GRA 6280 Performance Management
GRA 6280 Performance Management
We begin by studying a comprehensive summary of cost definitions and classifications. We look at how the usual fixed vs. variable costs classification can be enriched by showing the distinction between the cost of resource supplied and the cost of resources used. We also analyze the role of managers in making long-term decisions on whether to introduce or sustain specific products, business lines or market segments through cost analysis. Building on the previous, we finally analyze budgeting and planning decisions.
Then, we shift attention to the measurement and analysis of performance. We discuss the Balanced Score Card and summarize the set of financial and non-financial performance measures tied to customers, innovation and operational processes, and enhanced employee and system capabilities. Moreover, we focus on profit and investment centers to portray the measures for the financial perspective of the Balanced Score Card. We do not limit to studying the usual Balanced Score Card, but we focus on additional models like EFQM, the performance pyramid model or the use of operational dashboards. We finish this topic by focusing on the quantitative techniques for this type of models, including variance analysis.
We end the course by analyzing trends in research and real business related to performance management.
The course will strengthen the ability to reason through complex arguments and defend an argument or thesis on the basis of theory and evidence. It also provides students with the ability to assess the relevance of costs and costing methods and to make decisions and evaluate real-world management problems through specific instruments and financial variables. The course strengthens the ability of students to identify the core decision variables in a problem.
In particular, you will learn how to read, interpret, and use:
- Cost and profitability concepts like cost behavior (variable and fixed cost), cost specificity (direct and indirect cost) and margin types (contribution margin, gross margin and profit margin).
- Analysis, identification, and decision-use of accounting information.
- Design and decision consequences of internal accounting systems, such as activity-based costing.
- Basic uses of accounting information: key performance indicators.
- Contribution of accounting to organizational management systems like comprehensive performance measurement (e.g. Balanced Scorecard), design of responsibility centers, and risk management.
The student should also be able to apply the acquired knowledge to real-life management problems and to critically evaluate the performance strategies employed by real companies in real situations.
This course builds and reinforces the following general competences: decision making, critical thinking, judgment, team work and communication.
In terms of specific skills:
- Understand and interpret financial and non-financial measures used for managing companies including product and customer profitability as well as return indicators.
- Learn how to design and use internal control mechanisms.
The student should critically reflect on performance management’s role in society as a whole by evaluating the sustainability of a company’s management actions.
Topic I: Responsibility centers and budgeting.
- Introduction.
- Revenue and expense centers.
- Profit and investment centers and measuring profitability.
- Budget preparation process and quantitative techniques.
Topic II: Measuring and analyzing performance. Financial and non-financial indicators.
- Measurement of assets employed.
- Economic value-added (EVA) vs. Return on Investment (ROI).
- Performance measurement systems: Balance score card, EFQM, performance pyramid and operational dashboard.
- Variance analysis and its limitations.
Topic III: Trends in research and special applications to finance
- Other financial indicators: debt structure.
- Private equity: valuation, due diligence and M&A.
Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class that is not included on It's learning or in the text book.
This is a course with continuous assessment (several exam components) and one final exam code. Each exam component is graded by using points on a scale from 0-100. The components will be weighted together according to the information in the course description in order to calculate the final letter grade for the examination code (course). Students who fail to participate in one/some/all exam elements will get a lower grade or may fail the course. You will find detailed information about the point system and the cut off points with reference to the letter grades when the course start.
At resit, all exam components must, as a main rule, be retaken during next scheduled course.
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.
| Assessments |
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Exam category: Activity Form of assessment: Class participation Weight: 10 Grouping: Individual Exam code: GRA 62801 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Activity Form of assessment: Presentation Weight: 40 Grouping: Group (3 - 4) Exam code: GRA 62801 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 50 Grouping: Individual Support materials:
Duration: 3 Hour(s) Comment: Written examination with supervision Exam code: GRA 62801 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.
The case study will have some questions that students will have to address and will prepare a presentation with the “solution” to the case study. Note that, as in real life, there is not always a specific solution to a specific scenario/problem and thus, any solution is welcome as long as it is well-justified and it is related to the content of the course.
The project content will be discussed in detail the first day of the course.