Lecturer: Bernard Van den Berg

Saxion University

This lecture course is designed to broaden and deepen the students' conceptual and technical understanding of management control (MC). The students will be presented a conceptual framework based the theory of Merchant and we will take a look at the implementation of MC in both a big international organisation and a small multinational company.
In this lecture, MC is considered broadly to include everything that managers do to ensure good performance or, more specifically, to ensure that the company's strategies get implemented effectively.

The definition of a MC system applied in this lecture is: All the devices and systems managers use to ensure that the behavior and decisions of employees are consistent with the organization's objectives and strategies.

The approach of Management control in this lecture is based on the objectives of controls and covers both hard controls (results and actions) and soft controls (HR and culture).  The basic assumption is that management control is about human behaviour.

An part of the lecture will be used to discuss a case study that consist of the actual implementation of MC in both a big international organisation in the professional service industry and a small multinational company in the equipment building industry.
Using controls requires managers to make think about the following questions:

• What is the desired behaviour of our employees?
• What is likely to happen without controls?
• Which types of control are appropriate for the company?
• How tight should controls be?
• Which type of responsibility structures is appropriate (e.g., cost centres, profit centres)?
• Which performance measures should be used (e.g. financial, and/or nonfinancial measures and their combinations)?
• How should performance be evaluated and which rewards and penalties are appropriate (including performance-dependent compensation)?
• How strong are the chosen performance measure at the different organisational levels aligned with the strategy?

During the lecture these questions will be discussed and will be linked to both cases.

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