup talks for 2 hours or has all the successful exchange of knowledge!
necessary answers correct • Demonstration of a good understanding
of the topics covered
• Structure a session and ensure that all
• Elaborated on the session topics and
relevant parts of the materials are
covered (can include lecture, group work, assured everyone got a good
quizzes… - be creative!) understanding
• Bringing in extra background
• A facilitator is neutral and does not knowledge and real-life examples
take/prescribe sides. That means a
• Application of the readings to real-life
facilitator:
examples
• Isn’t there to give opinions, but to draw
out the opinions and ideas of the group • Clear structuring of facilitation
members • Enthusiasm in guiding the group
• Is a guide to help people move through a creativity in the facilitation
process together, not the seat of wisdom • Integration of fellow students in the
and knowledge discussion
• Management of the group dynamics

0-10 Points Page 13

 Group performance on hand-in case
(15% of final grade)
• An analysis of a case, including the (most important) control problems in the case.
• The development of practical, realistic and feasible solutions for these problems, using
theories already discussed in the course.
• The case reports will be evaluated using the following criteria:
• Is there a clear division between the introduction, body and conclusion?
• Are the problems clearly defined and put into context?
• Is the line of argumentation logical and clear?
• Is the analysis well-grounded in the literature, and are the correct references provided?
• Do conclusions follow from the analysis in a logical way?
• Are the proposed solutions reasonable/implementable?
• Is there a correct use of grammar, with no spelling mistakes, and a well-planned layout?

• Hand-in by November 13, 2023, 08:00am

• 0-10 points

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 Exam (40% of final grade)
• 100 points
• Open ended questions
• Small case to solve
• Open book

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Grading scale

Excellent (1) 87.5%-100.0%

Good (2) 75.0% -<87.5%
Satisfactory (3) 62.5% -<75.0%
Sufficient (4) 50.0% -<62.5%
Fail (5) <50.0%

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 Feedback
• Feedback is crucial
• To safeguard fairness in the evaluation process
• For helping students learn and improve

• Feedback is not a one-way street

• Peer Feedback after the hand-in case
• You can ask us for individual feedback at any point in time!
• Give timely feedback back to us

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 Literature
• Textbook: Merchant, K.A. and W.A. Van der Stede,
Management Control Systems: Performance measurement,
evaluation and incentives, Prentice Hall, Fourth Edition, 2017

• Academic articles – all available in CANVAS;

• Case Store24(A) and (B)

• Will post a link to the course package on the Harvard Business School
Website

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Overview of Course

Management
Management Control Practices Organizational
Control Problems and Control System success
Design

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 Overview of sessions
Session Date Block Topic Session Facilitators

A Opening Lecture Christoph & Kate

1 16.10.2023 Introduction to Management Control, Control Problems and Management Kate
B
Control Systems
A The Design of Control Systems and the Cost and Benefits of Delegation Christoph
2 23.10.2023
B Responsibility Accounting Group A

A Planning, Budgeting and Target Setting Christoph

3 30.10.2023
B Financial Performance Measures Group B

A Non-financial performance measures Group C

4 06.11.2023
B Statistical Testing of non-financial measures Kate

Open office hours for questions about the case; attendance voluntary - Kate
09.11.2023
please schedule an appointment
A Discussion of Hand-In case Kate
5 13.11.2023
B Experience Management Accounting Research Kate

A Subjective Performance Evaluation Group D

6 20.11.2023
B Relative Performance Evaluation Group E

A Management Control through Self-selection Group F

7 27.11.2023
B Q&A session Kate

8 05.12.2023 Final exam (open book) Page 20

 Plan for today
• Introduction to Fundamentals in Management Control
• Get to know each other
• Course setup
• Course content

• Organizing for Performance: Four Vignettes (we’ll look at two)

• Introductions to Management Control, Control Problems, and

Management Control Systems

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 Group Work

• Discuss vignette 1-2 (Walmart and Starbucks) within small

groups

• We will meet back to discuss

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DEPARTMENT STRATEGY AND INNOVATION
Welthandelsplatz 2, 1020 Vienna, Austria

Christoph Feichter
Kate Patterson

T +43-1-313 36-6361
[email protected]
[email protected]
www.wu.ac.at/ifu

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