Management Control Systems

InstructorProf. Dr. Trapp

Wednesdays: 8.30 – 11.45 in 47.0.501 (red lecture hall)

The first lecture takes place on Wednesday, 17 October 2018.

Learning objectives 

At the end of this course the students will

         understand the need for management control systems, their design and limitations and know what it means to have an organization “in control”,

         be familiar with the alternatives managers have for ensuring “good” control and will be able to advise managers how to choose from among various control elements,

         be able to analyse the intended and unintended effects of financial control elements,

         be able to design management control systems that strength-en managerial commitment and employee motivation,

         be able to critically evaluate management control systems operated in corporate practice.

This course is intended as an overview for students who will make business decisions, evaluate organizational or individual performance, or will be evaluated through the use of financial and nonfinancial information. Its target audience consists of those who aspire to be managers, management consultants, or specialists in staff functions such as controllers, financial analysts, auditors, and human resource specialists.

Course contents

This course is designed to broaden and deepen the students’ conceptual and technical understanding of accounting as it is used for management purposes. Therefore, its focus will be placed on the measurement and evaluation of organizational and individual performance. A particularity of the course is its reliance on case studies developed from real-world practice that bring the topics “to life”. The core contents of the course are:

         The control function of management

         Management control alternatives and their effects (Results, action, personnel and cultural controls; Control systems tightness and costs; Designing and evaluating management control systems)

         Financial results control systems (Financial responsibility centres; Planning and budgeting; Incentive systems)

         Performance measurement issues and their effects (Requirements for and limitations of financial performance measures; Myopia problems; Performance measures in the context of uncontrollable factors)

         Corporate governance, important control-related roles, and ethics (Corporate governance and board of directors; Controllers and auditors; Management control-related ethical issues)

Course materials


(the password will be announced during the first lecture)



Merchant, K.A., Van der Stede, W.A. (2017): Management Control Systems, 4th edition, Pearson, Harlow.


Open exam. For exam dates, please refer to the Moodle page.