Please note! Course description is confirmed for two academic years (1.8.2018-31.7.2020), which means that in general, e.g. Learning outcomes, assessment methods and key content stays unchanged. However, via course syllabus, it is possible to specify or change the course execution in each realization of the course, such as how the contact sessions are organized, assessment methods weighted or materials used.


The objective of the course is to develop student s ability to design and implement effective performance management systems. Course reviews various practices to manage organizations performance, and develops understanding when and under what circumstances each of them are effective in dealing with various managerial challenges.

Course gives special emphasis on accounting based controls as part of the organizations management systems. The link between strategy and performance measurement is elaborated.

Moreover, various aspects of operational control are discussed. Course allows insights into the current research in this field as well as helps those who plan to do master s thesis in this topic area.

Credits: 6

Schedule: 10.09.2019 - 22.10.2019

Teacher in charge (valid 01.08.2020-31.07.2022): Teemu Malmi

Teacher in charge (applies in this implementation): Teemu Malmi

Contact information for the course (valid 19.08.2019-21.12.2112):

I am available for questions before and after classes. I have no office hours, but should there be a need to meet outside teaching hours, send me an e-mail.

CEFR level (applies in this implementation):

Language of instruction and studies (valid 01.08.2020-31.07.2022):

Teaching language: English

Languages of study attainment: English


Assessment Methods and Criteria
  • Valid 01.08.2020-31.07.2022:

    1. Lectures, cases and group assignments (50%) 24 h, prof. Teemu Malmi.

    2. Exam (50%).

  • Applies in this implementation:

    Course grading is based on case reports and class activity as well as final exam. Final exam accounts for 50% of the final grade. 

    Course includes nine case studies students need to prepare prior to class. Four out of these nine cases will be graded separately and each of those four cases makes 7 % of the final grade, i.e. 28%. These four cases are indicated above as “to be graded”. Class activity is 22 %. 

    The evaluation of class activity is based answering to remaining 5 cases, answering on e-mail questions, and active participation on class discussion. 

    I will assess these 5 cases on three-point scale: inferior = 0; fair=1; outstanding=2, and this assessment will be part of your class contribution grade. This makes maximum of 10 points out of 22 for class activity and 10% of your final grade.

    There will be five e-mail questions. Answering e-mail questions on time gives you either 0,5 or 1,5 points each. In total you may receive 7,5 points for your final grade from e-mail answers.

    The participation on class discussions may give you 5 points, or 5% of your final grade.

    In total you can collect 100,5 points from final exam, cases and class activity.

    The class is divided into groups of four, which is also the maximum size of a group. The minimum group size is three. Grading of cases (4 + 4 cases out of nine) is based on group performance. Group can split their points unevenly within the group to reflect individual contributions, if wished. If you wish to do so, please indicate that in the cover sheet of the case you hand in.

    Final exam, the first case to be handed in, e-mail answers as well as participation on class discussion is evaluated on individual basis.

    Final exam will account for 50 points and you need to receive a minimum of 20 points to pass. Similarly, you need to collect at minimum 20 points out of 50,5 available for case assignments and class activity.

    I try to assess your cases weekly and grades will be provided in MyCourses. 

  • Valid 01.08.2020-31.07.2022:

    - Classroom hours, 24

    - Class preparation, 46 h

    - Case assignments, 40 h

    - Exam preparation, 47 h

    - Exam, 3 h

  • Applies in this implementation:

    Our class-room sessions will start 12.15. We will have one break around 13.45 for 20 minutes. I expect class-room sessions to end around 15.45. Class-room attendance is not mandatory, but absence will have an impact on your learning as well as participation grade.

    Some of the cases are relatively short, some require more work. You should read relevant chapters from text-book as well as additional readings materials before preparing cases. The four case assignments that you hand in for grading will likely take some 5 to 8 hours each, including the time spent on readings. The five other case assignments should take from 2 to 5 hours each.


Study Material
  • Valid 01.08.2020-31.07.2022:

    Reading material as indicated in Syllabus.

