Part 1: Management control and management control systems ........................................... 5
Chapter 1: Introduction to management control .......................................................... 5
1.1 Management control ................................................................................ 5
1.2 Need for control ....................................................................................... 5
1.3 Firm size .................................................................................................. 6
1.4 Management and control .......................................................................... 7
1.5 Accounting and control............................................................................. 7
1.6 Human behaviour..................................................................................... 7
Chapter 2: Designing management control systems..................................................... 9
2.1 Objects ........................................................................................................ 9
2.2 Elements .................................................................................................... 10
2.3 Control model ............................................................................................. 11
2.4 Strategy, management control and task control ............................................. 12
2.5 ................................................................................................................... 13
....................................................................................................................... 13
Framework for strategy implementation ............................................................. 13
Part 2: The environment and strategy of organizations ....................................................... 14
Chapter 3: Organizations and their environment ........................................................ 14
3.1 Shareholders and stakeholders .................................................................... 14
3.2 Goals of the organization ............................................................................. 15
3.3 Two major trends ......................................................................................... 15
3.4 The environment of the organization ............................................................. 17
Chapter 4: Strategy and management control ............................................................ 19
4.1 Strategy from different perspectives ............................................................. 19
4.2 Strategic frameworks ................................................................................... 20
4.3 Strategy and management control systems ................................................... 23
Part 3: The management control and the organization’s internal structure .......................... 24
Chapter 5: Decentralization, control and incentives ................................................... 24
5.1 Decentralization .......................................................................................... 24
5.2 Types.......................................................................................................... 26
5.3 Management control overview ..................................................................... 27
5.4 Tight and loose control ................................................................................ 28
5.5 Controllership ............................................................................................. 29
1
, 5.6 Case study: Southwest Airlines Corporation .................................................. 30
Chapter 6: Responsibility centres: revenue and expense centres ................................ 30
6.1 Responsibility centres ................................................................................. 30
6.2 Revenue centres ......................................................................................... 33
6.3 Expense centres .......................................................................................... 34
6.4 Case study: BookWorm ............................................................................... 37
Chapter 7: Responsibility centres: profit and investment centres ................................ 37
7.1 Introduction ................................................................................................ 37
7.2 Profit centres .............................................................................................. 37
7.3 Investment centres...................................................................................... 41
7.4 Case study: Vyaderm Pharmaceuticals ......................................................... 44
Chapter 8: Transfer pricing, shared service centres and cross-functional management 47
8.1 Transfer pricing (TP) ..................................................................................... 47
8.2 Shared service centres (SSC) ....................................................................... 52
8.3 Cross-functional management (CFM) ........................................................... 53
8.4 Case study: Birch Paper Company ................................................................ 55
Part 4: The management control process ......................................................................... 56
Chapter 9: Planning and budgeting ........................................................................... 56
9.1 To plan or not – the goals of budgeting........................................................... 56
9.2 Long range, strategic planning ...................................................................... 57
9.3 The parts and linkages of the budget ............................................................. 59
9.4 Budgeting process ....................................................................................... 59
9.5 Beyond budgeting ....................................................................................... 62
9.6 Case study: Wilson Beverages ...................................................................... 63
9.7 Case study: Vershire Company..................................................................... 64
Chapter 10: Performance measurement and analysis ................................................ 64
10.1 Introduction .............................................................................................. 64
10.2 Financial measures: variance analysis ........................................................ 65
10.3 Strategy mapping and balanced scorecard ............................................... 71
10.4 Case Study: PETCO ................................................................................... 76
10.5 Case Study: Volkswagen do Brazil ............................................................... 77
Chapter 11: Compensation, incentives and motivation .............................................. 80
11.1 Compensation and incentives .................................................................... 80
2
, 11.2 Agency theory ........................................................................................... 81
11.3 Motivation crowding theory (MCT) ............................................................... 83
11.4 Comparing the theories ............................................................................. 85
11.5 Case study: Quality Metal Service Center .................................................... 85
Inleiding .................................................................................................................. 87
1.Traditionele kostprijssystemen en verschillenanalyse .............................................. 89
2.Activity Based Costing (& management) ................................................................. 90
2 cruciale opmerkingen vanuit theorie: ............................................................... 91
3.Time Driven Activity Based Costing ......................................................................... 93
4.Customer Profitability Analysis .............................................................................. 94
5. Relevante Kosten en Opbrengsten ......................................................................... 97
Theorie adhv voorbeeld: .................................................................................... 97
6.Total Cost of Ownership ........................................................................................ 98
3
,4
, Management Controle
Part 1: Management control and management control systems
Management controle = het topmanagement gaat er trachten voor te zorgen dat iedereen in de
organisatie werkt en de strategie gaat implementeren.
