M.

SC PROGRAM MATRICULATION
SYLLABUS
MANAGEMENT CONTROL SYSTEM
Instructors:
Arief Surya Irawan, S.E., M.Com. (AS) / Wulan Wimbari, S.E., M.Bus. (WW) /
Amanda Acintya, S.E., M.Sc (AA)
Accounting Department, Faculty of Economics and Business, Universitas Gadjah Mada
Email: arief.surya@ugm.ac.id / wulanwimbari@ugm.ac.id / amandaacintya@ugm.ac.id
Consultation: by appointment

Course Description
Controlling organization’s activities is one of the managers’ main functions. The control
mechanism allows management to ascertain whether members of the organization were taking
actions consistent with the objectives of the organization. In small organizations, control can be
done by direct supervision on a daily basis. As organizations grow, controlling organizations in
such a way is difficult, if not impossible, to do. Changes in the external condition (e.g., the
competition intensifies) further complicate the control issues. In this situation, managers need
tools that enable them to give up their involvement in the daily supervision of the organization’s
activities, while still maintaining their control function.
This course discusses techniques for controlling complex organizations. The discussion of
the control will be divided into two parts: the management control structure and the management
control process. However, before discussing these two components of MCS, the characteristics
and general control issues will be discussed. Recent development in control techniques, such as
balanced scorecard, is also discussed. Finally, the course also discusses the application of the
control models in service industry and multinational corporations.

Course Objectives
Upon completion of the course students are expected to be able to:
1. Describe the important elements of management control systems
2. Explain the concepts of organizational structure, decentralization, and responsibility centers
3. Explain what, when and why a transfer pricing system is needed
4. Explain the relationship between strategy, budget, and evaluation
5. Explain different ways to evaluate the performance of responsibility centers
6. Explain potential disfunctional behavior induced by inappropirate control systems
Learning Goals
Completion of the course contributes to the following learning goals and objectives:

Learning goal Objectives/Traits Low Med High Assessment

Instruments

1. Students 1.1. Demonstrate the ability to Assignments

demonstrate a comprehend knowledge in accounting and Exams
mastery in
accounting 1.2. Demonstrate the ability to Assignments
knowledge synthesize accounting knowledge and Exams

2. Students 2.1. Ability to write research report NA

demonstrate the with clarity, coherence, and
ability to conciseness in the structure of the
communicate report
effectively
2.2. Ability to conform with the Assignment
standard writing style

2.3 Ability to write research report NA

with consistent flow of thoughts

2.4 Ability to use presentation media Presentation

2.5 Ability to organize presentation Presentation

contents

2.6 Ability to answer questions Exams

accurately

3. Students 3.1. Ability to develop research NA

demonstrate the questions
ability to make
ethical and 3.2. Ability to design research NA
responsible
decisions 3.3. Ability to analyze data NA

3.4. Ability to draw conclusion

3.5 Ability to properly disclose

(quotations, citations, and results rights
and obligation)

3.6 Ability to obtain consent (sources NA

and sponsors)
4. Students are 4.1. Able to demonstrate model NA
able to develop originality
original research
that results in 4.2. Able to demonstrate contribution NA
original of research to international or local
contribution to settings
knowledge or
society

Course Material
Required:
Anthony, R.A. and Govindarajan, V. 2007. Management Control Systems, 12th Edition. New
York: McGraw Hill.

Supplementary materials:
Journals and articles provided for each meeting.

Teaching Methods
The sessions will be held mostly through discussions. Lecturing will be pushed at the minimum
level. Participation is not an option: students should participate actively in the discussion.
Students are required to read relevant materials as described in this syllabus or during previous
meetings before attending the class.

In familiarizing students with journals and articles, this course will also be equipped by a number
of chosen journals and articles relevant to the weekly discussions. Students are required to make
a review on each of the journals and/or articles provided.

Grading
Your grade will be determined based on your total score on the following items:
Mid Exam 40%
Final Exam 40%
Homework and Assignment 20%
100%

Your final score will be mapped to a course grade based on the following scheme:
A 90 – 100 C+ 55 – 59
A- 85 – 89 C 50 – 54
A/B 80 – 84 C- 45 – 49
B+ 75 – 79 C/D 40 – 44
B 70 – 74 D+ 35 – 39
B- 65 – 69 D 30 – 34
B/C 64 – 60 E 0 – 29
Course Outline

Week Topic Chapter Lecturer Additional Info

1 Syllabus Syllabus AA Journals/ articles:
and Malmi, Teemu and Brown,
The Nature of Management Control Ch 1 David A., 2008.
Systems Management control
- Basic Concepts systems as a package:
- Boundaries of Management opportunities, challenges
Controls and research directions.
Management Accounting
Research, 19, 287-300.

