SYLLABUS

AKU3203 – MANAGEMENT CONTROL SYSTEM

Rguler Program
Semester II AY2020/2021
Prerequisite: AKU2202 – Managerial Accounting
Credit Hours: 3

Instructor:
Setiyono Miharjo, Ph.D/Achmad Faizal Azmi, M.Sc.
Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada
Office: FEB UGM South Wing 3rd floor
Email: smiharjo@ugm.ac.id/achmad.faizal.a@mail.ugm.ac.id
Office Hours: by appointment
Class Meeting: Monday, 10.00-12.30WIB

Course Description
We are delighted that you are here, joining Management Control Systems (MCS) course. The
course will be using Anthony Govindarajan’s book, Management Control System as the main
source. However, it isn’t the direct translation of the book. Our interpretations, analytics and
experiences will enrich our discussions. Management control systems (MCS) are developed by
top management to make sure that managements implement the organization’s strategies. This
course focuses on strategy implementation through the use of management control systems.
Specifically, this course covers the knowledge, insights and analytical skills related to how top
management establishes and implements management systems to plan and control firm
performance. In addition, it also discusses the application of the control models in service
industry and multinational corporations. The elements of management control systems include
strategic planning; budgeting; performance measurement, evaluation, and compensation;
responsibility centers; and transfer pricing. After completing this course, the students are
expected to be able to evaluate or to design effective management control systems.

Course Objectives
At the end of the course, students are expected to:
1. understand the development of management control systems for business organizations;
2. be able to evaluate whether control systems are effective and promote goal congruence.

Learning Goals
Department of Accounting Mission:

“Enriched by our vibrant international network but rooted in local wisdom, we develop academics and practices
leaders with the integrity and accounting knowledge needed to serve society. Our contribution to the advancement of
knowledge is through quality research and teaching.”

The course contributes to the following learning goals and objectives of Undergraduate Program
in Accounting:
 Learning goal Objectives/Traits High Med Low Instruments

1. Students 1.1. Demonstrate the ability to deliver Group

demonstrate the written reports through (i) organization; (ii) assignments
ability to style, and (iii) knowledge of the subject.
communicate
1.2. Demonstrate the ability to deliver oral Group
presentation through (i) structure, (ii) presentation
reasoning; (iii) use of media, (iv) body
language; (v) respond to questions

2. Students have 2.1. Demonstrate the ability to identify NA

ethical ethical issues in accounting profession
understanding and
reasoning 2.2. Demonstrate the ability to identify NA
ethical standards in accounting profession

2.3 Students demonstrate an understanding NA

of ethical framework

2.4 Students demonstrate ability to make a NA

choice based on ethical consideration

3. Students 3.1. Students demonstrate theoretical and NA

demonstrate practical understanding of financial
theoretical and accounting
practical
understanding of 3.2. Students demonstrate theoretical and NA
accounting practical understanding of auditing
knowledge.
3.3. Students demonstrate theoretical and Assignment and
practical understanding of cost accounting Final Exam
and managerial control

3.4. Students demonstrate theoretical and NA

practical understanding of Accounting
Information System.

4. Students 4.1. Students demonstrate the ability to work Group

demonstrate ability with peers from diverse backgrounds presentation and
to work in team assignments

4.2. Students are present at team meetings Group

presentation and
assignments

4.3. Students participate actively in team Group

meetings presentation and
assignments

4.4. Students are committed to work together Group

on team assignments presentation and
assignments
 Learning goal Objectives/Traits High Med Low Instruments

5. Students 5.1. Understand their own strength and Group

demonstrate ability weakness presentation and
to lead others assignments

5.2. Students demonstrate the ability to Group

inspire their peers presentation and
assignments

5.3. Students demonstrate the ability to direct Group

their peers and team presentation and
assignments

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

Teaching Methods
Class discussions are the fundament of this course. You are expected to read the materials prior
to the class meeting to create fruitful discussions in the class. You will be assigned into groups to
work on group assignments and group presentations. In every presentation, one group will be
assigned as the presenters and the rest will be the discussants. The presenters must prepare power
point presentations, or the alike, while the discussants are required to submit a paper (TNR 12,
space 1.5) with discussions and answers to the case questions. Each member of the presenting
group must contribute to the presentation fairly in terms of effort and time. The individual mark
of the presenters will be based on the contribution.

