22705 Management Planning and Control

Subject level: Postgraduate

Handbook description

This subject examines the role of management accounting in organisations and society. The 'conventional wisdom' in management views accounting as an information system which assists managers in organisational planning and control, when, in fact, its role is to increase the effectiveness and efficiency of organisations. Functionalist theory of accounting such as activity-based costing, agency theory and contracting cost theory are considered. In recent years, there has been increasing criticism of mainstream functionalist accounting research because of its inability to provide an adequate understanding of the actual functioning of accounting in organisations. The subjects also looks at recent accounting studies which have attempted to redress this deficiency by locating accounting in its organisational, societal and historical contexts.

Subject objectives/outcomes

On successful completion of this subject students should be able to:

1. Develop understandings of planning, control and performance evaluation processes in contemporary organisations.
2. Develop understandings of the role of management accounting in planning, control and performance evaluation processes in contemporary organisations.
3. Identify and understand the nature and determinants of organisational choices with regard to planning, control and performance evaluation processes.
4. Identify and understand a range of management accounting theories which seek to explain planning, control and performance evaluation choices of contemporary organisations.
5. Identify and understand planning, control and performance evaluation issues relevant to inter-organisational collaboration ventures and international operations.
6. Demonstrate skills in researching relevant management accounting literature and an understanding of the logic of research as it applies to the role of management accounting in planning, control and performance evaluation of contemporary organisations.

Contribution to graduate profile

This subject provides a foundation for the application of accounting knowledge for effective planning and control of contemporary organisations and the consequent measurement and evaluation of organisations performance. It covers a number of perspectives on organisational decision making as a framework for understanding, analysing, and evaluating planning, control and performance evaluation processes.

This subject contributes to the objectives of the Postgraduate program by focusing on the development of vocationally relevant understandings of planning, control and performance evaluation concepts and the role of management accounting. It also focuses on the development of professional skills in the use of management accounting for planning, controlling and evaluating the performance of contemporary organisations, in Australia and internationally, with appropriate consideration of ethical issues, communication and information technology.

Teaching and learning strategies

The subject will be presented in 3-hour lecture / seminar format. The textbook material and articles from the readings list will be presented in the first part of the seminar. Case studies, practise exercises and discussion questions will be presented and discussed in the second part of the seminar.

The course material includes a significant number of case studies. The cases provide a wide range of settings where the practical consequences of the various topics studied can be further understood and evaluated.

Students are strongly encouraged to participate actively in the course. Active learners learn more. They also contribute to others' learning because other class participants benefit from hearing different approaches and perspectives. All students, therefore, are required to complete the set readings and prepare pro-forma answers to cases studies, practise exercises and discussion questions as a basis for participation in class discussion. Additionally, specific tasks will be allocated to individuals and/or groups of students on a rotating basis.

Content

• Planning, Control And Management Control Systems
• Introduction to management planning, control and performance evaluation, management control and strategic control, causes of management control problems, control alternatives, role of management accounting, ethical issues
• Management Control Alternatives and their Effects
• Action controls, results controls, personnel and cultural controls, formal and informal mechanisms of control, choosing an appropriate level of control, direct and indirect control systems costs, designing and evaluating management control systems
• Financial Results Control Systems
• Responsibility centres, financial responsibility centres, planning and budgeting systems, financial performance targets, common financial results problem areas
• Performance Measurement and Evaluation
• Financial and non-financial performance measurement and evaluation, accounting performance measures and their effects, financial results control remedies, balanced scorecard, and economic value measures of performance, rewards (and punishments)
• Planning, Control and Performance Evaluation – Contemporary Issues
• Planning, control and performance evaluation and environmental uncertainty, control, planning and performance evaluation of inter-organisational collaboration ventures and international operations, ethical issues, the role of management accounting in the future.

Assessment

Recommended text(s)

Merchant, K.A. and Van der Stede, W.A. (2003), Management Control Systems: Performance Measurement, Evaluation and Incentives, FT/Prentice Hall, London.

Indicative references

Anthony, R.N. and Gondarajan, V. (2000), Management Control Systems, 10th Edition, McGraw Hill Irwin, Boston.

Atkinson, A. A., Banker, R. D., Kaplan, R. S., Young, S. M. (1997), Management Accounting, Second Edition, Englewood Cliffs, Prentice Hall.

Child, J. and Faulkner, D. (1998), Strategies of Co-operation, Managing Alliances, Networks and Joint Ventures, Oxford University Press, Oxford.

Chua, W.F., Lowe, T. and Puxty, T. (1989), Critical Perspectives on Management Control, Macmillan, Basingstoke.

Emmanuel, C., Otley, D. and Merchant, K. (1997), Accounting for Management Control, 2nd Edition, International Thomson Business Press, London.

Hopwood, A. (1974), Accounting and Human Behaviour, Prentice-Hall, London.

Horngren, C.T., Foster, G., Datar, S.M. (2000), Cost Accounting A Managerial Emphasis, 10th Edition, Prentice Hall, Upper Saddle River.

Kaplan, R.S., Atkinson, A.A. (1998), Advanced Management Accounting, 3rd Edition, Prentice-Hall, Upper Saddle River.

Macintosh, N. (1985), The Social Software of Accounting and Information Systems, Wiley, Chichester.

Macintosh, N.B. (1994), Management Accounting and Control Systems, John Wiley and Sons, Inc., New York.

Moores, K. and Booth, P. (1994), Strategic Management Accounting, Australasian Cases, John Wiley and Sons, Brisbane.

Simons, R. (1995), Levers of Control, Harvard Business School Press, Boston.