CALIFORNIA STATE UNIVERSITY, CHICO COLLEGE OF BUSINESS Department of Accounting and Management Information Systems ACCOUNTING 623 Management Control Systems Spring 2006 Professor: Steve Adams Office: Glenn 211 Phone: Office - 898-6359
E-Mail:
[email protected] FAX: 898-4584
Materials: Anthony and Govindarajan, Management Control Systems, 11th ed. (AG) Goldratt and Cox, The Goal, Third Revised ed. (G&C) Prerequisite: Introduction to Managerial Accounting (ACCT 202 at Chico) APPROXIMATE BASIS FOR COURSE GRADE Group presentation . . . . . . . . . . . . . . . . . . . . . . . . . Individual and group quizzes . . . . . . . . . . . . . . . . . Case write-ups, problems and class participation . . Total . . . . . . . . . . . . . . . . . . . . . . . .
100 points 210 points 110 points 420 points
Each group will be required to prepare a comprehensive written solution to one case and present that case to the class. The solutions will be typewritten and include additional research about the firm, industry and/or accounting issues related to the cases. Visual aids often assist in a case presentation. The written solutions will be submitted to me before your presentation. Your group members will assess your contribution to the case presentation. For the remaining cases which you don't present, you are required to submit a maximum two-page (with 1.5 line spacing), typewritten solution in class which must include: 1) A brief outline of the major problems addressed in the case. Do not restate what is in the case! 2) A recommended solution to the problems identified (most of your write-up). (You are encouraged to be creative!) An individual quiz followed by a group quiz will be given at the beginning of most classes. The quizzes will cover the readings assigned for that day. The individual portions will be worth half the points, and the group portions represent the other half of the points. Group portions of the quizzes cannot be made-up. Class participation is critical in a graduate seminar. Therefore, any absences from class will materially reduce your participation points. You are expected to be prepared to discuss both the readings and the cases assigned. Basis for Grade:
93-100 90-92 88-89 83-87 80-82 78-79 73-77 70-72
A AB+ B BC+ C C-
Basic Approach to Case Analysis 1) Determine strategic key success factors which are critical to success at that specific organization. 2) Evaluate the effectiveness of the current accounting information/control system with respect to the critical factors. 3) Make recommendations for systems improvements that will assist in the attainment of organizational goals.
Case Presentation Grading Guide Background Research: Industry/product Firm, if identifiable
___________ ___________
Strategic Plan and Key Success Factors
___________
Accounting/Management Control Issues
___________
Integration of Text and Readings*
___________
Effective Use of Data Analysis
___________
Creative Solutions to Problems
___________
Answers to Case Questions
___________
Quality of Class Presentation
___________
Grammar, Punctuation, Spelling
___________
* Often the weakest part of papers.
Course Objectives The objectives of this course include: 1. An introduction to management control systems (formal systems developed by organizations to foster goal congruence and increase effectiveness); 2. A demonstration of how accounting information supports important organizational decisions (capital budgeting, pricing, performance evaluation); 3. An exposure to different how accounting supports process improvement efforts; and 4. An expansion of students' understanding of the assumptions underlying accounting. NOTE: I expect this course to be a learning experience for me as well.
Food for Thought "The most exciting and innovative work in management today is found in [managerial] accounting theory, with new concepts, new approach, new methodology - even what might be called new economic theory - rapidly taking shape." Peter F. Drucker "Let's not forget that the question of how to measure, objectively and constructively, past local performance is one of the most burning managerial questions. If we succeed in satisfactorily answering this question, we can justifiably call this portion of our information system 'CONTROL.'" Eliyahu Goldratt The Haystack Syndrome, p. 143 “I am as I am measured.” paraphrase of Descartes
TENTATIVE COURSE OUTLINE TOPIC
READING ASSIGNMENTS
COLLECTED ASSIGNMENTS
Jan. 23
Introduction
AG, Ch. 1
None
Jan. 30
Strategy and Performance Measures
AG, Ch. 2 & 3 Beischel et al.
Monarch Chemicals (H)
Feb. 6
Revenue, Expense & Profit Centers
AG, Ch. 4 & 5 Adams Case 2-2
None
Feb. 13
Investment Centers & EVA
AG, Ch. 7 Barber et al.
Abrams (AG) Problem 7-1, parts 1, 4-7
Feb. 20
Strategy & ABC (Adams 3-1)
AG, Ch. 8 Estrin et al.