Class attendance
Students should try the best they can to attend all the scheduled class meetings.
Absenteeism may count in the final grade.

Notes: The Faculty stipulate that a student may skip classes for 20% of actual class meetings for
the semester This absenteeism a fair allowance for events that are beyond the control of students
to be absent from a class. Allowance for absenteeism in not a right that should be taken but a fair
way to treat you for some misfortune (e.g. getting really sick). Of course you do not expect to
have a misfortune.
In universities abroad, students are not required to sign up the attendance list because
usually there is no such a list. Attendance list is unnecessary because students will always attend
all the scheduled classes to get some things that they cannot get from reading materials that is the
opportunity to discuss and reconcile their understanding from individual learning. It means that
learning motivation comes from within the learner (self-motivated learning) and attending list is
irrelevant or useless. Attending class is an intellectual pursue for self-development to become a
scholar.
 It may be assumed that in Indonesia such a learning culture have not been prevalent due
to high moral hazard so that external motivation is needed. In McGregor term, Indonesian
university students generally follow theory -X assumptions. Signing up an attending list is a way
to create an external motivation.
For real or genuine students, presence proof is not a big deal because they will attend a
class anyway for good reason. They can’t even wait for the next class.

Grading
Your grade will be determined based on your total score on the following items:
Participation and group presentation 30%
Assignments and quizzes 30%
Mid-term exam 20%
Final exam 20%

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 Grading

Grade E: There is no work that can be graded.

Grade D: Fail to demonstrate the major part or the whole part of learing goals.

Grade D+ up to C-: Demostrate a real shortcoming in understanding and applying underlying

concepts; communicate the ideas and informations in incomplete ways or confusing and give just
little attention the conventions of the science field.

Grade C up to B/C: Demonstrate a superficial or partial or erroneous (faulty) understanding of

basic concepts of the field of study and the limited ability to apply the concepts; giving an
unsupported or improper argument; communicate information or ideas with unclear and
inconsistent compliance with disciplinary conventions.

Grade B: demonstrate adequate understanding and application of basic concepts from the field
of study; building arguments or decisions and providing acceptable justification; communicating
information and ideas adequately in terms of disciplinary conventions.

Grade B+ and A/B: demonstrate a substantial understanding of basic concepts in various

contexts; develop or adapt convincing arguments and provide a comprehensive justification;
communicating information and ideas adequately in terms of disciplinary conventions.
Grade A-: like B+, with much evidence of originality in defining and analyzing issues or
problems and in creating solutions; using levels, styles and suitable communication means to the
discipline of science and audience.

Grade A: like A-, with consistent evidence of substantial originality and understanding in
identifying, producing and communicating conflicting arguments, perspectives or problem
solving approaches; critically evaluate the problem, its solutions and the implications of the
problem.

