Performance Evaluation and Accountability

Knowledge of Management Accounting

The classes in this UC are theoretical and practical.

As a general rule, there is first a presentation of theoretical concepts followed by practical examples to illustrate their application in specific organizational contexts.

Students are also involved in the various themes through research, and preparation/presentation of work (literature review articles), and through critical analysis of the work of other colleagues.

During classes, we seek to involve all students in discussing the work presented with the aim of stimulating critical analysis and scientific investigation.

The Course on Performance Assessment and Accountability aims to provide master’s students with the necessary knowledge about:

.The primordial and increasingly relevant role that Management Control has assumed in recent years in the management of Organizations, whether public or private, corporate or otherwise, due to the greater complexity of management problems and the consequent need to improve performance and get better results;

• The management control model by objectives applied in Responsibility Centers, as it is a fundamental management function;
• The bases of models for the control of management by objectives of Responsibility Centers, the definition of action plans and performance evaluation indicators, as extremely useful tools to support management
• Analysis of global financial performance
• Analysis of future value generation.

Skills:

Upon completion of the Curricular Unit, the student should obtain the following general skills:

Capacity for analysis and synthesis and decision making;
Critical and self-critical capacity;
Ability to understand theory and apply it to practice;
Abilities to work in a group.
And the following technical skills:

Articulate and insert the management control of a responsibility center in the strategic and operational planning of the company;
Develop management control of a responsibility center;
Design the bases of a responsibility center management control and implement it in the reality of the different business areas;
Build action plans and performance assessment measures applicable to the different types of responsibility centers.

1. The Budget Control Process in Management Control

1.1 Concept and objectives of management control

1.2 Basic aspects of Budgetary Control

1.2.1. Budgeting and uncertainty. Adjusted Budget Construction – flexible control.

1.2.2. Determination of significant deviations – control by exception.

.1.2.3. The conditions of effectiveness of budgetary control

1.3. Calculation and analysis of deviations.

1.3.1. Deviations by liability

1.3.1.1 Purchase Diversion

1.3.1.2 Production Deviation

1.3.1.3 Commercialization Deviation

1.3.1.4 Deviation of Structural Costs

1.3.2. The integration of deviations – the deviation of Results

1.4. Deviations by Cause

1.4.1 Volume deviation

1.4.2 Mix deviation

1.4.3. Deviation of efficiency

1.4.4 Price deviation

2. Management control and organizational structures.

3. Decentralization in organizations.

4. Organization by Responsibility Centers and their delimitation.

5. Concepts and characteristics of cost centers, income, results and investment.

6. Financial criteria for evaluating the performance of responsibility centers.

7. Internal Transfer Pricing (PTI).

8. Some indicators for evaluating the performance of managers and responsibility centers

9. Performance evaluation and incentives and rewards system

NAO

 Basic:

1. Robert N. A., Govindarajan V., Hartmann F. G. H. , Kraus K., Nilsson G.  (2014). Management Control Systems, – First European Edition , McGraw-Hill New York;

2. Daft, R., Management /New era of Management, 2005, 7th Ed., Thompson/South-Western

3. Drury, Colin: Management Accounting for Business (2021), 11th edition. South-Western Cengage Learning;

4. Merchant, Ka and Stede Wav (2007). Management Control Systems, Ed. Prentice Hall;

5. Neves, João C., Jordan, H., Rodrigues, José A. (2015) Management Control at the Services of Strategies and Managers, 10th Ed., Areas Editora,

6. Nicolas Berland, Benjamin Dreveton (2006). Management control system in public administration: beyond rational myths. Accounting Reform in the Public Sector: Mimicry, fad or Necessity, Réseau Cigar, p. 21-37.

7. OECD (1996), “Management Control in Modern Government Administration: Some Comparative Practices”, SIGMA Papers, No. 4, OECD Publishing, Paris, https://doi.org/10.1787/5kml6gb4gn32-en.

8. Welsch, Glenn A., Hilton, Ronald W. E Gordon, Paul N, Budgeting (1988). Profit Planning and Control, Ed. Prentice Hall, 5th Edition;

9. Simons, R. (2013). Performance measurement & control systems for implementing strategy, Text and Cases, Prentice Hall (FEP – 658.15-80)

Material prepared by the teacher:

Support material and practical cases provided by the teacher.