Synoniemen voor Management Controle (MC) zijn:
- Performance measurement and management
- Strategy execution
- Strategy implementation
- Goal congruence (doelstellingen wn in lijn met die van organisatie
Chapter 1: Introduction to management control
1.1 Management control
Management control is the systematic process by which the organization’s higher-level managers
influence the organization’s lower-level managers and employees to implement the organization's
strategies.
Decentralization is the single most important reason for organizations to need management control
systems (MCS)
- Wanneer je beslissingsbevoegdheid geeft aan anderen → meten en weten of die goed bezig is
dus daarom is performance measurement een synoniem
1.2 Need for control
Decentralized managers do not automatically understand the goals and strategies developed by the
higher-level managers, nor how they can contribute to these goals and strategies
- Goals: centraal gedefinieerde doelstellingen (bv: accounting profit, economic profit, PPP, CSR,
ESG, mission statement etc.) → er zijn dus heel veel verschillende mogelijkheden om doelen
te formuleren.
- Strategies: keuzes om doelstellingen te bereiken
Decentralized managers do not automatically agree with organizational goals and strategies
developed by higher-level managers
- Agency theory: het hoeft niet zo te zijn dat de doelstellingen van de gedecentraliseerde
manager gelijk zijn aan die van het bedrijf
- Gedecentraliseerde managers hebben ook veel ‘private goals’, zaken die zij zelf willen bereiken
met hun afdeling bv.
- Gedecentraliseerde managers hebben vaak ook private informatie: meer kennis over de markt,
klanten etc. daarom gaan zijn niet altijd akkoord → “met onze info zouden we iets anders doen
dan wat jullie beslissen”
decentralized managers do not automatically have the resources needed to act with organizational
goals and strategies developed by higher-level managers
5
Chapter 1: Introduction to management control .......................................................... 5
1.1 Management control ................................................................................ 5
1.2 Need for control ....................................................................................... 5
1.3 Firm size .................................................................................................. 6
1.4 Management and control .......................................................................... 7
1.5 Accounting and control............................................................................. 7
1.6 Human behaviour..................................................................................... 7
Chapter 2: Designing management control systems..................................................... 9
2.1 Objects ........................................................................................................ 9
2.2 Elements .................................................................................................... 10
2.3 Control model ............................................................................................. 11
2.4 Strategy, management control and task control ............................................. 12
2.5 ................................................................................................................... 13
....................................................................................................................... 13
Framework for strategy implementation ............................................................. 13
Part 2: The environment and strategy of organizations ....................................................... 14
Chapter 3: Organizations and their environment ........................................................ 14
3.1 Shareholders and stakeholders .................................................................... 14
3.2 Goals of the organization ............................................................................. 15
3.3 Two major trends ......................................................................................... 15
3.4 The environment of the organization ............................................................. 17
Chapter 4: Strategy and management control ............................................................ 19
4.1 Strategy from different perspectives ............................................................. 19
4.2 Strategic frameworks ................................................................................... 20
4.3 Strategy and management control systems ................................................... 23
Part 3: The management control and the organization’s internal structure .......................... 24
Chapter 5: Decentralization, control and incentives ................................................... 24
5.1 Decentralization .......................................................................................... 24
5.2 Types.......................................................................................................... 26
5.3 Management control overview ..................................................................... 27
5.4 Tight and loose control ................................................................................ 28
5.5 Controllership ............................................................................................. 29
1
, 5.6 Case study: Southwest Airlines Corporation .................................................. 30
Chapter 6: Responsibility centres: revenue and expense centres ................................ 30
6.1 Responsibility centres ................................................................................. 30
6.2 Revenue centres ......................................................................................... 33
6.3 Expense centres .......................................................................................... 34
6.4 Case study: BookWorm ............................................................................... 37
Chapter 7: Responsibility centres: profit and investment centres ................................ 37
7.1 Introduction ................................................................................................ 37