    Compulsory reading for the exam: Merchant, K. & Van der Stede, W. (2012), 3rd ed, Management Control Systems - performance measurement, evaluation and incentives. Prentice Hall.

    Suggested as a supplementary reading: Simons, R. (2005) Levers of Organisational Design. HBSP.


  • Applies in this implementation:

    The following articles are listed in the Syllabus and required for final exam:

    Malmi, T. & Brown, D, 2008. Management Control Systems as a Package – Challenges, Opportunities and Research Directions, Management Accounting Research, 19, 287-300.

    Buckingham, M. & Goodall, A., 2015. Reinventing Performance Management, Harvard Business Review, April, 40-50.

    Hansen, Stephen C., David T. Otley, & Wim A. Van der Stede (2003). Recent Developments in Budgeting: An Overview and Research Perspective. Journal of Management Accounting Research 15, pp. 95–116

    Kaplan, Robert S., and David P. Norton. "Having Trouble with Your Strategy? Then Map It." Harvard Business Review 78, no. 5 (September–October 2000): 167–176

    Robert S. Kaplan and David P. Norton (2001) Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part I. Accounting Horizons.

    Robert S. Kaplan and David P. Norton (2001) Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part II. Accounting Horizons.

    Aranda, C., Arellano, J., 2010. Consensus and Link Structure in Strategic Performance Measurement Systems: A Field Study. J. Manag. Account. Res. 22, 271–299.

    Melnyk et al., 2014. Is performance measurement and management fit for the future? Management Accounting Research, 25, 173-186.

    Bedford, D., Malmi, T. & Sandelin, M, 2016. Management control effectiveness and strategy: An empirical analysis of packages and systems. Accounting, Organizations & Society, Vol. 51., 12-28

Substitutes for Courses
  • Valid 01.08.2020-31.07.2022:

    This course replaces 22E25000 Accounting for Management Control.

  • Valid 01.08.2020-31.07.2022:

    Management Accounting II (22C00300), Financial Accounting (22C00400).


Details on the schedule
  • Applies in this implementation:


    - Introduction to the course and practicalities

    - What is performance management

    - The control function of management

    - Causes of control problems

    - Management control alternatives and their effects

    - Accounting as part of the organizational management system – ”Control Package”

    Cases: Wongs Pharmacy & Atlanta Home Loan

    (Note: Day is Monday, Time: 15.15-18.45, Venue V002)

    -      Financial responsibility centers

    -      Financial indicators for measuring performance

    -      What is EVA and why has it been argued to be superior to ROCE?

    -      What are the implications of Value Based Management to management system


    -      Transfer pricing

    -      Purposes of budgets

    -      Problems with traditional annual budgeting

    -      Beyond Budgeting

    -      Rolling Forecasting

    Cases: KCC (to be graded), Mainfreight 


    -       What are the uses of measurement systems? - Different types of Scorecards

    -       What are the design implications of different uses?

    -       Strategy as a basis for performance management systems

    -       How to derive measures from strategy – strategy maps

    -       How to link measures in different levels of organizational hierarchy

    -       How to use scorecards as part of management system

    -       What are value drivers and how do those link to BSC

    Case: Johansen’s: The New Scorecard System (to be graded)


    - Purposes of incentives 

    - Different types of rewards

    - Design choices: formula based or not, shape of pay function, size of bonus

    - Criteria for evaluating incentive systems

    - Pros and cons of group rewards

    - Targets: where do they come from?

    - How challenging targets should be?

    - How much influence subordinates should have in setting targets?

    Cases: HCC Industries (to be graded); Houston Fearless 76, Inc. 


    -       Remedies to the Myopia Problem

    -       Performance evaluation in the presence of uncontrollable factors

    -       Ethical issues related to MCS

    Cases: Beifang Chuang Ye Vehicle Group; The “Sales Accelerator Program”


    -  The impact of strategy on control system - innovation and ambidexterity as strategic objectives

    -  Do similar controls work in different cultural environments?

    -  What challenges multinationality creates for control? 

    -  Controls at not-for profit organisations

    -  Summary / Wrap-up

    Case: USC (to be graded)

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