Industrial Prod. (AG)
Feb. 27
Pricing (Adams 2-5)
AG, Ch. 6 Swensen et al.
Allied Office (AG)
March 6
Budget Preparation (Adams 4-1)
AG, Ch. 9 Jensen
Quality Dairy (H)
Spring Break
March 13 March 20
Variance Analysis (Adams 2-7, 4-5)
AG, Ch. 10, Adams et al. G&C, Ch. 1-20
Sound Dynamics (AG)
March 27
Performance Measurement
AG, Ch. 11, Kaplan et al. Adams, Case 3-4
None
April 3
Process Improvement (Adams 3-2, 3-4)
*Atkinson et al., *Ostrenga et al.
Analog Devices A&B (AG)
April 10
Theory of Constraints
G&C, Ch. 21-33
Motorola (AG)
April 17
International
AG, Ch. 15
Cal-Illini (H)
April 24
Service Organizations
AG, Ch. 14
Lincoln Electric (AG)
May 1
Project Control
AG, Ch. 16
Metropol. Bank (AG)
May 8
ERP systems & Green Accounting
Dechow & Mouritsen Gibson and Martin
None
NOTE: An (AG) after a case in the case assignment column indicates that the case is in the Anthony and Govindarajan text. Cases that will be handed out in class are denoted with a (H). Cases are in italics.
* On reserve in the library
ACCOUNTING 623 READINGS Adams, S.J., L. Pryor, D. Keller, and M. Harston, Using management Accounting Information (Cincinnati: ITP South-Western, 2003). Referenced sections on WebCT. Adams, S.J., H.R. Toole and P. Krause, "Predictive Performance Evaluation Measures: Field Study of a Multi-Outlet Business," Accounting and Business Research (Winter, 1993), pp. 3-10. Atkinson, H.A. Jr., G. Hohner, B. Mundt, R.B. Troxel, and W. Winchell, Current Trends in Cost of Quality: Linking the Cost of Quality and Continuous Improvement (Montvale, NJ: National Association of Accountants, 1991). Barber, F. and R. Strack, “The Surprising Economics of a ‘People Business’,” Harvard Business Review (June 2005), pp. 80-90. Beischel, M.E. and K.R. Smith, "Linking the Shop Floor to the Top Floor," Management Accounting (October 1991), pp. 25-29. Dechow, N. and J. Mourtisen, “Enterprise Resource Planning Systems, Management Control and the Quest for Integration,” Accounting, Organizations and Society (2005), pp. 691-733. Ditz, D., J. Ranganathan and R.D. Banks, Green Ledgers: Case Studies in Corporate Environmental Accounting (Baltimore: World Resources Institute, 1995). Estrin, T.L., J. Kantor, and D. Albers, “Is ABC Suitable for Your Company?,” Management Accounting (April 1994), pp. 40-45. Gibson, K. and B. Martin, “Demonstrating Value through the Use of Environmental Management Accounting,” Environmental Quality Management (Spring 2004), pp. 45-52. Jensen, Michael, “Corporate Budgeting is Broken,” Harvard Business Review (Nov. 2001), pp. 94-103. Kaplan, R.S. and D.P. Norton, “The Balanced Scorecard - Measures That Drive Performance,” Harvard Business Review (Jan./Feb. 1992), pp. 71-79. Ostrenga, M.R., T.R. Ozan, R.D. McIlhattan and M.D. Harwood, The Ernst & Young Guide to Total Cost Management (New York: John Wiley & Sons, 1992). Swensen, D, S. Ansari, J. Bell, and I. Kim, “Best Practices in Target Costing,” Management Accounting Quarterly (Winter 2003), pp. 12-17. (Online in Business Source Premier) Note: The ABI/INFORMS database has the full text of all articles except Swenson, which is in Business Source Premier, except for the two handout articles.
ACCOUNTING 623 Case Sign-Up Spring 2006 Presenter Team Abrams
_______________
Industrial Products
_______________
Allied Office
_______________
Quality Dairy
_______________
Sound Dynamics
_______________
Analog Devises A&B
________________
Motrola
_______________
Cal-Illini
_______________
Lincoln Electric
_______________
Metropolitan Bank
________________
Accounting 623 Student Background Survey Name ______________________ Hometown ___________________ Undergraduate Major___________________ Group Meeting Constraints:
Work and other Interesting Experiences:
What is your area of concentration in the graduate program?
What area (Finance, HRM) do you hope to work in after graduation?