Management Control Systems

Students must have prior knowledge in:

• Management and Administration, namely with regard to the management cycle and the various functional areas of organizations;
• Financial Accounting, namely with regard to Financial Statements and the Accounting Standardization System in general;
• Management Accounting, namely with regard to the different types of expenses and income and respective calculation methodologies.

The teaching methods to be used are as follows:

Theoretical component: Expository method, in which the teacher presents concepts, principles, deductions or statements from which conclusions or consequences are drawn. The participation of students will be encouraged during the presentation of the themes and that the students are the ones to draw conclusions.

Practical component: Programmed teaching, based on the active participation of students, division of tasks into parts that are easy to solve, increasing degree and complexity, immediate feedback and, whenever possible, adaptation to the learning pace of each student.

Provide the student with the necessary knowledge for the design, implementation and use of management control systems, namely in their aspects of behavior guidance instrument (a priori management control), strategic performance assessment (a posteriori management control) and decision-making support.

In order to achieve these objectives, the student must obtain skills in the following areas:

• Organizational information segmentation;
• Analysis of costs and income relevant to decision-making, namely in terms of their behavior in the face of changes in the volume of activity;
• Obtaining and processing relevant information for decision-making inherent to the organization’s internal and external constraints;
• Accountability of managers and assessment of individual and organizational performance, in financial and non-financial terms.

1. Definition of Management Control
    1.1. Management Control and its relation whit other areas of Management
    1.2. Historical evolution of Management Control
    1.3. Main Management Control tools
    1.4. Implementing a Management Control System

2. Management Control and Decision Making
    2.1. Cost-Volume-Profit Analysis: main indicators
    2.2. Sensitivity analysis: Goal seek and What If analysis
    2.3. Relevant costs for decision making
    2.4. Scarce resources and profit maximization
    2.5. Theory of Constraints and Management of Bottlenecks

3. Management Control and Performance: Segmentation of financial value and accountability for results
        3.1. Responsibility centers
        3.2. Performance evaluation criteria
        3.3. Internal transfer prices

4. Budgetary control and deviations
    4.1. The budgetary control
    4.1. The detailed determination of deviations by causes

NAO

Basic Bibliography:

• Jordan, Hugues ; Neves, João Carvalho das ; Rodrigues, José Azevedo – O controlo de gestão ao serviço da estratégia e dos gestores. 11ª ed. Lisboa : Áreas, 2021. 486 p.. ISBN 978-989-9010-03-1;
• Anthony, Robert N. – Management control systems. London [etc.] : McGraw-Hill, 2014. 640 p.. ISBN 978-007713326-9;

 Complementary Bibliography:

• Merchant, Kenneth A. ; Stede, Wim A. Van der – Management control systems : performance measurement, evaluation and incentives. 2nd ed. Harlow [etc.] : Prentice Hall, 2007. 850 p.. ISBN 978-0-273-70801-8;
• Hansen, Don R.; Mowen, Maryanne M.; Heitger, Dan L. – Cost Management. 5th ed.: Cengage, 2018. ISBN: 978-0-357-14109-0