Course Outline

Week Topic Chapter/ References and

Presentation Assignments
Group
1 Syllabus Syllabus
Introduction: Management Control and Ch. 1
Systems Overview
- Basic Concepts
- Boundaries of Management
Controls
- Road Map of the course
2 Understanding Strategies Ch. 2 Case 2-1 dan 2-2:
- Goals Encyclopedia Britannica (a)
- The Concepts of Strategies Group 1 dan (b)
- Corporate-Level Strategy
- Business-Unit Strategies
-
3 Behavior in Organizations Ch. 3 Case 3-1: Southwest Airlines
- Goal Congruence Corporation
- Informal Factor that Influence Group 2
Goal Congruence
- The Formal Control Systems
- Types of Organizations
- Functions of the Controller
4 Responsibility Centers: Revenue and Ch. 4 Case 4-6: Grand Jean
Expense Centers Company
- Responsibility Centers Group 3
- Revenue Centers
- Expense Centers
- Administrative and Support
Centers
- Research and Development
Centers
- Marketing Centers
5 Profit Centers Ch. 5 Case 5-4: Abrams Company
- General Considerations
Week Topic Chapter/ References and
Presentation Assignments
Group
- Business Units as Profit Centers Group 4
- Other Profit Centers
- Measuring Profitability
6 Transfer pricing Ch. 6 Case study: Stone Group
- Objectives of Transfer Prices
- Transfer Pricing Methods Group 5
- Pricing Corporate Service
- Administration of Transfer
Prices
7 Measuring and controlling assets Ch. 7 Case 7-5: Dell Computer
employed Corporation
- Structure of the Analysis Group 6
- Measuring Assets Employed
- EVA versus ROI
- Additional Considerations in
Evaluating Managers
- Evaluating the Economic
Performance of the Entity
MID EXAM
8 Strategic Planning Ch. 8 Case study: United Parcel
- Nature of Strategic Planning Service
- Analyzing Proposed New Group 7
Programs
- Analyzing Ongoing Programs
- Strategic Planning Products

9 Budget Preparation Ch. 9 Case Study:

- Nature of the Budget Citibank Indonesia
- Other Budgets Group 8
- Budget Preparation Process
- Behavioral Aspects
- Quantitative Techniques

10 Analyzing Financial Performance Ch 10 Case 10-3: Galvor Company

Reports
- Calculating Variances Group 9
- Variations in Practice
- Limitations of Variance
Analysis
11 Performance Measurement Ch 11 Case study: Microsoft Latin
- Performance Measurement America
Systems Group 10
- Interactive Control
Week Topic Chapter/ References and
Presentation Assignments
Group
12 Management Compensation Ch 12 Case Study:
- Research Findings on 2G Robotics
Organizational Incentives Group 11
- Characteristics of Incentive
- Compensation Plans
- Incentives for Corporate
Officers
- Incentives for Business Unit
Managers
- Agency Theory
13 Control for Differentiated Strategies Ch 13 Case Study:
- Corporate Strategy Singapore Airlines
- Business Unit Strategy Group 12
- Top Management Style
14 Service Organization Ch 14 Case study: Hadassah
- Service Organization in General University Hospital-Mt.
- Professional Service Group 13 Scopus
Organizations
- Financial Service Organizations
- Health Care Organizations
- Nonprofit Organizations
FINAL EXAM

Additional Information
 Plagiarism
For every written assignment (both presentation and written report), please make sure that
you know what constitutes as plagiarism. The University defines plagiarism as presenting
someone else’s work as your own, including images and other material as well as text. Do
not plagiarize, collude, or cheat in any way. All instances of plagiarism will be treated
severely according to University disciplinary procedures. Please check FEB’s website
https://paleffi.feb.ugm.ac.id/images/test/PANDUAN-ANTI-PLAGIARISME-Versi-Cetak-
170405084717.pdf for the guidelines for anti-plagiarism.
 Referencing
Referencing is the acknowledgment of the sources you used when producing your piece of
work. Referencing correctly is important to demonstrate how widely you have researched
your subject, to show the basis of your arguments and conclusions, and to avoid
plagiarism. You need to give the person reading your assignment enough information to
find the sources you have consulted. This is done by including citations in your work and
providing a list of references.
 You are expected to use the Faculty's version of the Turabian referencing style for your
assignments for this module. Guidance on how to include citations within your text and
how to reference different types of material using Turabian is provided here:
 http://lib.feb.ugm.ac.id/wp-content/uploads/2017/10/PEDOMAN-PENULISAN-KARYA-
ILMIAH.pdf.

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/notes/cellphone 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”).