7.2 Profit centres .............................................................................................. 37
7.3 Investment centres...................................................................................... 41
7.4 Case study: Vyaderm Pharmaceuticals ......................................................... 44
Chapter 8: Transfer pricing, shared service centres and cross-functional management 47
8.1 Transfer pricing (TP) ..................................................................................... 47
8.2 Shared service centres (SSC) ....................................................................... 52
8.3 Cross-functional management (CFM) ........................................................... 53
8.4 Case study: Birch Paper Company ................................................................ 55
Part 4: The management control process ......................................................................... 56
Chapter 9: Planning and budgeting ........................................................................... 56
9.1 To plan or not – the goals of budgeting........................................................... 56
9.2 Long range, strategic planning ...................................................................... 57
9.3 The parts and linkages of the budget ............................................................. 59
9.4 Budgeting process ....................................................................................... 59
9.5 Beyond budgeting ....................................................................................... 62
9.6 Case study: Wilson Beverages ...................................................................... 63
9.7 Case study: Vershire Company..................................................................... 64
Chapter 10: Performance measurement and analysis ................................................ 64
10.1 Introduction .............................................................................................. 64
10.2 Financial measures: variance analysis ........................................................ 65
10.3 Strategy mapping and balanced scorecard ............................................... 71
10.4 Case Study: PETCO ................................................................................... 76
10.5 Case Study: Volkswagen do Brazil ............................................................... 77
Chapter 11: Compensation, incentives and motivation .............................................. 80
11.1 Compensation and incentives .................................................................... 80
2
, 11.2 Agency theory ........................................................................................... 81
11.3 Motivation crowding theory (MCT) ............................................................... 83
11.4 Comparing the theories ............................................................................. 85
11.5 Case study: Quality Metal Service Center .................................................... 85
Inleiding .................................................................................................................. 87
1.Traditionele kostprijssystemen en verschillenanalyse .............................................. 89
2.Activity Based Costing (& management) ................................................................. 90
2 cruciale opmerkingen vanuit theorie: ............................................................... 91
3.Time Driven Activity Based Costing ......................................................................... 93
4.Customer Profitability Analysis .............................................................................. 94
5. Relevante Kosten en Opbrengsten ......................................................................... 97
Theorie adhv voorbeeld: .................................................................................... 97
6.Total Cost of Ownership ........................................................................................ 98
3
,4
, Management Controle
Part 1: Management control and management control systems
Management controle = het topmanagement gaat er trachten voor te zorgen dat iedereen in de
organisatie werkt en de strategie gaat implementeren.
Synoniemen voor Management Controle (MC) zijn:
- Performance measurement and management
- Strategy execution
- Strategy implementation
- Goal congruence (doelstellingen wn in lijn met die van organisatie
Chapter 1: Introduction to management control
1.1 Management control
Management control is the systematic process by which the organization’s higher-level managers
influence the organization’s lower-level managers and employees to implement the organization's
strategies.
Decentralization is the single most important reason for organizations to need management control
systems (MCS)
- Wanneer je beslissingsbevoegdheid geeft aan anderen → meten en weten of die goed bezig is
dus daarom is performance measurement een synoniem
1.2 Need for control
Decentralized managers do not automatically understand the goals and strategies developed by the
higher-level managers, nor how they can contribute to these goals and strategies
- Goals: centraal gedefinieerde doelstellingen (bv: accounting profit, economic profit, PPP, CSR,
ESG, mission statement etc.) → er zijn dus heel veel verschillende mogelijkheden om doelen
te formuleren.
- Strategies: keuzes om doelstellingen te bereiken
Decentralized managers do not automatically agree with organizational goals and strategies
developed by higher-level managers
- Agency theory: het hoeft niet zo te zijn dat de doelstellingen van de gedecentraliseerde
manager gelijk zijn aan die van het bedrijf
- Gedecentraliseerde managers hebben ook veel ‘private goals’, zaken die zij zelf willen bereiken
met hun afdeling bv.
- Gedecentraliseerde managers hebben vaak ook private informatie: meer kennis over de markt,
klanten etc. daarom gaan zijn niet altijd akkoord → “met onze info zouden we iets anders doen
dan wat jullie beslissen”
decentralized managers do not automatically have the resources needed to act with organizational
goals and strategies developed by higher-level managers
5