Case Studies:
1. Wal-Mart Stores, Inc

2 Understanding Strategies Ch 2 AS
- Goals
- The Concepts of Strategies
- Corporate-Level Strategy
- Business-Unit Strategies
3 Behavior in Organizations Ch 3 AS
- Goal Congruence
- Informal Factor that Influence
Goal Congruence
- The Formal Control Systems
- Types of Organizations
- Functions of the Controller

4 Responsibility Centers: Revenue and Ch 4 AS

Expense Centers
Journals/ articles:
- Responsibility Centers
To Be Announced (TBA)
- Revenue Centers
- Expense Centers
Case Studies:
- Administrative and Support
To Be Announced (TBA)
Centers
- Research and Development
Centers
- Marketing Centers
5 Measuring and controlling assets Ch 7 WW
employed
- Structure of the Analysis
- Measuring Assets Employed
- EVA versus ROI
- Additional Considerations in
Evaluating Managers
- Evaluating the Economic
Performance of the Entity
6 Strategic Planning Ch 8 WW
- Nature of Strategic Planning
 - Analyzing Proposed New
Programs
- Analyzing Ongoing Programs
- Strategic Planning Products
MID EXAM
7 Budget Preparation Ch 9 WW
- Nature of the Budget
- Other Budgets
- Budget Preparation Process
Journals/ articles:
- Behavioral Aspects
TBA
Quantitative Techniques
8 Analyzing Financial Performance Ch 10 WW
Case Studies:
Reports
TBA
- Calculating Variances
- Variations in Practice
- Limitations of Variance
Analysis
9 Performance Measurement Ch 11 AA Journals/ articles:
- Performance Measurement Kaplan R & Norton D
Systems (1992), The Balanced
- Interactive Control Scorecard: Measures that
Drive Performance,
Harvard Business Review,
Jan‐Feb, 71‐79.
- Ittner C & Larcker D
(2003), Coming up Short
on Nonfinancial
Performance Measurement,
Harvard Business Review,
Nov, 88‐95.

Case Studies:
Houston Fearless 76, Inc

10 Management Compensation Ch 12 AA Journals/ articles:

- Research Findings on Van der Stede W (2007),
Organizational Incentives The Pitfalls of Pay‐for‐
- Characteristics of Incentive Performance, Finance &
- Compensation Plans Management, 150,
- Incentives for Corporate Dec, 10‐13.
Officers
- Incentives for Business Unit Case Studies:
Managers Houston Fearless 76, Inc
- Agency Theory
11 Control for Differentiated Strategies Ch 13 AA Journals/ articles:
- Corporate Strategy TBA
- Business Unit Strategy
- Top Management Style Case Studies:
TBA
12 Multinational organization Ch 15 AA Journals/ articles:
 - Cultural Differences Dekker H (2004), Control
- Transfer Pricing of Inter‐Organizational
- Exchange Rate Relationships: Evidence on
Appropriation
Concerns and Coordination
Requirements, Accounting,
Organizations and Society,
29(1),
27‐49.

Case Studies:
TBA
FINAL EXAM

Coursework Information

1. Individual Assignments
- Students are required to submit assignment as instructed by the lecture (not weekly). You
have been given the task to write a response note for the articles that has been given prior
to the class meetings. The note should be a maximum of 2-page long A4, Times New
Roman, font 12, 1.5 space.
- Submission is done through Sintesis unless instructed differently. Be aware of the
deadline as it follows the relevant schedule for lecture, except for week 1.
- Outline:
1. What are the problems raised in the research or article you are reading?
2. Explain, why the issue is important or interesting so that it is worthy to be followed
up in a study or research?
3. Is there a theory used in the article? If any, what is the relevance of the theory to the
issue raised in the journal?
4. What is the methodology methods used in this article? Please argue if this
methodology fits for this journal.
5. Is this journal in line with previous research? Name the previous journals and identify
in what ways does this study support/not support the previous researches.

2. Exam
- Unless there are different instructions given, both mid and final-term exams are written
and closed book. The mid-term exam covers the topic from week 1-6 while the final-term
covers the topic from week 8-12.

Academic Integrity
Academic integrity forms a fundamental bond of trust between colleagues, peers, lecturers, and
students, and it underlies all genuine learning. There is no tolerance for plagiarism or academic
dishonesty in any form, including, but not limited to, viewing the exams of others, sharing
answers with others, using books or notes while taking the exam, copying answers or papers, or
passing off someone else’s work as one’s own. A breach of ethics or act of dishonesty can result
in A FAILURE OF AN ENTIRE COURSE (a grade of “E”).