![Page 1: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/1.jpg)
Darrell BrownAssociate Professor of Accounting
Portland State University
Managerial Accounting and Control: MBA 512
![Page 2: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/2.jpg)
Agenda
Introduction Problems on cost accounting basics Review the basics Overview of remainder of the quarter
![Page 3: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/3.jpg)
Introduction
Who we are Syllabus Questions about logistics
Exercises in cost accounting
![Page 4: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/4.jpg)
Where do we exist?
Economic Systems
Social Systems
Natural Systems
![Page 5: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/5.jpg)
Balancing organizational tensions
Profit, growth, control Short term results, long term capabilities and
opportunities Performance expectations of different
constituencies Opportunities and attention Motivations of human behavior
![Page 6: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/6.jpg)
Motives of human behavior
People want to contribute—orgs make it difficult for people to understand how
People generally choose to do right—orgs create pressure and temptation
People strive to achieve—orgs limit resources and create competing objectives
People like to innovate—orgs limit resources and punish failures
![Page 7: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/7.jpg)
Levers of control
Beliefs Boundaries Diagnostic systems Interactive systems
![Page 8: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/8.jpg)
Business strategy—focus thru control
Beliefs—what are the values Boundaries—what are risks to be avoided Diagnostic controls—what are critical performance
indicators Interactive controls—what are strategic
uncertainties
![Page 9: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/9.jpg)
Adapted from Simons, 1995. Levers of Control
![Page 10: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/10.jpg)
Relationships between the levers
Opportunity & Attention
Strategy
Expand Opportunity-seeking and learning
Focus Search and Attention
Frame the Strategic Domain
Beliefs Systems
Strategy as Perspective
Commit to grand purpose
Boundary Systems
Strategy as Position
Stake out a territory
Formulate and Implement Business
Strategy
Interactive Systems
Strategy as Patterns in action
Look toward tomorrow
Diagnostic Systems
Strategy as Plan
Do the job today
Adapted from Simons, 1995. Levers of Control
![Page 11: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/11.jpg)
Beliefs system
What: explicit set of beliefs that define basic values, purpose, and direction
Why: provide momentum and guidance to opportunity-seeking behaviors
How: mission/vision statements, credos, statements of purpose When: opportunities change dramatically; management wants to change
strategic direction, energize workforce Who: senior management write substantive drafts; staff facilitate
communication, feedback, awareness
![Page 12: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/12.jpg)
Boundary system
What: formally stated rules, limits and proscriptions tied to credible threat of sanction
Why: allow creativity within defined limits How: codes of conduct, strategic planning systems, asset acquisition
systems When: conduct—when reputation costs are high; strategic—when risk of
dissipating resources of the firm are high Who: senior managers formulate with staff (legal?) assistance and
sanction; staff monitors compliance
![Page 13: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/13.jpg)
Diagnostic systems
What: feedback systems that monitor outcomes and correct deviations (budgets, performance measures)
Why: provide motivation, define goals, establish guidelines for corrective action, evaluate/drive effective resource allocation
How: set standards, measure outputs, link incentives to goal achievement When: prior to operations, at the point of output/results, process or
output is critical to performance Who: senior management sets or negotiates goals, reviews exceptions,
follow-up; staff maintains systems, gathers data, prepares reports
![Page 14: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/14.jpg)
Internal controls
Not part of the levers, very necessary
What: activities, processes that protect and enhance assets, information quality
Why: protect company, assets, information from intentional and accidental losses
How: governance structures, staff competence, system quality When: all the time, all the business Who: staff, some BOD, management
![Page 15: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/15.jpg)
Remainder of the quarter
Levers of control…how do control systems (accounting is a major part) fit into the ability of a business to achieve its goals
Allocation of costs…the bane of accounting measures Meaningful performance measures…what measures really impact a
business Strategic cost accounting…expands the view of managerial accounting
from internal record-keeping to external strategy analysis and support
![Page 16: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/16.jpg)
Interactive control systems
What: systems managers use to involve themselves in the decisions of subordinates—project management systems, intelligence review systems
Why: focus on strategic uncertainties and provoke the emergence of new strategies and initiatives
How: ensure recurring discussions with subordinates; challenge and debate assumptions, data and plans; ensure attention by managers
When: periodic, regular; times of disruptive change Who: senior management use the systems, staff facilitate and emphasize
![Page 17: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/17.jpg)
Week 3
Overhead allocation– ABC– Transfer pricing– Behavioral implications
![Page 18: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/18.jpg)
Week 4
Performance measures– Balanced scorecard– Non-financial measures
Strategy maps
![Page 19: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/19.jpg)
Week 5
Strategic costing– Value chain– Strategic positioning analysis– Cost drivers
Old article…either incorporated or ignored
![Page 20: Darrell Brown Associate Professor of Accounting Portland State University Managerial Accounting and Control: MBA 512](https://reader036.vdocuments.mx/reader036/viewer/2022072014/56649e7f5503460f94b83c55/html5/thumbnails/20.jpg)
Finish
Questions Comments Suggestions